Kier Group Plc: The Impacts of COVID-19 Essay (Critical Writing)

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Introduction

Entrepreneurship refers to the process of discovering, evaluating, and exploiting opportunities to produce new goods and services in the market. On the other hand, innovation is defined as creating and delivering an unknown commodity to the community to solve a particular problem. These two processes are critical in the growth of any establishment, be it a company or a business, as stipulated in lecture one notes. Over the past two years, the pandemic has affected many business operations forcing them to close their operations due to reduced profits.

Some have shifted from their previous operations to stay afloat, adopting new strategies to ensure they remain relevant. Some companies fell into continuously growing debts and had to devise ways to settle the debts. They saved costs by firing employees and removing some roles in the company. Nevertheless, while other companies were collapsing, others grew, and this was attributed to the strategies they adopted to combat the pandemic’s negative impacts. Most of these companies majored in encouraging innovation and entrepreneurship among their employees as this would help to ensure they remained relevant to their clients by solving emerging challenges (Harrington, 2018). Therefore, this research aims to discuss the impacts of COVID-19 on Kier company group, further expound on how to improve innovation and entrepreneurship, and ultimately encompass the benefits of innovation to the company.

Summary

My company of choice is the Kier Group, and this is a construction company based in British and mainly deals with building and civil engineering. The company was established in 1928 by Jorgen Lotz and Olaf Kier as a concrete engineering company, but later on, it expanded to general construction and house-building (Mosey & David, 2019). It was first listed on the London stock exchange in 1963, but in1986 it became private after it was acquired by Beazer (Mosey & David, 2019). It was, however, bought out of Hanson Plc by its management in 1992, after which it was relisted on the London stock exchange in 1996 (Mosey & David, 2019). Despite the growth, the company began to register losses due to the COVID-19 pandemic.

Company debt rose exponentially, resulting in the consideration of another rights issue to service the debts. Market conditions were harsh, making it impossible for the company to operate. Company revenue dropped by 15%, its total headcount was 1700, and the debt stood at 436m pounds (Mosey & David, 2019). The company held a fundraiser by selling its shares at a lower price. In September 2021, the company scrapped its profitability program and announced 5.6m as pre-tax profit (Mosey & David, 2019). According to Mosey and David (2019), the company had settled more than half of its debts by January 2022 with only a standing debt of 200 million and speculated to meet the annual revenue mark of 4-4.5 billion pounds.

Facilitating Innovation

There are techniques that I have devised to facilitate advancement among innovators in the Kier Company. These approaches include: reward and reinforcement, adopting the 15%-time, diversification, leadership restructuring, immediate implementation of new ideas, considerate feedback process, encouragement of teamwork, and collaboration.

Reward and Reinforcement

I will see that employees who recommend creative ideas are rewarded accordingly. In this regard, it will entail embarking on different strides to encourage them to develop new ideas. The incentive will make them more innovative and ensure they feel appreciated. Adopting the 15% rule will allow employees to spend 15% of their work time daydreaming and experimenting freely with their ideas (Karlsson et al., 2021). Those who fail will not be scolded but given more chances to try again to ensure they do not fear making mistakes (Stephan, 2022). Therefore, they will work without fear since we all learn from our mistakes, and ultimately, an innovative environment will be established.

Diversification

Diversification, in this case, refers to allowing employees to think from a different perspective, not within the scope of the company line. I will assign them new projects unusual to what they are used to (Slack et al., 2019). Diversifying company operations will spread the risks and impacts of the pandemic, and thus, the company will not be affected adversely as it would if it dealt with one line of production (Si et al., 2020). Henceforth, innovation among the company employees will develop the habit of thinking wide and beyond to offer the best ideas.

