Practice of Management in Coles - Case Study Example

Practice of Management: A Case Study of Coles Insert Name Course, Class, Semester Institution Instructor Date Introduction Success in any business organization is to a great extent determined by the degree to which the organization’s management embraces and practices the various concepts associated with the prime functions of management. For a business to be considered a market leader, it has to keep abreast with the dynamics in all areas affecting business such as changes in technology, current trends in personnel management, economic policies and so on. Internationally, in the recent past, there have been substantial intellectual and structural modifications in the place of work (Singla, 2010, pp.74). These transformations that have taken place in the work process have been complicated and diverse. Some common trends can be recognized with regard to a neo non-interventionist Australian workplace setting. This essay seeks to analyze the various concepts of management with specific reference to Coles which is a leading business firm in the country. One of the key concepts in the contemporary place of work is globalization. Globalization has been defined as the process of widening the network and inter-reliance of world markets and trading concerns. This process has been most prominent in the last two decades (Rajpal et al, 1996, pp.26). Coles, an Australian company that runs a chain of supermarkets is gradually appreciating the concept of going global. The company imports its stock from countries across the world. Since Coles began embracing the concept of globalization, it has gained the advantages of economies of scale hence enjoying a big market share (Schermerhorn, 2011, pp.99). It is the second largest organization in the business of retail trading after Woolworths. Coles enjoys a market share of 35% and is second to Woolworths that enjoys a market share of 40%. The concept of diversity is one of the most prominent trends in the contemporary workplace. Diversity in business organizations deals with prejudices and discrimination at along various lines. The concept of diversity entails equal opportunity as far as employment and human resource management is concerned (Cornfield et al, 2001, pp.61). At Coles, the management applies the concept of diversity. The management offers equal opportunity irrespective of race, gender, age and religion. Coles applies diversity to avert the possible adverse effects of having to work with a group that is not responsive to change. As a result of applying the concept of diversity, Coles has gained competitive advantage since people from multicultural backgrounds have a wide array of ideas that help bring innovative procedures to the organization. Under the broader management function of decision making, there are very important major concepts, the most pronounced being participative management. Participative management refers to a style of management where the employees are involved in making major decisions in the organization (Strank, 1983, pp.112). Coles applies this concept in decision making and information management. This concept has given the staff of Coles a feeling of affiliation and a sense of ownership. As a result of feeling affiliated with the organization, the employees do their best to improve the standards of the organization. They make decisions with the notion that the company belongs to them. This has led to a strong decision making system where quality decisions are made within the shortest time possible. The end result is a good corporate image. This in turn widens Coles’ client base. It also has a strong positive impact on consumer loyalty. From the historical perspectives of management, organizations currently borrow concepts such as: chain of command, delegation of authority, and unity of command. Chain of command is majorly concerned with the flow of information and instruction within the organization. It describes the path followed by the management’s directives. It describes the organization’s hierarchy (Landstro, 2010, pp.89). Coles stick strictly to the chain of command in all matters governing the major operations such as import and export trade. Much as delegation of duties and informal groups are encouraged in the organization, some decisions are considered too critical to be left to the shop floor operatives. Strict adherence to the chain of command at Coles has strengthened their organizational culture and internal procedures. This ensures continuity in the organization. Delegation of authority is a concept that is taking prominence among many successful organizations today. Delegation refers to an aspect of management where the top and departmental heads give some degree of decision making powers to their employees (Morden, 2004, pp.113). At Coles, departmental managers and supervisors delegate authority to their employees on the criteria of working experience and professional competence. A store manager for instance may give supervisory power to one employee. This concept is common in all Coles’ stores and has gained massive acceptance at the organization. The concept of delegation at Coles has created a very good training ground for future managers. The concept has nurtured professional competence among the staff members of Coles. It has saved the Coles’ human resource department the costs of having to recruit and train new managers in case one senior manager retires, dies or leaves the organization. This has had a big positive impact on corporate image of the company. From the international perspective, businesses adopt such concepts such as international trade. International trade refers to exchange of goods and services between two or more countries. It is also referred to as import and export trade (Adler, 2008, pp.132). Coles imports its inventory and assets from other countries. Coles imports electrical appliances from China and Japan. Coles imports stock so as to reduce its cost of sales and maximize revenue. As a result of participating in international trade, Coles has gained competitive advantage in the Australian retail business. It has had the opportunity to enjoy economies of scale and foster good relations between Australia and its trading partners. International trade not only deals with goods and services but also the transfer of capital and technology. Coles has greatly improved its technology since it began expanding its international trade network. The greater management function of planning can be broken down into concepts such as management by objectives and consultative management. Management by objectives refers to a concept that entails preparing a company’s plans and activities in line with the key goals and objectives of the organization. It is designed in such a way that all plans- corporate, strategic, operational and functional- reflect some aspect of the chief goals (Verardo, 2000, pp.122). Coles employs management by objectives as a method of making, achievement of objectives easier and practicable since Coles adopted this concept, a decade ago most of its goals have