Unit 4 Marketing Principles 3

Unit 4 Marketing Principles 3

11-09-17 Maddox Smith 0 comment

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Pearson BTEC HNC/D Diploma Business – UKCBC unit 4 : Marketing principles 3

Unit Description

Task 1

1: Start your report by explaining two elements of  Marketing  Concepts Assignment based on the example of Starbucks. You are to prepare a SWOT analysis of the effective organization and explain the importance of using SWOT analysis as a marketing tool. Next present and evaluate the marketing objectives of Starbucks and explain how defining marketing objectives can help a business to develop marketing strategies.

Introduction

This section will discuss the SWOT analysis and the business decision marketing objectives of Starbucks. The SWOT analysis is a very popular and systematic approach and it is also very appropriate analysis which helps the company to devise a strategy on the basis of the factors like the strength and weakness of the company and also recognizing opportunity and threat of the company (Amin et al, 2011). Analyses of the market can effectively be done by recognizing the strength and weakness of the company in the market and it will also help in identifying the poten
tial opportunities for the company where the company can expand and also the potential threat for which company can prepare itself (Yangdong et al, 2010). Apart from this, this section will also discuss the marketing objectives of the Starbucks. Marketing objectives is an essential part of any organisation as it gives direction to the people and the motive to achieve those objectives. This section of report will also discuss how marketing objectives helps any organisation in devising the perfect marketing strategies and principles for the organisation: –

SWOT Analysis of Starbucks

Strengths 1.      Sound financial records 2.      Emerge as a number one brand in coffee house segment 3.      The experience of Starbucks 4.      Largest chain in the world 5.      Effective employee management	Weaknesses 1.      Major profit comes from coffee bean price and business 2.      High product pricing 3.      Negative publicity
Opportunity 1.      Large amount of supplier range 2.      Uplift of many developing countries and economies 3.      Diversified and large product range 4.      Expansion of retail operations	Threats 1.      Expensive coffee and other dairy products 2.      Saturated market 3.      Fierce competition 4.      Trademark breach 5.      Supply disturbance

Finding of SWOT analysis

·         Strengths

1. Sound financial records: the profitability of the company has been rising from past few years. The company saw a slowdown in 2008 but with proper strategies and planning the company revived from those losses (Civi, 2013). It is one of the most profitable businesses in the market.
2. Emerge as a number one brand in coffee house segment: the brand value of this coffee house is very strong. People perceive it as number one coffee house and the quality of the coffee served is of very high quality and they also have a strong customer service. This brand is the most valued brand in the business decision making(Civi, 2013).
3. The experience of Starbucks: people value the strong experience which they have while having a Starbucks coffee and the ambience of the coffeehouse which is cordial and with friendly staff the warm atmosphere cannot be compared with any other coffee house.
4. Largest chain in the world: the company has its existence all over the world with twenty thousand coffeehouses in almost sixty countries (till 2013) (Civi, 2013). This makes it largest coffeehouse in the world.
5. Effective employee management: the company also make sure that the employees are treated well in term of a range of benefits and higher pay in comparison to the competitors.

·         Weakness

1. Major profit comes from high coffee bean price and business: the major chunk of profitability come from the price of the coffee beans which is not in the control of the company and coffee prices are highly dependent on the coffee beans.
2. High product pricing: the coffee offered by the company is great and is of very high quality also the customer experience is what stand the company apart from the competitors but the high price of the coffee is the main roadblock which comes in between the success of the company as the other competitors premium coffee price is lower than the Starbucks normal coffee (Civi, 2013).
3. Negative publicity: there is always a debate about the company’s corporate social responsibility and many environmentalists complain about the lack of efforts by the company towards greenery and issues related to it.

·         Opportunity

1. A large amount of supplier ranges: the company doesn’t produce coffee beans but they get it from suppliers which are mainly located in South America, Arabia and Africa. The company must increase it supplier network so that they can also import coffee from Asia.
2. Uplift of many developing countries and economies: countries like China and India can be a major market for the company as coffee consumption is quite higher and there is less number of players in the form of competitors in the market (Ferrell, & Hartline, 2012).
3. Diversified and large product range: the company must diversify in their coffee offering with the introduction of new products in the coffee business.
4. Expansion of retail operations: the company also sell its products to various retailers apart from coffeehouse and franchise business (Civi, 2013). The company must explore this area even further with making the partnership with more retailers.

·         Threats

1. Expensive coffee and other dairy products: the biggest threat is that the company has no control on prices of coffee beans and the dairy product which are the determining factor of prices of coffee.
2. Saturated market: the market of the company is quite saturated in the developed countries. The competition is fierce and because of this the company is facing an intense competition in the market especially in developed markets. The growth of the company can face adverse effects due to this reason.
3. Fierce competition: competition is also there from local café which offers great coffee at lower prices and the options which these coffee houses offer are to the customers is more suited to customers taste and Starbucks has to face intense competition from these coffee houses also as they target market share of this coffee house (Ferrell, & Hartline, 2012).
4. Trademark breach: the company has to face many legal cases against them as they have too many people has complained against them for illegal use of a trademark which is detrimental to the image of Starbucks and also the company has to bear the cost of such cases (Ferrell, & Hartline, 2012).
5. Supply disturbance: as the company export its coffee bean from various countries, the company has the threat to face political, economic and weather condition which can be a threat to the company.

