Management Concept in Contemporary Environment - Essay Example

Management Concept in Contemporary Environment (Coles) Student’s Name: Instructor’s Name: Course Code: Date of Submission: Introduction In the contemporary business environment, management is a critical function for any organization that is looking forward to excel in its core works. This is because management seeks to identify what the organizational goals and objectives and thereafter embark on a journey to determine what kind of activities that should be put in place to ensure that the stated objectives are realized. Measures and control of the predetermined activities are also a responsibility of the management team. The management team can play a number of major roles and responsibilities which include planning, organizing, staffing, directing and controlling. In the contemporary business environment which is now very dynamic many changes are being witnessed including change in technology change, diverse demands from the employees and other stakeholders and the need to be a responsible citizen by taking into consideration the social and economical impact of the business to the society (Productivity Commission 2011). This kind of scenario is therefore calling for the need to employ different management concepts like organizational design and structure, remuneration management and improving communication and many more as one way of ensuring that the business is able to adapt to the changing environment by enhancing its effectiveness and efficiency. Cole which is the second largest retailer in the Australian after Woolworths is one such company that has employed different management concepts that has seen the company recover from its woes after it was acquired by Wesfarmers in 2007 (Condon 2012). The question that this assessment is seeking to answer is the identification of different management concepts which are relevant to the case of Coles and giving its significance in the field of management and in particular the case of Coles. Management concepts The case of Coles provides an example scenario whereby an organization that is almost collapsing is saved by employing different management ideas and concepts. In the case it is provided that before the purchase of the Coles Retailer by Wesfarmers in 2007, it is management was highly inadequate. This problem had greatly been contributed the rampant mistrust, blame game and politicking culture by the staff at all levels. The noticeable effect of this kind of situation is failed efficiency and effectiveness. This is because the management was not able to put into maximum use the available resources. Effectiveness which can be described as the process of doing the correct thing to help an organization achieve its goals and objectives was lacking in the company since a lot of bureaucracy and organizational politics dominated the management team. This also led to a confused strategic direction for the business. Failure to streamline management functions at Coles led to high level staff dissatisfaction and increased turnover as since the management could be able to modernize the business to meet the diverse expectations of various stakeholders in the contemporary society. However, after the purchase of the company by Wesfarmers in 2007 which led to change of its management, could see the company turn its fortunes because of the way in which the new management of talented, experienced and committed staff who chose to apply different management approaches which are identified below. Communication improvement Wesfarmers which purchased Coles believes that it is in a better position in terms of operations and that it has carefully been analyzing the company and are determined to revive it and return it into its former glory. Since the purchase of the company in 2007, communication is considered central to the company success. Communication in an organization takes very many different forms. Communication is always aimed at ensuring that all the stakeholders are informed of what is happening in the business and how they are likely to be involved. Communication in a management environment is important in establishing good relationships with the suppliers, customers and employees (Condon 2012). At Coles communication is a leeway to success. This is because it allows various stakeholders who include the employees, suppliers and investors to participate in important issues affecting the company. Citing the case of Coles, lack of proper and comprehensive communication had contributed greatly to the company’s failure. For instance when at Coles, was of significance when relating to the investors, lack of it was experienced when dealing with the suppliers and the employees. This can be learnt from the case of Coles when the company was being criticized of squeezing Australian farmers. This is because the company was paying less to the farmers when placing a bigger budget for bonuses and remuneration. For example, during the financial year, the company was paying over $11.1 million as bonuses and $15.6 million as remuneration. In such a case therefore, the company was considering improving communication structures so as to allow individual stakeholders have their concerns being addressed directly (Coles 2012). The implication of this management concept therefore, in the case of Coles is that an appropriate structure which is comprehensive and holistic be developed to involve all key stakeholders in matters affecting the company. Remuneration package Remuneration is what the employee gets paid by the company for the services rendered. This concept is very important to a management context. This is because with good remuneration the employees are likely to be more satisfied even though the motivation outcome cannot easily be achieved because of the different factors like work environment. According to Herzberg’s two-factor theory, since remuneration can only be categorized as an intrinsic factor which can lead both to motivation and satisfaction of employees. This concept has been conspicuously presented