Tesco Example For Free - Free Essay Example

Sample details Pages: 8 Words: 2502 Downloads: 4 Date added: 2017/06/26 Category Business Essay Type Review Level High school Tags: SWOT Analysis Essay Did you like this example? 1. Introduction Tesco is a British based supermarket engaged in retailing of food and non-food products. The company operates in 12 markets worldwide, having a team of 500,000 employees (Tesco.com, 2014). Don’t waste time! Our writers will create an original "Tesco Example For Free" essay for you Create order Tesco was founded in 1919 by Jack Cohen from a market stall in Londons East end. Tesco is one of the worlds largest retailers, serving millions of customers every week (Tesco.com, 2014). It operates via various store formats such as express, metro, extra and superstores. In 2013, Tesco recorded revenue of  £43.6 bn and trading profit of  £2,191m in the UK (Tesco Annual report, 2014). In the next section, the report will make use of the PEST framework and Porters five forces to analyse the external business environment in which Tesco operates. To analyse the internal business environment, the SWOT tool will be used. 2. Business Environment â€Å" A business firm does not operate in a vacuum but in a given environment, and has to interact and transact its business within this environment† (Fernando, 2011, p33). The two types of business environment are external (macro and micro environment) and internal. 2.1 External Environment 2.1.1 PEST Analysis of Tesco 2.1.1.1 Political As Tesco operates globally, it has to obey various government regulation and laws where they are operating. In terms of employment, the UK government encourages retail organisations to offer various types of job opportunities ranging from flexible, low wage and locally based jobs to high skilled, high wage and centrally located jobs to cater to the demands of groups such as students and senior citizens (Balchin, 1994). Most governments encourage businesses to employ local people for the development of the local economy. Many laws, regulations, codes of practice and guidance control the manufacturing, processing, distribution, packaging and labeling of food products (FSA, 2014). The Food and safety act provides food legislations acts in areas like hygiene, false description of food, low quality and unsafe food. Various environmental organisations encourage companies to reduce carbon emission in different stages of their supply chain. Tesco is working to achieve its 2020 target to reduce carbon emission throughout its supply chain. For example: using sea and rail modes of transport instead of doing so by road, opening new distribution centres to reduce transportation and hence reduce carbon emissions (Tesco.com, Tesco and society, 2014). 2.1.1.2 Economic Economic factors like recession, unemployment and GDP are important for Tesco as they influence demand of products in the market. People tend to spend less on goods in times of recession. Due to recession and unemployment, as the disposable income decreases, customers switch to discount stores such as Aldi and Lidl. According to the Office For National Statistics (2014), the number of people out of work declined to a five year low of 6.8 % (BBC News, 2014). Also, the youth unemployment rate declined with 283,000 people finding jobs in the early months of 2014, which is the highest since 1971 (BBC News, 2014). Though Tesco is expanding internationally, the economic indicators like unemployment rate in the UK will be of prime importance to Tescos profits in the future as the company is highly dependent on its home market. 2.1.1.3 Social Customer buying behaviour keeps on changing and hence retailers have to keep track of customers shopping trends. Customers like to shop at the smaller convenience stores rather than large stores (Tesco Annual report, 2014). Thus, Tesco has reduced opening of new stores and is focusing on convenience and online shopping. Shoppers are becoming more health conscious and they are more concerned about the quality of food (Doward, 2014). Thus, Tesco is investing in organic foods to meet the demands of customers. 2.2.1.4 Technological With the rise in the use of the Internet and digital technology, retailers have an added responsibility to incorporate new technology in their supply chain. According to the chairman of Tesco (2014), the capacity for customers to interact with each other and the organisation is driving different expectations in terms of service, choice and the overall shopping experience (Tesco Annual report, 2014). A major portion of consumers use smartphones for online shopping, comparing prices with competitors and reading reviews (Tesco Annual report, 2014). Tesco is increasing its investment in new technologies to serve customers better. In 2013, Tesco made huge investment to integrate point of cash management SMARTtill technology in over 10,000 UK tills to provide better customer service (Retail technology, 2013) 2.1.2 Porters Five Forces Analysis of Tesco According to Porter (2008), the five forces that shape industry competition are as follows: threat of a new entry, bargaining power of buyers, bargaining power of suppliers, rivalry between competitors and threat of substitutes (Figure 1). Figure 1 Porters Five Forces (Source: Porter, 2008, p80) 2.1.2.1 Threat of a new entry The threat of a new entry is low . The retail industry demands huge investment from a potential entry in the market (Economics Online, 2014). Many big players such as Tesco, ASDA, Sainsbury are operating in the market. Also, discount supermarkets stores such as Aldi and Lidl are present. Over the years, they have been investing in developing supply chain and efficient technology. It would be difficult for a new entry to compete with the well-established players. Moreover, it would be difficult for a new player to build relationship with suppliers. It should be noted that it would be difficult for a new start-up to compete in the UK retail market, however, for retailers established in other countries, it could be possible to gain a foothold in the UK market, just like Aldi and Lidl. Barriers to entry also include getting government authorisation to establish a new supermarket. This demands significant resources and time. 2.1.2.2 Bargaining power of suppliers Porter (2008) stated that suppliers have less bargaining power if they deal with big organisations in an industry. There are four leading players such as Tesco, Sainsbury, Morrison and Asda, accounting for 59% of total retail value sales in 2013 (Euromonitor International, 2014). These players are big organisations and can easily switch from one supplier to another due to strong financial resources. Hence, suppliers are dependent on the retail organisations and are keen to maintain long working relationships in order to remain profitable. Tesco, being the market leader can negotiate in terms of price with the suppliers and hence it has a strong position as compared to suppliers. Thus, power of suppliers is low . 