Harrison Case: Q 2
Rubric Question # 2 – Ethical and Socially Responsible Decisions:
Introduction
Conducting business is absolutely challenging especially in the modern business world, whereby ethics have become a major concern. Wrongdoing by business entities has captured great attention from diverse parties such as the public, governments, lobbying groups and other relevant parties, thus calling businesses to adopt acceptable business practices and conducts.
This paper explores ethical and socially responsible decisions. First, the paper will briefly identify all of the various social and ethical issues facing Harrison Company. Next, the paper will identify one issue from the list that relates to environmental sustainability and offer a brief discussion about the issue. Then, I will select one different ethical dilemma from my list of social and ethical issues facing the company. The next section will identify the various major stakeholders that could be affected by this dilemma and the ones who could influence the decision; before identifying three possible responses to this dilemma and suggesting possible consequences (for the major stakeholders) for each of the three responses. Later, I will provide a specific action plan for dealing with this specific issue and discuss why (or why not) my plan is ethical, socially responsible, and just; as well as how does this action plan affect the business strategy or vice-versa.
Brief description about the company
The Harrison Company is a publicly traded company situated in State College, PA. The mid-sized regional retailer with 80 stores in seven states is experiencing a period of crisis. It generates precisely $600,000 from each of its stores, which are in rural areas. The company has just appointed a new president after the former retired. Since the former president disregarded the need to adopt an unambiguous for operating the company, competition from other retailers, especially Dollar General and Wal-Mart, has steepened. Given that chances of adopting low-cost strategy followed by Wal-Mart and a differentiation strategy followed by Nordstrom are blurred, purchasing or constructing eight new stores, as well as the renovation of the Pennsylvania distribution center are the next year’s plans. The board members require the new president to adopt a specific strategy, though status of stores and distribution centers remained intact last year. Further, the company is facing various concerns, mainly related to social and ethical issues as identified in the following section.
The various social and ethical issues facing Harrison Company
| Issue | Explanation |
| Job protection | The company’s employees are uncertain about their jobs due to financial crisis facing the company |
| Supplier relations | The company infringes its contract with suppliers of a 30-day payment by paying the suppliers on more than 60-day average. It also takes supplier prompt payment discounts. |
| Employee relations | The company’s top management had recently fired one of the store managers for accusing the company of buying very inexpensive clothing from a Honduran company whose employees face slave-like conditions. |
| Environmental degradation | Construction of eight new stores will lead to environmental degradation. Also, there is an issue of increased pollution due to ineffective distribution network, and high energy consumption. |
| Accountability issues | Making of decisions in the company lacks accountability |
| Compensation issues | It delays compensation to suppliers |
| Long working hours | Both store workers and store managers are exposed into long working hours. |
| Accuracy of information | The company lacks qualified personnel for preparing accurate financial reports |
Issue relating to environmental sustainability
Environmental degradation is an apparent environmental sustainability issue resulting from different factors in the company. First, construction of eight new stores will absolutely have unfavorable impact on the environment. Again, the company has ineffective distribution network, which leads to intensive energy consumption and high levels of pollution. For instance, Harrison has only two distribution centers, which distribute to its 80 stores, whereby some of the stores are over 250 miles away. This implies usage of huge quantities of fuel to serve all the stores.
Ethical dilemma
The case introduces an ethical dilemma concerning how to improve the distribution network. It is shown that the company has only two distribution centers serving all 80 stores, of which some are beyond 250 miles away. Again, one of its next year’s plans is constructing eight new stores. The case shows that the company’s distribution centers receive inventories from different suppliers before distributing the inventories to its stores. On one hand, the manager can opt to increase number of distribution centers to reduce energy consumption. The manager can also choose to close down some of the stores, especially unprofitable ones. Further, the company can decide to close the distribution centers so that suppliers will be delivering the inventories directly to its stores. However, this would trigger different reactions from different stakeholders who could be affected by this dilemma.
Various major stakeholders that could be affected by this dilemma and the ones who could influence the decision
Suppliers, shareholders, and company’s employees and their families, as well as the general public are the major stakeholders who could be impacted by the dilemma. On the other hand, the company’s shareholders and board of directors are the stakeholders who could influence the decisions.
