Research Articles Base: Cadbury Case Study

Cadbury Research Proposal

Introduction   Governance has existed in the form of company legislation for many years and is not recent phenomenon. Against a background of corporate turbulence in recent years, it has taken on a prominent role since the 1990’s. Beginning with the Cadbury report in 1992, a number of codes and practices have been introduced. These codes require U.K listed companies to comply with their provisions and recommendations on board structure and activities. Whilst good governance is deemed to promote corporate stability and shareholder confidence, it does not contribute to the bottom line and would not prevent corporate disasters such as Enron and WorldCom therefore a question comes to mind – will the shareholders and other stakeholders derive any benefit from the changes to the Combined Code if the Higgs report is adopted.   Much of the focus has been on Institutional Investors, Executive directors and best practice codes, with improving the effectiveness, competency and efficiency of boards. As a result structural and operational aspects of corporate boards have been questioned. (Hermalin and Weisbach, 1998; John and Senbet, 1998; Frank et al, 2001). There has, to date been much comment and speculation but little rigorous research has been on non- executive directors who are most affected by the Higgs proposed changes to the Combined Code.   The context of my research will describe and discuss recent changes in the pattern of work of non-executive directors of large public limited companies in the U.K. An analysis will be made of the impact on their work of the series of reports and codes on the revised combined code which was published in the U.K.in 2003.  This connected series of report and codes was initiated with the publication of the Cadbury Report in December 1992 and a revised version of the combined code published 2003.  In my proposal and dissertation, I will refer to the series of revised reports and codes as the ‘Cadbury series’.   My research findings will be  based on  the views of a group of non-executive directors who, in 2003, would still have been on the boards of large public limited companies, which they would either have joined during, or prior to, 2003.  The target companies will be constituents of FTSE 100 and 250 indexes and because most of these non-executive directors would have served on their boards throughout the changes initiated by the Cadbury series, they will be in the position to assess the impact of these changes on board behaviour within their individual companies.   Research Objectives   The main aims and objectives of the proposed research are:   To explore the structures and patterns of work in the past. In order to achieve this aim a series of interview questions and interviews will be developed to produce summary statistical measures concerning the era before the Combined Code came into force;   To examine and analyse the extent of separation of chief executive and chairman roles, and the proportion of chairmen who were independent at the time of appointment;   To establish the length of tenure of non-executive directors and chairmen along with an examination of the procedures regarding recruitment, appointment and the diversity, skills and expertise on the board; and   To analyse the impact of a Senior Independent director and relate this to a wider examination of the relationship with major shareholders.   Potential Impact of the Research Higgs recommended in his report that the Government and the Financial Reporting Council measure the extent to which behaviour has changed as a result of his proposals and review the progress against his recommendations two years from the date of the review in July 2003. I trust that this research will add and or build upon other research currently being carried out by providing a wide –ranging perspective on the impact of Higgs proposal. Recording the opinions of non-executive directors through which we catch a glimpse of boardroom behaviour and its associated activities, will not only inform and enlighten fellow researchers and  but will also, hopefully, stimulate further analyses on this topic and raise issues concerning contemporary trends and future developments in the corporate world of governance.   Research Methodology As a qualitative research, it will be implemented in two phases. In the first instance, five to six areas of change proposed by Higgs will be the subject of discussion and my main focus of research. Names of non – executive directors will be drawn at random from a variety of public sources of NEDs at both FTSE 100 and FTSE 250 and where necessary lists of names will be purchased to facilitate the process.  A questionnaire will be prepared and presented to the NEDs in question to compare the situation in 1992 /99 with that in 2003 in order to assess the level of change in their involvement and the involvement of their boards in defined tasks and activities.   The second phase of the research will be conducted through semi-structured interviews. They will be asked a series of questions, the responses to which will subsequently be used to test a series of research propositions about the impact of the Cadbury series. Where appropriate, the researcher will match the findings of the research conducted to the specific issues Credit:ivythesis.typepad.com

Cadbury Research Proposal

Introduction Governance has existed in the form of company legislation for many years and is not recent phenomenon. Against a backgro...

