Executive Summary
This report involves the identification of the issue faced by Land Rover, which is a well-established automobile company. Despite its market existence for a considerable duration, the Land Rover Company has experienced a major increase in customer complaints over the past two years due to the quality of some of its automobile products.
This issue is well illustrated by the firm’s decision to recall some of its automobiles in the market. For instance, in China, the firm recalled 36,000 automobiles. This report assesses the alternative organizational leadership aspects that the firm should have considered in order to limit the occurrence of such issues.
The major alternatives reviewed include relationship management, teamwork, and total quality management. The strengths and weaknesses of the respective alternatives are identified and evaluated. Finally, a number of recommendations and the action plan that the firm should consider in its strategic management are identified and explained.
Introduction
The Land Rover Company has been in existence in the automobile industry for a considerable duration since it was founded in 1948. The firm mainly specializes in the manufacture of Jaguar Land Rover brand. The firm has undergone considerable changes over the past decades.
In 2008, the company was purchased by Tata Motors. Land Rover has successfully produced a series of models over the past decades. Some of its renowned models include Discovery 4, Range Rover SUVs, Defender, and Freelander 2. Consequently, the firm has gained considerable global reputation. Land Rover accounts for over 75% of the Jaguar Land Rover sales. The firm generates most of its sales from the North American, European, and the Chinese markets.
The company is committed to attaining extensive market penetration. In its Chinese market, the Land Rover established a new manufacturing plant outside Shanghai. The plant will specialize in the manufacture of Land Rover Evoque. The firm intends to capture 10% of the Chinese premium SUV market.
Problem Statement
Despite its past success, the Land Rover has experienced a major challenge over the past year, which forced the company to recall a number of automobiles from the market. In March 2015, the company announced its decision to recall 36,451 cars of the total vehicles manufactured and imported between June 3, 2013 and December 24, 2014.
The company’s decision to recall the automobiles arose from the identification of a major problem with the brake vacuum hose. According to the company, failure to address the problem might limit the affected automobile braking capacity, hence increasing the distance required to stop the automobile successfully.
This aspect means that the risk of crashing under such circumstances is considerably high. Additionally, some of the vehicles imported into different markets such as China were reported to be characterized by varied malfunctions. For example, some of the vehicles had faulty gearboxes, which made the gearshifts noisy.
Despite the Land Rover’s decision to recall the affected automobiles, the firm did not act voluntarily. On the contrary, the company was forced to implement the decision after the customer complaints were publicized by some media houses. One of the most notable cases relates to China whereby the firm only responded to the customer complaint after the issue was highlighted by the China Central Television.
The company accepted its knowledge of the problem and apologized only after the issue was broadcasted. Due to the highlight of the issue by the China Central Television, Land Rover was forced to recall 36,000 Jaguar Land Rover models that were imported into the Chinese market. Customer complaints entail transactional events and comprise a fundamental element in fostering and sustaining a strong customer relationship.
The above aspects illustrate the existence of significant gaps in Land Rovers’ strategic management and leadership practices. First, the firm is not optimally committed to addressing the issues raised by customers. Secondly, the company has not implemented effective strategies to maintain the quality of its products. These issues might affect the organization’s global reputation adversely, hence its market success. Therefore, the Land Rovers’ management team should integrate effective leadership strategies.
Purpose and Organization of Report
This report seeks to evaluate the alternative issues that Land Rover should have considered in order to avoid such occurrences. One of the fundamental issues that the organization’s management team should consider entails the management of corporate reputation.
This report is organized into a two main sections, which include the alternative analysis and the recommendations and the action plan section.
The alternative analysis section involves a discussion of the legitimate alternatives that the firm could take. Additionally, the strengths and weaknesses of all the identified alternatives are evaluated. Moreover, the evaluation of the alternatives further entails the identification of the decision criteria used to formulate the alternatives. The recommendations section involves the decisions that the organization should integrate.
Alternative Analysis
Relationship Management
The issue encountered at Land Rover shows that the firm has not fully appreciated the importance of synchronizing its operations within the external environments. The firm only acknowledged the existence of the problem only after the issue was broadcasted by the Chinese national television.
In the course of implementing strategic management practices, it is imperative for organizations’ management teams to consider the different issues arising from the external market. One of the most important aspects that the Land Rover’s management team should have considered entails customer relationship management. The organization’s failure to address the complaints raised by customers underscores the fact that the firm does not fully appreciate the significance of customers in the organization’s quest to achieve long-term excellence.