Three possible responses to this dilemma and possible consequences (for the major stakeholders) for each of the three responses
The dilemma would absolutely encounter different responses from diverse stakeholders. For instance, employees, suppliers and general public may support the first decision of increasing distribution centers. This is due to the fact increasing distribution centers would reduce energy consumption and level of pollution to the environment. Again, it will create more job opportunities for the general public. On the other hand shareholders and directors may oppose it on a basis that increasing distribution centers would increase costs.
Another possible response concerning closure of some stores is that employees, suppliers and general public may oppose it in a sense that it make many people jobless. Similarly, shareholders and directors may oppose it on argument that closing the stores would reduce the company’s revenues and profitability.
The third possible response regarding elimination of distribution centers is that employees and general public would absolutely oppose it since it will make many people jobless. On the other hand, shareholders and directors may support it on grounds the decision would mitigate operational costs, while the suppliers may remain neutral not knowing the consequences.
A specific action plan for dealing with this specific issue
In order to address the issue, I would consider the first decision of opening new distribution centers since it appears as the most ethical decision. This is due to various reasons. First, it is the decision supported not only by the most, but also by the core stakeholders – employees and their families, suppliers, as well as the general public. The decision is more likely to foster positive impacts on all stakeholders. In the case of the aforementioned stakeholders, the decision would create more job opportunities, thus improving societal welfare. Even though shareholders and directors may oppose it on a basis that it would increase costs, gains are more likely to exceed the costs. Crofoot, (n.d.) explains that ethical businesses tend to earn more profits compared to unethical ones. Being ethical needs focusing on business core stakeholders, particularly the public and environmental sustainability. The decision would have less impact on the environment in a sense that it would reduce amount of pollution, which might also impact the entire society including the shareholders and directors.
The effect of the action plan on the business strategy
Absolutely, the action plan would intensively boost the business strategy. For instance, the core stakeholders – employees and suppliers would remain committed to the business strategy since the action plan will be of great importance to them. Further, Reference for Ethics, (2015) apparently explains that ethical decisions may affect wide range of people compared to decision made by business owners. Thus, making ethical decisions is quite a powerful tool especially in the modern competitive business world, whereby ethical concerns are rampant.
Harrison Case Part 3
Current situation
Harrison Company has been performing poorly in the last three years. The revenue from sales has been dropping in the same period. Harrison Company owns 80 stores located in rural areas. Initially, the rural setting of the company stores enabled it to enjoy reduced competition. However, competitors such as Wall Mart and Dollar Mart have set up stores within approximately 10 miles of each store.
The company lacks an effective strategy to foster competition from other stores such as Wall-Mart. Also, the management requires necessary leadership skills and financial skills. It ‘s hard to embrace a low-cost strategy and a differentiation strategy at Harrison Company. Competing with low-cost stores such as Wall-mart is challenging because, the company does not have an effective strategy.
The employees of Harrison Company are not happy at the Company. The survey indicates that the employees feel that the future of the company is uncertain, there is a lack of accountability, poor management, and financial deterioration. Besides, a former employee has blown the whistle on the company’s strategy of acquiring cheap garments from and Honduras Company. The employees of the enterprise are subjected to slave-like working conditions.
The recession has negatively affected the industry over the last eight months. The monthly sales have reduced by 4% in the industry. Consumers have become price sensitive only purchasing affordable products. According to the consultant, the operating expenses will increase over the next three years. The cost of diesel fuel will increase by $4.80. Furthermore, electricity costs will escalate by 15% annually n the three years period. Inflation will increase by 9% and unemployment by 11%.
The current situation directly influences the sales forecast. Thus, the interaction between the economic situation, competition, labor, customers, and the company strategy will determine if Harrison Company increases its revenue from sales.
Trends
Revenue from sales has been dropping in the last three years. The revenue was at $52.102 million in the last three years. The revenue reduced to $ 48.992 million in the last two years. The revenue in the last one year was at $48.127 million. This represents a 7.629% reduction in revenue over the last three years.
Customers are becoming price sensitive. It connotes that customers are least likely you buy a particular product now if the price increases compared to three years ago. The entry of low-cost strategy stores further deteriorated the situation. Low-cost stores offer products at reduced prices hence attracting more customers. Intense competition from Wall Mart and Dollar has further reduced sales.
Inflation affects product costs. Because of inflation, the prices of products increase. Consequently, the spending power of the customers decreases. Price sensitive customers will reduce their spending or opt to buy cheaper products from other stores such as Wall Mart and Dollar. Because of inflation, operation expense increased from $7.659 million three years ago to $ 7.893 million last years. The operational cost grew by 3.06% in the three-year period.