2.1.2.3 Bargaining power of buyers There are many retail organisations operating in the UK market, offering standardised and less differentiated products. Buyers can easily switch from one brand to another due to the absence of switching costs. However, loyalty schemes like Tescos club card plays an important role in retaining customers. There are 38 million club card customers shopping in Tesco stores (Tesco Annual report, 2014). With the help of the Internet, customers can easily compare different prices to help inform their purchasing decisions. Overall, the bargaining power of buyers is moderate to high . 2.1.2.4 Rivalry among existing competitors The rivalry among competitors is high . The competitors of Tesco are ASDA, Morrisons and Sainsburys. The retail organisations compete directly in price wars in their stores such as labeling their product as low cost compared to the competitors. For example: ASDA has a price guarantee, and give a refund if the price offered is higher than other supermarkets. Tesco is also facing competition from low discount stores such as Aldi and Lidl. Tescos market share experienced a decline from 30.7% in 2012 to 30.1% in 2013, while discount stores Aldi and Lidl increased their market share to 3.6% and 3.1% in 2013 respectively, from 2.9% in 2012 (Neville, 2013). 2.1.2.5 Threat of substitute product or services Substitutes to supermarkets are the small convenience stores offering products to customers in their vicinity. However, supermarkets are planning to open convenience stores and smaller store formats closer to homes due to the preference of customers to shop more frequently and closer to home (Tesco Annual report, 2014). For food retailing, the threat of substitutes is low to moderate whereas for non- food products, it is moderate to high as people have various options to buy such as online and clothing stores. 2.2 Internal Environment 2.2.1 SWOT Analysis of Tesco A SWOT analysis is used to analyse the internal business environment of Tesco to identify strengths and opportunities. In addition, the SWOT tool also results in identification of core competencies of an organisation, and opportunities that the company is not able to exploit due to lack of resources (Wheelen and Hunger, 2011). Table 1: SWOT analysis of Tesco STRENGTHS WEAKNESSES Strong market position in the UK Strong brand name International expansion Clubcard loyalty scheme, owner of Dunhumby (world leader in customer insight) Diversification into other sectors Hypermarket store format Management change OPPORTUNITIES THREATS Increase in online shopping Rapidly growing economy – India and China Competitive market Government restrictions 2.2.1.1 Strengths Strong Market Position In The UK Tesco is one of the worlds largest retailers and has a market leading position in the UK. It is perceived as a strong brand offering great value to customers. The group has 3378 stores and employs about 313,923 staff in the UK (Tesco Annual report, 2014). According to Kantar media (2012), of 1.3 million customers that purchased groceries online during one month, over half of the customers purchased groceries from Tesco online. This shows that a greater number of customers like to purchase via Tesco online as compared to competitors. International expansion Tesco has international presence in regions like South Korea, China and Europe. It has been able to expand and build its profitable presence in various countries around the world. The ability to expand in various countries shows that Tesco has strong financial resources. Club card loyalty scheme â€Å"Clubcard, introduced in 1996, is our way of saying thank-you to our customers† (Tesco.com, Tesco UK, 2014). The company introduced club card scheme as a marketing tool to retain customers and hence increase customer loyalty. Tesco owns Dunhumby, a world leader in customer insight, and it has helped Tesco to understand its customers better (Tesco.com, 2014). Diversification The company is also involved in other business sectors such as banking and financial services, thus generating more profit from diversification. Tesco reported an increase by 14 % in main banking products like customer accounts for loan, mortgage, savings and credit cards (Tesco Annual report, 2014). 2.2.1.2 Weaknesses Hypermarket store format Tesco operates mainly through big store formats in the UK and internationally. However, customers prefer to shop in small convenience stores (Tesco Annual report, 2014). It is a challenge for Tesco as they have many big stores. The company has stopped its expansion plan of opening hypermarkets (Tesco Annual report, 2014). Management change Tesco is facing uncertainty in its management structure that could have an impact on its profitability. The CEO of Tesco cleared out 50 managers from its head office, with reasons unknown (Butler, 2013). It seems odd for a company to fire most experienced mangers in the competitive retail environment. 2.2.1.3 Opportunities Increase in online shopping There is a shift in customer trends; they like to do online shopping in the comfort of their homes or while commuting (Rigby, 2014). Tesco has skills and competencies to exploit this opportunity by providing better customer service. Investing in digital technology would be beneficial. Rapidly growing economy – India and China There is huge potential for Tesco to grow in developing economies like India and China. Due to rise of upper middle classes and increase in income spending (EY, 2014), Tesco can utilise its resources to tap this opportunity. 