Leadership Restructuring

I will make changes in leadership structures, all qualified personnel can take the lead regardless of their professional age. Initially, leadership was reserved for the old and experienced professional, but times have changed, and any qualified employee can lead (Si et al., 2020). Despite being very experienced, senior professionals lack new ideas, and this is where the new professionals help. When given leading roles, young professionals are likely to work extra hard to ensure they retain their positions and to prove that they are the right fit for the role. An innovative, friendly environment will be established in the company, and this is because creative leaders will challenge their members to be transformative, too (Stephan, 2022). Other younger professionals will want leading roles, and thus they will be more innovative to get the management’s attention for a promotion, eventually facilitating innovation in the company.

Teamwork and collaboration

I will create work teams through which employees will brainstorm their ideas and help each other in case of errors in idea formulation and implementation. As a manager, I will ensure that my relationship with all employees is supportive so that they can approach me freely whenever they are stranded. These teams will be essential in helping employees navigate the impacts of COVID-19 on their mental and physical health, thus increasing efficiency. I will create forums where employees will interact during projects and discuss how to improve their ideas. I will swap them to enhance new perspectives through their interaction and promote brainstorming sessions from various company departments. Employees will be allowed to have their forums where they air their grievances and discuss their ideas and projects (Karlsson et al., 2021). Through these forums, they will share ideas and generate more by breaking the monotony, thus helping in inspiring new thoughts.

Implementation and Feedback process

Implementation refers to the execution of ideas presented by employees as soon as possible. When employees see that they have a role in the company’s operation, they will be motivated to develop more ideas to be more significant. Moreover, they will ensure their views are successful and prompt their counterparts to join the significant race (Si et al., 2020). Poor communication channels between management and employees have contributed to the demoralizing of employees. Therefore, I have taken the initiative to establish direct modes of communication. Most employees rarely submit their new ideas since they are often rejected, and no explanation is given. Therefore, I will make sure that all opinions are vetted and considered, and if rejected, the employee in question will be informed of the reason and advised accordingly. Making them feel considered will motivate them to be more innovative now that they know the problem.

Innovation People and Operation

The Kier Company has access to vast resources to propel the company to greater heights when used accordingly. Nevertheless, these resources are used less if the company lacks innovative personnel to adequately deploy them for its benefit (Drucker, 2007). Despite having a wide range of resources at its disposal, the company may not be able to achieve its goals if the employees are not organized, especially due to the pandemic (Birley & Muzyka, 2000). The company has, therefore, adopted the Belbin team theory that will help management to know how to group employees.

The Belbin theory is designed to assess the weaknesses and strengths of employees by evaluating their performance in their duties. The theory consists of nine behavioral roles specific to each member for the team to be effective, as learned in the fourth lecture (Wickham, 2001). These roles are; plant, specialist, shaper, team worker, completer, implementer, resource investigator, coordinator, and evaluator (Drucker, 2007). Plant employees are creative, problem solvers, and free thinkers but also ignore crucial aspects which could endanger the company.

Resource investigators are enthusiastic, effective communicators, and opportunistic but are over-optimistic and lose interest fast. Coordinators are confident, effective, and have clear goals but can be manipulative (Birley &Muzyka, 2000). Shapers are self-driven, courageous, and efficient even under pressure but easily provoked and insensitive to people’s feelings. Monitor evaluators are strategic, not biased but lack drive and cannot inspire others. Team workers are cooperative, diplomatic, and good listeners but ineffective under pressure. Implementers are practical, reliable, and actualize their ideas but slow responders and inflexible. Completers are perfectionists, anxious and error searchers but worry excessively and are not delegators (Wickham, 2001). Specialists are dedicated, focused, skilled, and knowledgeable but majorly centered on technicalities.

Benefitting from Innovation and Entrepreneurship

The negative impacts of COVID-19 were adverse, and thus innovation and entrepreneurship would not be enough to salvage the company. Other factors have to be considered to guarantee success. Common thinking can only take the company so far, it is the unique and calculated moves that will ensure Kier Plc. Benefits from innovation and entrepreneurship. Different thinking involves; thinking in ambiguity, embracing risk, measuring and reflecting on outcomes, thinking internally and thinking of possibilities, and problem-solving.

