How to Develop the Eastern Foods in the UK - Essay Example

HOW TO DEVELOP THE EASTERN FOODS IN THE UK Table of contents Overview of the challenges facing Eastern Foods in the next few months with regard toHRM, Accounting, Marketing and Operations Management 3 2. HRM in Eastern Foods - issues that need to be addressed 5 3. Marketing challenges that Eastern Foods has to face 6 4. Conclusion - Recommendation for moving forward 8 References 9 Appendix 12 1. Overview of the challenges facing Eastern Foods in the next few months with regard to HRM, Accounting, Marketing and Operations Management Eastern Foods is one of India’s most powerful firms in the food manufacturing industry (Eastern Foods, About us). The firm’s plan to enter the UK market is based on the high attractiveness of the country’s food industry. However, the success of the firm in the UK market will be depended on its ability to address all issues related to critical organizational sectors, such as HR, Accounting, Operations and Marketing. Particular reference should be primarily made to the HRM issues related to the particular business: by the 1st of May the restaurant’s job roles should be defined as of all their aspects, including daily tasks, working hours and compensation (Stahl et al. 2012). Also the skills related to its job position should be set, so that hiring for these positions to be developed with no delay (Gilmore and Williams 2012). The HRM issues of the restaurant are analyzed further in section 2 of this paper. Another organizational sector that should be carefully reviewed in advance is accounting. Chapman et al. (2011) notes that in all firms accounting can result to important challenges mostly because of the following facts: a) it is difficult for managers to choose in advance the accounting strategy on which the business operations will be based; for example, emphasis will be give on re-investing profits or using profits for covering operational costs, so that the borrowing is fully avoided (Chapman et al. 2011, p.709), b) the level of profitability of a business and the market performance cannot be predicted in advance, a fact that it is quite common in new businesses; in this context, Eastern foods should not adopt a strict accounting strategy but rather short-term accounting plans should be applied, so that alterations and replacements are feasible in case of market changes or low profits. At the same time, Al-Hakim (2007) explains that managers in new businesses should emphasize on the introduction of effective knowledge management systems. These systems can secure high speed and accuracy in regard to the knowledge transferred; under these terms the success of a firm’s accounting system is guaranteed (Al-Hakim 2007). In addition, managers in Eastern Foods have to face a series of operational issues, such as: a) would the operational framework of the business be the same as in the mother company, in India? B) Should innovative practices be introduced in order for the restaurant’s operations to be more aligned to the Western culture (Barnes 2008)? c) Which will be the exact form of the firm’s operating system? At this point, issues such as the quality of products offered to the customers and the maintenance of the restaurant’s equipment on daily basis should be addressed (Kachru 2009). Also, managers of Eastern Foods should decide on the exact range and daily capacity of food available in the restaurant (Lewis et al. 2006), the terms of production and the rules on which the presentation of the dishes to the clients will be based. The potential need for an IT system that could support effectively the management of the restaurant’s operations (Kachru 2009) should be also reviewed in advance, i.e. preferably before May the 1st or, at least, before July the 1st. Finally, reference should be made to the marketing issues that managers in Eastern Foods should address. These issues would include the potential cost of the marketing plan, the choice of the marketing tools (Kolb 2013), the review of the plan’s results and the research over the local market, especially in regard to consumers’ shopping habits (Harvard Business School Press 2013) and the performance of food products in general. 2. HRM in Eastern Foods – issues that need to be addressed Between May and September, when the first restaurant of the business is expected to open, the managers of the firm have to decide in regard to the staff required for covering all the operations of the restaurant. More specifically, the firm’s managers should estimate the number of employees needed, the characteristics of each role and the skills on which each position should be based (Lewis et al. 2006). At the same time, the financial aspects of the firm’s HR, such as the level of compensation for employees in all organizational departments should be reviewed in advance (Pynes 2013). This means that the minimum wage, the payment for overtime work and any monetary award related to performance should be decided before May 1st. According to Storey (2007) the HRM of each organization should include not only the level of compensation or the hours of work but also the strategy that will be used for securing employee motivation. In regard to the HRM of Eastern Foods, emphasis should be given to the following facts: a) the skills of workers in the modern market have been highly changed, compared to the past (Society for Human Resource Management, 2008). Today, emphasis is given on skills such as ‘adaptability, problem solving and leadership’ (Society for Human Resource Management 2008, p.9). In other words, following instructions and communicating effectively have become skills of secondary importance compared to the development of initiatives for addressing emergent organizational problems, a fact that should be taken into consideration by managers in Eastern Foods when defining the skills required