商务文化策略

Assessment 1

Assessor: Qingchun Ma

Candidate: Wenzhi Duan

Words: 4587 words

SCN: 1

Submitted date: 22-4-2016

Table of Contents

Introduction…………………...………………………………………………….2

External environment……………………………………………………………2

PESTEL analysis……………………………………………………………..2

SWOT analysis……………………………………………………………….3

Guidelines for conducting SWOT analysis…………………………………4

Organizational culture………………………………………………..……….…6

Organization assumptions”..6

culture, “shared value”, “taken for granted

3.2 A model of organizational culture………………………………….………..7

Organizational culture and organizational behavior………………………7

An alternative model of organizational culture…………………………….8

Business strategy……………………...………………………………………….9

Four possible strategies…………………………….………………………..9

Benefits of the strategy……………………………………………………..10

An alternative strategy……………………………...………………………11

Two factors influencing business strategy…………………………………12

Business strategy and strategic choice……………………………………..12

Key issues in the management of business strategy……………………....13

Change……………………………………………………..……………………13

Forces for change…………………………….……………………………..13

The factor leading to change in the organization…………………………15

Dealing with change…………………………………………………..……16

Analyzing a change situation and overcoming resistance to change…….16

Conclusion……………………..………………………………………………..17

Reference list………………………………………………………………………..18

1.0 Introduction

This report introduces the external environment through PESTEL analysis, and SWOT analysis; and organizational culture and organizational behaviour. This report also describes some information of business strategy, and analysis of two different types’ changes for the organization.

External environment

PESTEL analysis

PEST analysis refers to a framework for the using of macro environmental factors in strategic management of environmental scanning components. (SQA, 2006)

Political/ legal factors refer to many kinds of law, which can affect how a company operates, its costs, and the demand for its products. Based on the case, the ‘tied house’ system had been broken by the MMC which limited the number of pubs which a brewer could operate. J D Wetherspoon has to obey the legal of MMC.

Economic factor include economic growth, interest rates, exchange rates, inflation rate, which has greatly affects how businesses operate and make decisions. (SQA, 2006)From the case, only pubs sell drinks before, but now supermarket and lots of new pubs began selling drinks, at lower prices during 2002-2004. With the increasing of supplies, the selling price of drink in whole area will be decreased as a demand of drinks is fixed. This economic factor has huge

impact on JD Wetherspoon’s selling price, market share, and other impact that makes it difficult for company to compete on price.

Social factors include the cultural aspects and health consciousness, population growth rate, age distribution, career attitudes and emphasis on safety, which affect the demand for a company's products and how that company operates. People pay more concern about their health, and all pubs and restaurants in UK are non-smoking places. Due to this social trend, J D Wetherspoon set space in each establishment was to be non-smoking.

Technological factors include technological aspects, which can determine barriers to entry, minimum efficient production level and influence the outsourcing decisions. J D Wetherspoon developed a new brand called ‘Lloyds Number One Bar’ which has various high-end technological equipments, such as plasma screens to show TV programmes to satisfied people’s needs.

SWOT analysis

SWOT analysis involved in a project or in a business undertaking. It involves specifying the current position and identifying the internal and external factors to achieve organisational goals. Strengths and Weaknesses are internal factors, Opportunities and Threats are external factors. (SQA, 2006)

Strengths are the business or projects that give it an advantage over others. Weaknesses are that place the business or project at a disadvantage relative to

others. Opportunities are elements that the project could exploit to its advantage. Threats are elements in the environment that could cause trouble for the business or project.

Strength:

JD Wetherspoon has a training policy to provide training opportunity, and committed to lifelong training for employees. Good quality employees is one of strengths for the enterprise, which can help JD Wetherspoon develop better.

Weakness:

JD Wetherspoon has to build from scratch when it entered into a hotel chain. The company lack experience when they entered into a new area. So it is weakness of J D Wetherspoon. It requires JD Weherspoon cost a lot on their finance, time, and human resources to develop as other pubs.

