Costa Coffee: Strategic Role in Business Environment

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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

 

 

 

 

 

 

 

KTG Corporate Strategic Management by Jolito Ortizo Padilla

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Executive Summary

KTG is a consulting company with diverse services to its client in the field of mining, engineering, architectural, construction and environmental services. KTG management have recognized that there are variables that will surely increase as companies grow more complex and will then become more difficult to trace the side effects of a change in dealing with a specific area of management responsibility.

There are many problems to be solved.  The challenge for KTG is to consider changes in structure of organization and the locations of authority and responsibility. The vital point to be considered is that the structural, technological and human aspects cannot be separated as they all interact.  When KTG changes from a functional to a services grouping, problem of interpersonal relations occur. This may in turn affect the techniques of control. A knowledge streams should enable a manager to understand that it may not be easy to find a simple answer to a problem but, by using facts and using available knowledge wisely, answers can be much more accurate and effective.

Introduction

There are many ways of looking at leadership and many interpretations of its meaning. Leadership might be interpreted in simple terms, such as “getting others to follow” or “ getting people to do things willingly” or interpreted more specifically, for example as “ the use of authority in decision making”. It may be exercised as an attribute of position or because of personal knowledge or wisdom. Leadership might be based on the function or personality or it can be seen as a behavioral category. It may be viewed in terms of the role of the leaders and their ability to achieve effective performance from others. Leaders can also be discussed in terms of a form of persuasion or power relationship.

From a comprehensive review of leadership theory and research, Bass, M (2010), concludes that: “There are almost as many different of leadership as there are persons who have attempted in defining the concept. According to Crainer, K, 2008, there are over 4000 definitions of leadership and “it it is a veritable minefield of misunderstanding and difference through which leadership, but essentially, it is a relationship through which one person influences the behavior or actions of other people. This means that the process of leadership cannot be separated from the activities of groups and effective teambuilding.

The changing nature of work organizations involves moving away from an emphasis on getting results by the close control of the workforce and towards an environment of coaching, support and empowerment. This places an ever growing importance on leadership. The leader follower relationship is reciprocal and effective leadership is a two way process that influences both individual and organizational performance. Leadership is related to motivation and interpersonal behavior. A major report from the Advanced Institute of Management Research refers to the dual role of leadership. Leaders both motivate employees and design effective organization. There are two broad conception of what leaders do-they motivate their followers and they design organizational contexts to enable their followers to function effectively.

Strategy

Corporate Level Strategy

Corporate Strategy is defined by Drucker as “ a continuous process of making entrepreneurial decisions systematically and with possible knowledge of their futurity, organizing systematically the effort needed to carry our these decisions and measuring the results against expectations through organized systematic feedback.

KTG should include the following in their corporate strategy:

·         Rational allocation of resources

·         Improved coordination and anticipation of technological change

·         Increased profitability

It is really more of the style of management working in an atmosphere of change. Corporate strategy is therefore needed to cope with social and political change. The need to equally careful thought in setting social objectives, policies, and plans to ensure the gain of social change of company’s ideas. The idea behind is to adapt the organization to its environment, and this will usually mean fundamental changes in management and the organizational structure(Padilla, J; Chan M; 2010)

Certain key factors should then be identified which improve KTG position. The final assessment would cover specific areas that follow:

·         Research and development

·         Human resources- the need to ensure staff are available of the desired quantity and quality

·         Knowledge Stream

·         Business Stream

·         Finance

The essential need is for the plans from the various areas of a business to be integrated, so the functional plans are interlinked to form an overall corporate strategy. An interesting account of the various strategies which can be adapted and classifications of opportunities and risks is given in Managing for Results by P.F. Drucker. He points out two important strategies which have to be decided:

a)      Decide what opportunities or wants the company wishes to pursue and what risks it is willing and able to accept.

b)      Decide on the scope and structure and the right balance between specialization and integration.

The classification of opportunities (additive, complementary and breakthrough) and of risks are interesting and practical guides to help the formulation of strategies. A capability profile of company strengths and weaknesses can be drawn up; one method is a point’s scale related to a desired level of performance.

Ansoff consider that the measurement of “synergy” is similar to what is frequently called “evaluation of strength and weaknesses” In synergy joint effects are measured between staffs , in strength and weaknesses evaluation, the firm’s competencies are rated relative to some desired performance level.