Sales forecast
Currently, the sales at Harrison Company are reducing. Many factors contribute to the reduction in sales. A working strategy has to be implemented for Harrison Company to realize growth in sales. The employees including sales employees need to have the necessary skills and attitude for sales to grow. Therefore investing in employees training is a worthwhile venture. The company strategy should also be revised to promote increased sales and reduction in expenses. A low-cost approach may be effective in attracting more customers to the stores and competing well with wall mart. Certain costs such as contribution to local charities and organization ($ 1,025,000) can either be removed or reduced.
The sales forecast takes into consideration other factors such as inflation, competition, and the company strategy. These factors affect the overall growth of the enterprise. The formula employed to compute the forecast sales is expressed as:
The inflation for the first three years is 9%, according to the consultant. A realistic growth rate for the company is 3% annually. The estimated sales forecast for Harrison Company is presented below:
| Year | Previous sales in millions | Inflation | Growth rate | Forecasted sales in millions |
| 1 | 48.127 | 0.09 | 0.03 | 53.90224 |
| 2 | 53.90224 | 0.09 | 0.03 | 60.3705088 |
| 3 | 60.3705088 | 0.09 | 0.03 | 67.61496986 |
| 4 | 67.61496986 | 0.04 | 0.03 | 72.34801775 |
| 5 | 72.34801775 | 0.04 | 0.03 | 77.41237899 |
Figure 1: Estimated Five years sales forecast
Figure 2: Sales forecast line chart
An assumption has been made that the rate of inflation will reduce after the estimated three years. The inflation rate used to determine the sales forecast for the fourth and fifth year is 4%.
Marketing
According to the marketing team, the company employs a push strategy amalgamated with advertising. The summer vacation months, June to August, and the Christmas festivities season contribute 75% of the total sales. The advertising plan of Harrison Company constitutes of 50% local television spots and sponsorship of local events accounts for 25% of the advertising scheme. Besides, 25% accounts for advertising in the form of coupons placed in hotels, restaurants, and motels.
Product
Harrison Company offers products in two broad categories. These include high-end products and non-durable consumer products. The high-end products that are divided into country style and new age products include products such as candles, jewelry, furniture, paintings, music CD, and incense. On the other hand, non-durable consumer products include clothes, soaps, cosmetics, and food. The company markets the products via media and local events. Also, employees dress up to reflect the country style and new age style of the high-end products. The company needs a product differentiation plan to be competitive. Even though the country and new age approach employs a degree of differentiation, more needs to be done to ensure uniqueness of the company’s merchandise
Price
The pricing of merchandise at Harrison reflects the category of the product. Premium pricing is done on high products such as jewelry, painting, and furniture. Consumer non-durable merchandise are sold at competitive prices. Consumer non-durable goods are moderately priced. Since non-durable consumer goods are mostly fast moving goods, their prices directly influence the sales. As earlier observed, customers are more sensitive to prices. Therefore, a customer may opt to buy a product at Wall Mart or Dollar if the price is affordable than I Harrison company. The solution is to engage in a low-cost strategy to attract more customers.
Place
Harrison Company own 80 stores distributed in seven states. These include 16 stores in Massachusetts, 12 in Connecticut, 10 in Maine, 10 in Vermont, 10 in New York (four of those in Western New York), eight in Pennsylvania (six of those in Western Pennsylvania), four in New Hampshire, four in Rhode Island, three in West Virginia, two in western Maryland, and one in New Brunswick, Canada. Harrison Company owns stores of the same size each stocking similar goods. The company distributes its products using its trucks. The company owns two distribution centers; one in Pennsylvania and another in Massachusetts. These centers serve stores that are 250 miles away. Even though it is cost efficient, distribution of merchandise takes longer time owing to the distance. The company may buy warehouses close to the stores for faster distribution. Besides, distribution time may be reduced significantly via contracting distributing companies.
Promotion
Harrison Company uses the media, local platforms, and coupons to promote its products. These methods account for 50%, 25%, and 25% of the marketing plan in total. The company takes part in local charities and organization where it donates close to $ 1,025,000. The company should expand its advertising medium to include online advertising. Social media advertising is also a viable option. Having an online store is vital. Online stores offer numerous advantages such as flexibility, freedom, and making informed decisions. Promotion can integrated with product differentiation to give the company an edge over its competitors.