Possibilities and problem solving

Kier company group will only be able to analyze possibilities from the innovation and entrepreneurship of its employees if the management can think critically of the prevailing problems and develop solutions. The company will succeed if it identifies a problem in the market and solves it. For instance, the pandemic created opportunities like the construction of new health facilities. Therefore, if the company had identified the opportunity, its revenue would have increased considerably. If Kier Plc adapts to changes instead of remaining rigid to its course, it will likely survive. The company’s survival depends on its ability to reinvent itself and solve the reigning challenge of the market.

Measuring and Reflecting Outcomes

As entrepreneurs, the company’s management should assess and evaluate the results of their actions in the market since it will help them stay prepared and know what to expect either way. If their efforts fail, they will be ready to counter the effects (Burns, 2020). The same applies to the market conditions during the pandemic as the company will be able to predict the effect COVID-19 will have on the market and how to counter it effectively.

Thinking Internally

The company will benefit from innovation and entrepreneurship if its management adopts entrepreneurial thinking where instead of self-pity due to external forces, they view it as an opportunity. In other words, the company should not have been put down by the pandemic, but instead, it reinvents itself and seized the opportunity provided by the pandemic (Drucker, 2007). Everyday life creates numerous opportunities, and thus it is up to us to identify them and utilize the chance. Internal thinking will enable the company’s leadership to direct their destiny and spot opportunities from afar (Burns, 2020). It will also help maintain and stay the course of its long-term goals and eventual achievement.

Thinking in Ambiguity

Thinking in ambiguity refers to the ability of the company’s management to operate efficiently and proceed smoothly regardless of the prevailing challenges like the pandemic. The company will gain an advantage over its competitors, who are likely to succumb to the effects of the pandemic. Thus, as long as company leadership maintains a clear head while still analyzing the prevailing factors, its dominance over competitors and survival will be guaranteed (Birley & Muzyka, 2000). Calmness is a crucial factor among company managers because, in case of market disruptions, impatient organizations take action only for the market to reverse (Burns, 2020). Thus by the time the firms are readjusting, the calm ones will have seized all opportunities.

Factors Affecting Company Operations

Companies such as Kier face challenges originating from within and outside the organization. External challenges may be from the same sector or independent sectors, as learned in the seventh lecture. Nonetheless, the company has adopted tools and techniques to help deal with these challenges, including PESTLE, Porter’s 5 Forces, and SWOT.

PESTLE

PESTLE stands for six external factors that influence the company’s goals and objectives: political, economic, social, technological, legislative, and environmental.

PoliticalEconomicSocialTechnologicalLegislativeEnvironmental
Tax policies
Company regulations
BREXIT
Fiscal policies
High interest rates from banks
Low demand
Product cycle influence
Demographic changes
COVID-19
Changing life styles
Customers’ tastes and preference
Enhanced research and innovation
Increased competition from new entrants
Minimum wage policy
Environmental law
Health and safety standards
Employment criteria
Strict environmental laws

Political factors are government activities that affect the company’s operations. The government has enacted tax policies, company regulations, and fiscal policies, which hinder the company from executing its daily operations, resulting in losses (Tidd et al., 2001). Some of the economic factors that affect the operations of the company include; demand, interest rates, and product cycles influence the company’s future operations. If the economic environment is unstable, the company will likely incur losses to remain relevant in the market. To counter this, the company has diversified its market and products.

Social factors are among the major challenges that influence the company, and they include taste and preference, changing lifestyle, and demographic changes. Customers’ tastes change over time, and, as the COVID-19 pandemic happened, the company has innovated new strategies to develop suitable products and survive the prevailing conditions. Demographic differences influence the types of products people want. Therefore, the company has researched and designed products according to each region’s preference. New technology has brought new and effective methods to cater to all clients’ needs and new challenges (Wickham, 2001). New technology has changed the market and demands, and thus, Kier group has merged with new partners to compete effectively with new companies. It has also enhanced research and innovation, thus promoting innovation in the company.

