Research Korner: Management of Change

Criticisms on Bureaucracy as an Organizational Form

CRITICISMS ON BUREAUCRACY AS AN ORGANISATIONAL FORM   Table of Contents I.      Introduction.. 3 II.     Perspectives on Bureaucracy.. 4 A.    Bureaucracy is Outdated. 4 B.    Bureaucracy Deserve Replacement with other Popular Approaches. 5 III.        Strengths and Weaknesses of Bureaucracy.. 6 A.    Advantages of Employing Bureaucracy. 6 B.    Disadvantages of Employing Bureaucracy. 7 IV.       Conclusion.. 8 V.    References.. 9         I.       Introduction The concept of the management theory has been around for ages. Organisations, new and old, rely on the principles of management to get the job done in an efficient and effective manner. Throughout the years numerous types of management theories have been infused in the business policies and consequently with the operations of the organisation. The existing literature on such practices indicates the presence of two general types of management theories: classical and neoclassical theories. The classical theories of management point to the early management theories which rely mainly on the structure of the organisation. On the other hand, neoclassical theories are the ones which initiate means on which other items directly and indirectly affecting the organisation are considered. In this paper, the discussions shall focus on a classical theory of management: bureaucracy. Being a rather dated model of management, bureaucracy has been acquiring a whole lot of flak from management scholars. With the advent of more recent and more comprehensive models of management, the hostility towards the model of bureaucracy is not surprising. However, there are certain companies that still employ this management model despite these numerous disparagement. This paper shall be looking into these lines along with the adverse implications of using the model. The arguments and observations presented in the following discussions shall be founded on the articles and studies on management theories and bureaucracy.   II.    Perspectives on Bureaucracy One of the forerunners of scientific management, bureaucratic management is associated with the renowned scholars synonymous with the model is . ( 2002, ) Though there were other noted scholars like Karl Marx that espoused the model,  take on the theory is the one preferred and currently used by organisations as a means to implement management operations. The core of bureaucracy is geared towards the elimination of inefficiency and establishment of stability in the organisation. ( 2002, ) This is achieved by a strict enforcement of law, high regard on hierarchy, and centralisation of the decision making processes in the organisation. As seen in the previous description of the model, there are certain flaws in its nature. Thus, it is inevitable that the model gains considerable criticisms from other management scholars. The following are the two most noted criticisms against the management model of bureaucracy.   A.   Bureaucracy is Outdated One of the prevailing criticisms on the theory of bureaucracy as a management model is the fact that it is outdated. Though the model did emerge several decades ago, it doesn’t necessarily mean that the thrust of the model is entirely obsolete. Studies have pointed out that certain basic principles of bureaucracy are still relevant in the modern society. For instance, companies still accepts the functional division of labour is still at play in most, if not all, organisations. ( 1998) The modern organisation is based on that basic principle’s intent toward efficiency of operations. In the same manner, the existence of a hierarchy of authority in an organisation is still indispensable.  ( 2002) A company would be impeccably lost without clear distinct lines of authority and prescribed duties of leadership. Moreover, Weber’s theory of bureaucracy also entails that the employees working to achieve the ends of the organisation possess certain rights. ( 1998) This means that an organisation implementing bureaucratic theories in its management practice inevitably has to operate within a specific line on which the rights and privileges of the employees are not infringed.    B.   Bureaucracy Deserve Replacement with other Popular Approaches There have also been reports indicating that the theory of bureaucracy should be done away with and totally replaced by a new management model. As seen in the definitions provided by the existing literature, there are flaws in the bureaucratic model that a number of organisations may find destructive. For instance, today’s management style appears to be gearing towards a more customer-centric approach. ( 2000) This idea is alien to the principles of bureaucracy as a management theory. For companies who implement the bureaucratic model, the element of impartiality is present; hence mobility is based on performance and merit. ( 2002)  Unfortunately, such attribute also entails that the company be impersonal to the human aspect of the organisation. The model has become too engrossed in instilling efficiency and maintaining stability that the company tends to treat people internal and external of the organisation as mere automatons, an means to the ends of the organisation.      III.  Strengths and Weaknesses of Bureaucracy The following discussions shall highlight the advantages and weaknesses of implementing the managerial theory in the organisation. To establish a clear discussion on the matter, certain companies that impose the bureaucratic model shall be provided in the subsequent parts.   