Category: Business 11471

Introduction

Every company, regardless of its size and overall performance, experiences the phase of startup, growth, maturity, and either death or revival. Each stage makes an organization face unique challenges. For the owners, it is essential to be aware at which stage the organization is because this would help to develop an appropriate growth strategy. In the current paper, I will describe each of the mentioned stages and provide examples to illustrate them.

According to the U.S. Bureau of Labor Statistics (2019), about 80 percent of startups are doomed to fail during the first years of being open. Therefore, this stage is characterized by a high rate of failure. The failure mainly occurs due to the lack of finance, problems with team management, technological issues, and the lack of experience of doing business. At this stage, it might be recommended to focus on the attraction of clients and developing unique features that would help a company to take a strong position in the market.

Now, I would like to give you some examples of companies that survived this first stage and became immensely prosperous. Probably, the most well-known example of success is AirBnB  a service for renting housings all around the world. The annual profit of Airbnb is about $10 billion. The commonly used social media, such as WhatsApp, Snapchat, Twitter, Facebook, Instagram, and Linkedin are also examples of startups that managed to survive and turned into companies with multi-billion profits. The success did not come in the first years of establishment. However, these businesses illustrate that survival depends on being unique and working hard.

Growth

The second stage of an organizations development is called growth. It is characterized by the maintenance of relationships with multi-year clients, constant reinvestment of money back into the company, substantial profits, and high competitiveness. The research conducted by Scott and Bruce (1987) reveals that despite the profitability, at the stage of growth, owners usually do not receive any significant personal income as money is reinvested into the companys further development. The problems at this stage are connected with the fact that demand might exceed supply.

The stage of growth could be illustrated by the examples of Goggle, Tesla, and Amazon. Indeed, it is erroneous to think that these companies are at the stage of maturity. All of the mentioned companies keep on investing in expansion and the implementation of new technologies. Another fact that unites these companies is that all of them are tightly connected with the field of technologies and innovations. Since digital technologies are constantly developing, it might be suggested that these companies would remain growing even in the distant future.

Maturity

At the stage of maturity, companies that fail to adjust to the ever-changing environment and innovations can notice the first signs of the coming decline. More precisely, the sales might decrease, employees might lose their motivation and resign. In addition to that, companies at the maturity stage are frequently criticized and accused of losing momentum. Due to these challenges, it might become more difficult for the company to compete with newcomers with a new vision and innovative ideas. The administration of an organization that experiences this phase is recommended to pay more attention to maintaining the corporate culture that would keep employees inspired. Additionally, the owner should not forget to control the recent trends and the business environment to prevent the company from becoming outdated.

Ford Focus was established more than a century ago, in 1903. Currently, the cars produced by this company have a reputation of being of high quality. Despite this, Ford Focus has already reached the peak level of market penetration. The demand for the cars produced by Ford is being threatened by cars manufactured by Tesla or other companies that manufacture electric cars. From one point of view, Ford constantly presents re-designed and better-equipped cars. This technique allows the firm to stay at the top of the market. From another point of view, the traditional cars filled up with petrol are gradually substituted by electric cars.

Decline // Revival

After the stage of maturity, any company has two possible scenarios. If it fails to adapt to the new realities, it will decline. If it adjusts successfully, it will experience revival. Kodak is an example of a company that failed to promptly modify itself and, therefore, experienced a decline even though it was a great business in the 1990-s. Netflix, on the contrary, tells a story of success. It was founded in 1997, and at those times, it was not an online service with movies and series. Netflix managed to shift from the company selling DVDs to a company that all of us are familiar with.

References

Scott, M., & Bruce, R. (1987). Five stages of growth in small business. Long-range planning, 20(3), 45-52. Web.

U.S. Bureau of Labor Statistics (2019). Table 7. Survival of private-sector establishments by opening year. Web.

What are the different types of 3PL firms? Give examples

Nowadays, the development of industry and economy leads to the blistering evolution of different means of transport. Moreover, a great number of different companies have the demand for various logistic services in order to guaranty their efficient functioning. With this in mind, the development of the issue of third party logistics (3PL) and its providers could be observed. There are several types of 3PL firms. The first type is comprised of companies that provide warehouse logistic services (Dapiran, Lieb, Millen, & Sohal, 1996) and help to deliver different cargos. DSC Logistics is an example of a company of this sort. Another type is a company like FedEx, which provides transportation based logistic services. Moreover, there are forwarder based 3PL companies that suggest their services to people and organizations all over the world. The Hub Group is the company that provides services of this sort.

What are the differences between 3PL and 4PL?

There are several differences between 3PL and 4PL. However, it is possible to outline the most important ones in order to understand the issue better. First of all, it should be said that 3PL is a sort of activity which provides single or various types of logistics services. The company, which suggests services of this sort, works with shippers in order to guarantee distribution of the needed goods. At the same time, companies that suggest 4PL possess certain management capabilities and control the whole process, though not the only function (Robinson, 2014). Yet, it is the main difference between 3PL and 4 PL companies. A company, which suggests 4PL services, manage the whole process of distribution at all stages and can also manage a 3PL company.

What criteria must be used in selecting 3PL firms?

The first and the most important factor which influences the choice of 3PL is the price of services provided by a company. (Dapiran et al., 1996). It is quite obvious that people and organizations try to find a company that will be able to provide qualified services at a low price. The second important consideration is the issue of service. People try to find a company which has a good reputation and is able to satisfy their demands. With this in mind, it is possible to say that the correlation between price and quality of services is the main criteria that must be used while selecting 3PL firms. The less important factors are personal knowledge of the contractor, coverage provided, previous experience and references, experience in project management and new systems implementation, and perceived competence (Dapiran et al., 1996, p. 40)

What are own-account transport operators?

First of all, it should be said that the term own-account transport operations means operations that are performed for various noncommercial purposes by a natural or legal person (Robinson, 2014). With this in mind, it is possible to conclude that operators that suggest services of this kind are organizations or companies that perform transport operations for noncommercial purposes.

Does Walmart hire 3PL firms? Why or why not?

Being one of the greatest multinational retail corporations, Wal-Mart obviously uses the services provided by 3PL firms. The thing is that the company has a great number of orders all over the world and it has to watch their progress. That is why Wal Mart states that there are many various 3PL logistic firms that now hold all contracts which this organization has.

References

Dapiran, P., Lieb, R., Millen, R., & Sohal, A. (1996).Third party logistics services usage by large Australian firms. International Journal of Physical Distribution & Logistics Management, 26(10), 36  45. Web.

Robinson, A. (2014). Third Party Logistics Services Explained, The Different Types of 3PLs, and The Various Levels of Outsourcing. Web.

Human capital reporting: Should it be industry-specific?

Analysis

In their paper, ODonnell, Kramar, and Dyball discuss the importance of a more standardized method of human capital reporting in determining the investors decisions. In this case, human capital is viewed as the competencies, attitudes, abilities, qualities, and skills of an organizations employees. They have proposed the Star Model as a way of standardization and reporting the human capital to investors.

However, there is a major question of whether the reporting should be industry-specific. From my experience, I have seen many people attempt to demonstrate the need for this reporting to be industry-specific because various industries differ in some ways.

In their analysis, ODonnell, Kramar, and Dyball base their arguments on three conditions. To start with, they have recognized that there is a need to have a systematic human capital analysis by the financial markets as well as the firms (ODonnell, Kramar, and Dyball 359). I consider this analysis as important because it is based on the assumption that human resource professionals have the required capabilities to provide such analysis. Finally, they have argued that there is a model through which human resource professionals can apply in order to carry out this analysis in the most effective way.

From my experience, I have seen a number of organizations recording a significant increase in their stock prices following adaptation of a systematic method in reporting their intangibles. This is because the majority of these investors strongly believe that these intangibles play a pivotal role in determining the ability of an organization to execute its strategy. I consider the importance of observers in making critical decisions about an organizations ability to manage its intangible assets depending on the information they retrieve.

From my experience, I have seen the importance of using human capital as one of the intangibles in an organization. In this case, human capital can be viewed as those abilities, attitudes, skills, and qualities possessed by an organizations employees. These aspects play a major role as they determine the value of an organization.

I also consider the regulatory responses as an important part although not sufficient in assisting the investors to clearly understand the value in an organization. For instance, an organization may disclose information such as the evidence in the board succession plans, performance evaluation, performance assessment as well as the performance of the committee and board members performance. There is always a need for clear information.

I consider systematic human capital reporting in determining the investors decisions about a company. In an effort to demonstrate the importance of systematic human capital industrial reporting in an organization, ODonnell, Kramar, and Dyball have used the Star Model. They have demonstrated that human capital management is the pillars of value creation in an organization. Without effective human capital management, then an organization can achieve very little in its operations.

I also consider the importance of the various human capital indicators in determining an organizations level of competitiveness. In their analysis, ODonnell, Kramar, and Dyball have also identified some unique human capital indicators (ODonnell, Kramar, and Dyball 363). One of the main indicators identified in this case is creativity. This is an important aspect as it determines the competitiveness of an organization. Creativity helps an organization to improve existing products or coming with high-quality products. This increases the competitiveness of an organization.

