Decision Making Leadership Development

Decision Making, Leadership Development and Business Ethics at Boeing

Title: Decision Making Leadership Development. The Boeing Company is an American organisation which has been manufacturing aircraft, rockets and satellite for a considerable period of time. In the early 21st century, it had faced several problems regarding its ethical policy. With reference to the case i.e. Boeing: How Low Can They Flow? It has been ascertained that at the end of 2003, the board of directors sacked its chief financial officer Michel Sears and Vice President Darleen Druyun for their unethical approaches towards the organization. Accordingly, the study intends to comprehensively explore the case in terms of certain crucial parameters including effect of the issues faced by Boeing on its stakeholders along with offering optimal solution to address the situation among others.

With regard to discrepancies ascertained, the department of justice accused Michel Sears and Darleen Druyun on the basis of unauthorized discussion with a supplier during the contract review process about employment opportunity. Specifically, it had happened during the contract between Boeing and United States’ Air Force during the deal of 767 airborne refueling tankers. As per the investigation, it has been revealed that Druyun had lobbied with the political parties for competing Airbus’s bid for a military tanker contract.

After exposing the scandal, Druyun admitted that she had considered this high priced tanker deal as a gift before she started working with them. Apart from this, it was also exposed that Sears and Druyun had interconnections in between their family. The entire set of information had been exposed through the memo which had been written by the Air force e general counsel. After exposing the evidence in front of Boeing’s management, Sears and Druyun had tried to cover-up their unethical activities’ clue. On the other hand, Boeing had started reinvestigation about them thoroughly. After conspiracy both of them had been penalized financially and also sent to prison for rehabilitation. Moreover, the chairman of Boeing Philip Condit had mentioned that the responsibility of the organization was to prevent the unethical operations.

At the same time, a former executive of Boeing Larry Satchell had also been charged earlier during 1999s due to the conspiracy to violate United State (US) procurement laws. It also happened during the Condit’s period. During his tenure, several issues that occurred had enforced Boeing to become highlighted in front of media. Difference between the male and the female employees’ salaries had been one of the key incidents among them. As a result, The Office of Federal Contract Compliance Program (OFCCP) under the U.S. Labour Department had charged Boeing and Condit had paid to settle that issue. In addition, in terms of airplanes cost recovering purpose, it had also come into focus. Even in case of personnel issues such as marriage and relationship, Condit had created conflict in Boeing. During the end of 2003, he had resigned from the post of chairman of Boeing. During his era, several personalities had complimented Boeing organization inversely.

After him, Harry Stonecipher had taken the responsibility of Boeing. During his period, Boeing had come up with couple of ethical programs to ensure the organizational discipline. The new chairman Lewis Platt had declared the zero tolerance policy for unethical behaviour. During that period in 2004, Stonecipher had taken extra responsibility for his employees at Boeing. Subsequently, in the year 2005, he had resigned from the post of Chief Executive Officer (CEO). Platt, the chairman of Boeing, stated that Stonecipher was having an extramarital affair with a Boeing female employee. Besides, he had also criticized about Stonecipher. In the middle of 2005, James McNerney had been appointed as the CEO of Boeing. After his joining, firstly McNerney had settled the Lockheed Martin’s stolen paper issue, due to which U.S. Air Force had suspended Boeing. McNerney through this settlement wanted to ensure the protection of unethical behaviour at Boeing. After a long time, in 2008, Boeing had attempted to enter into a large deal with Air Force to build refuelling tanker, but it was not successful. At that stage, U.S. Air Force had made an alliance with Northrop Grumman. Finally, it was observed that in the year 2011, U.S. Air Force confirmed the deal with Boeing, as it was lucrative one than that of Airbus.

Discussion of the Stakeholders Affected

According to the analysis of Boeing’s ethical conduct of its employees, it has been found that there were certain complexities that emerged for the stakeholders. The decisions of the stakeholders can affect an organization in both ways. Consequently, it can be also asserted that good practice in case of decision making in an organization can influence the work environment in a positive manner. In accordance with French Philosopher-mathematician Blaise Pascal (1623-62), the ethical decision making is related with the six steps. Those are mentioned below:

  • Perception
  • Analysis
  • Synthesis
  • Choice
  • Action
  • Learning

These are the factors that can be deemed as best practices through which the stakeholders can protect the ethical conduct of an organization. In this case, aircraft manufacturing company Boeing’s stakeholders’ such as employees, suppliers and consumers among others had been affected in several ways. In order to find those reasons, first of all, it was observed that there was an unauthorized discussion about employment opportunity. Besides, it has been also observed that during 1999s when Boeing had differentiated the salary of its male and female employees’, they were also noticeably affected. Moreover, the unethical approaches of the former CEOs Condit and Stonecipher with the internal organizational employees’ of Boeing can be termed as a key factor affecting the vital stakeholders of the company i.e. employees at large. Furthermore, due to the Lockheed Martin’s stolen paper issue, key stakeholders had been also affected in a bigger way and in order to settle that issue the organization had paid a substantial amount.

How the Company or Individual Should Prioritize Stakeholders

For maintaining the goodwill of the organization and good crisis management, prioritizing the key stakeholders is needed mostly. In order to find the stakeholders prioritizing process, it has been observed that it can be ethically maintained through BSR five steps approaches. This approach is emphasised below:

Engagement Strategy. In order to prioritize key stakeholders such as employees, suppliers and consumers among others first of all Boeing needs to set its vision. In addition, it needs to define the criteria for engagement mechanism and  it must have to keep focus on short and long term goals. Moreover, it should also  ensure the equality of stakeholders. Furthermore, identifying the opportunity to achieve the goals and planning for the future engagement ought to be key facets.

Stakeholder Mapping. It is a collaborative process, through research, debate and discussion, it helps to determine the key list of stakeholders. It can be segmented into four divisions. These include identifying, analyzing, mapping and prioritizing.

Preparation. It brings knowledge to fulfillment of a plan or project. It helps to ensure the engagement with stakeholders which in turn facilitates  to conduct the entire process successfully.

Engagement. After the preparation in case of Boeing for its stakeholders, it needs to  thoroughly work through  the planning stages. This is the moment when facilitation truly counts.

Action Plan. In case of engagement failure, it will help to avoid the pitfall. This step helps to develop a plan whose aim is to find the engagement with the stakeholders through communication.

This is the process through which Boeing can ensure the priority of stakeholders (Morris and Baddache, “Back to Basics: How to Make Stakeholder Engagement Meaningful for Your Company”).

What Is The Optimal Solution?

According to the analysis, it has been observed that there were multiple difficulties faced by Boeing. Even it has been also seen that within 18 months Boeing had appointed the third CEO for its unethical activities inside the organization. In order to prevent the ethical indiscipline, organisational decision-makers need to prioritize all challenging values and standards of organization behaviour. A common set of ethical standards can be developed to guide decisions when conflicting obligations, cost-benefit trade-offs, and challenging value choices are to be seen. These aspects are  illustrated below:

  1. Problem Awerness
  2. Problem Definition
  3. Decision Making
  4. Action Plan Implementation
  5. Follow Through

These are the optimum solutions which can prevent Boeing from unethical conduct and ensure leadership development in case of decision making (McGraw-Hill, “Ethical Problem-solving and Decision Making”).

Figure 1: The Rational Problem Solving Process/ Optimal Solution

Decision Making Leadership Development
Decision Making Leadership Development

Source: (Mcgraw-Hill, “Ethical Problem-Solving And Decision Making”).

An Optimal Solution?

This optimal solution can help Boeing to resolve the lingering multifaceted problems and eliminate the discrepancy between actual and desired outcomes. The prime responsibility of the decision making authority is to identify the actual problems and in order to do that gathering problem awareness is required. Through communication and monitoring process, it can be done. It will be useful because after identifying the issue trust needs to be established for assuring that the causes of disputes can be resolved. Clarifying the objective can also help to understand the problem otherwise it will be difficult to identify the core issues. Evaluating the current turbulent situation is also helpful for Boeing to identify the problem, because comparing the predetermined performance and earlier performance will enable to directly define the difference. Moreover, it can be asserted that identifying the problem can facilitate to understand the entire viewpoint.

On the other hand, through problem definition, problems can be analysed and it will also help to determine whether Boeing has agreed to solve the problem or not. However, decision making is also a very crucial task. It can help to establish a decision depending upon the situation. Besides, it can also aid Boeing to decide a way from various alternatives by evaluating those alternatives. Finally, it can facilitate to choose a better alternative plan.