A.   Advantages of Employing Bureaucracy There are certain companies that come to mind when one speaks of the bureaucratic model, one of these is Nokia. The following figure presents the matrix structure of Nokia as a multinational company taken from the website of the company. Figure 1. Matrix Structure of Nokia Seeing the image above, it appears that Nokia have acquired certain principles of the bureaucratic model. However, this does not manifest a clear adherence to the classical theory of Weber. Instead this shows a close comparison on the bureaucratic model according to the theory of Ford. The matrix shows that there is some form of standardisation involved. ( 1997) In the same regard, there is also a considerable manifestation seeking to augment in the volume of production as specific elements of the company concentrates on a particular niche in the market. ( 2002) With the existence of this division of labour, one could anticipate the similar existence of the consequent intense supervision. ( 1996,) All of these are clear and present manifestation of Nokia’s implementation of the bureaucratic model in their operations. In the end, Nokia is still at the running for the world’s top mobile company. Seen above, the desire of the company to implement the bureaucratic model is based on the desire to stabilise the internal environment of the organisation without compromising the quality of the performance. With the adherence to the strict rules of the company, professional mobility and professional development is ensured to the employees. ( 1997) In the same manner, the company is ensured that it will impeccably carry the organisation towards its ultimate goals. B.   Disadvantages of Employing Bureaucracy Like any other organisational model, the bureaucratic theory also has some weak points. The discussions earlier indicated that the human element, both internally and externally, is treated impersonally. In return, the company is treated the same way by the employees. This means that there is no deep-rooted desire on each and every personnel to do their part in achieving the goals of the company. Other claims that the use of a rigid system would trigger red tape. This ultimately defeats the purpose of imposing a system in the first place.   All in all, if a company which doesn’t have the environment that will complement the bureaucratic theory essentially signed a death wish if it uses it nonetheless. A good example would be the case of Procter and Gamble. Studies on the said company maintained that it has a slow process of innovation. ( 2003) The creation of new brands and other market expansion initiatives has been considerably sluggish such that it has been significantly been left behind by its closest competitors in the retail industry. ( 2002) This slow development on the part of the company tends to limit what  (2006) coined as bureaucratic inertia. The concept basically indicates the incapability of the company to trigger developments based on certain undertakings. The company dealt with this problem not by eliminating the implementation of the bureaucratic model in their operations. In its place, they opted to highly differentiate their products in the market to ensure increased performance. ( 1996) In this case, abandoning the tried and tested principles of the bureaucratic model was out of the question. In its place, the management did their jobs that formulated on their discretion a way for their products to complement the existing system. Though their standing in the market is still unstable, this is not because of their business policies to implement bureaucracy. It is because of the intensity of the competition in the international retail market.   IV.Conclusion The case of bureaucracy as a management theory has given organisations, old and new, a great formula in their operations. As seen in the discussions above, the theory is far from perfect. Some even states that it is already and obsolete theory. However, this paper contends that the bureaucratic model is still applicable but not to all organisations. The existence of other forms of management theories tends to adopt certain principles of the bureaucratic model that works for a particular set of circumstances. Though much criticism is being thrown towards the model, a lot of big firms have ignored it and continued to operate using the bureaucratic model. Admittedly, these companies do not adhere strictly to the ideal type of bureaucracy as stated in the model of Weber. Like any diligent entity of business, companies have learned to be flexible and adjusted certain elements of the theory’s shortcomings to a minimum and maximised the advantages it offered. The discussions above show that the management model provided by  could be limited to a particular part of the operations. For instance, the discussions above maintained that in the manufacturing areas of the companies like Nokia, a strict adherence to the bureaucratic method is apparent. All in all, the criticisms towards the theory of bureaucracy should be seen not so as to disparage those who espouse it and implement it in their organisation. It is meant to provide an impetus towards the development of these tried and tested principles put forward by the classical theory of bureaucracy.

Criticisms on Bureaucracy as an Organizational Form

CRITICISMS ON BUREAUCRACY AS AN ORGANISATIONAL FORM Table of Contents I. Introduction .. 3 II. Perspectives ...