Long range planning enables management to anticipate difficulties and take steps to eliminate them before they arise and can help to bring about a more unified approach. Plans, though, must clearly state which manager is accountable and for what results, i.e. it must be management by objectives.

To be effective KTG must be goal driven. By setting goals or objectives is therefore a key step in the strategic process and provide the organization with a sense of direction, provide a basis of motivation, as well as benchmark against which performance and effectiveness can be subsequently measured. It is the heart of planning process, and is prelude to the development of strategies.

Management by Objectives must not be looked at as just another management technique. It can be considered to be an approach to practical management. In essence, it embraces a clear cut strategic plan and its translation into departmental and personal goals, which are reviewed when results are obtained. The emphasis appears to be more on human needs and motivation and increasing subordinates’ participation in setting objectives.

Effective strategies and planning use the approach of MBO having a clear defined objective for function in the company. These objectives must also be part of contribution to other objectives of KTG. Drucker goes a stage further by suggesting that KTG managers at every level should participate in devising objectives for the next higher level of management. The important thing is to ensure that the individuals’ objectives are related to the common goal.

Douglas McGregor (Human Side of Enterprise) stresses the value of MBO especially the It is aspect of performance appraisal. McGregor approach suggests that KTG look at two sets of assumptions about individuals and their reaction to work as quote:

“Participation is one of the most misunderstood ideas that have emerged from the field of human relations. It is praised by some, condemned by others and used with considerable success by still others. Some proponents of participation give the impression that it is a magic formula which will eliminate conflict and disagreement and come pretty close to solving all management’s problems. These enthusiasts appear to believe that people yearn to participate,  that is a formula which can be applied by any manager regardless of his skill, that virtually no preparation is necessary for its use , and that it is spring full blown into existence and transform industrial relationships overnight.

Some critics of participation, on the other hand, see it as a form of managerial abdication.  It is a dangerous idea that will determine managerial prerogatives and almost certainly get out of control.  It wastes time, lowers efficiency and weakens management efficiency. A third group of managers view participation as a useful item in their bag of managerial tricks. It is for them a manipulative device for getting people to do what they want, under conditions that delude the “participators” into thinking they have had voice in decision making.

A fourth group of managers make successful use of participation, but they don’t think of it as a panacea or magic formula. They do not share either the unrestrained enthusiasm of the faddists or the fears of the critics.

It is therefore very important to specify exactly the main objective of any scheme for participation. It is concerned with power sharing power to allow employees to influence decisions. This may be specific (i.e relating to an employee to influence decisions. This may be specific (i.e . relating to an individual –his career, promotion, remuneration). Or general (i.e. representing groups of employees who are involved in decisions affecting sections of the workpeople) and may refer to participation in profit sharing, ownership of assets and decisions that affect the career or remuneration of employees.

There are therefore many possible levels of involvement in participation where management and employees commit themselves to voluntary or legal agreements. The main point to consider is “what is participation designed to achieve”? It could be considered to be either:

·         To improve the material well being of the employees (e.g. profit sharing and bonus scheme)

·         To improve the efficiency of the company (e.g. to set up works councils, planning, and consultative committees)

·         To own an enterprise (e.g. worker representative on board and transfer of ownership schemes)

·         To safeguard position of individuals.

It was mentioned earlier that mutual confidence between management and worker is of paramount importance. If this is not present it is very doubtful if this can be installed by legislation. It requires employees to look at the needs of the enterprise as a whole and not to pursue sectional interest, and the employees have a right to be consulted and kept informed.

Behavioral Traits of KTG Leadership

A trait is a physical or psychological characteristic that accounts for the behavior of a person. Trait theories grew out of qualities found in great or well known natural leaders, whom it was thought were born with leadership qualities. It was later considered that if traits of natural leaders were identified it would be possible for others to acquire them through learning and experience.

Social psychologists were interested in leadership as an aspect of behavior in the workplace and not just in personal characteristics. There are studies led by Padilla, J and Chan, M. (2010) and both concluded that there were two principal aspects of leader behavior:

·         A concern of people

·         A concern for production

These studies led to the development of matrix to depict managerial leadership styles. This was created by R. Blake and J. Mouton and called “ The Managerial Grid”

R. Tannenbaum and W. Schmidt (2008) found that managers were often uncertain to handle specific types of problem. In particular, to distinguish between the types of problem they should handle themselves and those that should be resolved with their subordinates.

