Managing People in XYZ Company - Research Paper Example

Managing people and organisations XYZ is a UK based private day nursery and it is operating in a suburb locality where the organisation provides special care to children in the age group of 0 to 4 years. At present the organisation has a good market image due to the care it provides to the children and the understanding attitude of staff members. Day by day the competition is getting intense as many new nursery schools have emerged in the nearby localities; hence the organisation has decided to adopt most suitable future strategy to retain the market share and the sustainable growth rate. The XYZ Company has decided to analyse their existing business strategy, the internal strength and weakness along with external opportunities and threat to analyse what can be the other suitable strategies which will help the organisation to retain the high growth rate and market leadership. Later on using different models and theories like Michael Porter 1985's value chain, Ansoff’s growth strategy and BCG Matrix the competitive environment will be determined. SFA model will use to find out which of the chosen strategy should the organisation adopt undertaking the political, economical, social, technical, legal as well as environmental environment. The business plan will be made and evaluated to introduce the new strategy for retaining organisation’s competitive position and also for enhancing sustainable growth in coming future. At present the company is paying more attention toward maintaining the market image of “intense care providing nursery” and they have the monopoly in the market being the only nursery which provides care for children in the age group of 0 to 4 years. The parents feel more relaxed after sending their children to this nursery because they know the staff members are well trained and have the ability to handle their children. But the fact is many other nurseries started developing in proximity which will hamper the business and position of market leaders. The director of the nursery realised the fact that if the organisation does not change or modify the prevailing strategy, it might be problematic in the coming future. So it was decided that undertaking the internal strength & weakness and external opportunity & threat the organisation will plan its future strategy. The management of XYZ nursery decided to conduct a SWOT analysis for understating the organisation’s position in market through the help of strength and weakness which the organisation posses and the threat as well as the weakness which it faces from outside (Stapleton & Thomas, 1998 p79-81). Considering the SWOT analysis below mentioned strategies were developed: Increasing the numbers of trained staff members to handle the peak time pressure. Arranging better technical training for the staff members so that they can handle physically challenged students in more efficient way. Developing outdoor play area for the children to facilitate even physically challenged children. Arranging a training programme for the parents so that they can handle their children in better way at their home. Developing a more advanced indoor game room for the children who are within the age group of 0 to 2 years. These are the alternative strategies which the organisation can adopt in near future for enhancing its competitive position. Considering the SWOT it can be concluded the no other nursery is so efficient for handling children of 0 to 4 years and the numbers of physical challenged candidates are growing at a faster rate. So it will be more beneficial for the company to develop its outdoor play area which is an all time favourite for small children and even the physically challenged children would love to be out. If the other new entrants are considered, it can be distinctly seen they lack the expertise and experience in handling smaller and physically challenged children. At present the nursery has an outdoor play area which is the most favourite zone of children, so enhancement of this into a more sophisticated one will surely be a profitable venture for the nursery. To further analyse this new idea, management decided to consider more detailed analysis by utilising Ansoff growth strategy. (Source: Groucutt et al., 2004 p212) As the nursery in providing service from many years, hence it has a well developed market and also the staffs have a good knowledge of handling children. So as per Ansoff growth strategy matrix it is better to follow “market penetration strategy” and to attract more and more children for admission. Figure 1: The growing numbers of nurseries in UK as on 2003-04 (Source: Bargaining Support Group, 2003) The above given data provides information regarding how fast the day care nurseries have expanded in from 1998 to 2005. The growth has been slowed down but still they are growing at faster rate. If XYZ have to enhance its business, they should work more on their core competencies. To evaluate XYZ’s present services, Boston's BCG growth matrix was used and the result was used by the management to scrutinise the chosen future strategy. Figure 2: BCG Growth Share Matrix (Source: Paley, 2000 p 36) It was found the nursery provides different types of services to the children who are bought to the nursery, so considering the BCG matrix these were segregated in different parts. Star: Attractive outdoor play area Intense care services for small children Question mark: Expansion of the existing numbers of staff persons Cow: Proper