The Effects Of Human Resource Attributions on Employee Outcomes During Organizational Change - Case Study Example

Institution : xxxxxxxxxxx Title : xxxxxxxxxxx Tutor : xxxxxxxxxxx Course : xxxxxxxxxxx @2015 Table of Contents 1 Executive summary…………………………………………………………………..3 2 Findings from the case study………………………………………………….…….3 i. Consumer satisfaction ………………………………………………….3 ii. Branding…………………………………………………………………4 iii. Human resource management…………………………………………....4 iv. Marketing promotion…………………………………………………….4 3 Discussions…...............................................................................................................5 v. Consumer satisfaction ………………………………………………….5 vi. Branding…………………………………………………………………6 vii. Human resource management…………………………………………....6 viii. Marketing promotion…………………………………………………….7 4 Conclusion……………………………………………………………………………7 5 Recommendations …………………………………………………………………...8 6 Implementation …………………………………………………………………..….9 7 Bibliography…………………………………………………………………….…..10 Flight Centre Limited Case Study Executive summary Flight Centre Limited is an Australian multinational travel company. It runs approximately 2,000 stores across various foreign countries such as the UK, Canada, US, New Zealand, China, and South Africa. The company has a large workforce comprising of over 4000 employees and boasts of a total of 20 brands to its name. Flight Centre has been highly successful in the past. As a service based organization, it associates this with the keen the attention it pays to customer experience. However, it is looking to improve the levels of customer experience as a means to guarantee better performance in the future. In this regard, it contracted Colmar Brunton to undertake a market research on its behalf. This research focused on customer experience and how its various metrics impact on revenues. The research found out that Flight Centre has a strong following in the market as most respondents gave high approvals of overall experience and service quality. However, it also revealed weaknesses in branding and value addition. Several theories will form the basis of discussions in the subsequent sections. They include consumer satisfaction, human resource management, market segmentation, and marketing promotion among others. Findings from the case study Flight Centre case study has revealed several problems within the organization. The following is a discussion of the problems drawing upon evidence from the case and conventional marketing concepts; Consumer satisfaction The case has identified that Flight Centre does not satisfy consumer needs to their expectations. This is clear from the value for money metric score where the best manage only a 51 score. This implies that the customer experience offered does not conform to the price charged to consumers. There are two explanations for this. Perhaps Flight Centre could be overpricing the product offerings. On the other hand, the customer experience levels could be below expectations. In marketing, high consumer satisfaction is only possible when the marketers have clear understanding of consumer needs. All marketing activities from product development to promotion and selling must revolve around these identified needs (Harris & Stone 2007 pg 50). In this case, Flight Centre might not have in-depth understanding of the consumer needs. And if it does, the only logical explanation for the case is that the marketing mix elements are deficient in their efforts to meet these needs. Branding The study also reveals that the Flight Centre brand is not a strong one. Its reputation metric has 48 and 35 scores for the best and worst stores respectively. According to marketing, a brand is a company's promise to deliver aforementioned utility to the consumers. The fact that the brands have below average perceptions implies they are not doing what they company’s promises (Thellefsen, Sørensen, & Danesi 2013 pg560). From the study, reputation drives a store’s revenues respective to its level. Therefore, it is critical that the stores have better reputations to increase future performances. Furthermore, Flight Centre has too many brand names, 20 in total, which could be part of the problem. With such a number, it is possible that it does not provide the required attention to each. This low consumer perception of the brands could also be as a result of ineffective branding strategies. Maybe there is nothing wrong with the brands. Perhaps Flight Centre could be directing unsuitable brands to certain target market segments. Human resource management The knowledge and expertise metric realized 53 and 39 scores for the best and worst stores respectively. This is a likely indication of problems to do with human resource management. These low scores imply that the over 4,000 travel consultants do not fully undertake their allocated tasks. As a travel company, the employees could not be providing satisfactory responses to consumer queries at the premises. The first assumption is that the employees are not fully qualified. This is why they fail to dispense their mandate to the market and consumer expectations (Dusheng & Zhongming 2014 pg1440). The other assumption is that the employees might be qualified but are not in touch with the factors prevailing in the wide market and the travel destinations. In terms of revenue growth, knowledge and expertise do not have massive impacts on revenue growth in relation to other metrics. However, this should not come as a relief to Flight Centre. This is because the effects of this metric