Opportunities:

J D Wetherspoon need to choose to between brewing and retailer, J D Wetherspoon took this opportunity as a retailer to build from scratch. After ‘tied house’ system broken by a ruling from the MMC. JD Wetherspoon got the license trade which could provide opportunities for JD Wetherspoon to enlarge the business.

Threats：

In 21st century, J D Wetherspoon was facing much more competition; the number of increasing number of pubs caused the market over-supplied. It will affect the JD Wetherspoon’ s profits. Thus J D Wetherspoon had more stress as its threats.

Guidelines for conducting SWOT analysis

Business environment influence the company a lot. S&W are internal factors, and they always depend on what the firms has done in the past. Managers need to identify them based on internal environment. For example, JD Wetherspoon has gained convenient location, good reputation, and staff loyalty. These are the internal factors which can identified the S&W.

PESTEL can be used to identify O&T for macro environment. In other word, JD Wetherspoon’s manages need to identify O&T for the company firstly with PESTEL analysis.

Current S&W may base on the result of past O&T. The government limited the alcohol provided by pubs, it will be the T for the JD Wetherspoon. JD Wetherspoon now reduce the content of cocktail for customers, it would help the company enjoy a high reputation on against drink problem. Then, it has become to strength for the company.

S, W, O, T is changing over time. To begin with, JD Wetherspoon did not have TV and serve crisps as a dissimilarity with other pubs is S for JDWetherspoon. But now people realized the important of healthy, so they did not prefer junk food anymore. At the same time, they did not has TV caused the company lost the competiveness. Therefore it became to a W in that period. But the company has TV later on, and help JD Wetherspoon win the competitive power. So it becomes S in 2002.

SWOT analysis is important help the company to identify the situation subjectively. It does not determine the strategy, but it usually be taken account when the company needs to makes strategy become more efficiency.

The organisation should take consideration on all of four elements together, they should not pay too much attention on W or T only if they want to take some measures according to SWOT analysis. Managers should find solution to overcome W and T, and turn the W and T become to S and O. And also, the company should use its’ strength and catch the opportunity to get competitive advantages and develop better.

Organizational culture

Organization culture, “shared value”, “taken for granted assumptions”

Organization culture refers to a system of shared meaning between members of an organization or the way we do things here. Culture is a symbol of

organization which discriminated from another, includes artefacts, espoused values and basic underlying assumptions.

Shared values are the organisations’ stated values and rules of behavior, which includes many elements such as strategies, goals, slogans, and mission statements. JD Wetherspoon thinks people are best assets of the company, and give people lifelong training opportunities. Each employees recognizes this value within the organization. So this way will form a shared value that employees can be devloped.

Taken for granted assumptions are more informal and develop overtime to create an unseen and unopened rule to give managers direction, and lead the employees perceive things more correctly. JD Wetherspoon has toilets for customers with disabilities. There may not have any disabled customer use the toilet, but if there has disabled customer, they can use the toilet. JD Wetherspoon has already considered about the things will happened.

3.2 A model of organizational culture

Terrence Deal and Allan Kennedy’s culture model shows that different types of organization, have different receiving feedback or reward speed, and risks the organization should take. Deal and Kennedy is important for organization management, and this culture is suitable for JD Wetherspoon.

Work hard/ play hard culture is most suitable for JD Wetherspoon. This culture

encourage the staff completed the low risk task and has rapid feedback. As a chain of 44 pubs, JD Wetherspoon needs immediately feedback. For example, their frequency weekly meeting and broad meeting could let management receive feedbacks immediately. And if there is any issues of JD Wetherspoon, management let employees participate to discuss the issue immediately. Thus, the company has high speed action. Therefore, the immediately feedback and high speed action will lead good-quality work and high-quality service for customers. The employees are promoted internal, and the human resource in the company is stable. It is familiar of the company to get know the background of employees. So the risk is low.