2.2.1.4 Threats Competitive market The UK retail market is highly competitive. The competitors such as ASDA and Sainsbury also have diversified operations in sectors like insurance and loan scheme and hence they are competing with Tesco in all sectors. Customers can easily switch to discount stores like Aldi and Lidl. Government restrictions Tesco is not only affected by the Eurozone crisis but also the problems arising in the Asian market. In terms of international expansion, Tesco is prone to government restriction on opening hours in South Korea (Tesco Annual report, 2014). 3. Conclusion Tesco is affected by many internal and external business environmental factors. Economic factors like decline in unemployment rate in the UK and increase in income spending in developing countries can be considered as an opportunity for the business. Social factors like changing consumer shopping patterns is a challenge for Tesco. For example: usage of digital media. However, Tesco is investing in new technology to serve customers better. In the retail market, the technology factor is of prime importance for a company to competitively position its product and services. Social factors like customers opting to shop at small stores is a threat as Tesco operates mainly through hypermarket stores that are located far from city centre locations. However, the company has stopped expansion of its big stores and is focusing on convenience stores to attract customers. In terms of competitive forces, bargaining power of buyers and rivalry between competitors is high. Hence, offering dif ferentiated and great value products is the solution. Tesco has strong resources and capabilities to tap the opportunities like expanding in developing economies and customers preference towards online shopping. 4. References Balchin, A. (1994) Part-time Workers in the Multiple Retail Sector: Small Change from Employment Protection Legislation?, Vol. 16, Isuue 7, p 43-57. BBC News (2014) UK unemployment rate falls to five-year low, Last accessed 22nd June 2004 at: https://www.bbc.co.uk/news/business-27406457 Butler, S. (2013) Tesco gets rid of 50 top managers as Clarke steps up pace of change, The Guardian. Last accessed 23rd June 2014 at: https://www.theguardian.com/business/2013/jul/31/fifty-tesco-managers-lose-jobs Doward, J. (2014) Organic food back in vogue as sales increase, The Guardian. Last accessed 22nd June 2014 at: https://www.theguardian.com/environment/2014/feb/09/organic-produce-sales-increase Economics Online (2014) Barriers to entry, Last accessed 27th June 2014 at: https://www.economicsonline.co.uk/Business_economics/Barriers_to_entry.html Euromonitor International (2014) Grocery Retailers in the United Kingdom, Last accessed 27th June 2014 at: https://www.euromonitor.com/grocery-retailers-in-the-united-kingdom/report EY (2014) Middle class growth in emerging markets, Last accessed 15th May 2014 at: https://www.ey.com/GL/en/Issues/Driving-growth/Middle-class-growth-in-emerging-markets Fernando, A.C. (2011) Business Environment, India: Pearson Education. FSA (2014) Regulation and legislation, Last accessed 22nd June 2014 at: https://www.food.gov.uk/enforcement/regulation/#.U6bpQI1dUVm Kantar Media (2012) Online Shopper Intelligence – UK, Last accessed 23rd June 2014 at: https://www.kantarmedia.co.uk/media/55366/kantar-media-compete-online-shopper-report-grocery.pdf Neville, S. (2013) Big four supermarkets squeezed by high-end and discount competitors, The Guardian, Last accessed 23rd June 2014 at: https://www.theguardian.com/business/2013/jul/16/big-four-supermarkets-squeezed-competitors Porter, M.E. (2008) The five competitive forces that shape strategy, Harvard Business R eview, January 2008, Vol. 86, Issue 1, p78-93. Retail Technology (2014) Tesco updates EPoS cash drawers, Last accessed 22nd June 2014 at: https://www.retailtechnology.co.uk/news/4764/tesco-updates-epos-cash-drawers/ Rigby, C. (2014) UK shoppers spent  £91bn online in 2013 – and look set to spend  £107bn in 2014, Last accessed 27th June 2014 at: https://internetretailing.net/2014/01/uk-shoppers-spent-91bn-online-in-2013-and-look-set-to-spent-107bn-in-2014/ Tesco Annual report (2014) Tesco annual report and financial statements, Last accessed 22nd June 2014 at: https://www.tescoplc.com/files/pdf/reports/ar14/download_annual_report.pdf Tesco.com (2014) About us, Last accessed 22nd June 2014 at: https://www.tescoplc.com/index.asp?pageid=6 Tesco.com: Tesco and society (2014) Reducing our impact on the environment, Last accessed 22nd June 2014 at: https://www.tescoplc.com/index.asp?pageid=636#tabnav Tesco.com: Tesco UK (2014) Clubar d, Last accessed 27th June 2014 at: https://www.tescoplc.com/index.asp?pageid=282 Wheelen, T.L. and Hunger, D.J. (2011) Concepts in Strategic Management and Business Policy: Toward Global Sustainability, 13th edition, Prentice Hall.

Police Brutality Based On Racial Profiling - 1682 Words

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Arthur Miller s Death Of A Salesman - 1061 Words

In â€Å"Death of A Salesman,† Arthur Miller takes a view about the usually positive value people put on success. By examining Willy’s downfall, we can see Miller is arguing how the fallacy of success crafts the amiss dreams. Miller displays how the constant mania to maintain the image of success destroys the concept of American Dream for ordinary people like Willy. Miller portrays Willy as a hard-working exhausted man, â€Å"I’m tired to the death† (1557). Willy expends enormous amounts of time and energy pursuing the money because he thinks it will improve his well-being and make him happy. In his visions, Willy constantly sees his older brother – Ben, who has fantastically grown rich on the diamonds mines in Africa. For Willy, his brother is†¦show more content†¦Sources of his situation are sheltered in the past. Biff constantly followed his father’s orienteer that charm and good look are the only tickets to promising future and success. 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The Relationships Between Parents and Children in Greek...