MANAGEMENT OF CHANGE: THE CAFÉ DE CORAL EXPERIENCE

MANAGEMENT OF CHANGE: THE CAFÉ DE CORAL EXPERIENCE Table of Contents   I.      Introduction.. 3 II.     Background of the Company.. 4 III.        Diagnosis.. 5 A.    External Change Drivers. 6 1.     Political Factors. 6 2.     Economic Factors. 6 3.     Socio-Cultural Factors. 7 4.     Technological Factors. 7 B.    Internal Change Drivers. 8 Figure 1. Ansoff’s product/market Matrix. 8 1.     Market Penetration. 9 2.     Market Development 9 3.     Product Development 9 4.     Diversification. 10 C.    Current State. 10 1.     Strategy. 10 2.     Structure. 11 3.     Systems. 11 4.     Shared Values. 12 5.     Skills. 12 6.     Style. 12 7.     Staff 13 D.    Source of Resistance. 13 1.     Endings. 14 2.     Neutral Zone. 14 3.     New Beginnings. 14 E.    Leadership in the Company. 14 IV.       Prognosis.. 15 A.    Status Quo Scenario.. 15 B.    Change Scenario.. 15 V.    Conclusion.. 16 VI.       References.. 16   I.      Introduction The realm of the fast food industry, the current trends brought about by western monoliths like McDonalds has been the prevailing formula. Specifically, serving dishes that are easy to prepare and serve such as sandwiches, deep fried foodstuff and other pasta-based products are those that fit the requisites needed in the formulaic process employed in such types of industries. However, one must also highlight that the advantage of these types of companies are not limited to their products and the dishes that they serve. These are only a fraction of what make them leaders of the industry. To be precise, it is this efficiency and quality that places these western companies in the top of their game. This primarily establishes the fact why their respective operations and processes are considered as the prevailing models in the fast food industry.    This problem brings forth a limited number of food genres that would fit the classification as a fast food company. In Hong Kong, a local company, Café de Coral, attempted to dispel the myth that such dishes that offer oriental cuisines will not complement the processes inherent in the fast food industry. This study will be taking a closer look in the existing conditions that Café de Coral is experiencing in their daily operations. The said name is under a corporation controlling various types of stores in the food industry. For the purposes of this paper, the focus of the study will be the Café de Coral based in Hong Kong. The arguments and observations held in this paper shall be reinforced by existing literature on organisational development and change management.    II.    Background of the Company Café de Coral is said to be the largest group of Chinese restaurants in Asia and the rest of the world. The company is listed under the Café de Coral Group in the Hong Kong Stock Exchange. The said company covers fast food, institutional catering, specialty restaurants, food manufacturing, and distribution among others. For the purposes of this study, the focus of the discussions will be the fast food operations of the company. The first store of the company commenced in 1968 on Causeway Bay. After several decades, the company controls over a hundred and twenty restaurants which serves drones of satisfied customers in a daily basis. Based on the company’s website, the current battle cry of the organisation is “A hundred points of excellence.” This is driven by the desire to provide imminent customer satisfaction by constant improvement in the quality of their products, the service that they provide, and the ambience in their restaurants. In doing so, the company makes their customers realise that the value of their money is given importance in the stores managed by the company.   The company has risen in the ranks of the food industry in Hong Kong because of the top products and services that they offer. In the area of products, the company flaunts of their signature products that are made with premium ingredients and prepared with the strictest quality control. The area of services is also one of the major factors why Café de Coral is at the top of its competition. With the motto mentioned above, continuous staff improvement through training is given the top priority of the company. It focuses on both individual and team skills of the company.   III.   Diagnosis In an article of Wong (2006), he coined the term “fast-foodization” as the process imposed by McDonalds in the modern food business. He also pointed out the phenomenon wherein exotic cuisines have become one of the major competitors of these big fast food companies in the West. Japanese, Indian, and Chinese restaurants which serve their respective local dishes directly take on the likes of Burger King and other major companies in the western world. This makes perfect sense as these exotic restaurants offer an alternative to the ubiquitous burger and fries offered by these established organisations in the fast-food industry. In order to establish the change needed in any company, an analysis of both the internal and external environment is required. In doing so, the specific areas on which companies like Café the Coral could pinpoint the specific parts of the operations that require improvements or reductions that will trigger change in the organisation. The following parts shall do exactly that, analyse both internal and external environments of Café de Coral to establish how it could initiate improvements in their operations. In doing the said discussions, the use of analytical tools such as the PEST Analysis, Growth stages, 7s framework, the company’s cultural web, transition curve, and the leadership theories and models implemented in the company. The findings in these discussions shall be the basis of the succeeding parts of the paper wherein two scenarios will be depicted.      A.   External Change Drivers To establish the existing conditions surrounding the external environment, the PEST Analysis will be employed. In doing the change drivers of the external environment shall be directly observed. 1.    Political Factors The government of the administrative region adheres to the encouragement of trade and business in Hong Kong. (Speath, 2004) This is shown in the liberties that it provides companies like Café de Coral and its foreign counterparts. Specifically, this is proven by the fact that the first McDonald’s in the region was established several decades earlier. (Watson 1997, 78) However, the business-friendly nature of the laws in Hong Kong does not make it weak. Companies have to similarly comply with the standards provided for by the laws of the land.     2.    