Business and Enviroemnt

You are a member of a team of researchers employed by HCM Consultants (fictitious). Your team is currently carrying out surveys and compiles statistics on a wide range of employment issues at the request of local employers or employer organisations. Your team has just been assigned to conduct an investigation into how sample of organisations approach the management of their activities. Your analysis will extend into an examination of organisation structure and culture, as well as management style. COMPANY – Electrolux

AB Electrolux (‘Electrolux’ or ‘the group’) is a leading producer of appliances for household and commercial use. The group operates in Europe, North America, Asia Pacific and Latin America. It’s headquartered in Stockholm, Sweden and employs about 51,544 people. The group sells 40 million products annually across 150 countries under various brands. Some of its products include refrigerators, dishwashers, washing machines, vacuum cleaners, cookers, and air-conditioners that are sold under brands such as Electrolux, AEG, Eureka and Frigidaire.

The group distributes its products through 20 sales companies worldwide and through a global network of independent distributors. Electrolux has its manufacturing facilities in 16 countries across the world. The group’s manufacturing operations consist mainly of the assembly of components and processing of standard raw materials sourced from various third party manufacturers. Electrolux operations are divided into five business areas, which include six sectors and a total of 25 product lines.

Within Major Appliances, the business sectors are geographically defined, while the sectors Professional Products and Floor Care and Small Appliances are global. There are five Group staff units that support all business sectors: Finance, Communications, Branding, Legal Affairs, and Human Resources and Organizational Development. In order to fully take advantage of the Group’s global presence and economies of scale, a global organization was established in 2009 with responsibility for product development, purchasing and manufacturing within Major Appliances.

The Group has a decentralized corporate structure in which the overall management of operational activities is largely performed by sector boards. In Europe The Swedish multinational company has grown through acquisitions to become a dominant player in Europe. But the European market is highly competitive and the company had to find ways to cut down on costs and improve product standards to stay ahead of fierce competition. Electrolux Home Products Europe used a functional organizational structure to compete in the European market.

Their solution was quite simple yet strategic in nature. They introduced a Europe-wide functional structure to replace the geographical structure (resulting from its acquisitions). The new organizational structure had four functions/departments. 1. Purchasing, Production and Product Development – This department/function was important as it ensured a seamless flow from supplies to finished products. 2. Supply Chain Management and Logistics – This function was responsible for getting the products to the customer and created the association between sales forecasts and factory production. . Product Businesses, Brand Management and Key Account Management – This function was involved in all the marketing activities to support products and brands. Also included key account management, service and spare parts functions. 4. Sales clusters – The different sales divisions grouped geographically. The Electrolux People Vision is to have an innovative culture with diverse, outstanding employees that drive changes and go beyond in delivering on the Group’s strategy and performance objectives.

The Electrolux culture features diversity and innovation. Development of innovative products is a vital part of this vision. Diversity is a prerequisite for Electrolux ability to compete in a global market. Personnel with diverse backgrounds create a greater understanding of consumer needs in different countries. At Electrolux, leadership development is a process, which focuses on taking Electrolux forward and improving the overall business results through accelerated development of the leadership capabilities of the managers. Source: ttp://group. electrolux. com/en/governance-structure-1413/, http://creately. posterous. com/how-functional-structures-benefit-in-bringing COMPANY – LG Electronics LG Electronics (LGE or ‘the company’) is one of the global leaders in consumer electronics, home appliances and mobile communications. Its product range includes kitchen appliances, home entertainment products, communication devices and electronic components. Its production network is spread across North America, South and Central America, Middle East, Africa, and Asia-Pacific.

Its product range includes kitchen appliances, home entertainment products, communication devices and electronic components. In FY2010, the company operated through five business segments: business solutions, home entertainment, mobile communications, home appliance, and air conditioning and energy. However, LGE restructured its business under four segments: home entertainment, mobile communications, home appliances, and air conditioning and energy solutions. The home entertainment segment operates through the subsidiary LG Home Entertainment Company.

This segment offers wide range of products such as liquid crystal display (LCDs) TVs, plasma TVs, pen touch TV, LED monitor, TV upgrader, home theatre system, LED projector, commercial display and hospitality TV, and security camera. The mobile communication segment operates through the subsidiary LG Electronics Mobile Communications Company. The subsidiary offers a range of cell phones and laptops across the globe. The home appliance segment operates through the subsidiary LG Home Appliance Company.