From my experience, the majority of the managers have not been using the appropriate measures in reporting the same. This is despite the importance of a systematic reporting of human capital in an organization. For instance, the report has indicated that a significant number of organizations do not have any systematic way of sharing information between human resource professionals and external financial analysts.

From my experience, I have noticed that most analysts have been used in analyzing the tangibles rather than the intangibles in an organization. ODonnell, Kramar, and Dyball discussed that this can be of little benefit in some sectors which largely requires knowledge in the realization of the set goals. For instance, it may be very difficult to convince the brokers about the expected future value of a certain organization without the provision of such an analysis. This may threaten the success of an organization to some extent.

From the above analysis, I can conclude that both the human resources reporting as well as industry-specific human capital analysis have not yet developed in the modern business world. In connection to this, ODonnell, Kramar, and Dyball have emphasized the role of the human resource profession to ensure that the value of an organizations data is communicated to the market.

Discussion

From my personal experience, I strongly believe that the way an organization reports its intangibles is of great importance in determining the investors decisions. Thus we need to have a more standardized method of reporting these intangibles in order to influence investors positively in their decisions. This is more so in the contemporary world where we have an increased demand for investment in intangibles due to recent improvements in intangible investment and reporting.

I consider human capital as one of the main intangible assets in an organization. It is necessary to have an industry-based reporting of the human capital within an organization. I think that signatories would be more willing to invest in an organization that is able to demonstrate a high level of social, environmental, and governance attributes. Therefore, I think it will be important to have a more clear and systematic method of reporting about the intangible in an organization. In the contemporary world, which is characterized by a very high level of competition, this will be vital in the development of competitive advantage.

From past experience, I believe that investors will be influenced in making their decisions depending on the information at hand about a certain organization. One of the most important information that investors can use in judging an organization is its corporate and social responsibilities. This is because CSR is determined by the level of returns for an organization. Those organizations which are able to communicate this information effectively manage to create a good image in the eyes of the public. They also emphasized employee engagement. Such information is recognized since it is useful in estimating future value in an organization.

From my experience, I have noticed that the level of technology has significantly improved in the modern world. Therefore, most production functions are done by machines. This has reduced the gap between the levels of performance of various organizations since most of these machines are similar. For instance, the production of a certain product using similar machines and raw materials will lead to an almost undifferentiated product. Therefore, the only best area where an organization can create its competitive advantage is through intangibles. Therefore, it is necessary to have a more systematic industrial-based analysis for human capital.

Team development at Fisher and Paykel: The introduction of Everyday Workplace Teams

Analysis

This article was written by Mallon from the University of Otago and Kearney of Fisher and Paykel, New Zealand. This paper seeks to address the issue of change in an organization and the importance of employees groups in this change. In their paper, Mallon and Kearney emphasized the importance of teams in facilitating change within an organization. In particular, self-directed teams are of great importance in an organization.

I consider it important for every organization to keep up to date with recent management practices. I consider the fact that the largest potential for improvement is among the people because they are the ones who use various processes within an organization. Skilled and high-performing teams that are focused on the realization of organizational goals facilitate the development of an organization.

I also consider it necessary to emphasize the need to have every individual get determined in performing the best in their respective areas of responsibility in promoting the success of an organization. Therefore, it is important for an organization to develop self-directing teams within the organization. The essence of this is to come up with work teams composed of individuals who are fully committed to making improvements in their respective areas in the workplace.

From my experience, I have seen the importance of teamwork among the employees in promoting innovation within an organization. When an organization adopts teamwork in its operations, this improves the exploitation of the new technologies. Each member of the team will have an opportunity to contribute to their teams and hence apply their unique skills. Since every team specializes in its respective area, it will be easier to maximally apply the new technology for the benefit of an organization. Mallon and Kearney observed that this will. Mallon and Kearney further added that teamwork encourages innovation among the employees. This is because there is an exchange of ideas among employees sharing related skills.

I consider it disastrous to have team-working in promoting unhelpful and rigid altitudes among the workers. In some cases, it is not every team member who will tend to respond positively to the teams genders. For instance, the already established organizational norms may be violated by the introduction of the team working. In such a case, it may be very difficult to overcome such difficulties. There are also some complications related to power within teams in an organization.

This paper also emphasized the importance of necessary training among the employees in the realization of the desired goals (Mallon and Kearney 98). Team training plays an important role in maintaining good performance among employees both in the present and in the future.

From my experience, I discovered the importance of the implementation team in promoting the performance of a certain team in an organization. This team ensures that every participant is fully informed about the functions of a certain team. These teams are built within operational boundaries. However, the major challenge is posed on the introduction of the change which would transform and challenge the already established comfort zones (Mallon and Kearney 98).

From my past experience, many organizations have applied the idea of the workbook in promoting the Mallon and Kearney also talked about the idea of the workbook in their explanations. This is highly interactive and is supposed to be used by every member of a team. An organization can use a workbook in facilitating a common understanding among the employees. This acts by reducing the level of misunderstanding among the workers. There are several advantages associated with the use of a workbook in a team. To start with, the workbook promotes the development of functional teams. It also encourages the team members to direct all the resources available towards the improvement of activities in their respective working areas.

Discussion

I consider the fact that change is of great importance in every organization. This is more so in the contemporary world where the level of competition is extremely high. Therefore, it is necessary to have the effective change to retain competitiveness.

I consider teamwork as a very important aspect of every organization. It helps an organization to build its competitive advantage. For instance, through teams, an organization is able to disintegrate various parts of an organization into small functional groups representing various activities in an organization. By so doing, it will be easier to identify which specific teams are failing the organization before an organization fails completely. I also think that small teams are easier to manage than larger ones.

From my experience, I dont believe that teamwork always comes along with achievements in an organization. Although Mallon and Kearney made important contributions to the importance of teamwork in an organization, there are some areas where I completely disagree with their observations. I disagree with the fact that teamwork always encourages innovation and creativity, among the employees in an organization. When employees are organized in teams dealing with a certain field, this discourages diversity among employees.

I think that when employees are forced to interact in a team, for instance, they are denied a chance to interact with other employees from outside their department. In this case, teamwork discourages employees creativity to some extent. Since various activities or processes within an organization are related to others in one way or another, it is important for the employees to have some ideas about other departments. In other words, teaming employees undermines diversity.

I also disagree with the point that workers do always respond positively to teamwork. Mallon and Kearney have overemphasized the fact that teams are always yielding positive achievements in an organization. In some cases, some workers may tend to oppose teamwork depending on the prevailing situation. The opposition is always likely to occur among the workers. It is therefore not realistic to assume that workers will always be receptive when subjected to teams.

It is also not realistic to assume that teams will always lead to the realization of organizational goals. Several cases have been observed where workers have used their teams in organizing strikes and go-slows. This undermines rather than encourage the performance of an organization. For instance, workers may use their teams to reject a certain change within an organization collectively.

Works Cited

Mallon Mary and Kearney Tania. Team development at Fisher and Paykel: The introduction of Everyday Workplace Teams Asia Pacific Journal of Human Resources 2001; 39; 93-106.

ODonnell Loretta, Kramar Robin and Dyball Maria. Human capital reporting: Should it be industry specific? Asia Pacific Journal of Human Resources 2009; 47; 358-374.

Introduction

The customer is always right is a slogan popularized by the management to encourage staffs to take customer complaints seriously (Zikmund & Babin, 2006). This view assumes that customers are always rational and functional in their encounters with employees (Harris & Reynolds, 2003). While honest customer feedback is vital in improving business services or products and growth, addressing unrealistic expectations and requests can affect employee morale, leading to high turnover (Ben-Zur & Yagil, 2005). Therefore, business owners should protect staff from deviant customers to improve employees satisfaction, increase confidence in their work and reduce turnover intentions. Research has shown that there are factors that affect employees turnover intensions. According to Harris and Reynolds (2003), such factors may include consumer aggression, job satisfaction, workload, distributive justice and management style. In-depth research has shown that some of the aforementioned factors have positive influence whereas others have negative impact on employee turnover intensions (Harris & Reynolds, 2003).

Research Question

The research question for this study is; does customer deviance influence turnover intentions in the service industry?

Research Objective

The objective of the study is to identify the effect of customer deviance on turnover intensions in the service industry.

Background Research

Research shows that unruly customers cause psychological and emotional stress to staff through verbal abuse, unreasonable requests, and disrespect for companys policies (Harry & Reynolds, 2003). According to a study conducted by Zikmund and Babin (2006), there are customers who have verbal aggression that affects employees turnover intention. It is important to note that employees play a mediating role between employers and customers hence they may suffer from emotional exhaustion (Harris & Reynolds, 2003). When employees face aggression and pressure from their employers, they are likely to develop psychological stress. Harris and Reynolds (2003) point out that psychological stress in the workplace lowers staff morale and job satisfaction, which increase turnover. In this view, Zikmund and Babin (2006) admit that support from the management can help staff deal with challenging customers. Ben-Zur and Yagil (2005) highlight that lack of organizational support and customers deviance can cause burnout, emotional exhaustion, and low self-esteem among staffs. This eventually affects employees productivity and retention. Thus, customer deviance coupled with a lack of organizational support can increase turnover.