Economic Factors Hong Kong is one of the imminent tourist destinations in Asia. People flock the administrative region wither for business, pleasure, or both. Studies have pointed out that travellers from the mainland have increased exponentially in the past couple of years. (Kam-Yee and Kim-Ming, 2006, 217) This means that aside from the tourists and locals of Hong Kong, companies like Café de Coral have to cater to a much larger crowd as massive numbers of mainlanders have added to the overall market of the Hong Kong food industry. 3.    Socio-Cultural Factors In the study of Chan et al, (1999, 12) they described the consumers in Hong Kong with low uncertainty avoidance. This basically means that the buyers’ decision in Hong Kong is primarily based on impulse. Buyers tend to do away with the possibility of planning to buy a particular product or brand before they actually make the purchase. This spells great for companies like Café de Coral since they already have a strong brand name and recall on the consumers. This makes them already a part of the short list of choices of the consumers when it comes to fast food cuisines. Moreover, it has also been noted that the consumers in Hong Kong possess long term orientation. (Chan et al, 1999, 12) This basically establishes the fact that Hong Kong consumers tend to be loyal to a particular brand or company once they have already tried it and are satisfied with the products or services. This reinforces the observation that companies like Café de Coral has strategically placed themselves in the core list of companies which the Hong Kong consumer will constantly visit. 4.    Technological Factors Companies involved in the food service industry have to contend with a complex system of inventory as they deal with stocks that are perishable and ultimately fragile. Fortunately, Hong Kong is one of the hubs of IT in the whole of Asia. (Koo, Lee, Ngan 2003) Most of its workforce is able to easily apply these processes in their operations. (Lee, Leung, Lim, Sia 2004) Infusion of inventory and logistics is highly workable for companies operating in this environment.      B.   Internal Change Drivers Though the standing of Cafe de Coral in Hong Kong appears stable, it is merely the tip of the iceberg. At some point, one must realise that there are several organisations that operate in the same industry that will readily take away the existing market share of the company. Thus, it is important to make sure that the company is aware of its strengths as to whether it would find a fit with the rest of the external environment. The drive towards market ascendancy of Cafe de Coral shall be presented with the help of Ansoff’s product/market matrix. In this manner, the company establishes the areas which could be considered as internal change drivers. (Adamson 2005, 358) The areas on which the company should consider is summarised in Figure 1 below.   Figure 1. Ansoff’s product/market Matrix     1.    Market Penetration The concept of market penetration basically establishes the possibilities on which an organisation could grow with the use of its existing market and products. (Stopper 2004, 21) In the case of Cafe de Coral, its market in Hong Kong shall continue to be stable provided that it holds true on its resolve of improving its signature products, ensure that premium ingredients are used, and the strictest quality control should be observed. 2.    Market Development As pointed out in the earlier part of this paper, Hong Kong is the centre of commerce in Asia. It has low uncertainty avoidance and long term orientation. This intimates that companies like Cafe de Coral should anticipate impulse spending and a more profound sense of brand loyalty. Hence, it is advisable for Cafe de Coral to find ways to seek new markets as they progress as a company to maximise this opportunity. 3.    Product Development With the area of product development, it appears that the company is lagging behind as they tend to display a single set of signature products. However, they maintained in their website that they never stop looking for ways to improve their products and services to ensure customer satisfaction. (Stopper 2004, 21) This shows promise on the part of the company as a prospective insight on the market appears to insinuate positive results. 4.    Diversification On the whole, the corporation on which Café de Coral is under have taken steps to come up with restaurants and other stores that will cater to those aside from the fast-food model in the food industry. There are several brand names controlled by the Café de Coral Corporation that focuses on catering and food production among others. This shows that the diversifications held be the company are still interconnected with every elements in the food industry. C.   Current State Another element that could determine the areas on which change could be induced is the current state of the company. In this paper, McKinsey’s 7s Framework shall present the distinct nuances of Café de Coral. This tool shall establish the possible implications of changes within the organisation. Hence, it will show the best way to tackle a particular strategy proposed to the company. The discussions in this part of the paper shall base its arguments on the website of Café de Coral. 1.    Strategy The company seeks to acquire “A hundred points of excellence.” In order to do this, the company has implemented a customer-centric approach in their operations. Customer satisfaction is held highly by the company. This is ensured by staff training at regular intervals which seeks to improve the individual and team skills of the organisation. However, it is observable that the company have not indicated a stable and veritable feedback system that would house the demands and criticisms of the customers. In doing so, the company may have difficulty in dealing with the demands of the customers as they are not actually aware of these specific elements.   2.    Structure Café de Coral is divided into independent operations of each store. Each store is considered as a team that has to maximise their profits and generate revenue for the corporation. It is responsible for its operational costs, hence, required to find ways to limit their expenses and find ways to attract clients to their respective stores. The store manager is the one that overseas the operations with the help of their staff which includes the administrative sector and those that deal with food preparation and customer assistance (waiters and servers). This thus manifest the decentralised nature of the decision making process in the organisation. Moreover, the organisational structure in every store is apparently flat hence giving the assumption that the communication lines are rather open between management and the other employees. 3.    Systems The company’s primary activities are basically composed of the acquisition of the raw materials that they would use as ingredients for their dishes. Normally these items of inventory are acquired from the main supplier of the corporation. Subsequent activities are manifested in serving and interaction with the customers. Moreover, the maintenance of the equipments used in the operations is also added into these set of activities.       