Leadership Assignment

Leadership: It is the process in which an individual leads a group of people or an organization by influencing them with the same notion to attain a common goal. We can also define leadership as defined by Theo Haimann as “Leadership is the process by which an executive imaginatively directs, guides and influences the work of others in attaining specified goals”. The leader is at center of the group’s power structure and responsible for keeping the group together along with infusing life into it so that it can move towards its goal. Inside each every one of us there is a leader who is waiting for an opportunity to come out and lead it in an effective manner. A good leader is fully aware of his/her strengths and weaknesses. I would like to list down some of my strengths related to my personal leadership effectiveness –

Optimistic: I am highly optimistic person. I have the ability to think positive and look after the bright side of everything. It’s really important for the leader to lift the people of his/her group to the clouds instead of dragging them into mud. I seek out the positives in people and help them overcome their feelings of self-doubt which helps them keep motivated.
Confidence: Highly effective leaders know deep down inside their minds that they and their team can accomplish the work they set themselves for. Confident makes you motivated and helps you strive even in difficult times. In a group if the leader is confident about something, his followers will be too. I also possess this trait of confidence in me. I am always optimistic and confident about any work that I have to do because it helps me complete the work easily.
Self-Assessment: I believe I know my areas of strengths and weaknesses and it helps me to self-assess myself which is really important. A Leader should always be good self-judging himself and also others so that at every point of time, the leader has an idea that whatever he is doing is not wrong which would allow delegating to others who have those abilities.
Decisive: Basic duty of a leader is to make decisions. I personally believe I have that decision making quality in me. I am not afraid to make decisions and quick calls when circumstances require it. Once I make a decision I stick with it unless there is some strong particular compelling reasons for me to change it.
Supporting my Team/Group: I have worked in various teams as a leader. Be it in school or during my work term, I have always supported my team/group by making it safe to take risks, speak up or to tell the truth. Supporting your group by making this kind of environment always facilitate the group’s progress towards attaining the desired aim or goal.

Some of weaknesses include procrastination due to which sometimes I pay a lot attention to non-urgent work rather than concentrating on the urgent work. Also the compulsiveness to complete one task while having the stress of all the other tasks at the same time has led me to think unkindly about the person or the circumstance. Sometimes I get too much occupied with work that I even don’t think about my personal life. This is due to the inability to say “No” to people who ask me for any kind of help or work. I also have this problem of overthinking sometimes. I care way too much about things than normally required.

Too leverage my strengths and to develop my weaknesses the best thing can be asking people around for the input and then deciding- what areas to work on. Asking people to give genuine feedback on what they feel about my abilities and weaknesses will help move forward in the right direction. I have always listened carefully whenever someone has given me feedback and I try to work on my weaknesses. I have to stop being procrastinating which will allow me to take on urgent tasks rather than taking on something I like. This will help me complete those urgent tasks first and then proceed on to other tasks. To do this I will make a task plan stating which tasks need first attention. The issue of compulsiveness can be solved by managing equally between the tasks. Even if I have multiple tasks to work on, I will not limit myself onto solving one task first; rather I will aim on completing each of them side by side which will eliminate any kind of compulsion and the effects after. Talking about overthinking, the best way to overcome this is self-satisfaction. I usually don’t get satisfied easily with anything which creates this problem of overthinking and over looking into matters which do not even require that attention. I believe all of the action plan discussed above will help me overcome my weaknesses. To grip on my strengths I will keep on working in the same leadership style and manner. To improve and gain new skills I will set specific life goals with timelines. The goals can be designed by moving backwards in time of your life to the present month. After setting up goals and deadlines next thing is to formulate the action plan so I can commit to that and it will help me achieve those skills. I will keep on educating and improving myself in every possible way. The person who thinks he is an expert in something, has a lot more to learn. Learning never stops. I aim to be receptive to others perceptions and information I get from people I meet daily. I am keeping my self-updated with any kinds of development in my field. As John F Kennedy once said “Leadership and learning are indispensable to each other.” So always learn and grow.

There are different barriers that can come up while implementing the plan we discussed above. We always fear of overstepping our boundaries and think that the response to our initiatives will be “Mind your own business”. Some of us are even afraid to get evaluated by others because of uncertainty about what people think of us. There are challenges that come from different sources, some being external and some internal (ctb.ku.edu). External challenges usually include public criticism, financial issues, and hostility from powerful forces etc. whereas internal challenges come up from within the (leader) person. Internal challenges can include emotional intelligence which is defined as the ability to understand and manage one’s own emotions. If someone has a high degree of emotional intelligence then that personal know what their emotions are, what their emotions mean to themselves and to others, and how their emotions can affect themselves and others. To be an effective leader one should has strong understanding of his/her emotions so that emotions does not create any kind of barrier while leading a group. There are some other internal factors like impatience, lack of decision making ability etc. that can result in hampering the growth of the leader.

Values guide human actions and they are really important in understanding leadership as they explain the focus and directions of people’s actions (Katherine D, 2015). They may vary with culture but some of the values are fundamental like honesty, credibility etc. which fits all human beings uniformly. Demonstrating the values through appropriate actions enables leaders to build network and connection with their followers which helps in building the bond of trust and commitment. To satisfy followers, a leader has to connect with them and then values come into the play as values are the primary way in which that connection is made. Our values certainly influence every decision we make in our daily life. As values play such an important role, so it becomes critical to recognize, understand and evaluate these values in sound decision making. Some of the personal values driven by leadership are:

Perception of Decision: The personal value associated with a decision is the perception of considering it as successful or ineffective. As an example let’s consider a leader who thinks more about the people and environment will consider a decision to invest in community and environment in contrast to the leader who thinks about company’s annual profit will make decision that favors statistical performance. The thing that matters is value associated with the decision making.
Loyalty and Trust: If someone is loyal and trustworthy then this personal value of that person helps to remain committed and loyal with anyone that persons works for. If a group is made of members who are loyal to each other and trustworthy then that group is effective in terms of achieving the final common goal. I personally think being loyal and trustworthy has helped me get many lead roles in the organization I work. Being someone whom your management can trust can surely help that person attain leadership roles.
Vision stimulation and inspiration: If a leader has a vision setup in his mind regarding the goal of his team/group, the personal value is inspiration and motivation to others. In order to get employees passionate about what they are doing, leaders have to possess great energy so that they can spark excitement and achieve results. (Katherine D, 2015). According to Peter Ernest, CEO of Values Journey, “when a truly values-based leader ensures that his organization has an engaging process for the people to explore their personal values, as well as their teams’ and the organizations’ values, there are benefits on many levels”.

To understand the behavior of people there are few variables such as attitudes, motivations, personality, skills, knowledge, confidence, perceptions etc. The importance of a value system is that once internalized it becomes, a standard or criterion for guiding one’s action. Thus the study of leaders’ values is extremely important to the study of leadership (Bruno F.C, 2006). Personal values impact leaders in at least two ways one out of which is it acts as a perceptual filter that shapes decisions and behavior, and personal values act as a driver of leader’s methods of creating these values.

Heroic Management versus Engaged Leadership

After reading the article by Mintzberg, I have a clear understanding of the differentiation between a heroic manager and an engaged manager. Let’s first start off talking about heroic managers. To manage is to make decisions and allocate resources and it often involves analyzing and calculating. In heroic management, the managers are considered important people which are quite apart from all those who develop the products or deliver services. As these managers go higher up, they become more important part of the organization and at the “top” of the organization is the chief executive. They have a clear, deliberate and bold strategy and the chief is the one who takes the dramatic steps that drive up the share price. Everyone else implements the same. But this is the time when the problem comes because although chief embraces change, most of the other people resist it. This is the reason to favor contractors or consultants over the insiders. The rewards for increase in the share price go largely to leader and the risk taker who pays no penalty for drops in the share price. According to a recent survey, “Executive Excess 2001,” conducted during the 1990s by the Institute of Policy Studies, CEO pay rose by 570%, while profits rose by 114%, and average worker pay rose by 37%, barely ahead of inflation (Anderson S. 2001). Real leadership is often more quiet than heroic. It is about teamwork and long term goals, which builds an organization slowly and collectively.

