Operations People & Performance in Aldi Supermarket - Essay Example

ORGANISATION, PEOPLE AND PERFORMANCE ALDI SUPERMARKET 0 The Human Resource Strategy IntroductionIn an ever increasing competitive market, the consumers enjoy a very great choice on where they can purchase their products. For the supermarket to achieve its business targets, it must identify the needs and preferences of consumers and look for the best means of satisfying them. Therefore, creating a competitive advantage for the business is not an easy task. Therefore, the marketing strategy of the business must be unique to ensure an effective product promotional campaign. Competitive business strategy of Aldi supermarket Since its establishment in 1913, Aldi has successfully, emerged as one of the most important retailers in the United Kingdom while supplying high quality products to consumers. The major objective of the business is to provide consumers with their daily products they need and ensure that the products are at the highest quality and with lowest prices possible (Athanassopoulos & Ballantine 1995) Assigning the prices for commodities is among the most serious challenges in the business during the development of marketing mix. The various marketing strategies in use include, marketing penetration that involves the act of assigning low prices for the newly introduced products that help the products to gain a large share of the market within a short time (Mitchell & Kiral 1999). Competitive pricing that involves offering the products at prices that are relatively, lower than the prices offered by the rivals. Strategic pricing that involves putting great emphasis on the quality of brands that help to enhance the price of the brand that finally leads to increase in profits and good performance. Aldi implements this strategy through the utilization of the benefit of economies of scale, by buying at lower prices from suppliers, which then reflect to consumers (Mitchell & Kiral 1999). In determining the best location for any new branch, Aldi supermarket considers the size of the market based on the number of people visiting the area, the demographic issues of the area that in turn affects the demand of specific products, the level of competition, the accessibility of the area that ensures efficiency of supply of products and the amount of parking space to allow for many customers at a time. All these strategies are responsible for the excellent performance of the business. Human resource issues and challenges While operating on large scale and managing to attract a large portion of consumers daily, an important issue is the determination of the right quantity of human capital required. The management has therefore the burden of evaluating and fixing the right number of employees that can be able to serve customers efficiently. The other challenge is in the capability of the business to attract and retain the best talents in the organization. This comes because of the high competition from the close rivals as every firm seeks to acquire and retain the best talents to assist in innovation, which is one of the most key determinants of performance in the modern environment of business operations. The other major issue is the ability to motivate employees to achieve the highest possible performance through the adoption of a good reward system. Strategic human resource management The resource based model suggests that the business must have the right amount of human capital if it aims at achieving high performance. The performance of the organization according to Ling & Nasurdin (2011) is related to the quality and quantity of its human capital. The business, while operating on large scale, it has to acquire and develop the employees to have better skills and capabilities than the employees serving in the rival organizations. To gain a competitive advantage over the others, the human capital should be unique and of high value. This model drives the business into adopting a high commitment management system that entails the establishment of mutual form of commitment in the business that will influence performance. High performance management will enable the establishment of interrelated human resource practices that upon working together will influence performance (Peteraf 1993). A high involvement management strategy will create partnerships with employees and enable good communication and involvement. The implementation of the integration model means that Aldi has to examine the relationship between the human resource strategy and the overall performance of the business. This will stress on the alignment between the human resource strategy and the key objectives of the business (Katou 2008). An efficient means of implementing the strategy means the presence of all forms of integration that include vertical, horizontal and combined integration. With horizontal integration, the business will focus on establishing a set of interrelated and equally reinforcing human resource practices within the organization. This comes from the fact that within the business, there are certain human resource best practices that can match and fit together to reinforce one another. A major emphasis of this horizontal integration is synergy that comes when the set of combined performance of the human resource policies is higher than the sum of individual performance. The universalistic model bases on the assumption that these human resource practices are capable of finding relevant applications under all prevailing conditions. The major characteristics of the model that can match the prevailing business environment are that there exist a linear relationship between the human resource practices and the performance of the business; best human resource practices are relevant under all prevailing conditions and the internal fit, which is the major concept. Some of these considerations proposed by the model are security of employment, selectivity in recruitment, higher wages, incentive payments, employee ownership, sharing information, employee empowerment and participation, redesigning jobs, training and skill development and symbolic egalitarianism. There are thus numerous combinations that the business can use to achieve the best results in the name of the doctrine of Equifinality (Peteraf 1993). With vertical integration, the business will be looking to establish a set of human resource practices that align with the business strategies out of the area of human resource management. This aims at achieving the most appropriate match between the business strategies and the human resource practices (Purcell & Kinnie 2007). This can assist in enhancing the performance of the business and winning a competitive advantage over the other players. The quality strategy aims at looking to improve the quality of the products by fostering a high desirable conduct of employees that reflect to the goals of the organization. The strategy of cost leadership according to (Porter 1997) will aim at optimizing efficiency by proper management and good control of the activities of employees. External match, best match and strategic match are all alternative expressions describing vertical match that constitutes the contingency theory. With combined integration, the business will be seeking to benefit from both the two forms of integration discussed above (Luna & Camps 2007). This means that Aldi is going to implement a wide range of human resource practices. This