4.    Shared Values The core value of the company, as intimated in the earlier parts of this paper, is the maintenance of a strong customer relationship management within the organisation. The customer is held highly and thus the operations revolve around what these individuals demand from Café de Coral. 5.    Skills The company basically requires both technical and soft skills. This means that each and every unit of the organisation has to take on skills like accounting and use of store equipment such as telephone and computers. In the area of soft skills, given that the main concern of the company is the consumers, involves elements like leadership, initiative, and communication skills. Looking at the reports provided by the organisation, there appears to be minimal gap in the overall workforce of the company. This is because they conduct regular trainings to keep their personnel sharp and deeply acquainted with the shared values within the organisation. 6.    Style The leadership style in every store varies from manager to manager. However, since there is a flat structure in every store, the leadership and management style tend to be highly participative. On the whole, the stores have a healthy competition with each other. Though they do not contend as to the actual market share, these teams contend to gain some “bragging rights” with the other members of the Café de Coral group. 7.    Staff The number staffs of every store of Café de Coral depend on the demands of the consumers and the required business activity in each store. On the whole, the training provided by the company shall place the required skills of new employees and ensure that the seasoned ones are kept informed of the knowledge required in their respective functions. D.   Source of Resistance To determine the sources of resistance in Café de Coral, the transition curve will be employed. The said model is summarised in the figure below. Figure 2. The Transition Curve 1.    Endings This phase of the transition curve, resistance is anticipated from the employees. This is especially true with regards to the seasoned personnel who are used to the traditionally applied processes. In the case of Café de Coral, it is anticipated that if ever there is some anxiety or denial of the change proposal, it would be rather minimal. 2.    Neutral Zone In this zone, the level of uncertainty is high among the personnel. This is especially true to those who hold positions that are contractual. More specifically, they will be in constant fear whether their contracts would be renewed or not. The managers of the respective stores would have to bear this responsibility to mitigate the implications of this state. The management has to keep control over the situation. 3.    New Beginnings In this state, the change is anticipated and accepted by the personnel. In the case of Café de Coral, the personnel may have realised the positive implications of the proposed change by the management. In this part, the proposed change is openly implemented as a part of the normal operations of the organisation. E.   Leadership in the Company As stated in the earlier parts of this paper, the leadership styles and management styles complement the flat organisational framework of the organisation. Basically, participative leadership is seen exercised in the operations of the respective stores. In this regard, the employees are empowered and the managers keep the human resource under his control.   IV.  Prognosis The following discussions will pinpoint the changes required of the operations of Café de Coral. To clearly establish the implications of these changes, two scenarios will me meted out in the process. Based on the discussions above, the company requires synchronisation in the operations of its numerous stores. However, as their independence has contributed much of their success, the management is in a dilemma what to do. Basically, the answer would be to install additional IT technologies that would put correspondence between the different stores and the respective suppliers in real time communication. A.   Status Quo Scenario In this scenario, nothing will change. The operations will be the same however the existence of a gap in between transactions could lead to delay that will essentially establish significant losses for the company.   B.   Change Scenario The implementation and installation of added IT technologies will provide the company added flexibility and opportunity to adjust their operations to actually minimise the losses of the company in instances where any unforeseen events come up. The apparent issue is the added costs in training the appropriate unit of each and every store in the use of the hardware and software applicable in the process. However, as pointed out in the earlier parts, the common Hong Kong worker is adept with the basics of information technology. Hence, this added instruction will not lead to any more wasted resources and time. V.   Conclusion The discussions above have intimated that the proper fit between the internal and external environments is essential to the achievement of the major goals of the organisation. Be it financially or not, it is left on the shoulders of the company to find a way to balance out the situations wherein they are able to remain flexible and keep things under their control.   VI.  References   Adamson, J. (2005) "Using Marketing Visuals for Product Talk in Business English Classes." Business Communication Quarterly. 68(3), 358 Chan, A., Chow, W., Fosh, P., Snape, E., Westwood, R. (1999) Hong Kong Management and Labour: Change and Continuity. Routledge. London. Kam-Yee, L., and Kim-Ming, L. (2006) "Citizenship, Economy and Social Exclusion of Mainland Chinese Immigrants in Hong Kong." Journal of Contemporary Asia. 36(2), 217. Koo, R., Lee, C., Ngan, M. (2003) “Voices and Implementation of Information Technology in an Elementary School Classroom : A Hong Kong Case Study.” Childhood Education. 79(5) 268 Lee, M., Leung, K., Lim, K., Sia, C. (2004) "Is eCommerce Boundary-Less? Effects of Individualism-Collectivism and Uncertainty Avoidance on Internet Shopping." Journal of International Business Studies. 35(6) 545 Speath, A (2004), “Hong Kong's defiance: China warns the city to forget democracy and get back to business. But many Hong Kongers aren't listening.” Time, Available at: http://www.time.com/time/asia/2004/hk_politics/story.html [Accessed 31 July, 2008] Stopper, W. (2004) "Establishing and Maintaining the Trust of Your Employees." Human Resource Planning. 27(2), 21. Watson, J. (1997) Golden Arches East: McDonald's in East Asia. Stanford California: Stanford University.