attention on each and every child Good communication channel with parts and their faith in the nursery’s staffs ability Hygienic environment Dog: Drop home facility to the children whose parents are highly busy It was determined that at present the nursery is gaining good business due to its quality services and well trained staffs but if the management pays more attention toward their speciality they will find the market share is expected to increase. Hence it will be more beneficial if XYZ concentrates on development of outdoor play area strategy for attracting children in the age group of 0 to 4 as well as those who are physically challenged. For further understanding the fact that how well the organisation supports outdoor play area development strategy, Michael Porter 1985's value chain analysis was conducted for identifying organisation’s inner strength and weakness. This model was developed by Michael Porter which group all the activities involved in production of product and services. This model also assists in determining the cost involve in running the business (Thompson & Martin, 2005 p254). Figure 3: The Value Chain (Source: Marcus, 2006 p52) After conducting the analysis facts which might affect organisations future strategy were identified. Administration: It is quite strong and has a good understanding with the staffs. Encourage the staff members to participate in decision making activities. Maintains an easy approachable attitude and is always eager to help and guide the staffs as and when they need assistance. Human Resource Management: The staff members have faith in the management and they always assist management in their each and every decision. The members have good understanding among themselves. The work force is highly enthusiastic for development of the organisation and they often share their ideas with management for betterment of prevailing facilities. They children are treated with care and affection. Technology development: Technology is gaining importance within the organisation Management has started paying more attention in developing and updating it to enhance the quality of service offered and also to reducing the cost in future. Resource Management: As the service is to be provided to small children, hence management makes no compromise with the quality of resources. To deal with uncertainty, resources are maintained in adequate amount and stocks are managed undertaking economical inventory management models. Inbound logistic: Management have good reputation with the suppliers, so this help in maintaining lower cost of inbound logistics The increasing cost of fuel and higher demand for transportation results in higher cost of resource procurement. Operation The XYZ nursery pays quite low to the staff to maintain lower cost of operation. A good care is taken toward cleaning and hygiene so such activities requires good amount of operational cost. Marketing and sales The organisation has a good name in the market, so they do not take marketing and sales so seriously and relies more on word of mouth publicity. As the organisation is in service industry so the cost related to sales is almost negligible. As the competition is increasing in the market, the company is planning to enhance the marketing activity for conveying their core competencies to the potential customers. Services XYZ maintains high quality in their services and this is their core competency. The management have enough funds to invest, hence the accessories can be improved for betterment of the service quality. Undertaking all these facts it can be finally concluded that management have the ability to invest in the expansion plan for outdoor play area and this will suit the prevailing core competency of the organisation. There are many other factors which will affect final selection of future strategy by the management of XYZ nursery. To have a better understanding of all these PESTEL analysis was conducted. Environment Political The condition is quite stable and well balanced. Political environment is conservative Union have strong role to play Economical GDP (PPP): $2.236 trillion (estimate 2008) GDP (Real growth rate): 0.7% (2008) GDP contribution sector wise: 1. Agriculture: 1.3% 2. Industry: 24.2% 3. Services: 74.5% Population below poverty line: 14% (2005) Social Age structure of UK as on 2009 1. 0-14 years: 16.7% 2. 15-64 years: 67.1% 3. 65 years and over: 16.2% Population growth rate: 0.279% Birth rate: 10.65 births/1,000 population urban population: 90% of total population Literacy: 99 % Education expenditures: 5.6% of GDP as on 2005 Technological Presence of high technology at different sectors High investment by different companies and organisation for updating technology in use. Legal Government have intervened in many corporate decision making activities. Constitutional monarchy and Commonwealth realm exists. Government goes on modifying the legal rules and policies as per the international market scenario Environmental Government introduced many legal laws for betterment of the prevailing environmental condition and reduction of carbon dioxide emission and other green house gasses. Companies and other non government organisations are participating in enhancing awareness among the common public toward environment related matter (The World Fact Book, n.d.). (Source: The World Fact Book, n.d.) After conducting PESTLE analysis it can be said there are many factors which will affect XYZ day care nursery in coming future, the vital facts are being