Contrary to the present archetypes involving the relationships between parents and children, Greek and Roman myths show us that at one point in time, incest was considered socially acceptable. Many Greek and Roman myths contain twisted relationships between parents and children. These twisted relationships can be broken into three different categories: mothers and sons that have exceptionally strong bonds, parents that are threatened by their children, and the betrayal of parents or children. Greek and Roman Mythology often employs many themes that, in modern life, we consider to be taboo; one of the most widely used ideas is the distortion and dysfunction of parent and child relationships. One idea displayed through these twisted†¦show more content†¦It stems from something deeper. Sigmund Freud named a theory of his after this myth. His theory of the Oedipus Complex states that every male unconsciously wants to kill his father and have sex with his mother. An unusually str ong relationship between mother and son is one of the themes that Greek myths include often. Another theme used often in Greek and Roman mythology is that Parents are threatened by their children. This is shown in The Creation of the Titans and the Gods when it is said that Uranus feared the terrible strength of these six children, and he hated them because they terrified him. So as each was born, Uranus took him from his mother, bound him, and hurled him deep into Gaeas being, the earth (Rosenberg 84). Uranus obviously feels threatened by the children. The real life equivalent of this act would probably be child abuse. Child abuse is definitely looked down upon in our society. This theme is also shown when Gaea forms the Furies from Uranus blood (Rosenberg 85). The Furies drive any child that kills his parents to insanity. This shows that although Gaea instigates Uranus downfall, she also feels threatened by her children. She is scared that because they were able to take down Uranu s, that she might be next. Cronus also feels threatened by his children. Cronus took the baby lovingly from his wife, opened his gigantic mouth, and swallowed the infant in one gulp (Rosenberg 85). Cronus feels so threatened by his children that he actuallyShow MoreRelatedEssay on Family Relationships in Greek Mythology 1632 Words   |  7 PagesGreek Mythology originated around 775 B.C.E. It all started with Homer’s Iliad and continued on with Hesiod’s Theogany. These were the first two myths to be recorded in Greek Mythology. Both of these myths reveal to us about their understanding of the universe, and about their culture. Not only do they talk about their various gods, and heroes, but they also talk about how they viewed the universe in general (Rosenberg 79). 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Nvq Level 3 HS Free Essays

CU1530 Promote Communication in Health, Social Care or Children’s and Young People’s Settings 1UNDERSTANDING WHY EFFECTIVE COMMUNICATION IS IMPORTANT IN THE WORK SETTING. 1. 1IDENTIFY THE DIFFERENT REASONS PEOPLE COMMUNICATE. We will write a custom essay sample on Nvq Level 3 HS or any similar topic only for you Order Now People communicate in order to establish and maintain relationships with others, to give and receive information and instructions, to understand and be understood, to share opinions, knowledge, feelings, and emotions, to give encouragement and show others they are valued. 1. EXPLAIN HOW COMMUNICATION AFFECTS RELATIONSHIPS IN THE WORK SETTING. Effective communication helps us not only relate better to each other, it also helps us do more with minimal effort. Breakdown in communication in the work setting can lead to a number of things including a sense of anxiety, alienation as well as feelings of isolation. Positive communication skills like listening, open-ended questions and calm tone of voice help unite people because they are behavior’s that lead to sustained relationships. Workplace relationships also become a lot stronger when people can clearly and effectively communicate what they need and allow others to do the same. A frequently overlooked quality is the ability to actively listen which will help you obtain more information to enforce better decisions. The power of effective communication is essential and the ability to have the chance to develop, expand and develop personal relationships will stand you in good stead and for the company. 2BE ABLE TO MEET THE COMMUNICATION AND LANGUAGE NEEDS, WISHES AND PREFERENCES OF INDIVIDUALS. . 2DESCRIBE THE FACTORS TO CONSIDER WHEN PROMOTING EFFECTIVE COMMUNICATION. When communicating with others the content of the message needs to be clear, but it also needs to be said in a clear way. When receiving messages it is necessary to be alert to both verbal (spoken) and non-verbal (body language) messages. To communicate effectively keep in mind factors such as – environment: Are noise and activity levels to o high? Do you need privacy? Would it be easier to have this conversation while carrying out an activity ogether? Walking or working side by side can ease the flow of conversation. Proximity: The better you know a person the closer you are likely to be physically. Closeness can encourage sharing. Positioning chairs at an angle rather than side by side makes it physically easier to talk to another person. Sitting directly opposite is more formal and can feel confrontational. Sometimes a table between you helps a person feel protected. Yelling from one room to another doesn’t aid communication! Orientation: Leaning forward can communicate that you are interested, but too close might invade ‘body space’. Turning away can show lack of interest, but standing directly opposite a person can be too direct, where being at an angle can provide a helpful space. Posture: Folded arms can look defensive and discourage communication. Friends and family without realizing, often mirror the other person’s posture during conversation, which is thought to increase a sense of familiarity. Standing over a person who is seated might feel patronizing or threatening. Touch: A light touch on a person’s arm or hand can communicate caring and understanding, but sometimes touch can feel intrusive, even threatening. Touch is a safeguarding issue and you must never impose yourself physically on a vulnerable adult. 3 BE ABLE TO OVERCOME BARRIERS TO COMMUNICATION. 3. 1EXPLAIN HOW PEOPLE FROM DIFFERENT BACKGROUNDS MAY USE AND/OR INTERPRET COMMUNICATION METHODS IN DIFFERENT WAYS. Each individual communicates slightly differently according to their different background and experience and the service users we work with may have a diverse range of communication needs and preferences. Although individuals share personality traits in common with others, the unique make-up of these and the way they operate together is individual to that person. One individual might be quiet and reserved, another enthusiastic and bubbly and this will affect the way each communicates and responds to communication. There are also factors such as literacy skills, Literacy skills refer to a person’s competence in reading, writing and speaking in a particular language. The service users you work with may be at different levels of competence in literacy and need to be communicated with at a level they can cope with. Some adults struggle with literacy and may feel embarrassed by their difficulties. As well as literacy skills, some individuals will have better access to and be more competent using information and computer technology (ICT) than others. You should not assume that everyone you have dealings with at work has access to the internet and email, or mobile phones, or that they are competent in using such technology. . 