Costa Coffee: Strategic Role in Business Environment

Copyright Infringement is Punishable By Law

Costa Coffee : The Changing Role In Business Environment

The secret our great delicious coffee is hot piping cup coffee of take away. Costa have eco-friendly paper cups made of pulp of wood which are sustainable coming Northern Europe forest. The cup is covered with 100% recyclable content and it is known in the world as environmentally safe and perfectly designed cups.

The smart coffee machines are always ready to serve our customers and are carbon emission free. Costa was given and first to be accredited as environmentally friendly Roastery in 2012. Coffee sacks are recycled into a carpet which is gives Costa its uniqueness when it comes to sustainable corporate responsibility. The coffee roastery has a refill of 0% landfill with and energy supply of 100% that reduced carbon and pollution free

 Tons of wastes of over seven thousand were diverted. Organic waste recycled and ground coffee is recycled thereby creating a renewed fuels. Uniforms that were not used were also recycled with the use of delivery vans to pick up these unwanted clothes.

Costa management is being supported by British farmers because what they produced are of quality standards and certainly all of Costa’s dairy products comes from British farmers which upholds its virtues of the highest quality of raising beef, chicken and other farm products. These are included and written in the packaging.

The vital links to Costa coffee is milk and are Farm Assured by British Agricultural Authorities. Costa has taken responsibilities about the British Dairy Industry, although Costa provides a volume of only 0.5% but the company ensures that the price they paid to farmers are fair. For almost years, Costa has the same suppliers and sees that they coordinate with this farmer supplier and ensure that they are capable of sourcing, monitoring and a well -coordinated efforts in order to produce healthy food products Because of this, Costa benefits to the long relationships with all of their suppliers.    

Costa use British which is an important product for Costa and all milk that are being used is Farm Assured. Although Costa's has taken responsibilities and seriously about dairy UK dairy products and ensure that a fair price is paid to farmers. Costa sourced their milk through innovative processor and took milk from the farmers of the same group for years of operation. This means that we are able to speak directly with the farmers as well as the processor and we all benefit from having long term relationships.

Description of Management Function

Costa Coffee has a structure which is functional and is related to line organization. Various levels should be preserved in every specialized section. For example, a human resources manager in a branch, reported direct to the plant manager, but in human resource matters is also supervised by the head office human resource officer.  There are divisions of loyalties and questions may arise so that the distinction about the role and scope of each in the structure are well defined. 

Functional organization is applied to systems where the responsibilities of manager activities are having the executive authority.  Functional department may, however will set programs and standards upon the authority of the general management which each department will comply.

 Functional relations arise when a specialist contributes greatly to the service in the level of line manager and organization executives. This specialist is often called a ‘functional” officer, with the responsibility to pursue all activities are being productively performed within the organization. The specialist advises “line” colleagues and is responsible for assisting line managers.

Those specialists having their own staff, has the relationships of a “direct”. The functional must not interfere with the service, advice and direction in relation of the manager’s authority along the chain of command , Dale McCkonley (1998).

Lateral (horizontal) relations are those existing between executives or supervisors at the same level of responsibility and holding equal authority at the. Similar level exists between executives and supervisors with equal authority which are responsible for the productivity. This is called lateral (horizontal) relations that are necessary to cooperate in support to reach organizational goals and objectives. The relationships should act according to the knowledge of the supervisors or executives along with their line staffs. This is known as Fayol’s bridge theory. There are two types (a) colleague relationships, which are those between managers in the same department who work together under one superior; and (2) collateral relationships, which exists between managers in different department s and serve to discharge responsibility more effectively.

In the pure form of the organization, neither line nor functional type’s effects exist separately. The main operational activities exists in a pattern of a line along with the specialized activities which are non operational in nature in which senior executives and staffs has a proper relationships from the line nature to the executives.

Costa Coffee common goals is to produce quality and tasty coffee. Communication plays an important role to each of the members to achieve these goals. The ethical and proper behavioral patterns are developed and expected which we called it as norms. Whenever there are deviation to the norms are not acceptable. The output as compared to the norms will be an admonishment to the group members, Caroll, P (2001).

Pressures cannot be prevented by managers. This will be done in a constructive way and tasks and channel them accordingly to the interest and harmony within the organization. This could be done by employee participation and interaction in decision making policy to the interest of the group members and to the management.