summarized below: The numbers of children will increase in future who will prefer to have good day care nursery for their young children (0-4 years). Due to financial crisis of 2008-09, affluent families will not be able to make higher expenditure, so this type of nursery that has a good name in terms of quality services will be the main target of these families. Lack of good nurseries who have well trained staffs for handling physically challenged children and in future number of such children will increase. Government is making the legal vigilance more stringent for reducing the growing cases of poor quality services in many new nurseries (Cleveland & Colley 2003). There is a growing concern in many researchers that regarding the effects on children below certain age going to a nursery school or not as learning pressure at such an early age can hamper the social growth of such children (The Times-a, 2007). Increasing number of mishandling of small children below the age group of 0-2 in many newly opened day care nurseries (The Times, 2009). Before taking any managerial action of introducing the outdoor playground development strategy, management decided to evaluate the chosen strategy with the help of SAF framework. Johnson and Scholes (1997) gave this test while one makes strategic option (Barnwell, 2008 p153). While selecting a strategy management have to check that whether it fulfils requirement of all the major stakeholders (company, owner and employees) Figure 4: Balance Benefit for each Stakeholder (Source: Grigoriu, 2006 p127) Suitability At present the organisation have a outdoor play area which is highly popular among the children of lower age group and the one having physical disability. The management have an idea what else should be introduced for betterment of the area. The well developed infrastructure and high quality service is the core competency of the organisation and as soon the outdoor play area will be part of the organisation it will attract more physically handicapped children and the child who are in their early age. None of the nearby nursery has the experience of handling small children of age 0 to 4 years and even their staff person lacks practical experience of managing physically challenged. The popularity of the nursery among the parents and their high level of interaction with staff persons is a strong opportunity for XYZ nursery. And also absence of sufficient outdoor are in many nurseries can be results as an opportunity (BBC NEWS, 2001). If the new entrants in this business develop same level of facilities and manage to earn good name in the market, it will be a strong threat of the organisation. The management have enough space to develop the outdoor play area and even the funds are adequate. Even after considering the strength and weakness of the organisation this strategy sounds to provide sustainable growth. Acceptability: It is acceptable that as soon this play area will be introduced in the nursery, the number of admission will increase by 30 to 50 percent. Many parents prefer their children to be more active and should participate in the outside games. Return: the income of organisation will go high as per head average market rate is £8,684 per year (Daycare Trust, 2009). Risk: there is a high market risk from the competitors, risk of changing government policies and regulation, negative publicity of nurseries from media persons (Neale, 2006). Stakeholder reaction: as development of outdoor play area is beneficial for the society and for the future generation, so the public will accept this idea full heartedly. Also the business will go high so management and owner will appreciate the new strategy. Feasibility: The organisation has plans to make the outdoor area a fusion of creativity and learning so they have decided to introduce certain games through which pupils can learn while they play, the main focus being providing better facilities for physically challenged children. But management does not want to make too high investment at a time; all the development activities will be completed step by step. The staff members are ready to participate in this development policy. As the children are the ultimate consumer of this organisation, hence management is paying more emphasis on providing better culture and facility. On considering the above mentioned analysis management decided to develop feasible business plan. This plan was developed to fulfil the organisation’s demand for retaining sustainable growth, so all the information was taken into consideration like: Market demand- at present the locality were XYZ nursery is present, number of families are growing so it might happen after the introduction of outdoor play area many families with small children and physically challenged children will opt for this nursery. The service will target families whose income is moderate and they have an aim of providing better care for their child with the age group of 0 to 4 years mainly. Management feel that they should not advertise much for their nursery as it will affect the total cost of operation. Instead of putting money in advertising, management will prefer to invest capital in development of their nursery. Demand for services: though there are many other nurseries providing the same type of services but none have the ability and experience to handle children who are too small and also with physical disability. Many new working families are shifting to this locality due to its proximity to many commercially importance