2: Next present and evaluate the marketing principles of Starbucks and explain how defining marketing objectives can help a business to develop marketing strategies.

The mission of the company is inspiring people with the taste of the coffee they offer and it clearly says one person, one cup and one neighbourhood at a time (Ferrell, & Hartline, 2012). The company is in the business from more than twenty years now and it has reached its mature stage. So the company is now focussing on spreading its wings in international business activities and strengthening the international partnership because it is giving enormous opportunities to the company.

The objective to grow in an international market has helped the company various marketing strategies. The company appointed multilingual and multinational managers to work towards the worldwide expansion in an effective and planned manner (Slater et al 2010). The motive of these people are developing new business for the company, looking after financing and also planning new stores all over the world, these people are held responsible for operations management and logistics of the business and in the last the main motive of this group was promoting and training new managers internationally for managing business in various countries (Ferrell, & Hartline, 2012).

Marketing objectives is an essential part of any organisation and setting an objective is the core of the success and failure of the business. It is also important to understand that objective plays a very crucial part in setting marketing strategies. It is a part of corporate business objectives and it should be kept in mind while forming a strategy. Following are the various benefits of the marketing objectives: –

1. Marketing objective provides a motive to the organisation and also ensure that all the functions and efforts of the organisations are targeted towards attaining those set targets (Slater et al 2010).
2. Marketing objective also provides a direction of the employees.
3. Marketing objectives is also a source of motivation for the leaders and employees (Slater et al 2010).
4. Marketing objectives also provide proofs and support to the organisations when the success or failure of the project is evaluated.

Conclusion

SWOT analysis and marketing objective both are very crucial for formulating marketing strategies (Amin et al, 2011). In the case, Starbucks is going through major changes and they need to formulate a strategy which is effective and at the same time give support to the slow growth of the business. For which the task one has analysed the business from two angles. First a SWAT analysis is conducted which defined how the company can make use of opportunities and analyse the threats and weaknesses and take corrective measures in order to overcome the weakness and be careful from the weaknesses. The next section of the task discussed the advantages of marketing objectives and how marketing objective can help the organisation to devise some effective marketing strategies (Slater et al 2010).

Task 2

Introduction

STP marketing is a three step approach which can be defined as segmentation, targeting and positioning which help in building the marketing planning (Turnbull, & Valla, 2013). This process helps the business in formulating a marketing strategy which is more focussed on customer behaviour and his or her expected buying behaviour (Turnbull, & Valla, 2013). This section will discuss in detail about the micro and macro environmental factors which influence the marketing decisions in Starbucks. This task will also discuss most appropriate segmentation criteria which can be applied to the company in different markets. Then this section will also discuss in detail about the targeting strategies and finally, this section will cover and understand the importance of buying behaviour which affects the marketing activities.

1: Start this task by analysing three micro and three macro environmental factors influencing marketing decisions in Starbucks.

Following are three micro environmental factors which influence the marketing decisions:

1. The supplier is very important part of the company since the coffee bean is not produced in the country but they are imported from countries like Africa, Arabia and South America. So the price of the coffee is highly dependent on the price of coffee beans which make it little expensive in comparison to the competitors like McCafe (Ferrell, & Hartline, 2012).
2. Another important micro-environment factor which influences the marketing decisions are its employees (Douglas & Craig, 2011). The company spent a lot in training the employees and the company are also known for its work culture. The company’s success highly dependent on the experience they provide in the form of the service and for which efficient employees are very important (Ferrell, & Hartline, 2012). The company make sure that the employees are happy and satisfied and that can be seen in their performance and happy customers.
3. The customer is another internal factors which are the most important factors and the basis of all the decision is the customer behaviour (Douglas & Craig, 2011) and their response towards the services and the product offered by the company.

As far as macro environment factors are concerned they are basically external factors like political, economic, social and technological factors. Following are three macro environmental factors which influence the marketing decisions:

1. First very important macro environment factor id economic factors and features like recession have made a huge impact on the company. The company’s growth slowdown like any other company in 2008 and the impact of the recession did hit the company performance. It was when the company decided to major changes in their marketing decisions.
2. A social factor is another which contributed the most to the marketing decision of the Starbucks (Ferrell, & Hartline, 2012). The company is the largest coffeehouse chain in the world and it is important to understand the culture before entering into the business in any country and the company exactly have to do that.
3. Competitors are other aspects of the coffee market which help the company to take many crucial decisions. The coffee market is booming and the competition is fierce so the Starbucks has to make strategies keeping in mind the actions of the competitors.

2: After that propose which segmentation criteria would be the most applicable for Starbucks to use for their products in different markets.

Segmentation is basically a process of dividing the market into different segments based on customer behaviour and needs (Weinstein, 2013). The company’s segmentation criteria are discussed as follows: –

1. Initially, the company visualised their potential customers in affluent people and well-educated customers but slowly they realised that coffee consumption is also very popular among youngsters and the less educated people (Ferrell, & Hartline, 2012). The company pushed their product among these segments also.
2. The company usually open they’re a store in big cities because according to the company coffee drinker is usually found in this area and that too in large number.

