Category: Business 11471

Training and development is the sphere that is focused on organizational activity, particularly on the improvement of the performance of groups and individuals in an organization. It is also sometimes referred to as human resources development (HRD) (Sung & Choi, 2014). Basically, training programs developed by HR departments concern themselves with improving employees current performance and ensuring that they are ready for their future responsibilities.

Currently, more and more companies implement various training strategies for their employees, and they do it for particular reasons. Certainly, there are many advantages of using this strategy, which allow organizations to improve their performance, thereby increasing the competitive ability. First of all, training programs can help create good teams within an organization, as there would be no weak members and everybody would know what they should do and collaborate with each other. One more advantage of good training is that employees often want to acquire more knowledge and skills so that their work would be easier for them and bring them more money, but they cannot receive this knowledge on some additional courses due to their high costs and the lack of time (Sung & Choi, 2014). Thus, having such courses in the workplace is a great opportunity for employees to improve their skills.

Sometimes, training programs can be a disadvantage to a company. First of all, there is always a fear that employees can take their newly acquired skills to a competitor. Another disadvantage of training programs is certainly the additional costs for the organization of these programs (Sung & Choi, 2014). However, if these programs turn out to be efficient, the expenses will be compensated.

References

Sung, S. Y., & Choi, J. N. (2014). Do organizations spend wisely on employees? Effects of training and development investments on learning and innovation in organizations. Journal of Organizational Behavior, 35(3), 393-412.

What were the challenges that Shikhar Ghosh faced when he joined Appex?

At the time, when Shikhar Ghosh joined Appex, this company faced several challenges; in particular, one can speak about the inability to plan long-term projects and prioritize the activities of the personnel. Moreover, this organization lacked accountability standards, and it was difficult to allocate responsibilities among employees. Overall, the structure of this organization was largely shaped during its start-up stage. It was mostly a project-based organization which means that the employees were grouped and regrouped according to the needs and timelines of a specific task. Such organizational design had several advantages.

For instance, the company was able to respond quickly to a new and urgent challenge. However, at the same time, the company was too chaotic, and the work of employees was poorly-coordinated. Additionally, the company began to have difficulties with their customers because these people felt that their needs were not timely met. These were the challenges Shikhar Ghosh and his team had to overcome.

Evaluate the importance and the impact of each of the structural changes that Ghosh implemented

Considering the first change, what was the intended purpose of this change?

The first change implemented by Shikhar Ghosh was the introduction of a circular organizational structure. The main purpose of this initiative was to develop a non-hierarchical organization in which employees and senior management could exchange information with one another. In part, this initiative can be supported by theoretical concepts, for instance, one can mention the idea of a learning organization that has a memory of its past successes and failures.

Moreover, such an organization can be compared to a living organism and a brain can respond to changes as quickly as possible. It is not stated clearly in the case whether this initiative improved the exchange of information. Yet, such a form of structural design made it difficult for the new hires to integrate themselves into a company. Moreover, many other employees could not understand how such an organization was supposed to work.

Considering the second change, what was the intended purpose of this change?

The second change was aimed at reorganizing the company according to a functional principle. The employees were asked to work in teams specializing in a specific area such as engineering, marketing, or finance. In part, Shikhar Ghosh strived to ensure that managers and employees were accountable for their achievements and failures. His intentions were premised on the belief that an organization could be compared to a machine in which every component performs a set of specific functions. However, one has to consider that these components cannot operate independently and the failure of one component can prevent other components from functioning.

This initiative did improve accountability in the company; yet, it also gave rise to several problems. In particular, the role of separate individuals increased, and this role of personality made Appex more vulnerable. Apart from that, different teams could not properly cooperate. The problem was that the managers of different teams did not know where their responsibilities ended.

Considering the third, fourth, and fifth chances, what was the intended purpose of these changes?

The purpose of the third, fourth, and fifth strategies was to remedy the mistakes that were identified by senior management at the previous stages. Shikhar Ghosh and his team attempted to improve the accountability, cooperation, and flexibility of the company. Overall, at that stage, Shikhar Ghosh relied on a more complex vision of an organization. In this case, one can mention all three metaphors used by managerial scholars, namely a living organism, the human brain, and a mechanism. These metaphors enable managers to understand the roles of different organizational parts and their interactions with one another. Shikhars strategies did improve budgeting and planning in Appex, but at the same time, different divisions began to act like separate companies that had their procedures. Moreover, they were not willing to share resources. Thus, it was rather difficult to join their efforts.

Were all the changes in structure necessary?

The philosophy of Shikhar Ghosh was based on the idea that a structural change was a way of resolving the problems that a company could face. However, it is possible to say that not every change that he implemented was necessary. For instance, in the beginning, he experimented with circular and horizontal structures in which hierarchical power relations were practically absent. However, this initiative did not take into account past experiences of employees, their work values, and skills. Moreover, due to these changes, the responsibilities of workers were not delineated. As a result, these people felt confused because they were only asked to achieve new financial targets, but sometimes they did not know how to achieve them. Thus, one can say that the initial changes could have been skipped.

What would you have done in Shikhars place?

If I were put at Shikhar Ghoshs position, I would first try to set accountability standards within Appex. In particular, the employees and senior managers had to understand what kind of quantitative and qualitative objectives they had to meet. As it has been outlined in the case, this objective was achieved by establishing a divisional structure in Appex. Additionally, I would attempt to ensure that these divisions worked closely with one another.

This is why I would argue I would insist that several executive officers of an organization should coordinate the work of different divisions and link their operations with the strategies of a company. These divisions had to share resources and information.

Shikhar Ghoshs vision of an organization is very complex. He regarded this company as an organism and a mechanism. On the one hand, he emphasized the ability of different teams and divisions to share information and resources. Yet, he also stressed their ability to perform a set of specific functions. This property is a characteristic of a mechanism.

Do you think that structural changes are a useful management intervention?

Structural changes should not be used as a regular method of managerial intervention. They are necessary when a company needs to change its policies and strategies radically. Such an intervention is appropriate when an organization has to adjust itself to external factors. The thing is that effective cooperation of employees is possible when they interact with one another regularly. Frequent structural changes disrupt these ties between employees. After an organizational change, a person needs time to get used to this change and he/she may not perform the duties effectively. Thus, it is undesirable to implement structural changes as a company faces minor problems within its departments or divisions.

Name two lessons from analyzing this case about the importance of organizational structure to an organizations effectiveness

The case of Appex illustrates many important lessons about the importance of organizational structure for its effectiveness. First, this formation has to ensure that a company can respond to various challenges, risks, and new goals. A company can do it only if its structure allows quick exchange of information across the borders of departments and if its employees can understand their duties and responsibilities clearly. The second important lesson is that structure is vital for long-term planning and prioritization of tasks. A well-developed structure enables a company to see itself in the future. Without such a vision, an organization cannot make progress and evolve. This is one of the reasons why the management of Appex decided to implement structural changes.

Possible Alternatives

Toms Shoes, a shoe manufacturing company, is on the verge of bankruptcy and, therefore, has been bought out by creditors to avoid disappearance. It is necessary to find out why this situation occurred and what mistakes are observed in the policy and its motions. The cause of the problem is that the organization has made a bet on a specific shoe model, interpreting it as a business card. Because of this, about half of the companys production was focused on its manufacturing. This is a significant mistake that needs to be replaced with an alternative. The industry should avoid emphasizing only one model which has turned out to be popular, conversely, critically analyzing the profitability of the production. In other words, an important conclusion is that management mistakes and incorrect allocation of resources in production caused the companys collapse. As a result, Toms Shoes failed to ensure the financial stability of its enterprise and suffered substantial losses. This paper aims to suggest several alternatives based on managerial models and an action plan to solve the problem Tom Shoes has encountered quickly, efficiently, and as painlessly as possible.

One such model is Six Sigma, which is most strongly suited to current conditions due to its simplicity and effectiveness. The modern understanding of the Six Sigma is expressed as a philosophy, a methodology, and a set of improvement tools. The process quality parameter is a random variable, so the likely proportion of process defects using the mean value and standard deviation must be estimated (Tannenbaum & Salas, 2020). To do this, the upper and lower bounds of the tolerance field of the quality parameter must be set in advance. The larger the tolerance field, the more significant is the proportion of good products in the process. Correspondingly, the higher the sigma value, the lower the proportion of quality or good products.

