Category: Business 11471

Gap Analysis

Service Quality Dimensions for Expectations

A comparison of Perception and Expectation scores

Averages of the Perception and Expectations

Overall averages computation

Graph 1. Two-Dimensional Differencing Planes

Expectation

Perception

• Assurance
• Responsiveness
• Tangibles
• Empathy
• Reliability

Discussion

The data indicate clearly that there is a clear disparity in the dimensions of empathy and reliability with negativity mismatch. The company has a lower perception of these services and performs poorly as opposed to the customers high regard for the service. As such, the company ought to improve in individual attention, consider a more flexible schedule that falls in line with the customers, while maintaining the optimum operation of the organization (refer to Appendices A1 and B1). Again, personal attention, and understanding consumer preferences and needs need to be given much attention. Develop Frequently Asked Questions page attached with the pass email that informs clients not to request a pass through the internet again. In addition, attach a tick-box for the clients to confirm only one receipt of pass. On the other hand, the company has won an assurance from their customers as well as to the knowledge of the management. Tangibles and Responsiveness are quality services that meet consumer expectations and company perception proportionately.

The quality management system is a combination of work ethics and practices for enhancing passenger safety and upgrading boarding services in the aviation industry (Smith, 2002). For example, the airline has upgraded its mobile messaging system to provide quality services at affordable prices (Mulholland, 2005). The airline has launched an SMS-based boarding pass and installed novel self-service check-in reception desks at airports to provide customers with efficient and swift check-in services (English 2004).

From the above, it is clear that that the identified gaps will help increase the quality of service and products in the Airline service. The gaps that exist hindered the organization and its passengers (the clients) from attaining an optimal operation that fully satisfies the customers. The priorities set up meet the expected demands as opposed to the real quality presently being achieved. The identity of the reasons for the presence of the gaps through a SERVQUAL analysis has made it possible to develop a number of programs that not only save time but also prove convenient to the clients. The achievement of the suitable processes through the service quality framework has proved to have reliability, assurance, tangibles, empathy, and responsiveness.

References

Das, S 2007, Quest for Quality: Thoughts, Ideas, Concepts, Views on Quality and Process Improvement in the Information technology.

English, L 2004, putting Quality Process in Place to Exploit Technology. DataFlux Corporation, Cary, NC.

Leney, A 2004, Vehicle Recycling on South Tawara.

Milojkovic, D 2011, Australian airline introduces SMS boarding passes.

Smith, M 2002, Safety Management Systems: Whats in it for you Web.

Appendices

Appendix A: SERVQUAL Perception Survey

Appendix B1: SERVQUAL Perception Survey

Introduction

Economies of scale widely imply the cost-related benefits a firm realizes from an increased level of output. The benefits usually occur from the inverse relationship between unit fixed cost and total output. The rationale is that as more units are produced, the fixed value attributable to each segment diminishes since a fixed figure is distributed over a growing number of items. If the reverse occurred, for example, prices surge as more units are produced, then it would reflect diseconomies of scale (Athanassiou, 2015). Economies of scale usually are obtainable through expansion, which allows a business to increase its productivity or efficiency, improving production processes. Through efficiency attained from features such as specialization, organizations can produce via the least-cost model hence realizing a diminishing average cost. EOS can be achieved within several industries such as banking and medicine through research and innovation

Theoretical Outline: Basic Concepts

Classification of Economies of Scale

Economies of scale (EOS) are widely categorized into two classes: internal and external, and they both arise from the level of aggregation experienced by a business. If the company is the item of emphasis, then the internal EOS would imply the industrial characteristics while the region would form the external EOS (Athanassiou, 2015). However, when the focus is on a firm or specific business, the internal EOS would constitute its elements. Simultaneously, the external EOS would entail every other influential item outside the individual business controls and regulations.

Within both internal and external environments, some economists further isolate the EOS in two main categories: static and dynamic. Static EOS decreases unit costs for the business through an increase of its output at a particular point of measurement. It is more prevalent if cost responsiveness to output is more elastic and this typically implies that the unit cost declines with a rising output at any point in measurement due to a diminishing marginal cost. Dynamic EOS sometimes referred to as learning effects, underscores the declining business unit costs attained from a cumulative production and is measurable over a long period of intervals as production accumulates. For instance, as the organization continues its production procedure, it may attain higher productivity through improved skills, effectively diminishing fixed costs over production time.

Sources of Economies of Scale

EOS is realizable from various areas, often categorized as full capacity economies, by-product recycling and waste management, economies of reserved stocks or inventory, economies of product multiple, economies of technical and human resource efficiency, and monetary economies. Full capacity economies and economies of expansion are mainly realizable from the indivisibility of factors of production, especially physical capitalization such as production equipment. As the units of production from equipment increase, the cost of production capital is diminished from increased revenues attained with more units.

Economies of technological and managerial changes are those attainable from improved processes and specialization. As the business grows, it may enhance its technical production process through innovation or improve its efficiencies through its workforce and labor divisions specialization ((Baumers et al., 2016, p. 193). As these processes increase production with efficiency and cost-effectiveness, the cost attributable to the production of a unit declines as it is divisible over many factors.

Economies of product multiple originate from a balance of productive capacities of each factor. When a production process involves the integration of multiple factors such as machines, labor, and plant, it is cost-effective to balance the productive capacity of each element through the improvement of cooperation levels between the items (Hernandez-Villafuerte et al., 2017). When the optimal productivity of a factor is not attained, inefficiency is realizable relative to factor costs. Usually, the realization of optimality is hypothesized to come from dividing the aggregate factor costs by units produced from their integrated processes.

Empirical Evidence of EOS

EOS and Scope in Health and Medical Researches

Funders of medical research usually desire to attain high-quality form innovations and often face investment decisions regarding research and development. Since funders need to account for the investor funds, mostly if they are publicly sourced, it is critical to evaluate which option would be economically viable in terms of investment costing, concentrated investment, or diversification (Hernandez-Villafuerte et al., 2017). As with industrial production, in research investment, the EOS is realizable through the average cost model. As presented by Hernandez-Villafuerte et al. (2017), economies of scale for researches are attainable when the average unit cost for a single output is less than the cumulative quantity produced at a time. For instance, an MRI scan cost diminishes as the number of times the scanner is used increases cumulatively.

In such a model, economies of scope are attained. Economies of scope are realizable when performing two activities concurrently or at the same place yields a greater output for each unit of expenditure than when both activities are undertaken in isolation, for instance, conducting diagnostic and researches on medicine at the same time (Hernandez-Villafuerte et al., 2017; Obure et al., 2016). In health and medical researches, economies of scale would yield higher-quality results if conducted in institutions with either several researchers or studies taking place simultaneously. Economies of scale would be attainable through improved efficiency that would generate more quality, survivability over a long time, thereby diminishing investment cost attained through several outcomes.