Let us talk about Engaging Management and leadership. According to Mintzberg, in this type of leadership managers are important to the extent that they help other people be important as well. Managers understand the importance of other employees in an organization and they create engaged teams. An organization is not a vertical hierarchy rather an interacting network where effective leaders work throughout and not sit on the top. People who develop the product or deliver the services solve little problems using strategies that later merge into new initiatives. In this type of management formulation and implementation go side by side and cannot be separated. The managers involved in this type of leadership style believe in bringing out the energy that exists naturally within the people thus making it more engaging and inspiring. According to a study conducted by Gallup, just 35% of the US managers are themselves engaged while 51% are not engaged. The not engaged group costs US $77 billion to $96 billion every year through their impact on those they manage (Gallup, 2015).

I work for a multinational oil and gas company. My organization has both types of managers and the management style. I will talk about my department and the managers I deal with. My manager use engaged type of management. They provide intensive feedback and training to new employees and proactively manage the onboarding process making a positive first impression. They communicate with their staff in a clear manner. Many of us prefer on having informal conversation with our supervisors regarding performance reviews or feedback which not only helps us keep involved with the team but also helps in performing the job better and easily. The engaged managers know that they are held accountable for the performance management of their employees. When employees are not meeting expectations, these managers listen to their employees and make suggestions from the vantage point of their professional capacity that will help them overcome their problems and difficulties (Insightlink.com, 2015). Being a part of the organization and led by such managers gives me chance to be effective during my work and it keeps me motivated and confident. Engaged employees are builders of an organization.

The two types of leadership styles impact on employee morale and performance. When an employee joins an organization he/she wants to know the role and their expectations which are desired by the supervisor/manager. It helps them meet their objectives and exceed them. Engaged management with the employees help them perform at consistently high rates. This also helps them use their talents and skills in the right direction. Hence the employees work with passion and drive innovation to move the organization forward (Govleaders.org, 2015). This different leadership styles sometimes also lead to participative approaches during projects. In this the employees working on a project in a team take part in decision making which gives them a chance to develop their leadership skills as well. Managers also have to challenge employees within their areas of talent and help them to acquire the required skills and knowledge which later can be turned to their strengths.

The strategic leadership of an ethical behavior in business practices cannot be ignored. To be considered a leader in ethical business practices I believe my organization can follow the points below –

The goals of creating and sustaining ethical climates within which employees act ethically as a matter of routine should be included in the strategic leadership responsibility for business executives.
Secondary stakeholders may be viewed with more urgency by executives than primary stakeholders. The government can shut down a business in a matter of hours; it takes much longer for disgruntled customers to have such a drastic effect (Terry Thomas, 2004).
Special attention should be paid in finding and developing the best people as it involves taking ethics and character into account in the selection process.
There should be a conversation across all levels of the business where the basics of value creation, stakeholder principles and societal expectations were routinely discussed and debated.

I think organizations should start establishing new standards and best practices that everyone can enjoy, learn from and improve along the way. The new workplace is less about the business defining the individual and more about the individual defining the business. The point noted above should also be taken into account towards an ethical behavior in the business practices.

Organizational Ethics

“The Corporation” movie revolves around the notion of limited liability and corporate social responsibility. It also shows the development of corporation as a legal entity and is an attempt to assess the “personality” of the corporate person. The film is based on the argument that – since the corporation has been given the rights of a legal person, we can evaluate what type of person it is. I work for an oil and gas corporation. My organization has its own culture where everything related to health, safety, environment and production growth is taken care of. The corporation movie revolves around the concept of corporate social responsibility and I will discuss what my organization has done for the same. My organization is committed to partnering with community members and other stakeholders in the areas it operates. A long term trust is built by sharing information, consulting with stakeholders about business decisions and working collaboratively to understand their needs and expectations. Now limited liability is the type on investment in which the investor/partner of any organization cannot lose more than invested amount. Even my organization has the same notion in which there is limited liability benefit that is given to all the organization’s partners or investors. So they are not afraid to suffer with any kind of loss.

Code of ethics is a kind of policy statement or a properly framed code in which the organization forms and issues a set of guidelines to its employees to help them conduct their actions properly. My organization also has an integrity work guide stating its code of ethics. Some of them are:

Respecting each other and Environment: As my organization deals with the production of oil and gas, special concern is given to the environmental safety. My organization believes in respecting its employees, stakeholders, customers and most importantly the environment. In respect of this, the organization ensures that emergency response capability is in place and is tested for all company operations and facilities. Everyone is open to different points of view and approaches while doing things and seek to understand and value each other’s perspectives.
Confidentiality and Privacy: As any other organization, mine also respects confidentiality and safeguards intellectual property. Sensitive information outside of organization is shared only with authorized parties who have signed an appropriate confidentiality agreement.
Accuracy: Ensuring accuracy and completeness of business records helps us make informed business decisions and allows us to meet our responsibilities to our stakeholders. There is proper disposal of business records according to policy and legal requirements; no undisclosed or unrecorded amount is maintained.
Secure Work Environment: My organization believes in protecting the assets and maintaining a secure work environment. All the movement of company’s equipment, its materials and inventory is tracked and reported accordingly. The organization is responsible for the security of all its employees and workers.
Avoiding Conflicts of Interests: Trust is important to every successful business relationship. To manage the conflicts of interests my organization discloses any situation that could be perceived as potential interest conflict.
No Bribes: A direct or indirect offer of anything of value like money, gifts or advantage of any kind is prohibited. My organization complies with international anti-corruption laws even when bribery may appear to be an accepted part of local business practice. Reasonable steps are taken to avoid making indirect payments to government officials, other employees and also customers.

The code of ethics reflects about an organization and if there is any failure in code of ethics it means that there is a failure in leadership as well. An organization always tries to create and define a logical and defensible code of ethics but it’s not easy to cover all the possible scenarios. The process of identifying an ethical problem and defining the facts and resolving organizational, interpersonal and professional conflicts that arise are instrumental in giving organizations ethical leadership credibility. When a system fails to adequately address legitimate employee concerns whistleblowing may occur (ispub.com, 2015). Leaders and employees adhering to a code of ethics create an ethical organizational culture. When leaders have high ethical standards, it encourages workers in the organization to meet that same level. Ethical leadership also enhances the company’s reputation in the financial market and community (smallbusiness.chron, 2015).

Sometimes organizations face some challenges while shifting or enhancing the social responsibility. One main problem that usually comes up is growing consumer skepticism. Consumers now recognize that for many organizations, social responsibility is simply a public relations campaign in disguise. They are skeptical about the true motivation behind corporate social responsibility and are not easily convinced that a business is acting in the best interests of the community and environment (toolkit, 2015).

After filling the survey on code of ethics, I came to know about a noticeable fact that 51% of the people say their organization currently does not have a code of ethics. And 62% people lack of know-how which they feel to be a barrier in creating code of ethics. An implication for my role in my organization is to have an ethical behavior among workers in the organization that ensures that employees complete work with honesty and integrity. I use ethics to guide my behavior, also referring to the organization’s work guide that adheres to employee policies and rules while striving to meet the goals of the organization. Ethical employees also meet standards for quality in their work, which can enhance the company’s reputation and also helps in responsible development.

Summary

There is a conventional wisdom that management and leadership go hand in hand, that every manager is (or at least should be) a good leader, thus leadership in management has been taken up as a cause to be promoted, and leadership as a word has become a mantra chanted by all. One should understand his/her own strengths and weaknesses to become a successful leader. The strengths should be changed to skills and the weaknesses should become strengths. I have learnt that to be a successful leader, one should have the ability to delegate and it’s also important to trust your team with sane vision and goal which will eventually help to take progress to the next stage. I have also learnt to be optimistic, confident and decisive. Personal values and ethics guide leadership and human actions and they are really important in understanding leadership as they explain the focus and directions of people’s actions. Talking about Heroic and Engaged management I learnt that a proper blend of both kinds of leadership and management style can help in getting out the best from the employees. They have an impact on employee’s morale and performance; implementing these styles properly can not only help employees give their best but also help them exceed their objectives. Heroic leaders set an example of discipline whereas the engaged keeps the morals of the team high and keeps the team members cohesive. While working in a team, one should listen to the ideas or point of views of the other team members. Although different arguments might lead towards conflict, but a real team leader listens to all the members unbiased and then makes a final decision which is favorable for the whole team. I have learnt that emotions also control the style of leadership. That is why it is worthy to keep a happy environment and a positive attitude in the team as well as in personal life.