Cadbury takes in managing human resources and it’s business strategy

Section A Question 1:             The first question pertains to the approach that Cadbury takes in managing human resources and its business strategy. Before I discuss this issue I will first present a brief discussion about Strategic Human Resource Management (SHRM). Strategic human resource management aims at the improvement of the way human resources are managed strategically within organizations, with the definitive goal of improving organizational performance, as judged by its impact on the organization’s declared corporate strategy, the customer or shareholders (2000). Strategic human resource management (SHRM) is a philosophy of people management based on the belief that human resources are uniquely important to sustain the success of a business. SHRM can be defined as the process of linking the human resource functions with the strategic objectives of the organization in order to improve performance (2006). Strategic human resource management involves the linking of HRM with the strategic goals and objectives of the organization in order to achieve a progressive business performance and achieve an organizational structure that promotes innovation and flexibility (1991). Strategic HRM according to  (2004) has emerged as a major approach to improving the competitive advantage of the firm. The goals and objectives of HRM are aligned with the strategic objectives and plans of the organization. Strategic human resources management means accepting the HRM function as a strategic partner in both the formulation of the organization’s strategies and the implementation of those strategies through activities such as recruiting, selecting, training, and rewarding personnel (2002).             The case presents a picture of an organization that has a clear business objective – to deliver shareholder performance. The company aims at dividends. The company has a clear goal and at the same time acknowledges that its people are important in achieving its goals. Cadbury’s approach to SHRM is something that can be considered as “contingency approach”. The company manages its human resources in a contingent manner. Let us discuss the underlying theory of this approach.               The underlying theory of Cadbury’s approach to managing its human resources is Contingency Theory of SHRM. Advocates of the contingency perspective of SHRM argue that a firm can be effective if its practices and strategy are aligned with other aspects and strategies of the firm. According to  (1998) HR must be closely integrated into the planning process of the firm. They also believed that a firm can achieve success if it is able to develop HR policies and practices that complement and support other HR policies and practices and other elements of the organization’s strategic plan.             It is evident from the case that Cadbury views its people as a source of competitive advantage and the main contributors to the company’s success. The company seeks changes; it has clear objectives and goals. It realizes that in order for it to achieve its goals and objectives, it must align the efforts of its people. This can only be done through SHRM. Through SHRM the company aligns the HRM activities to its business objectives, SHRM is used in order to integrate the policies, practices and activities of the HR department to the goals of the organization. Perhaps, communication plays an important role in the company’s approach. In order to successfully align the efforts of its human resources, the company communicates its plans, strategies and current situation to its people. The mere fact that Cadbury Schweppes has an HR director on the main board and that HR is represented at every regional business unit make it obvious that the company recognizes the strategic importance of human resources and takes HR issues and concerns seriously.   Question 2:             The second question pertains to the role of the HR department to the delivery of people strategy. The company believes that in order to maintain its market position and competitive advantage it must constantly evolve and remain at pace with the changes internally and externally. The organization makes it a point that its people can adapt, learn and become change-responsive. The organization invests on its people in order to make them more flexible, learning and adapting quickly to the fast changing conditions.               The purpose of SHRM is to make the integration of organizational objectives and HR policies and practices. The organization views its human resources as the most important contributor to the company’s success. Because of this the HR department was appointed to develop strategies and policies that is geared towards the achievement of the company’s goals by making use of the human resources. In order for us to have a clear picture of how the HR department deliver people strategy let us have a look at the SHRM process. 1. Identifying the impact of the company’s gaols on specific departments.             The plans of the HR department are based on the strategic objectives of the organization. The objectives of the HR department are derived from the overall strategy of the company. 2. Identifying the knowledge, skills, expertise and total number of employees required to achieve the organizational and functional and departmental objectives.             The top management encourages every department to come up with their own objectives and goals. Based on these goals, the knowledge, skills and expertise required are determined. The HR department makes sure that the company have access to adequate pool of knowledge, skills and abilities. 3. Determining the additional human resources requirements in light of the organization’s current human resources.             The HR department is responsible in keeping track with the current condition of the company’s human resources. The HR department is responsible for making sure that the human resources requirements are satisfied in order to keep the operation flowing. 4. Developing specific action plans to meet anticipated human resources.             The HR department makes a plan in order to accommodate the people in the organization. The HR department provides training for the new employees and makes sure that the knowledge and skills of the current employees are always updated.               Let us now discuss the case of Cadbury. Because of the changes that happened in the company brought about by its growth and acquisition strategy, the company needs to adapt to its new environment. The company started to give importance to delivering shareholder performance. This new business spotlight is communicated to every department and to every one in the company. The company made sure that its entire people understand and contribute to the company’s new business spotlight. The different HR programs and policies that are in effect in Cadbury Schweppes are geared toward achieving the organizational objectives. First, the program called “Managing for Value” is aimed at the enhancement of employee knowledge of how the company could be more profitable. This program is coupled with the “Three A’s” policy (Accountable, Adaptable, and Aggressive). We can say that the HR department is able to deliver people strategy by helping the employees adapt to the new organizational culture. The HR department helps the employees to become results-focused, be commercially focused on growth and be aggressive. In order to ensure that the employee’s individual goals are linked to the organizational goals, the employees went on a five-day programmed. In addition, to make employees feel a sense of ownership, the company has introduced two share schemes. The HR is able to deliver people strategy by motivating employees through the company’s share schemes. The company also strives to create an environment where every employee can build relationships with co-workers. This is evident in the result of the company’s first global climate survey. Over 90% of the employees felt they are part of a team. In addition, the global climate survey also revealed that the employees understood the business’s purpose and values and its local priorities, they also added that they felt proud to work for Cadbury Schweppes. Collaboration has become important since the acquisitions of different companies. “Working Together” provided more than 50 online tools for people to undertake in order to work more collaboratively than they were used to. In order to deliver people strategy, the HR department focused on motivating and coaching employees to unlock their full potential. With this thinking, the company introduced “Growing our People”, a program focusing on behaviors and unlocking the potential of people at different levels of the business.   