Financial analysis
Liquidity analysis of Harrison Company
The liquidity analysis indicates the ability of a business to meet the short-term obligations. Liquidity analysis consists of current ratio and acid test ratio. A higher ration in the former and the latter indicate greater liquidity including lower risk for the lender in the short time. Higher liquidity means that the company can handle its short-term obligations without defaulting. Acceptable ratios include 2:1 for current ratios and 1:1 for quick ratios (Financial Analysis, 2007).
The ratio 1:0.7 and 1:0.07 for current assets and quick ratio respectively are lower than the acceptable value (2:1 and 1:1). Therefore, Harrison Company cannot meet its short-term obligations.
Debt analysis for Harrison Company
Through debt analysis, the ability of a company to meet its debt obligations is evaluated (Financial analysis, 2007). The ratio indicates the degree a company is depending on debts to run its operation and investments.
Leverage ratios
The leverage ratio are low at 0.42:1 and 0.5:1. Thus, the company does not rely heavily on debts and can manage its debt obligations.
Profitability analysis of Harrison Company
Harrison Company has a low profitability as indicated by the calculations. The company has a little net profit margin at 0.002.
Efficiency analysis of Harrison Company
The efficiency analysis indicates the appropriate use of the company’s assets.
The average inventory at Harrison Company turns over 5 times. Thus, the company is managing inventory satisfactorily but not god enough.
Harrison Company has a low average collection period. The company is strict in its credit policy hence limiting the number of customers accessing credit services.
On overage, the shelf life of merchandise at Harrison Company is 73 days. It takes approximately 73 days for products to be sold off the shelves (Financial analysis, 2007).
The overall performance of Harrison company is not impressive. As earlier observed, the profits have been declining in the last three year. The liquidity analysis indicates that the company is incapable of meeting its short-term obligations. The company’s current liabilities exceed the current assets hence the poor current ratio. On the other hand, Harrison Company does not heavily rely on debts to fund its operations and activities. Many long-term loans is expensive to a company in terms of risks and restrictions to management in terms of restrictive lender covenants. The latter hinders the company in making certain decisions that affects its performance. A company with more debt than equity raises concerns. Therefore, at a debt to equity ratio of 0.42:1, Harrison Company is on the right track. The profitability of Harrison Company is low. The net profit margin, return on equity, and return on assets are low at 0.002, 0.003, and 0.003 respectively. Lack of a clear strategy amalgamated with intense completion is the major reason for a failing profitability.
The financial situation at Harrison Company can be improved through a change in strategy. In addition to profitability, the strategy must take into consideration the status of the employees and customers alike. A low cost strategy will increase the customer base of the company allowing it to compete against Wall mart. However, the company has a low liquidity ratio that will affect any short-term obligations. However, since the company has a low debt to equity ratio, long term borrowing to finance the strategy is a viable option.
The employees of Harrison Company are in doubt of the financial situation of the company. According to the employees, the company is in a difficult situation financially. The employees worry about losing their jobs In addition, owing to the financial situation, suppliers are paid on a 60-day average instead of the contracted 30-day period. Most employs do not consider Harrison Company an employee of choice. In addition, the case in court taints the image of the company. Therefore, intense marketing is needed to reestablish the brand name. In addition, the logistics and strategy are also affected since suppliers may decide to terminate their contract. If this happens the company may run out of stock and a result, the low-cost strategy will fail.
Logistics and operations
The essence of supply chain management is to ensure improved customer service delivery while reducing costs. In addition, the supply chain management should support the company’s expansion into new markets and product lines. A good supply chain leads to reduced cost, increased transparency, and reduced risks (Waters, 2003).