Cohesiveness and unity can influence the group over other individual in the organization. The solidarity and unity of the group can results to the sound decision making policy which can be effective. Each member group will not deviate from group norms if they are completely attached with each other.   

Awareness by Costa coffee managers on a certain aspects of group performance must be closely monitored.   Once the group is cohesive, this will be an influential factor that will encourage the group members to have a high productivity and the choice of employee to be selected to work on a certain tasks. This will involve employees and management to work together in a sound decision making process which may result to reduce antagonism and see themselves as a part of the whole organization. I

Communications, formally or informally provides group with security, social satisfaction among members are the essence of productive groups. They can also be liable to suggests solution to the problems in consideration for achieving goals.

3. External Environment

·         The Changing Role of Business in Society (Economic Environment)

The beginning of “laissez faire” is being scientifically studies by the ideas of Adam Smith, 1776, as an economic approach. Love of self, the habit of labor, the exchange need and being independent is being motivated by human conduct.

 

Competition within the organization was beneficial so as to ensure that they create innovativeness and produce goods and services people need to use. Over pricing would lead to sales of the competitors. The organization that pays poor wages will result that this employee will transfer to competitors, so is to the company’s interest to produce products or services at competitive prices. The price mechanism also affects the changing needs of customers and thus the intervention by the government is not necessary. Duncan, J, (2010).

 

The value system and industrial structure has changed .Business capabilities has seen an increasing size in terms of expansion and growth and secure economies of scale. This expansionary market concentration leads to a so called competitive pressure. Costa coffee has its strategy and resources to overcome temporary setbacks and they have the power to influence the allocation of resources and can instigate the transfer of cost internally and willing to diversify. They are financially stable and secured and can easily adapt to the competitive pressure of the market. This is through long term strategic planning.  Another important feature  Separation of control ownership to professional salaried managers as if they do not have shares of stocks has been viewed as a broader enhancement to Costa Coffee survival in the market place with accompanying growth in a long term, than in a short term profits.

 

·         Changing values and attitudes (Demographic Environment)

As the living standard rises above and over the minimum and subsistence level the standard of living rises and people focus more in education thereby there is a change in priorities, needs, wants and expectations. They become more interested in material possessions and concentrate to the betterment of their lives, job satisfaction, security and stability and environmental concern, Ibsen, H, (2010).

 

Most Industrialized countries gives higher priority to the growth of economy and focus with social costs associated with their growth like air and water pollution thus affecting plans. In many countries, pressure groups are more common whose objectives are to decrease environmental pollution.  Others are concern with the equality and fairness of income distribution, the underprivileged workers and workers the participation of the worker in the organization.

 

While the public opinion is focused on these areas of activities, acceptable standards that failed are publicized.  The effect of these is that Costa Coffee’s economic role of profits exists though this legal rule. By not following this rule, the approach will become irresponsible.

 

·         Government Influence on Business Purposes (Political Environment)

Private companies have relied upon government aid whether from. Subsidy or direct aid to its citizens has been the most important factor that contributes to the economic welfare of the people. As the business organization increase in size it become a complex entities that industrial conflicts cannot be evaded. 

 

Costa coffee management strategies of the Laissez-faire model believe that the organizations need to maximize profits. Competitors like Starbucks will eventually forced them to make losses once they did not do consistently well in the market. Market share and limited raw materials are of the utmost importance.  

 

The government is the major regulators, subsidized good and enacts laws that will enhance the economic condition of the country. The political unrest in the Middle East raised the price of oil internationally and results to inflation. The world is increasingly dependent in the government to improve its market and the people welfare thus it is the imperative that the firm is to consider the impact of political environment, Stobaugh, R and Telesio,P. (2009)

Protectionism is the is being practiced by most countries to protect and safeguard their own industries so as they tightened their policies of trade guidelines so as not foreign countries to market the product locally. High tariff rate and custom duties is meted to those countries who wanted to import the products and compete locally or barred them to import such product.

·         Social Responsibilities

Costa provides good services within its customers and stakeholders and that standard of raw materials and the way they operate are in accordance to the laws and regulations to the country where they operate.  They will not ignore the environment in which it operates and the success of organizations may depend to a large extent upon their public image. The attitudes of the organization to its employees form part of this image.