In the event there are limited finances to fund researches, quality from economies of scale would be attainable from undiversified investigations that are more focused. EOS in research and development may occur through other mechanisms such as the growth in scale of activities that efficiently utilize accrued items, equipment, and building or different location- concentrated fixed costs that are cheaper to solicit, such as an existing pool of experts (Hernandez-Villafuerte et al., 2017). However, the increase in research activities or factors may yield diseconomies of scale. Diseconomies of scale may come from coordinative complexities, divergent pressures to employ specific equipment or personnel, or from increased bureaucracies that can produce more costs.

Econometric Tools for Evaluating EOS in Healthcare and Medical Research

Evidence highlights three critical groups of econometric tools for assessing EOS; proxy variables, multi-product cost function, and multi-product production. Proxy variables analyses economies of scale through the use of proxies for ranking the research. These variables include cumulative innovative projects from a research pool, collective projects initiated by an institution, and the cumulative projects in progress of a particular set of researches at a point in time (Hernandez-Villafuerte et al., 2017). In the multi-product cost functions, the cost summation of attaining x outputs depends on the production for each unit and a group of control variables.

In the multi-product cost function model, two types of scale economies, ray economies of scale and product-specific economies of scale, are addressed. Ray economies of scale are the cost effects realized from a rise in the manufacturing of varied outputs by an equal proportion. On the other hand, product-specific economies of scale are the cost burdens of raising the quantitative production on one item while retaining other factors levels. The latter reflects the ratio of total costs of production for all outputs and the cumulative marginal cost of outputs. In case the total cost exceeds the marginal value, an overall rise in the production levels will yield a higher total cost representing diseconomies of scale. Product-specific economies of scale represent the ratio between the cost variations with and without producing an item I and the production of that item alone weighted by its marginal cost. Through these models, researchers are able to evaluate the overall cost impact of concentrating resources on individual research against employing the resources in isolated investigations at the same time.

Economies of Scale in the Banking Sector

Evidence prelude that interest rate spreads are high for bigger banks than their smaller counterparts. Perspectives hypothesize that bigger banks might be exploiting their market dominance to raise their loaning rates as they expand, improve efficiency, and become competitively dominant (Asongu and Odhiambo, 2019). Studies have also revealed that as banks expend beyond optimal limits, they begin to experience diseconomies of scale that arise from inefficacies. The standard or typical identifiable mechanisms used by banks to improve intermediation are raising loan portfolios or sizes of loans, lowering the cost of loans, interest rates, and fees, decreasing information flow between lenders and borrowers (Beccalli Anolli and Borello, 2015). However, broader evidence reveals that loan spread remains higher for bigger banks than the smaller ones, especially in the banking sector.

Big banks are presumed to attain economies of scale through smaller margins leveraged on their sizes. The leveraging capacity of bigger banks arguably should yield a lower funding cost relative to their smaller counterparts. Therefore, the hypothetical extension is that these efficiencies would trickle down to the bank customers through high returns on deposits and lower costs on borrowings. However, evidence point out that the banks do not retain this model. Paradoxically, big banks worldwide are continually more inefficient than smaller ones (Beccalli, Anolli, and Borello, 2015). As a result, there has been a growing concern on the role of economies of scale in improving banking sector efficiencies.

Two main arguments underpin this trend. First, it is hypothesized that as banks expand, improve efficiency, and minimize rivalry, they exploit the dominance by creating monopolistic features. Second, there is a perception that expansion beyond a certain optimum will yield economic disadvantages triggering inefficiencies. The second perspective points out that as banks grow, they experience increasing average costs that result in broader interest margins.

Bank Size and Efficiency

Through the economic model, it is widely expected that as an organization grows, it will experience a corresponding improvement in efficiency through the workforces improved technical process and specialization. However, the increased process may always yield coordinative complexities, for instance, in the banking sector, this may be through an agency. In effect, smaller financial institutions with reduced technical complexities become more efficient by reducing increased activities that may yield higher marginal costs.

Using the Quiet Life Hypothesis (QLH), results prelude that firms exploit market power in the context of cost savings and foregone revenues to realize economies of scale. In this model, businesses with huge market shares focus less on price reductions and profit efficiencies. Instead of using their sizes to reduce costs and improve lending-borrowing efficiencies, larger financial institutions prefer to remain quiet (Asongu and Odhiambo, 2019). The economies of scale are realizable in the banking sector through five significant efficiencies; cost efficiency, revenue efficiency, captivity efficiency, and concentration efficiency.

Cost efficiency is underpinned around the model that size yields average cost reductions through efficiency, hence economies of scale. The perspective is that unavoidable operation costs such as marketing, regulatory expenses, and salaries are cushioned with increased revenue from higher business volumes. However, economies of scale fail to rise from size growth for the banking sector since big banks are most likely to implement more technical processes such as the banking software (Pruteanu-Podpiera, Weill, and Schobert, 2016). However, revenue efficiencies are reliant on bank-specific items instead of size.

Three perceptions fundamentally underscore how economies of scale are attained from revenue efficiencies by banks. First, giant corporations are likely to use banks they deem reliable and offer quality services. Such clients demand extensive benefits as conditions to remain customers and usually are very profitable. Second, the broader assumption is that banks with wide cross-border networks are more reliable and provide better services. These two items are broadly achievable by large banks, hence realizing increased revenue from higher business volumes. Third, the large financial institution can leverage risk diversification better than the smaller ones, which is often achievable through credit syndicates and numerous insurance mechanisms (Pruteanu-Podpiera, Weill, and Schobert, 2016). Hence, as banks become more prominent, they can enjoy economies of scale from increased business volumes sourced from more customers.

According to Beccalli, Anolli, and Borello (2015), Captivity efficiency results in economies of scale from ambitious efforts by large banks to raise their control over financial product distributions. While regulating investments in line with Undertakings for Collective Investment in Transferable Securities (UCITS), large banks may underwrite several structured products for their customers hence realizing improved revenues from increased transactions (Beccalli, Anolli, and Borello, 2015). Similarly, through these underwritings, large banks substantially minimize the conveyance of transparent information to the market, thus maintaining a competitive advantage and attaining economies of scale.

Conclusion

Economies of scale widely imply the benefits a business derives from diminishing costs. As the number of units produced rises, the fixed cost associated with generating each unit reduces since it is distributed over several segments. Economies of scale are either internal or external and can be dynamic or static depending on the point average cost reductions are realized as productions take place. EOS can be achieved within R&Ds and banking sectors through slightly different models, although in both areas, it entails declining average costs as production units increase.

In the banking sector, economies of scale may be realized from expansions, resulting in technical and managerial efficiencies. Through these efficiencies, large banks can enjoy increased business volumes from the increased customer base, hence retaining a competitive advantage. In research and development, economies of scale are realizable when the average cost of units produced through innovation results in a diminishing average cost related to generating more units over time. In R & D, EOS can be attained through a synergistic combination of factors to perform concurrent studies or recycled resources in new research to avoid incurring more costs during the research life cycle.