Question 3:             The third question pertains to the role of culture within SHRM.             In the case of Cadbury, alongside with the integration of the company’s HR policies and practices with the overall business goals was the major restructuring of the company. This restructuring entailed a restructuring of the organizational culture. In order to achieve its goal, Cadbury Schweppes integrate every HR objectives to that of the company’s. The company has undergone major restructuring and a lot of new HR programmes has been introduced.  Let us look at the different strategies that the company employs to achieve its goal while giving importance to its HR.              Lets look at how the company has reshaped its culture in order to accommodate the changes that are required to achieve success. The company is openly looking for leaders that are aggressive. Someone who is results focused. The company actively seeks for potential leaders who will promote the organization’s goal. According to the article, Aggression is among Cadbury Schweppes’ core leadership value. In 1977,  , former chief executive (now chairman) introduced “Managing for Value”, a leadership program that aimed to increase employees’ understanding of how the company could be more profitable. Three As <ul style="margin-top: 0in; margin-bottom: 0in" type="disc"> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> Accountable – owning rather than saying “it’s not mine, it’s someone else’s”</li> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> Adaptable – coping with the changing world and changing your skills as required</li> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> Aggressive – being results focused and firm  </li> </ul> The company promotes a culture built on the above mentioned behaviours. The management believes that in order to lead, the organization as a whole must drive results, be commercially focused on growth and be aggressive. Cadbury Schweppes is a listed company with a set of financial goals. The “Managing for Value” program is geared toward educating employees about the goals of the company and its business context. Employees attended a five-day seminar that linked their work to organizational goals. According to Gibson, the HR department makes sure that people understand the context the business is operating in. To reinforce that message, the company has two shares. One of them is “ShareSave”, which has been in operation since 1974.             Along with the company’s goal of delivering superior shareholder performance, came its acquisition strategies. One of its biggest acquisition moves was the acquisition of confectioner Adams in 2003. The company has also undergone a major reorganization, moving to a more decentralised way of operating business units within a new structure based on five global regions. In all these, the HR played an important role. Adams and Cadbury Schweppes have different cultures. The HR needed to bring the two businesses together. In order to create a winning organizational culture, the two management teams collaborated. It was a move that made people feel that they own the company. It made the employees more engaged with the organization’s goals. Out of this strategy came “Working Better Together”, a program that provided more than 50 online tools for people to undertake in order to work together. The program made the company realized that in order to sustain its business, people, and brand advantage, the employees must be motivated. Another program – “Growing our People” came from the realization that the company could get more from its staff. The program is a three-day workshop that mangers are taking focuses on behaviours and unlocking the potential of people at different levels of the business.       Section B   Topic 3: Human Resource Planning and SHRM             (1995) defines human resource planning as an effort to anticipate future business and environmental demands on an organization and to provide qualified people to fulfill business needs and satisfy demands. Human resource planning is viewed as a process. As a process, human resource planning focuses on identifying an organization’s human resource needs under changing conditions and developing the interventions and initiatives necessary to satisfy those needs (cited in  2000).             In HRM planning, planners analyze an organization’s HRM needs in a dynamic environment and develop activities that enable an organization to adapt to change. The HRM planning process involves forecasting HRM needs and developing programs to ensure that right numbers and types of individuals are available at the right time and place ( 2000).   SHRM: Contingency Perspective             Proponents of the contingency perspective in SHRM argue that a firm can be effective if its HR practices and strategy are aligned with other aspects and strategies of the firm. Contingency perspective is also called ‘fit-alignment’ perspective. There are two forms of fit alignment – vertical and horizontal. The vertical alignment (external alignment) is the level of alignment between the components of the organization’s human resource strategy and core features of its business strategy. Horizontal fit (internal alignment) measures the level of alignment among components of the organization’s HR strategies such as recruitment, selection, training and compensation.             Perhaps, the most notable argument in favor of the fit perspective was presented by (1988). They argued that HR must be closely integrated into the planning process of the firm. In addition they also advocated the idea that a firm can achieve success if it is able to develop HR policies and practices that complement and support both other HR policies and practices and the other elements of the organization’s strategic plan. Two types of fit were identified by these theorists. These are internal and external. Internal fit refers to the level of that human resource practices complement and support each other. External fit on the other hand, refers to the level of complement and support between HR practices and other elements of the strategic plan. The contingency perspective according to  (2005) assumes that business performance will be improved when there is consistency or fit between the business strategy and HR policies. It has been argued that HRM practices that are not aligned and consistent with organizational strategy and which conflict with other HRM practices can restrain both individual and organizational performance.             There are several benefits that are attributed to the fit perspective on SHRM. Jackson et al (1989) suggested that firms that seek to pursue innovation as a strategy used HRM practices that will complement the strategy.     Definition of SHRM based on Fit Perspective             Based on contingency or fit perspective, SHRM can be defined as the integration of HR practices and policies to the overall organizational objectives with the aim of improving performance.  (2006) defines SHRM as the process of linking the human resource functions with the strategic objectives of the organization in order to produce better performance. (1991) on the other hand defines SHRM as the linking of HRM with the strategic goals and objectives of the organization in order to achieve a progressive business performance and achieve an organizational structure that promotes innovation and flexibility. The goals and objectives of HRM are aligned with the strategic objectives and plans of the organization. The role of HRM is to determine the human resources needed to support strategic objectives and to ensure that employees are selected, trained, evaluated, and rewarded in ways that further the achievement of business objectives. Strategic HRM is frequently described as a linear, balanced process that begins with the identification of goals that will guide human resource practices. The integration of the HR programs with the goals of the organization will result to the organization’s increased value. The recruitment, compensation, performance appraisal, promotion, training and other functions are designed and managed so that they work towards the strategic objectives of the firm . Strategic HRM has the purpose of improving the way that human resources are managed within firms. The main objective of strategic HRM is to improve organizational performance as judged by its impact on the organization’s declared corporate strategy (2004). Strategic human resources management means accepting the HRM function as a strategic partner in both the formulation of the organization’s strategies and the implementation of those strategies through activities such as recruiting, selecting, training, and rewarding personnel (2002).                         The contingency perspective of SHRM gives particular importance to HR planning. According to the contingency model, in order to achieve success, the HR policies and practices must be planned in such a way that they coincide with the company’s business objectives and strategies. The contingency model highlights the importance of the HRM department as a strategic partner of the firm. In this regard, HR planning is placed at the center of the formulation and implementation of the organization’s strategies.   Topic 4: HR Department in Organization Contributions of the HR Department in Organization 1. It provides the right kinds of talent to the organization at the right time. HRM is expected to assure that a supply of qualified labor in a timely fashion (1996). 2. It ensures that the organization is properly staffed. When done effectively, the staffing, recruitment, and selection process provides a flow of qualified individuals for filling open positions within the organization on a timely and efficient basis ( 1996). 3. Using appraisals, the employees are assesses and evaluated. Employee appraisals have very profound implications for both the employees and for the future success of the organization (1996). 4. Using effective pay systems, the management can focus employees’ efforts toward desired organizational goals (1996). 5. Ensures that the employees are properly skilled to perform their tasks and supports the organization’s growth through career development. The goal of training as part of the human resources management processes is to create cost-effective programs that build the skills to perform effectively (1996).     New Functions of HRM             Different changes and challenges have caused a dramatic shift in the functions of HRM. Aside from its traditional functions such as human resource planning, recruitment and selection, job analysis, wage, salary and reward management, performance management, training and development, legislative compliance and labor relations, HRM has been called to serve other functions that create competitive advantage and ensure organizational success. Among these new roles are the following: 1. HRM as Human Capital Steward As a Human Capital Steward, HR contributes to strategic capabilities by developing, leveraging, renewing, and nurturing a firm’s stock of knowledge, skills, abilities, interests, and talents. HR is there to help ensure that every individual is able to make value added contributions by identifying and cultivating individual competencies and capabilities. HR delivers people strategy by ensuring that renewal and rejuvenation are on-going activities. HR contributes to organizational success by initiating training and development activities and by creating a culture of continuous learning. HR shapes the values and provides the contextual backdrop that enables people to take initiative and use their judgment in a flexible and fluid business setting. The role of HR is not to create a dependency between the employee and the HR unit, but to forge a partnership that leads to increased intellectual capital, enhanced commitment, greater awareness of opportunities to make a difference, and adaptability (2004). 2. HRM as Relationship Builder The role of Relationship Builder focuses on creating programs and practices that enable employees to encourage, facilitate, nourish, and sustain relationships among fellow employees, customers, suppliers, firms in complementary arenas, and at times, even rivals. HR can deliver people strategy by contributing to a firm’s ability to leverage its resources and develop strategic capabilities and core competencies by helping individuals build a strong web of relationships. Developing relationships between employees helps workers find jobs and creates a richer pool of recruits. It facilitates inter-unit resource exchange and product innovation. Social capital facilitates the creation of intellectual capital since people are more likely to share tacit information and take intellectual risks in a supportive social environment. It facilitates cross-functional team effectiveness since social capital enables people to see situations from perspectives that are different from their own. It reduces turnover rates, since individuals are less likely to leave a firm if they have strong, positive social connections with their co-workers. It strengthens supplier relations, regional production networks, and inter-firm learning since social capital can be the foundation for multifaceted, multidirectional, mutually beneficial relationships that extend beyond transactional exchanges (2004). 3. HRM as Knowledge Management Facilitator It is not enough simply to hire employees and put them to work. Strategic capability requires a firm to be able to create and disseminate knowledge among its employees. HR can play a vital role in facilitating organization learning and knowledge sharing between employees, among departments, throughout the organization, and with external co-producers. An important aspect of human capital stewardship is identifying people who want to learn. Employees need to be able to learn and unlearn continuously, to teach and be taught. The organization must tap into all employees’ knowledge as sources of innovation. HR can make an important contribution by identifying sources of employee knowledge and eliciting that knowledge from employees. New knowledge must lead to new behaviors if it is to create strategic capability. Knowledge is of little use unless a firm is bale to adjust its actions, decisions, and relationships to capitalize on the insight. Knowledge management facilitation includes developing organizational capabilities that enable individuals to apply knowledge more skillfully, quickly and creatively. Equally important, HR must help organizations strike a balance between productivity focusing efforts on critical tasks while constantly incorporating new ideas (2004). 4. HR as Rapid Deployment Specialist The rapid pace and constantly changing environment that many organizations and industries confront creates another new challenge and new function for HRM: rapid Deployment Specialist. Strategic capability requires competence in rapidly assembling, concentrating, and deploying specific configurations of human capital in order to achieve mission-specific strategic goals. Rapid deployment of human talent requires adaptable employees. Workers need to be adaptable, versatile, and tolerant of uncertainty to operate effectively in the constantly changing global market ( 2004).   Credit:ivythesis.typepad.com