They concluded that in making an appropriate choice of how autocratic or democratic to be, a manager needed to consider three sets of issues:

1.       Personal concern- managers had to consider their own values, their inclinations toward leadership, and the level of confidence they had in their subordinates.

2.       Subordinate Concerns –managers had to consider their subordinates’ needs for responsibility and independence, their knowledge and interest of the problem , and the amount they desired to be involved in solving problems.

3.       Concern for the situation- this included concern for the nature of the problem, the competence of the group in handling the problem, the time available and the type and history of the organization.

They suggested a continuum of possible leadership behavior which is available to a manager, along which may be placed various styles of leadership. At one extreme, leadership was born-centered (or authoritarian) and at the other extreme, leadership was subordinating centered (or democratic). The continuum therefore, represents a range of action which relates to the degree of authority used by a manager and the area of freedom available to subordinates in arriving at decisions.

 Coordination

In order for KTG to be successful, coordination must not be directed in an autocratic manner, but rather encouraged in a democratic manner, everyone participating in a unified way. It operates vertically as well as horizontally and should be affected at the most appropriate time . In addition to these points , Mary Parker Follett suggested three more factors of effective of coordination:

·         By direct contact between the person immediately concerned

·         It must commence at the earliest stages of planning and policy making

·         It must be a continuous process

It is apparent that everyone is influenced by their colleagues and by the total environment: coordination will be easier to achieve if they understand each other’s jobs and they will compromise more if information is exchanged. The ideal is for arrangements for coordination to be such that problems can be anticipated and therefore more easily prevented.

As previously stated, coordination exists horizontally and vertically, and it is essential for authority and responsibility to be clearly delegated so that department heads know the limits of permissible behavior. It can be appreciated that as more functions are self contained the number of organizational relationships will be reduced and less cooperation will be required.

If authority overlaps, coordination generally will be more difficult; but this may be permissible in some cases especially if the objectives of each department concerned were different.

Motivation

A large part of a manager’s task is getting things done through people; he must therefore try to understand people’s motivation. This aspect of management element of direction is concerned with inducing people to work to the best of their ability. All aspect of motivation of employees cannot be provided by management as other influences occur outside the working environment, e.g. community and family pressures. Motivations refers to the way urges, aspirations, drives and needs of human beings direct or control or explain their behavior. It may simply be described as keenness for a particular pattern of behavior.

It is worthwhile taking a closer look at theories of motivation and one approach which is widely known by managers is clearly set out by Abraham Maslow in his book “Motivation and Personality (1970) end Harper & Row). Maslow theory of motivation claims that human motives develop in sequence according to five levels of need. This theory needs follow the sequence and when need is satisfied it decreases in strength and the higher need then dominates behavior. This leads to the statement that a satisfied need is not a motivator. There is a doubt whether this really applies in practice to the higher needs as it likely that self esteem requires continual stimulation and renewal.

It was not until FV Hertzberg in his book Work and the Nature of Man(1968, Staples Press) presented his two factor theory of motivation that differences between higher and lower needs were elaborated. Here again the outcomes related to satisfaction (satisfiers or  motivators) are those stemming from the intrinsic content of the job (e.g. recognition and responsibility, meaning and challenge) –these satisfy the higher needs; factors which create dissatisfaction (dissatisfiers or hygiene factors) stem from extrinsic job context (e.g. working conditions, pay, supervision)- these satisfy lower needs. An important point in the theory is that as dissatisfaction stems from lower needs not being satisfied, when these are satisfied, this only removes dissatisfaction, and does not increase satisfaction. If hygiene factors did not reach a certain standard (e.g. salary, working conditions, job security, poor supervision) they felt bad about their jobs, and were unhappy. Positive motivation and a feeling of well being could only be achieved, not by improving genuine motivators such as recognition, achievement, responsibility, advancement and the work itself.