Organizational culture and organizational behavior

Organizational culture refers to a share meaning system among each member in the organization or the way of doing things. （SQA, 2006）Organisational behaviour is a kind of reaction of change both for internal and external environment, and it refers to the way of human elements behave as a result of organsiational culture in an organization.

Organization culture is consistent with organization behavior, what organization culture the company selected determined the organization behavior. Organizational culture can guide the behaviors while the behavior can influence the organizational culture. The culture will help to dictate the behavior, and the behavior will come back around to reinforce the organizational culture.

Due to the selection of the work hard / play hard culture in JD Wetherspoon,

this company needs staff to be enthusiastic and reach high standards. Organization culture which place great importance on listening to, actioning on, and feedbacks from staff could affect organization behavior to help promote the business target achieves. Organization culture in JD Wetherspoon would also help the company ensure the ogranisation behavior on pursuing of innovation and service quality, and staff would develop their skills and knowledge by lifelong training to meet the each customer's needs. Create this sort of culture and ensure everyone in the firm know about this culture. Everyone in this organization is willing to compete initiatively to fulfill their abilities, which could help company to develop better.

An alternative model of organizational culture

JD Wetherspoon could adapt tough guy culture. This culture developed by Deal and Kennedy, and it focus more on present instead of the planning in the future. (SQA, 2006)

This culture has quick feedback as same as Work hard/play hard culture. For example, the weekly meeting, broad meetings, and news letter of JD Wetherspoon all shows the quick feedback of the company. Weekly meeting of JD Wetherspoon requires management and employees participate immediately can make contributions. The meeting is frequency means the employees participate frequency.

And another difference between work hard/ play hard culture and tough guy

culture are high risks and reward. And as for JD Wetherspoon entered into the hotel industry, they need to be decisive and careful. So this decision suffers high risks. And stress comes from risks and potential loss or gain of reward which focus on present rather than future. JD Wetherspoon would faces high risk because of the tough guy culture. When traditional link are broken, JD Wetherspoon enter the market as a retailer with no connections with any brewery. It is high risk to maintain their operation, and it is difficult to avoid dangers and catch interests for JD Wetherspoon. But JD Wetherspoon faces the challenge well to take effect measures to change. Therefore, JD Wetherspoon is successful.

Business strategy

Four possible strategies

Selection strategy is a direct impact on the development of the organization and in the future, we can adopt different strategies to solve different problems.

Cost leadership strategy

This strategy refers to use low cost to obtain the competitive advantage in the market. The low production cost and low commodity prices can help organisations gain competitive advantages. Plant establishment and maintenance, personnel recruitment and training can reduce production cost.

There will be lots of competition in business environment. Low cost can help company gain competitive advantages. Furthermore, if JD Wetherspoon adapts this strategy, the company would attract customers who prefer same products with lower price, and gain competitive advantages.

Differentiation strategy

Differentiation strategy refers to the products or service is unique. Providing products and services for a premium price to meet customer demand, in order to create superior products, and have a sustainable competitive advantage.

The drink is the production of different types of pubs to meet the customer. From the case study, JD Wetherspoon provides family areas and breakfast areas for customers, and differentiated services to win customers, and achieve sustained competitive advantage. The company paid attention to the company's products in order to attract different groups of customers.

Segmentation, niche or focus strategy

The Segmentation strategy is also known as a niche or focus strategy. The generic strategy of focus rests on the choice of a narrow competitive scope within an industry. Cost focus strategy emphasis produces products or service with lowest cost. Differentiation strategy emphasis produces special products or service which is unique. (SQA,2006)

This strategy only can be adapted by small business for short-term. If a branch of JD Wetherspoon followed the differentiation focus strategy to create more unique service or product, such as invite singers to perform could help company attract more customers and gain more competitive advantages.

Prospector strategy

Prospector refers to company should predict business trend and market needs to innovate new products or services, and find new market opportunities.