3: Thinking about a range of products and services Starbucks offer to choose a targeting strategy for a one of them and propose a positioning strategy for this product.

Following are the targeting strategy and positioning strategy for the product offered by the company: –

1. Since the local coffee market is getting very strong in many countries, the company mainly focuses on an amalgamation of two cultures by focusing on local taste and also promoting the American flavour of coffee all over the world (Ferrell, & Hartline, 2012). At the same time, they modify themselves according to the local taste as well.
2. The company believes in the effective visibility of the coffee houses that is why they choose the most premium location in the country and also focus on the infrastructure and architecture of the coffee house. Not only this, they never introduce all the flavours in one go. Rather they introduce it one by one and this way each product gets the much-needed visibility and each product gets the chance to establish themselves

4: Finish Task 2 by demonstrating how buyer behaviour affects marketing activities in different buying situations. Provide here two examples of buying situations which marketing managers in Starbucks should in your opinion especially consider.

Buying behaviour is mostly concerned with the process which involves people buying tendencies and usage of product (Kotler, 2011). Buying behaviour is directly related to the designing of marketing activities and it is a major factor which contributes to marketing decision making. Be it any type of business a multinational coffeehouse or a local coffee house, understanding the buying behaviour become crucial for everybody. Organisations indulge in various activities like market research and survey to understand the customer’s inclination and the pattern of their response to various things and, of course, it also directly affects the marketing activities.

Factors like pricing of the product, it’s advertising, the complete packaging and the way the whole product is marketed affect the consumer buying patterns. Following are two incidences which manager of the Starbucks must consider: –

1. Pricing: as discussed pricing to an extent is not in control of the company as it is impacted by coffee beans and dairy product and both these are outsourced (Kotler, 2011). The pricing of the basic coffee in Starbucks is higher than the premium coffee offered by McCafe. This does affect the buying pattern of the customers
2. Local competitors: there are many local cafés functioning in multiple countries that know the taste of local people and their menu suits the taste and preferences of the people. So, the manager should first invest some time in understanding the local preferences and then modify the menu as per customer demand. Also social media plays a crucial role these days so the company must increase its reachability to the customer through various social media network. This networking helps in changing the buying behaviour of the customer.

Conclusion

Understanding the market is very important before establishing the business. It became even more important for a multinational company because they have to work even harder to know the taste and preferences of the people (Kotler, 2011). Initial few months are the trial months because, in this time, the customer just try the product and decide whether they like the product or not. Starbucks is spread worldwide and it is so popular because of this reason. They spent time in understanding their targeted audience and bring modifications accordingly.

Task 3

In task 3 you will start analysing marketing mix elements, which are in the heart of all marketing strategies. As before, think about Starbucks while addressing all the elements of this task.

Introduction

The marketing mix is the heart of any marketing strategies. Marketing mix helps in putting the right product or service in front of the customer, at the right time, at the right place (Kotler, 2011).  Companies spent a lot of money and hard work in deciding a basic and simple question; what customer wants? All the elements should fall at the right place to change the mind of the customer and even if one element goes wrong, the complete marketing strategies will fail. The marketing mix is consisting of four elements or four Ps and these four Ps are product, place, price and promotion (Kotler, 2011). This section of the report will discuss the various marketing mix and how marketing strategies of Starbucks is affected by this.

1: Start by explaining how products in Starbucks are developed in order to make sure that competitive advantage is sustained. You should focus here on the differences in products between Starbuck and different coffee shop. Provide at least two examples.

The USP of Starbucks is their unique taste and the quality of coffee beans. The company spent a lot of money in getting the best coffee beans making the coffee unique and very different from other coffee offered by other coffee houses. Also, the company also spent money in creating a perfect ambience for the coffee consumer where the customer gets the perfect atmosphere to have coffee with friendly staff (Ferrell, & Hartline, 2012). When people explain about the coffee of this company, they talk about the whole experience and that is what the main focus of the company is. The main motive is creating a perfect business environment with the perfect coffee so that people can sit and relax and have their coffee.

2: Next you are to explain distribution strategies used by Starbucks. Think about customers’ convenience and satisfaction in relation to distribution channels used.

The coffee houses are available all across the world and Starbucks coffee house is quite popular everywhere. It is quite obvious the distribution channel is quite strong (Ferrell, & Hartline, 2012). They import their coffee beans from specific countries like Africa, South America and Arabia. The company is also trying many manufacturers in various part of Asia as well so that the distribution channel can be strengthened.

Apart from this, the coffee beans and other products are also available in various retail store so that people can buy the coffee beans also to have the coffee experience at home. They have their existence all over the world and they specifically have worked on the visibility of the coffee houses at premium locations.

3: In the next part you are to analyse pricing strategies used by Starbucks. Provide an explanation how prices are set in relation to company’s objectives and market conditions (competition, current economic situation etc.).