2IDENTIFY BARRIERS TO EFFECTIVE COMMUNICATION. Communication is not always straightforward and a number of barriers can be encountered when working in health and social care settings. Communication is a complex process and can be interrupted at any stage by a number of different barriers for instance – when someone cannot receive or pass on information because they have an impairment to one or more of their senses, most co mmonly a visual or a hearing disability or communication is affected by the environment that people find themselves in. For example, someone who does not see very well will struggle to read written information in a dimly lit room. There are also barriers faced due to cultural differences when the same thing means different things in two cultures, communication can be difficult or when a person uses language that not everyone uses, such as saying they have a problem with their waterworks. This can mean their plumbing system but also means a problem going to the toilet. Sometimes it may be appropriate to use slang with your peers but in normal working with colleagues or service users you should avoid using any language that can be misunderstood or misinterpreted or that might cause offence. 3. 5 EXPLAIN HOW TO ACCESS EXTRA SUPPORT OR SERVICES TO ENABLE INDIVIDUALS TO COMMUNICATE EFFECTIVELY. Some people have communication difficulties that require extra support or services to enable them to communicate effectively. How to cite Nvq Level 3 HS, Papers

Budgetary control free essay sample

Nowadays management’s philosophy revolves around the idea of planning. According to McKinsey (1922), chief executives have come to the realization that today’s task can only be properly fulfilled thanks to the meticulous planning of yesterday. The budgetary control framework has been openly accepted and widespread as a tool for management and overall organisation control. Nonetheless, recent evolutions in the managerial sciences have come to jeopardise the reliability of budgeting as an effective method for the control of performance and organisation. The concern of whether budgeting is in fact an apt tool has created mixed views and debate amongst scholars. This essay will aim to evaluate whether budgetary control is concerned primarily with the control of performance, or if it has of late taken on greater importance especially as a more integrative control mechanism for the organisation. In order to do so it will firstly define the meaning of two fundamental concepts such as budget and budgetary control. We will write a custom essay sample on Budgetary control or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page Secondly it will evaluate the use of budgetary control as a tool for today’s organization. Thirdly it will follow debates and criticisms on its the effectiveness and use and Lastly it will conclude by assessing to what extent budgetary control has become a more integrative control mechanism for organisations. The work of key specialists in management such as Bhimani, Otley, Van der Stede and McWatters, will be drawn on in order to cover the key issues of the discussion. Before commencing on a discussion of budgetary control, it is immanent to clarify and define the two key terms that will be used in this essay: ‘budget’ and ‘budgetary control’. On the one hand, as defined by Bhimani et al. (2008) â€Å"a budget is a quantitative expression of a proposed plan of action by management for future time period and it is an aid to coordination and implementation of the plan†. On the same line McWatters et al. (2008) highlights the importance of budgets as a planning control system for a company, which ‘translate’ organisational objectives into financial terms. Drury (2009) exemplifies the many different purposes that budgets serve, such as: coordinating activities, conveying various arrangements to different responsibility centres, arranging and controlling operations, motivating employees to attain organisational objectives and assessing the execution of managers. According to Johnson (1996), it was in the 1960s that associations started to highly regard the utilization of budgets as tools for performance measurement and the control of managerial objectives. On the other hand, budgetary control is described by Periasamy (2010) as â€Å"a system of controlling costs which includes the preparation of budgets, coordinating the department and establishing responsibilities, comparing actual performance with the budgeted and acting upon results to achieve maximum profitability†. A similar, yet more formal, definition of budgetary control is given by the Chartered Institute of Management Accountants of England and Wales (CIMA): â€Å"the establishment of budgets relating to the responsibilities of executives to the requirement of a policy and the continuous comparison of actual with the budgeted results, either to secure by individual actions the objectives of policy or to provide a basis for its revision†. There are two main purposes of budgets which scholars have identified: planning and controlling. The first purpose, which McWatters et al. (2008) discusses, is that budgets have a fundamental role in undertaking planning decisions. In fact, the integration of budgets into a strategic planning of long term and short-term objectives is crucial to the harmony of the project itself. This claim can be explained by Bhimani et al. (2008) who proposes that, budgets provide a more realistic view on the possible outcomes of investments, which consequently leads managers to adjust their strategic goals accordingly. To put it another way, when a company wants to match its potentials suitably with the prospects of the marketplace, it undertakes a strategic analysis to then set several long-run and short-run goals. On this basis a budget is formulated. However, as stated before, once the budget that has been formulated projects a more realistic view on the strategic objectives, these strategic objectives are then readjusted once again. The second purpose that Emmanuel et al. (1990) discusses is to do with budgets as a form of control and a tool for monitoring a company’s performance. McWatters et al. (2008) describe this function by outlining the idea that budgets are frequently used to assign responsibilities by allocating resources to different managers. A budget may be given with more or less flexibility, for example by assigning a large sum of money for ‘advertising’ to be used at the managers discretion, or by highlighting the different ways that this money should be used. The optional flexibility of budgets allows for a company to give the adequate level of responsibility to its employees and thus the organisation is able to maintain a level of control. McWatters et al. (2008) further elaborates on the function of budgeting for control by suggesting that â€Å"the numbers in a budget are also used as goals to motivate organisational members†. This motivational aspect of budgeting can be explained by Bhimani et al (2008) who states that â€Å"the manner in which a budget is administered can adversely impact on the managers’ behaviour†. A manager must believe that the budget is achievable in order to actively attempt to pursue it, Bhimani et al (2008) adds that through the constraints and goals set by budgeting