MANAGEMENT OF CHANGE: THE CAFÉ DE CORAL EXPERIENCE

MANAGEMENT OF CHANGE: THE CAFÉ DE CORAL EXPERIENCE Table of Contents I. Introduction .. 3 II. Background of...

The Case of 7-Eleven

Introduction Change is the only permanent in life. Change can be a lot of things, but no matter how the benefits are spelled out, it's often a scary proposition. A business cannot simply rely on past successes to withstand the internal and external forces that may threaten its profitability. So in order to retain a company's viability, its leadership must maintain a forward-thinking vision, be vigilant in recognizing the need for change and have the skill and leadership style to guide the organization through the process of change (Greenwood, 1991). Today's successful companies must change daily to keep up with their customers' changing needs and the competition. Organizational change can be defined as “Anything that affects people, processes and chains of accountability is organizational change" (Melbourne, 2003). Regardless of the size of an organization or the industry in which an organization resides, preparing for change is the same. The need for change is driven by market forces, a need to improve performance internally, competitive situations, and rapid changes in technology. Managers see a clear and positive impact to the financial bottom line or a boost in the performance and morale of employees. But improvements to technology and business processes also bring about human changes, which, if not managed effectively, can be the demise of any implementation. Monitoring and managing the human changes that result from changes to business processes and technology is what change management is all about. According to Weber (2005), consistent change management is critical to a new system implementation's success. Managing the implementation of these major changes is a must if you are to survive in today's highly competitive environment. Attempting to implement major changes without a well thought out plan will result in wasted efforts, lost time, missed sales and lower profits. Major changes within organizations are required for long-term survival. Getting these changes implemented as smoothly as possible with a minimum of disruption is a difficult, but manageable task. “Change management involves the process of effectively restructuring an organization to make it more responsive to its marketplace. It is the process consists of identifying destabilizing forces, determining the present situation, selecting the methods for the implementation of change, developing an effective strategy and applying these strategies accurately” (Kleiner, 1997). It is also important to determine the external and internal sources of the need to implement changes. Changes are continually happening in the workplace, and it would be futile for both supervisors and employees to resist it. Employees in general resist change because they are comfortable with the status quo (Trebilcock, 2002). Downsizing, buy-outs and mergers are occurring at dizzying speeds it seems. And "planned" change, the introduction of a new way of doing things, can arouse resistance. This paper attempts to analyze external and internal factors that affect to the choice of 7-Eleven to decide on organizational changes. Any company has undergone challenges in their business operations and 7-Eleven is one of the companies that have experienced these difficulties. For a company to sustain its competitiveness, it must be sensitive to the necessary changes in the organization. Usually in implementing changes, there are a number of persons on the organization that resist to these changes. However, change is good for the company when properly planned.  Company Background 7-Eleven is an international company operating as a convenience store in eighteen countries which includes Canada, United States, Mexico and Puerto Rico in the Americas; Norway, Sweden and Denmark in Europe; Taiwan (Republic of China), People’s Republic of China (China), Hong Kong, South Korea and Japan in East Asia; the Philippines, Thailand, Malaysia and Singapore in Southeast Asia; and also Turkey and Australia.    History 7-Eleven was founded in 1927 in Oak Cliff, Texas, USA in which started using the name 7-Eleven in 1946. In 1964, 7-Eleven enter the business of franchising when the company purchased a chain store named “Speedee-Mart.” It was in 1991, Ito-Yokado a supermarket chain, which operates 7-Eleven stores in Japan, purchased the majority interest of The Southland Corporation. In 1999, The Southland Corporation changed its name to 7-Eleven, Inc. Initially, these stores were open from 7 am to 11 pm, which was unprecedented at the time, hence the name; however, most 7-Eleven stores are now open twenty-four hours per day, seven days per week. In November 2005, 7-Eleven has turned to a publicly traded Japanese conglomerate when Seven and I Holdings Co. has completed its purchased of the company. Vision 7-Eleven’s vision is to be recognized as a leader in providing time-conscious consumers with a full-range of products and services that meet their ever-changing daily needs. Mission Statement 7-Eleven’s mission is to offer time-conscious customers a full range of products and services that meet their ever-changing daily needs through quality, speed, selection and value in a safe, friendly and pleasant environment.   Core Values 7-Eleven is a customer-preferred convenience store which value customer expectations through quality, speed, selection and value safe and pleasant environment. The company treats employees with dignity and respect the company also recognizes franchisees and suppliers as business partners. In addition, the company strives to be a good corporate citizen.   Competitive Analysis 7-Eleven is currently having various competitions which include superstores, hypermarkets, convenience stores and even traditional markets. However, the biggest competitors of 7-Eleven today are Circle K convenience stores, ParknShop and Wellcome. Currently, in Hong Kong there are already more than 600 supermarkets and convenience stores.   