Starbucks is known for employing a value based pricing strategy which focuses on earning maximum profits. The company conduct proper research and analyses techniques to decide the price. The price is set in a way that will not affect the buying behaviour of the customers and even attract more customers (Ferrell, & Hartline, 2012). The company follows profit maximization policies and a company decides the price of the product and the output level which generate the maximum profits. Usually, a company follows a strategy where they cut the price to attract customer but there are rare companies who are based on deep analysis and calculating the real customer foundation (Gordon, 2012). Starbucks in its complete lifespan never decreased the price. The price of coffee only increased and the increase in price has not impacted the buying behaviour. The company is more dependent on those customers who have a strong taste of the coffee and liked the quality the company offered (Civi, 2013). Many customers obviously switched but many stayed because the taste is what matter to them not, the price. The company stick and rather reinforced the premium image of the brand. They also applied price hike on specific flavours and the sizes instead on the complete menu.

4: Promotional activity is a must for every organization and behaviour. Make a research into promotional activities of Starbucks and illustrate how promotional strategies used by this organization are integrated and related to marketing objectives of the organization.

The company promotional strategy is something to study for. They have very few promotional advertisements for Starbucks coffee in newspaper, magazine or television advertisement (Gordon, 2012). Starbucks mainly depend on word of mouth promotion technique where the quality of product and the perfect ambience speak for itself. The company promoted the best services and these strategies helped the company to a great extent (Civi, 2013). The employees are trained in a way that they now just make the perfect coffee but also provide a legendary service in their language to the customers. This strategy includes various things like:

1. Personalized service by knowing the customer’s names.
2. Customized and specific coffee preferences.
3. Knowing the customer’s work and nature of work.
4. Also indulge in customer’s personal information like family and friends.

5: Finally at the end of this task you were asked to provide a short analysis of additional elements of the extended marketing mix based on the example of Starbucks.

The additional elements of the marketing mix are physical evidence, people and process. Starbucks provide physical evidence in the form of experience to the people which take back with them and this is the reason they come back to the same brand to have coffee. The company spent a lot on its people. They recruit and train the employees carefully. The company is known to be most ethical company and they make sure that the employees stay happy so that they can convert it into their performance. In the end process, include the perfect process which the company follow which the employees execute in making a perfect coffee and providing a perfect ambience to the customers.

Conclusion

The marketing mix is an essential activity for any small business enterprise and Starbucks follow it in a perfect way (Gordon, 2012). They make sure that no stone remains unturned and they cover all the aspect of marketing mix perfectly.

Task 4

Introduction

More than understanding the Marketing mix, it is more important to execute it perfectly. In this section of the report, we will discuss the application of marketing mix and how they are executed in practical. This section will also discuss the difference between the international strategies and the domestic ones.

1: To begin with you are asked to plan and prepare marketing mix for two different segments of the market in Starbucks. Use here an example of one existing segment and propose the second, new one. Design for both segments marketing mix plan (4P).

The existing segment of the Starbucks is the affluent class who can afford the price of the coffee the company offer. Following is the detailed discussion: –

1. Product: the company offer a high-quality coffee and people come back because of the taste of gourmet coffee and the experience they have while having a coffee in the Starbucks.
2. Price: the company never believed in decreasing the price and this existing class is ready to pay the price for the coffee the company offers.
3. Place: the company always target a premium location of the city for building their coffee house.
4. Promotion: the company believe in the word of mouth promotion and they don’t indulge much in another form of promotion because word of mouth promotion has made them the world-class company.

The new segment, which can be proposed for Starbucks, is the younger generation who have started exploring different taste and also look for a perfect hangout place. Following is the detailed discussion:

1. Product: along with premium quality, the company must also try to make it tastier by adding various ingredients to it. The company must also focus on introducing more products which can attract the younger generation.
2. Price: the price set should suit the young people pocket and it should also help them to bring more people to have this coffee.
3. Place: the company as it is focused on premium location which is the main attraction for the young people.
4. Promotion: the word of mouth strategy could also work in this case as this strategy is very strong in bringing more people and having the experience.

2: Your task is also to illustrate differences in marketing products and services to business rather than consumers. Next to Starbucks use here an example of another organization.

Marketing products and the services of Starbucks can be clearly compared with McCafe which is also very popular and quite different from Starbucks. McCafe sells little cheaper coffee and the class which have at McCafe is entirely different to that of people at Starbucks (Civi, 2013).

There is the difference in price, products and even the services are quite different in both the organisation. Starbucks service is more personalised while McCafe services relatively less personalised and professional.

3: Finally your report will end with the evaluation how and why international marketing differs from domestic one – use here, at least, two examples of marketing strategies Starbuck used to market their products internationally.

International marketing is quite different to that of a domestic one. The simple reason for this is while entering into a new market, the culture and taste and preferences of the customers completely differ (Luan & Sudhir, 2010). The company need to take into consideration the taste and culture of new market and modify accordingly. Following are two marketing strategies which Starbucks used to market the product: –

1. The company analysed the local market and modify their menu accordingly according to the taste and preferences of the customer in that respective country.
2. Another strategy which the company adopted to enter the international market is that Starbucks does not introduce all the products in one go. Instead, they focus on introducing one product at a time so that the customer can adapt the new product easily and quickly.

Conclusion

Application of marketing mix is the most crucial activity in the marketing process and of this is done in a proper manner than the company can succeed (Luan & Sudhir, 2010). So this step should be taken very carefully and after much analysis.

Reference

Civil, E. 2013. Marketing strategies to survive in a recession. International Journal of Business and Emerging Markets, 5(3), 254-267.