Harrison Company has stores and distribution networks across several states. These include Massachusetts, Connecticut, Maine, Vermont, New York, Pennsylvania, West Virginia, Rhode Island, Maryland, and Brunswick Canada. Even though the distribution accounted for 8% to 9% of the total costs of goods, the company can still lower the cost further. For instance, the distribution centers serve stores than are more than 250 miles away. Therefore, the company ends up spending more on transport. A viable solution is to buy warehouses near to some stores to store merchandise to cover a particular set of stores. The table below show stores that too far from the distribution centers and possible location of warehouses.
| Stores location | Nearest distribution center | Possible location of warehouse |
| Maine, New Hampshire, Vermont, Massachusetts | Pennsylvania | Vermont |
| Maryland | West Virginia | Maryland |
Figure 3: Location of distribution centers and possible warehouse
Currently, the company receives supplies from its suppliers once in every two weeks. In case of unforeseen stock completion, the company uses an emergency contracting mechanism. The current policy has its advantages and disadvantages. Uncomplicated management of supply is an advantage of the current policy. A major problem of the system is that some supplies are seasonal. For instance, customers demand certain products at particular times of the year. For example, the demand for high-end products increases at certain holidays such as Thanksgiving and Christmas. Suppliers should be categorized according to the type of products they supply. Secondly, suppliers of slow moving items should supply only when the stock is almost depleted. On the other hand, suppliers of fast moving consumer goods should supply at least once in every week. The move will prevent emergency contracting which may be expensive and inconvenient. The company needs to have access to information on suppliers to aid in effective decision making in procurement.
The company uses its trucks to make deliveries to stores from the distribution centers. This accounts for increased costs of distribution. A reduction of the cost will be observed if the company hires trucks from third companies. This is because the cost of fuel and maintenance of buses transfers to the company owning the trucks. The company policy discourages drop shipment of merchandise. However, drop shipment reduces the cost of distribution. In drop shipment, merchandise is transferred directly from the manufacturer to the customers. The cost of distribution, storage, and transport are reduced through drop shipment.
Harrison Company stores inventory with large sized items closest to the bays for efficient transfer. The company needs to incorporate technology into its inventory system. It connotes that Harrison Company should implement an efficient electronic inventory management system. An electronic inventory system is fast, secure and prevents fraud in storage and distribution of merchandise. It promotes transparency. Also, the storage should be changed to place fast moving consumer goods closer to the bay. The pro of such an inventory is that it fosters time management. Less time is spent loading FMCG to trucks since they will be stored in the bay.
Cost reduction and customer satisfaction are important aspects of logistics and supply chain. The flow of information is necessary to attain cost reduction and customers’ satisfaction goals. The ability to access information on customers, suppliers, and products ensures that decisions on supply chain and logistics are appropriate. Harrison Company should implement a feedback mechanism whereby both clients and suppliers relay their compliments, ideas, and grievances. All the departments of Harrison Company should co-operate in an attempt to foster efficient supply chain management.
Operating analysis
| Store location/ number of store | Number of hours (weekdays) | Number of Hours (weekend and holiday) | Number of employee (weekday) | Number of employees (weekend) |
| Massachusetts 16 | 10 | 7 | 20 | 10 |
| Connecticut 12 | 10 | 7 | 18 | 9 |
| Maine 10 | 10 | 7 | 12 | 8 |
| Vermont 10 | 10 | 7 | 12 | 8 |
| New York 10 | 10 | 7 | 12 | 8 |
| Pennsylvania 8 | 10 | 7 | 10 | 8 |
| New Hampshire 4 | 10 | 7 | 8 | 5 |
| Rhode Island 4 | 10 | 7 | 6 | 4 |
| West Virginia 3 | 10 | 7 | 4 | 3 |
| Western Maryland 2 | 10 | 7 | 4 | 3 |
| New Brunswick 1 | 10 | 7 | 5 | 3 |
Figure 4: Employees load schedule
Employees will work for a total of 57 hours in a week (Monday to Saturday). Thus, each employee works for 17 hours. Employees work for approximately 6500 hours each year (17*365). Locations with many stores will have more employees working during the day and on weekends than in places with fewer stores.
Logistics and operations decisions rely on the sales forecast (Waters, 2003). To attain the forecasted sales observed changes should be implemented in the supply chain, operations, and employee management. Harrison Company should adopt a low-cost strategy. Therefore, cost reduction is necessary if the goals are to be achieved. Employee training and development is also part of the plan. Efficient management of suppliers in terms of timely payment and properly scheduled delivery should be embraced.
Harrison Case Part 4
Harrison Company is a mid-sized regional retailer whose headquarter is in State College, PA and apparently it is facing a time of crisis. The specific industry and global trends have a great influence on the company and its business strategies (Cespedes, 2014). The company’s stores are 80 in seven states and primarily in the Northeast and has two equally sized distribution centers one in Pennsylvania and the other one in Massachusetts. All of the company’s stores has are majorly in the rural areas and generate about $600,000 per annum from every store. Recently the company has experienced continuous losses instead of profit due to industrial and global trends that are discussable.