targets, managers are often motivated to â€Å"effect changes in a forceful way†. The way that a budget is formulated, and the demands and pressures that it targets are key in encouraging the right degree of motivation, â€Å"an enterprise can set a difficult to attain budget in an attempt to motivate good performance. This is because, in practice, budgets that are set up to a certain degree of tightness often become stronger motivators† (Bhimani et al. , 2008). A final point to consider with the role of budgetary control is the function that it plays in enhancing communication within a company. Internal coordination between the steps of production , as well as communication among departments are key aspects for a company’s performance. Dury (2009) states that â€Å"the budget serves as a vehicle through which the actions of the different parts of an organisation can be brought together and reconciled into one common plan†. Hence, hierarchical and inter-departmental communication within the organisation is extremely facilitated thanks to the use of budgets. For instance, considering a multinational corporation that, due to its size, has difficulties in communicating between the production department and the sales department, budgets could in this circumstance be the most operational manner of communicating, as they set common goals between different departments. As it is clear form the paragraphs above, the controlling side of budgets play a stronger role than the planning aspect. An example that instead criticise this view can be found in the strategic planning of investments. Maximising performance of a company can be synonymous for maximising the shareholders value. Akintoye (2008) argues that equality in investment decisions are fairly dependent on the solidity of the budgetary control system, which in turn is key to maximise the company’s shareholders value. Therefore, it is arguable that a weak budgetary control system may be the cause of unprofitable investments and consequently may trigger the loss of shareholders value (Akintoye, 2008). There are many examples that reflect this issue, such as one reported by the European Journal of Economics Finance and Administrative Science where the Coca-Cola Company, with the purpose of differentiating production, failed miserably in their investment on food and wine in that the investment rate of return resulted to be beneath their cost of capital. The tremendous loss of money caused by this investment and other failures of this type grab the attention of scholars, raising questions on the salience of the budgetary control system, as well as whether budgets are mainly used to control or plan organisations. Other criticisms towards budgetary control as a main form of performance control, argue instead that the use of budgetary control in performance management has of late taken on greater importance especially as a more integrative control mechanism for the organisation. This stands on the basis of different points of view of the role that motivation and communication play within a company. Bhimani et al. (2008) argues that current speculation concerning budgetary control systems prescribes two inverse perspectives. From one perspective, there is the view that upholds incremental change to budgetary process in terms of interfacing such forms more closely to operational prerequisites, arranging frameworks, expanding the recurrence of plan amendment and the arrangement of rolling budgets. A second perspective supports the abandoning of the budgetary control system as a method of organisational control, and supplanting it with elective systems to empower firms on their adaptability and adjustability. The second perspective arose because of the consequences caused by the conflictual role of budgets between planning and controlling. To summarize; in planning and settling choices, budgets convey specialised information between different departments and hierarchy of the organisation, whereas for control, budgets serve as benchmarks for performance measurement (Otley, 1978). According to McWatters et al. (2008) if too many boundaries are placed into performance targets, then specialised executives will settle down and stop disclosing accurate predictions of prospected occurrences, and instead rely more on budgeted figures, which ease the achievement of the targets. A clear example of this conflict is given by the marketing sector. Salespeople according to McWatters et al. (2008) are usually very specialised and can very well forecast future sales. Their predictions are very important to settle the amount of goods to be produced. Inasmuch budgetary control of sales takes place at the end of the year, and it is used as a tool to evaluate performance. Salespeople are reasonably incentivised to under-forecast future sales in order to assure a positive evaluation of their performance. Nevertheless this behaviour induces the company to have higher production costs, creating counterproductive results. However, this behavioural theory is contrasted by Van der Stede (2000) in his study on the relationship between two consequences of budgetary control: slack creation and managerial short-term orientation. In his experiment he attempts to find the relationship between rigid budgetary control and slack creation, where he defines slack as the action by business unit managers that leads them to â€Å"†¦ exploit their position of superior knowledge about business possibilities vis-a-vis corporate management to get performance targets that are deliberately lower than their best guess forecast about the future† (lukka, 1988). Van der Stede’s (2008) statistical correlation showed in fact that rigid budget control reduced slack. To strengthen his view, Bhimani et al. (2008) states that â€Å"budgeted performance measures can overcome two keys limitations of using past performance as basis for judging actual result†, meaning that, not only budgetary control is a good â€Å"judge† of performance, but it also develops better aspects in comparison to other evaluation techniques. In conclusion, this essay has highlighted the role of budgetary control and it’s functions in terms of planning the organisational control of a company, as well as its role in performance management. Motivation and communication are both key aspects in the management of performance, and both of these functions are met through the system of budgetary control, either by setting achievable incentives, or by providing the necessary requirements to improve communications within a company. Having underlined the role of budgetary control as an enhancer of performance management, it is clear to see how it has become a key mechanism for the integrative control of an organisation. Nonetheless, this essay has outlined some of the key disputes of the reliability and effectiveness of budgetary control as an adequate method of performance management. An example of this is highlighted by the fact that when managers are given strict budgeting figures, they sometimes deem the goals to be too easily achieved, and hence give a lesser input of motivation. Despite the many critics of budgetary control as a tool for the organisation of a company, scholars such as Van der Stede (2000) and Bhimani et al. (2008) have confidently stated that when a budget is set correctly, it can significantly improve an organisations performance, including the integrative function within a company; and is in fact a more effective tool than other existing methods of control.