Research conducted by Zikmund and Babin (2006) also confirms that burnout among employees occurs due to customers deviance leading to undesirable outcome such as diminished performance, customer dissatisfaction, low commitment to organizational goals and absenteeism. It is therefore beyond reasonable doubt that burnout directly affects employee turnover intensions. Evidences have shown that there are personality resources such as optimism and hardiness that help employees from burning out due to customer aggression (Zikmund & Babin, 2006). Numerous researches have been done to compare the difference in turnover among employees in different employment sectors. Previous research has shown that professionals like doctors rarely encounter customer aggression hence they have more job satisfactions unlike bankers and other employees (Harris & Reynolds, 2003). Consequently, doctors are less likely to leave their jobs or absent themselves from work. Research conducted by Harris and Reynolds (2003) has also shown that majority of the employees in different sectors get little pay and experience pressure from their bosses yet they are less likely to leave their jobs unlike those whose major issue is coping with customer aggression. Zikmund and Babin (2006) reiterate that independence in ones job helps to overcome customer aggression. For instance, in as much as a customer is always right, the doctors can never be questioned for their actions unlike employees in banks and factories (Ben-Zur & Yagil, 2005). In other words, professions where workers are protected from customer aggression record low turnover intensions.

Hypothesis

The study will test the null hypothesis that there is no difference in turnover intentions between bank employees (front-desk staff) and factory workers.

Research Design

Previous researchers have relied on survey methodology in order to obtain anecdotal observation on customer aggression and employees turnover intensions (Harris & Reynolds, 2003). Numerous theories presented in the past have been empirically tested through use of multiple methodologies. However, research-based studies have been proved to be more reliable. Therefore, the study design will involve a descriptive research design. In this case, the research will be qualitative in nature. The study will have dependent and independent variables. Customer deviance will be used as an independent variable. On the other hand, there are key dependent variables in the study. These will include turnover intention, job satisfaction, customer incivility, and organizational/management support. The study will draw its participants from the front-desk and management staffs that spend most of their hours interacting with customers responding to their problems, queries and complaints.

Interview method will be used to collect data from the participants. Each respondent will be interviewed in a 15-minute session using semi-structured questions. The key focus will be on customer incivility, management support, and turnover intentions. It is important to highlight that information provided by participants will be treated with confidentiality. Data analysis will involve thematic analysis method.

Sampling Approach

The study focuses on employees response to customer aggression. Therefore, the sampled participants will strictly include people who are in banking industry and factory jobs. Moreover, the participants must have ample and direct contact with customers. A convenient sample of 25 participants will be sampled from the staff of a bank and a factory. It will consist of 10 front-desk staff (bank), 10 factory workers, and 5 managers/supervisors. The sampled participants will be derived through random sampling. Moreover, the researcher may use simple but stratified method to sample out participants depending on the nature of employment, age, sex and employment duration. In order to facilitate this procedure, a preliminary request for participation will be sent to the institutions to obtain approval and informed consent. Upon approval, the researcher will schedule the interview dates to collect the data.

Possible Types of Secondary Data

Secondary data for hypothesis testing will be obtained from existing sources when primary data are unavailable. Zikmund and Babin (2006) outline four different forms of secondary data, namely, published data, personnel records, government reports, public sector reports, and electronic records. Journals, books, and periodicals archived in libraries are the major sources of published data (Zikmund & Babin, 2006). These sources will be used to obtain and compare data compiled by different researchers in their study. Data published in periodicals and journals will be preferred since they are often reliable and current. Personnel records will encompass personal communications that can be used as sources of secondary data (Landrum, 2014). Personal letters and diaries can provide information, but efforts must be taken to eliminate any bias they may contain.

According to Zikmund and Babin (2006), government reports, particularly surveys, tax records, and census data, can also provide secondary data for hypothesis testing (p. 37). They are widely available in official government sites and databases. In addition, public/private sector reports published by various institutions contain information that can be useful in research (Landrum, 2014). Documentaries and films provide electronic data that can be useful in research.

To test the studys hypothesis, the researcher will use more than one type of secondary data (Landrum, 2014). Government reports, newspaper/magazine articles, and private sector reports will be useful sources of secondary data. These sources will provide useful statistics on turnover rates in the banking and manufacturing industries. This will allow the researcher to compare turnover rates between factory and banking staff.

Possible Measurement Benchmarks and Scales

A benchmark indicates the critical point at which the difference between the sample mean and the expected value becomes significant, that is, it supports the null hypothesis (Landrum, 2014). A p-value indicates the acceptable level of significance of a test (Zikmund & Babin, 2006). In most studies, the p-values of 0.1, 0.05, and 0.01 are used as benchmarks for acceptable levels of type I error. When the value obtained from statistical tests, such as t-test or Z-test, is lower than the benchmark value, it indicates that the difference is significant or the null hypothesis is not supported.

According to Zikmund and Babin (2006, p. 155), the main scales used to measure variables include nominal, ordinal, ratio, and interval scales. The nominal scale classifies variables into mutually exclusive groups while the ordinal scale organizes data in a ranking order or hierarchy. In an interval scale, the difference between any two values is fixed. On the other hand, a ratio scale is similar to an interval one, but contains a true zero point (Zikmund & Babin, 2006, p. 157). The type of measurement scale to be used in research depends on the nature of the study variables.

The proposed research will use a single measurement benchmark, namely, p = 0.05. Higher values than 0.05 will indicate an acceptable level of significance, i.e., the null hypothesis will be accepted. To measure turnover intentions, job satisfaction, customer incivility perceptions, and organizational support, the study will use the Likert (interval) scale. This scale will provide quantitative differences between the participants responses with respect to the four study variables.

Data Collection

As mentioned earlier, data will be obtained from secondary sources such as books, journals, periodicals, government reports amongst other published materials. Primary data will be obtained from structured interviews. The researcher will email all the participants in advance in order to explain to them the intent of the study and to assure them about the confidentiality of the information that they are to provide during interviews. Responses given by participants will be keyed into the MS-Access database for easier analysis.

Data Analysis

A statistical package maybe used to analyze data in order to determine the validity of scales used. SPSS and Micro-soft Excel will assist in calculating statistical frequencies (Landrum, 2014). Use of hierarchal regression will aid in comparing the effect of independent variable on the dependent variable such as turnover intensions and level of satisfaction. A co-relational analysis will help to establish the relationship between customers deviance and employees turnover intentions.

Results

Upon examining the behavior of employees in various work environments, the researcher will be able to establish the relationship between customer deviance and employees turnover intensions. The researcher will consider all demographic factors such as age, sex, job characteristics and hours of interaction with customers.

Discussion and implications

Depending on the results obtained in the study and the laid objectives, the researcher will be able to make conclusions. Therefore, discussion will be conclusive by approving or disapproving the research hypothesis (Landrum, 2014). The conclusion will determine the implications of the research. Hence, the researcher will make recommendations based on the research implications. It is worth pointing out that major findings will help to formulate managerial implications such as reinforcement of customer orientation and distributive justice.

References

Ben-Zur, H., & Yagil, D. (2005). The Relationship between Empowerment, Aggressive Behaviours of Customers, Coping, and Burnout. European Journal of Work and Organizational Psychology, 14, 8199.

Harris, L. C., & Reynolds, K. L. (2003). The Consequences of Dysfunctional Customer Behaviour. Journal of Service Research, 6, 144161.

Landrum, E. (2014). Research Methods for Business: Tools and Applications. New York: Sage Publishers, Inc.

Zikmund, W., & Babin, B. (2006). Essentials of Marketing Research. Mason, OH: Cengage Learning.

Introduction

A market is a system facilitating the exchange of goods, services, and information between its participants. This system is strongly influenced by market leaders, which can be a product, a brand, or a company with the highest percentage of total sales revenue. When there are market leaders, there are bound to be market followers, which use different follower strategies to win their share of the market. These strategies, along with examples of followers, will be reviewed in this paper.

Main body

Currently, there are four main follower strategies, namely adapter, imitation, cloner, and counterfeiter. The adapter is a white-collared market strategy, generally used in automobile and technology industries, when a follower adapts the qualities but alters the style of the leader, e.g., Maruti 800, Alto, and Zen cars along with Dell and Sony Vaio laptops copying from their closest competition (Bhasin). In the strategy of imitation, an imitated product does not possess the service or promise of the original and is typically made of cheaper material, thus can be sold at a lower price. This category is well exemplified with imitation jewelry, timesjobs.com, and Videocon, Airtel, Reliance, and other imitators of the original Tata Sky DTH provider in India. Unlike imitators, which not only copy but maintain some own product qualities, cloners copy the original with very subtle changes, i.e., a differently spelled name of GUCCA and RADA instead of GUCCI and Rado. As for counterfeiting, it is a black-market follower strategy of selling originals, such as Reebok and Adidas shoes via piracy.

Conclusion

Summing up, all market followers copy the original to a different extent and can cause considerable profit losses to the market leaders. Adaptors and imitators possess some brand equity of their own and can overtake the market, the way Samsung surpassed Apple. While cloning is highly questionable, counterfeiting is entirely illegal. However, as long as the market exists, so will market followers with the difference of the strategies that they choose.

References

Bhasin, Hitesh. Market Follower Startegies. Marketing91, 2019. Web.

