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Small Business Enterprises Essay Sample

Small Business Enterprises Pages
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Introduction:
This assignment is based on Small Business Enterprise in which the case study is Premier Group Recruitment. Another small business Leap 29 is chosen for the comparison. These small businesses are service sector organisations providing recruitment services in IT, Media and Engineering. They are small businesses because their employees are less than 50 and their turnover is low as according to the definition of small businesses by European Union. Learning Outcome 1:

Task 1.1:
Profile of PREMIER GROUP RECRUITMENT:
Premier Group Recruitment is a private sector service organisation which provides potential candidates to the client organisations who approach them. Premier Group Recruitment is ranked thirteenth position of UK’s Best 100 Small Companies as per The Sunday Times 2013. It is a small business enterprise as defined by European Union Small business is the one whose employees are 50 in number. They offer services in London, Reading, Manchester and Dubai. As Premier Group Recruitment is a small business enterprise so the information available is limited. There are some limitations in this assignment so assumptions have been made due to lack of information and description about the organisation chosen as case study. Identifying Strengths and Weaknesses in Premier Group Recruitment: “The internal analysis of a company helps the management in assessing their main strengths and weaknesses which is the key to strategic planning.”(Bratton and Gold, 2010) SWOT which is acronym of Strengths, Weaknesses, Opportunities and Threats is a tool to analyse the internal and external environment in which the business is functioning.

To sustain in today’s economical environment organisations need to conduct the analysis of the business itself as well as the external environment that is the market analysis and competitor’s analysis. It is a tool used by management when new strategies are made and to know at what position the business is currently standing and how to improve the performance of the business utilizing the strengths and the opportunities available to the business. The potential and existing problems are highlighted and management reaches to the solutions of the problems through strategic review and avail the opportunities to make improvements in the operations in a way different to the competitors. “SWOT Analysis helps to gain insight into past and think of possible solutions to existing or potential problems utilising the strengths and opportunities available to the business.”(Kachru, 2009) To look at the current and past situation of the organisation within the context of the mission, higher-level plans and goals; environmental analysis is accomplished. To flash at the situation inside the organisation internal audit is used in which strengths and a weakness are identified and for the situation outside the organisation external audit is used in which opportunities and threats to the business are recognized. Internal and external audit is a part of the SWOT analysis. Figure 1 Internal and External Analysis

Source: Management study guide website, 2013
During an internal audit five main areas are catered and analysed. These areas are the organisation’s available resources, current and previous performances, current services and products offered by the business, business affairs and key issues. This helps to leverage the internal strengths and reinforce the internal weaknesses by taking advantage from the competitor’s main weaknesses. Conducting SWOT analysis quarterly or yearly shows the position of the business performance in the past and the present. The managers can compare the performance of the business as well as the employees and make new strategies accordingly by availing the opportunities available. “Managers can face lack of control and find it difficult to find the four elements that is strengths, weaknesses, opportunities and threats due to some limitations of using and conducting SWOT analysis.”(Henry, 2008) Although SWOT analysis is powerful tool but it has some drawbacks also which makes its use less dominant. The information gathered after conducting analysis can be very subjective. It may contain the unnecessary detail which is not useful for the managers.

Maybe the strengths identified are not the strengths and weaknesses may be wrongly interpreted. There are some factors which are out of control for the managers conducting the analysis such as inflation levels, changes in prices of raw materials and changes in legislation so they may figure out these factors as weaknesses or threats which is the wrong guide. Sometimes the same factor can be concurrently characterised as the strength and weakness. The end result presented after analysis may contains the biased decision of the managers. Due o its limitations it can cause problems for the organisations. SWOT Analysis has been conducted for Premier Group Recruitment which identifies the strengths and weaknesses of this business. STRENGTHS:

Expertise of management and employees
Faster response
Location of the business
Onsite access to database
Tailored management information
Latest technology PGSoft database system
Good and intensive marketing
Career development
Commitment to the clients
WEAKNESSES:
Operations in limited countries
Lack of finance to operate globally
No international recognition
Weak brand name
Limited services being offered
Task 1.2:
Analysis using Comparative Measures of Performance:
“Comparative business analysis enables the management to improve their performance and enhance their abilities to achieve organisational goals and objectives.”(Armstrong and Redmond, 2012) Comparative analysis is essential to conduct so that effective strategies are made and the performance of the employees and the business can be improved. In comparative analysis two businesses are compared functioning in the same industry. In this comparison both financial and non-financial factors are taken into consideration. In financial comparison financial performance is measured by looking at return on equity (ROE) and return on asset (ROA). In nonfinancial comparison market share, customer loyalty and satisfaction, brand strength, turnover and employees morale and performance is considered. After the analysis management make new strategies according to the data available.

If weaknesses and problems arise then these are solved using different tools. The abilities are enhanced to achieve the long term goals and objectives. “Comparative Performance Measurement can be used to improve the management and operations of business which is the key to success.” (Harbour, 1997) Measuring Performance comparatively is critical for the improvement of management. When two businesses are compared the strategies of the competitors become comprehensible. This helps management in making new strategies better than their competitors. To achieve the goals and objectives management measures the performance of their employees as well as the business. The flaws are pointed out in not achieving the desired goal and hence new strategies and plans are implemented to overcome the weakness.