Reference List

Asongu, S.A. and Odhiambo, N.M., (2019) Size, efficiency, market power, and economies of scale in the African banking sector, Financial Innovation, 5, pp. 1-22.

Athanassiou, M. (2015) Economies of scope: international management. Web. 

Baumers, M., Dickens, P., Tuck, C. and Hague, R. (2016) The cost of additive manufacturing: machine productivity, economies of scale and technology-push, Technological Forecasting and Social Change, 102, pp. 193-201.

Beccalli, E., Anolli, M. and Borello, G. (2015) Are European banks too big? Evidence on economies of scale, Journal of Banking & Finance, 58, pp. 232-246.

Hernandez-Villafuerte, K., Sussex, J., Robin, E., Guthrie, S., and Wooding, S. (2017) Economies of scale and scope in publicly funded biomedical and health research: evidence from the literature, Health research policy and systems, 15(1), pp. 1-17.

Obure, C.D., Guinness, L., Sweeney, S., Vassall, A. and Integra Initiative (2016) Does integration of HIV and SRH services achieve economies of scale and scope in practice? A cost function analysis of the Integra Initiative, Sexually transmitted infections, 92(2), pp.

Pruteanu-Podpiera, A., Weill, L. and Schobert, F., (2016) Banking competition and efficiency: a micro-data analysis on the Czech banking industry. In Global Banking Crises and Emerging Markets. London: Palgrave Macmillan, pp. 52-74

Executive Summary

This business report presents a PESTEL analysis for Kingdom of Bahrain to determine external factors that influence the business environment and make recommendations for Kelly Services. The overall recommendation is to open an office in Bahrain. However, the company will have to mitigate the current political risks noted. Economic factors reflect the impacts of a slump in the global oil prices, but such effects will improve with new measures adopted.

Socio-economic trends show overdependence on foreign labour, which will favour the companys business, but it must observe related labour laws and employee rights. While the Internet is available and widely adopted (95% penetration), government interference continues to hinder its impacts. The legal system for property ownership is straightforward, but ownership is restricted to designated areas. Finally, Kelly Services should consider green products to support the governments efforts to protect the environment.

Company Overview

Kelly Services, Inc. (Kelly) specialises in temporary staffing globally. The companys operations are classified into three major business categories, including the US Commercial Staffing; Professional, Technical and Staffing Alternatives (PTSA), and International (Kelly Services, Inc. 2017). Alongside other conventional office services, Kelly seeks and provides professional and technical workforce across various industries and professions, such as education, science, information technology (IT), finance and accounting, engineering, healthcare and homecare, and legal. The company provides staffing services to a wide range of customer groups using about 2,600 independent, customer onsite and co-located offices in the US, the Americas, Europe, and the Asia-Pacific region (Kelly Services, Inc. 2017).

Established more than 70 years ago in 1946, the company now has more than 1,100 employees at the head office in Troy and additional 7,000 spread globally. The founder, William Russell Kelly is seen as the father of the modern temporary staffing industry. Kelly services first expanded to Canada in 1968, France in 1972, and today, it operates in more than 27 countries, listed on the NASDAQ Stock Exchange, is currently ranked 467 in the Fortune 500 list of Americas largest companies, and has won several awards.

A Management Consultant Report

In this report, the consultant has applied all aspects of PESTEL to analyse macro- environmental factors that affect business operations in Bahrain and make management recommendations for Kelly Services based on the up to date research on strategic trends on politics, economic, social, technological, legal, and environmental factors. These trends are important for strategic executives to ensure that they comprehend and prepare for entry into the country. Bahrain is a country that hosts many multinational firms, but getting qualified personnel is a major challenge for many firms.

PESTEL Analysis

The letters, PESTEL reflect Political, Economic, Social, Technological, Environmental, and Legal (PESTEL) factors for analysis. PESTEL is a framework used in a strategic management approach by consultants to assess and monitor external environment (macro-environmental) factors that affect business operations (University of Central Florida 2017). This tool is applicable across many industries (Rastogi & Trivedi 2016).

Quick Facts

Political

• Government type and stability: although Bahrain is relatively politically stable, it faces challenges related to home-grown sectarianism, incitement, violence, and terrorism. As the country struggles towards democracy, it has undertaken some legal measures to advance democracy, maintain security, stability, and unity of the people (Toumi 2016).
• Freedom of press: Bahrain continues restrictions on free press and free expression, and it is ranked 162^nd out of 180 countries on the press freedom index by Reporters without Borders in 2016 (Americans for Democracy & Human Rights in Bahrain 2017)
• Rule of law: the judicial system is seen as corrupt, all judges are appointed by the ruling family, tendering may not be transparent, but expropriation and petty corruption are not common (Heritage Foundation 2017). The legal system sufficiently supports property acquisition and disposal (Heritage Foundation 2017).
• Level of bureaucracy: high-level influences occasionally hinder foreign direct investment
• Regulation and de-regulation trends: the political class continuously reviews regulations to attract foreign investors and now 100% foreign ownership is allowed, but the labour market is still highly controlled.
• Employment legislation: Bahrain allows only Bahraini citizens and companies to engage in foreign manpower supply (Servcorp 2013).
• Tax policy: no personal income tax imposed, most firms do not pay corporate tax, oil firms pay 46% tax, and the overall tax burden is 3.8% of the total domestic income (Heritage Foundation 2017).
• Trade and tariff controls: higher minimum capital is required to start a business, labour is controlled and no minimum wage is established but labour cost continues to rise.
• Potential changes in the political environment: Bahrain is most likely to continue with reforms toward democracy and tough laws in response to emerging domestic threats.

Based on the current political factors, Kelly Services will have to considered the best approaches to mitigate the above-mentioned political risk factors before investing in Bahrain.

Economic

• Stage of business cycle: most companies in Bahrain are in the growth stage of their business cycle
• Population: Bahrain is a relatively small country with an estimated population of 1.36 million people. This number is expected to increase due to the increasing number of expatriates.
• Public spending: since 2009, the government adopted an expansionary public policy, which has created a large budget deficits and increasing debt levels, a situation that weakens the inclusive financial health of Bahrain. Thus, Bahrain requires fiscal reforms.
• Current and projected economic growth: the current GDP is $64.8 billion with a growth rate of 3.2% and $50,095 per capita. Following the drop in oil prices globally, this growth rate is most likely to decline in the period 2017-2018.
• Inflation and interest rates: the inflation rate (CPI) is 1.8%. It is estimated that the rate of inflation will continue to rise due to other issues associated with low oil prices. The rate of interest was 1.25% as at March 2017 (Trading Economics 2017).
• Unemployment and labour supply: the rate of unemployment is 1.2% (Heritage Foundation 2017).
• Labour costs: although there is no specific minimum wage set by the state, the cost of labour has continued to rise steadily and passed the overall productivity rate perhaps due to limited supply of qualified personnel. Additionally, the state controls all supply of foreign manpower.
• Levels of disposable income and income distribution: in 2015, consumer spending was estimated at 4774 BHD million and the per capita is $50,095. Generally, much of the wealth is controlled by the ruling class.
• Impact of globalization: 70 percent countrys budget revenue is supported by oil incomes. However, in the recent past, the government has focused on diversification. Consequently, Bahrain now hosts several multinational companies that serve the wider Gulf region. Additionally, Bahrain has signed a free trade agreement with the US.
• Potential impact of technological or other change on the economy: more and more companies continue to embrace technology in Bahrain, as some tech giants now have offices in the country.
• Ongoing and potential changes in the economic environment: since 2016, the government has cut subsidies on petroleum products, natural gas, water, food items, and electricity. Additional taxes may be introduced to supplement oil revenue.

