INTENDED LEARNING OBJECTIVES
As a person with knowledge of case studies involving management, organization and people, the author has always brought up to his superiors the viability of strategy formation regarding operations management within Leaches Sweets Limited and at times fail to understand the reasons or logic behind certain strategic implementations imposed on it.
By delving into this project paper, the author intends to have better insights into how operations management within Leaches Sweets Limited are thought up, formulated and then imparted down into its subsidiaries. The author hopes to have an in-depth understanding as to how the operations management of the company enables them to compete effectively and profitably in this era of internationalization where competition is extremely intense.
In order to reinforce the learning objectives, two key focal issues were focussed upon i.e. innovation and diversity. Innovation was discussed with regard to operations management of Leaches Sweets Limited where it was renowned for its development and manufacturing capabilities to constantly innovate. Diversity came under strategic thinking and formation as the author considered the diverse culture, political climate, economic surroundings, social environment, technological settings, government policies and legal systems within Leaches Sweets Limited in order to further understand the problems that the company faced.
EXECUTIVE BRIEF
This case study analysis utilized Leaches Sweets Ltd. and its HB department as the model organization to review its present problems concerning operations and human resource management and how they dealt with critical situations. From the analysis, key trends in the operations and human resource management were then identified, how it worked and its effectiveness in dealing with critical situations was ascertained. The paper then moved on to assess these operations and human resource management strategies with regard to their suitability to critical situations, during which the internal capabilities of these operations and human resource management policies in relation to the strategy being followed was determined also. An overall analysis of the performance and effectiveness of the operations and human resource management of Leaches Sweets Ltd. was also conducted to assess and compare the capabilities of these operations and human resource management strategies with those of others. Gaps in the operations and human resource management capabilities and environment were then identified.
Finally, several choices of strategies to improve the operations and human resource management of Leaches Sweets Ltd. and its HB department as effective means in critical situations were recommended and evaluated in terms of appropriateness to the issues reviewed, feasibility in carrying out the options and acceptability within the key stakeholders and decision makers. Several key implementation issues related to managing strategic change were also addressed as well.
SWOT Analysis of Leaches Sweets Ltd.
Strengths:
- has products that boast of a very powerful retail. This includes a reputation for value of money, convenience and a wide variety of products
- has grown significantly over the years, and has experienced global expansion.
- The company’s main competence lies on the use of information technology (IT) to fully support its international logistics system.
- is able to deliver good customer care, as the limited amount of work would mean plenty of time to devote to customers.
- can afford to change direction quickly if its management finds that the company’s marketing strategy is not effective.
- has little deficits and overheads. Therefore the company can offer good value to customers on a consistent basis.
Weaknesses:
- Since the company sell products across many sectors, the company may lack the flexibility that some of its more focused competitors possess.
- operates globally, but its presence is located in only relatively few countries worldwide.
- Some of the company’s weaker branches lack market presence or reputation
- Some of the company’s personnel still lack the essential skills base in many areas.
- The company is still vulnerable to the temporary losses of its vital staff (e.g. being sick, leaving).
- The company’s cash flow is unreliable especially in the early stages of a new product development.
Opportunities:
- Taking over, merging, or forming strategic alliances with other companies while focusing on strong markets like Europe or the Greater China Region.
- The branches of the company operate only on trade in a relatively small number of countries all over the world. Thus, this would open the opportunities for future businesses in expanding various consumer markets, such as those in China and India.
- The opening of new locations and branches offer the company the opportunities to exploit market development. This could lead to the diversification of the company’s branches from large super centers to local-based sites.
- Opportunities exist for the company to continue with its current strategy of establishing large branches worldwide.
- is continuously expanding, with plenty of future opportunities to exploit for success.
Threats:
- Being a global retailer means that the company might be exposed to political problems in the countries where the company has operations.