Comparative performance measurement shows the picture of both sides’ that is positive as well as negative aspects which makes it easy for the management to make appropriate changes in the already implied strategies and implement the strategies again to get better results in form of business success and maximised profits. “Balanced scorecard is a controlling tool which helps in developing strategy and measuring the performance comparatively in four perspectives including financial and non-financial measures.”(Clausen and Schmeisser, 2011) Figure 2 Balanced Scorecard

Source: Adapted from Niven. P, Balanced Scorecard Diagnostics: Maintaining Maximum Performance, John Wiley & Sons, 2005 The balanced scorecard helps in measuring and controlling the performance of the business. The areas in which the business is lagging behind are identified and new strategies are made to overcome the weaknesses. This helps in the success of the business by achieving the long term objectives. The balanced scorecard measures performance in four areas that is it measures the internal business performance through internal business processes, financial performance, customer’s perspective and learning and growth perspective. In internal business processes measurement the managers become aware of the internal business processes and how their business is running. In financial perspective the financial performance is measured. The risk assessment and cost and benefit analysis is measured.

From customer perspective the measurement of customer satisfaction is done. How satisfy are the customers and what do they want. What changes do they want in the services and how much loyal are they to the organisation. In learning and growth perspective the culture of the organisation is analysed. Whether the employees get opportunities to grow through learning, training and knowledge sharing. However, if comparative performance measurement is not done in the right it becomes the wastage of time and money. Costs will be more as compared to the benefits for the organisation. It may create a depressive environment in the organisation.

Manager’s decisions may be biased for their personal advantage if they want to grow and become good in the eyes of the management. Employees may not want to take participation in the process of performance measurement as they may take it as a source of demotivation and their morale gets down in the process. In this task Leap 29 has been chosen to measure the performance comparatively with Premier Group Recruitment. Austin Fraser is also a recruitment firm which provides potential candidates to the client organisations. They provide services in IT, Engineering and Renewables. As there are some limitations due to lack of information, comparison made has been assumed. Figure 3 Comparative Performance Measures

Comparison Parameters
Premier Group Recruitment
Leap 29
Financial Performance Measures
Earnings £35000+
68%
8%
Sales turnover
High
Low
Non-Financial Performance Measures
Staff turnover
7%
9%
Technology
PGSoft Database System
Common technology
Personal Benefit
70%
87%
Personal Growth and Development
87%
60%
Managers Support
91%
80%
Customer Satisfaction
High
Low
Employee Morale
High
Low
From the table above it is clear that Premier Group Recruitment is performing much better as compared to Leap 29. Financial performance: From the table above it shows that financial strategies of Premier Group Recruitment are very effective and beneficial for the business. Their earnings are 60% more than the earnings of the Leap 29. Similarly the sales turnover that is how quickly the services are provided to maximum number of clients is high much more than Leap 29 whose sales turnover is low. Non-Financial performance:

The comparison parameters shown in the table above indicate the superior performance of Premier Group Recruitment. Staff Turnover:
There is less staff turnover in Premier Group Recruitment that is the employees are satisfied with them and they do not tend to leave the organisation. Whereas in Leap 29 turnover is 9% which is higher than Premier Group Recruitment. Employees working there search for the new opportunities and leave the organisation when new and better opportunity is available which shows that they are not satisfied with Leap 29. Technology:

Technology used in Premier Group recruitment for the recruitment of candidates is up to date and new modern technology known as PGSoft database system. Whereas in Leap 29 the ordinary and common technology is used which doesn’t helps in selecting the best candidates and scrutiny is less effective in case of Leap 29. Personal Benefit, Growth and Development:

In Premier Group Recruitment there are more chances of Personal growth and development that is 87% as compared to Leap 29 where they are 60% only. Leap 29 provides more personal benefits as compared to Premier Group Recruitment. These benefits include Gym, Health Insurance, Childcare, Pension, Share Option and Maternity leave of 10+ weeks on full pay. Whereas the benefits offered by Premier Group Recruitment are limited to Pension, Health Insurance and Gym only. Managers Support:

The support of managers to the employees is 91% in Premier Group Recruitment. So their employees are fully satisfied with them and hence shows improved and better performance which is vital for the success of the business. In case of Leap 29 the support is only 80% which should be increased and the supportive environment should be encouraged. Employee Morale:

The employees of Premier Group Recruitment are highly motivated due to the supportive environment and learning culture. Their morale is very high and are competitive enough to do challenging tasks. Whereas the morale of employees in Leap 29 is low due to the unsupportive environment which can be overcome through learning culture. Customer Satisfaction:

The customer’s satisfaction in Premier Group Recruitment is high due to the services and the way the services are provided. In case of Leap 29 it is low. Both of the organisations need to focus on the provision of the services to increase brand loyalty and earn maximise profits. Analysis shows that Premier Group Recruitment is performing up to the mark as compared to Leap 29. However, there are few areas in which they lag behind so they need to make improvements in those areas. They need to train their employees and them effective enough to achieve organisational strategic goals and objectives. They also need to focus on some new services which they are not providing yet.