Introduction

There are various forms of market structures which exist in various marketplaces. This essay explores the market configuration which exists in the UK supermarket industry. As such, markets are influenced by several economic factors such as income level, inflation rate, forex exchange ratio, and taxation. While discussion the investment options for Penny Market in the Great Britain, this paper also explores the scope of Brexit and how it is likely to influence a business which plans to invest in the United Kingdom. UKs departure from the European Community came with several detrimental effects which are still present in the current marketplace. Moreover, the COVID-19 pandemic has worsened the present marketplaces they are still suffering from the adverse effects of Brexit. Therefore, the paper will explore the immediate and long-standing impacts of the global crisis while also offering recommendations for the company which intends to invest in the United Kingdom.

Keywords: economic factors, Brexit, COVID-19, UK

U.K. Grocery Industry

Penny Market is a discount superstore that primarily operates in Germany. This supermarket was established in 1973 by Leibbrand Gruppe, and it has several stores around the world (Hardaker, 2018, p. 220). In this scenario, the discount store intends to establish operations in one of the most lucrative markets globally, the United Kingdom. The Great Britain market is regarded as a highly developed, advanced, and diversified market in Europe and the fifth-largest one on the entire planet (Geyskens, 2018). A few trade barriers also characterize it as it serves as an entry portal into the European Union for the United States exporters (Geyskens, 2018). Penny Market intends to establish its operations in the UK grocery retail segment. This sector has been growing since 2004 and is estimated to account for approximately 190 billion GBP in 2018 (Hantzsche, Kara and Young, 2019). This paper explores the market structures in Great Britain, the economic factors within this region, the influence of Brexit on businesses, and the consequences of COVID-19 on business operations in the UK.

Various Market Structures

Market structures differentiate and clarify firms based on the types of products they trade and how external factors from the macro-environment influence their operations. There are several market configurations such as oligopoly, monopoly, and monopolistic and perfect competition (Lábaj, Morvay, Silani
, Weiss and Yontcheva, 2018). A market with oligopolistic features is characterized by few firms leading to a limited rivalry (Lábaj et al., 2018). Such companies may cooperate or compete against one another to utilize their shared market influence to increase profits. Oligopolies are also known for their responsiveness to competitors actions (Lábaj et al., 2018). For example, if a company lowers product prices, the other companies will respond by lowering their prices to maintain their position in the industry (Lábaj et al., 2018). It explains why there is limited rivalry in this market arrangement.

A monopoly exists when a market has one firm that controls and influences prices and products. These marketplaces do not have product substitutes, and entry or exit is blocked (Scahill, 2020). Monopolies get their power and influence from capital requirements, economies of scale, technological advantage, and premediated moves (Scahill, 2020). A monopolistic rivalry is a market structure where minor firms compete against one another. They also retail the same products, but they are highly differentiated (Scahill, 2020). It is also described as having the freedom of entry and exit, and inelasticity of demand makes the prices of products and services.

The Market Structure of the UKs Grocery Industry

Great Britains grocery sector depicts the significant characteristics of an oligopoly. A group of supermarkets that dominates this industry are famously referred to as the big four such as Tesco, ASDA stores, Sainsbury, and Morrisons (Hardaker, 2018). Tesco is a conglomerate operating in the grocery sector serves other global markets. Its central base of operation is located in Welwyn Garden City, England. Sainsburys Groceries is regarded as the second leading supermarket in Great Britain and is also the largest retailer of groceries in the region (Hardaker, 2018). Morrisons operates in Bradford, England and makes deliveries of groceries and other products as an online platform. Lastly, ASDA stores is a retail enterprise that operates from Leeds, UK and its governing organization is Americas Walmart stores.

Generally, the grocery segment in this region is primarily oligopolistic because it only comprises four large firms and the constraints of entering this segment are relatively high. Moreover, this industrys competition fits that of a non-price rivalry and the firms operating in it are interdependent (Scahill, 2020). For example, the business moves of Tesco influence the decisions of other supermarkets. Britains superstores offer exceptional products along with other services such as home shopping. Nonetheless, the UKs grocery sector creates a more disadvantageous situation for the customers, such as complicity and considerate market share.

The primary characteristic of the UK grocery sector, which makes it oligopolistic, is its non-price rivalry. It is a marketing approach which allows firms to use factors such as packaging, after-sales and customer services to increase the demand for their products and services (Scahill, 2020). Most supermarkets, especially the big four in Great Britain, tend to use some marketing mix aspects to increase sales. For example, these stores are well known for using home-delivery systems, loyalty cards, and 24-hour shopping services to improve customer relationships and drive sales (Hardaker, 2018). Therefore, the market features explored above indicate that this industry is primarily oligopolistic.

Economic Factors of UK and their Possible Impact on Penny Market

Income level is an important aspect of the economic landscape that influences all types of businesses. It is the amount of money earned by individuals and subject to a given regions taxation laws. At the end of the 2019 financial year, the intermediate disposable income was approximately 29,400 GBP in the United Kingdom (Sampson, 2017). Generally, income levels influence businesses in several ways, such as the marginal propensity of consumption, where a consumer spends money on commodities or services with a relative increase in their income level (Mishler, 2017). In contrast, a reduction in income leads to less spending, which also affects businesses.

By establishing business operations in the United Kingdom, Penny Market will enjoy some economic benefits such as UK residents income levels. Great Britain is the sixth most considerable financial system globally with an approximated financial output of 2.83 trillion USD and a per capita income of 42.943.90 USD as of 2018 (Liu, 2018). The figures reflect the regions market attractiveness, and, therefore, Penny Market is most likely to benefit from increased demand and disposable incomes. According to a survey conducted in 2018, the UK grocery segment is anticipated to register a 14.8% growth by the end of 2023 (Hantzsche, Kara and Young, 2019). The online platform for managing this segment is also expected to remain the fastest-growing arena.

Inflation is a significant aspect of an economic landscape that should also be considered before establishing a particular regions business venture. Governments use various policies to control the inflation rate, such as monetary and fiscal measures (Breinlich et al., 2019). Therefore, inflation can be described as a situation where the prices of products and services rise over a given period. Prices increases in the United Kingdom were estimated at 1.74% in 2019, which is a decrease from 2018 (Hantzsche, Kara and Young, 2019). In the case of Penny Market operating in Great Britain, rising prices imply that it would have incurred extra costs. For example, with suppliers prices fluctuating, the supermarket will have to take more time searching for and evaluating the best deals. The supermarket will also have to readjust its marketing program to accommodate the new changes such as reprinting sales brochures. Moreover, the superstore will have to renegotiate the wages of employees as the cost of living rises.

Unstable prices of commodities can also impact the firms international competitiveness, which intends to invest in the United Kingdom. For example, high inflation can affect the firm if it plans to import or export commodities and services (Lábaj et al., 2018). If Great Britain has a higher inflation rate than its trading allies, UK enterprises are more likely to become uncompetitive, resulting in loss of sales and shares in foreign markets (Chan, Ramly and Karim, 2017). Additionally, if the superstore faces competition from other foreign markets, it will lose its prices since they are rising less quickly than those in Great Britain (Maffini, Xing and Devereux, 2019). Therefore, inflation is an important aspect of the business environment that should be considered before venturing into a particular marketplace.

The Forex rate, also known as the exchange ratio, is the fraction at which one currency sells to one another. Various countries have their specific currencies, that are valued differently in foreign nations. For example, the United States uses the dollar while the UK uses GBP. When nations use these various currencies, transactions between individuals and enterprises are impacted. In 2019, one GBP sold at 1.33 United States Dollars (Breinlich et al., 2019). However, exchange rates are constantly fluctuating from one ratio to another, which may influence businesses in several ways. For example, if Penny Market invests in the United Kingdom, the superstore has to consider the price and demand of both exports and imports. Devaluation will be most likely to lower the prices of exports, thereby benefiting exporting firms (Mishler, 2017). If Penny Market intends to export its products to overseas nations, a situation of devaluation will enable it to export at a lower price. In contrast, if the firm invests in the UK market and intends to import raw materials from other nations, it will incur high costs.

Exchange rates are generally volatile; therefore, the grocery business reviews the market before venturing. As such, 40% of foodstuff purchased from the UK grocery segment is imported, meaning that if a period of depreciation persists, the prices of such products may escalate (Breinlich et al., 2019). Such a situation may also trigger inflation, which may affect grocery products sales. For example, in June 2016, the GBP declined by approximately 11% against the US dollar since the Brexit vote (Clarke, Goodwin and Whiteley, 2017). Moreover, the big four grocery stores continued to lose their market proportion due to Brexit and inflation (Clarke, Goodwin and Whiteley, 2017). Therefore, Penny Market should assess such factors to ensure a successful business venture in the UK market.

Taxation is a government policy that involves levying various forms of obligatory charges on individuals and businesses. There are several types of taxes which are levied on corporate enterprises. For example, Value Added Tax (VAT) is charged when customers purchase product and services (Alavuotunki, Haapanen and Pirttilä, 2019). A firm that intends to establish operations in the UK market will be liable to pay corporate taxes on its income and capital profits (Maffini, Xing and Devereux, 2019). The percentage of corporation tax in Britain for all firms is 19%, and it is bound to be decreased to 17% by the end of 2020 (Maffini, Xing and Devereux, 2019). Furthermore, changes in various types of taxes are likely to increase the consumers net income. If there is a reduction in income tax accompanied by increases in allowances, consumers will have more money to spend on products and services.

