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Kenright and Moores: Business Recommendations Coursework

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Updated: Oct 13th, 2021

Introduction

Change is inevitable, especially in situations where failure to do so would lead to the extinction of an entity. There are several strategies employed in change, the most common being a strategy that targets change in organisational behaviour (Luecke, 2006). This may include a change in Technological approach, corporate culture, leadership and management styles, conflict resolution mechanism and management control (Smith, 1977). Therefore, to ensure survival, change in K&M is inevitable. Furthermore, coming up with a strategy that addresses all the aspects involved in organisational change in a manner that will ensure success and implementation play a big role in ensuring the success of the plan (Kourdi, 2003).

Problems

The problems that are facing K&M can be categorised broadly into corporate, cultural and strategy.

Corporate

  • The salary structure is complicated by acquisitions, expatriation and repatriation. An example is the new senior managers brought in are South African nationals on short term contracts. A quarter of former employees of the German company are expatriates from the original owners and retain a complex hierarchy of grades which is almost irrelevant in the new structure.
  • Managing and supervision have become a problem. Graduate trainees and some senior staff are hostile to what they see as police state culture. There is thus a management problem coupled with egoism and unwillingness to relent nor cooperate.
  • High turnover among the support. This is due to the use of agencies in recruiting employees, therefore there are times when the organisation may be understaffed leading to reduced performance. Lack of exit interviews, due to the perception of disloyalty in leaving the company.
  • Poor working conditions as employees average 40 hrs per week and are compensated through a very exploitative TOIL system. Some work up to 70 hrs per week in customer-facing positions.
  • A poor reward and staff reduction system. The reductions are done on the basis of perceived performance. Loyalty is rewarded via a bonus system and enhanced security. Furthermore, the reduction often targets retirees and are not based on actual performance, professionalism and experience.
  • Poor troubleshooting and conflict resolution mechanism. The organisation has experienced a number of behavioural problems including some that involved actual violence. Such conflicts are handled through negotiated compromise settlements that have no clearly defined guidelines.
  • Harassment and work allocation inequalities are existent in the organisation. There is evidence of racial, ethnic, racial and sexual harassment in K&M. There is a growing concern in the manner in which the ethnic minorities are treated.
  • Poor financial position. This is a result of losses due to poor investment return and market difficulties. The damage in the brand name is partly to blame for the current trend. The shortfalls in endowment policies have also played a great part.

Strategy

  • The policy that K&M implements is ineffective. The company pursues a policy of slow growth with very few acquisitions. The policy which is more conservative does not allow for product innovation and is highly reliant on the already existing customer base.
  • Location: The actual siting of K&M is detrimental to its success as the current location does not suit the business needs. The reflection of perceived effectiveness and service by location is also detrimental to those that are viewed to be ineffective. This also holds true for those who are viewed to be effective as more often the pride often messes with their effectiveness.
  • Lack of a coherent human resource information system even though the company has the machinery to implement such. The internal resistance to the plan aimed at implementing the information system is to blame for the current state.
  • Distribution has also brought problems. In that measures aimed at improving the organisation as a whole find implementation problems as the two camps are of divergent views on the implementation details. A good example is resistance to e-learning by the London HQ while the regional call centre is appreciative of such a move.
  • A poor communication strategy has led to the loss of confidence in communication relayed to the employees by the administration. The strategy employed has been described as defensive, judgmental, dogmatic and hostile.
  • Lack of clear written policies. The lack of policies that govern whistleblowing, behaviour, protection of the employees and other developmental strategies have presented problems in the implementation of the policies. There are cases where the documents exist but are adequate in addressing the problem at hand.