for its position of the restaurant. Moreover, the HRM strategy of each organization can highly affect organizational performance. The relationship between HRM and business performance is presented in Figure 2 (Appendix). According to the graph a well planned HRM strategy can harm organizational performance if it is not applied appropriately, i.e. if the targets set by the strategy’s planners are not achieved. In other words, managers in Eastern Foods should focus on the development of a HRM that would be feasible, in terms of its costs, and effective in regard to the needs of the organization for employees of specific skills and experience. Wandera (2011) has tried to identify the effects of the mode of employment on business performance. The research developed by Wandera led to a series of important findings: a) temporary employment is not profitable for the organization, as probably believed; instead, it has been revealed that this mode of employment results to instability in regard to the business profits, meaning that it is rather impossible for the managers of a business to make a schedule in regard to the expected profits of the business when temporary employment is highly used, b) temporary employees are likely to have ‘lower morale compared to full-time employees’ (Wandera 2011, p.184); this result to low employee motivation and low employee performance (Wandera 2011, p.184). The close relationship between employee motivation and organizational performance is also verified in the study of Manzoor (2011). In the above study the power of employee motivation to affect business performance is made clear through a graph (Figure 3, Appendix). According to the above in Eastern Foods the use of temporary employment should be limited, and full-time positions should be rather created, so that employee motivation is high. 3. Marketing challenges that Eastern Foods has to face The marketing plan of Eastern Foods should include five phases: a) before deciding on the marketing plan of the restaurant the buying behaviour of consumers in UK should be reviewed (Harvard Business School Press 2013), b) the marketing trends followed by firms operating in the same sector, i.e. the restaurant sector of UK should be checked, as of their potential use for Eastern Foods (Kolb 2013), c) the cost of the marketing plan should be decided; the specific cost should be kept at average level (Kolb 2013), i.e. excessive investment on marketing should be avoided, at least within the first 6 months of business operations, so that profits are generated; d) the fourth phase of the plan would involve the choice of the appropriate marketing tools, based on the findings of the research developed in the three previous phases; in this phase also the use of each marketing tool in the promotion of the firm’s products/ services should be decided. Emphasis should be given on tools that are popular in the market, as for example TV and social media (Harvard Business School Press 2013); e) the fifth phase of the restaurant’s marketing plan would include a mechanism for controlling the plan’s performance and for making appropriate alterations, when necessary (Harvard Business School Press 2013). In regard to the marketing plan of Eastern Foods, the following issues should be taken into consideration: a) the effectiveness of traditional marketing tools, such as the advertisements in the press or the brochures, has been highly reduced today due to the development of technology (Lamb et al. 2010); b) when developing a marketing strategy marketers should employ a theoretical framework that has been already tested in practice; in this way, the failures and risks can be significantly reduced. Reference can be made, as for example, to the marketing mix (Lamb et al. 2010). Using the marketing mix the marketers of Eastern Foods should decide on the restaurant’s marketing strategy after reviewing four elements: b1) Product, i.e. the recipes of the restaurants as of all their aspects, including the ingredients and the presentation of the dishes to customers, b2) Place, i.e. whether the restaurant’s products would be available only in the restaurant or they could be also delivered outside, at home or at work, b3) Price; the price of the restaurant’s products should be decided taking into consideration the costs involved, including the costs of ingredients and the employee compensation; b4) Promotion; this element denotes the choice of a marketing strategy according to the resources available and the organizational goals (Lamb et al 2010). The marketers of Eastern Foods should choose marketing tools that are most popular in the UK market and which are within the marketing budget of the firm (Sandhusen 2008): social media would be an excellent, and cost effective, marketing tool, but TV advertisements would be also required. At this point reference should be made to the following fact: the culture of Eastern Foods is different from the culture of UK. Culture differences have been proved as quite powerful in affecting organizational performance (Lamb et al. 2008). For this reason, the marketing plan of Eastern Foods should be aligned with the Western culture so that it will be welcomed by local consumers. Of course, references to the Indian culture could be also included in the marketing plan of the restaurant, especially since the particular culture represents the cultural background of an important part of Britain’s population. 