Even action plan implementation is very essential for a firm as in initial phase it helps to assign the tasks and responsibilities in keeping with short-term objectives. During this process, it will also facilitate to schedule those tasks in an organized manner. This approach related to Boeing can directly and indirectly enable to fortify the organizational situation along with ensuring the level of commitment of key organisational stakeholders. Furthermore, it can also help to active the plan of resurrection of Boeing from the faced difficulties perfectly.

Consequently, the conclusive part in this solution approach is follow-through. It can help Boeing to evaluate its own decision making system. Through determining the actual performance and measuring the results, Boeing can take desired actions. It is almost like a feedback process through which Boeing can review its own leadership policies and ethical conducts for future period.

How Are the Various Stakeholders Effected and Why?

From the analysis of The Boeing Company’s case, it has been apparently observed that, various stakeholders are affected due to a number of key reasons. In order to discuss those unethical issues, first of all, it has been found that Boeing had suffered because its former CEO Sears and Vice President (VP) Druyun had been engaged in an unauthorized discussion about employment opportunity and during that time Druyun had lobbied with the political parties for competing Airbus’s bid for a military tanker contract.

Moreover, during Condit’s leadership, conflict had been raised in terms of male and female salaries discrepancy. Consequently, U.S. Labour Department had charged Boeing. In addition, he had also involved with an unethical issue for engaging in a relationship with the female employee of Boeing. As an effect, both of them i.e. Condit and the female employee involved had been fired from the organization.

Even after Condit’s period, the unethical approaches had continued in Boeing. Stonecipher had joined with several promises but he was unsuccessful to accomplish them. Within a short span, it had been exposed that Stonecipher was having an extramarital affair with a Boeing’s female employee. This kind of undesirable conduct by an organisation head affected different stakeholders of Boeing including its other employees as the image of the company got tarnished by a considerable extent. Moreover, Lockheed Martin’s stolen paper issue had been also happened at the same time; due to which U.S. Air Force had suspended Boeing from any short of business deals. This factor was a major setback for the company and its key stakeholders such as suppliers as they were deprived of placing their prominence in a competitive market.

Proactive Steps The Company Could Take To Avoid Similar Issues In The Future

With regard to avoiding these kinds of unethical conducts in the future, Boeing should take few precautions. Firstly, it should choose the right person as a leader who always intends to uphold strong ethical conduct as his/her main priority. Prior leadership experience should be provided greater emphasis to lead the organisation through complex and uncertain business environment. Besides, Boeing has to be stricter about its ethical conducts in terms of business dealings. In case of business deals with the suppliers or clients, Boeing should not only rely on one person instead it should give the responsibility to the top management council, where the decision will be taken by the discussion of the council members. Consequently, in case of employee selection, Boeing should follow the approaches laid down by best practices. Additionally, in case of women related scandals, it should react strictly to settle the issues and set examples for future ensuring zero tolerance. These are the key precautions Boeing should consider for future conducts to avoid the unethical scenarios in case of leadership development.

Works Cited

“Ethical Problem-Solving and Decision Making.” McGraw-Hill. n.d. Web. 22 Apr. 2014.

Morris, Jonathan, and Farid Baddache. Back to Basics: How to Make Stakeholder Engagement Meaningful for Your Company. 2012. Web. 22 Apr. 2014.

Other Relevant Blog Posts

Leadership Styles

Effective Leadership

Business Management Dissertations

Did you find any useful knowledge relating to decision making, leadership development and business ethics at Boeing in this post? What are the key facts that grabbed your attention? Let us know in the comments. Thank you.

Writing A Quality Business Dissertation

Writing A Quality Business Dissertation

Welcome! Here is a helpful collection of resources to help you Writing A Quality Business Dissertation. This post has been written to provide a general overview to writing business dissertations.

Writing Business Dissertations

Writing an extended piece of research such as a business dissertation can be a challenging but a rewarding process. The tips and techniques included here are designed to enable you to manage the writing process more effectively. This post highlights the importance of writing an inspirational business dissertation. It aims to help you to feel confident in writing your own business dissertation, and to support you in its successful completion.

Although your business dissertation should contain your own dissertation title or topic, you will also want to refer to the ideas of other academics that relate directly to your business dissertation topic. This shows evidence that you have research your business topic thoroughly.

Your business dissertation should critically evaluate existing ideas and identify potential problems that are still prevalent in your specific area of research. Also, do not forget to investigate a particular area of business that has not yet been explored. So many business management students write their business dissertations on over exhausted business fields of research. I have seen so many similar business dissertations written on Linkages between Organisational and Employee Behaviour and Advantages and Disadvantages of Globalisation. No disrespect here, but these business dissertation research topics are not exactly groundbreaking or original.

Business Students
Business Students

For you to handle academic research questions follow these steps;

Step 1 – Understand the question first

It is important to comprehend the requirements and expectations of the issue at hand. Be aware of different business genres that are creative writing, argumentative essays, and dissertation papers among others. Then lay out your ideas as per the requirements.

Step 2 – Manage your time

 Set aside time to deal with the assignment. If possible come up with a timetable that will guide you when handling the assignment. Do not underestimate the time required to handle a given task. Give it the attention it needs for you to submit an outstanding business dissertation.

Step 3 – Identify your audience

You should always consider the person who is going to read or mark your work. If you are aware of their likes, then write about them, and their dislikes avoid them. Moreover, avoid writing using a personal viewpoint (using; I, we or us) unless you have been asked to give your personal views.

Step 4 – Do proper research. Don’t glance over…

In order to submit an high quality business dissertation you must understand the question and then make sure you do good research. Use books, newsletters, journals, and diaries. Google scholar offers help with academic materials such as books and journals articles.

Step 5 – Referencing

You need to be certain you reference and cite all the materials used either in Harvard, APA or MLA style of referencing depending on specifications and university guidelines.

Step 6 – Get advice

Consult teachers, lecturers, and friends for help. It’s not wrong to ask for help and assistance where you do not understand or feel that you’re going off topic.

Step 7 – Check, check and check again.

Once done proofread and edit your work as an assurance you have done the best. Ask others for their views too before presenting your work for marking. Your dissertation supervisor is always looking for a quality business dissertation that clearly shows you applied logic, creative thinking, constructive arguments / critiques, fresh ideas to the research field and appropriate referencing.

Step 8 – Final step

Before you submit your business dissertation ensure the research has the following;

  • The required number of words.
  • Free from plagiarism.
  • The assignment has met your university’s guidelines.
  • Correct dissertation structure – This is very important.

Importance of writing a quality business dissertation

According to a study by Edwards (2010) concepts developed for one assignment can be used for the next assessment. The assignment is a clear indication that you have an excellent connection between the course material and the assignment itself. Studies for instance (Kalogrides, Loeb & Béteille, (2013) claim that assignments assist the learners in developing better skills that make the better responsible in the future. The ability to work on diverse topics indicates that students can cope with for instance managerial task in the future when they get employed. When teachers give assignments, they are using their expertise knowledge of different development levels to accomplish the course objectives. However, accosting to Burman (1992) there are no enough evaluations that are applied in students’ assignment evaluation, and thus students are asked to positively work on the little that the teachers offer as an assignment.

Business Dissertation Topics
Business Dissertation Topics

Business Dissertation Topics

Below is a list of business dissertation topics that you can look into if you are struggling to find a specific topic to research. These business management dissertation topics are current and should help you.

Entrepreneurship / Innovation Dissertation Topics

  • Strategic Analysis of Banks and Small Firms
  • Business Clustering
  • Business Incubators/Business Support
  • Corporate Entrepreneurship
  • Creative Problem Solving and Effective Decision Making
  • Entrepreneurial Environments
  • Entrepreneurial Management of the Innovation Process Discontinuous Innovation
  • Entrepreneurial Orientation
  • Initial Public Offerings
  • Management Buyouts
  • Managing Innovation within the chemical/pharmaceutical industry
  • Organisational Learning, entrepreneurship and innovation
  • Performance Returns of Entrepreneurship Activity
  • Private Equity
  • Social Capital
  • Social Entrepreneurship
  • Strategic Entrepreneurship
  • Technology Transfer and University Spin-Out Businesses
  • The Entrepreneurial Firm
  • The impact of Entrepreneurship education upon new business formation
  • Venture Capital