The Six Sigma philosophy is based on an approach of continuous process improvement and necessary reduction detection that an organization must implement (Tannenbaum & Salas, 2020). Progress can be made through radical changes or minor ongoing enhancing modifications, called the Kaizen approach. The improvement goals at Tom Shoes should be oriented toward improving quality, shortening the production cycle, improving jobs, and reducing costs. By lowering the Sigmas value through an increased number of products that fit the tolerance field, managers will provide a larger ratio of products more suitable for consumers. From the financial perspective, the Six Sigma will provide a more tight control over the production and marketing, thus, minimizing losses associated with potential market failure of a particular shoe model.

Key elements that management should pay attention to at this point on time to avoid forced unnecessary costs for the company:

1. Consumer satisfaction. The quality of any products or services is primarily attributed to customer perception. Whatever techniques or decisions are applied, a consumer is the one who decides whether the good is worth all efforts. A customer expects the producer to meet their expectations and provide high-quality products at a fair price along with premium service and reliability. Quality requirements are hidden in each element of consumer expectations (Mann & Warren & Westbrook, 2019). The objective of an organization is to identify these requirements and address them timely.
2. Processes definition and management. Work optimizations and quality enhancement strategically require an understanding of the customers perspective. All procedures and their elements should maximize the value for the consumer. Therefore, all the unnecessary or low-efficient operations have to be reconsidered and eliminated if possible.
3. Teamwork and employee involvement. Productive cooperation and alignment between employees significantly contribute to the organizations performance. Thus, managers should pay specific attention to teamwork and employees motivation to ensure high results for the business and quality of a service or a product. (Mann & Warren & Westbrook, 2019). Employee commitment leads to greater customer satisfaction.

Since the organization is financially unstable, it is worth paying attention to work with loans and credits. The analysis revealed that the company was dependent on borrowed funds and could not conduct its activities independently. To reduce accounts payable and increase accounts receivable, the following solutions are proposed:

• Increase the efficiency of working capital,
• refinance of funds,
• introduce a system of discounts and penalties,
• carry out a strict selection of the client base,
• introduce a system of control of accounts payable and receivable.

Improving the efficiency of working capital can be achieved by influencing the manufactured products, planning system, and organization of production, which is achieved by constant monitoring of the standards and the dynamics of the actual unit costs and turnover of working capital. Since Toms Shoes is an insolvent enterprise, the company is recommended to sign a contract with a factoring company, which will lead to the possibility of obtaining a certain percentage of accounts receivable. The factoring operation allows the company to refinance most of the accounts receivable in a short period, thereby reducing the financial and operational cycle (Skelton & Pais, 2019). Constant control over the timing of accounts payable will allow timely payment for debts. It will help to avoid overdue fees and penalties, which, in turn, are an inefficient use of company funds.

It is recommended to establish a discount for regular customers in the form of a slight reduction in the payment volume when paying in the first days of the loan term. Otherwise, it is proposed to introduce a system of penalties for late payments, which will increase with each day of non-payment. The company should generally review its customers and buyers, determine the terms of payment, and put them in contracts or agreements with them. (Skelton & Pais, 2019) When selecting customers, it is worth examining their current solvency level, carrying out a forecast of future financial capabilities, and studying the companys economic opportunities.

Recommended Plan of Action

The main point of the action plan is to highlight the stages of the Six Sigma implementation in production, along with previously discussed actions to reduce accounts payable. DMADV method is a helpful instrument when integrating the Six Sigma concept. The method consists of the following steps:

• Define. It is essential to start with identifying the purpose of new processes. Considering all discussed above, this should be done following the customers expectations and requirements. A six sigma project team is created to design the process (Bruce, 2020).
• Match. Further, the team has to elaborate specifications for the identified processes. These specifications will lay a foundation for the process objectives should be defined.
• Analyze. At this stage, each new process in place is to be thoroughly analyzed. The determined characteristics further form the preliminary versions of those operations and a drafted plan for their subsequent execution. (Bruce, 2020).
• Design. This stage is necessary to formulate the processes design and define in detail their characteristics and specifications. (Wheeler et al., 2020).
• Verify. In this step, the Six Sigma process design team verifies that the process meets its objectives based on the defined characteristics.

Process management represents a crucial aspect of The Six Sigma methodology. The complexity of the companys organization implies the simultaneous optimization of existing processes and the introduction of new ones. Managing ever-changing operations becomes quite a challenge. Of course, tracking and controlling processes based on the Six Sigma method is the responsibility of a dedicated team of process managers who have to identify gaps and improve business operations constantly. Teams should be built according to levels of management and are to contain the three main divisions:

• the highest level of control,
• the process management level,
• the task management level (Antony, 2020).

The teams have to be composed of specialists with varying degrees of mastery of the Six Sigma concept (Antony, 2020). Thus, working on accounts payable and implementing the Six Sigma in a corporation does not guarantee enrichment, but it can bring back the financial stability and independence of Toms Shoes.

References

Antony, J. (2020). Lean Six Sigma in higher education. A practical guide for continuous improvement professionals in higher education. Emerald Publishing Limited.

Bruce, K. (2020). Handbook of research on management and organizational history. Edward Elgar Publishing.

Mann, R. J., Warren, E., and Westbrook, J. (2019). Comprehensive commercial law. 2019 statutory supplement. Wolters Kluwer.

Skelton, M., and Pais, M. (2019). Team topologies. Organizing business and technology teams for fast flow. IT Revolution Press.

Tannenbaum, S., and Salas, E. (2020). Teams that work. The seven drivers of team effectiveness. Oxford University Press.

Wheeler, A. R., Baur, J. E., Halbesleben, J. R. B., and Buckley, R. M. (2020). Research in personnel and human resources management. Emerald Publishing Limited.

The European Foundation for Quality Management (EFQM) Excellence Model has been designed for offering a holistic view of an organization since it is used for determining how various processes within companies fit together and complement each other. It is widely used by organizations across the globe and is being updated regularly. Thus, the model can be used together with any other tools based on the needs and capabilities of an organization to maintain sustainable excellence.

Organizations that use the model are expected to reach and preserve high levels of performance that either meet or exceed the demands and expectations of their stakeholders. The EFQM Excellence Model makes it possible for managers to understand the cause-and-effect connection between what companies do and the results that they ultimately achieve.

The purpose of the current paper is to explore the integration of three EFQM criteria in the processes of an organization. The focus company for the report is the Abu Dhabi National Oil Company (ADNOC), which is a government-owned corporation that has been working in the industry since 1971. The organization is considered one of the worlds largest energy producers as well as the main facilitator for the growth and diversification of Abu Dhabis overall economy.

As mentioned on the ADNOCs webpage, the company operates across the entire hydrocarbon value chain, through a network of fully-integrated businesses, with interests that range from exploration, production, storage, refining and distribution, to the development of a wide-range of petrochemical products (Who we are, n.d.). Throughout the years of the organizations operation, it has been producing and preserving the hydrocarbon reserves of the Emirates on behalf of the Abu Dhabi Government.

The economic boost of the country has also been linked to the creation of jobs by ADNOC, which has increased the diversity of the economy and played a defining role in the worldwide emergence of Abu Dhabi. Today, the company is working on developing innovative methods for increasing the value of resources as well as pioneering new approaches to technologies that will ensure the ability of the country to meet the needs of an ever-changing energy market (Who we are, n.d.).

Because of this, discussing the role of EFQM at ADNOC can be of benefit for understanding the model based on a real-life example. The discussion will center around the following three EFQM criteria: leadership, people, and strategy. These criteria are especially relevant to the example of ADNOC because the combination of such factors creates a foundation for the competitive advantage of the organization. This report will include such sections as the history and emergence of the EFQM excellence model, the exploration of the models criteria (leadership, strategy, and people), recommendations, and conclusion.