In contrast, an increase in specific taxes such as VAT may make the business raise the prices of its products to cover the increase in the cost of doing business. However, high prices may undermine sales, which implies that profits are affected. In conclusion, these are some of the economic factors which are most likely to affect Penny Market if it invests in the UK market.

The Effects of Brexit on Penny Markets Business in the UK

Brexit is the retraction of Britains membership from the European Union (EU). The decision was made in June 2016 in a ballot that saw the UK leave EU (Clarke, Goodwin and Whiteley, 2017). While it does not have an association with the EU, it is currently in a transition period to discuss a new affiliation with the economic community (Sampson, 2017). Following the departure of Great Britain from the free trade zone, several businesses felt the impact. Therefore, Penny Market should consider such effects before investing in the UK. First, Brexit removed the UKs tariff-free trade privileges with other EU members (Kierzenkowski et al., 2016). Without such advantages, businesses operating in the UK will have to be subject to tariffs, which raises the cost of exports. They are harmful to exporters because their products become expensive in Europe (Hantzsche, Kara and Young, 2019). In this case, Penny Market will find it hard to export its products to Europe. At least 33% of the UKs imports originate from EU members (Gudgin et al., 2018). With tariffs in place, the prices of imports to Britain will be high.

Another considerable drawback that is more likely to affect UK businesses is Brexits damage to this regions economy. The damage is attributed to uncertainty pertaining to the outcome of the UKs retraction from the EU (Liu, 2018). Due to uncertainty, the UKs economic growth decreased by about 0.9% between 2015 and 2018 (Chan, Ramly and Karim, 2017). The UK government also predicted that Brexit would deteriorate the regions growth by approximately 6.7% over 15 years (Chan, et al., 2017). During the vote, the British Pound decreased from 1.48 USD to 1.36 USD the following day (Kierzenkowski et al., 2016). While it has a favorable impact on exports, it increases the cost of imports. Therefore, Penny Market should consider the possible repercussions of Brexit if it invests in the UK.

Another factor to consider is that Brexit has already undermined investment and employment growth in the UK. A survey shows that firms that have depicted Brexit as a significant source of uncertainty have had lower investment since the ballot than those which portray it as less significant (Chan, et al., 2017). UKs departure from the free trade zone has also brought employment disadvantages to the region. The younger generation was the most affected, whereas Germany is expected to have inadequate skilled personnel by 2030 (Erken et al., 2018). This fact implies that Penny Market will find it difficult to recruit potential candidates for its management.

Businesses in the UK are currently finding it challenging to get possible applicants. As of 2017, the number of EU-born employees decreased by 5% (Simionescu, Streimikiene and Strielkowski, 2020). If the consequences of Brexit persist in the UK, its productivity is bound to decline in the future. If the situation compels the UK market to minimize the output of highly-productive companies by low-output firms, it will result in a lower average output (Erken et al., 2018). It will translate to a decreased level of productivity in the UK by approximately 0.5% (Erken et al., 2018). Therefore, Brexits consequences in the United Kingdom should not be overlooked by a firm such as Penny Market since they are essential for a prosperous future.

Consequences of COVID-19 on Penny Market and Should It Invest in the UK

Immediate Impact

The COVID-19 pandemic has resulted in rapidly evolving and unanticipated variables for British enterprises in all industries. The latest predictions provided by the Bank of England signify that the British economy will decline by about 14% in 2020 (Nicola et al., 2020). The contraction can only be compared to the largest annual decline in economic activity since the Great Frost at the beginning of the 18^th century (Moore and Babij, 2017). Therefore, British businesses are impacted by unemployment levels that have risen from 4% to 6% since the advent of the pandemic (Brown, Rocha and Cowling, 2020). Household consumption is also expected to decrease by 14% at the end of 2020 (Nicola et al., 2020). Suppose Penny Market invests in this marketplace, it will have to manage these short-term effects of the pandemic.

Future Impact

Regardless of the pandemics temporary effects, the COVID-19 contagion may have some long-term effects on businesses operating in the UK. For example, consumers preferences may change over time, implying that they may want different products. With government lockdowns and curfews in place, consumers have changed their lifestyles (Nicola et al., 2020). According to Google Trends, a considerable number of consumers have been reported to have searched home cooking in March 2020 (Nicola et al., 2020). More consumers have also shifted to online shopping, which implies that E-commerce is growing and is also expected to keep developing. Therefore, the pandemic has not only affected businesses, but it has also changed various aspects of customer-business relationships.

In conclusion, this paper has explored the scope of the United Kingdom grocery segment and how firms intending to invest in it are more likely to be affected. Great Britains grocery segment has been explored, and it was discovered that it has an oligopolys primary features. This regions economic landscape has also been covered with emphasis on income levels, forex ratio, taxes, and inflation rate. Brexits scope, which is the removal of the UK from the European community, has also been explored. Furthermore, the paper has also discussed the consequences of Brexit on firms operating with the UK. The effects of the crisis on businesses operating in this region have been covered. A business expansion such as Penny Market will have to consider the market attractiveness of this region before embarking on the journey of establishing a store in this area. Considering the British environments economic background, certain features such as income levels may be of advantage to the grocery store. However, the present condition of the UK under Brexit is more likely to have detrimental effects on the business operation.

Recommendations

Regardless of the economic and social landscape of Great Britain, businesses can find the right routes to follow for a successful venture. It is recommended that Penny Market should consider having cash reserves while also keeping enough inventories to manage inflationary pressures. The grocery outlet should also adopt currency diversification as a financial strategy for managing fluctuating forex rates. Using a forward contract, that is an accord between two parties to purchase or sell an amount at a ratio and date predetermined, can help curb the effects of volatile forex rates.

In managing Brexits detrimental effects, the grocery store should ensure that its brand remains strong and appealing. The store should also consider making its supply chain network active despite the UKs departure from the EU. Workforce management is essential for the success of any company. Therefore, concerning the consequences of the economic factor, the grocery should evaluate its human resources to comprehend talent development requirements. Lastly, the business can mitigate the impacts of the COVID-19 pandemic by assessing workforce locations, reviewing the supply chain, and reevaluating continuity plans. With the above recommendations, Penny Market will find it easy to pursue its goals and objectives.

Reference List

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Chan, S.G., Ramly, Z. and Karim, M.Z.A., (2017). Government spending efficiency on economic growth: roles of value-added tax. Global Economic Review, 46(2), pp. 162-188.

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Hantzsche, A., Kara, A. and Young, G., (2019). The economic effects of the UK governments proposed Brexit deal. The World Economy, 42(1), pp.5-20.

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In 2006, Anthony Salim wants his Group to operate flexibly in order to capture whatever opportunities may arise& on the axis between Australia, ASEAN and China (case p. 2). Using module theory and evidence from the Salim Group case study, critically evaluate his chances of success

Introduction

In order to develop a sustainable competitive advantage, it is paramount for multinational corporations to be effective in dealing with challenges emanating from the global market (Bartlett & Beamish, 2011, p. 37). To attain this, the management team of multinational companies should enhance their multinational flexibility. This refers to a firms ability to exploit the opportunities available in the international market and also to deal with the risks (Chen, 2004, p. 76). The opportunities emanate from the existence of volatility and diversity within the global business environment.

Harzing and Ruysseveldt (2004, p.36) are of the opinion that diversity and volatility present both risks and opportunities to multinational corporations. The opportunities and risks arise from macro-economic factors in the business environment, for example, interest rate fluctuation, political instability, and changes in the wage rate. Other risks and opportunities originate from the available resources which include natural, human, and financial resources.

Additionally, the responses of competing firms within-host market also present a set of risks and opportunities. This question entails an analysis of the chances of Salim Group succeeding through the implementation of the concept of flexibility.

Analysis

By adopting the multinational flexibility strategy, there is a high probability of Salim Group succeeding. According to Stacey (2007, p.866), multinational flexibility enables a firm to be effective in exploiting opportunities presented in the host country. One of the ways which make this possible arises from the fact that a firm is able to perform regulatory arbitrage.

This means that a firm is able to capitalize on the existing comparative advantage between the host and the domestic country (Stahl & Grigsby, 1997, p.79). For example, by ensuring multinational flexibility, Salim Group will be able to establish its desired businesses in countries where there are no political or legal restrictions thus taking advantage of the existing business environment. This will increase the firms effectiveness in penetrating such a market.

In an effort to explain how a firm can develop its competitiveness in the world market, Michael Porter developed the diamond model which postulates that a firms competitiveness is dependent on a number of factors. These include the factor conditions, demand conditions, related and supporting industries, the firms strategy, rivalry, and organizational structure (Stahl & Grigsby, 1997, p.85).

Factors conditions assert that different economic sectors have a difference with regard to the availability of factors of production. By adopting the flexibility strategy, Salim Group will be able to take advantage of the resources available in the various economic sectors in the host country. For example, the firm will be able to capitalize on the available low cost of labor especially in emerging economies such as China (Merchant, 2008, p.54). The resultant effect is that the Salim Group will be able to cut the cost of operation with regard to salaries and wages.