Cadbury takes in managing human resources and it’s business strategy

Section A Question 1: The first question pertains to the approach that Cadbury takes in managing human resources and its busi...

CASE STUDY FOR LEADERSHIP CHALLENGE

CASE STUDY FOR LEADERSHIP CHALLENGE           INTRODUCTION                           The contemporary world is a borderless community that values consistent innovation and strategies in all spheres of societal life, rapid transfer of information and goods, and extensive human exchanges. Globalization impacts the lives of people as the Internet, cell phones, and technological gadgets become the avenues for lifestyles, trends, issues and problems to flow across various locations of the globe. Thus, personal choices for living become entwined with what the rest of the world dictates. However, globalization poses greater pressure on business organizations as trade policies become less strict and trade takes place in the international context. Trade liberalization in the age of globalization paves the way for convergence of national economies and gives birth to the multi-national corporations. As the phenomenon of globalization continuous to thrive, international firms and enterprises rearrange their operations to adjust to the demand of the international market. Business expansions outside the country of origin and across national boundaries demand a new set of knowledge, skills and strategies with international orientation. The norm in international business and trade is to develop and manage people who are willing to acquire knowledge of other cultures, languages and business practices, and therefore become capable of managing cultural diversity in light of a global business operation.   ISSUES THAT THE POTENTIAL LEADERS OF CADBURY AUSTRALIA WILL FACE IN THEIR INTERNATIONAL ASSIGNMENTS                            (1993) claims that going global requires transformation of managerial skills learned at the home office to enable the managers to function cross-culturally. Business firms must focus on selecting and training managers to become more attuned to different cultures, particularly in the culture of their country of assignment (). In the case of Cadbury Schweppes, the Board of Directors of Cadbury Australia have identified economy, politics, religion, value systems, and frame of reference of the Chinese consumers regarding the products of Cadbury Schweppes as the primary areas that posed distinct challenges in their expansion to China. Thus, the same aspects merit the attention of the leaders of Cadbury Australia who will be assigned at the company’s branch in China. The Chinese culture and lifestyle are different from those of the Australians and other Western nations where the company operates. Thus, the success of operation in China relies on the ability of the leaders to facilitate business operations in the midst of cultural diversity among the employees and distinct cultural characteristics surrounding the company such as laws, social norms and business practices.             The primary difference in the economies of Australia and China is the orientation. The Australian economy is an affluent, Western-oriented market economy ( 2007) while the Chinese economy adopts the economic style of Soviet Union wherein most of the economic activities are centrally planned by the government. In China, the local officials have immense authority although the economy is open to foreign investment and trade. The regulations state that Chinese firms should have at least 51 percent ownership and control of joint ventures with foreign investors ( 2007).  (2003) reports that it generally takes two to three months to register a business in China with the government putting limits on the company’s business scope (). The difference in the economic orientation of the two countries poses certain challenges to the leaders of Cadbury Australia. These leaders are accustomed to a free market in the Australian economy wherein investors, consumers and producers transact free business and determine the flow of economic activities. In China, they would encounter restrictions in the various operational activities of the company such as production and marketing of certain types of products because the Chinese government pursues the interests of Chinese business organizations. Secondly, China’s transitional economy as cited by  (2003) since the mid-1970s has fostered a tremendous opportunity for international firms to establish operations in the country and made international joint venture as a primary mode of foreign direct investment. However, managing joint ventures sometimes leads to cultural conflicts between Chinese managers and foreign managers. Australians are more Western and their approaches to management clash with the Chinese management approach. Chinese managers rely on interventions from the extended network outside the company to manage risks and threats rather than following the budgets and plans established in advance that are expected to guarantee success. The Chinese managers prefer particularistic and pragmatic solutions to organizational problems by analyzing causes of problems and soliciting outside intervention in problem solving while Western managers like Australians have the tendency to act in reference to a belief in an underlying principle that provides a ready matrix into which current reality and present existence can be fitted. Australians believe that future circumstances can be integrated into the ready matrix which serves as an analytic model to guide decision making processes (p. 147). Considering these differences, the Australian leaders who will