- The production costs of most consumer products have the tendency to fall because of lower manufacturing costs. Manufacturing costs fall because of outsourcing to low-cost regions around the globe. This phenomenon could lead to competition in prices, which in turn would result in the deflation of prices in various ranges. Intense price competition must definitely be considered a threat.
- The latest developments in information technology which could possibly change the markets might challenge the company’s ability to adapt to these changes
- A slight shift in focus of a large competitor might wipe out any market position that the company has achieved over the years. This could force the company to specialize in rapid response but good value services to local businesses. This would put so much pressure on the company’s consultancy staff to keep informed with the latest changes in technology where possible.
ANALYSIS
Participant’s Diagnoses of the Problems
Based on my understanding and interpretation of the problems in the HB department of Leaches Sweets Ltd., their problems are rooted on inefficient operations and human resource management.
Operations and human resource management pertain to the efficient and effective implementation of the policies and tasks necessary to satisfy a firm’s customers, employees, and management. They focus on the careful management of the processes involved in the production and distribution of products and services (1998,).
More often than not, small companies like Leaches Sweets Ltd. don’t really have the capabilities to implement operations and human resource management. Instead, these companies engage in activities that various schools of management typically associate with operations management. These activities include the manufacturing of products, product development, production and distribution.
However, operations and human resource management deal with all operations done within companies and organizations. Activities such as the management of purchases, the control of inventories, logistics and evaluations are often related with operations management. A great deal of emphasis lies on the efficiency and effectiveness of processes. Therefore, operations and human resource management includes the analysis and management of internal processes.
Leaches Sweets Ltd. is a company that is supposed to aim for sustainable growth as a broad market leader in sweets production as well as for segment leadership. In both cases, their sweet brands will play a crucial part. Leaches Sweets Ltd. can establish its broad leadership by acquiring other strong sweets producing companies and their products, which are then combined into a new, larger company. Offering training to its employees, improving the company operations, and the introduction of new technologies will then reinforce the positions of the various products of Leaches Sweets Ltd. This will practically result in economies of scale that will be able to create a distribution network for the products of Leaches Sweets Ltd. If a market is already in the control of other sweet producing companies, Leaches Sweets Ltd. must devote its attention towards the development of a premium segment with its various products.
However, since the company has inefficient human resource and operations management for at least one department, the immediate impacts involves failures in the following four critical elements:
Leadership
The aftermath of most operations and human resource management problems among organizations and companies often leads to the implementation of a somewhat autocratic type of leadership and management. Because of the adjustments that the newly combined workforce would have to endure, it is not surprising that at first the new management would hold so much power and decision-making authority. The management would have the tendency to seldom consult its employees especially in making crucial decisions. As a precautionary measure, the management would include having a perfectionist type of management to make sure that the new reporting system would remain consistently efficient. The motivation environment is often characterized through the establishment of a new structured set of rewards and punishments.
However, as time goes by the workforce and the new management gets to jive with each other. Along with this is the changing of leadership type from autocratic to a democratic type. This way, the participation of all key stakeholders especially the workers will be more encouraged. If they feel something is right or wrong, or if they want to tell something important to the management, they can now be free do so without any worries. Also, a democratic leadership approach allows the management to have a feedback regarding the policies and regulations being implemented. They will immediately know if there is any tension going on between or among the stakeholders involved. Thus, immediate action can be planned and implemented by the management to keep matters from getting worse.
Common Operations and Human Resource Mgt. related Organizational Behaviour Concerns
1) Formation of the divisional-corporate authority relationship – the problem here is in making the decision as to how much authority would be needed to centralize at the corporate level and how much authority would be also needed to decentralize at the divisional level ( 2001).
2) Information Distortion – if the corporate centre will pressure the divisions too much, then the divisions might be encouraged to radically change the information they normally supply to their corporate managers.
3) Competition of Resources – since corporate divisions are normally evaluated on return of investment (ROI) criteria, this might cause them to start competing for resources (. 2003).