Social

• Population: immigrants constitute 55% of the entire population of 1.3 million people. With the changes in demographic characteristics, population growth is expected, but at a slow rate.
• Employment patterns and attitudes to work: notably, many Bahrainis prefer public service than the private sector. Although Bahrain has grown, most technical and professional jobs are held by expatriates, including Americans, British, and Indians. Generally, locals continue to shun some private job offerings and expect employment in the public sector. As such, reliance on foreign labour has persisted.
• Job market freedom: the job market is not all free due to restrictions on foreign supply of manpower. Not many women work outside their homes, according Islamic culture.
• Socio-cultural changes: more women now strive to enter the labour market in Bahrain, albeit slowly due to effects of social relations, cultural orientations, or family politics.
• Division of labour: majorities of the workforce are concentrated in industries, business, and services; an extremely low percentage is found in the agricultural sector because of the arable land. As mentioned above, many jobs are held by foreign employees, and they occupy all types of jobs from low skilled works to more specialised jobs, including investment banking. Foreign influences continue to change division of labour in Bahrain.

Technological

• The government heavily censors the Internet and access is restricted to some extent. It is believed that social media platforms, such as Twitter and Facebook are used to cause unrest through spreading highly inflammatory contents.
• Impact of emerging technologies: efforts to provide advanced infrastructures for Information Communication Technologies (ICT) are supported by regulatory policies that reflect the Kingdoms commitment to developing the technology sector. Today, cloud computing, mobile technologies, creating apps, and sharing information, computing infrastructures, and the application of Artificial Intelligence (AI) technologies among other practices have started to gain traction in Bahrain (Carlson 2017). Additionally, small businesses and startups have also started to embrace technologies.
• Impact of internet: the Internet has opened opportunities for business growth and facilitated the concept of remote working. Today, more than 95% of the population is connected to the Internet. In fact, Bahrain is the country with the highest Internet penetration in the Gulf region.
• Research and development (R&D) activity: notably, Bahrain, as a country, has dedicated its R&D efforts to the oil industry. As such, it has developed more advanced technologies for the industry. Hence, majorities of other technologies are mainly introduced by foreign companies.
• Impact of technology transfer: multinational firms continue to introduce new technologies in the country. Cooper Fitch, for instance, has embraced social media and other platforms to advance its recruitment and human resource management in the country.

Environmental

• Environmental laws: foreign firms must recgonise that Bahrain has enacted several laws to protect the environment. They are related to energy, water, air quality, biodiversity, land use, waste management, coastal areas protection, and the use of chemical substances. These laws are in relation to climate change policies.
• Demand for green products: Bahrain has increased its efforts to support green technologies. Notably, the need for higher energy efficiency, greener products and sustainable technologies has increased the rate at which novel products and innovations are introduced in Bahrain (Saxena 2015).

Legal

• Property ownership: as previously noted, the current laws protects foreigners rights to purchase and sell their property. Only Bahraini and GCC citizens can acquire land in any location of Bahrain. However, for foreigners and foreign firms, they can only acquire and own property and real estate in specific developed areas, such as the Greater Manama Area, Seef District, new tourism developments, and other areas within the range of the Bahrain Financial Harbour (BFH), the Bandar Al Seef Area and Lulu Islands (Ministry of Industry, Commerce, and Tourism 2017).
• Commercial agent: in any case the company is unable to get 100% ownership because of the nature of business (e.g. foreign manpower supply), then a commercial agent may be appointed. The law requires 51% ownership by Bahraini firms or Bahraini citizens. Due diligence is required.
• Agency law: the law requires both parties to register an agency agreement at the ministry. Any unregistered agency agreement is not recognised under the agency law. Agency laws tend to favour locals agents even if the contract states otherwise.
• Discrimination law: the new labour law No. 36 of 2012 prohibits discrimination in the payment of wages based on sex, ethnic origin, language, religion or beliefs among others.
• Employment law: the new labour law No. 36 of 2012 aims to promote the private sector by granting more rights to employees. Employers are expected to ensure improved working conditions, better investment plans for employees, clear contractual terms, and prohibit human trafficking and employee discrimination (Oxford Business Group 2017).
• Anticorruption: unlike other Gulf countries, Bahrain has introduced laws that make it an offence for both public officials and private company executives to give and receive gifts or privileges. Notably, Gulf countries have weak systems for implementing such laws.
• Health and safety laws: the law requires employers to ensure safe workplace environments, which are free from occupational and health hazards.

Management Recommendations

The recommendations provided are based on the current results of the PESTEL analysis for Bahrain. Overall, a recommendation is made for Kelly Services to open a branch office in Bahrain.

• Political factors present some risks, which Kelly Services will have to mitigate.
• Economic factors are generally favourable, but a decline in global oil prices cannot be ignored in that economy. Bahrain already hosts many multinational firms.
• Socio-economic factors shows that Kelly Services will have to rely on foreign workforce to recruit for any clients in Bahrain (over 75% of the workforce is made up of expatriates)
• Technologies continue to drive business operations, but social media tools are highly monitored and access to Internet is controlled by the government.
• For legal factors, the company will have to concentrate on property ownership, the use of a local agent, and the new labour laws.
• Laws to protect the environment are available, and the adoption of green products has increased steadily.

Reference List

Americans for Democracy & Human Rights in Bahrain 2017, Bahrains recent attacks on press freedom. Web.

Carlson, T 2017, The future of cloud computing in Bahrain, News of Bahrain. Web.

Heritage Foundation 2017, 2017 index of economic freedom. Web.

Kelly Services, Inc. 2017, Company overview. Web.

Ministry of Industry, Commerce, and Tourism 2017, Bahrain investor center. Web.

Oxford Business Group 2017, A look at Bahrains recent legislation on employment. Web.

Rastogi, N & Trivedi, MK 2016, Pestle technique  a tool to identify external risks in construction projects construction projects, International Research Journal of Engineering and Technology, vol. 3, no. 1, pp. 384-388.

Saxena, A 2015, Bahrain backing projects with green technologies, Gulf Digital News. Web.

Servcorp 2013, Guidelines for setting up a business in Bahrain. Web.