In the past, Harrison Company has been somewhat shielded from competition by its stores’ rural locations. However, due to decentralization and expansion of the competitor, the competition as gone up reducing the profit and income generated per annum (Cespedes, 2014). For example, Wal-Mart a competitor company has its stores after every 10miles on average from each stores occupying even then the rural areas. Their availability of the competitors at the doorstep of the consumers reduces the chances that the clients will come to the selected Harrison Company store that might be further yet there is an alternative closer and convenient.
The company has a bigger problem with some of the staff who does not have the experience of the rapidly changing world. The employee effectiveness and efficiency help the company to adapt and transform through the changing technology and global trends that arise every now and again (Cespedes, 2014). In Harrison Company, eight of the home office employees have not developed advanced business skills. The advanced business skill helps the staff to work effectively and efficiently without struggling. Working from home office limits the employee from participating in activities that may require teamwork in an organization that helps to achieve organizational goals and objectives.
Some of the industry and global trend that might have the greatest potential to affect the company and its business strategy is the use of low-cost strategy and differentiation strategy. A competitor like Wal-Mart Company uses this strategy to beat its competitor by selling their products at a low price to attract new and maintain customers. With the use of low-cost strategy, clients tend to shift from the Harrison Company to the Wal-Mart since it is much cheaper yet the products perform the same function (Cespedes, 2014). A competitor like Nordstrom Company uses this strategy to beat the competitors by produce goods that are of better and different in quality. The customers like high-tech goods and high-quality goods making the clients move from the one company’s product to another.
The other global trends that might have the greatest potential to affect the company and its business strategy include supporting a local charity and sponsoring the baseball teams. Despite the losses that the company is experiencing, the company supports a local charity by approximately $1,000,000 yearly reducing the profit made by the company (Cespedes, 2014). The company also sponsors little league baseball teams with approximately $25,000 per year in total. The charity support and baseball teams’ sponsorship increases the financial problem since they are not directly contributing to the generation of income generation. Next year’s strategy is to renovate the old retail stores and construct eight more retail stores at strategic towns to increase the market. The renovation of the Pennsylvania distribution center will help in updating the technology in place with the latest technology so that the center can work effectively and efficiently (Cespedes, 2014). Construction of new stores will help to provide the clients with goods at a shorter distance of coverage.
Harrison Case Q 5
Rubric Question #5 – Leadership and Group Dynamics:
Introduction
Numerous trends in the contemporary business environment are forcing business entities to remain flexible to adopt, implement and manage new changes whenever need arises. Nonetheless, adopting, implementing and managing changes has been absolutely challenging in most organizations due to ineffective leadership and group dynamics, which exist within the organizations. Thus, it is imperative to have effective leadership that recognizes group dynamics, as well as how to deal with them in order to adopt, implement and manage new changes in the most appropriate manner possible. The paper focuses on leadership and group dynamics in the Harrison Company. First, I will identify specific leadership actions and behaviors needed to stabilize Harrison Company and allow it to success of operating; and how Iwould interact with and demonstrate leadership skills in dealing with the board of directors. Secondly, the paper will discuss how I would address infighting, unnecessary arguments, and the quiet resistance between home office personnel, howI would work to change individual and group behaviors, how long it will take to facilitate these changes in behavior, as well as what I will do if the identified actions that Ihave just described are resisted by one individual.
About the company
The Harrison is a public company whose head offices are located in State College, PA. It is a mid-sized regional retailer with two-equally-sized distribution centers serving 80 states, which are spread across seven states. Each store has been generating accurately $600,000 annually, although the sales and profits have been declining for the last three years. Harrison appointed a new president who found that the company is experiencing numerous issues, which seems to be associated with its organizational culture. The company’s board of directors is quite conservative and the members seem to be divided, even though they all emphasize on performance. The home office lack leadership ability. Further, significant infighting between people, accountability for decisions, and passive-aggressive behavior are prevalent issues in the company.