Over the years it has been in operation, Salim Group has managed to develop core competence in various economic sectors such as telecom, food, media, and property. In implementing its multinational strategy, the firms main focus is on these economic sectors. The firm intends to utilize the skills and knowledge it has developed over the years to exploit the market opportunities in these sectors. Despite this, the firm does not limit its business operations to these sectors, instead, it has a policy of diversifying to other economic sectors that do not have core competence.

The diversification strategy is in line with the firms value chain which the firm has integrated. To ensure the efficiency of operation, the firm has entered into an alliance with other firms in these sectors such as the suppliers. Additionally, the firm is also committed to ensuring that its customers (buyers) are satisfied through the provision of high-quality products. This is attained through ensuring that its employees are competent in executing their duties. The firm also ensures that the customers easily access the products through the establishment of outlets in different countries hence enhancing its value chain. The efficiency within which a firm integrates its value chain increases its chance of success. The flow chart below illustrates the value chain integrated by the Salim Group.

This presents an opportunity for the firm to succeed in attaining multinational flexibility (Dieleman, 2006, p.11). In its initial phase, Salim Groups management team intends to open small firms that are expected to grow in the long term. This increases the probability of the firm succeeding in exploiting the business opportunities presented and at the same time minimize risk.

According to the diamond model developed by Michael Porter, a firm should conduct comprehensive market research prior to venturing into the international market. The main objective of the research is to determine the existing demand conditions. According to Stahl and Grigsby (1997, p.84), the existence of a strong domestic demand enables a firm to be effective in developing its core competencies.

This in turn contributes towards a firm being effective in penetrating a similar sector in the foreign market. For example, the firm becomes effective with regard to dealing with competition. Since its inception, Salim Group has developed core competencies in sectors such as telecom and food. This means that there is a high probability of the firm succeeding in the regional market it intends to venture.

As one of the strategies that multinational companies can adopt, multinational flexibility enables a firms management team to understand the diverse country-specific opportunities. The resultant effect is that the management team is able to develop strategies to deal with the challenges. For example, by establishing firms in economic sectors in which Salim Group possesses core competence within the host countries, there is a high probability of the firm being effective in hedging against risks such as the effects of interest rate fluctuation, and currency fluctuation. In addition, the firm may also be able to minimize the effects of financial risks which may affect a certain economic sector.

In an effort to attain multinational flexibility, Salim Group intends to establish small firms. According to Stahl and Grigsby (1997, p.85), the success of a firm in the international market is affected by the size of a firm. For example, small firms tend to be more suiting in countries such as Germany. In addition, a small firm is more efficient in adjusting to changes in the business environment compared to large firms. This arises from the fact that there are minimal formal channels of control which means that structural flexibility is available (Mellahi, Frynas & Finlay, 2005, p.34).

Conclusion

In summary, there is a high probability of Salim Group being successful by adopting the multinational flexibility strategy. The success of the strategy will be enhanced by the firms strengths with regard to diversification and integration of the concept of the value chain. By venturing into new market segments, the concept of flexibility presents an opportunity for the firm to advance. This arises from the fact that it will develop a portfolio of businesses in different economic sectors hence minimizing risks. However, the firm is faced with risk due arising from increased competition and chances of the financial crisis.

In your view, how far and in what ways does the Salim Group have an integrated network configuration? Base your answer upon evidence from the recommended case study and concepts from the module core text. Identify and explain the advantages and disadvantages of this configuration for an organization involved in international business

Introduction

In their operation, multinational companies are faced with a challenge with regard to attaining efficiency in managing the complex MNCs. This arises from the fact that these firms establish a large number of subsidiaries in the foreign market in an effort to be effective in their internationalization strategy (Johnson, Scholes & Whittington, 2008, p.35). For a firm to be successful in managing its subsidiary firm, it is paramount for the management team to design a system that provides the firm with room flexibility (Morschett, Schramm-Klein & Zentes, 2010, p. 7).

The resultant effect is that the various subsidiaries will be able to compete effectively and also exploit the market opportunities presented. In addition, the firms management team has to ensure that there is a certain degree of coherence between the parent company and the subsidiaries. This means that the firm should operate as one company. This means that the management team should ensure that there is a given level of synergy.

According to Morschett, Schramm-Klein, and Zentes (2010, p.7), it is important for multinational companies to adopt an integrated network. Moschetti, Schramm-Klein, and Zentes (2010, p.10) define an integrated network to include a number of interdependent organizations that have dispersed and specialized activities. However, all the firms activities are coordinated. Dunning and Lunden (2008, p.228) define the integrated network as a continuum of control of the firms subsidiaries in the foreign market. The resultant effect is that an interrelationship between the subsidiary firms is developed. The interrelationship makes it possible for these firms to be effective in coordinating activities of subsidiary firms which are dispersed in different countries.

Analysis

In its operation, the Salim Group has to a certain degree integrated the concept of an integrated network. For example, upon venturing into the international market through diversification, the Salim Group was able to develop a strong conglomerate through the establishment of firms in different economic sectors. The success of the conglomerate arose from the firms efficiency in controlling the various business units.

The Salim Group attained this by ensuring that all its business activities were undertaken along a predetermined value chain. For example, in its food business, the management team of the firm ensured that the business value chain was based on the operations of the parent company. For example, it was ensured that Indonesian basic natural resources were used in production. In addition, the distribution of the final product to the final consumer was undertaken through the firms retail chains (Dieleman, 2006, p. 4).

In addition, the adoption of the integrated network configuration is also evident from the Salim Groups decision to implement the Management Information System. The core objective of implementing the Management Information System was to enable the firm to effectively in controlling the various subsidiaries (Dieleman, 2006, p.13). Implementation of the MIS has also enabled the firms management team to be effective in monitoring the activities of the subsidiary firms (Al-Abdul-Gader, 1998, p. 148).

According to Bartlett, Doz, and Hedlund (1990, p.118), the high rate at which globalization is occurring presents a challenge to firms in the international market. In addition, multinational companies face a challenge due to the existence of differences in government policies. To achieve global competitiveness, it is paramount for multinationals to adopt cross border integration with regard to some of their tasks. The resultant effect is that the multinational is able to attain a certain degree of strategic control (Bartlett, Doz & Hedlund, 1990, p. 118).

Integrated network configuration is an important design in the success of multinationals. For example, the network considers every subsidiary firm to be a source of capabilities, skills, knowledge, and ideas that can contribute to the success of the entire firm. According to Nonaka (1991, p. 96), attainment of knowledge can enable a firm attaining a high level of competitive advantage. In addition, the integrated network configuration can also contribute towards the firm attaining efficiency in its operation.

For example, the management team of the multinational company may decide to convert some of its efficient plants in its domestic country to be the units for producing for all the other subsidiaries (Spulber, 2007, p.67). To achieve this, all the subsidiaries have to undertake a shared decision-making process. The resultant effect is that the firm will be able to control its cost of production.

Additionally, the integrated network also gives the management teams of multinationals an opportunity of converting some of their innovative organizational units into centers of competence with regard to some of its products or processes (Mintzberg, Lampel, Quinn & Ghoshal, 2003, p.34). By adopting an integrated network, a multinational company increases its probability of being efficient in its value creation. This arises from the fact that some of the units which are efficient in undertaking some of the processes are assigned these tasks. For example, some of the units may be efficient in undertaking research and development. As a result, all the other units will benefit by cutting the cost of operation. The output is then distributed to the other units.

The resultant effect is that the firm is able to eliminate possible redundancies in some of its functions such as distribution and marketing. This greatly reduces the firms fixed cost. However, for the firms center of excellence to be effective, the management teams of MNCs must ensure that these firms have a certain degree of autonomy. An integrated network also enables a multinational corporation to be effective in responding to changes in the international market conditions.

Despite the benefits of the integrated network in MNCs, there are also some drawbacks to the model. For example, the model may not be effective in dealing with challenges such as the existence of differences with regard to culture between the host and the domestic country. In addition, the integration model also presents a challenge to multinational companies with regard to dealing with management complexity (Trautmann, Bals & Hartmann, 2008, p. 511).

Conclusion

In summary, the integrated network model presents an opportunity for a multinational company to succeed in a number of ways. For example, the firm is able to attain decentralized centralization. This means that the subsidiary firms are able to operate on their own but with a certain degree of control. In its operation, Salim Group has not been effective in decentralizing. This presents a weakness with regard to the rigidity of operation. Additionally, the firm has to deal with threats such as differences in culture which might not be effectively addressed by the integration network model. Another threat that the firm faces relate to the increase in globalization.

Critically assess the view that the Salim Group had a distinctive capability in the management of external relationships in the 1980s and 1990s. What are the main issues and options facing the firm in 2006, as it tries to sustain and develop its resource strengths for the future?

Introduction

According to Anderson (2010, p.94), the success of a multinational company is not only affected by the effectiveness with which it has established internal relationships but also the external relationships. A firms internal network is composed of diverse stakeholders who include the shareholders and the employees. By ensuring that there is a relationship between the top management and the low-level employees, a firm is able to create an environment conducive for working. The resultant effect is that the employees are motivated hence increasing their productivity. This can culminate in the improvement of shareholders satisfaction through an increment in their dividends and capital growth (Anderson, 2010, p.94).

