Implications of Decision Making, Globalisation and Motivation on Aldi - Case Study Example

Name: XXXXXX Course: XXXXXX Institution: XXXXXX Date: XXXXXX Aldi Introduction Aldi, a German based discount supermarket has been significantly expanding its markets especially in the United Kingdom and Australia. By implementing its strategic plan which involves purchasing a 15,650 sq ft store at Chase Gateway, extending its liquor offering and creating over 3,000 jobs, the company hopes to increase its customer base and competitive edge in the market (Birchall 2012; Birmingham post 2012; Greenblat 2012). This essay seeks to analyse three aspects of management namely; motivation, decision making and management in the global environment with reference to recent article on Aldi authored by Birchall (2012), Birmingham post (2012) and Greenblat (2012). Foremost, this essay looks into the role played by motivation in steering the organisation to achieving its strategic goals. The second part examines decision making regarding the company’s key activities and ventures particularly in light of the risks involved. Moreover, this essay will examine aspects relating to management in the global environment. In this case, it will highlight challenges and opportunities that this aspect of management presents to Aldi. In addition, this essay will examine the implications that motivation, decision making and globalisation has on the company, its employees and competitors. Motivation According to Mawoli &Babandako (2011, p.1), motivation is an inner drive that pushes individuals to act or perform. The fundamental aim of any organisation is to successfully attain its goals and objectives. Over time, many organisations have come to the realisation that employee motivation is paramount in the realisation of organisational goals and objectives (Waddell et al 2007, p.193). As a result, a considerable number of companies significantly invest in motivating their employees. In the article, “How the times have changed”, Birchall (2012) observes that Aldi is in the top 100 list of companies that graduates prefer as their potential employer. Nevertheless, Aldi’s ranking as a potential employer has dwindled with time although the company offers fresh graduates a salary of 40, 000 pounds and an Audi car. The decline in Aldi’s ranking despite of this incentives raises questions whether incentive based motivational strategies are effective and whether Aldi’s existing employee motivation strategies are effective (Birchall 2012). Abraham Maslow’s Theory of motivation (1943) provides significant insight on employee motivation. It suggests that motivation comes as a result of an intrinsic urge to satisfy certain needs. Maslow groups these needs into a hierarchy comprising of five levels needs namely physiological needs (food, clothing and shelter), security needs(property, health, resources, employment and physical employment) self-esteem needs (a sense of belonging, family and friendship) and self-actualization needs(a sense of fulfilment and achievement) respectively (Landy & Conte 2009, p 371). Maslow notes that the needs on the bottom of the hierarchy such as physiological and security needs must be met in order for an individual to aspire or become motivated to meets the needs in the upper levels of the hierarchy. Based on Maslow theory of motivation one can argue that Aldi’s strategy to attract fresh graduates by offering a salary of 40, 000 pounds and an Audi car can be an effective move for motivating fresh graduates to join the workforce and be diligent in their work. Basically, this offer may meet the physiological needs of the company’s employees. Nevertheless, after meeting the physiological needs of its workforce there is need for Aldi to employ other motivational strategies in order to attract new graduates, retain its employees and motivate them to work efficiently. Morell (2011, p. 318-323) observes that motivational strategies not only involves the use of monetary rewards but also non-monetary rewards. One can attribute Aldi’s decline in rankings as a preferred employer to the fact that the company has centered its employee motivational strategies on monetary rewards. There is therefore need for the company to focus on non-monetary motivational strategies such as providing employment security, provision of career advancement opportunities for employees, training, learning , education development opportunities for employees, recognition and praise or what Ciulla (2000, pp 116-118) refers to as providing a “meaningful workplace.” On the other hand, Chandler & Richardson (2008 p. 19) are of the view that mangers cannot motivate their workers and that they should stop trying altogether. They are however optimistic that the key to motivation lies in knowing where motivation originates from. They also believe that motivation can only come from within one’s self, that it is a choice that employees make whether to get motivated or not (Chandler& Richardson 2008). Baumeister and Vohs (2007, p. 2) regard motivation as self-regulation or an attempt by persons to constrain unwanted urges to tailor their behaviour so as to follow rules or pursue goals. Employee motivation can either come from internal drive or external drive. An external drive may be brought about by factors such as punishment or positive reinforcement on the part of the employer. On the other hand internal motivation comes from setting personal goals to achieve in a given timeline or the feeling of equal treatment in comparison to other employees in the organization (Ciulla 2000, p. 116-118). Thomas and Martin(2012) explain that Aldi plans to expand its’ Market into Britain and promises fresh graduates jobs with earnings that could appreciate to 63, 500 pounds in a period of four years coupled by the privilege of owning a company car. Whereas this may serve to motivate fresh graduates to send applications to Aldi, the company must recognise that motivation is divided between extrinsic and intrinsic rewards, as such managers in Aldi should consider the kind of motivation they offer their employees to achieve the desired motivational effect. Shanks (2012, pp. 32 -33) presents a few misconceptions that managers must avoid when tailoring motivational strategies for their workers. These misconceptions include the notion that motive people are born not made, that motivation is just but manipulation and one –size-fits-all kind of motivation strategies. Decision Making Aldi plans to sales alcohol at discounted prices in its outlets in Mt. Kuring-gai, has elicited mixed reactions from residents. A cross-section of the residents have expressed concerns over alcohol consumption trends amongst underage members of their community due to the sudden availability of cheaper alcohol whereas some endorse the decision of the company to sell alcohol terming it convenient as well as economical compared to other retailers in their reach. The management of Aldi is therefore faced with a dilemma that requires sound decision making on whether to continue or halt its plans. Decision making can be described as the process through which a choice is made between several courses of action (SQA 2009 p. 10). Decision making process is composed of three main elements that involve exploring opportunities that require decisive steps on the part of management, considering options that are available for commencement of the decision making process and selecting a course of action that is most appropriate from the available