Another approach recognizes that people will act only when they have a reasonable expectation that their actions will lead to the desired goals. They will perform better if they believe that money will follow effective performance, so if money has a positive value for an individual, higher performance will follow. This is called Expectancy Theory which places emphasis on performance noting that there must be clearly recognized goal and relationship between performance and outcome

Communication

It has been said that management is concerned with the way jobs are done through people. Communication therefore is the means whereby people in an organization exchange information regarding the operations of KTG. It is the interchange of ideas, facts and emotions by two or  more person by the use of words, letters and symbols.

KTG requires good communication but it is particularly important in directing and will be treated for convenience. It is widely considered that the organizing element of management should concern itself with the system and environment within which communication functions. Management of the communication process requires not only attention to the media of communications, but to the personal interrelationships of people in the organization.

Chester Barnard (2009) stressed the need for communication to occupy a central place in organization theory because the structure, extensiveness and scope of organization are almost entirely determined by communication techniques. Communication can be regarded as the foundation upon which organization and administration must be built. Barnard again stressed that the first executive function is to develop and maintain a system of communication.

Communication is a process which links various parts of a system and problem of communication have been divided into three aspects:

1.       The technical problems of how accurately the symbols can be transmitted.

2.       The semantic problem of how precisely the symbols convey the desired meaning.

3.       The effectiveness problem of how effectively the received meaning affects conduct in the desired way.

Cybernetics has helped to answer problems in group 1 above. Information theory is the quantitative measure of the amount of order in a system. If the properties of a system are known , the maximum rate at which a communication system can transmit information can be calculated. The more probable a message is, the less information it gives and the more uncertain a situation is, then the more information is needed to describe it completely.

As far as group 2 above is concerned –that is the meaning a message has to the receiver – a person may say one thing but may hear something different, even though the same words were sent and received. A manager must try and check whether the meaning of the communication has been understood.

In group 3 above, it is usually found that the more direct the communication, the more effective it is. The more levels of organization it passes through effects the action that is eventually taken. So the problem is really to consider how the receiver actually accepts the communication. It depends upon his needs, past experience, the completely of phrases used, the distinction between facts and opinions and the environment in which the communication takes place.

Formal communications are planned to meet the specific requirements of an organization, but informal communications are very important.  One informal channel is the grapevine where rumor passes quickly around. It is not an accurate method, but can be used to the advantage of management at times. It can be considered to serve the social needs of individuals in the organization.

Recommendation and Conclusion:

KTG must have an understanding of leadership is important for various reasons:

·         Leadership binds a working group together and assists KTG management , enabling an enterprise to perform successfully.

·         Good leadership sets the tone of an enterprise’s culture and creates a climate in which personal growth is encouraged.

·         If KTG managers assume their subordinates are lazy , uncooperative and need to be controlled, they will treat them accordingly (Theory X), but if they assume subordinates are hardworking , friendly, and cooperative they will treat them quite differently (Theory Y).

KTG must identify that communication is important for a number of reasons:

·         The success of KTG depends upon it in formulating and implementing plans and achieving enterprise objectives

·         It forms the basis of successfully introducing change

·         An understanding of the process and barriers to communications should lead to more effective management.

·         It is vital element in external enterprise relations.

People must be attracted or motivated (a) to join an enterprise and remain with it, (b) to exert sufficient energy and effort at an acceptable rate and (c) to maintain and develop the human resources of the enterprise.

For KTG managers to motivate subordinates, they must create a working environment in which their employees can understand how the achievement of organizational goals will simultaneously satisfy a range of their own personal needs.

References:

Ansoff H.I. Business Strategy , Penguin (1987), pp101-103

Abraham Maslow in his book “Motivation and Personality (1970) (edn) Penguin/ Harper and Row, pp89-91

 Chester Barnard (2009); The Value Based Leader, in Chowdhury. S (edn) Management 21C, Financial Times Prentice Hall, pp56-68

Bass, M (2010), Strategy in Action, Manager, The British Journal of Administrative Management, April 2010, pp 235-237

Douglas McGregor (Human Side of Enterprise)Penguin, (1987), pp55

  Drucker P.F. Managing for Results, Heinemann Professional (1989) pp90-92

  Crainer, K, 2008, Exploring Corporate Strategy, seventh edition, Financial Times Prentice Hall (2008)

 FV Hertzberg in his book Work and the Nature of Man(1968, Staples Press)

 Padilla, J 2010 and Chan, M. 2019, Strategic Management, 2^nd edition, Prentice Hall (2010), pp176-179