4) Transfer Pricing problem – when corporate divisions engage in competition, it would become extremely difficult to set fair prices for trading resources between them ( 2002). This is because each division will try to set the highest price it can to maximize its own ROI. However, these efforts can undoubtedly alter the corporate performance and ROI.
5) Short-term focus on research and development – if the corporate divisions will be evaluated on the basis ROI target, this might put pressure on research to improve their financial performance (Gonzalez, 2003).
Improving the Departmental Situation
A. PROPOSED HUMAN RESOURCE MANAGEMENT POLICIES
Leaches Sweets Ltd.’s Human Resource Management Policies must be divided into the ff. main policies.
Equal Opportunity and Employment Practices
1) LSL must not allow employment discrimination on the basis of race, gender, religion, age, or against qualified disabled persons.
2) LSL must not allow the lowering of bona fide job requirements or qualifications in order to give favor to any applicant for employment.
3) LSL must not allow all its employees, including, managers from taking any grudge against any person making allegations of violations of the company policies.
B. Compensation and Benefits Management
Leaches Sweets Ltd. must determine how it will implement the Compensation and Benefits Management System which is the basis for ensuring the equitable implementation of pay decisions. The Salary Administration Plan will administer the company’s internal compensation philosophy and policies, recruitment and selection process, performance management, administration of pay practices, and program evaluation plan. LSL must regularly evaluate this plan to make sure that its employees are continuously complying to the company policies as well as to the company’s mission and organizational needs.
C. Management Development and Training
Leaches Sweets Ltd. must provide various employee training sessions appropriate for them to be able to help the company in achieving its mission and accomplishing its objectives.
1. LSL must appoint an employee that is capable in helping to implement its training and development programs and serving as coordinator for the duration of training services.
2. LSL must develop a biennial training plan which includes:
a. a training needs assessment;
b. an action plan illustrating the objectives and approaches through which the plan can possibly be done; and
c. funding needed to implement the plan.
PROPOSED PERFORMANCE DEVELOPMENT and MANAGEMENT POLICIES
Role of LSL Managers
A. Gathering Information
Managers in Leaches Sweets Ltd. must have the primary role to make specific identifications of all the possible sources of evaluation information which includes observable employee behaviors. This is because aside from the observations of the immediate supervisor, performance evaluation information can still come from a variety of other sources, including the employees, subordinates, and work products. Whenever LSL will utilize performance information from individuals other than the employee’s immediate supervisor to build up the employee’s annual evaluation, the management should inform the employees of the possible sources at the start of the performance cycle, where they receive their performance plans.
B. Development and Presentation of Performance Plans
Managers within Leaches Sweets Ltd. must be the ones to develop their employees’ performance plans according to instructions on the Employee Work Profile form. The plans must be signed by the managers and then passed on to the management for approval. Managers make sure that performance plans are complete and adequate before signing the forms.
The manager must also discuss the performance plans with the employees of Leaches Sweets Ltd. especially in the troubled HB department in a clear and organized manner. Generally, discussions must be conducted within 30 days of the start of the performance cycle. With regards to the LSL employees who will be starting at a new position, discussions must be normally held within 30 days of the employee’s starting date.
C. Documentation of Performance
LSL managers must document their employees’ performance and provide feedback to them from time to time throughout the performance cycle. Documentation normally occurs in the form of memos, and these are retained in the manager’s confidential files, instead of being in the employees’ personnel files.
D. Identification of Substandard Performance
LSL managers must also have the authority to determine substandard or unacceptable performance. Managers normally address minor or marginal performance issues through performance counseling and coaching.
Deriving from the analysis between the wine industry, operations management and capabilities of the winery involved, many strategic options would become imperative. It is therefore essential to evaluate these strategic options as to whether they are appropriate to the issues addressed, whether they are feasible enough to be implemented and their acceptability to key stakeholders.