Talking about the code of ethics, it is really important for every business as it guides all managerial decisions and is common framework upon which all decisions are taken. It also helps in creating a cohesive understanding within an organization and also with stakeholders and customers. Code of ethics is used by many companies to prohibit any inappropriate employee behavior which compromises company’s policies and standards. Code of ethics can help employees understand what inappropriate actions are and what they are accountable for. Not only this, code of ethics build trust between the organization and its employees. Let’s now discuss the barriers towards more corporate socially responsible behavior. The common one being Lack of stakeholder awareness which is due to the lack of ethical awareness that keeps the stakeholders uninformed about CSR implementation. Also sometimes there are financial constraints due to lack of financial support from the upper level management. Due to this organizational managers find that implementing CSR does not fit their budget. Sometimes company culture also becomes the barrier as some organizations rely on old company culture and are resistant to new strategies (Duarte F, 2015).

References

Ctb.ku.edu,. ‘Chapter 13. Orienting Ideas In Leadership Section 6. Recognizing The Challenges Of Leadership Main Section Community Tool Box’. N.p., 2015. Web. Sept. 2015

Katherine D. (2015). Values Based Leadership – Valparaiso University’. N.p., 2015. Web. Sept. 2015.

Bruno F.C (2006). Personal Values and Leadership Effectiveness.

Anderson, J. Cavanagh, C. Hartman and B. Leondar-Wright, “Executive Excess 2001” (Washington, D.C: Institute for Policy Studies, 2001), 1

Gallup (2015). Gallup, Inc. ‘Only 35% Of U.S. Managers Are Engaged In Their Jobs’. Gallup.com. N.p., 2015. Web. 2015.

Insightlink.com, ‘The Nine Habits Of Highly Engaged Managers Insightlink Communications’. N.p., 2015. Web. 2015.

Duarte, F.P.; Rahman, S. Perceptions of corporate social responsibility by Bangladeshi managers: An exploratory study. Int. Rev. Bus. Res. Pap. 2010, 6, 119–136.

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Effective Business Communication

Real effectiveness in business can only be achieved when there is an efficient form of communication between employers, workers, clients and associates. Communication in business is used for swapping information, increasing efficiency, coordination and communication, decision making, formulating and executing plans and improving relationships with external parties. Hence, organizations where there is a seamless and unobstructed exchange of goals, objectives, and ideas in internal and external communication are the ones which prosper the most.

This exchange of information, however, is a form of art and requires a great amount of deliberation. Deficient communication within the company and with the outside world lead to poor performance. In the corporate world it is best to communicate ideas in a way in which they cannot be held against you. The exchange of information should be clear and fathomable, but should all so be somewhat evasive providing an opportunity of leeway.

When it comes to the professional world, it is better to speak and write tentatively and make statements which give room for error, rather than stating opinions and facts in a way, which give no space for denial or clarifications later on, in case of there being any fallacies in the prior stated words.

It is better to use an impersonal passive sort of approach in communication as it highlights the object of the message, yet does not draw as much attention to the correspondent. It is better to use vague writing in touchy situations where there is a blurred line between actualities and claims.

Such form of communication softens the tone of the language and makes it more persuasive. The addressee is more likely to show consent to the contention if the communicator is subtle and less insistent in delivering his ideas.Writing or speech lacking in tentativeness can be harsh and result in avoidance of the actual purpose of business communication, which is the smooth and persuasive conveyance of information.

Tentative language can be acquired by use of limiting words, modal verbs and hedging. Modal verbs are auxiliary verbs which indicate the mood or tone of the sentence, and provide room foruncertainty. They should be used carefully when dealing with official communications.Limiting words indicate the likelihood of something happening. They show the possibility of something happening, but do not confirm to it with entire certainty.

The purpose of all of which is to cushion the impact of the words which you are trying to convey giving, more room later on for denial or modifications. This use of tentative terms is suitable in making assertions that show as much evidence of accuracy as present in reality, and to avoid making assertions which may necessarily not be entirely true. This also helps in avoiding any form of opposition which may arise in case of a false claim, by the receiver picking on the initialcertainty in regards to the authenticity of the words.

Barack Obama, president of the United States, running one of the greatest nations of the world, a businessman of his own sorts on a late night TV show compared his poor bowling abilities to the Special Olympics(Business Communication: In Person, In Print, Online: Amy Newman, Scot Ober). What we see here is an example of lack of tentative language. The president first off could have drawn a better analogy, and if this was the most accurate comparison he could find, he could have stated it in a more subtle sort of way, covering the stringency of the meaning by using vague and tentative terms, not claiming to have the conclusive word on the topic, nor making any staunch and definite comparisons.

The result of the President’s verbal faux pas it seems to be, was that he had to call the chair of the board of the Special Olympics and apologize for his seemingly insensitive words. All of this due to lack of proper cushioning and adequate discretion on part of the President in delivering his notion. Thus extra care must be taken when referring to or dealing with handicapped. In the world of business where competitors and the press are waiting like scavengers to pick on your words it is best to use as much cushioning as possible in saying your piece.

Head of HR Management in Yahoo sent a memo to all employees in the not so distant past telling them that commuting or working from home would soon no longer be an option from them, and those who continue to wish to work this way would have to quit or clearly risk being fired. The harsh terminology used in this inefficiently conducted memo is evidence of why it resulted in a fervently adverse reaction on parts of the employees. First of the memo failed to give any staunch motives for this abrupt new policy. Furthermore, the lack of attempts, at dampening the impact of the new program, and trying to cushion the outcomes of what may happen if employees failed to meet with the new regime, make it blatant that the proposal would backfire on the company, which it did.

Thus we can see what happens when there is an absence of tentative language in communication within businesses. The employees were rightfully upset and there was a lot of bad water, all of this owing to the communication fallacy of just one manager. Had he used a better and more cautious approach in delivering the news, the employees would have accepted the new policy with open arms.

Tentative language gives room for opinions and change. It provides the addressee with an opportunity to add to what is being said. It makes the communicator appear more cautious and open for improvement. The recipient seems to have some room to add to the initial argument if the speaker or writer uses tentative language. This improves the exchange of ideas and removes any barriers which may exist between the two parties allowing an effortless exchange of thoughts and objectives.

Conclusion

Thus we can see the importance of effectual communication. Those people who cannot communicate effectively will find it difficult to beemployed, to function well and earn promotions in their jobs. If they don’t employ essential communication techniques, and continue making blunders which are bound to arise from lack of important practices such as that of using tentativeness. We can see now that caution in writing and employing the use of vague statements which give room for alteration are necessary and lead to better transfer of thoughts.

References

Judd, A., McElroy, J. and Baker, P. (2014). BC teachers’ strike: Tentative deal reached between BCTF and government. Global News

Enterprises, L. (2014). Metro, drivers and mechanics reach tentative deal on contract : News

The Globe and Mail, (2014). B.C.’s teachers are the losers in tentative deal

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Business Management Strategies

W H Smith is a company based in the United Kingdom and is one of the leading retail groups that specialize in selling stationary, magazines, books, entertainment products, and other impulse products. Its target market is travelers in places such as airports and train stations in addition to workplaces and hospitals. The company has grown over the years and has managed to open more branches all over Europe and internationally.

Porter’s Five Forces Analysis

The porter’s five forces analysis is mainly used to analyze the competition levels of an industry as well as the growth of strategic business developments. This analysis can be used to determine the overall profitability of a company, which marks a company’s success in its respective industry. The five forces are threat of new entrants, threat of substitute products or services, bargaining power of customers, bargaining power of suppliers, and the intensity of competitive rivalry (Jones & Hill, 2008, p. 45). Threat of new entrants refers to the introduction of new firms or companies into an industry that yields very high profits. Such markets attract new players into the industry that will in turn lead to lower profitability for the existing companies in that industry. Since new entrants will want to tap into the profits of the industry, they will tend to offer their products and services at a cheaper rate to attract more customers. Consequently, this will affect the whole industry, since the new competition will force all the companies in the industry to change their strategies in order to continue making profits (Jones & Hill, 2008, p.46). Therefore, these industries have to have certain barriers to ensure that few companies that enter are performing and the non-performing ones are unable to survive in the industry.