JD Wetherspoon wanted to expand because they developed well in pub industry now. Then they aimed at the hotel industry. New market means a great amount of new customers, it will bring more customers. In order to get better development and business growth, enterprise could bring new products to market to new customers.

Benefits of the strategy

From1980s to 1990s, JD Wetherspoon adopt differentiation strategy. JD Wetherspoon has developed better than many pubs, because they provide different services from other pubs. For example, company provides lunch and open earlier. Company also provide for toilets for disabled customers and non-smoking places. Therefore, the differentiation strategy helps JD Wetherspoon to satisfy the needs of different customers through a sustainable competitive advantage. These are differences between JD Wetherspoon and other pubs.

Maintain this strategy could help JD Wetherspoon attract highly skilled, creative people join this group by good reputation of company to help company develop better. This belongs to the reform of human resources, the company increased the number of employees to better serve enterprises.

As soon as the firm uses this strategy by providing good service will have repeat customers. This is a potential advantage for the company, not only can gain customers’ satisfaction and loyalty but also can gain good reputations.

This strategy can help the company to increase market share, make more profits. Since it has good reputation which brings opportunities for JD Wetherspoon, it has chances to diverse it business like entering others areas. The expansion means more profits.

An alternative strategy

As for cost leadership strategy which is adopted by JD Wetherspoon from 1980s to 1990s. In this strategy, JD Wetherspoon sells good quality of beers with low price and provides cheap food with good taste. Thus, JD Wetherspoon aims at low cost both for product and service.

In 21st century, the company followed prospector strategy. JD Wetherspoon faced more competition in this period. So the company started to develop new brand pubs called ‘Lloyds Number One Bar’. And company has catch market opportunity, such as expand business for hotel industry to develop better.

Things do not change:

Firstly, both 1980-1990s and 21st century JD Wetherspoon focuses on provide best services and foods for customers with low price. Secondly, company continuously devotes to create socializing atmosphere and emphasis this for a long-term culture. And it consistently set up family areas for customers.

Things changed:

In order to increase the profit, JD Wetherspoon changes content of ingredients by reducing the alcohol amount in cocktail pitchers. And JD Wetherspoon not only reduce the cost of operations to save money, but also expand it business to a new area, such as develop hotel chains.

Two factors influencing business strategy

First of all, the government policy influences the business strategy of JD Wetherspoon. Based on the case, the ‘tied house’ system had been broken by MMC’s policy which limited the number of pubs the brewer could operate. The profits will be decreased in this situation, and it will limit it business development. J D Wetherspoon has to obey the legal of MMC.

In addition, social trend will influence the business strategy of JD Wetherspoon. During 2002- 2004, supermarkets began selling drinks at loss-leader price, and encourages people to drink at home. So in order to makes

more profits and win the increased competition, JD Wetherspoon needs to take effective measures, such as have some discount or cut the price of drinks to attract customers.

Business strategy and strategic choice

Strategy choice is the type of business strategy of the decision should be taken. It refers to leaders or leading groups play in influencing an organsation trough making a choice in dynamic political process.

Business strategy refers to the plans choices and decisions in order to lead a company to make greater profitability and success. It used to be designed to bring success and avoid failure for organisation.

If the enterprises want to implement the strategy in the short term, they need to enable enterprises to survive the crisis, and then turn to other strategic plan. According to the company's development and corporate strategic objectives, when the market demand changed and need inevitable strategic choice, select the appropriate type of corporate development strategy is necessary.

Enterprise strategy divided into various specific aspects of personal development. J D Wetherspoon adopts the differentiation strategy in 21st century. In order to meet market demand, company start to provide TV, music player, dedicated family dining area and breakfast. In competitive market, JD Wetherspoon has developed new pub business and hotel business to meet

customers’ needs. It is a strategic choice for JD Wetherspoon to open a new market which increase the competitiveness and bring more risks. All in all, this company is successful according to take differentiation strategy and make the right strategic choice, which can bring more profits for company.