is because of the assumption that various combinations of human resource practices can cause high performance of the business depending on the context of the organization (Katou 2008). To bear in mind is that the bundle of human resource practices should possess the characteristic of reinforcing each other and attain a high level of match with the business strategies of Aldi. This idea combines all the attributes of the two forms of integration in the name of configurational theory of human resource management. Effects of the strategy Proper implementation of the resource based model will enable Aldi to possess enough human capital with unique characteristics that outwit the other players (Ling & Nasurdin 2011). This will result to efficient operations and creation of high quality product at lower costs to meet the goals of the organization. The strategy according to Ling & Nasurdin (2011) will also enable the organization to gain competencies through its unique characteristics of its labour that are difficult for the other firms to imitate. However, the implementation of this strategy will incur high financial costs for the organization. This is because, highly talented individuals with unique properties may also demand for high and unique payments. There will also be huge expenditure in training the employees to impart the unique qualities not present in the employees of other organizations. However, with proper implementation of the strategy that aims at the key areas that require improvement, the benefits will outweigh the costs. The development of interrelated processes that will reinforce each other greatly assists the organization to achieve high performance. Mutual commitment, good communication, trust and employee participation in decision making are all interrelated activities that altogether improve motivation that in turn lead to improved performance over other players (Katou 2008). The major challenge here is only in the determination of the best combination that fits the organization since there is a very wide range of choices. However, with proper knowledge of the goals and operations of the organization, this becomes easier. Cost leadership will enable the organization to either sale at a lower price and expand its market share or sale at the same price level as competitors to increase the profit margin (Porter 1997). A good reward system will also enhance motivation and the feeling of belonging to the organization that in turn enhance employee loyalty. However this will add on the operational costs of the organization. Conclusion The resource based model and the integration model are all the bast strategies that will assist Aldi to realize its objectives of maximizing efficiency and offering high quality products at a lower price than that of its rivals. With proper implementation of these strategies, Aldi is going to be the most recognized player in the country and will outwit the others. 2.0 Effects of Organizational Culture Organizational culture refers to the underlying beliefs and values that form the foundation for the system of management of the organization and the range of management practices or behaviours that reinforce the basic principles of the organization. The organizational culture greatly determines the degree that the values of employees align with the business strategies of the organization (Trice & Beyer 1993). The organizational culture advances over time and sets beliefs and values within the organization. The extent that the employees share the values in the organization dictates the strength of the organization. The culture of the organization according to Wilkins & Ouchi (1983) is one of the key determinants of the performance of the organization since it shapes the behaviour of employees during their daily activities. The culture can either act to motivate employees that benefit the organization or can act to demoralise employees that in turn produce negative effects for the business. This section will examine the effects of organizational culture on employee engagement and motivation in the organization. 2.1 Organizational culture and employee motivation A strong organizational culture occurs when the employees in the organization are sharing the underlying beliefs and values. The idea of sharing the beliefs and values may cause the employees in the organization to gain a strong connection with the organization and among each other resulting to greater cooperation and collaboration (Powell 1992). When new employees enter in an organization, they make efforts to understand what the organization is and make attempts to become part of the organization. A simple and clear culture that is easier to understand means that these new employees are capable of internalising with the values of the organization within the shortest time. These new employees as well as the old ones can thus gain a sense of motivation of the business environment and understand how the organization operates. The organizational culture is thus very important especially for new employees. This is a key consideration for Aldi because of its consistent recruitments of new employees because of the rapid expansion of its operations. Organizational culture according to Ogbonna (1993) can help in creating a feeling of belonging, increased satisfaction of their jobs and a feeling of commitment that in turn impact positively on the overall performance of the organization. A good organizational culture often results to high motivation of employees. Therefore, a strong organizational culture characterized by good reward, respect and sharing of the underlying beliefs and values acts as a very strong motivator for the employees. The strongest positive effects on motivation come when employees consider the underlying beliefs and values as part of their own and the correct thing to do. However, this will only come when the business aligns its culture based on the expectations of employees and the existing ethical standards. Employees who understand and accept the organizational culture tend to take less time to understand new instructions. They also demonstrate high degree of loyalty to the organization and are always ready to accept new changes. This has an effect of improving performance thorough high morale as well as innovation in the operations of the business (Yilmaz & Ergun 2008). This in turn will enable the organization to achieve the desirable uniqueness of its operations, which is the key factor to obtaining a competitive advantage. The employees who appreciate the organizational culture tend to take less time in learning new skills that aim at improving efficiency in the organization since they have a clear knowledge of what the organization wants from them. This in turn will reduce the cost of training and will enhance the speed of acquisition of new skills leading to low costs of operation that will reflect to the price of the products to gain a competitive advantage for the business. Aldi has the responsibility of redesigning and explaining the organizational culture to gain a lot from its employees in the name of employee morale and motivation. A weak organizational culture exists where the employees in an organization share the beliefs and values of the organization in a very poor manner. In this organization, employees are always willing and eager to see changes in the values of the organization (Mathew 2007). If the organizational culture is weak, the employees lose