only manifest in the long term as opposed to the others which are short term. As a result, it is much more potent in terms of determining future growth. Flight Centre should capitalize on this opportunity to rectify its human resource management practices. Marketing promotion The consumers clearly have trust issues with Flight Centre. The study shows 59 and 44 scores for the best and worst stores respectively. Therefore, consumers do not view the company as a trustworthy entity. Trust is one quality which requires time to build. The only way this is done is through marketing promotion which reaches out to the consumers to explain to them the company's product offerings among others. Therefore, these low scores reveal issues with ineffective or unethical promotional activities. The promotions could possibly be misrepresenting the characteristics or attractions in the destinations. Their main aim could be to create demand while paying very little attention to the actual state of the attractions. As a result, consumers rely on the promotions details to make travel decisions end up disappointed when the destinations do not live up to their expectations. Discussions From the above section, the case study has successfully assisted in pointing out the problems Flight Centre is facing. As a way forward, it is advisable to devise several solutions to the problems. This approach will ensure the company carefully explores all possible avenues to address each. The following is a discussion of the solutions to the identified problems. Consumer satisfaction The first solution to increase customer satisfaction is to undertake market segmentation. Consumer groups are different and so are their needs. In reference to the travel market, they each require different attractions to satisfy their travel needs. With segmentation it will be much easier to provide each consumer group with the relevant services for higher attraction (Lazicki, Vernberg, Roberts, & Benson 2008 pg270). Another advantage is that it facilitates effective marketing in targeting only the relevant audiences. However, the disadvantage is that it will require restructuring of the organization. Various resources have to be reorganized to focus on selected consumer groups. Such efforts are costly as they might even require the acquisition of new resources to accommodate increased organization activities. Another solution is to implement a low price strategy. Consumers have openly confessed that they do not receive value for money in relation to customer experience. There are high chances that competitors with lower prices could appeal to and snatch these consumers from Flight Centre. The advantage of this strategy is that the reduction of prices could go a long way in retaining these customers. In addition, it could lower their expectations of the experiences making them derive high value for money. The downside of this strategy is that it will decrease the profit margins. Since consumers associate high prices with quality, it could also wrongly communicate to the consumers that it incorporates low customer experience in its offerings. Branding There are two solutions to the low perceptions of Flight Centre brands. The first is effective branding strategy. The first step is to identify and modify specific brands with the respective target segments. Afterwards, Flight Centre needs to implement a hybrid strategy relying on both traditional and online media. The former will be critical in increasing wider market awareness of the travel options whereas the latter will reach out to the specific consumer groups (Dennis, Fenech, & Merrilees, 2003 pg184). Towards this, the latter will rely on discriminative marketing to provide relevant information to every market segment. The advantage of this is to increase the affinity of various consumer groups to their respective brands. This will go a long way in increasing their level of brand perception as they are tailored to their needs. The disadvantage is that it will trigger the balkanization of consumer groups. The second solution is to reduce the number of brands from twenty to a few that it can handle. The advantage is that this will guarantee maximum and undivided attention on each brand. However, the disadvantage is that this will have profound impacts on the other strategies. It does not augur well for the increased market segmentation and their respective brands which are some recommended solutions in the report. Furthermore, it will also require letting go of some segments leading to lower revenues and profitability. Human resource management The first solution to the human resource management problem is constant development of the workforce. This will require hiring of only the most qualified candidates and constant training of all employees on new developments in the travel industry. The benefit of this strategy is that it will ensure the organization has qualified employees that are equal to the task at hand. It will also equip them with skills and information to better attend to the customers (Jain 2014 pg7). However, the disadvantage is that it will increase the operational costs in relation to training and remuneration. The second solution is relying on online and automated transactions in attending to the customers. This option will not only facilitate flexible remote transaction and reduce operational costs but also conform to market trends as most transactions are now automated or occur online. The disadvantage is that it will make some employees redundant. Furthermore, not