Culture

  • Lack of a common Organisational culture. There has been limited effort to create a common organisational culture at K&M. This is not only true in the recent mergers but also in the relationship between HQ and the call centre. The support staff and the fee earner behave like they are from two distinct companies. There have been reports of workers from various departments being stereotyped and communication between workers of different cultures is viewed as a serious problem. The approach in work by the German and South African expatriates are quite divergent and the regulatory framework adopted by the organisation is yet to be assimilated by some employees who are new to this kind of approach.
  • Unequal treatment of employees. This is a major problem as there are disparities in the manner in which employees are handled in the organisation. Bonus payments, which are a percentage of the salary, generally favour the high earning senior employees and are not based on the proportionality of work or achievement. Furthermore, the female staff are generally lowly paid and have a small chance of being appreciated. A large number of the top-ranking employees are males and from the major ethnic groups in the company.
  • Poor work distribution especially among the support staff has led to inefficiency. One senior manager deals with both the administrative and support functions in turn. The managers are therefore bored as they view the job as tiring. The support staff area is quite crowded as they work in groups; such an environment is unsuitable. The support staff work is repetitive and therefore leads to boredom and lacks challenge.
  • The lack of recognised employee unions and the informal nature of employee relation has led to poor bargaining among the employees. The rights of the minor employees are often violated by their bosses and the employee’s agendas are never addressed. As a result, the employee morale is low and the working conditions are characterised by mistrust which has led to the loss in returns.
  • A poor management system that is characterised by a varying approach to issues by the staff members. The staff have been separated as the senior and junior staff have separate programmes and rarely interact. The junior managers focus on short term results whereas the seniors tend to focus on a more strategic view though the implementation is lacking. This divergent approach and lack of consultation have led to a lack of personal development planning.

Challenges

There are several challenges faced by K&M in trying to address the problems. Some of the challenges are:

  • The organisation wants to reap the benefits of flexibility while reducing cost and the use of non-standard contract arrangements. This presents a very tricky situation in that flexibility is often associated with increased spending and the use of a non-standard approach. There is also the challenge of either convincing the trade union on the importance of flexibility or reaching a consensus and coming up with a strategy that is both flexible, easy to control, predict and reliable which is quite hard to achieve.
  • Trust is hard to build, therefore the management is faced with the challenge of either coming up with a new communications strategy that is trusted by the employees, or try to convince the employees of the efficiency of the current strategy.
  • The company has a challenge in coming up with a document that addresses all the corporate issues and the resolution of conflict as the organisation is quite large and is faced with a wide variety of conflicts.
  • Coming up with a comprehensive policy that will address dismissal and promotion while putting emphasis on skill, professionalism and the future of the company. The challenge lies in coming up with a paper that addresses all these issues which are often at loggerheads in an amicable manner.
  • Streamlining the disparities in salaries between the staff in such a way minimises the effect the salary changes has on the concerned party while at the same time cutting down on the costs.
  • Coming up with a strategy that would lead to the reduction of support staff while minimising the loss among fee earners and staff with long term potential. This is tricky because the current informal mode could lead to bad working relations among the concerned parties in the event that such a strategy is applied.
  • Coming up with a mechanism that would ensure that the framework is complied with by both managers and staff in their behaviour and roles at all levels without creating an environment that is uneasy to work in while at the same time ensuring productivity.

Risks

There are several hazards involved in the formulation of this new strategy:

  • First, the change of culture, which is core to the plan, is a very long process. Thus correcting the current situation is limited by time.
  • Change is not always easy to accept and there is an acclimatisation period in which there is a loss of productivity as the workers get used to the new working conditions. A loss in productivity is not acceptable to the business in its current financial position.
  • The perception of the community on the organisation may take a long time especially rebuilding the brand name, there is also the possibility of a loss of the traditional customers who may view the new approach as threatening to their customer-business relationship.
  • The approach may also lead to the loss of jobs by the support staff and the less productive, this may lead to suffering especially if the concerned solely relied on the job as the sole means of survival.
  • The integration of the company and conformance to a laid-out guideline by all members may lead to the loss of diversity in the company that is one of its core values. With this loss, there is an associated limited solution space from which to get solutions to professional and technical problems.

Accessing these risks and come up with precautions to ensure that the plan addresses them in a manner that is acceptable is unavoidable. The following precautions must be implemented to ensure that the plan succeeds:

  • Change in culture must be assessed at all stages and any negative impact corrected by modifying the strategy. Thus the strategies must be flexible.
  • The initial stages of the implementation must be associated with increased incentives to the workers to try and eliminate the risk of performance loss. The same should be applicable for customers in order to retain them while attracting potential customers.
  • The implementation plan must provide a mechanism of dealing with workers who depend solely on their jobs or who have some special needs, in the retrenchment process. The plan should be comprehensive and cover all the varied factors that must be addressed in retrenchment.
  • A mechanism to promote diversity among employees while ensuring integration must be included in the new strategy.

