Friday 1 August 2014

Company Culture

The rapidly changing pace and focus of management has to be considered within the context of the organisation and that of its competitors, to gain any relevance or meaning. With this in mind, it may be useful to consider the impact of your organisation’s culture has upon both management style and employees’ involvement in their own company decision making.

Organisational culture has been defined as ‘the way things are done around here.’ Reviewing a company’s culture is not always as simple as it may seem…as any culture is value driven. The origins of most corporate cultures lie in the belief and value systems of its original management, however that was constituted. Hence, we can argue that mission statements, objectives and management style are all predisposed to reflect the dominant values of the company. If you consider your own organisation – the layout, artefacts, even the codes of behaviours taken by employees, will naturally be supportive of the culture.

Cultural Types 


It is interesting to look at the different characteristics associates to the four most frequently used cultural types, placing your organisation either in one dominant culture or across several.

1.Control (Hierarchy) Culture 

  •  Mainly found in autocracies and bureaucratic management led organisations 
  • Formalised recognised rules/procedures
  •  Specialised process 
  • Hierarchical structure 
  • Communication top-down 
  • Promotion through recognised stages 

2. Market (Compete) Culture 

  •  Core values of competitiveness and productivity 
  • Oriented toward the external environment instead of internal affairs 
  • Competitiveness and productivity achieved through external positioning
  •  Assumptions that the external environment is hostile rather than benign, consumers are choosy and interested in value
  •  Leaders are hard-driving producers and competitors are tough and demanding

 3. Clan (Collaborative) Culture 

  •  Shared values and goals, cohesion, participative, individuality 
  • Typical characteristics of clan-type firms were teamwork, employee involvement programs, and corporate commitment to employees
  •  Rewards on the basis of team (not individual) accomplishment 
  • Customers are best thought of as partners 

4. The Adhocracy (Create) Culture

  •  Management foster creativity, adaptivity and flexibility 
  • Titles, job responsibilities and even departmental alignments change frequently
  •  Dynamic environment of skilled individuals 

To accept that organisational culture has a strong identifying influence on both the internal and also the external customer, it is valid to question how managers can shape the motivational behaviour of staff through it. Interestingly, there can be very different interpretations of culture within one organisation, i.e what may be perceived by senior management as a highly effective learning environment, directed through an efficient policy driven management team, might be perceived by lower level staff as an organisation that is confining in terms of training and development opportunities and is disorganised within a confused management structure. This mismatch is not unusual and is often reinforced through a weak communications policy.

Many may remember Ricky Gervais’ character Brent’s motivational endeavours in the ‘Office’. Motivation is a complex and difficult task for management , requiring a need to understand not only the company’s cultural context, but having access to information concerning the extrinsic and intrinsic needs of staff.

Management Style and Staff Motivation 


There are many examples of organisational recognition of the positive relationship between management style influences and motivational behaviour. Central to most are:

  • Employee expectations
  •  Line management engagement 
  • Resources fit for purpose 
  • Recognition 
  • Communication 

It is useful to reflect upon the findings of theorist Herzberg in the context if staff perception. He suggested that employees do not necessarily become motivated by what they expect to be in place at work, such as: opportunities to work in teams, a fully equipped work station, access to line management and so on. However, if these were not available, the individual may well become demotivated. Thus, it is the ‘extra’ extrinsic or intrinsic opportunities made available that can motivate staff (features such as: new responsibility, training initiatives ,acknowledgement of their work) that positively influence behaviour. But, it is work recognising that what motivates one employee may not another – so what strategies can managers put in place to best access this knowledge?

Many companies have a rigorous performance management (PM) strategy that furnished them with detailed information concerning staff members. How this strategy is perceived by staff, again, depends upon the management communication style and how line managers view their role in the process. Ideally, PM initiatives should be the product of collaborative communication, to engender a more responsive and committed workforce.

In conclusion, the culture of any organisation is the key influence on internal and external perceptions, impacting upon the image and reputation of the company. Driven in many cases by traditional beliefs, management need to be responsive to the changing demands of both the internal and external customer within their particular market, to ensure they maintain or improve their position.

Meryl Bradshaw is senior lecturer in organisational behaviour at Warrington School of Management, University of Chester. 

Wednesday 9 July 2014

Warrington Wolves success can be a blueprint for other businesses

THE rise of Warrington Wolves, both as a sporting team and as a business entity has been quite dramatic over that last decade or so.
Their consistency on the pitch, coupled with investment in infrastructure has ensured that they have the appeal and through the Halliwell Jones Stadium the capacity, to draw and cater for an extensive fan-base.

A blueprint for rugby league facilities the creation of the stadium, despite any nostalgic feelings around moving from Wilderspool, represents the intent to grow the biggest club possible.