Ferrell, O. C., & Hartline, M. 2012. Marketing Strategy, Text and Cases. Cengage Learning.

Amin, S. H., Ramzi, J., & Zhang, G. 2011. Supplier selection and order allocation based on fuzzy SWOT analysis and fuzzy linear programming. Expert Systems with Applications, 38(1), 334-342.

Yangdong, W., Qin, A., & Zu Lixin, L. D. 2010. SWOT Analysis and Development Strategy of High Technology Service Industry in the Pearl River Delta. In Forum on Science and Technology in China (Vol. 10, p. 019).

Unit 4 Marketing Principles 3

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Unit 3 Organization and Behaviour

Unit 3 Organization and Behaviour

11-09-17 Maddox Smith 0 comment

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Unit 3 Organization and Behaviour

Pearson BTEC HNC/D Diploma Business – Unit 3  Organization and Behaviour

Unit Description

HND Assignment Help brings you solution of BITE College Organization and Behaviour Assignment that is part of HND Business course.

Introduction

Organizations can be said to be a system or combination of systems which is dependent on the structure of the organization, the people working inside the organization and behaviour, the technology that is being used inside an organization, etc. Since, the behaviour of the people working inside the organization is highly unpredictable, it makes it difficult to manage the day to day working of an organization. Thus, it makes it important to understand the various theories and approaches that are followed by various type of organization, to get a fair idea about the behaviour of various organizations. This report is a case study of company ASDA. The report will look into how the organization is structured and what type of culture prevails in ASDA. Then it will focus on the various leadership style that are available and what type of leadership style is being followed in ASDA and why. This report, will further drill on the various organization and motivational theories and which theories are adopted inside ASDA. In the last section, the discussion will be related to the importance of group, the advantage and disadvantages of working in a team and the impact of technology on ASDA.

LO 1- Understand the relationship between organizational structure and culture

P 1.1 Compare and contrast the organization structure and culture of ASDA PLC to that of British Airlines

An organizational structure can be termed as arrangement of different groups of people according to their level of authority based on the roles and authorities of different people. An organizational structure decides how information should flow across the organizations and is dependent on the strategy and goal of an organization. Based on the span of control here are two types of organizational structure: Hierarchical and Flat organization structure. A hierarchical organization structure is the one which has many layers of management. In hierarchical type of organization structure the lower group of people does not play much role in management related activities, their tasks are assigned by their managers and they are expected to complete those tasks and report it to their managers. The main decision making tasks are handled by the people who are at the top of the hierarchy (Katz, 1978). ASDA follows hierarchical type also known as Tall organization structure as it has more layers of management and the employees provides the information to other employees who report finally report it to their boss and the chain continues till the information is shared with the top hierarchy. This kind of approach is followed in most of the companies where the population is more. On the contrary, a flat organization is one which has lesser number of management layer, hence employees in a flat organization are involved in decision making activities. There is nothing like top or bottom level and each employee is allowed to give suggestions and feedbacks which are taken into account before taking any decision. British airlines follow flat organizational structure. Another difference between ASDA and British airline organizational structure is that ASDA follows functional division where the division of group is based on the function that is performed by the employees. The people involved in account related activities are grouped in accounts group; similarly other groups are formed like human resource, marketing, etc. While, British airlines follow divisional organization structure, where group is made based on the product. All employees involved in making a particular type of product are grouped as one. This type of structure helps British airlines in quick decision making and active supervision by the managers as their common objective is customer care.

Organizational culture is means how employees inside the organization behave. The culture of any organization shows the values, beliefs, goals, visions and habits that prevail inside the organization. The organization culture of any organization can be classified based on the double S cube. The double S stands for sociability and solidarity. There are four type of organization structure: Network culture, mercenary culture, fragmented culture and communal culture. A company like ASDA whose main objective is to serve their client to the best of their ability, respect each other within the organization, integrity and excellence, clearly shows that ASDA follows communal culture inside their organization, which is high in solidarity and sociability. On the other hand, British Airlines till recent times were focused more on delivering high customer satisfaction, but there has been drastic change in their organizational structure which resulted in communal culture in British Airlines.

P1.2- Explain how the relationship between ASDA’s structure and culture impacts on its performance

The performance of any organization is dependent on the how the strucuture of organisations and behaviour is? It has been observed by many researchers that it essential to form a well structure within an organization for smooth functioning of it. An unstructured organization will only lead to confusion and chaos across the organization. Moreover, behaviour of employee also plays an important role. The satisfaction level of any employee plays an important role in improving the performance of the organization. Thus it can be seen that both organization structure and its’ culture are essential to improve company’s performance.

Any organization which is well organized and works on the same principle and values creates confidence and provides great level of security and satisfaction among its organization. Any organization which is confused and unorganized will increase uncertainty and will develop insecurity in the minds of its employees. All this plays a big role in improving the performance of the company. Moreover, customers are also driven by how well a company is organized. Customers like to look at the background of any company before assigning them their work. Thus, to improve customer satisfaction, both structure and culture of any organization plays a vital role. However, both culture and structure should not be very complex as it can adversely affect the performance by slowing down the processes that are followed inside the organization (Wilkins, 1983).