Business Strategy Dissertation Topics

  • An investigation of how the decision to invest in future strategic high applications is made
  • Applications of the resource-based view of the firm
  • Business failure and its consequences
  • Capital Structure – its impact on firm behaviour and performance [note:  this is intended to be a quantitative dissertation – some data may be available]
  • Corporate Environmental Strategies (such as corporate strategies to react to climate change; organisations and the natural environment, organisations and sustainability issues…)
  • Corporate Environmental Strategies and Sustainable Strategic management (such as corporate strategies to react to climate change; organisations and the natural environment…)
  • Corporate Restructuring – its impact on pay/performance/investment [note:  this is intended to be a quantitative dissertation – some data may be available]
  • Creative industries: challenges and opportunities
  • Diversifying Market Entry as a Search Process
  • Doing business in China and India
  • Entry, Exit and Pricing in Electronic Markets
  • Executive Remuneration [note:  this is intended to be a quantitative dissertation – some data may be available]
  • Far Eastern Business
  • How Climate Change had become a strategic issue for insurers [note: this is intended to be a qualitative research based on articles published in insurance papers]
  • Identifying Core Competences as Predictors of Market Entry/Survival
  • Informational Asymmetry, Player Fitness and the Football Transfer Market
  • Institutional change and reform in public services
  • Insurance markets for terrorism risks
  • International Business Strategy
  • Optimal Model Life for Successful Products
  • Organisational learning and knowledge management
  • Price Discrimination and Academic Journal Publishing
  • Prices and Price Dispersion in Electronic Markets
  • Pricing and Product Characteristics [note:  this is intended to be a quantitative dissertation]
  • Strategic decision making
  • Strategic decision-making processes (investigation of how strategic decisions, such as decision to outsource, to diversify, to create partnerships/alliance, to launch a new business…are made)
  • Strategies for aging populations
  • Strategy and regulation: the case of financial services
  • Strategy in the financial services industry
  • Strategy in the insurance Industry
  • Sustainability and strategic management
  • The economic sociology of strategy
  • The history of strategy
  • The political philosophy of strategic management

Sources

Burman, J. M. (1992). Out-of-Class Assignments as a Method of Teaching and Evaluating Law Students. Journal of Legal Education42(3), 447-457.

Bucak, S. S., Jin, R., & Jain, A. K. (2011, June). Multi-label learning with incomplete class assignments. In Computer Vision and Pattern Recognition (CVPR), 2011 IEEE Conference on (pp. 2801-2808). IEEE.

Edwards, D. (2010). Managing an effective hardware based large class assignment.

Kalogrides, D., Loeb, S., & Béteille, T. (2013). Systematic sorting: Teacher characteristics and class assignments. Sociology of Education86(2), 103-123.

How To Reference A Dissertation

There are many other titles available in the business management and MBA dissertation collection that should be of interest to MBA students and academic professionals. There are many dissertation titles that relate to other aspects of business such as strategy, leadership, international business, mergers and acquisitions to name a few. It took a lot of effort to write this post and I would be grateful if you could share this post via Facebook and Twitter. Feel free to add your thoughts in the comments section. Thank you.

Effective Leadership

Title: Effective Leadership – Within this study, the topics being synthesized are the philosophy of leadership within the 20th and the 21st century. Furthermore, the skills and characteristics of a leader or manager are going to be synthesized, showing the reasoning behind having these certain skills.

Evaluate the philosophy of leadership within early years settings by critically analysing the characteristics and competencies of leadership. Ensure that you include why it is essential to have a leader who understands the importance of an effective and multi-disciplined team of staff

Over the 20th and 21st century the term leadership has been changed several times and the perception of what a leader is has also changed. Extensive research has been taken under the topic of ‘leadership’, it has been discovered that through the 20th century there have been more than two hundred different meanings (Northouse, 2010). In the early 1900’s it has been seen that leadership was defined as the centre of power and domination and further down the line in the late early 1900’s the term was defined as persons having certain skills, values, motives and also being able to deal with conflicts (Northouse, 2010). However, Bonnici (2011) explains that leadership is about receiving praise, it is about being influential to teams and improving the student’s way of learning. Traditionally, leadership has been defined as a person having certain personality traits and qualities (Rodd, 2006). However, in recent research the definitions of a leader have been associated with shared ideas and working together (Dunlop, 2008)

Furthermore, Effective Leadership is perceived as inspirational, influential and charismatic, whereas management is about the organisational techniques and controlling things (Walker, 2011). Essentially, leadership is constructing and sustaining a vision and interpersonal relationships and management is monitoring activities and functioning (Davies & Burnham, 2003). There are many misconceptions of the term leadership and is usually mistaken as ‘Power’, this is down to the progression of influence (Northouse, 2010).

There are many general leadership theories and few well known. House and Mitchell devised the Path-Goal theory which is centralised on a model of motivation and is a part of the contingency approach (Burnes, 2004). The leader must provide the employees with support, confidence, and influential behaviour to feel able to attain their future goals (Burnes, 2004). There are two different situational contingencies within this approach; one being staff member’s individual characteristics and the second being the environment which they work in (Alanzi and Rasli, 2013). This theory involves around different situations and behaviour and how the leader’s motivation could lead to other staff being achievement-orientated (Alanzi & Rasli, 2013). However, there is a lot of debate whether path-goal theory is efficient within settings and Alanzi and Rasli (2013) explain further that good leaders will know and understand when and what approach to use when needed. Furthermore, Devader and Alliger (1986) discussed that using the Meta Analyst approach and self-report measures of 120 surveys and discovered that the evidence of its efficiency was infrequent. From the surveys that were conducted analysed, they discovered the environment and the task would not be adequate, it will not change the behaviourism (Devader and Alliger, 1986). Therefore this implicates that the behaviour of the leader will not affect the performance of the subordinates (Devader and Alliger, 1986). The weaknesses involved in the path-goal theory are lack of research and findings. However, Aubrey (2011) explain that the theory does not encourage the staff/team to act themselves as leaders when needed.

Psychologist Kurt Lewin formulated this style of effective leadership in the 1930s and many people followed his path. Lewin debated that there are three key aspects to the styles, these are Autocratic, Democratic and Lasseiz-Faire (Lussier & Achua, 2015). Lewin believed through his studies a leader is not solely based on personality traits but he moved towards different behavioural styles (Lussier & Achua, 2015). However, Lewin has also gained many criticisms of this three step approach and academic sources have noted that he has been progressively critiqued as only appropriate small scale alterations in stable environments and also stated that his model has issues of ignoring conflict and organizational politics (Burnes, 2004).

The autocratic style involves a leader who dictates methods of work and staff, struggles to involve staff in decisions of the setting and also limits the staff to doing different jobs (Khasawneh & Futa, 2013). This could be a leader is the owner of the business.). Therefore, this leader could be over-ruling to staff and lead parents/staff feeling under-valued (Johnston & Williams, 2012). Within an early years setting, it is vital that parents and staff feel welcome. If staff are not enjoying their job, this may lead to retention (Sadek & Sadek, 2004). Similarly, Sadek and Sadek (2004) explained that an autocratic leader is ‘like a spider in the middle of the web’, this could indicate that the leader is the only one with the control and power. Nonetheless, there are positives of the style such as the leader of the setting/business is the only one able to make decisions, also this could mean that the leader makes sure things run smoothly (Johnston & Williams, 2012).

The second of the style is democratic; this type of leader is able to welcome ideas and encourage staff to participate in all decision-making and closely watches/supervises (Lussier; Achua, 2015). A style like this could be welcoming, and staff may feel as though they are able to input their ideas as to what needs to be improved and sustained (Johnston & Williams, 2012). Lussier and Achua (2015) indicate that the democratic style increases the chances of staff feeling a valued member of the team, this will lead to present and future motivation and commitment. However, Johnston and Williams (2012) discuss that staff may misunderstand and feel as though the democratic leader may not have any true values or visions themselves. Furthermore, being a democratic leader in a setting will be more organised and have staff feeling valued to the leader (Johnston & Williams, 2012).

The third style is called ‘Laissez-faire’ which is also seen as non-directive and leaders who pursue this style may prefer to let the group of staff set their own goals. However, if problems arise within the setting, it is likely that they will be unable to get the staff back to being positive and motivated (Wood, 2012). However, leaders within an early years setting acting in the style of ‘laissez-faire’ could lead the other practitioners to become somewhat lazy and inefficient (Wood, 2012). In addition, Johnston and Williams (2012) state that a setting ran by a laissez-faire leader would come across and welcoming to children, parents and recruiting new staff. However, a setting ran by a leader who wants to work for an ‘easy life’ could also be seen as chaotic at times due to the lack of management (Lussier & Achua, 2015). Similarly, Wood (2012) adds on explaining that staff could lack in vision or no direction, also this could lead to future retention as the staff feel unsatisfied with the way the setting is.