Learning Outcome 2:
Task 2.1:
Actions to Overcome Identified Weaknesses in the Business:
“Total Quality Management is a tool to minimize the risks, overcome weaknesses and maximise the performance of the employees and the organisation.”(Kaser, 2010) Total Quality Management(TQM) is a management practice which ensures that organisations consistently meet the needs of the customers. Figure 4 Total Quality Management Process

Source: Emerald Insight website, 2013
By using this tool internal process of the organisation and the customer satisfaction is improved. This is a process of continual improvement. For employees different benchmarks are defined which is feasible and easy to approach for the employees. When this tool is applied and implemented in right direction the risks are minimised to a larger extent. The performance of the employees can be enhanced through training. The weaknesses identified can be removed. When the weaknesses are removed and the performance of the employees is enhanced then it is the key to success of the organisation and the objectives can be achieved. “To overcome the weaknesses and to improve the quality of services management applies internal and external analysis and formulate effective strategies.”(Jeffs, 2008) Internal and external analysis assists in planning effective strategies. The problems are rectified through mutual consultation. To overcome the weaknesses and improve the quality of services strategic management approach is applied.

The management establishes such an environment where great service providers are rewarded and appraised whereas poor service is challenged and resolved. Any complaint from the customers is resolved quickly and efficiently. Employees are motivated through training and awarding reward. As employees play a vital role in the success of business so management should keep an open door policy for better employee feedback which is an easy way to trounce the weaknesses and improve the quality of services for better success of the business. “Due to some limitations Using Total Quality management approach does not always help in overcoming the weaknesses to achieve organisational objectives.”(Pekar, 2000) Total Quality Management six step approach is good in business situation where market growth is stagnant. It has some limitations which makes its use less significant. In constant changing environment it is not good to use the TQM approach. Implementing this approach is very costly as a lot of training is required for the employees.

Also its results are not certain that whether it will be beneficial or not. The time required to bring change in the behaviour of employees is also very large so it is not prudent to use this approach. There is an example of IBM where this approach was implied. They suffered a loss of $16 billion between 1991 and 1993 by using this approach. Using this approach in wrong situations may create implications for the organisations. The identified weaknesses in Premier Group Recruitment can be removed by utilising the strengths and opportunities. Each weakness and the solution how to overcome it will be explained separately. Operations in Limited Countries:

In order to operate globally organisations need resources which can both be financial as well as non –financial. Non-financial resources are human resource which plays a vital role in the success of the business. Premier Group Recruitment should make branches in other countries and give job opportunities to their people where they will start the business. This will help them to get recognised quickly which is done through marketing. Lack of Finance:

In order to start business in new country and market organisations need finance. When premier Group Recruitment starts business in some new country they should acquire loan from that new country rather than getting loan from UK and then investing it. When loan will be acquired in their currency it will be more beneficial as the value of Pound Sterling is more as compared to other currencies. For example if they start business in India they should acquire loan in Indian Rupees. It will be fruitful to acquire loan in their (new countries) respective currency. Weak Brand Name:

Weak brand name is due to the presence of best recruitment agencies in the same industry as well as due to the poor quality of services. Other agencies gain competitive advantage due to the cost and their employees. Premier Group Recruitment should train their employees in such a way that the employees should give maximum output in limited time. Total Quality Management should be applied at all levels to increase the efficiency and make a brand name among the people of UK. Shortage of Candidates Supply in Unstable Economic Condition: As UK has come out of recession in the recent years so the growth of economy is slow in UK due to which shortage of candidates arises. This problem or weakness can be solved if Premier Group Recruitment makes contract with the highly recognised educational institutes and ask them to provide best candidates of the year in respective fields which will increase the quality of the services as well as the brand name will be developed. When they will get the best candidates who are suitable for the job more organisations will consult them and long term objectives can be achieved in form of improved quality and maximised profits. Task 2.2:

Ways to Maintain and Strengthen the Performance:
“Developing appropriate learning and development activities creates a learning culture which enables the employees to uphold their performance which is advantageous to the success of the business in maintaining and sustaining competitive advantage.”(Johnson and Scholes, 2008) The employees improve their performance if they work in learning cultures where employees share knowledge and tactics of doing different tasks with each other. Learning culture provides opportunities to work in teams. They will highlight different problems and will solve them through knowledge sharing and effective communication. They increase their skills through training which is only possible in learning cultures. The unwritten psychological contract with the organization will become stronger and they (employees) will become loyal to the organization. The two ways feedback process will further motivate them as problems will be rectified and conflicts will be resolved and they will be able to achieve the desired results in less time.