ParknShop is associated with three other supermarkets by the name of Great, Taste, and Gourmet. These high-end supermarkets are after the more affluent clientele. They are ideal outlets for innovative, quality and priced international food products. These stores also carry a wide selection of organic products. Great adopts a stylish international food hall concept and its flagship store offers over 46,000 gourmet items.   In addition Wellcome also is a competitor of 7-Eleven which is also is owned of Dairy Farm. Wellcome, will also be opening an upscale supermarket in Hong Kong’s central commercial area catering to the more affluent clientele. It will be Hong Kong’s largest retail outlet for organic and natural products. About 6,000 items or 70 percent of the items in the store will be organic or natural products. The store will include an organic sector for baby products. “Health” and “natural” are the key concepts of this store.     Name of Retailer   Ownership   Food Sales US$   No. of Outlets   Location   Type of Purchasing agent   Wellcome   Hong Kong   over $1 billion   261, 27 of which are superstores   Hong Kong   Importers/Agents Exporters Consolidators   ParknShop   Hong Kong   over $1 billion   215, 45 of which are superstores*   Hong Kong   Importers/Agents Exporters Consolidators Source: USDA Foreign Agricultural Service (2006)   ParknShop and Wellcome account for almost 80 percent of the supermarket turnover. Both supermarkets are able to work closely with real estate developers to open stores in strategic locations, thus maintaining their significant market share.  Because of their significant market share, they are able to make suppliers offer goods to them at very competitive prices, so that they are able to set retail prices lower than their competitors. Consequently, it is difficult for small competitors to survive and new players to enter into the market. Moreover, a new development in 2003 is that ParknShop expanded into 24-hour convenience store operations.  The supermarket giant has opened a number of stores under the name ParknShop Express on a trial scheme and may expand the network across Hong Kong if the experiment succeeds.  Currently, there are about ten Express stores.  ParknShop has intrinsic competitive advantages over its rivals because it can use the leverage of the group’s existing infrastructure to offer products at low prices.  The stores carry the products as other convenience stores such as cooked food, drinks, newspapers and magazines.  In a bid to lure customers, the 1,000 products offered by ParknShop Express are priced at the same level as those being sold at ParknShop.  This is in contrast to other convenience store operators charging at a premium of up to 15 per cent from those selling at supermarkets.    In the convenience store, Circle K is the competitor of 7-Eleven. Circle K is continuing to expand.   Retailer Name Ownership No. of Outlets Location Purchasing Agents Year Established Client’s Age Circle K Hong Kong 180 HK Importers Agents 1985 15-35 Source: USDA Foreign Agricultural Service (2006)    SWOT Analysis Strengths Majority of the goods that 7-Eleven Store are low prices sue to low cost of operations. Also, 7-Eleven is more convenient to customers. Consumers could avoid the long checkout lines, crowded parking lots, and traffic. There are many choices of shopping methods; browsing the aisles, using product search, and choosing from a shopping list customized from frequently bought products. They could shop 24/7 since the store is open for 24 hours in 7 days. The store also offers variety of selection from fresh to processed food and whatever shoppers would need.   Threats However, despite the strengths, the store has also its weaknesses. One of which is inventory inefficiency in which they would experience stock outs. Moreover, with the presence of superstores, their current marketing strategies have been overshadowed. In addition, low performance of workers also has negative effect on the efficiency of the store.   Opportunities 7-Eleven has also some opportunities. With the problem of information dissemination, an opportunity to acquire new technology for more efficient operations can now be possible. Also, 7 Eleven has been already known by the people as a store open in 24 hours they have the advantage over it. In addition, the company also got the most strategic locations of their stores. Moreover, the company can still expand their business and open some more stores especially in China which got the opportunities of expansion with its large market.   Weaknesses Increase in competition is a great threat to 7 Eleven. Also, with the increasing high levels of educated people, consumers are now more skeptics and are more demanding. In addition, the traditional markets in which people can purchase fresh fruits and vegetables are still in its popularity in Hong Kong. Moreover, 7-Eleven has high employee turnover which is a sign of bad management.   Identification of Problem/Issues  7-Eleven faces an intense competition. With the continuous globalization, it is important for 7 Eleven to maintain its leadership in the convenience store industry. Superstores are already emerging which are mostly are also beginning to open 24 hours.   From the SWOT analysis, the company faces various problems that are needed to have a solution. It is recommended to concentrate on some areas. One of the areas that have a major impact on offering goods and service is the efficiency and effectiveness of the people doing the work.   One of the major objectives that the company should concentrate is the improvement of their workers. A strategic human resource development must be implemented within the company.   Human resource development (HRD) plays a vital function by maximizing employee expertise to achieve the main objectives of an organization. Human resource development (HRD) has served the needs of organizations to provide employees with up-to-date expertise. According to Swanson and Torraco (1994) Advances in HRD models and processes have kept pace with the increasingly sophisticated information and production technologies that continue to diffuse throughout our nation's most vital industries. During this period of rapid technological development, the HRD function could be relied upon to support a broad range of business initiatives that required a competent workforce.   