Toumi, H 2016, Bahrain to move ahead with rectifying political process, Gulf News. Web.

Trading Economics 2017, Bahrain: economic indicators. Web.

University of Central Florida 2017, Business research  industry analysis. Web.

Cost Volume Profit analysis (CVP) helps monitor an organizations activity levels, assisting managers in making decisions that lead to profits or avoid losses. The CVP has numerous uses and influences on most organizations cultural dimensions and best practices. Geert Hofstede proposed the cultural dimension theory, and the six key dimensions are power distance, individualism-collectivism, masculinity-femininity, uncertainty-avoidance, and short to long-term orientation (Gallego-Álvarez & Pucheta-Martínez, 2020). Managers and other decision-makers must conduct the CVP analysis with the knowledge that culture plays a significant role in the overall performance of the companys projects.

CVP seeks to answer questions like when an organization aims to achieve its break-even point. If the company wants this to happen as soon as possible, the organization may cut costs, affecting its culture and best practices. On the flip side, if the firm has a long-term orientation culture, the CVP mechanisms will differ from those of shorter-term oriented companies (Vollero et al., 2019). This analysis of costs, volume, and profits also helps organizations by giving them feedback on how expenses will be and assisting managers in knowing when to adjust the variable costs. It also prevents uncertainty about the expected performance of the companies various projects, ensuring that best practices such as giving back to society are assured.

Contemporary organizations also use the CVP analysis to gauge which cultures are likely to help minimize operations costs. To avoid biased decision-making, organizations must conduct studies that ensure that the culture increases costs while not boosting sales or profits (Omar et al., 2019). Since CVP can be explained to be the ratio between revenue and total profits, the decision makers use it to decide which best practices will likely boost the revenues while minimizing the costs. Managers should always be cautious of the CVPs short- and long-term benefits.

References

Gallego-Álvarez, I., & Pucheta-Martínez, M. C. (2020). Hofstedes cultural dimensions and R&D intensity as an innovation strategy: A view from different institutional contexts. Eurasian Business Review, 11(2). Web.

Omar, Y. M., Minoufekr, M., & Plapper, P. (2019). Business analytics in manufacturing: Current trends, challenges, and pathway to market leadership. Operations Research Perspectives, 6, 100127. Web.

Vollero, A., Siano, A., Palazzo, M., & Amabile, S. (2019). Hofstedes cultural dimensions and corporate social responsibility in online communication: Are they independent constructs? Corporate Social Responsibility and Environmental Management, 27(1), 5364. Web.

Introduction

The case scenario A. P. Moller-Maersk Group: Evaluating Strategic Talent Management Initiatives is expounded retrospectively, throughout the companys ideological changes since the pre-2003 era till recent times. After reading the article, it becomes clear why human resources function is crucially important and should be aligned with the strategic plan of an organization. Likewise, it is impossible not to place a high emphasis on the impact of current global conditions in Maersks industry, which strongly affects human resource management within this organization. Thus, different factors brought significant changes to Maersks companys whole structure, and now it is the right moment to explain how Maersks talent management strategy works.

Main body

As a matter of fact, HRs primary objective is to recruit, develop, and retain the best talents for the company. Those talents become not only leaders and role models for the subsequent employees but also a sustainable base for Maersks company development (Groysberg & Abbott, 2013). There is the following main reason why such people should fit in the process of growing alongside the company, complying with the plan.

Employees must know what the companys goals are to provide the workforce that will help the company attain its goals and succeed. In order to make it possible, Bill Allen, head of Human Resources (HR), has focused on essential three areas: getting the right people in the right jobs at the right time, leadership development [because it] drives business results and differentiation in terms of rewards and pay for performance (Groysberg & Abbott, 2013, pp. 5). Since 2008, these three revolutionary rules have made Maersks industry flourish.

Next, as Maersk family-owned firm transformed into a global publicly-traded one due to the current world-wide changes, its head of Human Resources, Bill Allen, had to allocate significant resources in implementing sophisticated recruitment procedures. Historically, there have been a special training program for young people, who have just graduated from school or college (Groysberg & Abbott, 2013). Hence, they could start knowing the companys culture from the very youth.

However, more experienced seniors, who had high potential and already proved their excellent performance, were not able to manage self-development within the Maersks industry. Consequently, Bill Allen found the solution again by creating a Development Shop  an online depository for training and learning resources (Groysberg & Abbott, 2013, pp. 10). Engaging in the individual needs of the employees, Maersk Groups HR department has actually benefited from their development.

Moreover, the head of the HR reconsidered the taboo of re-hiring people to make the staff more diverse in some way. In other words, boomerang alumni gained various skills in another organization, and now he or she is ready to apply them at Maersk. Besides, they still understand Maersks process and values, already have good connections with colleagues, and fell as much like family as coworkers (Groysberg & Abbott, 2013, pp. 12). Accordingly, the decision to invent alumni networks in order to inform former employees about new opportunities at the firm was vital in the current global conditions.

Then, one should claim that it is necessary to compare and contrast internal recruitment with the external one to determine the beneficial way of selecting people. First of all, there is a similarity between the two candidates. Both internal and external employees may be professionals in their field, and they could aim at the particular positive outcome for the organization, especially when both of them are paid well.

However, others state that there are many more distinctions between internal and external candidates. The key differences were detected while analyzing the case scenario. The first one is that the person that has already worked for the firm has a clear picture of his job, the peculiarities in the structure, and career development possibility within the Maersks industry, while an external candidate needs some time to adapt.

On the other hand, it is not profitable to keep law performance staff for many long years and the good decision is to hire a broad-minded and experienced person from the outside. Not accidentally, there was given a statistic in the case scenario: In recent years, the percentage of senior positions filled by external hires had increased from virtually none to 30% (Groysberg & Abbott, 2013, pp. 2). What is more, deployment was a homogeneous part of the talent management process, so the company established a connection with external consultants where management was coping without the skill-set internally. Nevertheless, if the question concerns specifically the recruitment, even then, the external candidates are mostly in the requisition.

Afterward, Maersks recruitment strategies should be described in detail to explain how the staff remains aligned with the organizations vision and goals over the years. As it was mentioned before, the practice of rehiring people has occurred to be one of the best methods since 2010 (Groysberg & Abbott, 2013). The Maersks industry did not need high risks and enduring recruiting processes, so a boomerang was less costly than other hires. Thus, training costs are lowered; employees have more precise notion, why do they join the firm this time, and finally, they probably returned due to the values and favorable conditions. Besides, one should recommend paying bonuses for every year staying at the firm (seniority) to improve employee success and retention.

Conclusion

In conclusion, it is essential to highlight that human resource function and an organizations strategic plan and its outlook are interconnected. As soon as Bill Allen has become the head of HR at Maersks company, the talent management strategy principle was put in action. It revealed that to form a successful staff, the leader should pay attention to the importance of personal and organization coincidence. In addition, current global conditions in the industry and the selecting process of new employees, either internal or external, resolve the industrys future.