Legislative factors pertain to laws that govern the company’s operations, and they include; health and safety, minimum wage, employment, and environmental law. Kier Group has, however, adhered to all legislations though very strict, to ensure company operations run uninterrupted. It includes providing better working conditions for all employees to enhance efficiency (Wickham, 2001). Environmental activists are currently very active in speaking against companies that dispose of untreated waste, thus forcing companies to adopt new technology to prevent environmental pollution. Other companies have been sued and fined for failing to adhere to the proposed changes costing companies both time and resources, which risks losses.

Porter’s 5 Forces

Porter’s 5 Forces refers to the framework used when determining the competitive ability of a company. As learned in lecture seven, there are five aspects of this framework: buyers’ power, suppliers’ power, the rivalry between competitors, substitutes’ threat to the industry’s products, and entry threat. Customers’ power refers to their ability to alter prices, the significance of each customer, and the cost of finding new customers. Smaller and more powerful clients can negotiate prices, and thus a company with such clients stands to make a profit easily (Birley & Muzyk, 2000). The power of suppliers depends on their numbers since the fewer they are, the stronger they are and thus can change the prices at will since they hold the fate of most companies.

The threat of substitute implies the effect a substitute product has on the original product because, if the new product is weak, the original company has the power to charge as it wills. The threat of newcomers affects the company if new entrants charge cheaper for quality products. Entrance barriers guarantee dominance for existing companies (Birley & Muzyk, 2000). A company’s competing power depends on its suppliers because if the cost is low, the company will be able to dictate the price, which is likely to put competitors out of the market.

Strength, Weakness, Opportunities, and Threats

SWOT refers to the strengths, weaknesses, opportunities, and threats of a company. They are internal factors that influence the long-term objectives of a company.

StrengthsWeaknessesOpportunitiesThreats
Located in Manchester, a well-developed city
The company has well trained innovators
Has many investors
Great brand reputation
Increased debts
Inability to match new entrants
Low profitability ratio
Formed Mergers to increase resources
Expansion to new markets
Growing online markets
Invested in new ventures; real estate
Strong competitors
Changing consumer tastes
New technological developments

The Kier Group has strengths that have enabled it to remain operational. The company is located in Manchester, a developed city and thus exposed to the world; it also has trained innovators who create ideas that contribute to the company’s growth. The company has developed a new product and acquired other partners hence the development (Birley & Muzyk, 2000). The company has its weaknesses, too, during the pandemic, the company’s debts accumulated, resulting in a low share value which ruined its reputation. Kier Company has seized opportunities through mergers and expansion to international markets and invested in new ventures like real estate. Through this, the company has grown exponentially all over the world. The company is not new to threats, it has been competing with ISG, Mitie and Amey, and Balfour and Beatty. Competitors merged to gain the upper hand over Kier Group, which threatened the company.

Solutions for the Effects of COVID-19 on the Company

The COVID-19 pandemic negatively impacted the normal operations of the Kier Group Company. Innovation and entrepreneurship of company employees were disrupted, leading to the decline of the company. Some of the challenges that the disease caused were comprised of low price of company shares, poor health of employees, and growth of company debts (Corrales, 2019). Nevertheless, company managers have developed strategies to counter the effects of the pandemic. Some of these actions include; reduction of salaries, disposing of non-essential company assets, raising company equity and initiating cost saving programs.

The company will institute legislations to ensure the salaries of company executives and employees are reduced to cut costs by reducing recurrent expenditure (Birley & Muzyk, 2000). More so, the company will sell assets like Kier Living to the highest bidders to raise capital and reduce managing costs. The company will also sell a portion of its shares to the public in order to raise money irrespective of the low prices so as attract more investors (Lounsbury et al., 2019). Kier group will introduce programs to cut costs by overseeing all company operations.

Models of Innovation

There are different innovation models, and they include the black-box model, linear model, interactive model, system model, evolutionary model, innovation milieu model. Linear model is the second generation model, and it has two types, the technology push and the market pull (Drucker, 2007). Linear model is commonly used by most construction companies, Kier Group included.