They will be able to improve their skills and will shape them according to the needs of the organization. The performance of the business depends on the performance of the employees. Performance of the business α Performance of the employees If the performance of the employees is enhanced the business will be able to achieve competitive advantage. “Maintaining and strengthening the employee’s performance and making them more effective is done through performance management process.”(Smither and London, 2009) It is important to get maximum output from the employees so that the organisational strategic objectives can be achieved easily and organisations can sustain competitive advantage. In order to satisfy the employees and manage their performance a five step process can be applied. In this process the first step is planning performance of the employees.

Here performance objectives are identified. In the second step the objectives are discussed with the employees that how these objectives add value to the success of business. Third step is managing the performance of the employees where monitoring is done. Here the performance is measured against the set standards. The fourth step involves development planning. In this step management focuses on how to improve and develop the performance of the employees. The last step is managing employee’s satisfaction. Management discuss with the employees and get feedback to what extents are they satisfied and how to improve their satisfaction and motivation.

Figure 5 Managing Employees Performance

Source: Managing employee performance website, 2013
“Management adopt approaches to strengthen the performance of the business through knowledge sharing, feedback and strategic plans to achieve competitive advantage.”(Aguinis, 2012) Employees develop and enhance their skills through training and hence become more effective in performing their work. Training polishes their skills and expertise to achieve organizational strategic goals. It also provides chances to management and employees to grow and improve the performance of the organizations. In order to satisfy the customers the employees need to apply their skills and knowledge learned from the training effectively. In this way the organizations can gain competitive advantage due to their employees. Humans working for the organizations are an important asset and accurate utilization of this asset is necessary to achieve goals and objectives. In order to be successful in today’s competitive business environment, organizations need to formulate strategies carefully and employees should be effective enough to make the strategies beneficial and successful for the organization.

If the employees of any organization are very effective in achieving the desired goals and objectives the organization can gain competitive advantage because of their effective employees and will be able to achieve their vision. There are several ways in which existing performance could be maintained and strengthened. Some suggestions are given below. Premier Group Recruitment should give training to their employees which will be a source of motivation for them. After training they should analyze and assess whether they are implementing the knowledge they gained from training in their job or not. Give and get feedback to the employees which will be helpful for the employees and they will feel part of the organisation and sense of belonging to the organisation which will make their performance consistent.

Management of Premier Group Recruitment should adopt a learning culture in which knowledge sharing and mutual consultation is at most priority. Before making any plans and strategies involve workforce as they can also give better and creative ideas. Management should
promote innovative culture where teams are formed for better performance and effectiveness to achieve shared goals and objectives. The concept of synergy is availed as all employees contribute to organisational success by applying their unique talents, knowledge and creativity in their work. Management of Premier Group Recruitment should create openness in flow of communication and provide supportive environment so that effectiveness and performance of the employees is enhanced and strengthened. Task 2.3:

New Areas in which Business can be expanded:
“Business can be expanded by using different strategies illustrated by Ansoff’s Matrix through product development, market development and differentiation.”(Doyle and Stern, 2006) Due to globalisation organisations tend to expand their businesses in new areas to sustain competitive advantage. There are different strategies for expansion of businesses. Ansoff’s Matrix is one of them. This strategy helps businesses in deciding market and product growth. Whether to grow new markets or target the existing markets through product development. Whn existing products are introduced in the existing markets market penetration strategy is implied where organisations charge low prices. When existing products are introduced in new markets market development approach is implemented. To launch new products in existing market product development and introducing new product in new product diversification is chosen. The most risky strategy among all these strategies is Product development and diversification as they are most costly as compared to others.

Figure 6 Ansoff’s Growth Matrix

Source: Tutor2u website, 2013
“Businesses can expand into new and different areas by availing the opportunities and sources of joint ventures through horizontal and vertical integration.”(Hill and Jones, 2009) To expand and grow business it is profitable to avail the sources of joint ventures. Horizontal and vertical integration are the sources of joint ventures. Figure 7 Sources of Joint Venture

In horizontal integration businesses acquire or take over some other business of same industry. For example Orange Company integrated horizontally with the T-Mobile. Whereas Vertical integration has further two types: Forward and Backward Integration. In forward integration the organizations make healthy relations with the suppliers so that the product is provided in time which helps in achieving market share. In backward integration the organizations make good relations with the distributors and use different channels due to which the organizations can maximize their sales when their product is delivered in time. This also increases the demand which is helpful in maximizing the profits. This integration is also helpful as cost of expenditure is less as compared to the cost on advertisements. It is one of the methods to generate awareness about the brand. “The limitation of sole-proprietorship form of organisations that is small business enterprises reduces the scope of expansion and growth for business.”(Tulsian, 2002) Figure 8 Limitations of Sole-Proprietorship

Source: Adapted from Tulsian. P, Business Organisation and Management, Pearson Education India, 2002. It is difficult for the small business enterprises to expand into new markets or develop new products due to some limitations. They have limited sources of finance and unlimited liability due to lack of assets which decreases the ease of expansion and growth. Similarly, they have less number of employees at managerial level so the skills available are also insufficient for generating and planning new ideas and strategies. There is also lack of continuity and stability as the ownership is with two or three persons so they may cause temporary or permanent closure of the business. Like large businesses, small businesses cannot benefit from the opportunities available to the large businesses. A huge amount of finance is required for the expansion and growth strategies which is not accessible for the small businesses.