Organisational Behaviour for Experiences and Associations

Question: Discuss about theOrganisational Behaviour for Experiences and Associations. Answer: Every person has a scheme or a collection of ideas, experiences and associations which are brought to a situation and as human beings every person has the tendency to get accustomed with the nature which we find to be the most convenient. Perception is actually the process of interpretation of the messages to the senses in order to provide order and meaning to the surroundings . Most vital of perceptions impacting organisational behaviour are those which the company members have for each other. An individuals behaviour in the workplace is based on the perception of people towards the place of their work. There exist numerous factors that influence the persons attitudes, motives, interests as well as the experience and expectations. The associated factors might also involve time, work as well as the social setting. It cannot always be possible for the perceptions to be accurate. There might be several existent biases in a persons perception. These have the power to impact organisation al performance (Alfes et al. 2013). It is believed that peoples perception is based on their individual outlook of what reality is rather than the existence of reality itself. It is possible for two people to see the same thing but interpret it differently. Perception is the basic cognitive process which is responsible for the transformation of every possible stimuli into meaningful information. In often happens in case of real life issues that they have multi dimensional aspects and the rational approach is often entwined with the instinctive feeling. It happens in organisations that perpetual differences exist and often are the reason for mutual dissatisfaction. There are two cases which are noticed namely stereotyping and selective perception. Stereotyping is basically a characterisation of individuals based on the attributes they possess and helps in the creation of a generalized and simplified belief that does not consider other characteristics. Selective perception involves the process of information selection th at supports existing belief and ignoring information that is unsuitable or discomforting. This method is considered as a catalyst to stereotyping. This is because it natural for people to notice things which favour their ideas and ignore others (Favero and Bullock 2014). The mindsets of people and their perceptions impact their behaviour in their organisations. This explains the way in which sensory information is actually organised interpreted and filtered by the people. The concept of attribution explains the way people act, thereby determining the way in which people react to the actions of others. Accurate perception assists the employees in interpreting things they hear and witness in the workplace in an effective manner. These also help them in making decisions, complete tasks and also act ethically. Wrong perceptions lead to issues including stereotyping and cause individuals to make erroneous assumptions (Denham et al. 2010). When individuals see themselves in difficult and unfamiliar circumstance they tend to find it difficult to cope. It is characteristic of successful business professionals to state their problems as well as the benefits of their ideas to all the prevalent people involved. By the presentation of a convincing case for their facts they get approval for their proposed strategies even in case it is opposed by any sort of apathy or confrontation. By the active recognition of the attributions and perceptions, effective leaders build reasoning for their approach and get the required support when they need it (DeConinck 2010). It is common for people to attribute their success to skill, chance or even luck. It is common for people to react to circumstances based on their feelings regarding what made the particular event happen. Just like perceptions can be faulty, there is the chance of attributions being inaccurate also. Organisations can ensure the fact that people attribute actions much more effectively by providing diversity in training. This also prevents the faulty attributions by the individuals in managerial positions. It often happens that managers tend to give work to those qualified individuals whom they consider to be lucky for the organisational success. It often happens that people evaluate or judge others based on their capacity, endeavour or individuality. The difficulty or the luck of a task is attributed to the resultant success or failure. These attributions make people give different explanations for their own behaviour in the organisation. Successful workers who succeed at tasks increase their confidence levels after completion of their training. Those failing have the chance of blaming others or considering themselves to be unlucky. The understanding of the common cause of behaviour might help people to react much more appropriately (Tohidinia and Mosakhani 2010). Minimisation of bias also helps in the effective team work and this is specifically in case of the reduction of biases which distort attribution. Perceptions, is one particular trait which has been found to either actively or passively influence other traits (Jehn, Rispens and Thatcher 2010). Perpetual process is the sequence of psychological steps which is utilized by a person in order to systematize and construe information which is obtained from outside world. A person observes those objects which are present in the outside world, uses perception for selection of objects, organises the perception of objects, interprets the perceptions and ultimately the person responds. The selection, organisation and perception interpretation varies among different people. Perpetual selection is caused by both internal and external factors including the personality, motivation and experience. Personality traits impact the way in which a person can select the perceptions. Conscientious people have a tendency to pick details and external stimuli to a greater degree. People select the perceptions based on what they require in a particular moment. Selections