This segment’s product offerings include washing machines, dish washers, refrigerators, vacuum cleaner, cooking appliance, built-in appliances, water purifiers and air purifiers. The air conditioning segment operates through the subsidiary LG AE. The segment provides both residential air cooling and commercial air conditioning solutions. Besides, it also operates in the solar energy and green lightning solutions sector. Some of its key products are: air conditioners, solar energy and lighting. The segment also includes three major solution-oriented businesses: home management systems, building management systems, and hotel solutions.

Supplementary LG ELECTRONICS EARNINGS HIT BOTTOM IN Q2: CEO – Asia Pulse [Rhodes] 06 July 2011. The worst has passed for LG Electronics (KSE:066570), the world’s No. 3 mobile phone maker, as its earnings hit bottom in the second quarter and will likely improve down the road, its chief executive officer said Wednesday. Koo Bon-joon, who took control of the electronics giant in October as its mobile business faltered in the lucrative smartphone race, said that the company’s earnings will not deteriorate further as its mobile and TV businesses pick up. We did not make a significant rebound in our overall businesses,” in the first half of this year, Koo said in a note to his employees. “But earnings are not going to worsen in the future so we will only go up. ” He said that the positive market response to its Optimus 2X Smartphone’s, 3-D TVs and premium home appliances were encouraging signs for the company. Hurt by mobile losses and weak TV sales, LG posted a second straight quarterly loss in the first three months of this year, losing 15. 8 billion won (US$14. 6 million).

LG’s mobile sector, which lost money for four straight quarters since the April-June period of 2010, will not make a turnaround in the current quarter, its chief financial officer said in April. While its rival Samsung Electronics Co. (KSE:005930) made a quick transformation from a smartphone also-ran to a viable competitor to Apple Inc. ’s iPhone, LG failed to produce a hit smartphone model, as it reacted too slowly to the rapidly growing market for feature-packed, mobile computing devices. The company unveiled a string of high-end Smartphone’s this year with 3-D glasses and a dual-core processor, hoping to regain ground lost to rivals.

Koo also said he will beef up efforts to stamp out corruption and wrongdoing from the company as he received many tips through his e-mail about improper behavior within the company. Koo’s pledge came after Lee Kun-hee, Chairman of larger rival Samsung Electronics Co. and South Korea’s top conglomerate Samsung Group, declared a war on group-wide corruption last month and conducted a management reshuffle. Part of the case reference is taken from ‘Datamonitor’ http://www. lg. com/global/ir/reports/annual-reports. jsp http://visiblebusiness. blogspot. sg/2012/02/organizational-chart-of-lg-electronics. html

LG ELECTRONICS EARNINGS HIT BOTTOM IN Q2: CEO Anonymous. Asia Pulse [Rhodes] 06 July 2011. The above data has been based on real life organisations, but details have been changed for assessment purposes and do not reflect the current management practices. You have been given specific responsibility for the areas outlined below: BRIEF: Prepare a report, citing relevant research, which addresses the following tasks: Tasks For both organisations sampled in your investigation, compare and contrast Electrolux and LG Electronics Inc. different organisational structures and culture. (1. 1) [Suggested answer]

Compare and contrast – It means you need to identify the similarities and differences between the two corporations. The question asks you about the organization structures and culture of the two companies. You may focus your discussion based on the following areas: 1. Extent of business: Both are MNCs having offices and factories globally. 2. Products: There are some similarities in products, e. g. electrical appliances. 3. Departmentalization: They structure their business according to segments or business sectors, a concept of departmentalization. However, for each of the geographical area (E. g.

Europe), the structure may be different due to market conditions and other factors. Take a look at the few structures, i. e. by function, by products, by geography, and matrix system. 4. Centralization vs decentralization: Which parts are similar (And different) between the two companies? Why? Flat and tall organizational structure…….. why? 5. … For each of the above points, discuss its advantages (E. g product innovation) and disadvantages, if any. Link the advantages and disadvantages to culture. E. g. decentralized organizational structure promotes empowerment and hence encouraging new product and market development.

To answer this question, you need to understand types of corporate culture. You may refer to your textbook or ask your lecturer. A useful link is listed below: http://www. haworth. com/en-us/knowledge/workplace-library/Documents/Four-Organizational-Culture-%20Types_6. pdf Explain how the relationship between an organisation’s structure and culture can impact the performance of the business (1. 2) [Suggested answer] Performance of business means many things including product innovation, market competitive advantage, profitability, sales……….. and many more.