On the other hand, threat of substitute products or services refers to the different alternatives in the market apart from the commonly known products. Existence of such alternatives in a market is more likely to persuade customers to switch to such products or services with regard to their availability and suitability. Customer shift to a competitor’s products or services will mean that, a certain product will be less used at the expense of a new or better substitute (Jones & Hill, 2008, p. 46). The depreciation in the quality or the substandard nature of some products is the main reason for the switching to alternative products in an industry.

Apart from that, bargaining power of customers is also one of Porter’s five forces. This refers to the power that the customers have over a company on their products and services. This means that if a large group of buyers come together and demand a reduction in prices on particular products, then the company will be forced to make that decision due to customer pressure (Jones & Hill, 2008, p. 46). Such pressure is very high if there are many alternatives in the market in question, resulting in higher buyer power. Customer pressure increases the bargaining power of customers since they can put a company under immense pressure, when it comes to pricing of products.

Bargaining power of suppliers is another of the porter’s five forces. It involves supplier power, when there are few substitutes for raw materials, labor, or even components in a particular industry. Suppliers may possess power over a company if the resources they supply are unique and hard to get. This means that the company will have to heed to the demands of the supplier if they are to receive such resources to continue their production. Suppliers, hence, may be able to charge high prices for their products as well as choose which firms to work with due to supplier’s monopolistic nature (Jones & Hill, 2008, p. 48).

Lastly, intensity of competitive rivalry is the last of the Porter’s five forces. In any industry, the intensity of competition determines the success of the different companies in that particular industry. Firms, therefore, have to engage in practices that ensure that they have a competitive edge over their rivals (Jones & Hill, 2008, p. 49). This means that the industry will be more competitive, if more companies invest in advertising and other innovative ways, in order to attract the highest number of customers in a market, which has very many substitutes.

W H Smith’s Competitive Position

W H Smith is a competitive company, since it has diversified its retail stores and opened up various stores all over the country. In the travel sector for instance, the company was able to record high profits even though passenger numbers were small. This means that the stores in the travel sector of the company were able to sell more even in difficult economic conditions. The introduction of new businesses by the company ensured that the sales in travel grew significantly. Innovative strategies such as the rolling out of self-service tills in airside units led to increased customer numbers as well as reducing the management costs for the company. This made the company able to save on costs and use the funds to improve other facilities enabling increase in customer satisfaction.

With competition in the high street sales on the increase, the company has experienced a hard time in improving the sales in the market. It has, however, put in place measures to ensure that customers can have newer products in the market. These retailers in supermarkets and online platforms will ensure that the company is able to provide services to their customers with ease and at comfort, while undertaking their normal daily activities such as, browsing a computer at home, or doing shopping at a supermarket.

Difficulties in Utilizing the Porter’s Five Forces Analysis in Practice

The porter’s five forces analysis is a good tool that may be utilized by many companies, but may only be important for new companies planning to enter a new market. This analysis provides very few and weak links between the internal and external environments of a company, even though the two go hand in hand. This is because both environments play a role in the competitive forces of the company. Therefore, a company may be incapacitated in identifying the impacts that the relationship may have on the competition in the market. The strengths of certain forces are described by Porter’s model relatively, and may have different interpretations by different companies in the different industries (Meir, 2009, p. 36). Therefore, a company will require more analysis to identify any underlying conditions that may make either the buyer or supplier have more or less power.

Ansoff’s Growth Strategy Matrix

This strategy involves the marketing strategies that a company may use to determine both product and market growth. The four alternatives in marketing strategies include market penetration, product development, market development, and diversification. These strategies can be used to ensure that the company employs the right tactics to stay relevant in a competitive industry as well as maximize its profits (Maria, Grandinetti, & Bernardo, 2012, p. 72).

Firstly, market penetration involves methods that will enable a company to get its products into a market. It should be noted, that this is the lowest risk strategy. This may involve promotion of the product, creation of an extensive distribution process to reach a wider consumer area, and putting attractive pricing to lure more customers into purchasing the company’s products. Coming up with innovative ways of increasing the usage of the product will also, help a company improve its sales in an established market (Maria, Grandinetti, & Bernardo, 2012, p. 72).

Product development on the other hand involves the introduction of newer products or modifying the products to suit the customers’ customized needs. Modifying a product in the existing market by changing its outlook, improving both its quality and performance, will create a more appealing product in the market (Maria, Grandinetti, & Bernardo, 2012, p. 73). This will attract more customers into buying the product, therefore, increasing the company’s sales.

Apart from that, market development is another marketing strategy in the Ansoff matrix. This involves the company venturing into new markets to increase its client base. Opening up different branches at different locations will enable the company to reach new customers in areas that the product was not available. Such new markets require a proper strategy that will enable the product attract more people. Selling through the internet or mail order will make work easier for the company, since they will reach a vast number of customers who can access their products online (Maria, Grandinetti, & Bernardo, 2012, p.75).

Finally, the last strategy is diversification of both the market and the product. This means that the company will be producing a new product that will be sold to a totally new market. This requires a lot of research to ensure that the move leads to success. Since it involves two unknowns, the risks involved are very high and the company will have to assess these risks and understand the consequence of such a decision (Maria, Grandinetti, & Bernardo, 2012, p. 77). A company may decide to diversify into the same industry that is less risky or join another completely different industry that has higher risks. Therefore, the company should have a balance between the risk and the reward to ensure that the company gets the highest rewards from the diversification.

Analyzing W H Smith’s Business Objectives Using Ansoff’s Matrix

Travel in W H Smith focuses on delivering value to shareholders through growth in the different sectors it is involved in. This means that the company aims at market development by looking for new contracts and trialing new formats that will improve customer’s productivity. Apart from that, the company has incorporated a product development strategy, with the introduction of newer products that improve efficiency such as the self-service tills. Such new products increase both customer numbers and the average profits of the company.

The high street plan for the company plays a huge role in not only cutting its costs, but also maintaining its presence in core categories of the market. The company is able to develop the market by continued brand awareness and efficient advertising on television and other forms of media. Additionally, introduction of new products such as the Gadget shop products, which is part of the new gifting ranges, will increase the client base since it aims at reaching more customers.

Difficulties of Utilizing Ansoff’s Model in Practice

The Ansoff’s matrix can only be used sparingly because different companies interpret the matrix with respect to their circumstances. This means that it is impossible for it to be used as the basic standard tool for all companies analyzing their marketing strategies. It requires each company to analyze their products well before deciding on a strategy, in order for it to reduce risks that may lead to its demise. Apart from that, risk management is highly required for any decision in the company that involves the product or market. Since the matrix does not put into account the nature of a company, it is possible for a company to undertake a certain risk that may be disastrous hence the need for extensive research, which the matrix does not produce (Maria, Grandinetti, & Bernardo, 2012, p.79).

PESTEL Analysis for W H Smith

The PESTEL analysis aims at looking at external factors that a company is involved with when undergoing a market research or undertaking strategic analysis. It enables the company to understand its position in the market, its growth or decline and its overall potential. The PESTEL analysis involves different factors, which include political factors, economic factors, social factors, technological factors, environmental factors and legal factors. W H Smith has various external factors that affect its overall performance.

Firstly, political factors influence many businesses in a country. In the United Kingdom, the government allows proper competition by giving fair allocation of opportunities for companies that may wish to indulge in different businesses. W H Smith has benefited from this since it has been able to set up retail stores in different travel points such as airports and train stations without many barriers. The proper infrastructure such as hospitals and airports set up by the government has provided different opportunities for the company and enabled it to expand over various sectors.