So the possibility for the small firms adopting the growth strategies for expansion is less as compared to large businesses. Premier Group Recruitment which is a consultancy firm providing services in limited areas. Only a few candidates from specific fields are reached and provide their (candidates) talent and skills to the client organisations. They (Premier Group Recruitment) only deal in IT, Engineering and Media. It will be beneficial for Premier Group Recruitment to expand their business in new areas. For their expansion they can choose different strategies. According to Ansoff’s Growth Matrix they can develop new products and markets. Market Development:

For market development they can expand their business in new countries and approach different markets where economic growth is at its peak. For example they can target BRIC countries (Brazil, Russia, India and China) which are the emerging develop countries where economic growth is fast. Targeting these markets can help in maximising the profits for Premier Group Recruitment. In this way they will be recognised globally and the brand image will also be developed. Product Development:

Premier Group Recruitment can improve and develop their existing product by giving training to their employees to improve their performance and the quality of the services. Training will motivate the employees and they will enhance their skills and talents and hence it will improve the quality of the services they provide to sustain competitive advantage. Product Differentiation:

Premier Group Recruitment can also use product differentiation strategy. Currently they are offering recruitment services in limited areas only. They can offer services related to some new and different areas such as architecture, accountancy etc. This will be a differentiated service as other firms are not offering services in such areas. In this way they can gain sustainable competitive advantage among its competitors. Premier Group Recruitment can also avail the sources of joint ventures through integration. Integration strategy can be chosen for expansion of business in new areas. Horizontal Integration:

Premier Group Recruitment can use horizontal integration in which they can acquire some other business in the same industry. They can take over any recruitment firm to become stronger and also the availability of candidates will be increased. Forward Integration:

If Premier Group Recruitment uses forward integration a type of vertical integration will also be fruitful for them. They can become supplier’s themselves. In this strategy candidate their selves will reach Premier Group and the number of candidates will become more and then Premier Group can provide their candidates to the respective client organisations.

Learning Outcome 3:
Task 3.1:
Assessment of Existing Business Plans and Objectives:
“Management conduct scenario analysis, market analysis and external analysis to assess the current business plans and objectives whether they are in line with the strategy of the organisation and would create value for the firm and the stakeholders.”(Hall. 2004) The objectives of the business should be according to the mission and vision statement of the organisation. For this purpose management conducts different analysis to check whether the objectives are being achieved according to the strategy and mission of the organisation. Whether the objectives are effective enough to achieve the mission of the organisation. For this purpose scenario analysis, market analysis and external analysis is conducted. In scenario analysis the current situation of the environment is assessed in which the business is competing. In market analysis the ups and downs in the market and the competitor’s analysis is assessed. How well the competitors are performing and what are their weaknesses. Then strategies are made to take advantage from the weaknesses of the competitors. In external analysis the opportunities and threats to the organisation are considered.

Whether there are opportunities for the business to grow in the market and to achieve maximum market share. The purpose of the achievement of business objectives is to create value for all the stakeholders. The stakeholders are the company owners, employees and the customers of the organisation. It is vital to satisfy them which is done through applying the objectives at the right place. “Management often provides lapses in assessing existing plans and objectives which create implications for the management to achieve strategic objectives.”(Mintzberg, 2008) It is not easy to assess and analyse the business objectives and plans. Sometimes managers does not conduct the analysis correctly which causes implications for the organisation and management. They may provide lapses in assessing objectives and plans. Their final decision may be based in biasness. So strategic control is important to assess the business objectives and plans effectively. Objectives of Premier Group Recruitment:

Existing business objectives of Premium Group Recruitment are: To giving our clients and candidates an efficient and personal service To provide skilled manpower to our clients
To provide good opportunities to the candidates who apply through us To attract and retain the best team of employees
Existing Business plans of Premier Group Recruitment:
The recruitment of the best candidates through training and career development process is the plan of the organisation. They provide enough training to the candidates to make them highly skilled so the quality of the services is increased. The current market of Premier Group is UK and Dubai only. Task 3.2:

Revision of Business Plans to Incorporate Appropriate Changes: “Due to radical changes in environment in which organisations compete makes it important to assess and revise business plans so that appropriate changes are incorporated easily and effectively.”(Rothwell and Stavros, 2009) Change is an expected aspect of life. In current business environment uncertainty is certainty due to fluctuation in political, economic, social, technological, ecological and legal policies and strategies. In an uncertain business environment to sustain, the organisations need development which is possible only by incorporating appropriate changes at right time. It is important for the management to conduct market analysis to know what new changes other organisations are implementing and what new opportunities are available for the businesses. When new changes in the environment are assessed, the management revise the business plans and the objectives and remake them with appropriate changes in specific areas.