The prevalence of the customers’ complaints regarding the firm’s products might affect the organization’s capacity to develop a strong global reputation. Subsequently, the firm might not generate adequate sales revenue to promote its long-term growth.
In order to avert such issues, it is imperative for the organization to integrate the concept of relationship management, which emphasizes a number of dimensions.
The core dimensions include communication, teamwork, cooperation, and customer relationship management [CRM] in its strategic management practices. According to Rajola (2), CRM refers to the process used by organizations in understanding and managing relationship with its customers. CRM constitutes a fundamental business strategy that links an organization’s internal functions and processes with the external networks to create and offer high value to the target customers.
The concept of CRM would have played a fundamental role in assisting the organization to nurture a strong long-term relationship with its customers. Moreover, integrating the concept of CRM would have played an essential role in assisting the firm to address the complaints raised by the customers effectively.
By focusing on the concept of CRM, the Land Rover would have entrenched the customer-centric business culture successfully. The customer-centric culture is focused on attracting and retaining customers. However, this goal is only possible if an organization delivers value to customers as opposed to its competitors.
Past studies show that the customer-centric culture is only possible if an organization’s management team focuses on implementing effective leadership behaviors. Additionally, studies show that customer complaints are a key component of an organization’s existence. One of the core sources of customer complaints relates to product failure, hence limiting an organization’s ability to attain the desired value.
In the event of an organization failing to address the issues raised by customers, they are likely to resort to raising the complaints with third parties through diverse mediums. This situation is well illustrated by the situation faced by the Land Rover. Such occurrences might affect the organization’s corporate reputation negatively. Therefore, it is imperative for organizational leaders to ensure that the complaints raised are addressed effectively.
By integrating the concept of CRM, the Land Rover would have been in a position to manage the complaints raised successfully without risking the development of negative reputation. However, in order to achieve this goal, the organization should consider entrenching diverse crisis and reputation management concepts such as apologia and image restoration.
Moreover, the concept of CRM would have fostered the organization’s ability to retain its customers. Consequently, Rajola (2) argues that the firm would have been in a position to develop a strong degree of product loyalty. Effective complaints handling is essential in pre-empting the occurrence of negative outcomes. The Land Rover’s management team should have considered the concept of CRM as one the critical elements in generating sufficient sales revenue.
In a bid to benefit from CRM, the Land Rover’s management team should have considered undertaking remarkable investment in CRM. Amongst the issues that the organization should have considered entail investing in effective Information Communication Technology (ICT).
By automating its customer service, the firm would have been in a position to develop a strong customer relationship. In a bid to achieve this goal, the organization’s management team should have considered investing in the CRM software. Different organizations have undertaken extensive investment in the CRM software in an effort to synchronize the internal and external environments in their strategic management practices.
The implementation of the CRM software improves an organization’s ability to handle and coordinate its inbound and outbound communication activities. This goal is achieved through the integration of different channels of communication.
Furthermore, most organizations that have invested in service automation over the past decades have developed service quality, improved the level of customer satisfaction, and minimized the cost of operation. In its pursuit for to deal with customer complaints through service automation, the Land Rover’s management team should have considered investing in the development of a call center.
The call center should have acted as the initial point of contact between the firm and its customers. In most cases, call centers are designed effectively to assist organizations in diagnosing customer problems. An example of technologies that the firm should have implemented includes the Interactive Voice Response [IVR]. The IVR enables customers to raise issues or complaints by interacting with the organization’s computers. The information gathered through the IVR should be used in undertaking customer relationship management.
In order to manage the customers’ complaints successfully, the organization should have considered undertaking an extensive analysis of the issues raised. This aspect means that the firm should have entrenched the concept of analytical CRM. Through this approach, the firm should have considered utilizing marketing data such as customer relationship.
In its quest to understand the prevailing customer opinions and responses towards its products, it is imperative for Land Rover to utilize emerging social mediums in collecting and developing market intelligence. Some of the social media platforms that the firm should have considered include Facebook, Twitter, LinkedIn, and YouTube.
Contemporary consumers are increasingly using social media platforms in communicating and sharing product experience with their colleagues. Therefore, failure to manage the issues raised through social media platforms might affect the organization’s corporate reputation negatively.
Teamwork
In a bid to achieve this goal, the firm should have ensured that all the organizational departments are customer-centric. Through this approach, the various departments would have ensured that their activities are focused on delivering high value to the target customers. Consequently, the likelihood of defects occurring in the final products would have been minimized extensively.