You can pick a few and link that to culture for discussion. E. g. a centralized production mean higher control which leads to economies of scale and that drives down the unit production cost, hence, market competitive advantage etc. Related to the given scenario, discuss the factors which might influence individual behaviour at work (1. 3) [Suggested answer] Individual behaviour, in your case, relate to such good and bad behaviors as motivation, corruption at work etc. Discuss those factors (E. g. Empowerment, communication, ……. ) and how they influence such individual behavior.

Compare the effectiveness of different approaches to leadership style in Electrolux and LG Electronics Inc. (2. 1) [Suggested answer] Check what are the few possible leadership style at this link: http://www. nwlink. com/~donclark/leader/leadstl. html Relate the style as provided in the case and discuss and compare the styles adopted in the cases by the two companies. Explain how organisational theory underpins principles of management (2. 2) [Suggested answer] Relate what the cases provided to the organizational theory you have learnt from the book. Organizational theory means such things as system approach, ontingency approach ……… Principle of management means many things. Essentially, management principles are statements of fundamental truth. These principles serve as guidelines for decisions and actions of managers. They are derived through observation and analysis of events which managers have to face in practice, e. g. division of work, unity of command, authority and responsibility, motivation ……… etc “underpin” – Here it means “as a basis to”. E. g One such organizational theory is the system approach, The System approach views the organization as a unified , purposeful system composed of interrelated parts.

This way the manager can look at the organization as a whole or part of the larger outside environment. Activity of any part affects all other parts of the organization. A system can be biological,physical or social. The system appraoch underpins that organizations need to,for example, consider to protect the ecology of its environment for business sustanability and future profitability. The ecological aspect of the enivironment is part of the total system……… Evaluate the different approaches to management used by Electrolux and LG Electronics Inc. (2. 3) [Suggested answer]

To evaluate means to discuss the advantages and disadvantages. Link that to management approaches (E. g. management reshuffle to fight against corruption etc) Good luck. Labels: Organization-and-behaviour Reactions: | | Wednesday, August 17, 2011 Guide to OB assignment This is a guide to a student who seeks help for his OB assignment Scenario: After passing the written examination for employment as HRD Trainee, you also need to go through an oral examination/group interview with other applicants. You need to prepare for this interview which will test your knowledge on dealing with people/employees

Required (task): Select an actual organization. Research on the following topics, as they apply to your organization. Then have a two-page report of what happened during the interview and how well you think you fared. The report should have a summary of what happened during the interview (who, what, why, when, how); and a self-evaluation of how you personally think you fared. Examine different approaches to management & leadership 1. Analyse how organizational theory underpins principles and practices of organizations and of management. (2. 1) Show interview questionnaire and notes as attachments. (M1) 2.

Analyse the relationship between organisations’ structures and culture and the effects on business performance. Approach to answer 1) The scenario says you need to go through an oral exam interview. This means your interviewer is going to ask you questions which will test your knowledge on dealing with people/employees. 2) The questions that your interviewer asks should generate answers to meet the outcomes of 2. 1 and 2. 2, i. e. – 2. 1 Analyse how organizational theory underpins principles and practices of organizations and of management. – 2. 2 Analyse the relationship between organisations’ structures and culture nd the effects on business performance 3) Therefore, one of the good approach will be that you prepare a list of Q&As and use that to answer your assignment. 4) Your answers would be quite similar to these two suggested answers: – http://btechnd. blogspot. com/2009/06/analyse-how-organizational-theory. html – http://btechnd. blogspot. com/2009/06/analyse-relationship-between. html Labels: Organization-and-behaviour Leadership approaches Discuss different styles and the effectiveness of these leadership approaches adopted By Agar Ltd and Boss Ltd (3 a) a. What is management style? Tips: Management style = leadership style b. State briefly the four types of management style. c. Which management style did Agar Ltd adopt? i. Characteristics ii. Effectiveness 1. Strengths 2. Weakness d. Which management style did Boss Ltd adopt? i. Characteristics ii. Effectiveness 1. Strengths 2. Weakness e. Draw a short conclusion Note: Relate your answer to the case study, if possible. Labels: Organization-and-behaviour Reactions: | | Approaches to management Compare the different approaches to management and theories of organization used by Agar Ltd and Boss Ltd (2 b) . Describe and compare the different approaches to management by the two firms b. Discuss and compare the different approaches including strengths and weakness of the two approaches provided in the case, quoting theories from relevant sources – c. Draw a short conclusion Labels: Organization-and-behaviour Reactions: | | Organization theories Analyse how organizational theory underpins principles and practice of organizing and management. a. Briefly introduce the various organizational theories (Scientific management, classical administration and etc) b.