in the case of Coles’ retailer as part of the company effort under the new management team to help rebuild the company by trying to motivate its staff (Schermerhorn et al 2011). When the company was bought by Wesfarmers, according to Bob Every, who is the chairman of Wesfarmers, it was severely underperforming and something needed to be done to improve its performance. by then it was maintained by the company that the only way that Coles would be able attract world class employers to work in the retailer, is by offering good remunerations that are accompanied with heavy payment of incentives. However, this could not help much in making the employees perform because the remuneration approached more appeared to be less effective (Speedy 2011). This is because there were no control measures and other metrics to determine the relationship between remuneration package and performance outcome. It is with this respect that the new management team in the company took the responsibility of redefining its remuneration package so as to ensure that its performance based. According to Ian McLeod who is the company CEO, using a remuneration package on well challenging targets for the employees, could significantly help the company improve on its performance and create good benefits both the company and its shareholders. The implication of this management concept to the company is that whatever remuneration package used, must correlate with the company performance which must be ascertained. Organizing Organizing can be described as the process of trying to arrange people together with other resources so that they can work together as a team towards realizing a given objective. In a management environment, organizing is important in ensuring that people and other important resources are able to work together for a common goal and it involves this entails the action of creating the division of labor for particular task performance and coordinating all the results to achieve a common purpose. However, most important to note here is that organization design is very necessary. According to (Anderson 1988), organizational design entails a series of decisions which are aligned to the strategy of an organization in terms of goals and purpose, tasks, structure, information organization, decision and reward systems and the people who are expected to carry out various tasks. This is especially important in ensuring that important pillars for organizational performance are put in place starting with labor as a very important resource. In the case of Coles, organizing is becoming a very important aspect of management given the size of the retailer. The company before purchase by Wesfarmers had over 105,000 staff, with 740 managers and 66 regional managers as well as 16 general managers who were working in the company’s 750 retail stores. The way this management concept is applied in the company is undertaking a comprehensive restructuring that covers design so as to ensure that all groups are working as one family with some sort of independency. This was especially desired to make sure that a lean and manageable team was in place which could facilitate easy recognition of individual effort and provision of credit (Coles 2012). The implication of this management concept to Coles is to ensure that the organizational processes and activities are all performed with a common purpose of improving organizational performance. Planning Planning entails the process of determining what activities that should be done to achieve a given goal and how they should be performed. Planning in a management environment is of great significance. This is because it helps the organization to identify key milestones to success and what ought to be done to achieve a stated objective. In the case of Coles, despite having a planning in the previous regime of management, now it’s being applied by with a very different approach. after the purchase of the company in 2007, Coles took the initiative to develop a comprehensive plan known as “circle of success.” this plan covered six major important business aspects that could be used by the company to excel and sustain itself in the competitive industry (Burrow 2007). the six aspects to be covered in the and which are all company goals include better value for the business, better services, quality and fresh food for the market, decently designed and smart stores, and excellence on-shelf availability as well as best customer experience. These organizational goals were being supported by 10 cross-functional programs which include buying, store operations and support, customer service, distribution, the store network, exclusive brands, customer service, fresh food value and marketing (Schermerhorn et al 2011). This was significant to the business in terms of planning and could help the business realize its long-term goals and objectives. The implication of this concept to Coles is that the company will have to integrate its major functions which include marketing and operations as well as finance to ensure smooth delivery of services to the market. Technology management Technology involves using the latest tools of communication where internet is being one of them to help facilitate business transactions. In a managerial context, technology is very instrumental in ensuring all programs are linked together and that various functions including marketing, operations and finance are able to access important information on which important decisions like promotion, investment and new product development can be based Greenblat & Hawthorne 2011. At Coles this concept is highly valued and more especially after the purchase by Wesfarmers in 2007. New technology is very vital in facilitating the company’s internal systems and programs and especially those that are related to ordering. for instance the automation of the company’s ordering system was introduced to service quality is improved especially in delivering fresh and quality products and enhancing coordination among different warehouses and suppliers. This concept