4. Conclusion – Recommendation for moving forward The food industry is one of the most important sectors of UK economy. The industry is characterized by high innovation; in 2011 ‘the new products of the UK manufacturing industry were estimated to 8,500’ (Food and Drink Federation 2014). At the same time, the specific sector shows trends of continuous growth (Figure 4). Indeed, for 2012 the contribution of the food retail sector in the ‘Gross Value Added of the UK food industry reached the 31%’ (DEFRA 2014, p.6). The high prospects of the UK food industry are verified through the table in Figure 5 (Appendix). According to the data included in the table, in UK the total consumption of households on food has significantly increased between 1990 and 2000, a fact that denotes the potentials of the sector for continuous growth (Figure 5). According to Ernst & Young (Figure 6, Appendix) the managers of restaurants across UK should emphasize on four strategies for securing the market position of their organization. These strategies should focus on the following goals: ‘a) to preserve capital, b) to optimize capital, c) to invest capital and d) to raise capital’ (Ernst & Young 2012, p.50). It is implied that efforts should be made in the sector’s firms for keeping costs low without lowering the quality of products/ services and without prohibiting expansion. In this context the success of Eastern Foods in UK would be secured if the following terms are met: a) the firm’s plan in regard to its various departments should be developed gradually, in the following sequence: 1. Operations, 2. Accounting, 3. HRM and 4. Marketing. The relevant plan would be ready by the 1st of May, so that the various parts of the plan can be applied, in the following two months; b) a mechanism should be introduced for monitoring the development of the various phases of the plan and c) no strict deadline should be set in regard to the achievement of the plan’s targets, especially as of the restaurant’s profits, taking into consideration the high industry’s competition and the lack of existing customer base. References Al-Hakim, L., 2007. Challenges of Managing Information Quality in Service Organizations. London: Idea Group Inc (IGI). Barnes, D., 2008. Operations Management: An International Perspective. Belmont: Operations Management: An International Perspective. Chapman,C., Hopwood, A. and Shields, M., 2011. Handbook of Management Accounting Research. Oxford: Elsevier. Department for Environment Food & Rural Affairs, DEFRA, 2014. “Total Factor Productivity of the United Kingdom Food Chain 2012.” Jan 30, 2014. Available at https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/275976/foodchainanalysis-productivity-statsnotice-30jan14.pdf Eastern Foods, 2014. Organizational website. Available at http://www.easternfoods.co.in/ Ernst & Young, 2012. “Pubs & Restaurants. Outlook” Available at http://www.ey.com/Publication/vwLUAssets/Pubs_and_restaurants_outlook_2012/$FILE/EY_Pubs_and_restaurants_outlook_2012.pdf Food and Industry Federation, 2014. “Statistics at a Glance.” Available at http://www.fdf.org.uk/statsataglance.aspx Ghafoor, S. and Khan, U., 2011. “Evaluation of expatriates performance and their training on International Assignments.” INTERDISCIPLINARY Journal of Contemporary Research in Business, Vol 3, No 4, pp.335- Gilmore, S. and Williams, S., 2012. Human Resource Management. Oxford: Oxford University Press. Harvard Business School Press, 2013. Understanding Marketing: Expert Solutions to Everyday Challenges. Boston: Harvard Business School Press. Kachru, U., 2009. Production & Operations Management. New Delhi: Excel Books India. Katou, A., 2008. “Measuring the impact of HRM on organizational performance.” Journal of Industrial Engineering and Management, Vol 1, Issue 2, pp.119-142 Kolb, B., 2013. Marketing for Cultural Organizations: New Strategies for Attracting Audiences. London: Routledge. Lamb, C., Hair, J. and McDaniel, C., 2008. Marketing. 10th ed. Belmont: Cengage Learning. Lamb, C., Hair, J. and McDaniel, C., 2010. Marketing. 11th ed. Belmont: Cengage Learning. Lewis, P., Goodman, S., Fandt, P. and Michlitsch, J., 2006. Management: Challenges for Tomorrows Leaders. 5th ed. Belmont: Cengage Learning. Manzoor, A., 2011. “Impact of Employees Motivation on Organizational Effectiveness.” European Journal of Business and Management, Vol 13, No 3, pp.36-44 Pynes, J., 2013. Human Resources Management for Public and Nonprofit Organizations: A Strategic Approach. 4th ed. Hoboken: John Wiley & Sons. Sandhusen, R., 2008. Marketing. New York: Barrons Educational Series. Society for Human Resource Management, 2008. “Critical Skills Needs and Resources for the Changing Workforce.” The Wall Street Journal, available at http://www.shrm.org/research/surveyfindings/articles/documents/critical%20skills%20needs%20and%20resources%20for%20the%20changing%20workforce%20survey%20report.pdf Stahl, G., Bjorkman, I. and Morris, S., 2012. Handbook of Research in International Human Resource Management. Cheltenham: Edward Elgar Publishing. Storey, J., 2007. Human Resource Management: A Critical Text. Belmont: Cengage Learning EMEA. UK Government, 2001. “National Food Survey.” National Archives. Available at http://webarchive.nationalarchives.gov.uk/20130103014432/http://www.defra.gov.uk/statistics/files/defra-stats-foodfarm-food-familyfood-nfs-2000.pdf Wandera, H., 2011. THE EFFECTS OF SHORT TERM EMPLOYMENT CONTRACT ON AN ORGANIZATION: A CASE OF KENYA FOREST SERVICE. International Journal of Humanities and Social Science, Vol 1, No 21, pp.184- Appendix Figure 1 – Key skills for today’s workers, compared to the past (dark green: old workers, light green: new entrants, source: Society for Human Resource Management, 2008, p.9) Figure 2 – HRM strategy and business performance (source: Katou 2008, p.122) Figure 3 – Employee motivation and business performance (source: Manzoor 2011, p.39) Figure 4 – Performance of food industry as combined with the economy’s performance, UK (source: DEFRA 2014, p.3) Figure 5 – Household food consumption in UK for 1990 to 2000 (source: UK Government 2001, p.5) Figure 6 – Issues on which managers of restaurants in UK should focus (source: Ernst & Young 2012, p.5) Figure 7 – Cost of training vs. expatriates turnover (Ghafoor et al. 2011, p.343) Read More