R. Tannenbaum and W. Schmidt 2008; Organizing and Mastering Works, 2^nd edition Financial Times Prentice Hall, pp 45-46

R. Blake and J. Mouton(2009) Organization: Contemporary Principles and Practice, Blackwell Publishing (2009), pp90-91

 

 

The Human Resources Effective Management Approaches by Dr. Jolito Ortizo Padilla

Human Resource Management Appraches

1.       Two traditional approaches in HRD and its implications:

 

1.1   Approach to recent developments in critical HRD research and writing

 

A.      Manpower planning seeks to maintain and improve an organization’s ability to achieve corporate objectives by developing strategies which are designed to increase the present and future contribution of manpower.

There is great difficulty in forecasting demand because of the change in the following areas:

·         Technological-changes in materials, technical systems and methods of power

·         Economic- marketing and capital formation

·         Social- population trends, social mobility, and education

·         Political- industrial legislation (wages and salaries, monetary policy, training, redundancy)

 The advantages of Manpower planning are:

·         The right number of staff is recruited at each level in the hierarchy

·         Staffing requirements can be better balanced and movement of staff made easier.

·         Areas of high labor turnover are highlighted

·         Implications of changes in recruitment, promotion, and succession plans are foreseeable.

Limitations:

·         Detailed records are needed plus expensive clerical staff.

·         Problems of forecasting changes, especially technological and government policy areas.

·         Forecasts can be uncertain even for a few years ahead.

 

1.2. Formulate personal definition of HRD and shaping national policies

The traditional attitude to manpower is that it is a cost; there is greater consideration now towards the idea that it is an investment. Therefore the best use of this investment should be made so as to ensure that the manpower achieves personal satisfaction and the company achieves a maximum returns on the cost.

It is important to stress the problem of uncertainty today; changes can occur in the following more detailed analysis:

·         Production and sales targets and new products’

·         Plans for diversifying, expanding or contracting production

·         Centralization or other organizational change

·         Technological changes, e.g. mechanization, improved methods, new management techniques;

·         Changes in hours of work, holidays, negotiations with trade unions and collective agreements;

·         National policies regarding taxation and redundancy

·         Changes within company, e.g. retirements, age structure, promotions

A company must be able to recruit and retain manpower of the type and caliber it requires for efficient operation. Change is a dominant factor today. Processes, products, systems and methods change quickly. The role of the computer is increasing and there is at present a shortage of system analysts and programmers, and this will continue for a number of years. New techniques e.g. operational research, influence the organizational structure of companies and later the pattern of manning.  Some jobs need increased skills, others need less. Thus a high standard of planning is needed. The rewards to a company are high as a great reduction in cost is possible; reduction in one area in particular, labor turnover can save a great deal of money.

The organization should be designed to attain the objectives of the company. Functional objectives are set and organization planned to attain them. Each department must be staffed so that the available skills and abilities are equated with task to be done.

There may be changes in the external markets, in the supply of local labor skills, changes in comparative earnings for each category of employee. Other relevant information includes output per man hour and total man hours available. The manpower plan can then be prepared and will also include consideration policies on; recruitment; promotion and career planning; training and development and industrial relations

Reviews of the progress of plans will take place periodically, with yearly revisions as part of a longer term planning cycle. Monthly budget statements will be prepared and a comparison of actual and planned targets will be made and variances noted. Information obtained will be then fed back to earlier parts of the cycle which may then indicate the need for the changes in the plans.

1.3 Implications of 2 above for VET Current Policy

Manpower planning should be an integral part of corporate planning and top management backing is essential. The skills of individuals must be continually developed in order to meet the needs of technological, economic, and social change.

The recruitment and selection processes must be continually reviewed and evaluated, as the cost of the process is high. Many companies’ reports now contain the average numbers of persons employed over the year and the amount of wages and salaries paid to them. Labor turnover figures may also give valuable information.

First of all, existing manpower strength and work volume are analyzed and detailed forecasts made of future work volume is then related to past ratios to give forecast. This is called ratio trend forecasting.

Another method is called theoretical requirements forecasting and involves assessing and defining the type and volume of activity needed to attain desired results. Specific objectives are given to management. Existing manpower and work volume are compared with forecasted future work volume and manpower, noting probable changes in the methods. So, for each category of staff, there is a statement of present and future positions, and this enables manpower requirements to be calculated.