Analyse in details the various organizational theories in terms of its principles and practice. ( Analysis: 1. Explain what they are, 2. describe their characteristics and under what circumstances each of them may be useful and 3. evaluate their strengths and weaknesses) c. Relate these theories, where appropriate and applicable, to the case study. d. Draw a short conclusion Tips: Or you can approach this way: 1. Briefly introduce the various organizational theories. 2. Mention that you will focus analysing two theories, where examples of principle and practice can be found from the case study, for the purpose of this task.

Note: Only 400-450 words are needed for this task. at5:40 AM2 comments: Labels:Organization-and-behaviour Reactions: | | Factors influence individual at work Related to the given organization, analyse the factors which influence individual behaviour at work (1 c) a. Explain individual behaviour at work? b. Discuss the factors (E. g. Personality & etc) which influence individual behaviour at work. c. Draw a short conclusion Note: Relate your answer to the case study. at5:38 AM2 comments: Labels:Organization-and-behaviour Reactions: | | Compare organizational structure and culture

For both organizations sampled in your investigation, compare and contrast Agar Ltd and Boss Ltd different organizational structures and culture ( 1 a) 1. Draw the organizational structures for both firms – You should be able to see the differences of the two organizational structures: Tall and short hierarchical structure, narrow and wide span of management, specialization by geographic or functions or something else. – These diagrams serve as the basis for you to do the following compare and contrast. 2. Compare and contrast the differences of organizational structures between the firms Based on the above diagrams, do the compare and contrast. – Compare and contrast means you need to find out: * What are the things similar between the two companies? * What are the differences between the two companies? Sample answer for 2 a. Organizational structure Given the diagram, it is clear that both companies have a formal organizational structure. There are however differences between the two companies. First, Boss Ltd is taller than Agar in organizational hierarchy. (Plagarism is a serious offence. This content can be found at http://btechnd. blogpot. om/) This is due to the structure necessarily to support Boss Ltd’s geographical and product divisions that accommodate 400 more staff than Agar Ltd(Plagarism is a serious offence. This content can be found at http://btechnd. blogpot. com) . In contrast, Agar has a layer reporting hierarchy. Its line of command is shorter than that of Boss Ltd. Second, the span of management, in the case of Boss Ltd, is narrower than that of Agar. That being the case, a stronger degree of decentralised decision making is practised in Boss. Agar’s decision making mainly centralized to the CEO himself. . Culture Both Boss and Agar are similar in that they do understand and practice employee empowerment although the degree of success may vary. The empowerment provides the basis for a more participative culture. Employees are tasked in smaller groups to take on challenge to solve problems. Due to the dominance of MD’s autocratic style, a power culture prevails in Agar(Plagarism is a serious offence. This content can be found at http://btechnd. blogpot. com) . In contrast, a task culture that supplementing role structure exists in Boss. Labels: Organization-and-behaviour

Organizational structure, culture and business performance Analyse the relationship between an organisation’s structure and culture as well as the effect of business performance How to approach this task? – This task asks about the relationship between * Structure * culture, and * the effect of business performance – Structures here refer to tall, short and matrix structures . – Culture means power, role, task and person culture. – Effect of business performance: Here means * Decision making by the boss directly or through a DMU * Decision making process: Short or long channel? Time consuming or quick decision * Closeness to customers * Formal or less formal * The extent of functional specialization * others Sample answer 1. Define organizational structure briefly 2. Define culture briefly 3. Relationship between structure, culture and business performance – Tall structure is usually supported by role culture. Reasons: Functional specialization, e. g. Boss Ltd is divided by product and geographic areas. Stable organization with processes, procedures and rules, thus, longer decision making process and may be less responsive to market changes (Business performance). Short structure is usually power culture because of lower hierarchy and owner’s direct involvement (Relate to example in the case). Decision making is quicker and less time consuming. – A matrix structure is usually set up to supplement tall organizational structure for project purpose. The advantages of matrix structure help to overcome the shortcoming of the tall structure because of its task-oriented nature. Relate to examples in the case. Relate these in your answer: “When the structure is tall, usually a role culture will be created to support it. Each department and each staff is usually given a certain role to play.

This role culture is necessary to ensure departmentalization and proper channels reporting with proper line of command. In the case of Agar, Mr XXX understands the importance of role structure given its huge number of employees. But, he also understands the role culture may lead to slower response to marketplace and less efficient to make business decision. To offset this shortcoming, he has implemented the task teams to handle projects. The task culture allows quicker decision making and thus more responsive to market changes and changing business needs”