Secondly, economic factors also have had an effect on W H Smith as a company. The low inflation rates and economic growth of the U.K. in general has enabled the company to thrive. Even though the economic times have had several changes over the year, the company was able to increase its operational profits by 8% within a year. This increase in the company’s profits under the given circumstances shows the company’s capabilities at such times which show the planning put in place and the strategies to ensure a balance in the economies of scale. The ability of the U.K. to attract visitors in major transport lines also played a huge role in the success of the company over the same period.

Thirdly, the social factors in the country also impacted the company. Since trends in social factors are able to affect demands for certain products, the company was able to adapt to new demands of the customers. New products and services were introduced to various parts of the area that were aimed at serving customers more efficient. Additionally, a growing number of travelers in the country provided the right platform for the company to develop over the years. W H Smith has been able to reach more people through its initiatives which have eventually benefited the company. Use of the Internet has increased exponentially and the company has taken advantage of this by sensitizing the society on the Internet. This has grown its market base significantly and increased sales.

Business_Management_Strategies_Dissertations

Moreover, technology also influenced the strategic decisions that the company had to undertake, with the company having to introduce automation in some parts of the retail stores such as the self-service tills. Apart from that, the introduction of e-commerce and mail order enabled the company to increase its online presence, since a huge number of people are always on the internet (Sekhar, 2009, p. 52).

Environmental factors that may affect the number of travelers visiting train stations and airports also affected the company at one point. Apart from that, the products that W H Smith sells to its customers are recyclable. This means that the products are environment friendly and does not in any way harm the environment. Such green products are approved by standardizing bodies hence are fit to be used by the different customers.

Lastly, legal factors are the final element in the PESTEL analysis that looks at the laws that govern the operation of companies. The laws that are in place enable W H Smith to operate within an acceptable range, since the company adheres to all the possible laws, which means that the company is able to monitor its costs, demand for the products they sell, and their overall operations.

Evaluation of W H Smith’s Current Position Using the SAF Model

W H Smith has developed and grown over the year and has been able to open up new branches in addition to the already existing 561 travel units and 612 high street stores. Through these various stores, it has made it possible to employ over 16000 employees who manage the running of these retail stores. Using the SAF model which consists of suitability, acceptability and feasibility we can evaluate the company’s current position.

Suitability in the company’s case can be seen with the strategies that it has put in place to address the different issues that the company in the industry. Furthermore, it has also begun e-commerce projects that will enable customers to see and order their products online and be able to purchase them from the comfort of their homes (Jones & Hill, 2008, p. 54). In addition, the mail order service it has begun will facilitate customers to place orders and then receive the products through the mail delivery process. All these are aimed at cementing the company’s position as a leader in this sector, and enabling it to gain access to more customers, therefore, increasing their market share in the U.K. and worldwide.

With regard to acceptability, the company has been able to manage their risks and returns in such a way that it can gain profits in the different ventures it has taken part in. W H Smith is in a position where it has an advantage over its competitors, since it has put its attention to growth drivers that will allow the expansion of the company. Diversification has also helped the retail stores to tap into new markets and gain a huge client base in this industry, with the development of more stores in both the travel units and the high street stores. All these factors have aided the company to develop significantly, and build its brand image, therefore, creating a huge force in this industry.

Lastly, feasibility in the company’s case refers to the resources that are required to implement the different objectives of the company. Through their development strategies the company is able to cope with the different challenges that it has faced in recent times. A significant number of problems affect the company such as, economic changes that affect the country, as well as competition in high street stores by other companies. The company has put in place measures to counter these problems by introducing innovative ways that aim at improving service delivery, efficiency, and sustainability in the company.

References

Jones, G., & Hill, C. (2008). Essentials of Strategic Management. Cengage Learning.

Maria, E. D., Grandinetti, R., & Bernardo, B. D. (2012). Exploring Knowledge-Intensive

Business Services: Knowledge Management Strategies. Palgrave Macmillan.

Meir, R. (2009). Knowledge Management Strategies for Business Development. IGI Global.

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International Intercultural

International Intercultural Management

The intercultural dinner is an interesting concept which helps gain insights into the various aspects of a culture. It is important to understand food and life style as well as personality aspects in order to form a better understanding of the culture of a nation (Hamel, 2007). I met all of the group members for dinner and all of us brought a dish belonging to different cultures. I brought Hummus which is a popular dip made from smashed chickpeas and tahini with other seasonings. China and Saudi Arabia were other two predominant cultures which were presented at the dinner. The learning and outcomes of this dinner was that culture is an extremely important aspect which impact management as well. As we discussed cultures, we were able to understand how history, lifestyle and exposure to globalization impacts them.

Culture of Iraq

Iraq is located in the Middle East Asia. Iraq is predominantly an Islamic country (A Country Study: Iraq, 2010). This makes it important to understand the laws of Islam and the preaching’s of Quran or Prophet Mohammad (Abdul-Jabar, 2002). Prophet Mohammed has been a very popular Prophet not only among the Muslims or the followers of Islam but also among several religion researchers, philosophers, diplomats and other people. Their culture and thought on food is that food is a blessing given by God. They believe in rich food which is enriched with nutrients and contains fruits, nuts and even meat. The teachings of Prophet led to his popularity growing from time to time and there are nations like Arabia, Pakistan and India where Islam is popularly preached and forms one of the main religions (Abdul-Jabar, 2002). Prophet Mohammed is as popular as Jesus Christ in America and United Kingdom. Similarly the food and cuisine of Iraq is also popular all around India, Pakistan, Arabia and other Eastern countries. Though the economy of Iraq is not very stable, it has a very rich culture (A Country Study: Iraq, 2010).

The revelations of God, received by Prophet Mohammad included the will of God and the principle of submission to God’s will (Musharraf, 2012). Prophet Mohammad narrated these principles to the people. The revelations of God include the Apostle of Peace which propagates love and brotherhood (Abdul-Jabar, 2002). So the people of Iraq believe in being good hosts and serving food generously to people that visit them. This is also an important part of celebrations of festivals like Id and Bakrid. Considerations of prestige and family strength are important values of the culture of Iraq (A Country Study: Iraq, 2010).

In Medina there were eight different tribes which had several conflicts among themselves. These led to them inviting Prophet Mohammed as a neutral negotiator and resolve these conflicts (Musharraf, 2012). So the food habits and lifestyle varies significantly among different sub groups in Iraq itself (A Country Study: Iraq, 2010).

Iraq does not have political stability and such elements like instable political situation, poor economic conditions and war has led to deterioration of life and business, but their culture still remains extremely rich (A Country Study: Iraq, 2010). The texts of the “Quran” play an important role in formation of the texts of several other religions including Judaism (Abdul-Jabar, 2002). It has also greatly influenced middle-eastern ethics and common beliefs as it is one of the oldest religions practiced (Abdul-Jabar, 2002).

Comparison of culture of Iraq with China and Saudi Arabia

Culture refers to the values and lifestyle adapted by a society. The post-globalization era has been a time of merging of cultures and this leads to one culture impacting another and understanding these influences is extremely important in the present times as they impact the management of human resources in multi-national corporations (Dauber, 2012). Culture refers to the several lifestyle elements like food, dressing, sports, entertainment and several such factors along with the values like uncertainty tolerance or emotional involvement and independence, openness and several other faiths (Greenfeld, 2013). Culture is shaped through the interaction of people and their ideas as well as ideologies (Schein, 2004).

The comparison of cultures of these countries has been based on two models – one being Hofstede’s cultural framework and another being Hall’s cross cultural framework. These models help understand the similarities and differences between the cultures of Iraq, China and Saudi Arabia.

Hofstede’s cultural framework

The culture of Iraq does have several similarities with that of Saudi Arabia but is very distinct from that of China. Hofstede’s cultural framework helps evaluate cultures based on five cultural and behavioural parameters as explained below.

Fig 1: Comparison of culture of Iraq with the cultures of China and Saudi Arabia, based on Hofstede’s cultural framework

Power Distance

This refers to the extent of importance and influence of hierarchical relations in a culture. It reflects the degree of unequal allocation of power and psychological detachment that is accepted in a country. Power distance in China is high (National culture – Iraq, n.d.). Subordinate-superior relationship tends to be polarized and hierarchical ranks are followed strictly. Power distance is extremely high in Saudi Arabia and Iraq (National culture – Iraq, n.d.). Inherent inequalities, centralization of decision making and bureaucratic hierarchy marks the culture of Saudi Arabia and Iraq.