all customers are internet savvy as some require physical guidance while transacting. Marketing promotion Implementing an effective public relations department is a possible solution to the marketing promotion problem. This will be critical in expounding on the messages in the marketing promotions. In addition, it will also collect information on consumer demographical changes in order to design options better suited to their needs (Murphy, Laczniak, & Lusch 2010 pg199). The downside is that it could fail to address the problem if it regurgitates the messages in the promotion. The second solution is to undertake factual promotional campaigns. This strategy will ensure that the destinations fit their exact description during promotions. However, this does not imply that it will assist consumers in the decision making process. The disadvantage is that it could actually dissuade them from visiting the destination which is not the aim of any promotion. Conclusion Flight Centre is a force to reckon with in the travel industry. The company has successfully created consumer loyalty with most declaring willingness to recommend its services to others. This is a clear indication of their faith in the company with the high ratings on the overall experience and service quality. Flight Centre will also see high numbers return purchases as most are not expected to switch to competing options. However, it must do something concerning value addition and marketing. The customers derive lower experience from its services in relation to both the prices charged and attractions drummed up in the promotions. The brands are also moderately weak and require effective strategies to restore their dented images. The same is true about its marketing strategies which have brought the company's name into disrepute as an untrustworthy organization. All in all, Flight Centre still has the loyalty of the consumers. It only needs to satisfy their needs much better to increase chances of higher revenues in future. Recommendations Market segmentation will put Flight Centre in a better position to understand and track changes in the needs of various consumers. With this information at its fingertips, it will design, provide, and market the suitable options to the relevant target segments. This is what consumer satisfaction requires from a marketer. An effective branding strategy will increase consumer affinity to the brands. Customer experience and satisfaction revolve around expectations. In relation, this is what the brands will address. The modified brands will assure relevant consumer segments what to expect in the specific attractions in various destinations. The branding strategy will facilitate the determination and fulfillment of expectations. Human resource management will provide qualified employees to the company. In addition, it will also orient their skills to the customer expectations and new market developments. It is the employees in an organization that are tasked with the actual tasks. Without their contributions, an organization is handicapped and cannot meet customer needs. In this regard, only human resource management will facilitate this situation. Public relation is the only way to manage a company's image in the market. This department seeks to explain a company's mission, values, and marketing initiatives among others to the general public (Van Leuven 1991 pg215). Through consumer interactions, it will also assist in the identification of consumer needs thus assist in the satisfaction process. Implementation The following table breaks down the implementation of the solutions arrived at the recommendation stage. Solution Parties Activity Costs (AUD) Timeline Market segmentation Executive manager Marketing research Identifying consumer needs Grouping employees in segments 50,000 June, 2015 Branding strategy Marketing manager Modifying brands Aligning brands to relevant segments Marketing to specific segments 50,000 June, 2015 Human resource management Human resource manager Employee evaluation 10,000 June, 2015 Hiring and training new employees Constant training of all employees 300,000 July - Aug, 2015 Public relations Marketing manager Setting up PR department Online and telephone interaction with employees 100,000 June, 2015 There are few barriers to the implementations of these solutions. First, they will require the approval of the board of directors which does not meet often. This will greatly interfere with the implementation timelines unless there is an extraordinary convention. The costs also do not represent actual prices but analysis from previous similar processes. It might require the adjustment of the costs when the actual prices do not conform to the indicated ones. Finally, there is no absolute guarantee that the board will approve the recommendations. Furthermore, the employees also need to be involved as their support is vital in the implementation even with the approval from the board. Bibliography Dennis, C, Fenech, T, & Merrilees, 2003, B 'Sale the 7 Cs: teaching/training aid for the e-retail mix', International Journal of Retail & Distribution Management, vol. 33, no. 3, pp. 179- 193. Available from: 10.1108/09590550510588352. [26 May 2015]. Dusheng, C, & Zhongming, W 2014, 'The Effects Of Human Resource Attributions on Employee Outcomes During Organizational Change', Social Behavior & Personality: an international journal, vol. 42, no. 9, pp. 1431-1443. Available from: 10.2224/sbp.2014.42.9.1431. [26 May 2015]. 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