Furthermore, Goleman’s research indicates that the visionary or effective leadership style is the most efficient and this is by making the vision everyone’s future goals (Burns, 2010). Leaders with this set style are able to connect with every individual in the workplace and know their capabilities and be able to give them time to grow and also how to achieve their goals (Mersino, 2013). Staff are able to benefit with this type of leader as they are able to tell them what they are doing right (Mersino, 2013). Visionary leaders heavily rely on the competencies, emotional intelligence, self-confidence, self-awareness and the ability to be empathetic to staff or others involved (Wood, 2012). In contrast, there are many issues with this style as Burns (2010) did not define how to be a visionary leader, this could come across as confusing. Furthermore, as this happened many researchers began to analyse the theory and show the cracks of it (Solan, 2008). Similarly, Bennis and Nanus (2003) searched further into the term ‘vision’ and researched into the behaviours of leaders with this style. They set out to do qualitative research and interviewed 90 different leaders. To add on Sashkin and Sashkin (2003) explained that Bennis and Nanus (2003) discovered that leaders have five different patterns of behaviour which were all down to trust, confidence attention and more.

One of the earliest leadership researches was based on characteristics of efficient leaders by Gregoire and Arendt (2004) who split these into a group of 5.

  • Surgency: – The traits being the individual characteristics and sociability.
  • Conscientiousness: – Dependability, the need to achieve and integrity.
  • Agreeableness: – Positivity, usefulness and connection.
  • Adjustment: – Emotional Intelligence, self-worth and strength of mind.
  • Intelligence: – Desire for knowledge, broad-mindedness and being learning orientated.

Since this approach based of characteristics, Jillian Rodd (2006) discussed personal assets of an early year’s leader. However, Jones and Pound (2008) indicate that characteristics, attitudes and skills are the base of an early year’s leader. Nowadays, researchers are following to think that the term effective leadership is now based solely about the interaction between leaders, staff, parents and agencies on the outside and also the emotional competencies between this (Jones & Pound, 2008).

Effective Leadership
Effective Leadership

Organisation is an important aspect of being a leader or a manager in a setting and this is because everything can be at hand. Practitioners that have a system in place for how they organize paperwork make it easier for inspections, to call people when in emergencies and also to look at different requirements for the children, for example, food requirements (Gabriel, 2005). Having paperwork at hand means that if anything goes wrong or they need to back themselves up by showing inspectorates that they have their filing systems up to date and showing that the staff are qualified up to standard (Gabriel, 2005).

Effective Leadership

A leader needs plenty of skills to be able to both manage and lead a setting. This includes many aspects such as assertiveness. Being assertive without needing to be may put the staff off their work and this may lead to possible retention (Stein-Parbury, 2013). However, being assertive for the right to be heard, valued and respected. Gabriel (2005) found within their research that practitioners were a lot better at being assertive in optimistic situations and this led to staff feeling appreciated and respected themselves. However, most of the research that has been done showed that assertiveness is usually seen in conflict and negative situations (Stein-Parbury, 2013). Furthermore, if an early year’s practitioner spoken to a staff member and told them to do something that they didn’t want to do, they would have to act assertively and also bring in an empathetic tone and let them know how it would help them move up and development (Stein-Parbury, 2013). Similarly, Maravelas (2005) explains that with high assertiveness, staff can become intimidated and undermined. On the other hand, she discusses that there is a low and high assertiveness and the lower toned assertiveness is used less (Maravelas, 2005).

Ofsted highlight the significance of having a strong leader within an early years setting which can influence how they are marked out of good and outstanding operations. The report also states that the visited settings have had few strong leaders who have the ability to self-evaluate and each staff being able to reflect on their own work (OFSTED, 2013). Furthermore, in the inspections, the leaders explain that it is vital to have staffs that are able to interact with the children effectively as it has a profound effect on the children’s development and learning (OFSTED, 2013). Ofsted created a survey that they gave to their ‘strong leaders’ and the findings were that they were inspiration to their staff, they were persuasive and passionate (OFSTED, 2013). Furthermore, the leaders were able to explain to other staff within the setting what strategies could work and why and also how this may be effective for children’s learning and development (OFSTED, 2013). Furthermore, due to the demand of “outstanding” schools and settings, there are many criticisms that OFSTED are facing, such as a member of the think tank explaining that “you’d be better off flipping a coin” and this shows that OFSTED are possibly becoming unreliable due to the amount of inspections that they are facing (Flanagan, 2014). In light of this, the inspections that OFSTED give are reasonable guidelines for schools and other settings. However, staff within a school may become pressured to do everything before the inspection as it is only once a year that it is done (Flanagan, 2014).

Blatchford and Manni (2006) explain that communication is key for all leaders working within a setting. Communication involves many factors, these include: reflecting, empathising, verifying, acknowledging, consulting and listening. Being accessible is vital for communication. Similarly, communication in the work place is vital, working with children involves a lot of communication as the job is pressuring and demanding, Making sure that everyone knows their role is especially important as the leader does not want the staff to make decisions without them and without consent to do so (Moyles, 2006).

In the early months of 2004, the government had dedicated themselves to use the United Conventions on the Rights of the Child (UNCRC). Furthermore, in 2011 the government devised a new law which is called the Rights of Children and Young Persons (Wales) Measure which also helps to confirm that the principles within this are actively used (Welsh Assembly Government, 2012).

There are also policies put in place to make sure settings such as nursery settings, family centres and child-minders have quality standards, such as nappy changing facilities (Welsh Assembly Government, 2012). One of the biggest of the policies is health and safety, Record keeping is also one of the health and safety standards. Records will consist of the parent’s contact details, the child’s health records (if there are allergies), medical administration, and statements on procedures in emergency, records of accidents (Welsh Assembly Government, 2012).

Over more than several years policies and governments have been changing the way they are working, especially with child care. Problems have risen within the past 20 years with mothers having to work and having to pay for childcare. It has been found that working parents pay more than twice as much for childcare than they do for food and bills (Lyus, 1999). Rutter (2015) has also found that 25% of families can afford to pay for full-time child care, whereas the other 45% rely on unreliable sources of care such as relatives, babysitters and friends (Lyus, 1999). In 2015 the family and childcare trust sent out a childcare cost survey and the findings were that parents still have to find the money to fund such necessities. Child care has risen for children under the age of two by 33% by the parliament (Rutter, 2015)

There a several different approaches to define leadership theory, for example the trait approach. Devader and Alliger (1986) established that traits of the personality were intensely related with insights of leadership. Furthermore, Kirkpatrick and Locke (1991) claimed that efficient leaders are diverse types of individuals in several ways. However, Stogdill (1982) had conclusions and his findings were that individuals will not become leaders because of certain personality traits that they have, but because they are able to be a leader in certain situations and then not necessarily be a leader in a different situation. Emotional intelligence is an important factor of our leadership skills; Devader and Alliger (1986) suggests that emotional intelligence entails two competencies which are personal and social. These include self-awareness, confidence and motivation (Northouse, 2010). However, the trait approach has several recognizable positives and has been researched for a century with theorists to back it up; secondly this approach shows what type of personality would fit a leadership role (Northouse, 2010). Nevertheless, the trait approach also has several weaknesses which could be critical, firstly it doesn’t state a definite depiction of the approaches needed to become a leader (Northouse, 2010). Furthermore, Stogdill (1982) implies that it is problematic to separate traits when there has been no insight to situational factors which is equally important as the leader might not lead in certain situations.

Since leadership has become wide spread within settings raising achievement in children, this is called shared / distributed leadership. This term is where a team within a setting are all active leaders other than the head leader (Lindon & Lindon 2011). Other team members have a role to play and it is their responsibility and feeling as they are capable to act as a leader in their own enjoyment (Lindon & Lindon, 2011). Distributed leadership is a well-known democratic theory, also in the category for ‘transformational leadership’ (Rodd, 2006), Moreover, this kind of effective leadership focuses on practice rather than delegation based on an individual’s expertise and encourages staff and practitioners to excel further and motivate them to work harder towards their goals (Rodd, 2006).

Lindon and Lindon (2011) explain that there are many misconceptions of the term and can be problematic within a setting. Distributed and shared leadership have separate meanings, the difference is that shared is that the leader delegates different roles to practitioners (Rodd, 2006). This would lead to effective partnerships within the work place, especially communicating with each other. Communicating is important when being a distributed leader and being able to listen to views of others, understanding and empathising with them (Williams and McInnes, 2005). Listening means providing individuals with their time and privacy and may require constant appraisal so that the staff feel invaluable (Williams and McInnes, 2005). Entrusting staff may be problematic, but with plenty of team working and outings, this may be reduced over time and staff time needs to be used efficiently (Williams and McInnes, 2005).

An example of shared/distributed leadership is family centres, such as sure start family centres. Becoming a leader within a family centre involves the ethic of care and sustaining caring relationships (Blatchford, 2006). Family centres involve multi-agency teams which consist of professionals within health care systems and supporting parents and children holistically. With extensive research in to ‘Sure Start’ family centres there have been many noted challenges. The challenges consist of: maintaining high quality services, leading through change, maintaining morale and motivation, increasing vulnerability, managing outside agencies (Rodd, 2006). Furthermore, family centres need staff that are able to form strong relationships by partnering with children, staff, parents and multi-agencies (Rodd, 2006).