Key issues in the management of business strategy

First key issue of JD Wetherspoon is commitment from staff. Employees are regard as best assets in this company, and there are 20% managers began as bottom staff. There are not any fresh blood accepted by JD Wetherspoon, because the company prefer to get internal staff’ commitment. The lack of new ideas may cause the problem of future development.

The other is the strong traditional orgnisational culture. From 1880s to 1990, JD Wetherspoon does not have any entertainment establishment, such as TV. They use ‘socialising places’ culture, and only provide customers a place to drink and chat. However, people nowadays want to entertain themselves in pubs, therefore the previous culture arrested the sales of pubs and cause the loss of customers.

Change

Forces for change

Kurt Lewin`s force field analysis

Force field analysis provides a framework for the forces to influence a situation and the original social status. It focuses on the social science of helping forces or hindering forces.

Beckhard and Harris’ change formula

Beckhard and Harris’ change formula represent the change process mathematically. It provide a model to access the relative strength affecting the likely success of organizational change programs. (Arthur D, 1960) D means the dissatisfaction of current situation; V means the vision; F means the first step towards achieving the vision; R means the resistance to change. （D×V×F>R）

Force for change

In 21st century, because people pay more attention to entertainment, JD Wetherspoon started to provide entertainment facilities, such as TV, Wi-Fi, etc. for customers. In the competitive pub industry, does not has entertainment facilities will increase the customer dissatisfaction, whereas cause the loss of customers to decrease the profits of JD Wetherspoon. Therefore, people’s attitudes influence the organization to change.

In 21 century, supermarket begin to sell drinks at a lower price, thus the company faces heavier competition. Therefore, JD Wetherspoon has to take effective change to be the leader in the industry.

Force against change

Since 1990s, JDW owns 900 pubs, and has become very successful for a long time. The company cannot develop by sticking to the beaten track and being self-complacent. Therefore, the JD Wetherspoon’s previous success is the force against company to change.

Tim martin wants to handle the power in his hand, and he wants to stay control the company forever. Thus, people who has management abilities and rich experiences will have less opportunity to distribute new ideas for JD Wetherspoon. The fresh blood cannot be adapted in market competition. This is one of the forces against change.

All in all, the forces for change are stronger than force against change in the JD Wetherspoon. Therefore, the company changed positively.

The factor leading to change in the organization

Social responsibility

Social responsibility refers to an ethical framework, which indicates an entity, it can be an organization or individual, has an obligation to act for the benefit of the community. Social responsibility is the duty of each person to maintain the balance of economic and ecological system. This responsibility can be passive to avoid engaging in social harmful behaviors, or activities, through the implementation of

activities, directly to promote social goals. (Palmer Karen, 1995)

How could the issue cause the change in JD Wetherspoon

Social responsibility links with reputation of an organization, and may influence the profitability of the company. JD Wetherspoon cannot only preoccupied with company’s productivity, and ignore the social responsibility. The ignorant of social responsibility may reduce the company’ reputation, causes the loss the customers’ loyalty, and the loss of market share.

In 21st century, binge drinking and anti-social behavior has increase the government concern. People will be reckless and cause some bad impact when they are drinking. JD Wetherspoon would like to lost the profits, rather than sell hard liquor. It’s due to the company’s high social responsibility. Thus, JD Wetherspoon will enjoy a high reputation to keep its position in pub industry and attract more customers.

Describe a credible and likely change in JD Wetherspoon

JD Wetherspoon could set up a special corner for teenagers and business man with some quiet spaces. They can study and deal with business in a quiet atmosphere. And JD Wetherspoon could only provide drinks without alcohol for people who consume at special corner. It is also the way to show its’ responsibility to the society.