Uncertainty avoidance

Uncertainty avoidance refers to the risk appetite of the culture of a country. Hofstede refers this as “what is different, is dangerous” (Khastaret, et.al., 2011). China is low on uncertainty avoidance (National culture – Iraq, n.d.). Adherence to laws and rules in China are flexible and adapted on situational basis (Country Profile: China, 2008). Iraq and Saudi Arabia are very high on uncertainty avoidance (National culture – Iraq, n.d.). The rules play an important role in all aspects of life. People of Iraq and Saudi Arabia are bound to abide by the stringent codes of belief based on Islamic preaching. They are intolerant of modernisation and influence of western cultures.

Individualism vs collectivism

This dimension reflects the relative importance that a company places on interests of an individual or a group (Ryh-Song and Lawrence, 1995). China, Iraq and Saudi Arabia are collectivistic society (National culture – Iraq, n.d.). Individualism is found to be very low because the cultures are relationship driven. In China relationship needs to develop before doing business (Hatch, 1993). The traditional root of Chinese culture is Confucianism. Confucianism focuses on long term orientation, thrift and perseverance (Ryh-Song and Lawrence, 1995).

Masculinity vs femininity

This dimension reflects the importance of the level of dominance of masculine values for achievement of the organizational goals. Chinese, Iraq and Saudi Arabia cultures have more of Masculinity aspects than femininity (National culture – Iraq, n.d.). Chinese often prioritise work over family and leisure (Country Profile: China 2008). In Iraq and Saudi Arabia, the leaders in the organisation are decisive and assertive. Conflicts are often resolved by confrontation.

Long term orientation

The Chinese culture has a high long term orientation and Iraq and Saudi has a short term orientation (National culture – Iraq, n.d.). The Chinese are comparatively more employer oriented and the employee retention rate in China is higher in comparison to other countries (Bu and Xu, 2000). Cultures of Iraq and Saudi Arabia immensely respect and follow traditions. Propensity to save is low as Shariah law and Islamic banking does not encourage savings (Aggarwal and Tarik, 2000).

Hall’s Cross Cultural Model

Hall presents a popular cross cultural framework and when we apply that to these 3 cultures, they have been found to be extremely compatible. The Hall’s model is based on cultural awareness, cultural adaptation and effective management of the elements of personal, social and cultural aspects in present times of multiculturalism (Schneider and Barsoux, 2003).

Cultural Awareness

Awareness is high in Iraq and Saudi Arabia when compared to China. But in present times technology enables people everywhere to find information easily.

Cultural Adaptation

The model explains that multiculturalism is an important element of present times and seamless communication and technology promote it and the same can be observed in various cultural texts as well and in present times of globalization (Schneider and Barsoux, 2003). The adaptation of these elements is based on cultural adaptation, which is high in China as compared to Iraq and Saudi Arabia.

Management of Cross Cultures

This can help create effectiveness and better competency (Schneider and Barsoux, 2003). It can help bring teams together and also create an environment that is suitable for work and helps create several competencies. It also helps ensure that there be effective balance between operational and strategic level planning and organizing.

Comparison of leadership styles in these countries

Leadership behaviour in organizations is demonstrated through taking initiatives, considering broader roles and helping the organization achieve better progress through focus on improving the overall organizational performance (Pillai, et.al., 1999). This is evident in China when compared to that of Iraq and Saudi Arabia.

Leadership in Iraq and Saudi Arabia

In case of Iraq and Saudi Arabia, senior levels of management focus on overall performance of the organization and its competitive position. In order to create effective business development, leaders focus on operational efficiency as a whole and deal with managers who actually communicate with the team members. Leaders at the senior management levels set goals and targets which help in ensuring that the organization is able to form the common vision (Hofstede, et.al., 2002).

Authoritative style of leadership is focused on the creation of authority. The leader is mostly expressing the authority and passing the judgment during using such style leadership. The management communication follows a top down approach (Zaharna, 1995). This is evident in the day to day organizational activities in several of the local organizations. This is evident in Iraq and Saudi Arabia where in the rules and regulations are extremely strict and stringent. It is important that the authoritative style of leadership be based on mutual understanding and acceptance in order to avoid conflicts and retaliation (Smith, et.al., 2007).

In case of Iraq and Saudi Arabia, religion and political systems have a great impact on the leadership style used in these countries (Smith, et.al., 2007). It forms an essential impact on the styles in which the government and the public sector is managed. It also impacts the various business ideologies and set of ethics followed in these organizations (Smith, et.al., 2007).

The culture of Saudi Arabia and Iraq is based on the preaching of Prophet Mohammed. In discussing the leadership style of Saudi Arabia, it would be relevant to evaluate the leadership style of Prophet Muhammad. Prophet Muhammad can be considered as a transformational leader (Musharraf, 2012). His teachings and public speeches have inspired thousands of people to do things for greater good of mankind (Musharraf, 2012).

Intellectual Stimulation: Prophet Muhammad not only inspired them for good deed and good thought, he also made is followers aware of following the right path. He increases awareness about what is right and good.

Individualized Consideration: the followers of Prophet Muhammad were trained by Prophet himself (Musharraf, 2012). He guided them to become leaders in their own ways.

Inspirational Motivation: He motivated his followers to spread Islam fearlessly.

Charisma or idealized influence: Prophet Muhammad can be considered an ethical charismatic leader. He had a unique vision for his followers and a long run perspective. His high ethical and moral values, forgiving nature and optimism for future showed direction to the followers (Musharraf, 2012).

Leadership in China

A futuristic measure is ensured in case of leadership in China. It assists the organization to take futuristic decisions and helps in implementation of the firms’ long term plans or strategies (Management in the People’s Republic of China in comparison with the West: Convergence, divergence or crossvergence?, 1997). Mostly, all organizations follow some core values according to their business strategies to serve the customers with better products and services (Hirst & Thompson, 1996). The mission and vision creates an alignment with the strategic planning of the organization. These values impact the leadership as the leaders of the organization or the top management form these and ensure that they are effectively passed on to the subordinates (Management in the People’s Republic of China in comparison with the West: Convergence, divergence or crossvergence?, 1997). But this is not the case in present day multinational organizations as they belong to globalized environments. In this way the leadership styles used in organizations in China are compatible with the trends in leadership in several of the globalized countries and this helps them take benefit or advantage of globalization to propagate economic development. Leadership in China has been considered as effective and has been used to benchmark leadership strategies in several of the multinational firms all around the world (Management in the People’s Republic of China in comparison with the West: Convergence, divergence or convergence? 1997).

Future Trends

Transformational leaders are those who influence others based on the usage of participation with all of the other members of the team. In this way they are able to accept the leader as a part of the team (Wade, 2013). This form of leadership is coming up rapidly in all of the countries including Iraq, Saudi Arabia and China. In case of democratic leadership, it is crucial that there be consideration of opinions of everybody. A leader requires ensuring that things are understood by the people who are to actually implement them. He should be very careful about the client requirements as well as the need of the project (Wade, 2013). This is not consistent with the cultures of all the three countries and may not be adopted in the near future.

Conclusion

To conclude, culture forms an extremely important part of all nations and the global culture as well (Albala, Ken, 2011). Culture is an extremely important factor that affects the business environment of an international business. It is important for present day organizations, especially multinational organizations to reform their policies in order to suit the present day need of these organizations. It is important that the business environment is well researched and cultural change adaptation strategies are formed for the purpose of creating better synchronization with the cultural changes. It is extremely important that there be effective balance among the culture and the dynamic environment around the world in the present times of globalization. It is also important that the focus on the required changes in organizational environments be made slow and steady in order to ensure smooth transitions.

References

A Country Study: Iraq, 2010, Federal research division, Library of congress.

Country Profile: China, 2008, Federal research division, Library of congress.