Market Pull

Market Pull

According to lecture six, there are four different types of innovation: disruptive innovation, incremental innovation, sustaining innovation, and radical innovation. According to Drucker these types of innovation are guided by four principles and they are: product, process, position, and paradigm.

Innovation typeIncrementalRadical
Product- what we offer the worldBuilding and construction goods and servicesNew technology and unexplored construction designs
Process- creation and deliveryImproved construction techniques and servicesOnline tendering and contracting
Online banking
Position- growing towns and citiesThe company targets developing towns and cities for contracts and tendersExpanded to international markets for new customers.
Paradigm- how we frame what we doHigh quality goods and services
Authentic construction designs
The company diversified from concrete only to general constructions and real estate

Delivery strategy refers to the entire process of delivering a product to the customer. Delivery strategy is significant as it determines the state in which the products reach the customers. The approach used depends on the products, and different strategies work best for different products. They include; self-delivery, third-part delivery, distributors (Lounsbury et al., 2019). Self-delivery involves delivering the products to the clients directly. In the case of Kier Company, the company has distributors all over the country. The corporation uses a distributor delivery and self-delivery strategy, and in self-delivery, employees deliver products to their clients in bulk purchases.

Company Characteristics That Facilitate Innovation

The Kier Company has been in operation for a long time, and despite the pandemic, it has maintained characteristics which facilitate the innovation process. As learned in module seven, companies have features that accelerate the innovation process. Some of the characteristics of Kier Group Plc are; the failing option, autonomy, innovative leaders and implementers, and risk acceptance.

The Failing Option

The Kier Company encourages its employees to experiment with their new ideas and freedom to research without fear. Hence, it means that they can research any ideas and are encouraged to fail because it is better to try and fail than not try at all (Lounsbury et al., 2019). It is believed that when they try and fail, they learn more from their mistakes and make better choices. The company management rewards all employees who experiment with their projects even after failing. When more employees are testing on all their ideas and destroying those that fail and cannot be repaired, the company saves on the cost of implementing ideas that would eventually fail.

Autonomy

The company provides its employees with instructions and allows them to find their ways of coming up with ideas. The organization does not supervise its employees but instead lets them be accessible since close supervision may distract them and cause them to lose focus. Opening to the infinite possibility of mistakes, they learn from their mistakes and thus improve their performance. Through these mistakes, they discover new and efficient ideas, autonomy among employees facilitates innovation.

Risk Acceptance

Kier Company is a company known for taking risks, and this keeps its employees on their toes since they are required to submit new ideas regularly. The habit of regular submission of statements has helped nurture the company’s culture of innovation (Rexhepi et al., 2019). Taking risks has created opportunities for the company, thus creating more promotion opportunities for the employees, and the most innovative are promoted (Corrales, 2019). Therefore, these promotions motivate employees to be more creative to be promoted too.

Establishing Innovative Environment

The pandemic interrupted the company’s activities, and as a middle manager, I have planned and wish to implement various activities to establish an innovative environment. Some of these activities include accommodating leadership styles, fair treatment of employees, provision of adequate resources, and benchmarking from the best.

Flat Management structure

The company aims to establish a flat management structure in the upheaval department because this form of management creates a sense of equality among all creators and thus eliminates any form of discrimination. Further, the firm will also appoint an innovation champion who will act as a link between the top management and the innovators (Corrales, 2019). These strategies will be essential for the company to establish an innovative environment.

Benchmarking and provision of adequate resources

The organization has set aside funds to finance the benchmarking process, and this focuses on allowing the management to learn how to develop an innovative environment. Organization executives will then implement what they learn from other managers in the company (Rexhepi et al., 2019). They will also be required to provide adequate resources for their innovators to enhance analysis and experimentation of new ideas, consequently establishing an ambivalent culture in the company.