There are many successes in working with multi-agencies, however there are also challenges. The children’s act (2004) brought out a plan to improve children and family services and emphasized the importance of integrated teams of educational professionals, health professions, social workers, job advisers and support for vulnerable parents and young people (Aubrey, 2011). Since the Every Child Matters Green Paper (2003) was devised because of the Victoria Climbie died from negligence and reports were made that on 12 occasions integrated services could have been able to help. This Green Paper is also along with the Children Act 2004. Every Child Matters (2003) discuss that ‘integrated working focuses on encouraging and enabling all professionals to work together and to have common visions which they can deliver, building around the needs of the individual children’. The professionals involved in working in a multi-disciplinary team could be:

  • Police
  • School teacher
  • Early Years Practitioner
  • Midwife
  • GP
  • Social Worker
  • Speech and language therapist
  • Health Visitor
  • Educational psychologist

There are several key aspects of working with other professions, such as having an early intervention before problems become more of an emergency; The CAF which is Common Assessment Framework and is also consent based (NDNA, 2007). Furthermore, multi-agency working also involves record keeping, sharing information to the right people, working with the family and the leader (NDNA, 2007). There are also policies and legislation supporting multi-agency working such as EPPE Report (2003), local safeguarding children board (LSCB) and Children’s Act (2004-06).These legislations have strengthened the meaning of multi-agency working bringing all professionals together in sight of the child (NDNA, 2007). However, there are many potential barriers for integrating professions which can be parental consent. Parents can often feel judged and pressured by certain individuals. In comparison, Aubrey (2011) explain further that with a code of ethics within the setting and moving forward with strategies such as developing a mutual respect and trust, support the continuing development of the parents’ skills and help to develop them further. Furthermore, other publications such as the DCELLS (2005) explain that the challenges could include recruitment. Recruitment can be vital in a centre with such professionals due to new talent, and this could show more of a diverse work-force.

Methods of communication are also important within the early year’s sector with staff. For example, communicating face to face now and again is essential and gives the member of staff time to feel listened to and a valued member (Daly & Byres, 2009). However, Lussier and Achua (2015) explain that communicating one on one could also have negative effects from being unable to record informal discussions and make other team members worried that they haven’t been in a meeting and therefore they may feel less valued. Group meetings are also an easy form of communicating; this would consist of staff being able to make their opinions known and to share views on certain aspects. Employee handbooks can also be an official way of communicating with the leader and other staff, this could be important when a job role has changed (Daly & Byres, 2009) However, this could also have a negative effect as all written information needs to be up to date and this could apply with the National Minimum Standards (Daly & Byres, 2009).

Parents are as much a part of their child’s education as the practitioners and Bowlby (1969) stated that parents are the child’s first source of learning and need to be in close contact with the work that is provided to the children (Daly and Byres, 2009). In successfully managed settings, the leader will have to keep the parents up to date and communicate about the development of their child. Parents being able to feel welcome, valuable and able to trust the practitioners are a key aspect (OFSTED, 2013). Childcare providers can assure the parents that the information that they give them about the child is with them and that they will take care of every child’s needs (OFSTED 2013). It is important that parents feel that they can confide in the manager/practitioner so that they can give them the information that they need and so they can be used to organise activities for particular needs (OFSTED, 2013). There are many ways of keeping parents frequently updated on the development of their children. For example, there are systematic approaches which enable the parents to be updated every six weeks. The ways that communication can be easier for parents/practitioners are regular text messages through mobile phones, emailing via the internet and also the settings website page (OFSTED, 2013). However, systematic approaches to the means of communication can also be hard due to parents having lack of technology to enable them to contact the settings (Bryant & Oliver, 2009). In sight of challenges, many parents feel as though they are being judged by their children’s practitioners and back away from having face to face contact with them weekly (Moyles, 2006).

Challenges that are faced within the workplace need to be underpinned by the leader for some form of conflict resolution. For a good leader, being able to notice staff that are not getting on for some reason should be easy, however sometimes this may be challenging as staff do not want to go through problems that they are facing (Moyles, 2006). There many general ways of how a conflict is, competition, accommodation, avoidance, collaboration and compromise (Rodd, 2006). Leaders with a certain amount of emotional intelligence will be able to understand strategies how to resolve conflicts between staff members. Generally, solving problems such as conflict are able to gather information and evidence to what has possibly happened, and after the time it has taken to get the information, they may get staff in separately and speak to them (Rodd, 2006). However, Sadek and Sadek (2004) explains that many colleagues suffer from conflicts between each other now and again and this may hinder their ability to be efficient to children or other adults within the setting.

ACAS (2015) provide conflict resolution for managers and leaders to show them effective ways of problem solving through times like this. ACAS (2015) also offer information and case studies for leaders and managers to help them with these possible challenges. The government sees wider benefits to improve ‘leader and employee relationships’ which will lead to the ‘high trust relationships’. They have come up with a method of how to manage and avoid conflict within the workplace. Developing strategies which may help manage conflict before it may become a problem is essential within the workplace, such as developing handbooks for staff before they enter the place of work (ACAS, 2014). A democratic leader would be needed in such situations, as this would be an empathetic situation in many cases and they will not presume the problem, they are able to communicate informally (ACAS, 2015). The steps which can be taken are 1. Informally asking an individual to come and talk to you about the problem. Furthermore, if the informal stage isn’t as effective as it is needed then the issue would need to be investigated informally. 3. If stage 2 doesn’t work, then internal procedures need to be used (ACAS, 2015). Finally, making diagrams which could also be designated to the staffroom wall could be used for staff to understand policies and procedures which may be used when a conflict arises (ACAS, 2015). Adults need as much support during team building exercises as much as children need help when they have conflict with peers. Team building is vital within any daily job or setting as colleagues need to get to know each other and get to know how to work together on a daily basis (Williams and McInnes, 2005).

To conclude, this discussion shows leadership in positive and difficult situations. Distributed leadership is seen as one of the most important factors of a setting and partnerships with parents are also significant. The organisation ACAS (2015) has given leaders and managers information and procedures on many challenges that will be faced through working with parents, staff and children. Overall, the most efficient style is Goleman’s visionary leadership, where all staff are aimed towards the same outcome and goal.

References

ACAS (2015) Mediation and Early Resolution.

ACAS (2015) Conflict Management.

Alanazi, T & Rasli, A. (2013) ‘Overview of Path-Goal Leadership Theory. Journal of leadership. London: ED Publications.

Aubrey, C. (2011) Leading and Managing in the Early Years. 2nd ed. London: SAGE Publications Ltd.

Bonnici, C. (2011) A Successful Leadership Style. Lanham: Rowman & Littlefield Education.

Bryant, J. & Oliver, M. (2009) Media Effects. New York: Routledge.

Burnes, B. (2004) Kurt Lewin And The Planned Approach To Change: A Re-Appraisal. Journal of Management Studies.

Burns, J. (2010) Leadership. London: Harper Perennial Modern Classics. 33-56.

Bennis, W & Nanus, B. (2003) Leaders: Strategies for Taking Charge. London.: Harper Business.

Blatchford, I, and Manni (2006) Effective Leadership in the Early Years Sector (ELEYS) Study – Research Report, London: Institute of Education, University of London/General Teaching Council for England.

Daly, M. & Byres, E (2009) Early Years Management in Practice. Harlow: Heinmann.

Davies, B. & Burnham, A (2003) The Handbook of Educational Leadership and Management. London: Pearson Education.

Department for Education (DfE) (2010) Working together to Safeguard Children: A guide to interagency working to safeguard and promote the welfare of children [London]: Department for Education (DfE).

Devader and Alliger (1986) A meta-analysis of the relation between personality traits and leadership perceptions: An application of validity generalization procedures. Journal of Applied Psychology.

DfES (2005) Children’s Workforce Strategy:A Strategy to build a world class work force for children and young people.

Dunlop, A. (2008). A Literature Review on Effective Leadership in the Early Years.

Every Child Matters (2003) The Stationery Office, Effective Leadership. Norwich.

Family and Childcare Trust. (2015) Frustrated Parents Take To Parliament To Demand Answers On Childcare.

Flanagan, P. (2014) Ofsted Inspections: ‘You’d Be Better Off Flipping A Coin’.

Gabriel, G. (2005) How To Thrive As A Teacher Leader. Alexandria, Va.: Association for Supervision, Effective Leadership and Curriculum Development.