likely to help them with their present needs are much more likely to be favoured and things irrelevant to their needs are likely to be ignored. The patters of occurrences or association a person has learned in the past affect the present perceptions. The person is likely to select perceptions in a way which fits their past findings (Heilman 2012). There are different sorts of biases in human judgement which is applicable in case of organisations. There is the concept of confirmation bias which highlights the fact that human beings have a strong tendency to manipulate new information and facts until their own preconceived notions are matched. The inappropriate confirmation allows for the poor level of decision making which often ignores the truth of situations (Glckner and Witteman 2010). Another common bias is that of self serving nature. In this situation people have the tendency to take credit for their success and passing their loss on failure. Belief bias is also a common occurrence where individuals take decisions without themselves having all the facts. Their confidence in such decisions is based on a logical and rational assessment of the facts. Framing is also common where individuals ignore relevant facts and consider those only which are applicable. Human beings by nature also match patters where past events are analysed to predict future outcomes (Miner?Rubino and Reed 2010). The impact of such perceptions and decisions made on the basis of such perceptions lead to a variety of outcomes. The decisions which are already taken also impact the decision making in the future. Several outcomes are experienced. Regret, feelings of disappointment, dissatisfaction with choices is made with any one potential outcome of the decision which has been taken. In huge organisations it happens that when the people in managerial positions particularly take decisions which are biased, they become responsible for any sort of wrong or negative organisational outcome. In case it is realised later that the decisions connected to the organisation which have already been made are wrong, their often remains nothing more to it than regret. In case the decisions made are positive people also feel satisfied with their respective decisions. Organisational choices often rely on a plethora of managerial decisions which are made by the impact of the choices of the individual organisers (J oo 2010). There are several organisational constraints which affect the perception of people ultimately leading to incorrect decisions. One of the most crucial avenues is that of a reward system. In case a reward system is not properly managed by the team members or the employees at large, the overall organisational performance might be affected. Apart from this in case there are any sort of historical precedents they might largely affect the perception of the individuals in the work environment. In case the rules and regulations are extremely rigid the organisation might perceive the management to be highly inflexible and hostile in their approach. In case the roles and the goals of the organisation are undefined or not clearly explainable it might cause the individuals to take up soft and comfortable goals thereby resulting in the organisational harm. Bias towards different religious or social segments of the people might also cause their people to have a negative idea about the organisation (Hatch 2018). It is necessary for the managers of today to understand that organisational success is possible only when the perceptions of the employees are completely understood and well addressed. This might involve correcting wrong perceptions as well. Consequently the retention of employees might also reduce and pose a challenge. This clearly shows the importance of proper perception at the workplace and shows that it can make or break an organisation. References: Alfes, K., Shantz, A.D., Truss, C. and Soane, E.C., 2013. The link between perceived human resource management practices, engagement and employee behaviour: a moderated mediation model.The international journal of human resource management,24(2), pp.330-351. Chiang, C.F. and Hsieh, T.S., 2012. The impacts of perceived organizational support and psychological empowerment on job performance: The mediating effects of organizational citizenship behavior.International journal of hospitality management,31(1), pp.180-190. DeConinck, J.B., 2010. The effect of organizational justice, perceived organizational support, and perceived supervisor support on marketing employees' level of trust.Journal of Business Research,63(12), pp.1349-1355. Favero, N. and Bullock, J.B., 2014. How (not) to solve the problem: An evaluation of scholarly responses to common source bias.Journal of Public Administration Research and Theory,25(1),.285-308. Denham, S.L., Gyimesi, K., Stefanics, G. and Winkler, I., 2010. Stability of perceptual organisation in auditory streaming. InThe neurophysiological bases of auditory perception(pp. 477-487). Springer, New York, NY. Glckner, A. and Witteman, C., 2010. Beyond dual-process models: A categorisation of processes underlying intuitive judgement and decision making.Thinking Reasoning,16(1), pp.1-25. Hatch, M.J., 2018.Organization theory: Modern, symbolic, and postmodern perspectives. Oxford university press. Heilman, M.E., 2012. Gender stereotypes and workplace bias.Research in organizational Behavior,32, pp.113-135. Jehn, K.A., Rispens, S. and Thatcher, S.M., 2010. The effects of conflict asymmetry on work group and individual outcomes.Academy of Management Journal,53(3), pp.596-616. Joo, B.K.B., 2010. Organizational commitment for knowledge workers: The roles of perceived organizational learning culture, leadermember exchange quality, and turnover intention.Human resource development quarterly,21(1), pp.69-85. Miner?Rubino, K. and Reed, W.D., 2010. Testing a moderated mediational model of workgroup incivility: The roles of organizational trust and group regard.Journal of Applied Social Psychology,40(12), pp.3148-3168. Tohidinia, Z. and Mosakhani, M., 2010. Knowledge sharing behaviour and its predictors.Industrial Management Data Systems,110(4), pp.611-631.