motivation and thus produce poor performance. The organization cannot benefit optimally from the knowledge and skills of the employees as there is less satisfaction from the organization on their part. However, A weak organizational culture can also benefit the organization in that there will be less behavioural customs that can act against the business. This therefore means, the management has the responsibility of determining the values that it should enhance and emphasise within the organization and those that it should not place strict adherence. The idea is to strike a balance between the benefits of the effects of strong organizational culture and weak organizational culture. The idea of sharing similar beliefs and values in an organization with weak culture is less significance and therefore the management will have to focus on actions done by an individual rather than groups. This can be costly for Aldi but very beneficial in the work and responsibilities that the organization will rely on specific employees rather than a group of employees. The organization can enhance this behaviour through the reward system in which every individual may want to struggle on his own to come up with something that can earn him a good reward. This is especially more relevant when dictating the innovation strategy for the business since it will enable each individual to think deeply and committed to ensure that he emerges the best out of the large group of employees (Martin & Terblanche 2003). The result of this is increased knowledge and hard work that will impact positively on the performance of the organization. This argument drives us to the conclusion that depending on the prevailing conditions, neither strong nor weak culture is desirable or bad but depends on what Aldi want to achieve at that particular area and time. The idea that an achievement made by a single individual is more important and rewarded than the achievement made by a group can act as a very strong motivator in an organization as may act to eliminate laziness. However, there are some things that require cooperation between employees as it is very difficult for one individual to achieve. This means that the organizational culture should not discourage cooperation between employees since sharing of information and ideas helps to impart skills especially to the new employees (Martin 2000). There should be proper reward to encourage those individuals that assist others in achieving what they achieve. This culture is also very important in encouraging motivation and employees will always be willing to assist each other in achieving the goals of the organization. The organizational culture must therefore be very inclusive of all the factors and directly reflect to the goals of the organization. The organizational culture according to Liviu & Cornia (2008) enables the employees to be familiar with the historical background of the organization as well as the current existing modes of operation. This in turn will enable the employees to gain proper understanding about the future norms and behaviours of the organization. This may greatly act in favour of the organization since it may influence them to make proper preparations and efforts to reach the target within the shortest time possible. It may also make employees more loyal and feel part of the organization as they struggle to serve it. Therefore, this strategy may motivate employees and help the organization to gain a competitive advantage over other rival players. This means that an effective system of human resource of an organization that base on appropriate beliefs and values create a good impact on the attitudes as well as the behaviour of employees that in turn leads to high performance (Liviu & Cornia 2008) The organizational culture according to Furnham & Gunter (1993) serves as the internal integration as well as the coordination between the organizational activities and the employees. The internal integration is the social integration of the new employees with the prevailing ones and thus establishing the boundaries of the feelings and identity of the organization amongst the personals and the commitment to the business. The shared strategy that forms the foundation of both communication as well as mutual understanding between employees in the organization is a product of the organizational culture. If the culture of the organization does not succeed in fulfilling these roles at a reasonable degree then the culture will produce a significant undesirable influence on the level of motivation of employees (Furnham & Gunter 1993). The shared beliefs and values is one of the basic elements that define the culture of the organization. The beliefs and values, is a range of norms of the society that define the obligations or structure for societal interaction as well as communication behaviours of the members of the society that reflect to the causal assumptions of the culture. Thus, employees who have similar beliefs and values will feel and analyse matters and events in a similar way that in turn minimises uncertainty, ambiguity of roles as well as conflicts (Kristen & Ann 2006). This in turn allows for precise prediction of the behaviour of other employees, which in turn facilitates interpersonal interaction. Therefore, according to Kristen & Ann (2006) the performance of the organization is dependent on the extent of sharing the beliefs and values of the culture of the organization. In addition, the sharing and strict adherence to the beliefs and values of the organization will enable the management to foresee the reactions of the employees to a particular change and therefore take the necessary decision. Maintaining a good organizational environment such as the provision of good communication, freedom, employee participation and mutual trust can lead to employee satisfaction and good attitudes that in turn result to high motivation and hence high performance. The level of satisfaction as well as the attitudes of employees is a very vital factor in shaping the behaviour and the responses in the organization, which in turn determines the effectiveness of operations (Hofstede et.al. 1990). Therefore, positive organizational culture as well as well being of the organization can act as a very perfect competitive advantage for the organization. 2.2 Conclusion Many characteristics of organizational culture have a very vital role in influencing the motivation and the manner employees engage in an organization. Aldi needs an organizational culture characterized by a group of employees that does not greatly share the underlying beliefs and values as well as the various aspects of the beliefs and values to constitute a weak organizational culture. This in turn will influence autonomous decision making and enhance the spirit of entrepreneurship that results to improved innovation in the organization. Aldi should motivate its employees through an efficient rewarding system both at individual and group level for better implementation of the strategy. In a condition where there are consistent rewards to an employee in Aldi, the employee will consider his conduct as normal and this will lead to high motivation as in a strong culture of the organization. The board of management of Aldi must understand that only the employees who conduct themselves in a manner compatible with organizational culture are the ones to receive rewards. 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