In order to attain a high degree of customer focus, the organization’s management team should have integrated effective leadership. First, the organization should have ensured that all the organizational employees understand the importance of attaining a high level of customer satisfaction in order to achieve long-term excellence.
Achieving this goal requires the firm to inculcate a culture of teamwork. Culture underscores to the common values and beliefs that an organization has integrated into its operations. Through the successful incorporation of teamwork, the Land Rover would have been in a position to entrench information sharing amongst the various departments. The concept of teamwork would have enabled the firm to deliver quality service to employees.
Teamwork contributes towards improved attentiveness in improving the employees’ capabilities and motivation. Therefore, the organization would have been in a position to undertake successful product development due to information sharing amongst the various departments. Such consideration would have contributed towards the development of a high level of synergy in the manufacturing process, hence delivering value to customers.
Total Quality Management
One of the major reasons that spurred the recall undertaken by Land Rover entails poor quality of some of its automobiles. The organization’s failure to manufacture high-quality automobile illustrates the existence of a significant lapse in the organization’s total quality management process.
Charantimath (3) holds that the implementation of total quality management in organizations is greatly dependent on the effectiveness of the top management team. Leadership comprises an essential element in organizations’ quest to implement different organizational strategies and action plans.
Different scholars in total quality management affirm that leadership cannot be delegated. Therefore, the Land Rover’s management team should have focused on developing a strong leadership. Literature shows that strong visionary leaders are fundamental in entrenching efficient quality management approach.
In a bid to achieve this goal, the organization’s management team should have considered a number of issues. One of the most important elements that the firm should have considered in entrenching a culture of quality management entails promoting a high level of commitment and vision amongst the employees. This assertion arises from the view that employees are largely involved in the production process.
The organization’s management team should have established aggressive targets. This aspect means that the firm should have entrenched a strong degree of focus amongst the employees towards quality. Moreover, the organization should have ensured that all employees understand the quality benchmarks in order to ensure that the final product contributes to the development of a high degree of customer satisfaction.
In its total quality management, the firm should further ensure that the products progress through a comprehensive quality process. The process should be comprised of quality control and assurance. In a bid to ensure that the quality of the final product meets the customers’ needs, the organization should integrate an effective criterion in selecting the source of its raw materials.
Charantimath (4) posita that one of the issues that the firm should consider in selecting the raw materials entails quality. This approach will play a fundamental role in minimizing the likelihood of the firm producing its automobile from substandard raw materials.
Strengths of the Alternatives
Corporate Reputation
By considering the above issues, the organization will be in a position to improve its global corporate reputation. Consumers have increasingly become more conscious of quality in their consumption process. Therefore, failure to meet the customers’ quality expectations can affect an organization’s ability to generate sales revenue. This trend has arisen from the association of quality with value for money. Therefore, investing in the above strategies will play a fundamental role in promoting brand loyalty.
Investment in teamwork will further promote the organization’s corporate image both internally and externally. This goal will be achieved by integrating the different crisis communication techniques such as apologia, image restoration, and impression management. The concept of apologia constitutes one of the most important aspects used by organizations in managing corporate reputation in the event of a crisis. Under the concept of apologia, an organization accepts the complaints or the issue faced.
Despite the fact that the organization accepted the existence of some problems in some of its automobiles, the apologia was not timely. However, it resorted to apologia only after the issue was raised through the media. The consideration of the identified aspects will improve the organization’s capacity to attract and retain human capital from the global labor market.
Promoting Corporate Social Responsibility
In the course of their operation, organizations are required to operate ethically. One of the ethical dimensions that business entities should consider relates to customer safety. Focusing on total quality management will ensure that the final product meets the customers’ safety requirements.
Customers within the target market will develop the perception that the firm is not only concerned about profit maximization, but also on consumer protection. Thus, considering the aforementioned approaches, Land Rover will improve its market rating remarkably with reference to corporate reputation.
Customer Involvement
Investing in relationship management will enable Land Rover to be effective in promoting a high level of customer loyalty. This goal will be achieved by entrenching effective crisis communication. This assertion arises from the fact that the customers will feel valued as a critical component of the organization.
Apart from the organization’s contribution to addressing the complaints arising from the customers, investment in customer relationship management will also play an essential role in enhancing the organization’s ability to develop and exploit market intelligence. This goal will be achieved by using the complaints and compliments raised by customers as a source of knowledge. Therefore, the organization will improve its effective in being proactive about issues that arise in its quest to deliver a high level of customer satisfaction.