Gregoire, M & Adrent, S. (2004) Effective Leadership: Reflections over the past 100 years. Journal of the American Dietetic Association. 103

Johnston, J. & Williams, L. (2012) Early Childhood Studies. England – Pearson Longman.

Jones, C & Pound, L (2008) Effective Leadership And Management In The Early Years: From Principles To Practice. London: Open University Press.

Kirkpatrick, S & Locke, E. (1991) Effective Leadership: Do Traits Matter?. Academy of Management. 5 (2), 48-60.

Khasawneh, A & Futa, M. (2013) The Impact of Effective Leadership Styles Used by the Academic Staff in the Jordanian Public Universities on Modifying Students’ Behavior: A Field Study in the Northern Region of Jordan . International Journal of Business and Management. 8

Lindon, J. & Lindon, L. (2011) Effective Leadership and Early Years Professionalism: Linking Theory to Practice: London: Hodder Education.

Lussier, R. & Achua, C. (2015) Effective Leadership: Theory, Application, & Skill Development. 6th

Lyus, V. (1999) Management in the Early Years. London: Nelson Thornes.

Maravelas, A. (2005) How To Reduce Workplace Conflict And Stress. Franklin Lakes, NJ: Career Press.

Mersino, A. (2013) Effective Leadership and Emotional Intelligence For Project Managers. United Kingdom: AMACOM.

Moyles, J. (2006) Effective Leadership and Management in the Early Years. Maidenhead: Open University Press.

Northouse, P. (2010) Effective Leadership. Thousand Oaks: Sage Publications.

OFSTED (2013) Getting it Right.

Rutter, J. (2015) Childcare cost survey 2015.

Rodd, J. (2006) Effective Leadership in Early Childhood. Maidenhead, England: Open University Press.

Sadek, E. & Sadek, J. (2004) Good Practice In Nursery Management. Cheltenham: Stanley Thornes.

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Leadership Dissertation Topics

Penetration Pricing Strategy

Penetration Pricing Strategy

To create and develop a sound pricing strategy in line with the demands of the target market segment, it requires proper market analysis before segmentation and positioning takes course. As a perquisite to their pricing strategy, distribution and promotion tactics development insured the success of the promotion bid as a security factor to the entire marketing process. Managers have the opportunity to design innovative pricing models that meet the needs of both the firm and its customers in an efficient manner. To achieve this, the organization sets a product price to levels adequate to achieve a target return-on-investment. Therefore, to market their shipping services to potential customers in the competitive Maritime Industry in UK, London and Overseas Freighters marketing executives invoke a penetration pricing strategy designed to gain a larger marker share greater than the rest of their competitors.

Introduction

Pricing a product or service is among the four key elements of marketing. It is an important strategic issue because it relates to the entire process of positioning a product in a target market segment. The other three marketing elements namely product features, channel decisions, and promotion utilized in positioning a product depend on the pricing strategy. To create and develop a sound pricing strategy in line with the demands of the target market segment, it requires proper market analysis before segmentation and positioning takes course. Since the introduction of this aspect of marketing into the corporate business sector, 12 pricing strategies offer marketing executives an efficient way of marketing products and services as they appeal to potential consumers (Longenecker & Petty, 2005:338). These strategies are namely premium, penetration, economy, price skimming, psychological, product line, optional product, captive product, product bundle, promotional, geographical, and value pricing respectively. The aim of this essay is to explain the pricing strategy that London and Overseas Freighters uses to market their products to potential customers and their overall effectiveness.

Penetration Pricing Strategy

As a perquisite to their pricing strategy, distribution and promotion tactics development insured the success of the promotion bid as a security factor to the entire marketing process. While there is no single recipe to determine pricing of services offered, the management board of the organization commissioned a team of 11 competent market analysts to perform an in-depth market analysis (MvGrath, 2001:196). Their major role revolved around segmenting the target market to initialize the process for positioning their products in the market.

This process entailed defining various shipping service packages that the company wanted to introduce into the UK maritime industry. As a way of estimating their demand for shipping services in UK and its neighboring countries, the marketing executives estimated a demand curve that indicated a high surge in demand for automated shipping services that other competitors did not have (Smith, 2011:71). From the analysis, price seemed to dictate the quantity of demand for their electronic-simulated shipping services that were more efficient than manual handling of cargo.

Understanding Environmental Factors

As a way regulating overhead operation costs for the entire organization, market analysts enlisted by the company derived fixed and variable costs associated with each product line they hoped to introduce into the selected market segment. In the UK, the maritime industry is highly monitored by the government as a means of eliminating unhealthy competition among players in this economic sector (Shen, 2008:41). Furthermore, evaluation of likely competitor actions served as a way of understanding the demand and supply of shipping services in UK to all the major destinations in the world.

Setting Pricing Objectives

The main objective set for the pricing strategy was to maximize revenue collected by the company from its shipping operations. To achieve this, London and Overseas Freighters management team decided to lower their shipping prices to levels 10-15% lower than their rivals (Shen, 2008:45). This marketing strategy aimed at attracting potential customers with bulk shipping needs as well as to poach customers from their rivals with low prices for large cargo shipments. Price reduction as a marketing tool served to attract a large clientele base for the organization before restoring the prices to normal to maximize on profit generated. Using the information collected by market analysts, the organization marketing committee selected the penetration pricing method by developing a coherent pricing structure that was inclusive of attractive discount rates offered to meet different client needs.

Applying Pricing Methods

Pricing methods assist managers of organizations to set specific price levels designed to achieve certain pricing objectives. In this, London and Overseas Freighters lowered their shipping prices for large cargo shipments to capitalize on ensuing large economies of scale. This period lasted for three consecutive months before the company restored their prices back to normal. This gave them a large clientele captured by their pricing strategy three months prior to price restoration. It is a complex way of marketing hence the company had to plough back their 2005/2006 fiscal year profits prior to initializing the marketing (Atienz, 2002:80). In addition, plans to purchase new and more efficient automated loading machines siphoned much of the company’s capital set aside for asset development that could have acted as another financial back-up resource.

Efficiency of the Penetration Pricing Strategy

By aiming at building a large clientele before profit maximization, London and Overseas Freighters managed to market their products to many local and international customers within a very short period. Immediately after running their first commercial outlining their low-priced shipping services, customers started walking into their premises inquiring of the advertised offers (Burton & Holden, 2008:53). Within twelve weeks after launching the pricing strategy, the company registered a 30% percent increase in revenue collection before tax. This remarkable achievement signaled the beginning of the next phase of the pricing strategy that involved restoring prices back to normal to capitalize on the captured clientele.

Though harshly criticized by their rivals for implementing price cuts and discounts below normal market standards, the company capitalized on the opportunities they curved for themselves in the target market segment (Bojanic & Reid, 2009:96). Shipments headed to Middle East and China received a 10 percent price reduction as a way of forging permanent business relations with these fast growing economies. In conclusion, by reinvesting back profits to finance the pricing strategy, the company did not strain its reserves as projected in the initial master plan. This pricing strategy formed the foundation for all other marketing strategies that the company has implemented since 2007.  Several other companies have also created and developed similar pricing strategies in a bid to catch up with London and Overseas Freighters.

As outlined by Berry and Yadav, flat rate pricing boosts a company’s competitiveness of a service by minimizing the imminent threat of escalating costs. Satisfaction-based pricing application to marketing shipping services offered by London and Overseas Freighters could have increased the company’s profit margins as the penetration pricing strategy. In addition, introducing product guarantee could have increased customers loyalty to the company as well as attract potential customers. The main reason why customers become loyal to a business is the measure of satisfaction they receive from the service or product they purchase from the company. Therefore, London and Overseas Freighters could have ensured this by providing shipping services that meet the needs of each individual customer. By modeling their service products according to the shipping needs of each customer is hard but the rewards are great. A company capable of implementing a satisfaction-focused pricing strategy needs to understand individual needs of each customer before suggesting a price for the services they promise to offer to ensure they include all the costs they are to incur whilst offering the service.

Penetration Pricing Strategy
Penetration Pricing Strategy

A company offering satisfaction-prices prioritizes customer’s needs over the organization objectives of the company. Therefore, satisfaction pricing is not suitable for marketing service-based products in a competitive market such as UK.  According to Berry and Yadav, Relationship pricing could have helped the company to base its pricing parameters on issues that define their individual relationship to their each customer (Berry & Yadav, 1996:160). Some of these factors include how long the customer has been loyal to the company, the total volume of business transacted, and the type of transaction they use regularly. This helps a company to identify profitable and not-so profitable customers. By having such a deep understanding of the needs of each customer, the company can comfortably develop products aimed at different classes of customers in the same market segment (McDaniel & Gitman, 2008:309). Moreover, it is easier to monitor their transactions to assist them derive appropriate discounts for each product line offering.