points (Run A Day Nursery, n.d.). Financial Feasibility: for implementing new strategy of developing outdoor play area many changes have to be introduced in existing play area (Literacy Trust, n.d.). To make the place more friendly more scientifically developed furniture has to be purchased which will be comfortable for those children having problem in term of physical ability. Almost 50 percent of the budget will be invested in purchasing furniture and equipment. Management has decided to take up the plan in step by step manner so if anything goes wrong things can be modified without much problem. At present the government of UK is providing grants to many nurseries, hence XYZ day nursery has a plan to apply for a grant for getting 30-50 percent of their budgeted cost. But even without this assistance, they have enough funds to take up the project themselves. Management will try to maintain a balance in profit making in future and also retaining sustainable growth. Organisational capacity: if the number of children increases in future, in equal proportion staffs has to be enhanced. Management is planning to expand the staffs by 30-40 percent in near future because many members will have to actively participate in outdoor play area development. The above mentioned business plan is planned after considering the threats and opportunities offered by the outside environment (PESTLE). This will assist the organisation to maintain its competitive position through enhancing core competency. Such developmental strategy will be effective in making the organisation capable of fulfilling all the legal rules and regulation imposed by government. They will get a positive publicity from media and their market image will be improved as well as the business will go high. Considering the organisation’s current inner strength and weaknesses and opportunity & threat from outside through strategic management models such as SWOT, Michael Porter 1985's value chain, Ansoffs growth strategy, Boston’s BCG Matrix and PESTLE analysis, it was decided that if management goes for Outdoor play area development, it will be beneficial in the long run for XYZ nursery as well as for the society. Reference 1. Bargaining Support Group. June 2003. Nursery companies. UNISON. [Pdf]. Available at: http://www.unison.org.uk/acrobat/B886.pdf [Accessed on January 07, 2010]. 2. Barnwell, H. 2008. CIMA Official Learning System Test of Professional Competence in Management Accounting. 5th ed. Butterworth-Heinemann. 3. BBC NEWS> December 28, 2001. Nursery outdoor play areas 'inadequate'. [Online]. Available at: http://news.bbc.co.uk/2/hi/uk_news/education/1721196.stm [Accessed on January 08, 2010]. 4. Central Intelligence Agency. No date. The World fact Book. [Online]. Available at: https://www.cia.gov/library/publications/the-world-factbook/geos/uk.html [Accessed on January 07, 2010]. 5. Cleveland, G. & Colley, S. June 4, 2003. The Future Role Of Government In Supporting Early Childhood Education And Care In Ontario. A Report to the Panel on the Role of Government in Ontario. [Pfd]. Available at: http://www.law-lib.utoronto.ca/investing/reports/rp24a.pdf [Accessed on January 07, 2010]. 6. Daycare Trust. January 28, 2009. Childcare Costs Survey 2009. [Online]. Available at: http://www.daycaretrust.org.uk/pages/childcare-costs-survey-2009.html [Accessed on January 07, 2010]. 7. Grigoriu, A. 2006. An Enterprise Architecture Development Framework: The Business Case, Best Practices and Strategic Planning for Building Your Enterprise Architecture. 3rd. An EA Development Framework. 8. Groucutt, J., Leadley, P. & Forsyth, P. 2004. Marketing: essential principles, new realities. Kogan Page Publishers. 9. Literacy Trust. No date. The importance of play in children's development. Available at: http://www.literacytrust.org.uk/talktoyourbaby/play.html [Accessed on January 08, 2010]. 10. Marcus. 2006. Management Strategy. Tata McGraw-Hill. 11. Neale, J. September 14, 2006. Run a day nursery. Business Wings. [Online]. Available at: http://www.businesswings.co.uk/articles/Run-a-day-nursery [Accessed on January 08, 2010]. 12. Paley, N. 2000. Marketing for the non-marketing executive: an integrated resource management guide for the 21st century. CRC Press. 13. Run A Day Nursery. No date. How to Plan for Indoor and Outdoor Play at Your Day Nursery. Available at: http://www.runadaynursery.co.uk/how-plan-for-indoor-outdoor-play-your-day-nursery.html [Accessed on January 08, 2010]. 14. Stapleton, J. & Thomas, J. M. 1998. How to prepare a marketing plan: a guide to reaching the consumer market. 5th ed. Gower Publishing. 15. St Joseph’s Nursery. NO date. Outdoor Play Policy. [Doc]. Available at: http://www.stjosephsprimary.aberdeen.sch.uk/files/St%20Joseph%27s%20Nursery%20Outdoor%20Play%20Policy.doc [Accessed on January 08, 2010]. 16. The Times. May 19, 2009. Why nursery schools are bad for little boys. [Online]. Available at: http://women.timesonline.co.uk/tol/life_and_style/women/families/article6313945.ece [Accessed on January 08, 2010]. 17. The Times-a. April 5, 2007. Children who go to nursery full-time 'become antisocial'. [Online]. Available at: http://www.timesonline.co.uk/tol/news/uk/education/article1615190.ece [Accessed on January 08, 2010]. 18. Thompson, L. J. & Martin, F. 2005. Strategic management: awareness and change. 