Leadership actions and behaviors
In order to stabilize the company and allow it to achieve success in operating, it is compulsory to take specific leadership actions and behaviors. First, I would encourage effective communication to offer a lucid vision and direction towards achievement of common goals, at the same time creating alertness for need to change. The second action I would take istraining. I would conduct a continuous training for all organizational members to show them why a change is necessary and to implement it successfully. Recruitment would be the next action to take. The company consists of various people lacking sufficient skills to execute their duties appropriately. While considering personal qualifications, I would also consider adaptable and flexible individuals (Teri, 2010).
In addition to above discussed actions, I would encourage recognition. I would recognize organizational members who are ready to adopt the new change and motivate them through empowering. Given that lack of accountability is a core issue in the company, the next action is management accountability. This will involve establishing a daily basis mechanism to promote accountability in decision making processes, and monitor how the change will occur.
Given that change has to occur through a process, I would consider measurement as the next leadership action. I would establish a measurement mechanism designed to measure the progress of the progress in the process of change. The mechanism would be designed not only to measure the progress, but also to identify any deviations, and communicate the identified issue(s) so that necessary corrections should be adopted. Upon establishing the measurement mechanism, I would create the corrective action system. It is obvious that during the change process various obstacles will come across. The corrective system will be there to take any corrective measures of any issues or obstacles identified (Teri, 2010).
How I will you interact with and demonstrate leadership skills in dealing with the board of directors
I would interact with and demonstrate leadership skills in dealing with the board of directors in different ways. Given that the company lacks effective coordination and accountability, I would majorly rely on democratic leadership style based on participative leadership theory. Under this style, I would include all members in decision making. When interacting with the directors, I would be a proactive leader rather than reactive. That is, I would look at dysfunctional processes and how the existing processes have being impacting the directors. I would be a flexible and adaptable leader so as to cope up with new situations whenever they emerge. The case study reveals that the board members have differing priorities, even though profitability is a common priority. While interacting with the directors, I would be a good communicator in order to comprehend the needs and expectations of every member. Further, I would be respectful to everyone, at the same time encouraging each board member to respect others’ opinions.
However, I would recognize the commonly identified types of power and which ones I would use as part of my leadership style. Leadership powers are broadly categorized into two categories, which encompass: position power (legitimate, reward, and coercive) and personal power (referent and expert) (Northouse, 2010). Among the five types of leadership power, I would only exclude the coercive power, which mainly entails penalizing or punishing others.
How I would address infighting, unnecessary arguments, and the quiet resistance between home office personnel
Significant infighting between people and passive-aggressive behavior are rampant issues in the organization. Even though group members associate themselves with the group, they sometimes feel that they are unrecognized. Consequently, they tend to adopt unacceptable behaviors, which in many cases disrupt group activities. The Zimbardo’s emergent norm theory asserts that “members of collectives are more likely to act in extreme and unusual way” (Forsyth, 2009, pp. 521). Extreme and unusual behaviors in most cases spur conflicts in teams and groups as witnessed in the Harrison case.
Available literature reveals different approaches of dealing with conflicts. These encompass: ignoring, giving in, negotiating, arbitration and mediation. Rather than using all approaches, I would rely on negotiation. This is a process which involves the conflicting party to mitigate or eliminate the existing conflicts (Forsyth, 2009). During the negotiation, I would encourage open communication and recognition of every member. I would also encourage group members to avoid using their powers during negotiation in order to avoid discouraging other members from taking active participation. This would take approximately two weeks before reaching appropriate solutions. However, in other cases, a single individual might resist the identified actions that I have just described. In such a case, I would encourage face-to-face discussion with the resisting party to explain the value of such aspects to him/her.
Harrison Case: Q 1
Rubric Question #1 – Implications of Integrated Business Processes
Strategic management is dynamic in any organization since it ensures that the organization achieves its objectives based on its capabilities, constraints and the nature of the environment its operating in. therefore, with this in mind then strategy formulation should be taken as an integral part in any strategic management process. Strategic management should be reviewed in three phases to develop a future oriented strategy, including diagnosis, formulation and implementation. Diagnosis involves analyzing organizations internal and external environment, and identifying issues and categorizing them from high priority to low priority. Formulation in its case involves development recommendation aimed at creating sustainable advantage over competitors. Lastly is the implementation stage that involves actualizing an implementation plan at all cost to ensure the developed operational strategy achieves its objectives. Therefore, this paper will focus on the most effective strategy the Harrison company should utilize to have a competitive edge over its competitors.