History and Emergence of the EFQM Excellence Model

EFQM was founded in 1988 by leaders of fourteen companies that had an idea that a new Europe-based organization was needed for promoting higher standards of management through recognition and knowledge sharing. Subsequently, the purpose and the membership base of EFQM transformed and extended, with the interests in the framework reaching the public sector and small and medium-sized organizations as well as worldwide (Who we are, n.d.). As to the EFQM Excellence Model, it was initially launched in 1991, with the latest 2010 version of the model released in 2009.

The impact of the EFQM Model since its launch was immense as it became the standard for many National Quality Award schemes in European countries, and within a decade, reached the Middle East, South Africa, South America, and Asia. Many worldwide organizations have implemented the principles of EFQM within their business model. In this way, they have spread the model throughout all their businesses across the globe. While it is difficult to estimate the number of organizations that have used the model to reach excellence, it must be globally far over 50.000 organizational entities (EFQM, 2016, p. 4).

The non-prescriptive, simple, and well-structured framework proposed by EFQM means that any organization can implement it to its advantage. In addition, the model is fully aligned with the Ten Principles of the UN Global Compact that are associated with human rights, corruption, bribery at organizations, and forced labor (EQFM, 2016). Both profit and non-profit organizations can use the model to their advantage, regardless of the degree of maturity, sector of operation, size, or structure. Such a high level of agility represents the main advantage for the integration of the model in any setting. However, there is a requirement for leaders to follow EFQM principles strictly in the context of their companies.

EFQM Excellence Model Criteria: Exploring the ADNOC Example

Leadership

Within the EFQM Excellence Model, leadership implies the extent to which leaders can meet their needs in terms of their mission and vision of an organization. Also, leaders are expected to develop values that will lead to relevant actions and behaviors of employees as well as be involved in ensuring the management system is implemented and developed. This means that within the EFQM Excellence culture, which is reinforced in the model, leaders are expected to fulfill the following range of responsibilities:

• Participate in developing an organizations mission and vision;
• Introduce role modeling ethics to support the development of organizational culture;
• Encourage and support the learning activities of workers;
• Stimulate and encourage collaboration with other organizations;
• Ensure a procedure for measuring, reviewing, and improving key results;
• Create a cohesive system for overseeing processes and ensuring their implementation;
• Engage in processes that improve the environment and positively contribute to society;
• Personally communicate the objectives and targets to workers;
• Encourage and enable workers to participate in improvement activities.

ADNOC has been recognized as an important EFQM player as the organization has invested in continuous performance improvement to enhance its competitiveness in the energy industry. The role of the Excellence Model within the energy sector should not be underestimated, especially because of the great importance of partnerships between global organizations for achieving competitive advantage.

At ADNOC, the achievement of Excellence through leadership is achieved through managing the efforts of environmental stewardship. The leaders of the company are investing in new tools for decreasing the environmental footprint despite ADNOC operating in the energy industry. As mentioned in its report, the company is striving for excellence through reducing GHG emissions by up to 10% by 2023, substantially increase its use of Carbon Capture, Utilization and Storage technology, reduce its use of potable water and the cut the volume of was sent to landfill sites (ADNOC reinforces leadership role, 2019, para. 2).

For achieving this goal, the organization has invested in leadership dedicated to advanced technologies, artificial intelligence (AI), and operational efficiencies that would enhance performance. The importance of leadership in the discussion about environmental sustainability is reflected in the approach of the corporations heads toward reducing the impact of gas and oil production. ADNOC Group CEO, the UAE Minister of State, Dr. Sultan Ahmed Al Jaber, mentioned that the commitment of the company to environmental stewardship had been at the center of operations due to the need to protect the natural ecosystems of the country (ADNOC reinforces leadership role, 2019, para. 4).

Furthermore, embedding environmental protection principles in the corporate culture of the company was the aspect of the organizations leadership carried out to set high standards of quality and expectations of performance. Thus, the operations of ADNOC align with the EFQM leadership principle of being involved with partners and representatives of society.

Strategy

Within the EFQM Excellence Model, the strategy criterium is associated with the implementation of mission and vision through developing and deploying a strategy that is stakeholder-focused. A high variety of processes and objectives is developed and used for delivering a strategy. In the context of the model, companies are expected to develop strategic capability, which implies the ability of an organization to develop an integrative process of framework formation process that, as a result, generates greater organizational flexibility that leads to a greater organizational performance level (Revuelto-Taboada, Canet-Giner, & Balbastre-Benavent, 2011, p. 28).

The strategic orientation of ADNOC is important to discuss because, as a global oil and gas industry leader, the organization has developed a strategy for long-term success. As mentioned in the report on the companys website, the 2030 strategy is enabled by a focus on partnerships, technology, and human capital and will be sustained through active engagement with stakeholders who are core to the development and sustainable implementation of the integrated strategy (Enabling ADNOC 2030 strategy, 2019, para. 4).

Technologies, partnerships, and people represent the key enables of the 2030 ADNOC strategy. In regards to technology, the company heavily relies on it for ensuring the sustainability of competitiveness, growth, and assuming an advantageous position of market opportunities. As the organization is focused on achieving excellence through value creation, it drives technology development in three distinct ways.

First, it develops technologies in instances when they are necessary for responding to specific challenges that have not been addressed by other services available in the market. Second, ADNOC invests in proven technologies that can deliver the necessary solutions to arising issues in the most cost-effective ways. Third, the company works with universities and other partners in the industry to seek talent that would facilitate the future deployment of technologies.

Partnerships represent an important aspect of ADNOCs strategy as the company has a 45-year track record of reliable and long-term partnerships with strategic, value-add partners (Enabling ADNOC 2030 strategy, 2019, para. 5). At this time, for achieving excellence, the organization is changing its approach to both co-investment and partnerships to attain smart strategic alliances. These new opportunities help the company optimize its financial performance at all levels of the organization to secure its access to target markets. Therefore, partnerships can bring a new level of expertise to foster greater knowledge-sharing between the company and its partners as well as enable co-development of the latest intellectual property and technology.

While the role of people within the EFQM Excellence Model will be discussed further, it is essential to mention the value of human resources when exploring ADNOCs 2030 strategy. According to the report on the companys website, its employees are our greatest asset, and throughout the transformation, we are focusing on developing a highly skilled world-class workforce and instilling a strong sense of responsibility and commitment built on a performance-driven culture (Enabling ADNOC 2030 Strategy, 2019, para. 6).

Across the entire organization, ADNOC establishes enhanced human capital policies and regulations. The company is therefore dedicated to ensuring that its workers have multiple growth opportunities. It is important to note that the training and professional improvement of workers within the 2030 strategy is supported by the organizations leadership as well as a range of youth development programs that focus on the creation of opportunities for women in senior positions specifically.

People

The links between people and the performance of organizations under the EFQM Excellence Model have been established since the frameworks development. As mentioned by Para-Gonzalez, Jimenez-Jimenez, and Martinez-Lorente (2018) within the EFQM framework, the influence of both leadership and strategy on workers allows companies to improve their performance. Therefore, the previously explored criteria of leadership and strategy are essential to consider when it comes to the discussion of workers roles within the model. When both leadership and strategy align and positively influence people, the latter are more likely to exhibit high levels of performance and contribute to organizational goals and objectives (Para-Gonzalez et al., 2018). In addition, when a strategy of an organization implemented under EFQM Excellence Model principles is integrated into business processes, it can facilitate positive contributions to companies.

The professionals operating at ADNOC are offered a range of career opportunities, providing a rewarding work environment in which individuals can realize their full potential and help to shape the future of the energy sector (Working with us, 2018, para. 2).

Thus, the organization is highly driven by performance and invests in people to ensure that their ideas and contributions are considered and realized to their full potential. This means that people working at ADNOC represent the key to success. The management of organizations takes a career-oriented and long-term approach to the professional development of their workers, providing them with the desired level of skills and experience needed to meet the future challenges of the energy sector.

Within the EFQM Model, excellence is achieved through the provision of a broad range of both technical and non-technical career opportunities for experienced workers who are looking to advance and enhance their careers. In addition, the company is dedicated to providing work opportunities for UAE Nationals, to achieve 75% Emiratization across ADNOC Group companies (Working with us, 2018). Thus, the employees of the organization play a fundamental role in ensuring that the company achieves its long-term goals.