options. Courtney (2001 p. 17) notes that managers are faced with decision making instances that may include social, political, environmental and economic concerns. In the case of Aldi, the decision to sell alcohol at its Mt. Kuring-gai outlets was non-programmed and was preceded by a series of wide consultations with community members. The decision was made using the classical model, where the management of Aldi identified the problem as whether to sell alcohol at these outlets, developed alternatives (selling or no selling), assessed these alternatives through consultation with community members, chose to sell alcohol as the best solution for all stakeholders involved and proceeded to implement the decision. However, the decision elicits a number of ethical issues. For instance, one can argue that although this move may increase the company’s profitability, it is unethical for the company to introduce the sale alcohol at discounted prices in its outlets in Mt. Kuring-gai mainly because it may lead to alcohol-related violence and underage drinking. This kind of argument is based on a consequential outlook on ethics which determines the morality of an action based on its consequence. Others would argue that Aldi should avoid selling cheaper alcohol out of the Kantian deontological imperative which states that an action is only ethical if the motivation is good regardless of the consequences. Globalisation In simple terms globalisation refers to the phenomenon of increasing interconnectedness of social, political and economic aspects in different regions of the world such that events in one part of the world are shaped by others in a different geographical space. Economically, globalisation is manifested by the increasing interdependence of world economies as a result of the growing scale of cross-border trade of commodities and services, flow of international capital and the rapid spread of technologies (Shangquan 2000, p.1). Aldi’s expansion has seen it venture into markets far and wide opening branches in other parts of the world. The expansion of the firm touches on the social political and economic aspects of the nations in which it extends its market share coverage. For instance, Greenblat (2012) discusses efforts by Australia-based Aldi CEO Tom Daunt to push for reforms in legislation to allow Aldi to compete with established chains such as Woolworths and Coles. This move is expected to put in motion plans by Aldi to extend its market coverage in the region and bring about the much needed competition among major players in the market given its track record of trading at lower prices. Globalisation proves to be an extremely challenging undertaking for Aldi but one promises profitability if handled appropriately. Some of the hurdles in the globalisation process among other factors include social, political and economic aspects. In the case of Aldi, political reforms as related to the ease of legislation towards zoning has led the head in charge of operations of Aldi in Australia to engage the government in formulating conducive regulations to allow smooth penetration and expansion of the company in the Australian market. However, globalisation is not limited to policy reforms only. A host of political, social and economic factors may also present problems for the globalisation process. Globalisation brings about more positive than negative effects ranging from employment creation, harmonisation of goods and services and increased competition to increased connectivity of the world at large. Bacchetta& Jansen (2011 p.39) state that it is the responsibility of major stake holders in the globalisation process such as managers of major corporations with branches all over the world to try and identify the groups of in society that win or lose from globalisation. In the case of Aldi, receiving mixed reactions from residents of Mt Kuring-gai as highlighted in Hornad (2012) is an example of the challenges companies face due to globalisation as they are at times expected to conduct business in an ethical manner that does contradict the residents’ values and belief systems.In most cases, this may serve as an impediment to the success of such an organisation in attempts to becoming globalised. Bunzl (2011 p.16) concludes that the success of any organisation targeting globalisation of its functions squarely lies on the capability of such organisations working hand in hand with various stakeholders like trade unions and governments to tailor policies for global governance. This will ensure uniformity and the ease of operations in different locations around the world. Implications of Decision Making, Globalisation and Motivation on Aldi The implication of poor decision making on the part of management results in general poor functionality of the entire organisation. Fischhoff and Parker (2005, pp 2-3) describe effective decision making as Decision-making competence (DMC) and their studies suggest that people with tendencies of high DMC are associated with successful ventures and interactions. However, this is opposite for persons with low DMC. The management and employees stand to benefit if the organisation is guided by quality decision making. Chowdhury (2007 p. 240) suggests that both extrinsic and intrinsic motivation lead to improved performance of employees, the implications of having intrinsically motivated staff for management is that the organisation achieves its objectives with the individual contributions coming from a workforce of motivated staff at all levels of hierarchy. However, lack of motivation results in a backlog of incomplete work and incidences of poor performance by workers in the organisation. The management then has to grapple with effects that unmotivated staff brings about such as poor service delivery leading to a dented image that in the long-run translates into losses borne by the firm. Globalisation on the other hand has implications pertaining to the expansion of the organisation which brings about several social, political and economic challenges as well as and opportunities. The management and employees must therefore endeavour to accommodate diversity in their organisations as it is paramount for the success of the firm venturing in an increasingly globalised market. Conclusion Aldi is on the verge of significant changes as it expands into the global market. To realize its strategic objectives, it should address key issues pertaining to decision making, globalisation and staff motivation. The management of Aldi should devise the most appropriate motivational techniques for their employees. Decision making in contemporary times also demands that managers take a systematic approach in identifying a problem and strategizing on a course of action to ensure that decisions made are effective (Shanteau 2001pp 913-914). Globalisation of organisations is a lucrative venture that every company must endeavour to achieve, however it is important that managers engage stakeholders in trade unions and world governments in tailoring policies towards global governance so as to ensure sustainability of the globalisation process (Bunzl 2011). References Bacchetta M & Jansen M 2011, Making Globalisation Socially Sustainable, International Labour Organization and World Trade Organization, WTO Publications Manager, Geneva. Baumeister FR &Vohs DK, 2007, ‘Self-Regulation, Ego Depletion, and Motivation’, Social and Personality Psychology Compass Vol.1, pp 1-10. 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