Aggarwal, R. K. and Tarik, Y., 2000, Islamic Banks and Investment Financing, Journal of Money, Banking and Credit, 32 (1), pp. 93-120

Abdul-Jabar, F., 2002, Ayatollahs, Sufis and Ideologues: State, Religion and Social Movements in Iraq, Saqi Books

Albala, K., 2011, Food Cultures of the World Encyclopedia, ABC-CLIO, pp. 251–252

Bu, N. and Xu, J., 2000, Work-related attitudes among Chinese employees vis-a-vis “American”

and “Japanese” management models. In M. Warner (Ed.), Changing workplace relations in the

Chinese economy: Beyond the iron rice bowl (pp. 185-204). London: Macmillan

Dauber, D., Fink, G. and Yolles, M., 2012, A Configuration Model of Organizational Culture. Sage publications.

Greenfeld, L., 2013, Mind, Modernity, Madness: The Impact of Culture on Human Experience, Harvard University Press

Schein, E., 2004, Organizational culture and leadership, 3rd ed. San Francisco, Jossey-Bass.

Khastar, H., Kalhorian, R., Khalouei, G.A. & Maleki, M., 2011. Levels of Analysis and Hofstede’s Theory of Cultural Differences: The Place of Ethnic Culture in Organizations. [online] Paper presented at International Conference on Financial Management and Economics. IPEDR, 11. IACSIT Press, Singapore.

Hatch, M.J., 1993, The Dynamics of Organizational Culture. Academy of Management Review, 18 (4).

Hofstede, G., Van Deusen, C.A., Mueller, C.B. and Charles, T.A., 2002, What Goals Do Business Leaders Pursue? A Study in Fifteen Countries Journal Of International Business Studies, 33 (4), pp. 785-803

Musharraf. H. M., 2012, The Independent. Muhammad (SM): Transformational Leadership.

Management in the People’s Republic of China in comparison with the West: Convergence,

divergence or crossvergence?, 1997, Speech at the Centre for Asia-Pacific Initiatives Forum: Chinese

Interpretation of Western Institutions. University of Victoria. Victoria, B.C.

National culture – Iraq, n.d., The Hofstede Centre.

Pillai, R., Scandura, T.A. and William, E.A., 1999, Leadership – Similarities and differences accross Cultures, Journal Of International Business Studies, 30 (4), pp. 763-779

Ryh-Song, Y. and Lawrence, J. J., 1995, Individualism and Confucian Dynamism: A Note On Hofstede’s Cultural Root To Economic Growth, Journal of International Business Studies, 26 (3), pp. 655-669

Schneider, S.C. and Barsoux, J.L., 2003, Managing across Cultures, Financial Times Prentice Hall

Smith, P.B., Achoui, M. and Harb, C., 2007, Unity and Diversity in Arab Managerial Styles, SAGE Publications

Wade, L., 2013, Hook up culture: College kids can handle it. LA Times.

Zaharna, R.S., 1995, Understanding cultural preferences of Arab communication pattern, Public Relations Review, 21 (3), pp. 241-255

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Sustainability IKEA

The popularity of the issue of sustainability has been growing in the past several decades and it now represents a priority point for the strategic planning and operations of companies, organizations, but also for communities and whole countries (Bell and Morse, 2008). This report addresses one particular area of sustainability from a business perspective and that is the area of monitoring and evaluation.

In order to enable this, the report refers to the theory behind the concept of monitoring systems, indicators and most importantly, the characteristics and features that these systems and indicators need to possess in order to be successful and effective.

To enable a more detailed analysis, this specific sustainability area has been overviewed by applying the selected theory to practice. IKEA has been chosen as the company of interest of this report, and its sustainability efforts, accomplishments and plans have been considered from the perspective of the three sustainability dimensions.

To furthermore focus the research and analysis conducted in this report, one specific dimension of sustainability, the environmental one, has been chosen and reviewed in more depth. In relation to this, an identification and selection of relevant indicators has been conducted and these indicators have been analyzed in terms of their measurement and limitations. The purpose of this was to ensure the tangibility of the indicators and to identify the potential problems that the company may encounter while pursuing the set objectives and goals.

Monitoring Systems

Over the last three decades, sustainable development has become priority for a large number of countries, communities and organizations. All of these expect one thing from their various development programs and projects and that is to deliver results (Bossink, 2012). This is why the ideas and actions that are implemented in these projects and programs have begun to be evaluated form one perspective – whether or not they promote, enable, improve sustainability. But, in order to answer this question, countries, communities and organization in fact have to provide the answers to two other questions – what will success mean and how do we know that this success have been achieved (Gorgen & Kusek, 2009).

Monitoring systems are what makes the answers to these questions possible. By definition, monitoring stands for the periodic and repetitive measurement of specific values of variables, and represents one of the crucial factors in the actual achievement of sustainability (Chai, 2009). The sustainability monitoring systems are designed to gather information, cross reference it in regards to a set scale and support the decision making process. The data that is received as a result from the monitoring systems enables the decision makers to assess whether or not they are on the track with sustainability progress and helps them to quickly identify if something has diverted the organization from the planned path and how to quickly move back to it (Devuyst, Hens & De Lannoy, 2001).

In order for monitoring systems to achieve the objectives they have been designed to achieve, they need to be well defined, optimized and tested continuously to ensure their adequacy. But, what they need the most is a good set of indicators that will be used for the actual measuring (Dalal-Clayton & Bass, 2002).

Sustainability Indicators

Indicators related to various aspects of the society have become increasingly popular after World War II. Economic and social indicators have been introduced during the second half of the twentieth century, even though some of them did not manage to capture the political acceptance that they aimed for. In addition to these indicators, the environmental ones began to take up a significant portion of the public attention with the strengthening of the global environmental movement (Lawn, 2006).

After the emergence of all these indicators, sustainability became the No. 1 topic during the 1990’s making sustainability indicators as important as the issue itself. These indicators were first developed by the United Nations, but they have been continually developed and widened with the use of various different approaches (Zoeteman, 2012). The greatest improvements of the sustainability indicators were introduced by a number of non-governmental agencies, and mostly the United Nations, the OECD, the European Union and the World Bank, who have been investing significant resources and efforts into the development of these indicators (Patterson, 2002).

However, their efforts did not end there, which leads to the next most important trend in the development of sustainability indicators. Namely, after setting up the base of indicators, the aforementioned agencies and organizations have attempted to standardize this set across different countries in order to enable the tracking and comparing of the achieved progress in relation to one another. Today, this set of basic sustainability indicators numbers about 200 indicators, about 50 of which are considered as core sustainability indicators (UN, 2013). And even though they have been primarily intended for use by countries, today they are widely accepted and used not only by countries, but also by communities, companies and various organizations (Hak, Moldan & Dahl, 2007).

What Makes Good Monitoring Systems And Indicators?

According to Espinosa and Walker (2011), it is essential that the monitoring system used is well defined and relevant. In addition to a base set of indicators, every monitoring system needs to integrate four crucial elements in order to be successful and efficient. These four elements are ownership, management, maintenance and credibility. Here, ownership stands for and comes from all of those who use the system in every level, or represents the stakeholder of the system. Kusek and Rist (2004) argue that if people who do not recognize the need of such a system or do not have any use of the data collected with the monitoring system, than there will be issues related to the control of the quality.

Management answers the questions of who, where and how will manage the system, which is crucial as it ensures timely collection and distribution of data in order to support the decision making process. Maintenance ensures that the system used will not crash or decay. This means that updates, improvements and control continuously undertakes to enable the renewal, rebuilding and strengthening of the system. Finally, credibility ensures that reliable and valid data are collected with the system, which means that the data will be realistic or not tempered with, and also that both bad and good data will be displayed and used by the system (Kusek & Rist, 2004).

The selection and use of indicators is also one of the main factors that define the quality of the monitoring system in general. When selecting these indicators, it must be taken into consideration that their number should be relatively small and that they should be chosen in accordance with the following criteria (Gosling & Edwards, 2006):

Data collected will clearly show whether set objectives have been achieved or not
The problems to which the indicators refer are of priority for the organization
The data needed is available and it can also be gathered accurately and effectively
The data gathered will be used for evaluation and reporting

In addition to these criteria, sustainability indicators should also have a number of other qualities including tangibility, regardless of whether qualitative or quantitative indicators are used, linkage to the set objectives, relevancy for various stakeholders of the monitoring system, they need to be specific, need to reflect different situations, to reflect changes and to have a well-defined and specific baseline data that will clearly show whether results are good or bad (Gebremedhin, Getachew & Amha, 2010).