Recommendations for ADNOC

The practical application of the EFQM Excellence Model is associated with detailed considerations regarding the organizational environment characteristics that should be reviewed regularly. Flexibility is considered an important factor that can benefit all organizations, regardless of size and impact. The EFQM Excellence Model is therefore focused on addressing such business challenges as agility, the focus on developing approaches, the accountability of leadership, measurement indicators, explicit and prescriptive criteria, sustainability, corporate social responsibility, innovation, and other subtle changes that lead to excellence (Bobek, 2015).

While it has been identified that ADNOCs strengths lie in leadership, strategy, and people, some recommendations should be made in regards to achieving competitive advantage and the prosperity of the company. Processes, products, and services, which represent the enabling criteria within the EFQM Excellence Model, must be improved at the organization. ADNOC has been criticized for the fire that occurred at its Ruwais complex in 2017. While the fire caused no injuries or posed no threat to the local community, it harmed the operations of the organization, affecting its processing capacity (McAuley, 2017). This example shows that the company needs advice as to how to optimize its processes within the EFQM Excellence Model.

Excellent organizations, according to the principles of the model, invest in the design, management, and improvement of processes, products, and services to generate value for both clients and stakeholders. The management of processes is needed for optimizing stakeholder value. ADNOC should define the ownership of its processes, responsibilities, and roles in developing and maintaining a framework of main processes. Within such a setting, new ideas are quickly turned into reality through innovation processes that align with the nature and importance of the changes that the company will make.

The range of processes implemented at the company is meant for developing both products and services that provide the ultimate value for customers. In regards to this perspective, the company should align its processes with the values of collaboration, respect, responsibility, and efficiency. ADNOC is recommended to maximize the value of the energy resources it provides to customers and stakeholders as well as invest in efforts that benefit the community. To prevent issues such as the fire at Ruwais, the organization is recommended to invest in the improvement of its responsibility efforts.

The commitment to safety, health, and environment essential to reach excellence through the EFQM Model. For example, according to Jeff Thomsons article for Forbes, innovation is crucial for companies in the gas and oil industries for ensuring high standards of safety. Thus, it is advised for the organization to empower creativity among staff and partners to develop innovative solutions that increase reliability and decrease the risks of emergency occurrence. This is necessary for oil and gas companies to evolve and avoid relying on past experiences and approaches to securing the future of their businesses.

Conclusion

The formation of the EFQM Excellence Model has been attributed to companies recognizing and promoting sustainable success and guide those organizations that seek to achieve it. The value of the model lies in using it within any context and scope of an organization as well as the possibility to use it in conjunction with other tools. Through exploring the example of the Abu Dhabi National Oil Company, it was possible to discuss how companies can use the EFQM to their advantage.

For instance, the management of the organization provides exceptional leadership to oversee the processes at the organization, especially in regards to innovation and sustainability. These efforts are particularly important for people, business, and society results. In terms of ADNOCs strategy, the company is dedicated to combining the efforts of people, technologies, and partnerships to achieve its 2030 strategy. In addition, the role of employees in sustaining the performance of the organization is of special importance because ADNOC invests in continuous training and professional development of the personnel, which is another important EFQM principle.

References

ADNOC Reinforces leadership role and commitment to environmental stewardship as it strengthens its position as one of the lowest greenhouse gas emitters in the oil and gas industry. (2019). Web.

Bobek, V. (2015). Perspectives on business and management. London, UK: IntechOpen.

EFQM. (2016). 25 Years of the EFQM excellence model and the EFQM partners network. Web.

Enabling ADNOC 2030 strategy. (2019). Web.

McAuley, A. (2017). ADNOC begins investigation into fire at Ruwais refinery. The National. Web.

Para-González, L., Jimenez-Jimenez, D., & Martinez-Lorente, A. (2018). The link between people and performance under the EFQM excellence model umbrella. Total Quality Management & Business Excellence, 2018, 1-21.

Revuelto-Taboada, L., Canet-Giner, A., & Balbastre-Benavent, F. (2011). Quality tools and techniques, EFQM experience and strategy formation. Is there any relationship? The particular case of Spanish service firms. INNOVAR, 21(42), 25-40.

Who we are. (n.d.). Web.

Working with us. (2018). Web.

Introduction

The analysis of case studies is essential for business and marketing management students because it shows the challenges and constraints entrepreneurs face running a business. The case study of Covetellas experience is instructive as an example of a business in a foreign but quite attractive economic environment. Besides, Covetella is a business in the fashion industry that demands a high level of creativity and sociality from entrepreneurs. The analysis of this case study will be divided into three parts: a discussion of entrepreneurial resources, value propositions, and revenues with a cost summary.

Entrepreneurial Resources of Covetella

Covetella was founded by Carol Chen, an immigrant from Taiwan to the US, who dreamed of having a business that satisfied her ambition of being an entrepreneur in the creative industry. Having experience selling cheerleading uniforms and China, Chen moved to Singapore with tens of her designer dresses, which took up a lot of space in her parents house in Texas (Dann & Orr, 2018). The reason is that Chen wanted to use these dresses in her future business project. She did not fear the risk of failing because of the low interest in second-hand clothing in Asian cultures. Thus, Chen started a website for dress rentals with the name Covetella. After that, their skills in constructing social relations helped her to find local designers and other lenders who gave her dresses for rental service (Dann & Orr, 2018). Finally, the success of Covetella was conditioned by the successful selection of the companys employers and by the decision to base their business on an in-person experience (Dann & Orr, 2018). It required Chen to become more flexible in her expectations about how the business will be structured in the future.

The entrepreneurial resource is an important concept in the modern scholarship on business management. It refers to the individual skills and abilities of creative thinking, intuition, and analytical decision-making (Dana et al., 2019). Dana et al. (2019) also incorporate the term personal social capital, that is, social bonds and communication skills. In the case of Covetella, it is hard to understand the full picture of her entrepreneurial resources. She has a creative vision and intuition on how to change her business strategy for successful operations. What seems unknown is the impact of her level of knowledge and education that she accumulated during her years in different schools and universities. Dann & Orr (2018) tell that Chen majored in economics, psychology, and fashion design at the top universities. Nevertheless, it seems unclear what concrete knowledge from these educational programs played an integral role. Finally, Chen had great communication resources because she started many social contacts in Singapore. Remarkably, Singapore was an entirely new country of living for Chen.

Value Propositions from Covetella

In this section, the discussion will be built around what Covetella provided their customers that made their business distinctive from competitors. For this purpose, the concept of value proposition will be used. Payne et al. (2020) define value proposition as a competitive advantage that companies can suggest to their customers, so companies usually determine their value proposition in corresponding marketing strategy. Considering Covetellas positioning, this company stood in a favorable position because dress rent in Singapore had not been developed. Chen admitted that Singapore is very small. Were trying to target the same 250,000 women who might use our service. This is not exciting for investors, so its the major struggle for us (Dann & Orr, 2018, p. 8). Nevertheless, Dann & Orr (2018) indicate that four other companies were also involved in the designer dress rental. The value that Covetella gave to its customers was in-personal contact in showrooms with the desire to implement a full-scale Cinderella experience for customers.

Except for the use of showrooms, Covetella provided a wide range of womens clothes which is not limited only to designer dresses. For example, some other companies in the market like Rent a Dress offered only designer dresses (Dann & Orr, 2018). At the same time, Chen, commenting on the value Covetella gave to the customers, said that we have the widest range of inventory for occasionwear and exclusive styles that you cant find anywhere else (Dann & Orr, 2018, p. 8). It helped Chen address the limited market problem by expanding the range of available clothes.

Finally, Chen performed excellently in giving her brand widespread recognition and vivid marketing. Indeed, Chen spent a lot to make her brand well-known in Singapore. Firstly, Covetella hosted several events during Singapore Grand Prix in Formula 1 (Dann & Orr, 2018). Cooperation with such global brands might give significant growth of brand recognition, especially when the host country of some global event is the place where the business operates. Dann & Orr (2018) also recognized that the advertisement of Covatella during such a large-scale event made an image of a highly successful brand with tens of thousands of customers. Although this perception may have no connection with reality, it will help newly born businesses to become recognizable. Secondly, Chen found professionals who had skills in developing brands. The most remarkable cooperation was with Valerie Lim, a model, and Miss Singapore of 2011 (Dann & Orr, 2018). In addition to being quite famous in the fashion sphere in Singapore, Lim also modeled photos of dresses for the website. Such cooperation also contributed to the value increase of Chens brand.