Relationship-based pricing would assist the company to streamline its product-centric pricing practices across the enterprise as well as to switch to a customer-centric pricing policy (Bateson & Hoffman, 2010:160). RBP solutions assist product managers at London and Overseas Freighters to define price lists for various product lines at a global level as well as define expectations at regional, customer, and account levels. This assists them to personalize the product to fit the needs of the client. Thus, it would be the most appropriate pricing for marketing shipping services offered by London and Overseas freighters in the UK maritime industry.

As a cushion to unexpected over-head costs, Relationship-based pricing would assist the company to take care of the pricing and billing functions of any product. In addition, Relationship-based pricing assists companies to retain loyal clients, sell more to the existing customers, as well as have a 360-degree view of the customer-base to prevent revenue leakage (Ryals, 2009:303). Relationship-based pricing is an economically sound strategy that does not require the replacement of the existing core system to function properly. Furthermore, it is low-risk inclined in that it would enable a company to achieve its business vision successfully.

To achieve true customer-centricity, company could utilize Relationship-based pricing to assist them to leverage and reinforce their individual relationships with each customer the transact business with (Phillips, 2005:24). To improve on the profitability of the each product line, Relationship-based pricing assists a company to facilitate innovative approaches to manage existing customer relationships. It is the easiest way of empowering companies to reward clients for their loyalty by introducing specific pricing and reward scheme aimed at fulfilling the organizational goals and objectives. In addition, Relationship-based pricing helps to minimize the overall maintenance and set-up time for individual customer accounts as well as improve customer communication aimed at reducing misuse of the collected revenue (Berry & Yadav, 1996:159). Therefore, relationship pricing is more suitable for marketing shipping services offered by London and Overseas Freighters.

Efficiency pricing serves to appeal to economically minded customers who are looking for the best priced products or services. Therefore, if implemented by London and Overseas freighters, it would help them to market their shipping services o economically minded customers who are looking for the lowest price possible to ship their products to China and the Middle East. To achieve this, the company would need to redesign their current shipping products to offer discounts for loyal customer every time they ship with them. This would increase customer’s loyalty and increase their annual revenue collection. However, it would cost the company a lot to implement this pricing strategy as getting customers who ship regularly in a competitive market like UK is hard. Therefore, Efficiency pricing is not an appropriate pricing strategy to market shipping service products currently being offered by London and Overseas Freighters.

Reaching Target Markets

Well-articulated marketing strategies assist marketing executives to build adequate awareness of a business, its products, and the service they offer. Communication methods such as company websites, press releases, brochures, and trade show presentations assist an organization to communicate its business offerings to potential customers. To reach its target market easily, London and Overseas Freighters designed an attractive website where customers can view all the product prices that they are currently offering (Goldszmidt, 2003:73). This way, potential customers get a chance to learn of the various shipping services that London and Overseas Freighters offers. Before deciding on which marketing communications strategies to adopt, marketing executives at London and Overseas Freighters carried out a substantial research in the target market. The aim was to identify individual customer’s needs in order to develop appropriate marketing strategies that could ensure every customer is well versed with the shipping services offered by London and Overseas Freighters.

An in-depth analysis of the target market segment assisted marketing executives at London and Overseas Freighters to understand the processes involved in buying and selling shipping services products in order to develop pricing strategies that could march these needs sought by the clients. By the time London and Overseas Freighters introduced low-price cuts to shipments destined to the Middle East and china, no other company in the UK had implemented such a pricing strategy (Vargo & Lusch, 2006:376). Therefore, the company developed and implemented a promotional mix aimed at stimulating potential clients to buy the shipment service packages that the London and Overseas Freighters had introduced into the UK maritime industry.

Positioning In Relation To Competitors

Operating a shipping company in UK is tough a business especially considering the large number of competitors and the current economic downturn. To meet this challenge, the company’s market analysts selected the right combination of promotion tools aimed at squashing the competition and giving the company a competitive edge over their rivals (Vargo & Lusch, 2006:378). The promotion mix depended solely on the shipment needs expressed by potential customers as well as the current pricing standards prevailing in the market segment.

Advertising

Through promotional advertisements, the company was able to market its products and services to potential customers describing to them how their shipping services could benefit their businesses. Their aim of advertising new product lines was to promote the company as a whole entity rather than single products and services. This served as an efficient way of popularizing the company to all potential clients in UK and its neighboring countries. Moreover, advertising helped London and Overseas Freighters to keep their existing customers updated on new developments in the industry (Bekkum, 2001:129).

To increase on their profit margin after implementing the penetration pricing strategy, London and Overseas Freighters invoked an advisement drive aimed at reducing per unit cost of each product line as well as increasing the sale of their services to their existing customers. This enabled them to communicate their product changes to their customers directly rather than depending on intermediaries to educate potential customers of their new service offerings. Therefore, through advertising they were able to increase their market share formerly commanded by major competitors in the maritime industry in UK.

Forming Customer Expectations of the Services Offered

Introducing new products into a highly competitive maritime industry in the UK necessitated London and Overseas Freighters to develop appropriate ways of forming customer expectations for the Services Offered by the company. This entailed sales promotions, public relations, and personal selling which helped the company to communicate to potential customers of the low-priced shipping services that the company had introduced to all shipments destined to Middle East and china (Jones, 2008:144). Given that the company based its pricing strategies on market analysis derived by professional marketing executives, the new prices were designed to cover almost every hipping need raised by potential customers during the process of analyzing the target market segment.

To reach more customers through direct marketing, the company employed 2,000 sales agents who were responsible of marketing their new price-cuts to potential customers in the streets of London and all major towns in the UK. Moreover, they hired billboards strategically located on all major highways in the UK to post their advertisement targeted at motorists plying these routes (Jones, 2008:143). These advisements outlined the benefits that customers would gain by shipping their products with London and Overseas Freighters. These included assured security for their shipments, full compensation in case shipments were lot before reaching their destination as well as automated methods of handling cargo to prevent breakage and damages commonly associated with manually handling of cargo from a ship. Finally but yet importantly, the company streamlined its electronic cash transfer systems to accommodate clients transacting business with internally recognized credit cards such as American Express, MasterCard, and Maestro inclusive of visa cards too. This enabled customers to transact their businesses in real-time as well as reduce the need of carrying cash to pay for shipping services.

The Impact of Marketing Communication Strategies on the Employee’s Behavior

The marketing communication strategies implemented by London and Overseas Freighters motivated employees to work harder to achieve the set marketing goals and objectives. As a way of motivating them, the company introduced commissions to be earned every time a sales agent convinces a customer to use their shipping serves. This was beside their basic pay that was inclusive of entertainment, housing, and travel allowances. Costs incurred by sales executives travelling abroad to meet with potential customers in Middle East and china were covered under the company’s marketing campaign budget (Gradus & Dijkgraaf, 2008:125). To meet high employee job satisfaction and retention rates, the company introduced a training program that equipped each employee with the relevant knowledge and skills concerning its operations in each department. This gave employees a chance to develop their career in the field they felt suited them most as a way of motivating them to achieve the set organizational goals and objectives.

Equipping employees with the relevant information regarding the core operations of the company gave employees a feeling of belonging to the organization. Finally yet importantly, employees received awards for their achievements as a way of appreciating their commitment to ensuring the realization of the company’s organizational goals and objectives. In some cases, promotions and pay rises were given to employees who showed exemplary marketing skills as well as adequate knowledge in new product management.

Conclusion

In summary, the pricing strategy had to take into account all the legal constraints expected to pose a challenge to the marketing plan endorsed by the organization’s management committee. Lastly, the main objective set for the pricing strategy was to maximize revenue collected by the company from its shipping operations.

Referencing List

Atienz, T. A. (2002). Shrewd Business Tactics. Chicago: universe

Bateson, E. G., & Hoffman, D. K. (2010). Services Marketing Concepts, Strategies, & Cases. New York: Cengage Learning.

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Socio-Technical System

The Advantages and Disadvantages of Conceptualising the Organisation as a Socio-Technical System

What Is A Socio-Technical System?

Before discussing advantages and disadvantages of applying socio-technical approach in companies, it is necessary to define it in a few words. Socio-technical system is a system which has both a material technology and a social organization (Buchanan & Huczynski, 2010). The former consist of the equipment and methods of operations used to transform raw materials into products or services; the latter includes the work structure that relates people to the technology and to each other. (Cummings, 1978) These definitions are pretty scarce and do not give us much information about the concept itself, but they are something to begin with. All other, more specific, aspects of socio-technical systems will be presented further in this essay.