The Company’s Strategic Alliances

Strategic alliances are arrangements made between two or more companies to invest in a project from which all parties involved benefit. Similarly, Kier Group Plc has formed alliances with other companies to increase their effectiveness (Birley & Muzyka, 2000). For instance, the company made an alliance with the Supply Change and Thrive companies. Partnership with Supply Change will enable Kier Group Plc to connect with its suppliers to procure high quality goods. In turn, Kier Group will help eliminate the social enterprise barriers for Supply Change Company. Kier Company formed a partnership with the Thrive Company, which has produced a calculator for social value (Drucker, 2007). Both companies will benefit from the partnership since Kier Group will be able to evaluate its products’ value, and Thrive company will get a new investor

Advantages and Disadvantages of the Company Growing Bigger

Entrepreneurship and innovation in the company will guarantee its growth and expansion in the future. Nevertheless, this growth has both advantages and disadvantages for the company, as illustrated in the ninth lecture (Drucker, 2007). Some of the benefits associated with the growth of this company will include; attracting more investors, an increase in customers and new markets, and an increase in resources and stock. The company will attract more investors who are looking to make profits as the company guarantees great returns (Drucker, 2007). The company will be able to reach new customers as it expands, in addition, it will join new markets and thus generate even more profits.

Despite the various advantages of growth and expansion of the company, there are limitations that the company faces due to its growth. Some of these disadvantages consist of a shortage of capital, an increase in cash requirements, and a loss of control of the company (Drucker, 2007). Growth of the company will result in a shortage of capital required to finance its wide operations, and this may hinder its development. Expansion of the company will also lead to the delegation of roles and responsibilities, and thus, company managers will not be able to control the company fully.

Conclusion

The Kier Company is among the oldest construction companies in the UK. The firm has faced and overcome many challenges over the years. Nevertheless, at the beginning of the COVID-19 pandemic, the corporation was at its peak, but it began to decline as the pandemic progressed. The decelerating trend continued progressively for two years prompting the organization’s leadership had to develop strategies to settle its growing debts and stay relevant in the market. Therefore, as learned from the lecture notes, there are measures that company managers execute to encourage innovation and entrepreneurship to ensure the company does not collapse. The firm, in turn, creates a favorable environment that facilitates innovation and entrepreneurship.

References

Birley S., & Muzyka D. (2000). Mastering entrepreneurship. Harlow: Pearson Education Ltd

Burns, P. (2020). Corporate entrepreneurship and innovation. London: Macmillan Education UK.

Corrales, E. M. (2019). Innovation and entrepreneurship: A new mindset for emerging markets. Emerald Publishing Limited.

Drucker P. F. (2007). Innovation and entrepreneurship. Oxford: Butterworth-Heinemann.

Harrington, H. J. (2018). Creativity, innovation, and entrepreneurship: The only way to renew your organization. CRC Press.

Kanter, R. M. (1984). Change masters. Simon and Schuster.

Karlsson, C., Rickardsson, J., & Wincent, J. (2021). Diversity, innovation, and entrepreneurship: where are we and where should we go in future studies? Small Business Economics, 56(2), 759-772.

Lounsbury, M., Cornelissen, J., Granqvist, N., & Grodal, S. (2019). Culture, innovation, and entrepreneurship. Innovation, 21(1), 1-12.

Mosey, D. (2019). Collaborative Construction: Contracts, Alliances, and Bim. John Wiley.

Rexhepi, G., Hisrich, R. D., & Ramadani, V. (2019). Open innovation and entrepreneurship: An overview. Open Innovation and Entrepreneurship, 1-7.

Si, S., Zahra, S. A., Wu, X., & Jeng, D. J. F. (2020). Disruptive innovation and entrepreneurship in emerging economies. Journal of Engineering and Technology Management, 58, 101601.

Slack, N., Chambers S., Harland, C., Harrison, A., & Johnston, R. (2019). Operations management. Harlow: Pearson Education Ltd.

Stephan, U. (2022). Cross-cultural innovation and entrepreneurship. Annual Review of Organizational Psychology and Organizational Behavior, 9, 277-308.

Tidd, T., Bessant J., & Pavitt K. (2001). Managing innovation. Chichester: John Wiley & Sons.

Wickham P.A. (2001). Strategic entrepreneurship. Harlow: Pearson Education Ltd.

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