PROPOSED OPERATIONS MANAGEMENT POLICIES
A. Business Level Strategy
There is definitely a need to reconcile both the inside-out and outside-in capabilities. While Leaches Sweets Limited’s operations management involves focusing on its core competencies with market position following its resource base, the company will be put into a disadvantageous position should it choose to neglect both the macro as well as sweets industry environment. Therefore, this company has to be aware of the latest operations management changes, as well as changes in political, economic, legal and even demographic trends in order to develop the outside-in capabilities, such as sweets market sensing, customer linking, channel bonding and technology monitoring.
The advantages enjoyed by Leaches Sweets Limited may come in the form of increased revenues. Knowing what the market demands and the latest trends could help the company fully exploit its research and development capabilities to come out with sweet products which are not only cost-effective but also high in quality. The strategic option can even be used as marketing tool where the focus is on staying close to the company’s customers and listening to their feedbacks. On the flip side of the coin, there will be huge mobilization of resources involved, and the associated risks bestowed on the company.
Nevertheless, the mentioned strategic option seems the most practical in the wake of globalization, since there is a sudden shift towards a more integrated and independent world economy. The key stakeholders too should not have any objections so long as the company’s core business is not threatened. By virtue of Leaches Sweets’ centralized control of its business, it is being expected that major barriers should not exist in carrying out such an option except additional time may be required given the scope and span of the company’s operations.
Understanding the strategic importance of operations management is something that Leaches Sweets Ltd. has to be familiar with. This company normally practices a centralized and globally scaled configuration of operations and capabilities. This allows information dissemination to be retained.
GENERAL RECOMMENDATIONS
A tie-up or merger with various local sweets producing companies offers tremendous benefits in terms of access to their operations and human resource management policies, infrastructure and even their resources. However, Leaches Sweets Ltd. must not lose sight of its core competencies while pursuing these tie-ups. Otherwise, the image of this company might be put in jeopardy.
Meanwhile, the collaboration of Leaches Sweets Ltd. with its major competitors can be seen as a ridiculous move at first. However, upon close examination, this move could pave the way for this company to improve even more its operations and human resource management. The bottom line is both sides would be able significantly gain in such an alliance. LSL’s strengths in sweet products development combined with the operations management capabilities of their competitors can transform them suddenly into an unbeatable force to reckon with. One possible setback, however, is the differences in the cultures of the companies involved. Another possible setback could be whether any of LSL’s competitors has the need to form alliances.
The third option also focuses on alliances, but this time with either one of the suppliers specializing in sweet products. The benefits of these alliances should outweigh the costs in the long run.
In terms of appropriateness, all three options are able to directly address the current issues mentioned. However, the question remains whether Leaches Sweets Ltd. could be able to implement any of these options, and whether these options can be acceptable to the key stakeholders. Any merger or alliances may also involve the sharing of expertise. This company has traditionally relied on the inside-out approach. It is important to note that any merger transactions would have many implications on the company’s values and culture as well as the resources. The key stakeholders definitely would be concerned with such options and need to be convinced of the positive aspects. Somehow, Leaches Sweets Ltd. will be able to overcome this barrier in managing strategic changes in the process of implementing any of the above mentioned strategic options.
CONCLUSION
The results of the analysis carried out on the operations and human resource management of Leaches Sweets Ltd. indicated very significant effects, even amidst the threats of unrest. Therefore, we could conclude that the operations and human resource management of the HB department could still be expected to improve faster than average.
The review of the company’s operations and human resource management capabilities and resources revealed very little inconsistencies regarding their strategies. This is coherent with their traditional inside-out approach. However, the need to reconcile both the inside-out and outside-in approaches becomes imperative now for the HB department of the company.
The analysis among the environment as well as the operations and human resource management and capabilities of Leaches Sweets Ltd. revealed certain gaps, most of which are biased towards the environment. However, these gaps paved the way towards determining a number of recommended strategic options to secure the company’s competitiveness.
Also, the company has to find a balance between adherence to internal forces within the management and to the changing forces of the environment in order to implement such strategic options.
Credit:ivythesis.typepad.com
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