In the case of Harrison Company, the best strategy to employ is defensive strategy considering it is less risky and has high benefits. Additionally, major competitor is Wal-Mart who has a price, customer and resource advantage to apply offensive strategies. From the case, it is clear that Harrisons have a targeted market since all its stores are located in rural areas with a rural setting and hence application of a defensive strategy will work to is advantage. Defensive strategy focuses mainly on marketing and advertising, which are effective ways of attracting and retaining existing customers. Furthermore, I would consider defensive strategy mainly because the company board of directors is conservative in the sense that they will try as much to maintain the old strategy applied by the former manager. Additionally, the company has a good structure on marketing and advertising which will be easy to convince the board if minor amendments needs to made. On the other hand, defensive strategy can be actualized through passive measures which are not a threat to the company or market share. However, an offensive strategy will be used but minimally with major focus on defensive strategies.
Considering the fact that defensive strategies are aimed at lowering the risks of being attacked, weaken any attack that might occur and influence competitors to focus their attacks on rivals they are various aspects that Harrison should consider based on the case report. From the case it is evident that employees are incompetent and lack the basic skills of doing business especially the financial team. Therefore, it would be prudent that the company fires certain employees and replace them with qualified employees to deepen the company’s capabilities. Logistics department is in chaos, and therefore there is need for enhanced flexibility in distribution of stocks to stores that have run out of them immediately to maintain customer confidence. Wal-Mart are known for their low prices and wide range of stocks, to still maintain a competitive advantage over them the company should source their stocks from suppliers with the best prices and quality in order to keep low prices that match competitors offerings. Since most of Harrisons stocks are acquired locally, the company should sign exclusive deals with the suppliers to ensure that competitors do not stock the same ones. The company’s structure are old fashioned, therefore it should adopt modern production technologies and invest highly on refurbishment of existing infrastructure to match those of Wal-Mart and other competitors. Lastly, the company should develop a framework that allows public announcements of its commitment to retain its current market share.
Considering that Harrison Company is a first mover it has an advantage over second movers hence keeping it at a strategic advantage. The company has not received any major competition in most of their location except that when Wal-Mart has launched. However, this does not mean that there will be no other players who will be interested to venture in the locations. Therefore, the company should build its image to boost customer confidence, adopt new technologies to replace old fashioned infrastructure and develop an exclusive distribution channels. On the proposed expansion the company should ensure that it moves first since first time customers always remain loyal and also new entrants will find it difficult to imitate the company’s model of business. Market location tactics fall under both defensive and offensive strategies, and based on the company’s location advantage it should in this case apply frontal assault, flanking maneuver, encirclement, bypass attacks and guerrilla warfare on its competitor as an offensive tactics to strengthen the defensive strategies already in place. However, offensive tactics will be more applicable in locations where no competitor has launched.
There are various generic strategies that the company can employ, however considering the fact that the board of directors is more focused on profits and maintaining the old structures laid by the former manager differentiation would be the best strategy. Another factor that will make differentiation more applicable is the fact that Harrison has marketed itself to stock high quality product, in facts it try very hard to conceal labels that read “made in China”. Harrison acquires most of its supplies from small local industries which have a reputation and a connection with the local people; hence people will have confidence with product stocked by Harrison with respect to Wal-Mart regardless of the price. On the other hand Wal-Mart is known to acquire its products mainly in China and other developing countries which have a reputation of producing low quality products.
Old fashioned structure might in this case work for its advantage since the locals have a connection with such designs and it’s hard for competitors to duplicate. However, this is only based on location basis because to all people are willing to keep on stagnated with the same old technology. In terms of differentiation, Harrison Company should ensures that local products are well stocked and those from other locality comprise latest product features. Additionally, the company based on its setting at locality it is mainly a narrow customer segment based.
However, to ensure that the strategic management strategy is achieved and well implemented the company must make changes. Based on the fact that most of the employees lack basic qualification in their areas of jurisdiction, the company will be forced to retrench some of them and replace them with qualified ones. Additionally, management needs amendment and my recommendation is hiring new managers who understand the working of a business in a competitive environment. Also, low morale among junior employees as reported in an earlier report was due to poor management and leadership. However, considering that retrenchment is a costly thing it should be carried out in phases. During the first phases the management should be changed to boost employee’s morale and customer confidence, and it should be in the first year. Lastly, replacement of employees with qualified ones should be done within the next four years.
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