The Company

The history of IKEA which spread across 6 decades of success actually began in the 1920’s in a farm in southern Sweden where the IKEA’s founder Ingvar Kamprad was born. He pursued the idea of having his own business ever since he was a little boy, and at the age of five, he began his first trading attempts by selling matches to his neighbors. He soon found out that he could buy matches in greater amounts for cheaper price from Stockholm and then sell them with good profits. His matching endeavor was so successful that he expanded his business to selling greeting cards, flower seeds, Christmas ornaments, pencils and pens (IKEA, 2013).

In 1947, Kamprad introduced furniture into his business. He used local manufacturers, enabling him to lower the costs of the items he sold, which led this branch of his company to become very successful. In fact, it became so successful that he soon turned out all of his other products and decided to focus solely on furniture. IKEA opened up its first showroom for the furniture in 1953 (IKEA, 2013).

During the following several years, IKEA began to sell more and more furniture, which soon led it to come into direct confrontation with its main competitor and soon entered into a price war. In order to minimize the expenses as much as possible, and thus make the price war endurable, IKEA started implementing some of the concepts that will eventually make it one of the world’s greatest companies. These concepts refer mainly to stylish and innovative design which enabled flat packaging. This in turn, enabled a minimization of the transportation costs, reduced the damaged acquired during transport, increased the capacity of IKEA’s inventory, and made it easier for customers to take their own furniture home (Parker, 2012).

According to Haig, the innovative approach to packaging and the main focus of IKEA to producing stylish and good quality products at affordable prices is not the only reason why IKEA is being referred to as a concept company. Namely, the spirit of the company, in the words of Kamprad himself, consists of thrift, enthusiasm, humbleness, responsibility and simplicity. These are the very qualities that the company does not implement only in the design of its products, but also in all of its operational practices (Haig, 2007).

The Three Dimensions of Sustainability in IKEA

The extent to which IKEA is committed to sustainable development is evident from several perspectives. Primarily, IKEA has created a sustainable strategy that is systematic and well defined, but has also been upgraded and improved continually. Besides from setting short-term objectives in its annual strategies, IKEA has also constructed a long-term strategy setting its goals and priorities for achievement of sustainable development by the year of 2020. This strategic plan offers concepts and guidelines that the company follows in the achievement of its goals of environmental, societal and economic nature, thus addressing the three dimensions of sustainability (IKEAa, 2013).

The environmental dimension in the IKEA’s sustainability strategy is represented through a number of initiatives and programs which include supply of the wood used for the production of furniture from preferred sources. In 2012, over 22 per cent of the total wood used came from FSC – Forest Stewardship Council certified forests. It is also projected in the long-term strategy that this percentage will be over 50 per cent by the end of 2017. Furthermore, the cotton used in the production of furniture is produced in alignment with the Better Cotton Initiative, and it is planned that 100 per cent of all the cotton used should be such by the end of 2017 (IKEAa, 2013).

The company also invests in the sustainability training of farmers and foresters to ensure that the issues are addressed at the very source. Other environmental initiatives include production and use of renewable energy from the wind, the sun and biomass. In 2012, the company has produced 34% of the total energy it consumed from renewable resources, enabled through the quarter of a million solar panels placed on the company’s facilities and 83 wind turbines that have operated during 2012 (IKEAa, 2013).

The social dimension of sustainability is also addressed in IKEA. Not only that the company is committed to designing and production of furniture that will improve the quality of life for all of its consumers, but also the company makes significant efforts to ensure the rights and well-being of all of its workers. The company also requires that all of its suppliers also be compliant with the people strategy of IKEA. This strategy is based on the UN Guiding Principles on Business and Human Rights that have been implemented. Furthermore, the company also supports the best interests of all children, and implements the Children’s Rights and Business Principles all throughout its operations to ensure the protection of their rights. Finally, it must be stated that part of the sustainable strategy of the company is to ensure that 95 per cent of employees and suppliers as well as 70 per cent of all the consumers consider the company as a company that is highly environmentally and socially responsible (IKEAa, 2013).

The economic dimension of sustainability is represented in both the short and long-term strategy of the company. In fact, in terms of economic performance and growth, IKEA has set a series of goals which include the increase of production and sales volumes of its products to four times by 2020. In the meantime, IKEA is focused on achievement of short-term goals, sales and growth. In 2011, for example, these goals were both achieved as the company has opened up stores in several new countries, finishing the year with 287 stores in 26 different countries, and has managed to increase its global net profits by almost 7 per cent, amounting to a total of 24, 7 billion Euros (The Local, 2012). This indicates that the economic dimension of sustainability still remains to be an important focus of the company.

The Environmental Sustainability Dimension in IKEA

In accordance with what has been stated above about the three sustainability dimensions applied to the operations of IKEA, it is clear that the company is dedicated to all three dimensions equally, and is investing serious resources and efforts to achieve positive financial goals and positive social impact, while reducing the damage and negative influence on the environment, and this is, in fact, the true purpose and goal of sustainability. Considering the nature of business that IKEA runs, and its great impact on the environment in particular, which is due to the use of natural resources as production materials, this dimension of sustainability is especially interesting for IKEA. Indeed, the company needs to employ additional efforts to ensure that the negative impact of its operations on the environment are minimized and/or diminished. This is why this dimension has been selected for further exploration.

List and Assessment of Sustainability Indicators

The importance of the environmental dimension for IKEA is so great that it is necessary for indicators for monitoring this dimension to be very carefully selected. In order to enable this, the criteria for selection of indicators stated above were used. Also, the key features of effective indicators were also considered during the selection. Consequently, a list of several indicators for monitoring environmental sustainability has been created and is given in detail below:

Indicator	Definition	Measuring	Limitations
Increase of FSC certified wood used	Ensure that all the wood is certified and comes from companies – suppliers that are also committed to sustainability	Percentage of FSC certified wood used in the production of furniture (goal – 100 per cent).	Lack of FSC certified companies – suppliers present and operational locally, which may increase total cost of expenditure due to transport and import costs
Increase of Better Cotton Initiative cotton used	Ensure that all of the cotton used in the production of the furniture is in compliance with the Better Cotton Initiative	Percentage of Better Cotton Initiative cotton used in the production of furniture (goal – 100 per cent)	Lack of suppliers aligned with the Better Cotton Initiative present and operational locally, which may increase total cost of expenditure due to transport and import costs
Increase of main furnishing materials used for the production of the furniture that are made from renewable, recycled or recyclable materials	Ensure that all of the materials used in the production are renewable, recycled or recyclable	Percentage of renewable, recycled or recyclable materials used in comparison to total materials used	None
Production of renewable energy	Production of as much renewable energy as it is consumed by the company	Percentage of renewable energy produced in comparison with the consumption	None
Use of electric vehicles and environmentally safe transport solutions	Use of electric vehicles and environmentally safe transport solutions to and from the store to ensure that all aspects of the company related to energy used are from renewable sources	Percentage of used electric vehicles from the car parks of IKEA and the proximity – availability of environmentally safe public transport to the IKEA stores	Local level of sustainability, government policies

If this list of indicators is analyzed, it shows that all of the indicators selected are very realistic, in line with the priority problems of the company in relation to the environmental dimension of sustainability, and above all measurable. Indeed, for each of this indicator a good base line is identified and it is easy to assess what the progress of the company actually is in its achievement of the set goals and objectives. However, the analysis also shows that there are two types of factors that influence the limitations or challenges related to these indicators. The internal factors are related to the company and refer mostly to the increase of costs of production which is not considered to be a serious problem. The external factors, on the other hand, refer to forces that are outside of the influence of the company. These are mainly related to the existence of suppliers with the desired sustainable operations in terms of certification or compliance. Given that the company acquires its materials and products made by other supplier locally in order to reduce the expenses, this can be considered as a serious problem. However, the demand that IKEA sets on its suppliers may influence setup of such companies due to economies of scale.

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