be assigned to China may encounter conflicting management styles with their Chinese colleagues. Thirdly, Australia and China differ in religious beliefs. Australians follow Christianity, especially Protestantism, and believe that good works are gifts of hardwork and God’s grace in the life of His believer and not by interventions of outside forces ( 2007). Chinese are more fatalistic and believe that humans must follow their destiny by living in unity with the world of nature and pursuing social conformity ( 2001). Hence, Australian employees would perform their duties based on their personal judgments and decisions while their Chinese counterparts would consistently attempt to abide by the rules and seek opinions of other employees as they are more inclined to seek conformity. These differences in idea of independence would make the leaders of Cadbury Australia consider the outcomes and motivations of their manpower. Australian employees would be motivated to perform well if they are given sufficient freedom at work while Chinese employees may prefer to work in teams and have access to constant supervision. Fourthly, the Australian value systems relative to interpersonal relationships are in conflict with those of the Chinese. Australians as cited by Alon and  (2003) value personal relationships with colleagues and supervisors but organizational hierarchy does not dictate their relationships. They equally communicate and relate to all members of the organization. Chinese employees, on the contrary, prefer a system in which coordination is hierarchical wherein the key institutional values underscore loyalty and submission to a leader whose right is to establish the goals of the group       (). Accordingly, the leaders of Cadbury Australia who would be assigned to manage some operations of Cadbury China have to practice special care in dealing with their Chinese subordinates and fellow supervisors. They may encounter Chinese colleagues who would constantly consult them before they perform their responsibilities. These leaders have to recognize that the Chinese culture places much reverence to leaders while Australians prefer to work independently most of the times. Furthermore, Chinese are conservative chocolate consumers. According to  (2006) most Western goods are regarded as luxuries by Chinese consumers. The average per capita consumption of chocolates in China is less than 50 grams annually which is lower than the consumption of Western countries and other developed Asian countries like South Korea and Japan. This statistics render a challenge for the leaders as they would have to come up with strategies that would make Chinese consumers appreciate chocolates more. Finally, Chinese consumers have a different frame of reference for Cadbury products. Cadbury products are widely popular in Australia and the population enjoys the chocolates and candies manufactured by the company. Presently, Cadbury Schweppes has a 55 percent share in the Australian chocolate confectionery market, leading Nestle (18% share) and Masterfoods (19% share) ( 2006) while the company has a weaker performance in China with a marketing shortfall of around 20 million pounds in 2002 (2003). Thus, the leaders of Cadbury Australia have to design marketing strategies and campaigns to increase consumer awareness about the desirability of the products.   THINGS THAT THE LEADERS SHOULD LEARN BEFORE DEPARTING               The six leaders from Cadbury Australia will be deployed in China for three years to achieve the purpose of expanding operations in the country. Before their assignment they should first obtain knowledge about the country’s culture and different aspects of business practices in China. According to  (2003) in the age of globalization, information and intelligence should be the priorities of global managers. In a restrictive market like China, exhaustive research is one of the keys to success (). It is important that the six leaders should search the Internet, books, magazines, and other relevant sources to increase their knowledge about the culture, languages, business ethics and practices in China before they go on with their assignments. This way, they would be oriented on what the Chinese requires in business processes and thus, ensure that Cadbury would not deviate from what the Chinese culture dictates.             After accumulating intelligence regarding the Chinese market and culture, the leaders can now focus on specific Chinese beliefs in leadership to enable them to tailor their management approach and operational plans for the company. The Chinese culture as argued by  (1996) dictates that business transactions should highlight relationships among the different parties involved in the business operation, especially between supervisors and subordinates ().  (1997) elaborates by saying that a notable characteristic of Chinese leadership behavior is the concept of “Guanxi” which is the Chinese term for “relationships”. The concept of Guanxi refers to the continuous exchange of favors between persons in an organization that ensures the developing, nurturing and sustaining of interpersonal relationships. Guanxi dictates that the Chinese organization is an aggregate of people wherein the leader and his followers try to keep good relationships in order to enhance group cohesiveness and establish a shield against the uncertainties of the uninstitutionalized market economy. Guanxi dictates that the leaders of an organization should protect their subordinates in order to solicit their participation in the accomplishment of organizational objectives. Thus, employees are motivated to contribute to task