Critical business issues, from new marketing strategies to innovations in production technology, were based on, among other factors, the performance capabilities of those expected to use these new work systems. As a factor integral to business success, employee expertise itself has been expanded through effective programs of employee development. According to Swanson (1994), expertise is defined as the optimal level at which a person is able and/or expected to perform within a specialized realm of human activity.   However, according to Swanson and Torraco (1994), today's business environment requires that HRD not only support the business strategies of organizations, but that it assumes a pivotal role in the shaping of business strategy. Business success increasingly hinges on an organization's ability to use employee expertise as a factor in the shaping of business strategy.    The rationale for using HRD interventions to support business objectives is to enhance employee expertise through HRD increases the likelihood that business objectives will be achieved (Jacobs and Jones, 1995; Swanson, 1994).   Training and other initiatives associated with total quality management have been critical in transforming marginal manufacturing plants into successful facilities (Sullivan, 1994). HRD continues to be a primary vehicle for assuring mandated levels of employee competence and public safety in highly regulated sectors like the nuclear power industry (Paquin, 1994).   Jacobs and Jones (1995) posit the argument that "Organizations in the new economy have come to realize that employee expertise is a vital and dynamic living treasure. The desire for employee expertise is meaningless unless an organization can develop it in ways that respond to the business needs."   However, some Organizations have rushed to embrace information technology as a way to improve overall efficiency and reduce costs. Yet, it is not the information technology itself, but the way information technology is thoroughly integrated into major business processes, that represent the greatest opportunity for the successful transformation of outdated business processes (Davenport, 1993). However, those who have successfully used information technology to improve business performance will quickly point out that these advantages will not materialize without highly competent people to both implement and utilize these innovative work systems.   The human capacity must exist to use information technology to maximize performance (Lawler et. al., 2003). Employee expertise is critical to an organization's ability to capitalize on the vast opportunities afforded by information technology. HRD is then in a strategic position to assure that the required expertise is available and effectively utilized.   Organizations in market leadership positions realize sooner or later that human resources are ultimately the only business resource with the creativity and adaptive power to sustain and renew an organization's success despite changing market conditions (Torraco, 1993). The development of employee expertise provides a potentially inexhaustible source of ideas for further innovation and increased productivity because the most basic output of the highly competent employee knowledge is not used up in the process of producing it (McLagan, 1989). Developing employee expertise at all levels of the organization and using knowledge as a catalyst for growth and competitive advantage represents a major frontier in organizational performance that is only now beginning to be fully appreciated (Senge, Kleiner, Roberts, Ross, and Smith, 1994; Nevis, DiBella, and Gould, 1995).    Resistance to Change No matter how much analyzing, planning and employee participation you do, some of your employees will resist the changes. The majority of human beings naturally resist change (Trebilcock, 2002). Change takes employees (and some presidents) out of their comfort zone and places them in an unknown situation. This results in resistance to the needed changes. According to Trebilcock (2002) resistance comes in two forms; overt and passive. Overt resistance is the easiest to overcome. It comes from the employees who openly oppose the changes. Allow these employees to speak their mind and then work with them to overcome their concerns. Passive resistance is much tougher to overcome. If you don't know it exists you cannot overcome it. The most passive resistance comes from employees who have n opinion when asked about the proposed changes. Everyone has an opinion; be very careful and watchful of those who do not express it when asked. After passive resistance is detected take immediate action to eliminate it.   No Change Scenario If 7-Eleven would not change its human resource management, there would be an increasing number of staff turnovers because mainly staff are not motivated and are unsatisfied with their work. In addition, because of lack of expertise of most of its staff, more problems will prevail. Change Scenario When the company would adopt changes on its human resource management, the staff would likely to be motivated and empower with their proper training and with their development and expertise with their job. Conclusion More than anything, human resource is important to any company. And its development would likely improve the performance of any company. HRD serves a broad range of interests and outcomes in organizations. The primary purposes to be served by HRD can range from programs intended to meet the personal development needs of individuals such as identifying individual learning styles or personal financial planning to HRD programs necessary for everyone in the organization such as programs addressing a new performance appraisal method or role changes secondary to structural reorganization. HRD is a crucial antecedent to successful business strategy. In these situations, HRD actively shapes strategy.   Some companies jump into deciding on application of technology however, it is important first to reorganize the organization as a whole. Changes in the management of human resources should be the first at hand with the company of 7-Eleven.

The Case of 7-Eleven

Introduction Change is the only permanent in life. Change can be a lot of things, but no matter how the benefits are spelled out, it...