As discussed above, ASDA follows hierarchical and functional type of organizational structure. Thus, it becomes important for it to have a communal culture because functional type of structure is characterized by lack of communication between different groups, each group works separately. Similarly, in case of hierarchical structure, the lower group of people feels dissatisfied because they do not play any active role in taking decision. However, the common goal of the company and communal culture helps the company to minimize these disadvantages, so that company can aim for better results. Thus, the culture and structure of ASDA compliments each other and effectively improves company’s performance.

P1.3- Discuss the factors which influence the behaviour of ASDA’s employees at work giving relevant examples

In this section, the focus will be on various factors that affect an individual behaviour while working inside an organization. Some of the factors are discusses below:

1. Communication: The most important factor which influences human behaviour is communication. An effective communication between a manager and its team member can lead to the individual gaining interest in the work. It is essential to share your views, ideas, and problems to be more expressive and creative in your work. This can be made possible with the help of effective communication. ASDA has been working in improving the communication so that no employee is left alone. Their policy “Your Voice” that was adopted in 2013 had a survey among all stores to know how the people feel and what do they expect and think about the company. This kind of small initiatives shows how communication has been used effectively by ASDA in influencing the behaviour of its workforce.
2. Culture: As discussed above, any organization should have a common objective. The rules and regulations should not differ from person to person. If such thing happens, it will create insecurity in the minds of employees. As discussed, ASDA follows communal culture, which means Sociability and Solidarity. Sociability means that employees should share cordial relationship with each other at work, while solidarity means that organization should have a common goal. Thus, ASDA has been pro-active in maintaining both solidarity and sociability as part of their culture, to improve individual behaviour at work.
3. Leadership: An effective leader is the one who not only can get the work done from the team, but also get involved with the team. A leader should know each member of his or her team not only professionally but also personally so that he can understand the problems of each individual and actively participate in solving them to bring out the best from each individual of his team. In ASDA, according to an audit, some of the positives were that employees felt they were treated alike by their managers, equal opportunities were given to each one of them and there was feeling of respect for each other. This has been made possible because of effective leadership.

Thus, it can be seen that ASDA understand the importance of individual behaviour at work in order to attain better performance, at tries hard to provide better environment to all its employees so that they feel part of the organization and should not feel left alone. These increase the interest towards work and results in better efficiency from each individual.

LO2- Understand different approaches to management and leadership

P2.1- Compare the effectiveness of the leadership styles used by the CEO in ASDA to that used by British airways CEO

In this section, the discussion will be on different types of leadership styles that are available and then the focus will be on the effectiveness of leadership style in ASDA compared to that of British Airlines.

Leadership can be considered as a quality through which the attitude and behaviour of others can be influenced. Based on various types of theories, leadership style has been classified into various types. According to Michigan and Ohio theory, leadership was classified into task oriented, relationship oriented and participative leadership style.

A task oriented leadership style is one where leaders are more focused on doing and getting the task done rather than having an effective relationship with his or her team. The leader provides its team with the necessary resources required to complete the task. British Airways use to follow task Oriented leadership style under the leadership of Willie Walsh.

Relationship-oriented leadership style is one where leaders also focus on maintaining good relationship with its employees, along with getting the work done (Graen, 1995). As discussed above, ASDA follows relationship-oriented leadership style, where it effective measures were taken by the leaders to maintain healthy relations with their subordinate members.

Participative leadership style: The main feature of this type of leadership style is it involves the whole team while taking decision and the decision is taken after complete discussion, suggestions and feedback from the whole team.

According to another theory, leadership style can be classified into transactional and transformational leadership style. These are:

A transactional leadership style is one in which the leaders used to motivate their subordinated by giving them rewards and used to punish the employees who fails to deliver quality product on time. Willie Walsh believed that Salary of an employee is sufficient to get the work done, hence British airlines used to follow transactional leadership style.

Transformational leadership: In this leadership style, as seen in ASDA, the morale and motivation of an employee was not just defined by rewards and punishments. Transformational leadership doesn’t believe in give and take business but focused on bringing the change through leadership. A leader should set an example through his belief in the work, his ability and skill. The employees will follow him eventually (Podsakoff, 1990).

P2.2– Identify any organizational theories practiced at ASDA PLC and explain how organizational theory underpins the practice of management

An organization theories are models that explains how an organization is working and how is it related to external environments. It is essential to understand the organizational theory of an organization for better management. Management related activities require theory, which can be used by managers to refer while performing these activities.

It was in 2000, when ASDA for merged with Wal-Mart, that leads to confusion in the minds of many employees working in ASDA. Since, the merger resulted in new rules and regulations, the employees of ASDA were not comfortable and felt insecure. At this point of time, the higher management took the initiative of explaining the new business activities to its workers which help them build trust and made the employees felt more secure. Though, the two organization had similar kind of structure, still the organizational theory acted as the base for the management team to take crucial decisions in favour of the employees and the company as a whole.

P2.3– Evaluate the different approaches to management used by ASDA to that used by British Airways

The difference between the approach in the management of the two companies ASDA and British Airways comes from the difference in the organizational structure. As discussed above, ASDA follows functional organizational structure while British Airways follows divisional organizational structure. Thus, in case of ASDA, the management focuses on how to maintain effective relationship with their employees and make them understand their goals and objectives so that they can perform to the best of their ability to have competitive advantage over other companies in UK. The management also focused more on maintaining good relationship with their employees during the merger process with Wal-Mart.