If these changes are incorporated at the right time the organisations become effective enough to achieve organisational objectives and strategic goals. “There are various internal and external forces within and outside organisation that exert pressure on the organisation and compel it to change.”(Sharma, 2006) Nowadays business environment is changing rapidly and has become very competitive. There are various factors inside and outside the organisations that act as forces of change in the organisation. The internal factors within the organisations which compel change are system dynamics, individual and group expectation, organisational design and structure and the managerial and administrative processes. The changing technology and formation of domination groups in organisations, interpersonal relationships in the organisation the system of the organisation needs change.

Similarly organisations make changes in their structure to reduce the level of costs and increase the productivity for the organisations. The expectations of the employees also change rapidly with time. They want new and modern technology to be used in the organisations which compel organisations to move towards change. Similarly there are number of external factors such as political changes, changes in government policies, changing customer needs and increase in competition which induce organisations to change. For this market analysis should be conducted shortly to stay up to date. There may be opportunities for the business to grow. Government may provide such strategies which are beneficial for the organisations.

Figure 9 Internal and External forces that compel Change
Source: Adapted from Harigopal. K, Measurement of Organisational Change, 2006.

“To initiate change in the organization tangible and intangible costs are incurred which causes problems for the management to incorporate appropriate change.”(Jain, 2005) To incorporate changes in the organisations is never easy. There are always costs associated with the change. The tangible costs can be the purchase of new equipment that is when new technology is implemented machines have to be bought which are very costly. Similarly the intangible costs are also incurred. The employee’s morale may get decreased when they are pointed out that they lag behind in some areas and need to change themselves. They may get demotivated and may tend to leave the organisation. Employees can also resist changing. They may create empire building and try to defend their personal causes. So management needs to create a learning culture and knowledge sharing should be done to let the employees know about change and tell them the long term benefits of the change.

Incorporation of Appropriate Changes in Premier Group Recruitment: Although the objectives and plans are very effective but the management still needs to match resources, skills and competencies against the required goals and objectives. The management of the Premier Group needs to focus on new markets and sustain competitive advantage through market segmentation. Effective strategic decision making needs to be done by the management. Although the employees are appraised by the management but the management still needs to recognise the performance of the employees and reward them monetary and non-monetary incentives. To strengthen the brand name and image they still need to do intensive marketing in UK and UAE.

To attract the new candidates provide them services on lower costs. Management needs to make Research and Development department to explore new markets and opportunities available. Premier Group needs to develop their product. Add some more features to the services they offer so the customers should approach them only. Management needs to get a full view of the culture, business objectives and candidates criteria of the client organisation so that they should focus on the most suitable candidates. Management needs assistance with current market values and trends to attract top candidates. Increase the pool of candidates at minimum cost.

Recruiting candidates based on their industry clout is an excellent way to gain ground in competitive markets and sustain competitive advantage. Task 3.3:
Action Plan to Implement Changes:
“Action plan to implement the change process should involve management and all employees at all levels in analysis and consideration to sustain in the competitive environment which is done through knowledge sharing and feedback process.”(Paton and McCalman, 2008) To bring change in any organisation is very difficult even if there is democratic leadership in action. So the management needs to develop and create an innovative learning culture. They should involve all the employees at all levels when they decide to bring the change. They should explain them the reasons to bring the change that external environment is going through change and compels to bring change in the organisation. Listen to the views of the employees and take them into consideration. There should be open communication where employees are free to participate in the decisions and there is close relationship between employees and the management.

Teams should be formed to initiate change where they will solve the conflicts and the problems through knowledge sharing and mutual consultation. Management should get feedback from the employees that what they think of bringing the change in the organisation. “To implement change in the organisation management should develop awareness for the need of change and focus on people to implement it effectively.”(Daft, 2009) To implement change people or the employees are the major resistance in bringing it. So management needs to make some sessions with the employees and make them aware of the pros and cons of bringing the change. Why change is necessary, change is the process of continuous learning and persuade them to support change. Management must pay attention to broaden and mobilize support for change. Through task forces and teams and the use of incentives system and training. However it has been seen that in some organisations management with autocratic leadership imposes change on the employees and the workforce which creates negative impact on them. They become resistant to bring the change.

In this scenario highly intangible costs are incurred in the form of demotivation of employees and their dissatisfaction among employees which causes implications for the organisations and management in achieving the strategic goals and objectives. Action Plan to Implement Change in Premier Group Recruitment: Management of Premier Group Recruitment will involve all employees in the change process. Management will adopt a learning culture where everyone will participate in giving ideas and feedback. There will be open and two way communication between management and employees. Management will make teams with defined goals and objectives to achieve better results after implementing the change in the organisation. Change will be brought in steps that are first it will be brought at team level, then department level and lastly at the organisational level. Management will create flexibility in culture based on learning, knowledge sharing and feedback which will help employees to adapt to the change effectively. Management will monitor the change that is how the change effects the employees and what are the outcomes derived from the change being implemented.