Moreover, the firm will be in a position to develop an effective knowledge repository. This goal will be achieved by developing an effective database using the different Information Technologies. Therefore, the firm will benefit from effective knowledge management. .
Weaknesses
Despite the benefits associated with the proposed alternatives, the firm’s management team must appreciate the existence of weaknesses. Some of the possible weaknesses that the firm might encounter in implementing the alternatives are evaluated herein.
Security of Information
Relying on Internet-based technologies in gathering market information relating to customer opinion might be limited by the existence of cyber security. Currently, cyber security threats have increased considerably, hence affecting the reliability of data generated through online platforms. The reliability of online platforms may be compromised if the platforms are hacked by competitors. Moreover, the effectiveness of security may further be affected by the organization’s failure to implement effective online security measures.
Resistance
The process of implementing the identified alternatives will require the firm to undertake considerable changes. Implementing the concept of total quality management and relationship management will require the firm to make significant adjustments in its organizational culture.
Such changes might trigger resistance amongst employees. The resistance might arise from the fact that employees will be required to integrate new operational strategies, hence triggering stress. One of the fundamental sources of stress in the workplace entails job characteristics. Organizational changes translate into additional job demands. For example, the concept of CRM will require the organization to entrench new standards in order to handle customer complaints successfully.
Cost of Implementation
In order to implement the above alternatives successfully, the organization will be required to undertake extensive investment in developing the necessary resources. For example, the organization will be required to institute a comprehensive investment plan in order to automate its customer relationship management. Failure to automate the firm’s operation successfully will considerably limit the organization’s capacity to achieve the desired outcome.
Recommendations, Action Plan and Implementation
In order to avoid the occurrence of such issues in the future, it is imperative for Land Rover to consider a number of issues as discussed herein.
Total Quality Management
The above analysis cites the lack of effective total quality management in the organization’s operation process. However, the firm should focus on ensuring that its products are of high quality. In a bid to achieve this goal, the organization should invest in extensive total quality management.
The organization should devise an effective action plan based on the Westinghouse Total Quality Model. The model is comprised of a number of steps. Adopting this model will ensure that its pursuit for total quality management is entrenched in leadership. Thus, the firm should nurture a strong organizational culture that is focused on effective and efficient product development.
Land Rover should ensure that its employees are involved in the total quality management.
One of the elements that the organization should consider in promoting the employees’ focus on product quality entails communication. In its quest to position itself as a quality-conscious organization, the Land Rover should ensure that the employees’ perception towards quality is positively impacted. The organizational leaders should constantly communicate to employees regarding the predetermined quality dimensions set by the organization.
Through optimal employee involvement in the total quality management process, the organization will be in a position to establish a clear vision for the desired outcome. Moreover, the organization will be highly proactive in addressing the quality issues raised by various departments. Consequently, the firm will ensure that the products introduced into the market contribute to a high level of customer satisfaction.
Leadership
In its pursuit for business excellence, the organization’s management team focuses on establishing effective leadership across the various organizational departments. The organization’s management team should integrate charismatic leadership style. The quality of the leader considerably affects an organization’s ability to influence their followers/ employees.
Adopting charismatic leadership style will aid in the development of a strong sense of vision amongst employees. Consequently, the employees will be committed to ensuring that the organization’s operation process contributes to the attainment of the set organizational goals.
Customer Service Training
Despite the fact that the organization acknowledged the existence of the quality complaints raised by customers, no proactive measures were undertaken to resolve the issue. Therefore, it is evident that the organization’s employees did not possess adequate knowledge on how to address the complaints successfully.
In order to address this challenge, it is imperative for the organization to invest in extensive customer service training. The training process should focus on delivering optimal customer service. In order to train its workforce successfully, the organization should seek expertise from well-established consultancy firms. This move will enable Land Rover to address the existing gaps in its customer service delivery.
In order to foster customer service in its operations, the Land Rover should implement the internationally accepted standards of quality. One of the most important standards that the firm should consider entails the ISO 10002. This standard will provide the firm with an effective framework that it can adopt in addressing the complaints raised by customers.
References
- Charantimath PM. Total quality management. 2nd ed. Delhi, India: Pearson; 2011. 589 p.
- Rajola F. Customer relationship management: organizational and technological perspectives. Berlin, Germany: Springer; 2013. 188 p.