On the other hand, British Airways, being a divisional type of organizational structure, focuses more on training its employees so that the employees are aware of the complete process rather than just knowing what is expected from them. In case of ASDA, management expect that each employee should be best in whatever work he is doing, while in case of British Airways, which focus more on customer service, management tries to incorporate different skills to all its employees so that each one is aware of the complete process and it’s functioning.

LO 3. Understand ways of using motivational theories in organizations

P 3.1 What type of changes could ASDA have engaged in, Discuss the impact that different leadership styles may have on motivation of ASDA’s staff in periods of changes

Any organization keeps on changing from time to time. The structure, the culture, the values, everything that is been followed inside an organization is subjected to changes. As already discussed above, ASDA follows hierarchical type of organizational structure, thus it has the top level or the senior people which takes most of the decision, while the lower level people do not contribute in any part of decision making. Their goals and objectives are defined by their manager, and they are expected to meet their targets on time.

However, it has been observed in recent times, that most of the organizations have changed their structure from hierarchical to flat. Thus, it is possible that in near future, ASDA also changes its structure to a Flat structure. The main advantage of a Flat organization structure is that it gives all the employees equal chance to give their suggestions and feedbacks are taken are considered while taking the decision.

Thus, based on changes in the structure, it will become essential for the company to change their leadership style as well. Today, the company follows relation oriented leadership style, where managers share healthy relation with his or her subordinates. With flat organization, it would become essential for the organization to follow participative leadership style, where even the lower level of people are encouraged to bring their suggestions and these suggestions are used for making better decisions for the organization.

P 3.2 Compare the application of different motivational theories with special reference to ASDA’s employees as Maslow’s hierarchy of needs, Vroom expectancy theories and McGregor’s theory X and Y.  Which theory is most applicable and why?

Motivation is the driving force which gets the work done. The main role of any developing manager in any organization is to keep his team motivated. A motivated team performs better and delivers good output consistently. The performance of any team is not only dependent on the ability of the team, but motivation plays a big role too. If people continue to do same kind of work again and again, they reach a saturation point and started losing interest in work. At this point of time, it is the manager who needs to push and motivate his subordinates.

There have been many motivational theories that are practiced in various organizations. They are: Herzberg Dual factor theory, Mayo’s human relation theory, McGregor X and Y theory, Maslow’s Hierarchy of Needs theory, Taylor’s scientific theory, Vroom’s Expectancy theory, Equity theory, etc.

Some of the theories that are adopted in ASDA are: Maslow’s hierarchy theory, Vroom’s Expectancy theory and Equity theory.

According to Maslow’s hierarchy theory, an individual is motivated to achieve an objective; once that objective is achieved the individual changes his goal and is motivated to achieve the next goal. Thus, Maslow gave a hierarchy diagram in which the lowest level was the basic needs, which motivates everyone to work. Once, a person is able to meet those needs, their objective changes to the next level of requirement are they are motivated to meet the next set of objectives (Hall, 1968).

According to Vroom’s Expectancy theory, employees are motivated if they see that their efforts are getting converted into desired rewards. Expectancy theory comprises of three things. Firstly, the management should be aware of what type of rewards keeps the employees motivated. Secondly, management should be aware of expectation of each employee which differs from person to person. Thirdly, management should assure the employee that their efforts will result in better rewards (Van Eerde, 1996).

According to Equity theory of motivation, people are motivated when they see that their efforts are fairly being converted into proper output. If the company does not follow a fair process or if an employee feels that the amount of input is more compared to the rewarded output, the person can be de-motivated.

P 3.3 Evaluate the usefulness of a motivational theory for managers. How could a theory like Hertzberg’s motivational theory be useful and relevant to the managers of ASDA?

Motivational theories are useful for any organization. An organization on most occasions follows multiple theories to understand the various factors that keep the workforce of the organization motivated. Earlier, organization use to think that the reward in terms of salary is enough to keep their workforce motivated. However, with passage of time, people realize that there are other factors such as security, respect, involvement in decision making, providing responsibilities, managing financial resources etc. that also affect the performance of the employees.

In a company like ASDA, which is second largest supermarket chain in UK, it is essential that the workforce feels that they are being valued inside an organization, which keeps them motivated. As discussed above, ASDA follows Vroom’s Expectancy theory. The managers are aware that there should be a proper process of measuring the efforts of each employee, only then proper rewards can be shared with them. Thus, a proper performance review system is followed in ASDA. This system is followed in almost all the companies in UK. Thus, managers’ sets up the goals for their employees and the results are compared with the goals and based on that rewards are distributed. This kind of system keeps the employees motivated and increases their efforts in order to meet their goals and get rewarded. According to Herzberg dual factor theory, there are some factors which keep the employees motivated and there are some factors whose presence may not motivate the employees but whose absence may result in demotivation. This theory make the management realize that some factors are just essential so that employees are not demotivated to do the work (Maidani, 1991).

Thus, it can be seen that motivational theories are highly useful to the managers and the management team inside any organization as it helps them realize the importance of various factors that are needed to be taken care of in order to have better and consistent performance from their workforce.