performance and collective goal achievement while leaders rarely fire their subordinates. Dismissal of employees is considered as a failure of the supervisor because he has not entirely fulfilled his obligation as a “protector” (). The notion of Guanxi is a vital element in effective management at the Cadbury China office. The six leaders from Cadbury Australia should be able to depart a little from the more liberal practice in Australia wherein leaders guide their subordinates and subordinates dictate their performance in order to become effective leaders of Chinese employees. They should be able to recognize that since Guanxi is a guiding principle in Chinese business practices, they should also condition themselves to become protective leaders instead of guiding leaders. Also, the concept of Guanxi can be utilized by the six leaders in soliciting the participation of Chinese officials and other Chinese organizations that are also contributory factors in the success of a multi-national corporation. By pursuing harmonious relationships with the Chinese government, Cadbury would be able to access new business policies and requirements and therefore, adjust organizational practices thereof. This relationship with the government would also make the citizens aware that the company is compliant to the laws, and thus establish a good reputation or customer loyalty. Furthermore,  (1998) states that Chinese traditions mostly emphasize group-oriented values in human interactions and business transactions. This focus on the group makes team management a significant approach in performance evaluation, personnel selection, quality control and project management. Team management has been considered by Chinese businessmen as the best approach to enhance collective culture at work (). The importance of teams or groups in managing business in the Chinese context runs contrary to the business philosophies of most Western nations and Australia for that matter. The Australian culture dictates autonomy in performing business tasks wherein the employees can exercise discretion in the performance of their responsibilities as long as they abide by the organizational processes and procedures. The Chinese culture, on the contrary, values teamwork and supervision.  (1997) argues that the old Chinese saying that “the king shall be the king, and the subjects shall be the subject” applies to Chinese business practices. Leaders formulate decisions and policies which loyal subordinates comply with. This requirement bind supervisors and employees in a close relationship geared toward accomplishment of corporate goals (). In order to adapt to the Chinese culture, the six leaders of Cadbury Australia must be able to incorporate in their personalities and eventually put into practice a form of leadership style that does not eliminate the notions of Chinese Guanxi and teamwork. Studies on cross-cultural leadership practices have found out that managers and employees in all countries and cultures in the world favor democratic styles of management. Managers should direct and not persuade ( 1996). Considering the concept of democratic style in cross-cultural leadership, it is important that the six leaders of Cadbury should be able to familiarize themselves with the theories of democratic leadership. They should be able to accept that the success of any company relies on the collaborative efforts of the managers and employees. Thus, they should be able to formulate strategies on how to promote open communication and active coordination between the various departments of the company’s office in China before their actual assignment. They should also be able to design approaches that would guarantee that the employees have adequate participation in problem solving and decision making. Through the democratic leadership style, the six leaders would be able to abide by the Chinese’s emphasis on relationships and teamwork without losing the Australian orientation on autonomy.      MEASURING THE EFFECTIVENESS OF PROPOSALS               The best way to measure success in international business is through constant monitoring by the mother company. Through monitoring, the head company can gauge expatriate failure or success, and cross-cultural competence of expatriates ( 2006). Cadbury Australia must be able to implement consistent monitoring measures in the operations of Cadbury China and the performances of the employees and the six managers sent to the country.  (2006) state that expatriate failure is oftentimes associated with lost opportunities, reduced productivity, and damaged relationships while expatriate success connotes the accomplishment of the opposite (). Furthermore, cultural competence is measured if the manager assigned at a foreign location possesses a strong personal identity, has knowledge of and complies with the beliefs and values of the culture of the country where he is assigned, demonstrates sensitivity to the affective processes of the culture, communicates clearly in the language of the country of assignment, displays a degree of culturally-sanctioned behavior, nurtures active social relations with the people and authorities of the country, and negotiates the institutional structures of that culture (2006). Cadbury Australia can follow the two strategies set forth above to measure the performance of the six leaders when they start their assignments in China. Basically, the leaders should be able to adapt quickly to the Chinese culture, comply with its requirements while performing their responsibilities, and gain appreciation of the unique processes of doing business in the country. Credit:ivythesis.typepad.com