On the other hand, external relationships include stakeholders such as the customers, the suppliers, and credit financiers. The establishment of a relationship with the customers plays a vital role in ensuring that the firm develops a high competitive advantage. This is attained by ensuring that the customers needs come first. However, there is a strong interrelation between a firms success and its external stakeholders.

Analysis

During the 1980s and 1990s, the Salim Group was effective in establishing its conglomerate. One of the factors which led to the firms success relates to its ability to establish organizational networks with other firms in the Southeast Asian countries. Some of the firms in which the firm established networks include the banks. As a result, the firm was able to improve its financial capital base. For example, the company established a relationship with banks in Indonesia. Through collaboration with financial institutions, the firm was able to develop its financial strength by accessing credit finance. This increased the efficiency with which the firm established subsidiary firms in the host countries.

Collaboration with other firms has enabled the firm to take advantage of the opportunities presented in the environment. For example, the firm was able to enter into a partnership with other firms in the host countries in an effort to be successful in venturing into the foreign market.

Additionally, Salim Group was able to establish a strong customer relationship. According to Mababaya (2002, p.279), the success of multinational companies is dependent on the effectiveness with which they address the customers needs. For example, when supplying products and services, the MNCs have to take into account a number of factors such as the nature of the local customers, their cultural needs, and values.

The Salim Group has also been effective in controlling the firms shareholders. To achieve this, the Salim Group ensures that it has the largest shareholding in all the major operating companies. By virtue of its shareholding, the group is able to actively control the operation of these companies. For example, the proprietor of Salim Group was able to actively take part in the firms decision-making process. However, to be effective, the Salim Group has hired professionals to undertake some of the activities. The firm ensured that a good relationship with the managers and other professionals was maintained. This helped in eliminating agency conflict. Despite this, the firm undertook the supervisory role.

The Salim Group was also aggressive in venturing into new market segments even if it did not have all the required resources. This made the firm to be effective in exploiting the opportunities available in the international market. One of the ways through which the firm attained this is by outsourcing some of its functions and processes from well-established companies. According to Dunning and Lunden (2008, p.231), outsourcing increases the firms effectiveness in penetrating the international market For example, the Group did not have a competitive edge with regard to technology.

However, to be effective in its operation through the implementation of new technology, the firm entered into a partnership with firms that have well-established technologies. For example, in its automobile business, the Salim Group entered into a partnership with Suzuki Corporation. The resultant effect is that the firm was able to venture into new market segments. Additionally, the firm also entered into joint ventures with other firms in an effort to establish their business entity.

The Salim Groups success during this period also arose from its effectiveness in addressing the customers demand. This arose from the firms efficiency in developing synergy from the various business sectors in which it operates. As a result, the firm is able to deliver what the customers need (Barber, 2010, p. 96). Additionally, the firms ability in developing synergy from the various businesses it operates such as the food and media has enabled the firm to be effective in understanding the customers needs.

This contributed towards the firm establishing a strong relationship with the customers hence developing customer loyalty. This good customer relationship with the customers contributed and its ability to establish an interconnection with the various stakeholders contributed towards the firms success during the 1980s and 1990s.

Currently, one of the challenges which the firm is facing in its operation rates to increase the rate of competition. The competition has been necessitated by the high rate of globalization. Additionally, the firm also faces a challenge arising from the high rate at which firms are undertaking innovation. This is necessitated by the rate of technological advancement. To deal with these strategies, multinational firms such as the Salim Group must develop their competitive advantage. One of the ways through which the firm can attain this is by entering into mergers and acquisitions with other firms. This will increase the firms probability of succeeding.

Conclusion

In its operation, Salim Group has developed strengths with regard to the effective establishment of external relationships. Some of the external networks that the firm has managed to establish relate to the customers and credit suppliers. The firm has also entered into a relationship with other businesses through the establishment of strategic alliances. The integration of alliances increases the opportunity of the firm succeeding in new market segments. One of the difficulties which the firm may face relates to inefficiency in integrating the different cultures between the firms. However, the firm faces a challenge with regard to increased competition.

Reference List

Anderson, U., 2010. Managing the contemporary multinational; the role of headquarters. Cheltenham: Edward Elgar.

Al-Abdul-Gader, G., 1998. Managing computer based information systems in the developing countries: a cultural perspective. Hershey: Idea Group Publication.

Barber, J., 2010. Reshaping the boundaries of the firm in an era of global independence. Bingley: Emerald.

Bartlett, C.A. & Beamish, P.W., 2011. Transnational management: text, cases, and readings in cross-border management. New York and London: McGraw-Hill/Irwin.

Bartlett, C., Doz, Y. & Hedlund, G., 1990. Managing global firm. New York: Routledge. Chen, J., 2004. International institutions and multinational enterprises; global players-global markets. Cheltenham: Edward Elgar.

Dieleman, M., 2006. The Salim Group: the art of strategic flexibility. Asian Case Research Journal.Vol. 10, issue 1, pp. 1-25.

Dunning, J. & Lundan, S., 2008. Multinational enterprises and the global economy. Cheltenham: Elgar.

Harzing, A. & Ruysseveldt, J., 2004. International human resource management. London: Thousand Oaks.

Johnson, G., Scholes, K. & Whittington, R., 2008. Exploring corporate strategy: text and cases. Harlow: Pearson Education.

Mababaya, M., 2002. The role of multinational companies in the Middle East: the case of Saudi Arabia. London: University of Westminster.

Merchant, H., 2008.Competing in emerging markets: cases and readings. New York and Abingdon: Routledge.

Mintzberg, H., Lampel, J., Quinn, J.B. & Ghoshal, S., 2003.The strategy process: concepts, contexts, cases. Harlow: Pearson Education.

Morschett, D. Schramm-Klein, H. & Zentes, J., 2010. Strategic international management texts and cases. New York: Wiesbaden Gabler.

Nonaka, I.,1991. The Knowledge-Creating Company. Harvard Business Review. Vol. 69, Issue 6.

Spulber, D.F., 2007. Global competitive strategy. Cambridge: Cambridge University Press.

Stacey, R.D., 2007. Strategic management and organizational dynamics: the challenge of complexity. Harlow: Pearson Education.

Stahl, M. & Grigsby, D., 1997. Strategic management: total quality and global competition. Oxford: Blackwell Business.

Trautmann, G., Bals, L. & Hartmann, E., 2008. Global sourcing in integrated structures; the case of hybrid purchasing organization. Journal of Purchasing and Supply Chain Management. Vol. 1, issue 4, pp. 274-293.

As a financial advisor, are there factors other than return and risk that should be considered in making this decision?

When making a decision regarding the companys further investment in a specific stock, one needs to be especially careful as the companys further success hinges on the choice made by the organizations leader. Although the consideration of the return and the existing risks is crucial to the process of making the right choice between the existing investment options, it is also necessary to address the issues such as the firms return on investment (ROI), the annual income, and the gross margin. Additionally, the liquidity of the companys stocks and shares will have to be analyzed carefully so that the existing financial risks should be identified. While the ROE rates along with the standard deviation of stocks serve as rather graphic evidence regarding the companys potential, additional calculations will have to be carried out so that the purchase of the firms shares should not trigger drastic event in the organization acquiring the shares (Graham & Smart, 2011).

Based on these factors, what stock would you recommend to the client?

Although the information provided does not allow for an all-embracive analysis of the organizations assets and the possible outcomes of acquiring its stocks and shares, the fact that the first option has a slightly higher return rate speaks in its favor. Although the difference of 1% may seem insignificant, it shows that Company A has more potential at present and, therefore, is worth investing in.

However, the fact that the first organization has a significantly higher standard deviation rates than the second one as far as the stock price is concerned shows quite clearly that the first organization is less trustworthy. Herein the significance of a third indicator of the organizations performances lies; until the one is introduced, the data provided will remain rather contradictory, and the chances of making a mistake are going to be rather high.

What reasons will you convey to your client to justify your decision to recommend this stock?

As it has been stressed above, the fact that the first organization has a higher stock price signifies that it is going to be rather profitable; therefore, the chances of gaining impressive returns are going to be comparatively high. One might argue that a difference in ROE making 1% is not going to matter much in the choice of a target for further investments. Indeed, given the fact that the global economic environment is very competitive, the opportunities for the second company to boost its ROE rates are rather high.

Additionally, the second set of data shows rather graphically that the first organization has a very high standard deviation rate. Therefore, the variance of the companys stock prices is very high as well. Hence, it can be assumed that the firm in question may lack stability in the environment of the global economy. In other words, when it comes to choosing an option for investment, locating the organization with higher stability rates seems a reasonable decision to make (Setianto, 2015).

How will this recommendation impact the client?

The recommendation provided above will spare the client a lot of problems concerning economic risks related to buying stocks and shares. Particularly, the customer is not going to be concerned with the possibility of the company collapsing under the pressure of the global economy. One might argue that the acquisition of the shares of the first company may also have its risks; however, the second option clearly has more to offer in terms of predictable outcomes. The client, therefore, can rest assured that the target of their investments is not going to make them incur losses.