has proved to be very instrumental. Since its introduction, the company has managed to ensure smooth flow of stock without any shortage and maintaining it most convenient levels (Wesfarmers Limited 2009). At the same time, sales have also increased while wastage of fresh foods and markdowns has also reduced significantly. The implication of this management concept is that the company introduces an internal program that supports fully the use of the automated systems so that all functions can be at the same level. Staff management Staff management is an important function for any organization that is intending to make good use of its labor force since it entails acquiring the best people, encouraging best practices and ensuring that each and every person is given an opportunity like any other to participate in goal achievement. The importance of employing strategic human resource management in an organization is particularly aimed at supporting an organization to reaching an objective by employing a strategy that human resource can support and bring about the intended change. At Coles, human resource is an important factor given the size of its workforce and the number of retail outlets it runs (Burrow 2007). For instance before the purchase of the company by Wesfarmers in 2007, job security was a big issue in the company. This is because over 70% of those who worked in the company employed were on casual basis. According to Stuart Machin who is the director of stores, the approach to have majority of the employees working in the stores to be working on casual basis, contributed greatly to poor performance by the employees. With the concept of staff management as designed by the company new management team, the situation is changed for the better now and performance has continued to improve. This is because unlike in the past, over 80% of those employees working in the stores are now on permanent basis. Further, absenteeism has fallen from about 12.5% in 2007 to 3% in 2011 thanks to the 24 hours a month that has been guaranteed to each casual worker. On the same line, employee turnover has also decreased significantly from 37% to 26% following high level of employee satisfaction. This concept has therefore helped the business to enhance its staff development for the good overall development of the business (Wesfarmers 2012). The implication for the business therefore is to put in place the most suitable staff management approaches that could ensure that all staff across all functions are involved and issue affecting them addressed. Training and development The concept of employee training and development can be described as a process of instilling different skills and knowledge to the staff with the aim of enhancing their proficiency and competence levels. In management, training and development of employees is especially important when preparing employees to take up new and more challenging roles in the business (Schermerhorn et al 2011). This is because an individual to acquire the most suitable skills to carry out specific functions. In Coles, training and development of employees since the purchase by Wesfarmers in 2007, has been of great significance. according to Durkan John the merchandize director, training and development has been revived and each employee goes for training twice a year a according to Wesfarmers chief executive Richard Goyder, training and development is paying off and can show some good prospects into the future (Wesfarmers 2012). The implication of this concept is that, the organization be structured in away to establish a function in charge of employee training and development. Conclusion As management environment has continued as also did the management concepts. This is to ensure that the business is well adapted to fit in the challenging environment. This assessment that was aimed at answering the question of management concepts in the contemporary business environment with particular reference to Coles Retailer has identified various management concepts applicable today and they include communication improvement, remuneration package, organizing, planning, technology management, staff management and employee training and development. In general, it can be argued that the success of any company is depended on the management concept that is being applied. References Burrow, V. (July 3, 2007). A $22bn win, but does it stack up? The Age. Retrieved from: http://www.theage.com.au/news/business/a-22bn-win-but-does-it-stack- up/2007/07/02/1183351124247.html Coles. (2012). All about Coles 2011. Retrieved 15th Dec 2012 from: http://www.coles.com.au/portals/0/content/images/about-coles/sustaina bility/246974_Coles_CommunityReport_2011_A4L_KIND2_LR.pdf Condon, J. (2012, August 16). Supplier, customer relationships key to Coles' retail strategy. Retrieved from: http://beefcentral.com/p/news/article/2042 Greenblat, E & Hawthorne, M. (2011, February 12). Coles takes the battle to Woolies. Retrieved from: http://www.theage.com.au/business/coles-takes-the-battle-to-woolies- 20110211-1aqp8.html Productivity Commission PC. (2011). Economic structure and performance of the Australian retail industry. Canberra, Australia: Productivity Commission. Retrieved from: http://www.pc.gov.au/__data/assets/pdf_file/0019/113761/retail-industry.pdf Schermerhorn, J.R., Davidson, P., Poole, D., Simon, A., Woods, P. and Ling Chau, S. (2011). Management: Foundations and Applications, Wiley, 1st ed. 2011 Speedy, B. (2011, February 01). Coles strengthens sales growth against arch-rival Woolies. The Australian. Retrieved from: http://www.theaustralian.com.au/business/coles- strengthens-sales-growth-against-arch-rival-woolies/story-e6frg8zx- 1225997695760 Wesfarmers Limited. (2009). Westfarmers.In Coles Sustainability Report 2009. Retrieved December 8, 2012 from http://www.corporate- ir.net/Media_Files/IROL/14/144042/WES09-xxx%20Sustainability%20Report.pdf Wesfarmers. (2012). Wesfarmers Annual Report 2012. Retrieved December 5th, 2012, from Wesfarmers: http://thomson.mobular.net/thomson/7/3319/4677/ Read More