 

The attitude of management to labor is at the core of the social responsibility of management. Workers have become better protected e.g. like staff status claims and security of tenure. Management must give a lead in these matters and the government periodically “exhorts” industry to do things which would aid the country socially, for example the location of Costa branches in development areas Padilla, J (2010).

 

·         Consumers have the right not to be exploited by an organization which depends upon the community in many ways. Management therefore cannot avoid the fact that its responsibility for industrial and commercial direction is mainly its responsibility to society.

 

Other social issues Costa Coffee manager face upon which they have to decide policies are:

1.       Marketing policies- Avoiding product that is detrimental to one’s health.

2.       A policy that social costs like pollution and waste disposal – the organization must have proper waste segregation and disposal.

3.       The relation which Costa with the government.

 

Social and political change should be implemented and formulated according to the strategic plan which may be challenging and assess and evaluate to ensure that the organizational could be achieved. 

 

·         Technological Environment

Costa Coffee for 2014 used enticed its customers through website by 50% a rise of 30% as compared in 2013. Technology is a key to Costa Coffee success as it strives to compete with Starbucks in Bahrain market.  The website is digitally interactive and customers can view how coffee is being mixed to their delight and satisfaction. The loyalty promotions are promoted heavily in the website.

 

The opportunities and threats changed through internet by altering the life cycle and spreads by introducing any other condiments and expanding into a new market and branches that erased the traditional spread of distribution in between trade-offs towards standardization of of product, MacCkonkey, D (2010). The economies of scale changed with entry barriers thus redefining the relations of various industries and its stakeholders.

 

New markets is created by  technological advancements  resulting  in the proliferation of new and improved products, change.ng the cost position of each of the competitors that render the obsolescence of the product , Padilla, J (2010)

 

4.       Costa Communications Strategies

 Costa management is concerned with how the jobs are done effectively by means of proper interactions and communications among staffs and managers. Communications therefore is the means of exchanging information and other interactive forums with regards to the operations of Costa. It is an exchange of ideas, facts and emotions by two or more people by the use of words, letters, and symbols Padilla, J, (2012).

The following points considered by Costa as to effectively communicate with their employees:

1.       Clarity- the language used in Costa must be clearly defined and concise to communicate the objectives of the company.

2.       Attention and presence of mind must be always emphasized.

3.       Integrity and Sincerity. Transparency of information about the company’s present and future plans should not be withheld to the workers. The management should foster the dignity and respect to raise the morale and encourages harmonious relationships among employees. Any communications should be carefully explained at an early stage. Communications should wherever possible also be sent down the accepted line of authority, because if people are by-passed they lose status and resent the action.

4.       Costa emphasized that the right information in communications both internally and externally

·         Face to face  interviews, during meetings and conferences

·         Orally or verbally telephone or other social media.

·         Written through letters, memos, circulars, periodicals and manuals

 

5.       Conclusion and Recommendation:

 Human Resources is a vital part of management process whereby its external context becomes explicit in the course of Increasing turbulence in the market and industries around the world.  Its framework deals with collecting data and evaluating economic, social, demographic, political, governmental and technological information. Empowerment among managers and employees makes them explicit in stature because it mobilizes, identify, monitor and evaluate the external forces that convert these into emerging opportunities to pursue an effective and productive work environment.

 Costa work is an activity based on groups, and teamwork is a major feature of human behavior and work organization. Cooperation among members is being carried out. Harmonious working relationships and good teamwork support and help staffs a sense of belonging and value which is the essence of staff morale and excellent organizational performance .Value and norms are developed thereby respect and dignity to work in Costa is of importance.

 Performance should be related to such factors as increasing profitability, improved service delivery or obtaining the best results in important areas of organizational activities. Costa has to insure that they meet satisfactorily, or exceed, the demands and requirements of customers, and are adaptable to specific requirements, changes in external environment and the demand of the situation.

References:

McConkey, Dale, Planning in A Changing Environment, Business Horizons, September –October 2002, pp66

Caroll, Paul, No more Business As Usual, Wall Street Journal, October 23, 2003, pp 24

Duncan, Jack , Organizational Dynamics , Prentice Hall, pp456-457

Ibsen Herman, Corporate Cultures The Rites and Rituals of Corporate Life )Reading, MA: Addisson-Wesley, 2006) pp23

Padilla, Jolito, Strategic Management, 2^nd edition, 2010