Learning Outcome 4:
Task 4.1:
Impact of Change on Business and its Personnel:
“Proposed change brought through learning culture in the organisation increases the level of efficiency and motivation of employees.”(Whiteley, 2007) Adapting to change is never easy. Change causes a level of anxiety in employees. It can have positive and negative impacts on the business and employees. So it is very important for the management to adopt strategic leadership approach to implement change. It is necessary to involve employees and workforce at all levels in the decisions of implementing change. Every strategy has some pros and cons. So while implementing the change the managers have to be concerned about the consequences and impacts of the change. The implemented strategies affect the organisation as well as the stakeholders. If the change is imposed on the employees it will have negative impacts. The employee’s turnover will increase and their level of satisfaction in the organisation decreases. It has been seen that the employees become less efficient in performance and achieving tasks. If the change is brought in an innovative learning and knowledge sharing culture the employees get satisfied and motivated.

They become more efficient and effective in performing tasks. “Change helps to make the personnel more experience as a result of open communication and new training for new challenges which helps to improve the image of the organisation.”(Cowan, 2008) When management implements change in the organisation they give training to the employees so that they can adapt to the new change easily and effectively. Organisational change creates new challenges for the business and employees. For this very reason the employees are given training so that they can learn to cope with the new challenges effectively. Change brought through knowledge sharing makes training an essential part for the change where the personnel learns new skills and apply them in their tasks to achieve tasks effectively. Democratic leadership with centralised control in a learning culture is vital to bring and implement change in the organisation.

Similarly open communication inside the organisation between the management and the employees can have positive impact on implementing change. When change is implemented there is uncertainty that the employees will adopt it easily. The employees feel insecure and dissatisfied with the change. The level of job insecurity increases among the employees. In this situation the management can communicate with the employees at all levels and convey them the positive aspects of organisational change. The employees will gain confidence and show readiness for change. In this way effective change is implemented and positive output is obtained from the employees to create value for the stakeholders and the business itself. It is necessary to build teams to implement change where employees can work together and share knowledge. This will be helpful in accepting the new challenges effectively.

“Management often impose change without knowledge sharing, feedback and employees participation which creates negative impact on the performance of employees and business.”(Anderson, 2010) The change brought without the participation of employees and knowledge sharing is known as imposed change which has negative impacts on the performance and effectiveness of the employees and business. This results in low morale, demotivation and dissatisfaction of the employees in the organisation. They feel job insecurity which leads to the high turnover rate of the employees. This form of imposed change causes implications for the management to continue their operations during change management. However, imposed change management works in the smaller organisations with autocratic leadership.

As the businesses operate on smaller scale and there are less number of employees so change creates opportunities for the employees to excel in their career. For this reason they perform more effectively in the challenging environment. Change helps the business to stay current with industry trends, which can make it more attractive to potential customers as well as help maintain current customers. Businesses that are proficient at handling change can foster an environment that encourages innovation. Impact of Change in Premier Group Recruitment:

There is innovative and learning culture in Premier Group Recruitment. The leadership of Premier Group is democratic with centralised control which makes easy for the management to implement change. They know their employees well as there is open and two way communications between the management and the employees. The proposed appropriate changes have positive impact on the employees and the business performance. Management gives training to the employees so they work more efficiently and effectively and hence improve their performance. The feedback culture keeps the management informed about their employees and helps them to make strategies to solve the problems of employees competently. The employees become more adaptable to change in Premier Group as the change has been brought through knowledge sharing.

The employees have become more motivated and satisfied with their jobs as training is provided at every stage of implementing change. Due to the delegation of authorities while implementing change has made the employees more decisive. The employees improved their performance as they cope with new challenges effectively to sustain competitive advantage. The employees of Premier Group have become more competent as they learned new skills and expertise during and after change and hence become more capable in performing different tasks. The change created an opportunity for the development of best practices, effective leadership and improved employee engagement in Premier Group Recruitment. Better customer service and operational service to clients from assertive and experienced employees increased the profitability for Premier Group. Task 4.2:

Managing Change in Business:
“Change can be managed and implemented when it is brought in steps and there is stronger internal and open communication between management and the employees” (Carnall, 2007) Change is implemented effectively in any organisation if there is open internal communication between the management and the employees. Better communication offers space to the employees so that they can judge the pros and cons of the change and adapt to the change easily and effectively. It is vital to manage the change to get maximum output from the employees and earn maximised profits. The change can be managed if it is brought in steps at individual, departmental and organisational level. Kotter suggested eight steps to bring and manage change in the organisations.

1. Management needs to develop a sense of urgency around the need for change.
2. Convince the employees that change is necessary.
3. Create a strategy to accomplish the vision.
4. Flexibly and reliably communicate the vision.
5. Remove the obstacles and hindrances that resist change.
6. Create short term targets for the employees so that they can achieve success and know the positive impacts of change.
7. Build on the change and learn the ways of continuous improvement.
8. Anchor the change in corporate culture to achieve long term success Source: Project Management website, 2013

“Strategic management and leadership share knowledge take feedback and involve everybody to manage and implement the change effectively.”(Griffin and Moorehead, 2011) Strategic management approach and leadership can manage and implement change effectively which is done through knowledge sharing and feedback system. Strategic management approach implements change according to the new mission, vision and goals and objectives of the organisation. Strategic leadership support the employees and help them to achieve the goals of the organisation and shape them according to the needs of the organisation. In this way maximum output is attained from the employees in the available limited resources. The employees are delegated authorities so that they can take decisions on their own and cope with the challenging tasks successfully. Strategic leaders influence and motivate the employees and there is good communication between the leader and the employees.