A shift from terraces to seating, the addition of added on-site leisure facilities, parking and good accessibility makes for a better crowd experience and so a stronger family appeal. The “From Wire 2 Wolves” display and DVD captures a huge shift in the operations, cultural context and business model of this historic entity.

The 130 year plus history of the club is a triumph, as few businesses manage to survive through so many ups and downs over such a period. It is the loyalty of the supporters which has ensured continuity. All businesses should learn from this lesson; build a brand that enough people love and the future should be assured.

Professor Lawrence Bellamy is Associate Dean at Warrington School of Management, University of Chester (Padgate Campus)





Wednesday 11 June 2014

Flexible working in a 24/7 culture

Marketing and organisational behaviour lecturer, Stephenie Hodge, from the Warrington School of Management (University of Chester) provides insight into flexible working practices.

There is no disputing that over the last decade organisations of all sizes and sectors have worked in a constant state of change brought on through the recession, expansion of globalisation and the speed in which new technology and social media are testing the skills of even the most effective managers. So how does the manager of the future not only cope with, but thrive in, leading and motivating a team that is aligned with the organisational goals and have a mind-set of managing output, not hours?


A flexible working approach

A major future trend researched by The Institute of Leadership & Management (ILM, 2013) has identified that 94% of UK organisations offer some form of flexible working. 51% of all the managers surveyed expect flexible working to become the norm within five years and recognised as a future global trend. This is proven to be a highly effective incentive to attract and retain talented employees. It empowers the individuals, giving them greater control over their working week; increasing their engagement, productivity levels which in turn reflects positively to the brand image of the organisation. Their autonomy creates a corporate personality and helps to identify and verify the company’s values, therefore achieving the ‘buy-in’ to the culture and psychological contract.

Individual’s values and perspective on working life has changed; they don’t buy into the job for life concept anymore and would rather have the option to adjust their work/life balance to best suit their personal circumstances. Therefore, flexible work options can also be used as a trade-off against a salary increase, which may suit or be the only option available to an employer.

This research is further endorsed by Kingston University/Ipsos MORI who found that ‘workers on flexible contracts tend to be more emotionally engaged, more satisfied with their work and more likely to speak positively about their organisation and less likely to leave (CIPD, 2014)


Leadership and management

However, before this approach can even be considered the 2020 manager will not only have to be agile and adaptive, but also that the fundamentals of good leadership and management will matter more than ever.
52% of managers agree that skills such as communication, delegation, goal-setting and motivation are vital when operating with less time and in a more complex working environment (ILM, 2014). Trust and transparency are key as the flexible working approach has to be seen as fare and consistent and be embraced by the organisation and not seen a career limiting option.

There will be yet more on-going cultural changes due to the social and demographic shift, so a different hybrid breed of manager is required that still possess the traditional skills and qualities, but is equipped with a modern mind-set and approach (ILM, 2014).

Generation Y

There is now an expectation from our up and coming generation that this freedom and autonomy goes hand in hand with their ambitions. They are very much motivated by money, status and career advancement and do not perceive working in a flexible manner as impeding their promotion or dedication. This does not mean that they don’t want to work as hard or as long as required, but in a different working format to enable more a work life balance. This mind-set of changing working patterns needs to be embraced by employers or they could be missing out on new talent to take their business forward.


What is the payback?

If managed correctly, the payback will be built around a stakeholder relationship approach:-

·         The individual-Self-motivated and empowered which leads to a natural drive and commitment to the team effort.
·         The manager-Managing a contented team with an ethos which is aligned with the organisational values, therefore reassured that the job is being done to the best of its ability with no conflict acting as a barrier.
·         The customer & external stakeholders-The vision for transparency leads to collaboration and mutual trust which can bring a true competitive edge.
·         The organisation-Will be viewed as holistic and modern forward thinking in their approach. It holds potential value as a recruitment, engagement and retention tool; as well a great brand endorser.


Managers who are prepared to trust in their team and think differently can model the way into making flexible working the norm, will be the ones who are remembered not just as managers but as great managers.





Top of Form

Tuesday 29 April 2014

Profit or Cash - which is more important?

Jim Stockton, Senior Lecturer in Finance at the Warrington School of Management (University of Chester), discusses profitability and liquidity planning – essential elements for every business to succeed!

Introduction

There are many reasons why these failures occur-some relate to the lack of a coherent business strategy, some to the absence of a focussed market research but many are simply due to the absence of some rudimentary financial planning, or to be blunter, basic budgeting. This brief article seeks to point out some fundamentals on this often neglected skill or to quote Monty Python the “bleedin obvious”!