Revenue-Related and Cost-Related Elements in Covetellas Business Model

A case study analysis in business management is almost unimaginable without consideration of a companys revenues and costs. Revenues and costs are key metrics for understanding how a companys business model is set up. To continue the discussion, it is necessary to define what the concept of a business model means. The problem is that scholars are still arguing about the correct definition of this phenomenon (Osterwalder et al., 2005). Osterwalder et al. (2005) define it as a conceptual tool that contains a set of elements and their relationships and allows expressing the business logic of a specific firm (p. 10). In other words, it presents the outlook of how the company intends to make revenues from its operation.

In the case of Covetella, the key elements regarding its revenues are the profits from dress rental, favorable economic conditions in Singapore, and some number of clients who enjoyed Covetellas services. All the money that Covetella got came from a dress rental. Women pay for the time they used some dresses, so the used clothes items return to Covetellas showroom. What is interesting is that some people have used dresses from Covetella more than two times. Dann & Orr (2018) indicate that most businesses came from repeat customers, some of whom shopped monthly and some of whom visited annually, with the average being two times per year (p. 6). All that conditions are contextualized in the preferable business environment in Singapore. According to Dann & Orr (2018), the Singaporean government proposes different investment plans for newly created businesses, so World Bank ranks it as the easiest place to do business.

In terms of costs, Chens business avoids huge financial outlays due to the rental business strategy. All the costs include the rental of the showroom and clothes laundering. The showroom was essential for Covetella because customers needs forced Chen to change her mind about her desire to implement a minimum contact business strategy (Dann & Orr, 2018). It seems that Chen did not lose a lot of money on such a decision because the cumulative costs of shipping, which customers did not want to manage, were significantly reduced. Another considerable cost was clothes laundering, which is the combination of washing, ironing, and, if necessary, dry cleaning. Finally, there is a sense to briefly mention alternative costs that are not regular but financially demanding. The integral one here is advertisement costs that made Chens business highly recognizable. In addition, it is salaries for employers, purchase of new clothing, and so forth.

Conclusion

To sum up, the case study of Covetella helps to identify the key components of the coherent business model. Initially, the successful start of the business depended on the personal skills of Carol Chen, the founder of Covetella. Her communication skills and good knowledge of business startups helped her to succeed in the initial steps. Through Covetellas development, one could identify the key value propositions of the business: in-personal experience with clients, comfortable business opportunities in Singapore, a wide variety of clothing, and excellent marketing. Considering the revenues of Covetella, come from the payment of customers when they use services of dress rental. As for the costs, the majority of them are directed towards showroom rental, washing of clothes, and salary payments.

References

Dana, L. P., Gurau, C., Light, I., & Muhammad, N. (2020). Family, community, and ethnic capital as entrepreneurial resources: Toward an integrated model. Journal of Small Business Management, 58(5), 1003-1029. Web.

Dann, J., B. & Orr, J. (2018). Business models and fashion models: Covetella plans for growth. Lloyd Greif Center for Enrepreneurial Studies.

Osterwalder, A., Pigneur, Y., & Tucci, C. L. (2005). Clarifying business models: Origins, present, and future of the concept. Communications of the association for Information Systems, 16(1), 1, 1-25. Web.

Payne, A., Frow, P., Steinhoff, L., & Eggert, A. (2020). Toward a comprehensive framework of value proposition development: From strategy to implementation. Industrial Marketing Management, 87, 244-255. Web.

Appendix A

Introduction

Rent the Runway is an innovative online business that rents out designer dresses for ten to fifteen percent of the retail price to young women. Co-founded in 2009 by Jenn Hyman and Jenny Fleiss, it is marketed as Netflix for fashion that provides women with the best night of their lives by empowering them to feel special and beautiful on big occasions. The company showed rapid growth by attracting over 150,000 registered members within its first two months. The relevant question now is whether Hyman and Fleiss should pursue another funding round ahead of schedule to expand in new directions or adhere to their initial plan toward cash flow breakeven. Whatever path they choose, it is primordial that RTR deal with significant problems regarding their technology deficit and operational logistics, as well as smaller issues such as inventory shortage and marketing.

Main body

Firstly, Rent the Runway (RTR) has not reached its maximum efficiency because of the co-founders lack of technical expertise. RTR is primarily a technological service with a fashion component, and it requires an executive branch that reflects it. Before the launch, Fleiss and Hyman had already lost out on thousands of dollars because of their incapability to manage website development and dependence on bad recommendations from former classmates. Even after finally deciding not to outsource website management, RTR suffers from poor site usability and a confusing checkout process resulting in a high rate of car abandonment. While the co-founders have a vision for the product and a customer experience geared towards online personalization, they cannot judge the web developers quality of work or identify missing skills in the engineering team. If RTR wants to institute innovative measures, they need to pay attention to their technology deficit, hire an experienced CTO, and expand their engineering team.

Secondly, RTR struggles with inefficient operational and logistical systems. RTR warehouses have to wait for dress returns and take them to be dry-cleaned or mended before shipping them off to the next customers. The rental process and distribution need to be optimized and error rates reduced to avoid delayed shipments, long waiting lists, and frustrated customers. Fleiss recognizes that their warehouse is often chaotic, and directly after the launch, they were scrambling to meet demand because its processing system is essentially manual (Eisenmann & Wining, 2012, p. 8). Fleiss states that RTR needs to analyze customer rental patterns and develop algorithms to optimize inventory according to fashion trends and peak demand periods for different kinds of dresses. Efficient operations and logistics are among the most important facets of RTRs business model and thus require a hired expert to meet future demand.

Technological deficit and inventory management are RTRs most serious problems, but smaller issues could also be tackled to boost credibility. Despite their projected demographic, RTR is in heavy demand by women in their thirties and older, and the inventory needs more choices to meet their preferences. Additionally, current marketing strategies have focused solely on PR without taking advantage of brand ambassadors, even though forty percent of their members come from word-of-mouth referrals. It is difficult to get women to be comfortable renting dresses online without fittings, and brand ambassadors who have cultivated a sense of trust with their audience are the most optimal way to achieve that. RTR needs to utilize its insights on customer demographics and appeal to develop innovative ways to improve conversion rates.

Conclusion

In conclusion, Rent the Runway has the hallmarks of a successful online business, but several wide-scale changes have to be made to ensure future growth. Hyman and Fleiss need to address their companys lack of technological and logistical expertise, given its importance for business efficiency and customer satisfaction. Their dysfunctional website and logistical errors are causing them to lose a hefty amount of profits. Additionally, RTR needs to take advantage of modern data collection methods and use existing customer insights to attract an even bigger clientele and sustain current growth.

References

Eisenmann, T. R., & Winig, L. (2012). Rent the runway. HBS No 9-812-077. Boston, MA: Harvard Business School Publishing.

Introduction

Most Americans pronounce it as hair, while others make it sound like higher. The latter is more like it, for Haier Global occupies a higher place in the worlds electronic and home appliances goods and products. This Chinese company with a global presence has a long history, from a Qingdao-based, state-controlled, loss-making, and almost bankrupt company in the 1980s to the worlds fourth-largest manufacturer of home appliances. This turnaround phenomenon has been made possible by the visionary and strategic management techniques of Zhang Ruimin, the companys chief executive officer. This man assumed leadership in this company in 1984, as a young manager, and through his disciplined management techniques, he turned it into one of Chinas jewels in the global arena.

Haier Group Company: Going Higher

Haier Group Company appears to have resources and capabilities that make it move higher and higher in the market. Some of the capabilities are distinctive, while others are subtle and not discernible by a casual observer. Some are also common in the industry, making them be not so unique to Haier Group Company. Capabilities, according to Coulter (2008, p37), stand for the companys core competitiveness. This means that they are the factors that make the company stand out from the others, giving it an edge in the market. If the capabilities are properly developed and distinctive to the company, they have the potential to take to greater heights, and this is no different to Haier Group Company.