Reference List

Graham, J., & Smart, S. (2011). Introduction to corporate finance: What companies do. Boston, Massachusetts: Cengage Learning.

Setianto, B. (2015). Profile of the 45 Most actively traded stocks 2011-2014 in Indonesia stock market: Using formula of Warren Buffet and Benjamin Graham. Jakarta: BSK Capital.

Introduction

An organizations expression of its vision and mission is essential to its overall structure. A vision statement for a corporation lays out its goals and objectives for the foreseeable future (Carpenter et al., 2009). It gives an indication of the path that the company intends to take in the future. However, a mission statement elucidates the reason an organization exists. The organizations mission statement provides an overview of the companys operations, as well as the organizations objectives and plans for achieving those objectives (Carpenter et al., 2009). It is the plan that will lead to the realization of the vision. In contrast to the mission, which concentrates on the more operational components of the organization, the vision statement looks ahead to the trajectory of the business. The formulation of a strategy is impacted as a result of these statements. Therefore, it is important to make sure that the vision and mission statements align with the strategy developed by an organization.

Mission Statement

A mission statement is action-oriented and declares the purpose that an organization serves to its audience. In other words, it is an explanation of the goal of an organization framed in terms of specific actions (Carpenter et al., 2009). Typically, it includes general definitions of a company, its main function, and its aims. It provides a summary of what the company performs for consumers, employees, and owners. When writing a mission statement, an organization explains what they do and the reason (Carpenter et al., 2009). It frequently contains an overview of the organization, its mission, and its goals, as well as an explanation of its role. A companys mission statement could cover a far wider scope if it accurately reflects the nature of a business (Carpenter et al., 2009). It explains how the company serves its clients and staff and how they serve their community and the world at large.

Vision Statement

A vision statement is important to every organization because it ensures consistency with its mission, fundamental values, and culture. It explains the objectives set for the organizations future (Carpenter et al., 2009). In addition, it can be described as a document used in business that outlines an organizations present and long-term goals. A firms vision must be congruent with its mission, strategic planning, culture, and fundamental principles. It serves as the foundation around which the organization builds its strategic planning. The statement enables an individual to have a benchmark to work for if a goal has been effectively articulated (Carpenter et al., 2009). It describes the objective of the company that is being pursued. It explains the response to the question of where the organization is headed. The purpose of a vision statement is to define the core of the path the organization intends to take in a single sentence.

The Relationship between Mission and Vision and Organizations Strategy

A companys mission and vision statements help guide the organizations strategy. Both give a strategy purpose and goals, which are necessary parts. Being aware of the goals and purpose, business leaders and managers can develop a more step-by-step strategy that helps the company reach its mission and vision in the short and long term. Mission and vision statements help businesses set performance standards and metrics based on the goals they want to reach (Carpenter et al., 2009). In addition, they give employees a clear goal to work toward, which makes them more efficient and productive. When it comes to the strategy of an organization, mission and vision statements are not just important for employees and business owners. The mission and vision statements can be used as public relations tools to get the attention of stakeholders, get the attention of specific groups of people, and form business partnerships with companies that have similar goals. The formulation of a strategy begins with creating a purpose and vision statement. One of the criteria for determining whether or not a strategy is successful is how effectively it assists a company in achieving its purpose and vision (Carpenter et al., 2009). As shown in the figure, it is important to view the mission, the vision, and the strategy as a collective funnel to better understand the link among them (Morden, 2017). An individual will notice that the vision statement is closer to the strategy. The vision statement has the mission condensed down to such a degree that it can direct the creation of the strategy. It is possible to locate the strategy from the two statements. This makes it unambiguous what the company will do and will not do to realize the vision. In addition to this, vision statements function as a connection between the mission and the strategy.

The Relevance of Creativity Relevant to Mission and Vision

Creativity plays an integral role in developing a compelling vision and mission statement. It is often defined as a collaborative effort to solve problems, improvise, and experience new ways of thinking and learning. Firstly, imagination is a form of creativity that assists in developing a unique and transformative vision and mission (DeGraff & Lawrence, 2002). It helps in the generation of important ideas that make the statements informative. Secondly, incubation is a type of creativity that aids in developing a sustainable vision and mission. It enables statements based on empowerment, trust building, teamwork, and cohesion. Thirdly, improvement is a form of creativity that helps create an organizations systematic mission and vision (DeGraff & Lawrence, 2002). It covers crucial aspects such as problem clarification, quality, and process control. Fourthly, investments develop a highly competitive and problem-solving vision. It assists organizational leaders and managers in crafting a vision that solves problems experienced by different stakeholders. Creativity is important for organizations, especially in developing mission and vision statements. It allows a company to integrate all the key stakeholders interests (DeGraff & Lawrence, 2002). It is essential to make sure that the needs of customers, employees, suppliers, government, and other stakeholders are captured in the two statements. For example, it is significant to consider incorporating concepts such as providing healthy foods in the case of fast food. Creativity is an aspect that makes sure that everyone in an organization is heard (DeGraff & Lawrence, 2002). It promotes brainstorming to generate ideas for the development of vision and mission. For instance, the views of employees and customers are included in the process to achieve the intended objective. In addition, creativity helps create statements that consider the changes in the business environment. It ensures that future-based ideas are used when developing a vision and mission statement. It assists in the development of competitive statements in the market.

Conclusion

A vision and mission statement is important part of every organization because it ensures that its strategy, core values, and culture align with each other. On the other hand, a mission statement tells people what an organization does and why they should care. It overviews what the company does for customers, workers, and owners. The mission and vision statements of an organization help shape its strategy. Both give a strategy, a goal, and a reason for being, which are both important parts. Creativity is an important part of coming up with a good vision and mission statement for a business. It is often thought of as a group effort to solve problems, come up with solutions on the spot, and try new ways of thinking and learning. Based on this, imagination is a form of creativity that helps people develop unique and life-changing goals and visions. Thus, the statements have a link with the strategy that an organization adopts.

References

Carpenter, M., Bauer, T., & Erdogan, B. (2009). Principles of management. New York.

DeGraff, J., & Lawrence, K. A. (2002). Creativity at work: Developing the right practices to make innovation happen. John Wiley & Sons.

Morden, T. (2017). Principles of management (2^nd ed.). Routledge.

Major milestones have been achieved by global perishable goods logistics, culminating in dramatic shifts in peoples lifestyles. Consumers worldwide love each bite of an apple, and each splash of roses, the comfort which is brought by the global supply chains. However, the onset of the Coronavirus has resulted in unrivaled disruption, regardless of the virus scale or stage of growth, in most economies mechanics. In particular, the erection of Covid-19s barriers has put immense strain on the worlds food chains, especially on food stock, concurrently affecting farm production, transport, and logistics, and final demand (Sarkis et al. 9). It has brought great ramifications and changes which require one to devise or overhaul the previous logistics and distribution channels to cope with the current situation. This paper highlights the distribution process and logistical solutions to the fruit and vegetable business.

Major impacts have been felt on the transportation of fresh food across countries and continents, which has resulted in an increase in food loss due to the quality deteriorating. Fruit and vegetables need to be conveyed fast, and, therefore, they are usually transported by passenger airplanes. However, due to the global pandemic, air conveyance has been greatly affected, hence, disrupting the normal transportation of goods. For example, global air capacity was 26 percent lower than in the same timeframe last year during the week of 10 to 16, May (Sarkis et al. 9). The greatest decrease in capacity on the routes between Europe and Latin America with the decline of more than 80 percent (Sarkis et al. 9). According to Sarkis et al., the disruption is due to a dramatic decrease in passenger air traffic, which usually accounts for the bulk of the capacity of air freight (9). Hence great strain has been imposed on the transportation of fruit and vegetables to final consumers.

Social distancing, lockdown, and curfew policies have led to more inspection time at airports with fewer checkers. The inspection includes the number of import/export assessors has declined at work leading to more time wasted and the condition of the goods waning with each passing moment. Besides, foodstuffs deteriorated in quality at grocery stores due to the lack of constant customer flow to purchase the items. Similarly, labor has decreased at the farms and warehouses as a measure to combat the virus. The restrictions on peoples mobility have limited the supply of seasonal workers for planting and harvesting fruit and vegetables, leading to consumer dissatisfaction.

To combat the logistics problem posed in the business, implementing a supervised logistics method is required. The procedure will aid in monitoring the freshness of the product and the location of delivery. The information will be shared with consumers and supply chain planners in real-time. It will increase the levels of transparency and flexibility of supply chain operations. Additionally, companies can liaise with the cognizance of the freshness of the products and can make decisions towards mobility and control of quality.

Introducing new delivery systems which offer door-to-door services will save time for both consumers and businesses. In addition, data collected on fruit and vegetable required in the market will be of help to producers to plan well for the unpredictable future. A robust system in the supply chain is vital because it will ensure that despite the occurrence of a pandemic or other natural disaster, consumers will still receive their desired fresh food.

Work Cited

Sarkis, Joseph, et al. Overcoming the Arrogance of Ignorance: Supply-Chain Lessons from Covid-19 for Climate Shocks. One Earth, vol. 3, no. 1, 2020, pp. 9-12. NCBI.