Reference

Groysberg, B. & Abbott, S. (2013, May). AP møller-maersk group: Evaluating strategic talent management initiatives. Harvard Business School Case, 1-20.

Introduction

The high level of competition and the rapid development of the business environment significantly impact the way companies evolve. In order to justify the reasons for an investment into a company, one should ensure that the company at hand effectively responds to the social, political, and business environments, as well as performs competitively in its respectful niche. This report is aimed at reviewing the business performance and environment of an American electronic cigarette company Juul Labs. The review identifies that the company occupies a significant share in the market of alternative smoking products, which is now a trending industry. It has a competitive advantage due to its strong scientific and technological basis. However, the social environment and governmental regulations related to adverse health effects of vaping induce negative stakeholder experience. While the dispute over the business mission triggers elevated social concern, Juul Labs invest in the scientific improvement of its products, thus increasing their quality. The report concludes with recommendations as per further business research.

Juul Labs Business and Purpose

Juul Labs is an American company with headquarters in San Francisco that specializes in producing and retailing electronic cigarettes. It is a relatively young company; it was co-founded by Adam Bowen and James Monsees in 2015. The purpose of the company is to apply industrial design and produce alternative cigarettes that would help adult smokers transfer from regular cigarettes to less harmful smoking products (Our mission, 2020). Juul Labs produces nicotine-containing electronic cigarettes that have become a popular alternative to conventional cigarettes. The businesss aim is to reduce the harm and encourage the elimination of nicotine smoking.

Juul Labs Stakeholders

Juul Labs cooperates with several investment companies. It is supported by its stakeholders on the basis of the technology-informed production processes that are capable of meeting the needs of a contemporary consumer. The team working in the company includes designers, engineers, scientists, and customer specialists who create a high-quality product that effectively competes in its market (Our mission, 2020). The main stakeholder of Juul Labs is an American company Altria, which has a 35% stake in Juul Labs (Feuer, 2020). Until recently, Juul had a positive financial impact on its main stakeholder by generating growing annual revenues. However, the recent legal issues around the harmful effect of smoking products have caused noticeable losses to Altria, about $4.1 billion in impairment charge (Feuer, 2020). Thus, the companys cooperation with its stakeholders is controversial.

The shaping of Juul Labs Business Activities

The company has grown significantly since its founding and has expanded to a multinational chain of suppliers and stores. With the revenue growth, the company has faced a controversial perception by society, which predominantly considers that the business operations of Juul Labs have negative implications for their customers health. In the past year, the company has experienced several legal cases related to the mortality and morbidity related to vaping (Feuer, 2020). In response to such social environment particularities, the company has adjusted its marketing practices and overall business activities. It does not use promotional methods and does not cooperate with any advertisers limiting its non-promotional online presence to a few social media platforms (Our mission, 2020). Also, the company invests more in its technological and scientific processes to ensure the high quality of its products.

Business, Government and Society

Since the company produces a newly designed product that is relatively unknown to the general public, the business activities of Juul Labs are subject to an on-going dispute on the intersection of social and governmental perspectives. The companys business goals are justified by the mission to pursue more healthy experiences for adult smokers. Thus, the company strives to improve the tobacco industry, which has multiple adverse effects (Our mission, 2020). On the other hand, it complies with the governments regulations and explicitly states that e-cigarettes are available only to consumers who have reached legal age. However, multiple legal cases filed against Juul Labs have caused more strict regulations of its production operations from the governments side. Also, these events have shaped the current reputation of a company as a non-stable business that provokes contradiction in society (Feuer, 2020). For example, as of the beginning of 2020, 60 deaths and more than 2,000 hospitalization cases related to vaping. Several lawsuits have been filed against Juul Labs that have led to Altrias significant financial losses in impairment charges (Feuer, 2020). As a consequence, the company is considered to occupy an unstable position in the market.

Conclusion

To summarize, Juul Labs is a business entity that contributes to the technology-driven smoking industry and aims at eliminating the harm of nicotine consumption. The overall technology and alternative product trends in the business environment contribute to the companys growth. However, despite its strict compliance with governmental regulations, health concerns troubling society lead to legal cases and stakeholders losses. Therefore, the presence of both positive and negative business characteristics around Juul Labs performance, it is necessary to engage in more in-depth research to validate the decision of investment.

References

Feuer, W. (2020). Altria stock craters after $4.1 billion hit from Juul investment, blames growing legal risk.

Our mission. (2020). Web.

Introduction

Before reading the unit materials, I had a strong desire to live and work in a foreign country, but now I am not sure. As it appears, to find a job abroad, one needs to be an extremely valuable specialist in the field or already be an employee of a large company that has received a foreign assignment. Expatriates do not have problems with employment, as they come to the conditions prepared for them by the company. People who plan to find a job on their own in a foreign country can meet with numerous difficulties.

Discussion

This unit provided many useful insights into the process of recruiting, selecting, and preparing expatriates for work abroad. First of all, in order to build a successful career in a foreign country, one needs to establish oneself in a multinational company while working at home. Researchers found that 89% of the MNEs international assignees were sourced by internal recruitment by the relevant business unit (Waxin & Brewster, 2020, p. 2). Thus, working and living abroad as an employee of a large company is much safer and more comfortable, as the employer provides all the necessary conditions for cultural adaptation. Finding a job for an expatriate in a new country can be a challenging and stressful task, which makes the idea of self-relocation to a foreign country to work extremely unattractive.

Additionally, selection criteria for expatriate employees include self-confidence, relevant skills and knowledge, and resilience to stress. In general, employees of multinational companies who hold a certain position in their own country for a long time do not have significant difficulties in temporary work abroad. Some employees may have problems with cultural adaptation, but relevant training to develop cultural competencies should help with the adjustment process.

Conclusion

Thus, for employees of multinational companies, there are no difficulties in supporting them during the adaptation period in a new country. Thus, I would like to work in another country as an expatriate who received a foreign assignment from a company, but not as an independent applicant.

Reference

Waxin, M., & Brewster, C. (2020). The recruitment, selection and preparation of expatriates. In J. Bonache, C. Brewster, & F. J. Froese (eds.), Global mobility and the management of expatriates (pp. 31-57). Cambridge University Press.

When it comes to the performance of a particular organization, every employee and employer are affected by training. Every worker participates in training at some time in his or her career, usually a number of times. While managers need to be sure that they possess required competencies to occupy supervising positions they are also often asked to provide training to employees (Blanchard & Thacker, 2013, p. 3).

Thus, this paper is a development and delivery plan for creating a two-day training workshop for a hundred of managers on how to use effective feedback skills when delivering one-on-one performance reviews to their employees. Training will comprise three learning objectives: developing feedback skills through coaching; understanding performance reviews through lecturing; developing an ability to motivate employees through role play.