One of the capabilities is human resources. At the helm of the company is one of Chineses finest business executives, Zhang Ruimin (Haier Global, 2010, para. 3). This man has been ambitious all along, and his persistence has made this company one of the worlds best in the market. This can be viewed as a distinctive capability. He has an MBA from a Chinese university, and this, combined with his knowledge of global business trends, makes him competent in coming up with strategic policies that address the uniqueness of Chinese culture and market while at the same time being adaptable to the global market.

Other capabilities of the firm include its financial capital. The annual revenue for the company is estimated to be thirteen billion dollars (Engardio & Arndt, 2006, para. 3). This may not be as distinctive, but it is one aspect of the company that Zhang can use to make it move to a higher place. The company can make this capability distinctive by turning it into a sustainable factor, ensuring that the revenues do not fluctuate. This can be done by improving the quality of the products and turning Haier into a reputable global brand.

David (2009, p. 35) is o the view that every business has strengthed and weaknesses, and it is up to the strategic managers to rectify the weaknesses while at the same time making use of the strengths to take the business to new levels.

One of Haier Group Companys strengths is the sheer number of countries where it has operations. It exports to more than 160 countries in the world (Raskin, 2009, p. 92). More than 58,000 sales outlets all over the world are dedicated to the promotion of Haiers products (Raskin, 2009, p. 92). This makes it possible to increase revenues by increasing sales. It is also a recognizable brand, having been ranked as the third most popular brand in China, ahead of coca-cola and behind Motorola. It is also recognized as one of the worlds most popular brands (Engardio & Arndt, 2006, para. 5). This makes it possible to attract and retain a profile of loyal customers, increasing the potential of the company to grow.

But Haier, despite all the strengths and others highlighted above, has some weaknesses that, if not taken seriously, can derail the progress thus far made. For example, the products of the company are associated with other Chinese products, which are taken to be low-end, low-quality products (Raskin, 2009, p. 93). It is associated with the production of refrigerators and other appliances ranging from two hundred to three hundred dollars. This reputation can make it the brand harder to penetrate high-end markets for example in the United States.

The company can prevent its strengths from becoming weaknesses by several methods. First, Zhang should conduct an internal analysis to map the strengths, while at the same time identifying the weaknesses. The company will then come up with strategies to ensure that it exploits the strengths while at the same time keeping at bay the negative effects likely to be incurred from the weaknesses.

Zhang Ruimin should adopt a capabilities assessment profile in carrying out an internal analysis of the firm to map the strengths and weaknesses. This is because the most important aspect for the company now, given the fact that it has the ambition to go global, is to identify the capabilities that it has for it to be able to compete in the global market. The distinctive capabilities, such as the high quality of products, will be identified and developed.

Zhang has several goals that he has set for the company in the future. One of the most important and notable of these is the intention to turn Haier into a reputable global brand (Haier Global, 2010, para. 6). This is to put it at par with other brands such as coca-cola and Microsoft. This is the right direction for the company to go at this juncture, and it is well-timed. This is given that for a successful global venture, a company must have developed a strong home base. This will ensure that it enjoys economies of scale and have a platform to test their products before going global (David, 2009, p. 45). Haier has attained all this, having established itself in the Chinese market.

The company needs to strengthen its marketing strategies if it is to go global. It can do this by exploiting the capabilities and resources at its disposal. For example, it can adopt online marketing, whereby customers around the world can place orders and have their goods delivered. This is given that the company must take advantage of the developments in information technology for it to remain relevant and have a global face.

Conclusion

Haier Global operates more than forty-six factories in different parts of the world. It employs more than 50,000 people in these factories. This is up from eight hundred employees in the 1980s. It is one of the worlds largest producers of home and electronic appliances. Zhang Ruimin, the CEO, seeks to make this into a global brand, and this is the current dream of the company. To do this, the company must carry out internal and external analysis to identify its strengths, weaknesses, opportunities, and threats. The CEO will then make strategic decisions based on this.

Reference

Coulter, M. (2008). Strategic Management in Action. 4th ed. Upper Saddle River, NJ: Pearson Prentice Hall.

David, Fred (2009). Strategic Management Concepts and Cases, 12th ed. Upper Saddle River, NJ: Pearson Prentice Hall.

Engardio, P. & Arndt, M. (2006). Haier: Taking a brand name higher. BusinessWeek. 

Haier Global. (2010). Haier Global Company. Web.

Raskin, B. L. (2009). Strategic management in practice: A case study of Haier Group Company. New York: McGraw-Hill.

Introduction

This is a management essay based on Cadbury Schweppes where we shall evaluate operational cost control, product costing, pricing policy, planning, and decision making, monitoring business performance, building and maintaining competitive advantage, and capital budgeting decisions.

Cadbury Schweppes was incorporated in 1969 and is listed in London and New York stock exchange with 36,460 employees worldwide and with big sales of over eight billion. They are involved in the manufacture of chocolate and confectionery products, soft drinks and they engage in the business of confectionery wholesale in various parts of the world. They have a head office in London although the initial owners originated from Sweden and moved to London where they started operating business. Its one of the oldest companies and largest family-run businesses in the world today.

They are competitors of Coca-Cola since 1969 when it was incorporated and merged with the carbonated drinks company. The companys top management is still under the Cadbury family and it has been in the management of that family in the last two centuries. The company initially started operating as a grocery shop in Birmingham with the sale of popular drinks like Cocoa and chocolate coming in a few years later.

Product Pricing and Costing

When setting the prices for the products to be sold, the unit per cost is considered. Depending on the market the unit selling price will be set above the unit cost. However, if faced with stiff competition, the unit price can be set at the break-even point or slightly higher than the break-even point. At that production, the company will not be making any profit or losses.

Maintaining Day-to-Day Operational Control

To avoid wastages and losses, there is a need for the company to have operational control. That wastage that cannot be attributed to any unit of production should be amalgamated and be re-calculated for the value of one unit.

Planning and Decision-Making

The company has had good planning and decision-making process. They have budgets which are annual plans. They have capital investment plans and other strategic plans. Before taking any decision, the company takes into account budget plans or five-year plans. The budget for the company involves the day-to-day operations of the company in terms of finances and forecasts. The budget is short-term but will have long-term effects on the long-term sustainability of the company.

Monitoring Performance

For any company to succeed in production especially a company faced with competition from giants like Coca-Cola will need to strategically control and monitor the performance of each unit or cost center. This company monitors its operations through the use of cost centers which they maintain. They have monitored cost elements such as direct materials, variable overheads, fixed overheads, direct wages, and other costs. In accumulating form for a particular period which is normally per day, and by the end of the day the management accountant produces reports showing the cost incurred in production and how much is attributable to each unit.

Building and Maintaining a Competitive Advantage

Faced with the problem of competition from companies like coca-cola, the company has adopted generic strategies and uses five forces in positioning itself strategically in the market. This is entering agreements with suppliers to supply them with raw materials; They provide refrigerators and distribution vanes to distributors thus giving the buyer a flesh product like many competitors in the industry. They have also controlled the entry of new competitors through strategic alliances, acquisitions, mergers, and takeovers. Again, most of their products do not have substitutes except beverages which have substitutes like tea, coffee. This gives them an advantage over others.

Application of Costing Techniques (Methods) in Cadbury Schweppes

Marginal costing assumes that there is an excess of selling price over variable cost which will meet the fixed cost of ay organization. In the world of marginal costing, there is the contribution of each unit which is defined as the difference in sales value and the marginal cost of sales and the contribution must be equal to fixed cost at break even point. The applies marginal costing in the production of soft drinks. Each bottling plant is taken as a cost center and where there is the transfer of materials to a bottling it is charged at end of the day there is allocation of costs and the cost per unit is determined. This is used in determining the price of the drink.

ABC costing

This is an activity-based costing where activities are taken as cost centers. Each activity is allocated overheads as though they are cost centers. In this case, activity-based costing is applied in the production of soft drinks where each activity is allocated some costs. They use activities like maintenances of machinery and plants and are allocated costs from rent and rates, employees benefits, and many other costs. This is allocated using a specified method. For example, the allocation of employees benefits will be done using the number of employees performing the activity in the company.