5th ed. Cengage Learning EMEA. Bibliography Alexander, J. No date. The Impact of Day Care. Available at: http://www.ncbi.nlm.nih.gov/pmc/articles/PMC2153933/pdf/canfamphys00236-0121.pdf Aubrey, C. 2000. Early childhood educational research: issues in methodology and ethics. Routledge. Business in Glasgow. No date. RES 13 - Day Care Nurseries. Available at: http://www.glasgow.gov.uk/en/Business/CityPlan/Part3_DevPol_DesGuide/Residential/RES13.htm Cohen, B. 2004. A new deal for children?: re-forming education and care in England, Scotland and Sweden. The Policy Press. Cochran, M. 1993. International handbook of child care policies and programs. Greenwood Publishing Group. Department Of Human Services. Child Care Choices. [PDF]. Available at: http://www.macombcountymi.gov/MSUEXTENSION/documents/ChoosingChildcare.pdf Doxiadis, S., Tyrwhitt, J. & Nakou, S. 1979. The Child in the world of tomorrow: a window into the future. Pergamon Press.   EPA. Sampling for Lead in Drinking Water in Nursery Schools and Day Care Facilities. [Pdf]. Available at: http://www.epa.gov/ogwdw000/lcrmr/pdfs/guidance_lcmr_sampling_nursery_day_care.pdf. Goodhart, K. 2008. Childcare: The Guide for Busy Parents. Crimson Publishing. Joffe, E. C. 1977. Friendly intruders: childcare professionals and family life. University of California Press. John, M. 1996. Children in our charge: the child's right to resources. Jessica Kingsley Publishers. Michigan Legislature. Child Care Organizations (Excerpt). Available at: http://www.legislature.mi.gov/%28S%282hm10uup5qsqqxz0ws1mqz55%29%29/mileg.aspx?page=getObject&objectName=mcl-722-111&highlight=Act%20116 Melhuish, C. E. & Moss, P. 1991. Day care for young children: international perspectives. Routledge. Penn, H. 1997. Comparing nurseries: staff and children in Italy, Spain, and the UK. SAGE. Rutgers. Upcoming Events Department of Psychology. [Pdf]. Available at: http://psych.rutgers.edu/history/Chapter8.pdf Stewart, C. A. 1993. Daycare. 2nd ed. Harvard University Press. US Depart of State. Chapter 4 - Day Care and Foreign Service Families. [Pdf]. Available at: http://www.state.gov/m/dghr/flo/c23959.htm. Appendix STRENGHTS WEAKNESSES 1. Staff and management relationships are very solid and managers are always approachable. 2. A stimulating outdoor play area is provided for children and is very friendly for children who may have disabilities. 3. Each member of staff is aware of what their job roles and responsibilities are 4. Resources are up to date and are always available for staff and children to use 5. Good results in terms of financial status for the nursery as a whole 6. Good management of financial budget and overall strategic plans. 7. Staffs are always given opportunities to build up their knowledge in the profession. 8. Long working hours. 9. Staff get only half hour breaks which leads to frustration. 10. Higher work load on the staff members if any member is absent. 11. Comparative lower pay scale for the staffs as compared to the competitors. OPPORTUNITIES THREATS 12. The establishment has excellent access for children with special needs, as they have a key worker who works closely with them and their parents to provide them with the best care and opportunities as the other children. 13. They have a big outside play area for the children to use but have not been fully developed. 14. Interaction with other schools and nurseries has provided the nursery with good links in surrounding areas as children are then referred to them. 15. The organisation provides care for children from birth to age 4, whereas other nurseries do not provide the same care as them. 16. A couple of nurseries are open in close proximity of this nursery. 17. Less staff can sometimes cause problems as nurseries nearby use the same outside agencies as them so staffs are not always available at short notice. Outdoor Play Policy: Appendix 1 Outdoor Play Equipment Daily Check Sheet Visual check of all fixed equipment and play area is necessary. Please tick the appropriate box if equipment / area is satisfactory. If a minor repair was carried out to make the equipment or area safe please note the action taken. (E.g. Broken glass removed, drain cover replaced.) If a repair cannot be made please note the defect. Notify the nursery staff that the outdoor play area cannot be used. Notify the head teacher of the repair required. Week beginning: MON TUES WED THURS FRI Fixed equipment E.g. Climbing frame, boat, train, swings, bridge, tunnel, see-saw, and playhouse. (Other) Play surface Paths Steps / ramp Fence Gate Storage shed / container Action taken to remove hazard or effect repair: Play area is unsafe. Action required: Signature of person carrying out visual check: Defects to look for: Foundations cracked, or loose. Sharp edges, broken edges, protrusions, sharp points. Rusting or rot. Gate catches broken / missing. Holes in fence or other damaged to fence. Drain covers sticking up or missing. Nails or screw sticking out. Cracks or holes on ground surface. Broken glass; discarded objects (needles, matches, etc.); dog fouling. (Source: St Joseph’s Nursery, n.d.) Outdoor Play Policy Appendix 2 Outdoor Play Equipment Annual or Termly Check of Fixed Equipment Please complete and give to nursery manager / head teacher. One sheet for each fixed item of equipment. E.g. Climbing frame, Fixed Play Boat / Train/ Wendy House / Swings etc. Also for Storage Shed/ Bunker or Storage Container. Name of equipment / storage. State of repair around the equipment. Term 1 Term 2 Term 3 Date: Comment: Action required: Date: Comment: Action required: Date: Comment: Action required: Signature: Signature: Signature: Date of Annual Inspection: Comment: Action required: Signature: Read More