Personal records must be adequate and kept up to date. Records containing relevant facts must be easily available; some firms have the details on computer files.

Employment inventories are useful, and analysis into male and female just costs-advertising, job categories, part and full time is needed. The pattern of ages should be noted as it may be that many retiring shortly or many are ready for promotion. Thus the problems which may arise can be dealt with if known time. Turnover can be analyzed into reasons for leaving, length of service, age group and type. The cost of turnover is great.

An ordinary clerical job involves this costs-advertising, management time on interviewing, temporary help or overtime paid during staff shortage, reduced output during training time and trainee’s time. This could easily add up to $2000 per job vacancy. A reduction in job turnover from 10 percent to 5 percent in a firm is an enormous saving.

These changes with International Business Machine and other UK companies has a five year forward plan, broken  about fifteen main occupational groups, showing numbers to be recruited  to replace predicted staff turnover and to meet the company’s growth plans, which are based upon market research and product development forecasts. The key is a very detailed job classification, which is expressed in a four digit code for computing processing.

1.4 Recommendations:

Manpower planning is part of corporate planning and seeks to maintain and improve an organization’s ability to achieve corporate objectives by developing strategies which are designed to increase the present and future contribution to manpower.

The brief point to consider is;

·         Examine the existing situation to see if manning effectiveness can be improved;

·         Plan to assess and determine future objectives of the business;

·         Determine the method of organization needed and the post needing to be filled;

·         Note the present staff, their potential and career requirements;

·         Identify requirements for manpower required

 

2.       Traditional approaches to HRD and its Implications

 

2.0   Induction and Training

2.1 Approaches of recent developments in critical HRD and research writing:  

Arrangement should be made for new employees to be introduced to the firm and to the job. A new employee must be shown where his place is in the organization. This service varies greatly among organization, but a systematic course of induction should cover:

 

·         Brief history of company, product, place in industry, present organization, names of department heads and the work of various department

 

·         The rules of working and safety and  health regulations
·         Human resources policy regarding discipline, education and training and promotion, holidays, method of computation  and date of payment of salaries and wages
·         Introduction to the new employee’s own department and a detailed summary of department’s work;

Some forms of training are needed to all employees.  It may give a wider general knowledge of new techniques or a broader outlook, but can be most beneficial to employee and employer.

An effective training program can be:

1.       Improve efficiency and morale;

2.       Introduce new techniques;

3.       Provide for succession, enabling qualified replacements to be available;

4.       Raise the standard of unskilled personnel, thus helping overcome labor shortages;

5.       Develop supervisors and decrease the amount of supervision needed;

6.       Lead to a reduction in scrap rates and improve machine utilization

Many companies do not regard training as a professional activity, and in many cases training officers are not themselves trained. Many courses are held and employees sent to college without any serious thought being given to real training needs of the company.

After identifying the development needs of the individual the choice of course must be made. Some firms have noted the waste of money on external training. Course objectives are often ill defined: these should be determined together with the staff’s qualifications and experience. Course literature is more attractive than informative and the training officers need advice on courses. A system of reporting back after each course is essential. The report should go to the training officer as well as to the departmental head. In addition, individuals must be given an opportunity to use knowledge gain.

Training needs must be assessed to determine:

1.       The jobs for which planned training is required;

2.       The number of people who need to be trained annually for these jobs;

3.       The standards of training required

When the skills and knowledge required have been noted, a training program is needed. An essential part of the program is the need to train instructional staff and design a method of controlling progress. This program should be of course periodically evaluated. The training officer therefore, advises management on training policy, basing his advice on training needs. He analyses job to identify skills; he plans programs and follows them up. He must be familiar with assessment of training needs and job analysis; he must know how to plan programs and evaluate cost of training, also he must keep abreast with methods of training, including program learning.

Training can be considered as the creation of learning opportunities.

The required needs of managers and supervisors can be said to consist of:

1.       Knowledge. Basic knowledge for the job; this usually come from education early in his work, or before employment.

2.       Skill and Experience- these are related closely to the job content. Preparation for new jobs can be made by giving person assignments, case studies, decision making exercises and management games to stimulate real conditions. Group projects and role playing can supplement planned work experience to enable a person to increase his effectiveness.