Budgeting

Budgets are generally regarded as having at least five areas of usefulness:-
  • Budgets tend to promote forward thinking and the identification of short term problems
  • Budgets can help, in larger businesses to co-ordinate activity and ensure a common understanding exits on priorities-for example there is little point in the sales team aiming to deliver optimistic targets if the production team have a different aim in mind
  • Budgets can motivate managers and staff to improve performance if “stretch “ goals are set
  • Budgets can help control a business-simply put does actual performance, measured monthly, compare favourably or adversely with the budget?
  • Budgets can also act as a means to authorise spending within a business
coinsThe purpose of this article is to concentrate on the difference between profit and cash flow or, put another way, highlight the fact that profitability AND liquidity are opposite sides of the same coin when it comes to business survival. Business may fail through lack of profitability but its running out of cash that actually sends them to the wall. Indeed it is entirely possible for a profitable business to go bust by failing to pro-actively manage cash flow (known as overtrading)


Profitability

Let’s consider some basics-business has to generate profit in the medium to long term-after all, in our capitalist society, that is what it is all about-why take the risk otherwise? Business entrepreneurs see an opportunity in the market place to launch a product or service and to do so in a way that will generate a profit possibly with an idea or expertise that others will find difficult to copy. A business plan can be developed around this which should be capable of being expressed in financial terms-in other words- a profit forecast based on the sales compared to the cost of those sales. All pretty straightforward so far hopefully.    This forecast or budget can and should be expressed over a reasonable time scale and should be as detailed as possible especially in the early days of the business-certainly for the coming year (broken down into months) and hopefully for another two years after that in order to give a reasonable perspective on the future of the business.. Let’s assume our small business compiles a profit forecast and that it looks reasonable-losses can be incurred in the early months as long as the longer term position indicates future profitability on a sustained basis. This profit projection can be enhanced by compiling a forecast balance sheet which will indicate:-
  • The assets the business will own
  • The liabilities it will generate
  • The impact on the owners initial and subsequent investment
It is important at this stage to differentiate between the long term (investment in fixed assets such as premises, machinery and vehicles) and shorter term assets such as stock, debtors and free cash). Equally a distinction needs to be made between short term financing obtained by trade credit from suppliers and an authorised bank overdraft and longer term funding via a formal bank loan for example.


Cash flow/liquidity

It’s at this point where the cash flow forecast becomes important-even vital. Our profit forecast can and should indicate business profitability based on the assumptions made by the owner of the business. However the next question to be asked is how does this affect cash flow going forwards? Just because the profit forecast is positive does not mean that the business will generate a positive cash flow and enable the business to meet its short term liabilities which includes those nice people from HM Revenue and Customs as well as suppliers to the business. The profit forecasts need to be converted into cash flow forecasts that take account of:-
  • Credit terms to be granted to customers
  • Credit terms obtained from suppliers
  • Stock holding levels to prevent stock outs but avoid overstocking
  • Investment in longer terms business assets
  • Use of any agreed overdraft facility
  • Longer term financing facilities
Plugging this information into our cash flow forecast should reveal any problem areas regarding whether the business will run out of money or need to increase any of its financing sources i.e. additional overdraft facilities, a longer term loan arrangement or increased investment in the business from the owner. At this point, it should become clear whether the business has a chance of financial survival or whether a complete rethink is required concerning the business assumptions built into the profit forecasts. Sometimes numerous iterations are required (know rather grandly as “sensitivity analysis”) in order to arrive at a business plan that meets the business owners’ aspirations but is also grounded in commercial reality as far as the generation of cash is concerned.


Summary

This article is necessarily brief and skips conveniently over numerous issues in order to deliver a fundamental point-(remember Monty Python above?). Business must financially plan to in order to succeed and that planning must involve profit planning and liquidity planning. One without the other is a business disaster waiting to happen.  


  Jim Stockton, Senior Lecturer in Finance at the Warrington School of Management (University of Chester)    



    

Friday 25 April 2014

Warrington Businesses set to benefit from the International Festival of Business


THE International Festival of Business 2014 will be held in and around Liverpool during June and July.

The aim of this event is to boost international business opportunities and focus on regions of the world; China, India, USA, Asia, Europe and South America during different weeks.

Sector themes include Energy, Finance, Logistics, Manufacturing, Maritime, Creative and Digital Industries, Science, Technology, Research, Education and Enterprise.

The north west is well-recognised for these.

This will be a huge event, with 50 days of workshops, presentations, expert advice and networking activities to attend.

The City of Liverpool will be putting on an extensive cultural programme too, to showcase itself as a leading business and leisure destination.

So if your neighbour in the big house next door is having a party then you’d better make sure that you have an invite!

Warrington businesses are well-placed to benefit from the opportunities which this event will bring.

Energy, Manufacturing and Logistics industry clusters lead, not only in the region but also internationally.

Warrington businesses should not only be attending, but should be putting themselves forward within workshops, on stands, displays, volunteering their expertise and raising their profile with the international attendees.

Let’s make it IFB Warrington.

Professor Lawrence Bellamy is Associate Dean at Warrington School of Management, University of Chester (Padgate Campus)




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