Solution

The solution is to come up with a new business strategy that addresses the organisations problem as the current strategy (McKenna, 2006) is irrelevant. The aim of the strategy is to come up with an objective that addresses the problems (Campbell et al, 2002) faced by K&M while dealing with the challenges. The following are the implementation strategies that if adopted addresses the needs of K&M.

Culture

  • The company must come up with a company-wide culture that will be common to all its employees at all levels.
  • A networked organisation corporate culture is best suited for K&M. This will be implemented by creating workgroups consisting of employees of different skills, ethnicity and professionals knowledge. Sociability will be promoted among the groups which are clan-like.
  • A document that contains tough measures and rules to curb inequalities in treatment and abuse must be formulated. Furthermore, all employees must be members of a trade union that would be given the power to champion their rights.

Corporate

  • The business must adopt a strategy that is more aggressive. This will be done by improving on the product diversity, increased mergers and acquisitions of companies that have a similar approach to business.
  • Promotion of professionalism and performance. This will be achieved by adopting the use of technology in all the departments, having a constant bonus for given quantifiable performance. Increasing the number of people involved in in-house e-training on all areas of service provision. Recruitment through agencies followed by internal assessment will ensure that the company has access to a wide pull of professionals while assessing their performance ability per the companies requirements. Lastly, standardising the salaries and basing them on a job groups system.
  • Adoption of a general management approach. This style should focus more on getting external and internal information. The information obtained is then used in restructuring, evaluation and planning. The system will focus more on balancing between the strategies and the operation.

Business Strategy

  • More focus on service delivery. The services provided must be good and satisfactory to the customers in terms of meeting their needs and the mode of delivery. This will be ensured by continuous evaluation of customer needs and satisfaction through the use of research and suggestion boxes. There will be more focus on quick response to customers, flexibility and follow up.
  • Product/service innovation and dynamism must be ensured. This is achieved by constantly monitoring customer needs and general trends in the financial service provision sector while making necessary changes to suit the ever-changing customer needs.
  • Monitoring growth and development. This will be done by professionals in this area. Growth in industry and the business will be monitored and any negative trends corrected. In doing so the operational strategy will be more focused on the availability of information and research.

Analysis of the Strategy

Political

The UK government policies are aimed at ensuring the availability of data and research findings (Rawlings, 1997). This will make the implementation of the plan quite easy as the availability of reliable data from professionals will aid in research as laid out by the strategy.

Environmental

London, due to its geographical location is a hub of many businesses (Rawlings, 1997). Financial service providers are quite conservative in their approach to service provision, therefore the dynamism provided by this new Strategy could be a competitive advantage.

Social

England is a metropolitan country with a large pool of professionals from all over the globe (Rawlings, 1997). This situation makes it easier for K&M to access a professional which is one of their strategic directions.

Technological

The ICT service sector in England is quite developed (Rawlings, 1997). The e-commerce and e-learning areas are quite comprehensive and well developed with most universities offering courses through long-distance e-learning. This will complement the strategy of personnel development in ensuring performance.

Legal

The law in England allows the easy acquisition and merger of businesses (Rawlings, 1997). The legal system in both the local and the federal governments is business-friendly. Therefore, mergers and acquisitions will be easy to conduct and thus the strategy as a whole.

Economic

London and the UK in general are quite developed (Rawlings, 1997). This development has led to high demand for financial services. This situation provides a good market for the services of K&M.

Conclusion

The new plan if well implemented could revive the company and make it more competitive as the company will be more responsive to the customer needs.

Bibliography

Campbell, D. , Stonehouse, G. & Houston, B., 2002, Business Strategy: An Introduction, Butterworth-Heineman, Oxford.

Kourdi, J., 2003, Business Strategy: A Guide to Effective Decision Making, Profile, Shepherdsville.

Luecke, R., 2006, Harvard Business Essentials: The 10 Strategies You Need to Succeed, Harvard Business School, Cambridge.

McKenna, E., 2006, Business Psychology and Organisational Behaviour, Psychology Press, London.

Rawlings,R., 1997, Law, Society, and Economy, Oxford University Press, Oxford.

Salim, K. (2008). Organisational Behaviour. Web.

Smith, A. T., 1977, Dynamic Business Strategy: The Art of Planning for Success, Tata McGraw-Hill, New Delhi.

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