3.       Attitude- the development and conditioning of attitudes and patterns of behavior depend more upon a learning experiences. A person will for example benefit more by experiencing cooperation than reading about it, and a person’s ability to adapt change, cooperate with others and be more self confident, comes partly from the work’s situation. The development of attitudes can be quickened by organizational development training. These methods, briefly, teach a group to monitor its own performance, identify and agree problems and their resolution. Other business exercises can be operated under conditions of stress to improve the effectiveness of the individual, the group and the company.

Effective learning can take place according to Bass and Vaughn (1966) when the following four requirements exist:

·         Drive- that is the motivation of the individual who must accept and be committed to the need of the training;

·         Stimulus – the signal received and interpreted by a trainee;

·         Response- the behavior resulting from a stimulus; this can be developed through training

·         Reinforcement- information that the learner receives giving an indication of progress-ideally as soon as possible to enable more effective learning to occur.

It is important to note that a training officer must work closely with the line management in preparing programs of training which meet the needs of employees and minimize their learning problems.

Education can be considered to be instruction in knowledge and skills to enable people to be prepared for various roles in society. Its focus is mainly broadly based for the needs of the individual and to a lesser extent the needs of society.

Training relates to the acquisition of knowledge and skills for the purposes of an occupation or task. Its focus is much more narrowly based than education or development, and is job or task oriented.

Development is concerned more with changes in attitudes behavior and employee potential than with immediate skill. It relates more career development than job development. It is a learning activity concentrating on the future needs of an organization.

2.3 Implications of VET policy

The main objective is to improve current performance and provide a suitably trained staff to meet present and future needs. A person’s knowledge and skills have to be improved and his attitude and behavior modified by training and development.

 

The volume of management training and development has increased greatly in recent years  in UK and other countries and there is a proliferation of course available. These courses are not necessarily geared to the needs of the individual and, therefore, before the courses are organized, it is vital to analyze training needs.

Once the true needs are known the most effective means of training can be determined. Within the framework of overall manpower needs of the individual needs, supervisory and management succession plans can be drawn up. The needs of each individual manager must be considered and his performance appraised and weakness remedied.

The training should develop knowledge, skills, and attitudes, through various methods of instruction, demonstration and experience.

Job Rotation

This can be instituted within the department, within the company, or within another company. The   purpose is to improve a manager’s understanding of jobs other than his own and provide specific experience which will equip him for promotion. It is, of course easier to arrange for lower levels of management. Short periods in different departments were at one time widely used for induction training but it was never fully satisfactory and led to a high labor turnover. As the period was short, it did not enable the trainee to feel a sense of responsibility as he was not responsible for the results of his decisions.

Projects and Assignments

A good assignment should involve investigations into a number of departments and can reveal a person’s capabilities. Superiors should be interested and carefully examines findings. Assignments given into a group of managers will give a good experience in team working. These  courses is adopted on management courses, where members are split into syndicates to work on a problem, and here the problems of other departments become known to all.

Job Restructuring

Early management writers proclaim the advantages of specialization, particularly increased productivity. Some writers like Karl Marx and Friedrich Engels in 1850’s were not so happy with job specialization. They saw division of work as alienation of the worker which enslaves him instead of being controlled by him. Other writers have also noted that both the individual and society would also be affected adversely by too many dull repetitive jobs.

Research studies on the relationship between specialization and job satisfaction vary in their conclusion although the balance of opinion seems to indicate that there is a relationship and increased specialization can lead to job dissatisfaction. Hulin and Blood in Psychological Bulletin (Volume 69, No.1 pp41-53, USA) suggest that workers backgrounds largely determine their attitude. Those who deem work important and meaningful are aiming to progress may become dissatisfied in jobs that are specialized. Those employees who are alienated from work may prefer restricted jobs as they are easier and require little effort to perform.

2.4 Conclusion and Recommendation:

Management education deals with the theoretical aspects of management, usually acquired through formal methods of study. Management training is concerned with the practical aspects of management and implies preparation for an occupation or for specific skills and is job oriented than job orientated, and stresses potential rather than the present skills. It enhances latent abilities made evident through education and training. Training can be evaluated effectively if precise training standards are set. The five levels for achieving results should be noted. There must be scientific approach to measurement to enable the cost incurred to be justified.