Standard costing

Standards costing involve preparing budgets with the measure set out. The standard is set out of what is required from each production or the usage of each unit of material. The standards are always available if they have to make meaning. The standards are set under the following:

1. Realistic  they should be realistic and attainable under the existing conditions or if efficiency is followed.
2. Under conditions that are achievable by any reasonable man with existing resources.

Standard costing is applied by the company when producing chocolate since the production is known and the efficiencies of production have been measured over time.

Zero-based budgeting

For new activity, a product whose costs are not yet established will be produced based on the zero-based budget. This is important to the company as the new product can be produced and tested in the market. it is used by the company under study, during inflationary tendencies which are beyond control and when introducing new products in the market.

Benefits of costing techniques

Marginal costing  there are many benefits associated with this company method. This include:

• One can know the cost of each production factor and unit cost for each product.
• The company can know the units to be produced to reach break-even.
• The costs for each product produced will guide the price-setting where that if the production is below break-even, the company will use the information provided by this strategy to get out of this market.
• The company can compare the costs of products from different cost centers.
• It assists in determining the absorption rate for the overheads to different cost centers.
• It is easier to identify unprofitable products.

ABC costing

• There is the identification of costs associated with each activity.
• Each activity can control its costs.
• While allocating resources, each activity is recognized.
• There is motivation among employees as they would bed measured. based on the activities they perform.

Standard costing

• Actual costs comparing with the standards set.
• Cost deviations are measured and assessed which will assist in controlling the business of the company.
• It encourages investigation in the methods used in production which may lead to greater improvements in the production cost.

Limitation of the techniques

Marginal costing  there are many limitations associated with this company method. They are:

• Identification of the costs associated with particular productions becomes very difficult thus it is assumed that the use is uniform. This will affect the effectiveness as it is difficult to ascertain.
• The company break-even units are determined based on the costs which do not involve cash such as depreciation.
• The relationship becomes true for only a particular product or mix. The change in the mix will change the results.
• Selling prices are not constant thus the application of selling price is subjective. Also, sales may be made in large quantities calling for changes that are the issue of discounts.
• Variable costs vary from time to time.

Standard costing

• The standards set may unattainable.
• Conditions fluctuate from time to time thus the assumption of existing conditions will affect its effectiveness.
• Resource are limited changes in resources will affect the effectiveness of the method in use.
• Cost deviations are measured and assessed which may be unrealistic in cases where.

ABC costing

• There is the identification of costs associated with each activity becomes a difficulty.
• The allocation is done on the basis that is predetermined which is not true.
• Some activities may shortly run thus it is used as a cost center may be costly in the long run.

Conclusion

A company like Cadbury Schweppes with operations worldwide has a strong management accounting department that maintains the cost of the company. The department is involved in coming up with transfer costs for products between countries and production centers and these costs are shared out in the consolidated financial statements of the company. Its no surprise apart from Coca-Cola, Cadbury Schweppes is the second company with the best transfer prices on earth.

The company has adopted standard variance costing, marginal costing, and ABC costing. They only referred to zero-based costing when they are starting a new product for product differentiation or cost leadership. To succeed in such a turbulent environment, costing and cost management are essential and Cadbury Schweppes has adopted it. This is why they are succeeding where others have not succeeded.

Many people face a problem: it often turns out to be much faster and easier to do the work on their own than to entrust it to another person, who, in fact, should do it. Or there are examples where people choose their partners based on attractiveness to them, and not on their abilities. Solving this problem is critical for improving the workplace environment and increasing the effectiveness of the organization.

The recommended action plan should be developed by the companys managers. The main role should be given to human resource managers, since they study the work of the companys personnel. Actions to change the patterns of interaction of workers should be taken immediately after the adoption of the strategy, in order to achieve effective consequences as early as possible. This will include a step-by-step introduction to avoid a negative reaction due to a sharp change in the working way.

It should be emphasized that a workable team is based on professionalism, motivation and discipline. It is these aspects that need to be taken into account when developing a plan for working with personal. Casciaro and Lobo (2005) state that in most cases, people choose their work partners according to two criteria: competence at the job and likability (p. 2). The main goal of employee training should be to remove the tension associated with choosing a partner. It is important to let the staff understand that by working together, not only the success of the company increases, but also the efficiency of each individual employee.

The main mechanism for solving this problem can be the right motivation of employees. It does not require immersion in psychological aspects, in the needs of each employee. A more significant way is non-material motivation, which often has a longer-term effect (Ro~man et al., 2017). To encourage employees to work and get involved in the process, managers should instill in them a desire to cooperate and spend time with colleagues. This will help to understand the strengths and weaknesses of each person and help in the development of the weak. Monetary motivation is the simplest kind which can be used as contingency plan to back up the ideal course.

There are a large number of theories of staff motivation. They describe the incentives for employees to perform activities that make it possible to interpret and predict their behavior in different situations. To prove the plan, the theory of Frederick Taylor can be chosen. According to it, employees of an organization are largely interested in work if material remuneration is closely related to the results of their work (Coccia, 2019). Moreover, it is noted that the labor process for an employee is instinctive, and people strive to realize themselves only at the physiological level.

To get rid of the problem when employees choose their partners according to the criterion of pleasantness and competence, it is important to make timely decisions to reduce tension in the working environment. The recommended motivational plan was chosen because staff motivation is a process of regulating peoples behavior in order to achieve business goals. This state of internal tension tends to act in a certain direction and give more successful and productive results. It would work because the motivation of work concerns the inner state of a person, causing a sense of conviction in the correctness of actions.

References

Casciaro, T., & Lobo, M.S. (2005). Competent jerks, lovable fools, and the formation of social networks. Harvard Business Review, 83(6), 92-149.

Coccia, M. (2019). Theories of self-determination. Global Encyclopedia of Public Administration, Public Policy, and Governance, Springer International Publishing AG, part of Springer Nature.

Ro~man, M., Treven, S., & an
er, V. (2017). Motivation and satisfaction of employees in the workplace. Business Systems Research: International journal of the Society for Advancing Innovation and Research in Economy, 8(2), 14-25.

Super Nanny Middle East

The Super Nanny Middle East is a unique business that is going to transform an industry that has remained unregulated for a very long time. The idea of training nannies and making them better equipped to meet the educational, nutritional, health, physical, and wellness needs of children of various ages is very unique. Most of the nannies hired in most of the homes in the United Arab Emirates are untrained. They get to learn how to handle these tasks while at work, and this means that they often make lots of mistakes in their learning process. This new institution will transform the industry completely. However, it will need to make a successful entry into this market and prove that indeed it has something unique to offer to its targeted customers. The researcher will use A, B, C, D, E Model to look at the environmental forces and ways in which this firm can enter the market despite these forces.

Strategic Planning: A, B, C, D, E Model

A, B, C, D, E Model is a framework that sets out how a firm should analyze the internal and external environments before coming up with effective ways of making successful market entry. In this section, the researcher will look at every step that Super Nanny Middle East will need to follow to enter this unique market and operate with very minimal challenges.

Assessment

The first stage is the assessment of the firm itself to identify the internal strengths and weaknesses that may limit its ability to manage the external environmental forces.

Background information

Super Nanny Middle East is an institution of learning that will recruit people who can work as nannies and then subject them to an eight-week educational program to sharpen their skills in childrens wellbeing, education, health, and other unique needs that they may have. Chantel Rijmata, the founder and current director of this institution, was concerned that most of the nannies working in the United Arab Emirates lack basic education on how to handle children of different ages.

The core topics which are covered at this institution are Health and Safety, Nutrition, and Learning Activities. After training, this institution will then post their graduates to various homes that need nannies at a fee. The target market for this new firm is families who need nannies to take care of their homes or children when the parents have gone to work. The firm will have its headquarters in the city of Dubai.

Environmental scan

I will need to conduct an environmental scan to identify the forces that may act to its benefits and those that may affect its operations negatively with the view of developing a comprehensive plan that will guide its operations. A SWOT analysis model will be necessary at this stage.

SWOT analysis

The biggest strength that Super Nanny Middle East has is that it is a unique project. It is something that has never been seen before in the local market. In fact, it is a fact that this concept is still relatively new even in the international market. It means that the firm has an opportunity to take advantage of the near-virgin market before it can be flooded by other firms. The idea is original and very unique. The main weakness of this firm that it will need to deal with is its lack of experience in the market. The firm is not sure what to expect, and this means that it is not aware of how it will need to deal with some of the environmental forces.