Dealing with change

Management in businesses and organizations is the function that coordinates the efforts of people to accomplish goals and objectives by using available resources efficiently and effectively. (Wikipedia, 2016)

Management plays an important role for change. Management is to determine and implement a suitable change strategy. Management has responsibility to decide and plan a change and change strategy. Besides, management also has to implement a suitable change strategy.

JD Wetherspoon take actions to solves the problems by changing the strategy. During 2002-2004, binge drinking and anti-social behavior has increased public and government concern, and people started to pay more attention on their health which means the business of company will face adverse effect. Thus, JD Wetherspoon considered changing. So, they reduced the amount of alcohol in its cocktail pitchers. JD Wetherspoon has high social responsibility and tries to enjoy high reputation in the society. At the same time, with the development of strong competition, pubs are not earn like before. Based on this situation, JD Wetherspoon developed new brand bar, and started to operate hotel brand to make more profits.

Analyzing a change situation and overcoming resistance to change

Analysing a change situation

Firstly, each company should know that analyzing change situation will be accomplished by company’s managers. The senior management in JD Wetherspoon needs to identify the change situation, and take consideration for each element will be changed. Then they need to analysis a suitable strategy and prepare materials which will be used. Such as relevant documents of change, time of change, and where the changes occur. In addition, management could to determine the strategy and inform to staff.

Besides, the managers in the company need to make a suitable plan for change. The plan needs to be implemented by involving senior managers and employees who participate in change process. Documents should be prepared before. Managers should determine the time, location, finance resources and other outsources which need to involve in the changing process. At last, change will be succeed by overcome all resistance.

Overcoming resistance to change

Kotter and Schlesinger’s management style could offer helps to managers for identifying different types of changes, and dealing with different stages in changing process. Their management style involves participation, education, communication, support, negotiation, co-opting, and coercion.

Education and communication way refers to managers should make sure the communication with all employees become more effective in each stage. The support style is effective for offering supportive efforts to reduce resistance for

change, especially when employees are fear or anxiety. Manipulation refers to control or influence employees, often in a dishonest way so that they do not realize the change. Co-opting refers to include employees in change, according to ‘buy off’ ways of a resistance group, often when they do not want to be a part of it. Coercion is in an application of making resisters to accept the change, even using force or threatening to use force. (SQA, 2006)

Negotiation is discussion between management and employees to reach an agreement for change. It requires the exchange of something of value for a lessening of resistance. (SQA, 2006) JD Wetherspoon faces the increasing market competition, more and more pubs are attending into this market to fight for the market shares. But JD Wetherspoon did not have any entertainments before 21st century; it will cause the loss of customers and profits. So the management has to change current strategy. Employees and managers have weekly meetings and other communication ways to talk about the situation of the company, to negotiate a solution for the company. Then make a change of the strategy.

Participation style refers to management should involve all employees in the changing process. Managers should have good communication with employees and let than participate into decision making. Employees in JD Wetherspoon can get news letters, and they are encouraged to join the organisational meeting frequently. Staff could know the latest information to discuss company issues, and provide suggestions for organization. Since the staff are involved in the decision-making, there is less disagreement while the change process. Therefore, staff will not against the change in large extent.

Conclusion

Based on the analysis of the changes in external environment which JD Wetherspoon has faced in recent years through PESTEL and SWOT analysis, managers will get useful guidelines to do it in the future, and amend mistakes on the management style. This report provides improvement on realizing professional knowledge, and logically thinking skills. It can be an useful analysis model not only for JD Wetherspoon, but also for other company who needs to change better.

Reference

Authur D (1960) Beckhard and Harris change fomula [online] [Accessed on 16th Mar 2016]

Karen (1995) Social responsibility [online] [Accessed on 14th Mar 2016]

Scottish Qualification Authority (2006) Business Culture and strategy, Beijing China Economic Press

Wikipedia (2016) Organisational culture and strategy [online][Accessed on 16th Mar 2016]

Organisational culture and strategy

Wikipedia (2016) Role of management [online][Accessed on 17th Mar 2016]

Role of management