Developing Performance Feedback Skills

Since providing employees with effective and honest feedback on how they perform is one of the most complicated tasks every manager must do. Many supervisors avoid giving performance feedbacks since it is often uncomfortable and overwhelming (Peters, 2015, p. 1). Thus, the first learning objective for the training workshop is coaching managers to develop appropriate skills to ease the procedure of giving performance feedback to their employees.

Coaching often implies the involvement of an outside consultant to assist managers in dealing with a particular type of issue (Blanchard & Thacker, 2013, p. 230). The room set up will involve a large auditorium with a large whiteboard where the consultant will stream a presentation. The coaching will take four hours including two twenty-minute breaks and an hour for the coach to answer questions from trainees. Such a room set up will not allow for much discussions among participants; however, it is the most effective for the coach to provide a lesson to a hundred people audience.

Understanding Performance Reviews

Setting an objective of understanding performance reviews is important since such reviews offer a win-win experience for employers and their employees. When discussing performance in a one-on-one discussion, companys workers have an opportunity to reinforce the values a company holds, strengthen culture in the workplace, and achieve the strategic objectives set by the company (Busser, 2012, p. 32).

Thus, the lecture that will take place on the second day of training will focus on the principle of performance reviews and its main components: how to share thoughtful information regularly; how to encourage employee-generated solutions; how to become an ally instead of a critic; and how to ask questions before giving out information. These components of a performance-based review will give managers a guideline for how to structure their work when it comes to one-on-one discussions with employees. In the course of the lecture, managers will learn the importance of listening and understanding employees, as well as give their ideas a chance.

The lecture will take place in a large classroom or conference hall with tables as chairs so groups of managers will be distributed across the classroom in groups. Such sitting arrangement will encourage more informal conversations between a lecturer and the group. The lecturer will provide a one and a half-hour lecture with a half an hour break. The information will be presented in short and concise points any manager will understand since the topic of performance reviews does not require deep theoretical knowledge; rather, practical advice is much more effective.

Developing an Ability to Motivate Employees

Managing performance of an organization usually spans across several activities a manager should adopt in order to enhance their work and the work of the employees. Thus, performance management has been developed to motivate employees into reaching corporate goals. Performance management can motivate employees by setting goals and expectations as well as giving feedback on the performance of the employees while they are in the process of meeting the set expectations (Selden & Sowa, 2011, p. 253).

Since developing an ability to motivate employees implies practice rather than theory, the last part of the two-day training will be a role-playing game in which trainees will be divided into groups and given practical tasks on the learned material. For example, in a group of five people, one person will play a role of an employer, and other four are employees with different goals and different performance indicators. The task of an employer will be to conduct a brief one-on-one performance feedback review with each employee and motivate them into doing their work effectively. Then roles change.

Role-play in a training environment will facilitate discussions and active participation of managers. This activity will be better organized in an open space, for example, in a park, where each group of trainees will find a suitable for them spot to complete their role-play task. The trainees will be monitored by five supervisors who will answer questions on the practical side of performance management as well as give managers advice on how to better structure their motivational discussions with their employees. Completing a two-day training course for employees on a practical task will motivate managers themselves, giving them an inspiration to better communicate with their workers, set attainable goals, and motivate.

References

Blanchard, N., & Thacker, J. (2013). Effective training: Systems, strategies, and practices (5th ed.). Upper Saddle River, NJ: Pearson Education.

Busser, D. (2012). Delivering effective performance feedback. T+D, 66(4), 32-35.

Peters, P. (2015). 7 Tips for delivering performance feedback. Supervision, 76(2), 13-15.

Selden, S., & Sowa, J. (2011). Performance management and appraisal in human service organizations: Management and staff perspectives. Public Personnel Management, 40(3), 251-264.

Introduction

When processing or manufacturing a new product, the manufacturer needs to ensure the quality of the products meets the customers expectations. Quality control (QC) is a process through which the quality of a product is assessed, maintained, or improved (Eissa, 2018). Quality control is essential to create an enabling environment where employees and management strive for perfection. QC is done by creating quality product benchmarks and testing tools that check for statistically significant variations (Eissa, 2018). Consequently, these controls help the manufacturers to establish well-defined controls by limiting any room for errors.

Discussion

Control charts are examples of QC used in operations and manufacturing departments. Othman et al. (2019) defined control charts as graphs used to monitor the quality of a product being manufactured or processed. For instance, during the production of electric black box items for vehicles, a company may need to monitor the quality of the boxes to ensure that they meet the requirements of automatic driving (Eissa, 2018). A printed circuit board with a solder paste is placed on top of the electric component in preparing electric boxes. To ensure the success of this process, the application of control charts is encouraged.

A control chart has three lines. The central line (CL), the UPL (upper control limit), and the lower control limit (LCL). During the production of the electric boxes, the producer must ensure that the process is in control. This happens when the graph is always between UPL and LCL. On the contrary, when the graph moves out of UPL or LCL, the production is said to be out of control. Further, if the production generally lies within the CL, then the production is within the recommended average.

Thus, the control chart helps monitor the oven temperatures needed for pasting the solder paste on the black boxes. Once the results are populated on the control chart from the computer, it becomes easy to monitor the temperatures and ascertain whether they lie within the specified temperatures. In this experiment, the control readings were within the specified temperatures from zero minute to the 11th minute (Eissa, 2018). However, on the 12th minute, the temperatures were out of the UPL range. Consequently, the production was out of control, so the a need to contact the supervisor to bring the production within the recommended temperatures.

Systems that are out of control can be brought back to control levels with the application of the Western Electric Company (WECO) rules. Velinovska et al. (2019) defined WECO rules as decision rules that help manufacturers detect out-of-control systems in statistical processes (Eissa, 2018). However, for the WECO rules to be applied, the system must fall within ±3 of the standard deviations. In this system, the recommended temperatures and the out-of-range temperatures in the oven are not given, which makes it difficult to calculate the mean temperature of the oven and the standard deviation of the out-of-control temperature (Othman et al., 2019). Consequently, it is impossible to tell the extent of the standard deviation in the control chart, making it challenging to apply the WECO rules. In this case, WECO rules could be applied or not.

Conclusion

In general, control charts play an essential role in monitoring the quality of the products in the final project. For instance, in this project, control charts play a significant role in controlling the quality of electric boxes by monitoring the temperatures in the oven. Furthermore, control charts are easy to use compared to other QC tools.

References

Eissa, M. E. (2018). Adulterated pharmaceutical product detection using statistical process control. Bangladesh Pharmaceutical Journal, 21(1), 7-15. Web.

Othman, L. M., Ponchet-Durupt, A., Boudaoud, N., Bosch-Mauchand, M., & Cherfi-Boulanger, Z. (2019). Integrated decision rules for adaptive condition-based maintenance and multivariate control charts. Proceedings of the 29th European Safety and Reliability Conference (ESREL). Web.

Velinovska C., M., Popstefanova, N., Ilievska, M., Karadzinska, E., Davceva Jovanoska, M., & Glavas Dodov, M. (2019). Trending and out-of-Trend results in the pharmaceutical industry. Macedonian Pharmaceutical Bulletin, 65(01), 39-60. Web.