Historical Background of the Idea of the Socio-Technical Systems

This concept was developed by Eric Trist and Kenneth Bamforth in mid-twentieth century. Why not earlier? Because at the beginning of the twentieth century there was no need for that kind of approach to organizational design. Ford’s assembly line and Taylor’s scientific management triggered off a chain of changes, some of which are still present in today’s business world.

Unfortunately, they did not bring only new formula for gaining much bigger profit, but also a lot of problems and undesirable side effects. Meaningless simple tasks were not much of an inspiration for workers. Strict rules, clearly defined roles and relationships inside organization killed every spur of joy and enthusiasm in employees. On the other side, technology developed at a great speed and it was not possible any more to operate in relaxed, cosy atmosphere where everyone worked as a big happy family.

Companies expanded, they needed more complex organization, but bureaucracy just did not seem as the right answer to every problem. Socio-technical design offered new solutions. This concept was not developed only to assure that employees earn their living in a more pleasant environment, but also because researchers, such as Elton Mayo, discovered human factor and became aware of its importance in the race for profit. (Ropohl, 1999)  Has the socio-technical system managed to fulfil both its purposes or failed to do it?

The Advantages of Socio-Technical Systems

This brief historical introduction implies that just the inventing of the socio-technical system was a radical and constructive move. The social aspect of this system brought many positive changes. Work is now based on collaboration of employees, not on fulfilling segmented assignments.

The feeling of joint effort in achieving goals creates more pleasant working environment. Employees find themselves doing meaningful work in an interaction with their colleagues. As the impact of formalization and standardization has been reduced, it is expected from workers to show greater knowledge and deeper understanding of what they are doing.

This leads to greater number of opportunities for enhancing skills and professional improvement. Of course, it is not something that each employee sees as an advantage. Trist himself (1981) wrote about his observations that there are individual differences in motivation pattern.

Socio-Technical System
Socio-Technical System

Some people need strict orders and defined place in company’s hierarchy or otherwise they will feel insecure and frustrated. The socio-technical design managed to overcome this problem, as members of each group occupy certain positions and have tasks to complete, but have greater freedom to do so and also have better insight in their own contribution.

Not just that there is an increase in the degree of satisfaction among employees, but also in the amount of productivity. These groups mentioned above are one of the most famous ‘products’ of socio-technical theory. They are called autonomous groups. They have not be widely accepted and applied, but they have proved to be efficient. One of the most famous cases – The Mannley Innovation is an explicit example that socio-technical systems functions well in reality, not just in theory.

Another plus for the socio-technical system is that the number of managers who occupy higher positions in hierarchy can be reduced, as focus of the control is partially in the groups themselves. This means that less money is needed for highly-educated managers whose skills must be well paid.

Also, leaders of the groups are in better position to detect problems during production process, as they have the technical knowledge that most external controllers do not have. This means that less money and time will be spent on dealing with the unexpected situations.

In my opinion, the greatest value of this system lies in the fact that it is concerned both with those who gain profit and those who create it. It is designed to meet the social and psychological needs of employees in order to increase the profitability of the work and make it all compatible with the technology in use.

Ideas of socio-technical design are not applicable only in the mining industry, oil refineries, but also in completely different segments of industry, such as textile (Trist, 1981) and even in hospitals. This can be considered as a great advantage, as this approach is broad enough to offer a suitable framework for organizing a whole range of different types of organizations.

The Disadvantages of Socio-Technical Systems

The broad framework of socio-technical system can also have a negative side. Some authors, such as Dillon (2000), claim that this system is not good enough for implementation in companies whose area of work is technology and that applying it can even cause a communication breakdown!

This sounds as a paradox, but Dillon gives a quite reasonable explanation: technology companies are changing fast, becoming more and more customer-oriented and need a usable system, so in order to achieve that they need defined sequence of steps in solving specific problems they face.

Socio-technical system cannot offer something like that. In its strongest spot lies its greatest weakness – the freedom of choice and responsibility. Not all the organizations can rely on the sound mind and decisions of their employees, sometimes the consequences are too serious and no risk is allowed.

Apart from not being applicable to all kinds of organization, there are some other negative sides of socio-technical system. One of them is the fact that it is far from being easy to create autonomous groups which will fulfil their purpose. Some of their characteristics previously mentioned as advantages can be perceived in a different way.

Task differentiation lies in the core of the autonomous groups. It refers to the extent to which the group’s task is itself autonomous forming a self-completing whole. The more autonomous the group’s task, the more differentiated its task boundary from other organizational units (Cummings, 1978). It is easy to define, but hard to accomplish. For some managers it is a great source of trouble to form groups which characteristics distinguish them from others, but not too much, as they are still part of a wider context.

If there is no balanced differentiation, socio-technical system can be not just ineffective, but also damaging for the organization. The problem lies in the fact that there are no strict rules how to form autonomous groups, because it is up to members to build their structure and up to managers to find them place in the organization. If there are no clear boundaries and connections with others groups, its members will not experience the benefit of meaningful work, as they will not be able to perceive the whole picture of the process, which is the purpose of this system.

Another problem also stems from the concept of autonomous group: task control, as defined by Cummings (1981), refers to the extent to which employees can regulate their behaviour to convert raw materials into finished products. Simply, this means that group members choose on their own work methods and sequence of work activities.

If the groups consist of specialists, this is an excellent method for dealing with the unexpected and stressful situations, because there is no need for permission for changing the working routine when the time is of great importance. But on the other hand, too much freedom cannot be given to all groups and reasons can be different. Managers may believe that the staff is qualified enough to take that responsibility, but then in the in the end it can turn out that they were wrong.

Socio-Technical System Differentiation

Same as with the task differentiation – it is quite challenging to find the balance between too much and too little freedom. Both ends of that continuum lead to inefficiency. Also, managers who control these groups have to be aware of the fact that too much interference is not desirable. They have to keep the distance and be more of guides than controllers in a usual sense. If the manager’s impact is too strong on the group then we can no more talk about the group’s autonomy.

The last, but not least important disadvantage of this system that will be mentioned here is the lack of individuality. Almost every individual strives to develop to their fullest potentials and there is less possibility for something like that when one operates as a team member. On the one hand, teamwork contributes to the high spirit of employees, but on the other it can cause a decrease in motivation of individual members.

Some of them can even feel frustrated because they cannot show their potentials. This could be a problem especially with above-average talented people who would be more helpful if they acted on their own. Also, when socio-technical system is implemented, the hierarchy is flatter, which implies that there are fewer opportunities for climbing the career ladder and it is widely known that this serves as the motivation for many of us.

Conclusion

Before giving the final thought on this subject I would like to present the summarized table from Trist’s work that shows what socio-technical system brought with it:

Old Paradigm New Paradigm
Man as the extension of the machine Man as complementary to the machine
Tall organization chart, autocratic style Flat organization chart, participative style
Competition, gamesmanship Collaboration, collegiality
Organization’s purposes only Members’ and society’s purposes also
Alienation Commitment
Low risk-taking Innovation

(Trist, 1981, Table 2-3)

This table shows that socio-technical system is more human-oriented than others. As I advocate the humanistic approach to management and organizing, I believe that it is much better than bureaucratic or scientific approach. People are not machines and although they are able to adapt to new situations, their power to do so has a limit. Once that limit is reached, consequences can be catastrophic.

Even from the profit-makers’ point of view it is not desirable to have demotivated employees who would have ran as far as they could from their work place just if they could. Socio-technical system balances needs and strivings of both. It is true that it takes a lot of effort to build this system successfully.

It largely depends on effective communication channels, qualified staff and appropriate use of technology in each sector. But before completely rejecting this organizational design one should take into consideration the fact that the socio-technical system frees the organization from restraints of bureaucracy to the content of both employees and managers. Whatever approach you decide to pursue, there will be difficulties.

Socio-technical system has changed since it was developed. Of course, it is still far from perfect, but its adaptability allows managers to customize it for their company’s needs and take the best from it. As Charles Caleb Colton said: Where we cannot invent, we might at least improve.

References

Buchanan, D. A., & Huczynski, A. (2010). Organizational Behaviour, Harlow. Financial Times Prentice Hall.

Ropohl, G. (1999). Philosophy of socio-technical systems. Techné: Research in Philosophy and Technology, 4(3), 186-194.

Trist, E. (1981). The evolution of socio-technical systems. Occasional paper, 2, 1981.

Dillon, A. (2000). Group dynamics meet cognition: combining socio-technical concepts and usability engineering in the design of information systems. In The New SocioTech (pp. 119-125). Springer London.

Cummings, T. G. (1978). Self-regulating work groups: A socio-technical synthesis. Academy of management Review, 3(3), 625-634.

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