CASE STUDY FOR LEADERSHIP CHALLENGE

CASE STUDY FOR LEADERSHIP CHALLENGE INTRODUCTION The contemporary world is a borderless communi...

Cadbury

Cadbury Cadbury is one of the world’s largest businesses that is engaged in a chocolate business and positioned itself in the market as one of the company that has a great market share for almost all of the countries. Moreover, the company also spread in the emerging markets most especially in the competitive markets where the company will find another domain. The popular products of the company includes many global, regional and local all-time favorites such as Cadbury Dairy Milk, Flake, Crème Egg, and Green & Black’s in chocolate; Trident, Dentyne ad many other popular brands that  are available in the markets. PESTLE Analysis Political – The Company’s strong advantage is the seniority in business. With that the company can able to manage any adjustment needed in every country. The seniority of the management enables the other foreign country also welcomes the company’s existence because of its competence in the market. Economic – There is no doubt that the Cadbury is making a big contribution in the economies of the foreign country as well as in their own country. The high level or rate of sweet-lovers, the company placed a label as the best choice of the market. Another contradicting factor is the economic downturn that affects all confectionery companies. Social – The impact of the business in the society is really great because of it became sweeteners after every meal. Therefore, many individuals can enjoy the happiness it brings inside the house. In some instances, the other people turned down the idea of eating chocolate because of some serious health problems. In terms of valuing the people, Cadbury recognizes the rights of the workforce and valued the ideas they might contribute for their progress. Technology – From the traditional crafting of chocolates, the company also recognized the importance of technology. From the production, Cadbury had incorporated into many types of machinery that make their production be a cost-efficient procedure. Legal – The ideas of creating a specified taste to be available in the markets. The competitors and the other company making the same nature of business are unique. In terms of the merging and acquisition business, the company recognized the legal aspect that is the basis of the right flow of the business.  Environment – The Company recognizes the certain impacts that they might bring in the environment. There are available strategies and continuous inspection came from the local officials to insure that the resource, as well as the environment is not exploited. Porter’s Five Forces Analysis Supplier Power – The Cadbury has many contracted suppliers that can support their on-going operations. Although there is an existing competition, the raw materials such as nuts or special ingredients are sufficient enough to satisfy their production. The good relationship of the company in their suppliers is considered as an advantage. Barriers to Entry – Since the company is already popular and widely known, Cadbury can earn the trust of the countries. The only hindrance that might affect the production of the Cadbury is to find a good location and gather the requirements for the smooth entry and the foreign policy that might affect the operation. Power of Buyer – The demands is not that high because of the existing health conscious. The price subjectivity of the products is not a question for the people but the increasing number of competitors that offers the same type of products at a lower cost might be the cause of the customer loyalty alteration. Rivalries – Many businesses are competing against the Cadbury and planning to take over the supremacy the company kept for years. The difference of choice depends on the taste ad preferences of the customers. And in the past years, companies like the in the other industries are continuously developing their products or innovating the ideas making it more hard to compete. Threats for Substitutes – There are only a minimum rate for threats which came from the other competitors. The reason behind this is the brand strategy already created by the company. Through their high level of equity, the brand name is transformed into three different categories that make it more effective in the market. It allows the corporate brand name to be combined in supporting the product identification.  Corporate Strategy The company’s board of shareholder values and believes that it is best to achieve the strong performance through the growth of opportunities and maintaining their strong position in the market. In addition, the brilliant minds of the corporate sector are guided by their plans and using the importance of their brand strategy that involved specific targets and continues to focus on it. They addressed in forward looking plans that tries to diminish any uncertainties and challenges involved and exchanged it with strategies based on the assumptions existing in the present markets. This idea will help the company operate for the future and achieve long-term reign. Credit:ivythesis.typepad.com

Cadbury

Cadbury Cadbury is one of the world’s largest businesses that is engaged in a chocolate business and positioned itself in the market as ...

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