been realized. This concept is quite significant to the management as it is geared towards the realization of the shareholders expectations (Schermerhorn, 2011, pp.117). Formulation of strategies is one of the key functions of management and with it comes the concept of the balanced scorecard. The balanced scorecard refers to an approach to the provision of information to management. Such information is meant to assist the strategic policy formulation and achievement (Landstro, 2010, pp.131). It is a new integrated set of performance measures derived from the strategic plans. The performance management technique involves reviewing the business from the main perspectives. These perspectives are: the financial, learning and growth, internal business processes and the customer perspectives. Coles applies the balanced scorecard in implementing its vision and strategy. The balanced scorecard is of great significance as far as the objectives, initiatives, measures and targets of a company are concerned. It provides information by answering questions concerning the above perspectives (Baron, & Armstrong, 2005, 144). The greater concept of human resource management is applied in all firms especially the big, well established firms. Human resource management refers to the staffing function of management. It entails recruitment, training, appraisal, discipline, welfare and dismissal of employees (Crother & Green, 2004, pp.41). The most prominent concepts covered by human resource management include: segregation of duties, job rotation, and performance appraisal as well as on-the-job training. Coles employs all these concepts. Segregation of duties refers to the process of distinctly separating tasks in the organization. Every employee has to strictly stick to the description of their job. At Coles, the management insists that segregation of duties be carefully observed. For instance the accountant at a Coles store cannot perform the work of a cashier or a book keeper. Since Coles adopted this concept, its audit function has had an easy time in verification of assets and liabilities. Job rotation is a very common concept in the contemporary workplace. This refers to a human resource management process that entails moving one employee from one task to another within an organization at random intervals (Flamholtz, 1996, pp.126). The personnel management department at Coles encourages this concept. It applies rotation in enhancing internal audit procedures. It is very significant to management in the sense that in the long run all employees will be proficient in different tasks and can easily replace one another in the event of unforeseen disturbances. Coles has practiced this concept for a long time and currently, its results are seen in the reduced incidences of pilferage, fraud and theft. Job rotation also reduces the costs of having to train new recruits since manpower for all departments can be sourced from within (Dubrin, 2009, pp.61). The concept of performance appraisal is in line with recognition of employee efforts. It entails analyzing the performance of employees and evaluating the quality of their ideas. This is a function of the human resource department and is carried out annually (Porter, 1980, pp 65). Coles gives a lot of prominence to this concept. For instance the management at Coles organizes such events of employee of the year awards. Promotions are based on the results of performance appraisal. Coles continually executes appraisal on its staff with an aim of promoting hardworking nature amongst its employees. The management works on the premise that positive individual results translate to positive organizational results. Performance appraisal is an integral part of personnel management at Coles and it is one of the major reasons for the high degree of discipline among its staff. Another concept under the human resource function is the concept of on-the-job training. This is a form training where the recruits are trained in the process of carrying out their duties. This means that the instructors do not have to take employees and new recruits off their jobs (Scott & Jaffe, 1995, pp.78). They train them as they execute their tasks. The personnel department at Coles uses both on-the-job form of training and off-the-job training. However the former is more pronounced than the latter. Employees at Coles are continually undergoing training and instruction on current trends and new technologies. The concept has greatly cut down the costs associated with training Cole’s employees and fresh recruits. Such costs include the cost of advertising, recruiting, training and orienting fresh recruits. Another great unseen cost is the cost of time. Unlike off-the-job form of training the concept of on-the-job training saves time and financial resources (Schermerhorn, 2011, pp.146). The concept of motivation and rewards is one aspect of management that plays a key role on improving employee morale. Motivation is defined as efforts by the management to boost employee morale. Motivation takes the form of rewards, promotions, holidays and so on. Morale has been described as the strong will to perform the tasks assigned to an employee (Scott & Jaffe, 1995). Coles holds the belief that motivated employees work better even under minimal supervision. They have the morale to achieve both personal and organizational goals and objectives. Coles motivates its employees through annual promotions and end-year awards. The employment of this concept has assisted the organization uphold discipline and responsibility among its staff. This has served in creating a good corporate image for the company. Good image is associated with quality. And such presumptions widen the client base of an organization. The concept of change management is of great importance in all organizations considering the rate at which the business world is becoming more and more dynamic. The problem of resistance to change among employees and to some extent members of the top management necessitates the employment of such concepts as change management. Changes in such fields as technology call for extensive training and guidance as they are associated with fear of the unknown (Kotter, 1996, pp.67). Coles has change management as an integral part of its human resource function. At Coles, those entitled with the task of change management are considered leaders during training sessions. Coles has structured its training programs in such a way that it accommodates change managers whose main responsibility is to make the employees. The decision by Coles to adopt this concept has paid out well since they no longer experience the problems of adopting new technologies due to resistance by employees. Another important concept in the management process is benchmarking. Benchmarking refers to a process where a firm examines the standards of a better placed firm- usually the market leader- and uses those standards as the yardstick for evaluating its own performance (Adler, 2008, pp.141). Coles carries out benchmarking not only on other local organizations but also on other better performing firms