This results in increased efficiency and improved quality of the services and the products to sustain competitive advantage. The responsiveness to the customers is increased and there is more innovation. The feedback process helps in rectifying the problems and resolving the conflicts which is key to success. However, in some organisations it has been seen that the management fails to manage and implement the change effectively due to the resistance from the employees and they don’t know to bring change in steps. Management doesn’t listen to the employee’s views and opinion and impose change on them which causes implications for the organisation and its personnel. The employees get demotivated and dissatisfied and the level of productivity is decreased which sometimes results in the collapse of the organisation. It is necessary to bring change in learning culture thr4ough knowledge sharing and mutual consultation. Internal and external analysis conducted shortly compels to bring change in organisation due to advancement in technology and changing trends in market. Market analysis, trend analysis and competitor’s analysis are conducted to bring change in the organisation. Bringing change is not important rather than it is important to manage the change.

In Premier Group the change is managed in an efficient way and in steps. To manage change management will establish as effective strategic planning and control system to create value for stakeholders. Management will develop flexible, knowledge sharing, learning and feedback culture for effective management. Management will establish more openness in the system to manage change effectively and efficiently. Management will develop a system for the awareness of the change for the employees. To make employees more adaptable the management of Premier Group will provide training mechanism. Management will delegate authorities to the employees so that that they can take decisions on their own and manage to deal with problems easily. Further the management will establish a proper reward and recognition system to motivate the employees and strengthen their performance to maximise the profits. Task 4.3:

Monitor Improvements in Performance of Business:
“Monitoring employee’s performance assists strategic management in setting the performance standards and aids in appraisal review process to achieve consistent performance.”(Poister, 2007) To achieve sustainable competitive advantage strategic management approach assists the leadership to measure and improve the performance consistently. The management reviews the performance of the employees shortly to make improvements in the areas where employees are not performing well. The overcome the weaknesses the management will provide training for better performance. The employees show improvement in the performance and achieve the short term goals quickly. When these goals and objectives are achieved management sets higher targets for the employees so that they can learn new skills and become expert in the specific fields. The employees then shape them according to the requirements of the organisation and meet the goals over a given time frame. So monitoring the employee’s performance is one way to change and set the higher standards for the employees. Similarly monitoring also aids in the appraisal review process.

The previous and current performance is measured against the standards and then new standards are set to achieve consistency in the performance of the employees. “Performance of the business and employees can be improved if managers conduct monitoring throughout the evaluation period and send feedback so that they can achieve the established level of performance.”(Welbourne, 2011) Monitoring the employee’s performance is a tool to increase the quality of the services. Managers conduct monitoring and measure the performance of the employees and send feedback to them as a result of which the employees know their strengths and weaknesses. They try to 0overcome their weakness to get recognised and rewarded. Monitoring the employee’s performance also helps in customer satisfaction. They will focus more on their work and try to waste less time. Monitoring also helps in recognising and rewarding great performance. If there are any problems and errors arising then monitoring can help to rectify the errors and resolving the problems. In this way the employees who performing poor can be managed through brainstorming and training in learning culture.

The discussions and meetings of managers with their employees can help in formal performance reviews and rewarding the employees on fair basis which is possible only through monitoring the performance of the employees. “Management often provides lapses and gap in communication due to which they (managers) fail to establish an effective control to monitor business performance within time scale.” (Bhattacharyya) Often it has been seen that in some organisations management doesn’t monitor the performance of the employees accurately which causes implications for the business. This may be the causes of lapses and gaps in internal communication. When there is no open communication between the management and the employees it causes complications. The managers fail to monitor the performance and are unable to achieve the targets. The manager’s decisions may be comprise of biasness which causes a feeling of mistrust among employees and the level of stress increases which lessen the performance of the employees and they get demotivated.

The open communication between management and employees is necessary to improve the performance of the employees. Monitoring the performance of the employees and the business helps the management to improve the performance. In Premier Group Recruitment the management will review the performances of the employees on weekly basis and measure it against the desired goals and objectives and strategic plans. The flaws in performing up to the mark will identified easily. If the weaknesses and flaws are controllable then the management will provide training to overcome them and will improve their performance through learning different skills. If it is not in control of management then management will provide different action plan to the employees. The alternative plan is known as contingency plan and these plans are made for such situations. This way of monitoring the employee’s performance in Premier Group will assist in improving the performance of the employees which will improve the quality of the services to create value for all the stakeholders and sustain competitive advantage. Conclusion:

In this assignment small business has been explained with the case study. How to conduct SWOT and other internal and external analysis to make strategies have been explained. How to overcome the weaknesses and improving and strengthen the employee’s performance has been discussed. Similarly when and how to bring, manage and implement change to create value for the customers has been discussed.

List of References and Bibliography:

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