Introduction

For a restaurant business to be successful, its management should establish a strong purchasing process that includes both selection and procurement. The process should be well organized in order to control costs and deliver the best possible product for the companys target customers. Chick-fil-A, a major fast food chain, has recently established a Chick-fil-A Supply as part of its distribution network to ensure consistency of delivery and high quality of products throughout the chain. The purchasing process for each individual restaurant in the chain can be optimized using modern purchasing technologies to facilitate the quality of supply.

Company Overview

Chick-fil-A is one of the largest American fast food restaurant chains that specializes in chicken sandwiches. The company operates more than 2,600 venues located in 48 states. Chick-fil-A was originally founded as the Dwarf Grill in 1946, then changed its name to Dwarf House until rebranding as Chick-fil-A in 1967 (History, n.d.). The first restaurants of the chain were located in suburban malls food courts, but since the 1980s, the company has been focusing more on the stand-alone type restaurants, expanding its presence all over the country. The average restaurant size is around 5,000 square feet and seats approximately 128 customers. The layout of the restaurant sees customers coming in from the side of the ordering counter, getting their order, and seating both inside and outside the facility.

Chick-fil-As menu is centered around chicken, with the companys trademark slogan, We didnt invent the chicken, just the chicken sandwich, referring to its flagship menu item, the Chick-fil-A chicken sandwich. The standard menu includes eight categories: classics, wraps & salads, sides, breakfast, desserts, beverages, kids meals, and trays. According to the companys statistics, the most ordered menu items of 2018 included sandwiches, strips, chicken biscuits, hash browns, nuggets, waffle fries, iced tea, and lemonade (Lewis, 2018). While other fast food chains constantly expand their menu offerings, Chick-fil-As remains focused on chicken sandwiches and offers a simple, standardized menu throughout its venues.

The companys business strategy is focused on providing good customer service and high-quality food. The company retains ownership of each restaurant, with franchises only having to invest $10,000 to become an operator and undergo a rigorous training program to ensure that they would provide high-quality customer service. According to Chick-fil-A, much of the food served at their restaurants is raised and grown on local farms all over the country, and the company is committed to ensuring that its suppliers follow rigid quality standards (Where our food comes from, n.d.). In 2008, Chick-fill-A became the first fast food restaurant to become completely trans-fat free, and it claims that it only uses chicken grown on farms and free of antibiotics.

Chick-fil-A Commissary

Since 2019, Chick-fil-A has been operating in Redwood City from DoorDash Kitchen, which is a shared commissary kitchen designed for restaurant brands looking to expand their off-premise sales without opening a physical restaurant. Using a commissary kitchen allows foodservice providers to meet the growing demand for off-premise orders and provides more control over every stage of the restaurant process from receiving to preparation (Arnett, 2020). Chick-fil-A reported that operating out of DoorDash Kitchen is part of a brand initiative to provide more convenience to customers (Luna, 2019). Together with entering into a partnership with DoorDash Kitchen, the chain has also opened several delivery-only units that have no dining room or drive-thru.

In 2019, Chick-fil-A created Chick-fil-A Supply, a part of the chains distribution network aimed to ensure that restaurants have the ingredients, packaging, and other items they need to serve customers. The first Chick-fil-A distribution center opened in Cartersville, Georgia, and has the capacity to serve up to 300 restaurants (Kelso, 2019). Chick-fil-A Supply provides a more seamless distribution process and allows the company to better manage food safety parameters and quality control (Kelso, 2019). Single restaurants served by the distribution center get the ingredients at unified prices and can be sure of timely and quality delivery and the uniform quality of products.

In order for each individual restaurant to fulfill customers needs, they need to have a stock of the following food items: chicken, cheese, condiments, vegetables, salad mixes, buns, and desserts. The soft drink suppliers include Coca-Cola, Minute-Maid, Buddy Fruits (the supplier of apple sauce), and Simply Orange. With the company offering no alcoholic beverages, it does not require any special licenses. Non-food items include primarily restroom supplies, drink cups, and food packaging.

Purchasing Process

• Product ordering. Each restaurant needs different quantities of products, and this quantity should be calculated based on their average consumption and the estimated consumption for the period. Perishable items, which include fruits, vegetables, meat, and dairy products, should be bought frequently to ensure freshness. Frozen food has a longer lifespan and can be served in a freezer. Non-perishable items can be ordered on a weekly and monthly basis. Having a unified distribution center allows each individual restaurant to depend less on each individual supplier and be sure of timely delivery and continuity of supply. Order times should be agreed upon with the distribution center, with order quantities determined by the restaurant and updated according to its current needs.
• Storage management. The basic goal of storage management is to prevent the loss of products. It includes providing correct storage for each item, ensuring that temperature-sensitive items are stored quickly and correctly and that freezers and refrigerators are not overloaded (Walker, 2017). Adequate temperatures and storage specifications of each item need to be observed to ensure continuity of supply. Each restaurant needs to have a sufficient storage area and qualified employers to handle products upon delivery.
• Product identification. When delivered, products need to be correctly identified to ensure their proper storage. Identification includes inspecting the products for quantity and quality to control any discrepancies, checking delivery invoices, products conformity with required temperature statutes, and the condition of packaging (Walker, 2017). Items should be sorted and stored based on their shelf life. Each restaurant needs to possess the necessary equipment and qualified personnel to ensure correct identification.

The proposed purchasing process corresponds with five main purchasing objectives. Maintaining adequate supply and minimizing investments are ensured through a fixed delivery system through the unified delivery center. Uniform product quality and lowest prices are maintained by Chick-fil-A Supply, which means that each individual restaurant does not have to deal with independent suppliers, compromising on prices and quality. The companys competitive position is maintained through providing better customer service and the uniform quality of food throughout the chain.

Conclusion

For Chick-fil-A to establish an effective purchasing process, each individual restaurant needs to work in cooperation with the companys distribution center. Uniform product quality, adequate supply, low prices, and the companys competitive position are maintained with the help of the centralized supply system and the efforts of each individual facility. Ensuring correct product identification, storage management, and product ordering are the main elements of each individual restaurants contribution to the effectiveness of the supply system.

References

Arnett, L. (2020). Best practices for building a centralized kitchen. Foodservice Equipment Reports. 

History. (n.d.). Chick-fil-A. Web.

Kelso, A. (2019). Why Chick-fil-A is opening a company-owned distribution center. Restaurant Dive. 

Lewis, S. (2018). Chick-fil-As most-ordered menu items of 2018. Chick-fil-A. Web.

Luna, N. (2019). Chick-fil-A launches delivery-only operation from DoorDash Kitchens. Nations Restaurant News. 

Walker, J. (2017). Introduction to hospitality (7^th ed.). Pearson.

Where our food comes from. (n.d.). Chick-fil-A. Web.