overseas. Locally Coles carries out its benchmarking on market leaders like Woolworths. The employment of this concept has led to better standards of quality and improved personnel management. Benchmarking has had a great positive impact on the performance of Coles since through cross examining other companies It has improved its marketing strategies a great deal. Closely related to situational analysis is the concept of SWOT (strengths, weaknesses, opportunities and threats) analysis. This is the evaluation of an organization’s strong points, areas of weakness, the opportunities available to the company and the threats that a company is faced with. Such analysis assists a company in identifying possible areas where it can invest. This is very important to the owners of the company (Strank, 1983, 135). Coles integrates SWOT analysis into its planning process. The management capitalizes on the strengths and opportunities and tries to work on the weaknesses and threats. SWOT analysis is an all-inclusive concept and should be applied at all levels of decision making. The concept of open system relates to the interaction between an organization and its environment. The organization is a dynamic structure that interacts with its surroundings. It draws certain contributions from the surroundings and converts inputs to outputs that are somehow taken back by the environment. The organization as a system interacts with subsystems such as: the economic, the socio-cultural, political, the technical and the legal environments (Sims, 2002, pp.123). Coles interacts with its environment through all these subsystems in the sense that it operates in the legal framework of the country, works in accordance to the prevailing economic conditions and has its activities affected by political and socio-cultural factors. Coles also interacts with the environment through corporate social responsibility. Douglas McGregor, put forward his famous concept of X-Y theory in 1960. His two theories X and Y. Much as critics have condemned the theory as being rigid; it remains the basis for all the theories of management. Theory X is also referred to as authoritarian management, operates on the premise that workers are lazy and hate work. It argues that workers should be threatened with punishments in order to work effectively. Contrary to theory X, theory Y also known as participative management believes in the assumption that workers need to be treated like adults in order to be efficient. It entails consultative dealings between the managers and the workers (Verardo, 2000, pp.127). The management of Coles believes in and practices theory Y in directing their staff. The application of theory Y in Coles has led to better relationships between the stewards and the employees. In some extreme cases, aspects of theory X such as punishments like dismissal become necessary. In 1943, an American psychologist by the name Abraham Maslow introduced a concept known as the hierarchy of needs. This hierarchy was demonstrated in a pyramid known as the hierarchy of human needs. Maslow argued that human beings are motivated by their needs. The urge to satisfy their wants motivates them. At the lower levels of the hierarchy were such basic needs as food, shelter and clothing. Moving up the pyramid, there are advanced needs like self esteem with self actualization at the apex of the pyramid (Sims, 2002, pp.211). The management of Coles is aware of the fact that satisfaction of individual needs is the beginning of motivation. They therefore apply this concept through an employee welfare scheme and proper remuneration. As such, the workers get motivated and work hard towards meeting organizational needs. The concept Learning Organization is turning out to be a more and more prevalent idea in contemporary companies, from the best established global to the smallest business undertaking. The achievements of this idea depend significantly on the organization’s understanding and loyalty to it (Sims, 2002, 78). People at all levels of management at Coles, are continually increasing their capacity to produce better results within the framework of organization’s culture. Another concept is organizational culture which is the total of an organization’s past and present postulations, ideas, and principles that hold it together. Coles has a strong organizational culture that allows the practice of all other concepts that impact positively on the organization. Other concepts include the SMART model, expectancy theory, and goal setting. The SMART model relates to the objectives of an organization. The term SMART is an acronym that stands for the qualities of objectives, (Specific, Measurable, Attainable, Realistic and Time Based) Coles sets its objectives in line with these qualities. As such they have been able to achieve most of their goals. Closely related to the SMART concept is the goal setting concept. This concept is based on motivation and the belief that workers are motivated by goals that are achievable and realistic. It however advocates for the exclusion of the employees from the goal setting program. This is aimed at realistically challenging goals (Verardo, 2000, pp.111). The expectancy theory of incentive is a generally accepted hypothesis for elucidating how people make decisions concerning a variety of behavioral choices. It is based on the premise that when making choices people tend to go for those alternatives with the greatest motivation factor (Verardo, 2000, pp.90). This concept is motivation oriented and Coles practices it in boosting the morale of its staff. The workforce of Coles is highly motivated following the combination of this concept and other concepts such as rewards. One of the major factors that have a negative effect on the morale of the staff of Coles is the issue of conflicts. As such, the management has opted to introduce the concept of conflict resolution. This is a function of management that is handled by industrial counselors. These are people who are proficient in industrial psychology and counseling. They have been of great use in as far as reduction of conflicts and promotion of focus is concerned. This concept is at the core of Coles’ personnel management department. Finally there is the concept of Redefining administration as a Service arrangement. Regrettably, several administrators see the task of managing as an affair of controlling the conduct of the workforce. In actual fact, the members of management are stewards of the shareholders. They are agents and should act as such. They should therefore treat staff like adults rather than boss them around like children (Schermerhorn et al, 2011, pp.143). For a better performance, the employees need to feel respected and valued as the most important assets in the organization. Coles’ type of management is such that it makes the employees feel they can contribute to decision making in the organization. This has boosted cooperation between the employees and the stewardship. The mangers and the employees see their jobs as service to the organization. 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