The market in the United Arab Emirates offers a huge opportunity that this firm will need to take advantage of as soon as it starts its operations. The majority of the families in the major cities of Dubai and Abu Dhabi are in gainful employments hence they need nannies to take care of their children and family affairs when they are at work. The biggest threat that the firm will need to address is the expected new entrants that will pose serious competition in the market. This business idea can easily be implemented by others. It is, therefore, necessary for this firm to know how to deal with this problem.

Baseline

At this stage, the firm will be analyzing where it wants to be in the near future. In the baseline survey, some environmental forces are critically analyzed to understand how they may influence the operations of Super Nanny Middle East.

Situation

Past

Conducting a market situation analysis makes it possible to understand what it should expect once it starts its operations in terms of competition, economic, political, social, legal, and ecological environments, and how to deal with these environmental forces. This business model is very unique at it never existed before. It means that there are no historical records that can be used to make references.

Present and future

The present and future environmental forces can be analyzed using various models. Porters diamond and PESTEL analysis may help at this stage to conduct a market situation analysis.

Porters diamond

Market situation can be critically analyzed using porters diamonds shown in the figure below.

This model starts by reviewing the rivalry in the market and how to a firm such as Super Nanny can deal with it. Currently, it is apparent that the scope of market rivalry is very minimal because no firms are competing directly with Super Nanny. This firm is at its very initial stages of growth and its life cycle in the industry is yet to be defined. I will review other factors such as demand conditions, related industries, and factor conditions and determine how they may affect its operations.

Significant Issues

The significant forces in the external environment can be analyzed using the PESTEL model. This model will help in critically analyzing the external environmental forces and how they will affect the operations of this firm. The political environment is the first factor that this firm will need to take care of in the market. The United Arab Emirates has experienced a relatively stable political environment despite the political instability that has been witnessed in many other countries in the Middle East and North Africa (MENA) region (Cunningham & Harney 2012). The royal family has provided effective leadership and this has promoted peace in this country. It is this political stability and peace that Super Nanny Middle East needs to operate successfully in the market. It will be assured that its operations will not be interrupted by violent protesters.

The economic environment is also very critical in ensuring that this firm achieves success in the market. According to a report by Adelina (2015), the United Arab Emirates has a population of about 9.346 million people about 20% of the population are aged 0-14 years while the rest, about 79.6% are aged over 14 years. For every woman, there are about 2.2 men. It means that out of a population of 9.346 people, women in this country are estimated to be 2.921 people while men are estimated to be 6.425 million. A report by Pablos (2013) indicates that there are about 957,000 mothers in this country, out of which only about one third (about 290,000 million women) are in employment. However, Peng (2003) notes that most of the mothers in this country can afford to hire nannies because they have husbands who are in gainful employment. This means that there is an attractive market for Super Nanny Middle East because most of the mothers are economically empowered and can afford the services it offers.

The social environment in the United Arab Emirates is highly diversified. As Noack (2009) notes, over half of the population of the country are immigrants from various parts of the world. This social diversity means that families have different needs when looking for nannies. The diversity means that having a wrong nanny for a given family may have a negative effect on children. This firm will be in a better position to understand the specific needs of every family. This will be an advantage for Super Nanny Middle East because it will be in a position to meet their unique needs.

Technology is changing the way business is being conducted and Super Nanny Middle East will need to understand and embrace these changes to operate in the market without straining. For instance, it will need to embrace modern means of advertisement based on social media platforms such as Facebook, Twitter, YouTube, and LinkedIn.

The ecological and legal environment will also need to be taken into consideration as soon as the Super Nanny Middle East starts to operate. It will need to ensure that its operations do not have negative effects on the environment. It will also have to ensure that it respects the legal structures put in place by the government of the United Arab Emirates to regulate businesses.

Aligning with capabilities

After reviewing internal capabilities and understanding the external environmental forces, the next step for Super Nanny Middle East will be to understand how to align its capabilities with the external environment. I will find ways of addressing its weaknesses and taking full advantage of its strength to gain a competitive edge in the market.

Components

My team at Super Nanny Middle East will then move to the next step of components. This involves putting down systems that will be involved in the operations of this firm. Vision, mission, goals and objectives, principles and values are developed at this stage.

Vision statement

My team will develop a vision statement that will propel it to the next level that it seeks to be in as soon as it starts the operations. The statement should provide the team with a clear path of what this firm seeks to achieve. The following statement may be appropriate.

To become the provider of highly trained nannies who can meet educational, nutritional, health, and wellness needs of children at different ages.

Mission statement

Based on the above mission statement, Super Nanny Middle East can also develop an effective mission statement that can read as follows.

We seek to train our recruits to become super nannies who can offer educational, nutritional, health, and wellness needs to our super kids to ensure that they grow under great care and protection.

Goals and Objective

The team will define the goals and objectives that will define the direction that the firm will take. The primary goal of the firm will be to become the leading trainer and provider of nannies who can meet the different needs of the clients. The following are the specific objectives that will have to be realized.

• Recruit and train a team of highly skilled nannies who can work under different environments.
• Develop a pool of loyal customers who will be using the services of this firm.
• Maintain close client-firm relationship as a way of improving the loyalty.

Principles and values

The following principles should be observed by all the nannies in their respective areas of work.

• Respect;
• Transparency;
• Professionalism;
• Dedication;
• Hard work.

Down to Specifics

The next step in this model is moving down to specific. At this stage, structures and systems have been defined, and what my team at Super Nanny Middle East will need to do is to come up with an effective implementation plan that can be used to roll out the project.

Action plan

I have developed an action plan that will help in entering the market. Super Nannies will start its operations in Dubai before spreading to other emirates such as Abu Dhabi and Sharjah after six months. The institution will have Ajman free zone virtual office trade license to help minimize overhead costs. We will develop a strategic alliance with kids play area centers and nannies agencies as a way of reaching out to the targeted clients. The clients will bring their nannies so that we can offer them training at a given fee. We will hire trainers who understand different cultural backgrounds in the country to help in imparting the necessary knowledge on the nannies.

Performance measurements

I will also come up with performance measurement programs for its employees. Performance contracts may be highly relevant at this stage, especially when the operations have begun.

Targets and standards

I will need to set targets about the size of its workforce and the number of clients it will be handling. The targets can be set bi-annually or after every four months of operation. The standards should be defined based on what the employees should achieve per given period.

Evaluation

The last stage in this model is evaluation. This takes place when the project has been rolled out and there is a need to evaluate how the firm is performing. The following are some of the issues that should be reviewed.

Performance management

Performance management will be one of the critical roles that I will need to consider in its operations. The director may develop a performance review plan that is based on the reviews from the clients and have means of addressing any complaints they may have about the products offered to them (West, Ford, & Ibrahim 2015). This will help in maintaining a high level of customer satisfaction.

Review process

The review process can be conducted using a balanced scorecard framework. Using this framework, I will critically review the firms financials, internal business processes, customers, and learning and growth strategies embraced by the firm and determine if they are in line with the set vision of the firm. The review process is summarised in the balanced scorecard below.

Feedback and corrective measures

My team at Super Nanny Middle East will also develop effective ways of receiving feedback from the clients. If there are issues of concern, then they should be addressed effectively and within the shortest time possible to avoid causing any dissatisfaction among the customers.

Reference List

Adelina, M 2015, Handbook of Gendered Careers in Management Getting In, Getting On, Getting Out, Edward Elgar Pub, Northampton.

Cunningham, J & Harney, B 2012, Strategy & strategists, Oxford University Press, Oxford.

Noack, S 2009, Business Guide: Doing Business in Dubai & the United Arab Emirates, Books on Demand, Norderstedt.

Pablos, P 2013, International business strategy and entrepreneurship: an information technology perspective, IGI Global, New York.

Peng, M 2003, Institutional Transitions and Strategic Choices, The Academy of Management Review, vol. 28, no. 2, pp. 275296.

West, D, Ford, J & Ibrahim, E 2015, Strategic marketing: creating competitive advantage, Oxford University Press, Oxford.