LO 4 – Understand mechanisms for developing effective teamwork in organizations

P 4.1 Explain the nature of the various groups that may exist among ASDA’s staff and how they may influence the behaviour of staff

A group is collection of people who work together to attain a common objective. Group behaviour is how a team or group behaves with each member of the team within the team. Group inside an organization can be classified as two types: Formal and Informal Groups. Formals Groups are generally formed by the leaders keeping in mind various skills that are required to do a particular job. On the other hand informal groups are formed by the employees themselves. Formal groups are more organized and compared to informal groups. It has been observed that working in a team leads to better results when compared to the sum of output of each individual inside the group working alone. ASDA faces the issues in group behaviour during the early phase of their merger with Wal-Mart. The main reason was because; a cordial relationship in a group can only be maintained when each individual working in the group has a common objective. Since, the merger means new set of rules and new set of objectives, this lead to initial problems and conflicts in the groups. However, the management of ASDA was proactive in identifying the employees with common skills and objectives, thus formed new formal groups which solved the problem of conflict and increased the relationship between the employees.

P 4.2 Discuss the factors that may promote or inhibit the development of effective teamwork among the employees of ASDA PLC

As discussed in ASDA, communication plays a vital role. Communication is one of the most important factors that contribute to have an effective teamwork. Leaders are specially trained so that they can connect with their team members in a better way. It is important for a leader to be proactive in understanding the problems of his team members, listening and helping or giving advice, helps in building good relationship and results in effective teamwork.

Another important factor that affects the teamwork is recognition and reward. The organization provides bonuses and salary hikes to those employees who have shown great results and good performance consistently. Money and rewards, always keeps the employees interested and motivated and thus, helps in developing an effective teamwork.

Leadership can be considered as the backbone for smooth and effective functioning of any team. A team without a captain or leader cannot function on its own. The leader is someone, who a team looks forward to, the leader keeps the team motivated, and the leader defines the goals and explains what is expected from each team member. Thus it is leader who defines the structure of a team. An un-organized team will result in chaos, confusion and insecurity, while a well-organized team will function to the best of its ability. Leader also brings the belief in the work which is very important to build trust among each other. In ASDA, leadership is considered as key element within the organization. The company follows Tiny Noticeable Things, which are being followed by the leaders, which help them improving their bond with the team. For example, the polite behaviour, helping the employees at the stores and get involved in the social events makes the employees feel more valued (Dionne, 2004).

P 4.3 Evaluate the impact of technology on team functioning within ASDA PLC

The recent advancements in the field of communication and information technology has been a contributing factor in impacting the proper functioning of the team within the organization. With the introduction of mobile phones and internet, it has become easy for employees to stay connected and help other employees during emergencies. However, these advancements also have their negative affects too. Since, these days’ computers have become prime source to store data and confidential information of an organization; these are subjected to various malicious threats such as virus and Trojan. Activities like phishing can lead to stealing of data or credentials which can be misused later. Mobile phones have become an easy source to communicate with each other, but too much use can lead to burden also. A person who is on vacation or away from work would not appreciate too much phone calls (Kumar, 2003).  Thus it can be seen that these advancements have contributed a lot in smooth and proper functioning of the team as they can interact more conveniently, but at the same time these technologies should be used wisely in order to make full use of it.

As we know, ASDA is a retail company who has many supermarket and stores across UK, it is important for managers to interact and keep track of day to day activities. Thus, ASDA follows an effective communication system, since it is not possible for managers to physically visit each store. Thus, with the coming up of new and improved technologies interaction in ASDA has increased a lot, which has improved the proper functioning of the team. The nomination process which is used by managers in ASDA to nominate employees who have shown great results, so that they can be rewarded is now done through an online process. The new recruitment process in ASDA also involves an online process, which has been made possible because of the new tools and software because of the development in the field of technology.

Conclusion

It can be concluded from the above report, that understanding organizational behaviour is an important aspect of management. The rules and regulations, the structure and the culture should be such that they complement each other, so that the company can perform better. It is important to have effective leaders in any organization that can motivate the team and defines their goals so that the team as a whole can work effectively. The report also bring out the importance of different organizational theories and motivational theory that acts as the theoretical aspect, which the management can refer in order to take better decision within the organization. The report has studied the organizational behaviour of the two companies and have shed light on the various aspects of both and also compared them to show that each organization has different structure, different culture and follows different approaches depending upon the main objective of the company.

Reference

Dionne, S. D., Yammarino, F. J., Atwater, L. E., & Spangler, W. D. 2004. Transformational leadership and team performance. Journal of organizational change management, 17(2), 177-193.

Graen, G. B., & Uhl-Bien, M. 1995. Relationship-based approach to leadership: Development of leader-member exchange (LMX) theory of leadership over 25 years: Applying a multi-level multi-domain perspective. The leadership quarterly, 6(2), 219-247.

Hall, D. T., & Nougaim, K. E. 1968. An examination of Maslow’s need hierarchy in an organizational setting. Organizational behaviour and human performance, 3(1), 12-35.

Katz, D., & Kahn, R. L. 1978. The social psychology of organizations.

Kumar, S., & Zahn, C. 2003. Mobile communications: evolution and impact on business operations. Technovation, 23(6), 515-520.

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