Nature of Organisations

Topics: BusinessDecision Making

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Last updated: April 18, 2019

Organisations have to develop a strategic plan by creating a mission statement, establish their goals and business values, develop strategies to carry out their goals and values and then develop specific action plans to implement each of the strategies set. Finally these have to be communicated to all staff in order for them to be implemented.Finning (UK) Ltd.

are the sole Caterpillar dealer for the whole of the U.K., a dealership for equipment, parts and service which encompasses Scotland, Wales and England.Finning (UK) Ltd. is structured into specialist divisions, Construction, Power Systems and Materials Handling, to enable the company to provide its customers with the best possible service and right equipment.

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Finning currently employ 1500 people nationwide with their head office based in Cannock, Staffordshire. They also have 19 other branches throughout the UK with the main service centre for Scotland in Glasgow.The mission statement outlines the direction that an organisation intends to follow and briefly summarises the reasoning and values that lie behind it.

The purpose of a mission statement is to communicate to all stakeholders inside and outwith an organisation what the company stands for and where it is headed.Throughout this assessment I shall use Finning (UK) Ltd. as my example.Finning (UK) Ltd’s mission statement is “Finning (UK) Ltd. will be the premier equipment distributor in the UK through the delivery of best value products and services that earn customer loyalty. We will meet shareholders expectations by maximising employee potential to create competitive advantage”In order to achieve the desired end results of a mission statement it is essential to set organisational goals. A goal is a future expectation.

It is something that an organisation is striving to accomplish. To be effective goals have to be clearly communicated to and understood by all members of the organisation.Primary goals are commonly held to be survival, profit and growth. Finning (UK) Ltd’s primary goal is to have 20% return on equity, 30% market share, 15% revenue growth / year and $40 share price.The secondary goal of Finning is improving the level of employee engagement by developing, retaining and recruiting the human talent necessary to achieve the desired results of their mission statement.This represents a systematic attempt to influence the medium and long term future of an organisation by defining overall company objectives; by appraising those major factors within the company and the environment which will affect the achievement of the objectives; and by establishing sufficiently detailed action plans, which can be amended if necessary, and which will therefore help ensure that the overall objectives are achieved. In general the period of the plans will involve looking ahead between 5 to 10 years.

Boards of directors and very senior specialist staff tend to carry out strategic planning.Finning (UK) Ltd. has four key goals.* Customer service excellence / Consumer Goals* In order to achieve customer service excellence Finning (UK) Ltd. must improve customer satisfaction ratings to 95% “Fully Satisfied” in each industry group.* Efficiency & effectiveness / Product & Service Goals* Segmented sales and service delivery* Review business processes to improve efficiency.

Installation of new computer software, DBSi.* Employee engagement* Monthly divisional briefings* Training and development plans* More segment meetings* Less emails, more people contact* Ability to do the job – More resources* More team actions* Profitable growth* Revenue growth* Margin growth* Reducing costsThis represents a lower level of planning and might be termed intermediate range planning. Management plans tend to be thought of as more concerned with such matters as, determining the structure of the organisation, establishing functional and departmental objectives in accordance with the overall policies laid down by the board of directors, deciding product sales mixes, formulating financial budgets, planning staff requirements.

Functional directors and senior managers are usually responsible for developing tactical goals.Finning (UK) Ltd. aim to achieve higher equipment and customer service revenues of �10m from construction industry segment and also achieve overall revenue increase from acquisitions and partnerships. Finning (UK) Ltd. are continually increasing and improving their product range to give their customers more choice and better value in order to increase their customer base and always be one step ahead of their competitorsThis represents the lower level of planning and involves line managers down to supervisory and foreman level in the setting of specific tasks. Operational planning takes place within the context of management plans, the focus of operational plans is upon individual tasks, for example scheduling individual works orders through a production planning systemFinning (UK) Ltd.

has adopted an appraisal system where each year line managers and employees will meet on a one to one basis. It is during these meetings that each employee is given several objectives that they must meet in order to achieve their grade by the end of the year. It is by issuing these objectives to all employees that Finning (UK) Ltd. will eventually achieve all of their organisational goals.e.g.

Myra Carragher’s objectives are:* Liase with customer service salesmen to produce top ten spend customers. Reports to be prepared on a monthly basis.* Liase with customer service salesmen to produce commodity reports, by customer. Reports to be prepared on a monthly basis.

A stakeholder is any individual or group which can affect or is affected by an organisation’s activities, whether they are a local community who want to know that a factory will not be releasing harmful pollutants, consumers who want product information or investors who wish to see a company prosper.An organisation’s objectives should take into account the interests of the various stakeholders. However, different stakeholders will have different and often conflicting objectives eg.* New technology may reduce costs, increase profits but could result in redundancies* Higher wages will lead to lower profitsIt is up to senior management to decide how much these conflicts can be worked out and dealt with. This will involve placing greater emphasis on the objectives of each stakeholder group.

How this is done will be dependent on three main factors.1. The ownership of the organisationEg. In government run organisations where government ministers can overrule the decisions of their management (eg. To prevent redundancies)2.

The relative bargaining power of the stakeholder groupsThe more powerful each group is, the more its objectives will have to be taken into account in decision making.3. The climate of public opinionEg.

Public attitudes against cigarette smoking.Below are a few examples of stakeholders and their influence within an organisation.Research has shown that satisfied customers are loyal customers and will continue to use a company for both service and the purchase of new products. It has also been found that a satisfied customer will tell 5 friends and colleagues and a dissatisfied customer will tell 9 friends and colleagues.

Good and bad news spreads and reputations are built on quality of service. Having a reputation for excellent service will bring and retain more customers for new and used sales, servicing and parts.Organisations are judged by the quality of goods and services they provide and the cost of these goods and services. Finning (UK) Ltd. must then make sure their goods and services are priced accordingly to enable them to be competitive in their marketplace.

Excellent customer service is also something that Finning (UK) Ltd. must concentrate on to ensure their existing customers continue to use their products and services.Governments can do much to strengthen the business case for sustainable development. Weak governance can be a major problem, with issues such as unsuitable economic policies, corruption, general policy instability and inconsistent regulations. Overall, good governance, regulatory certainty and an appropriate mix of policy tools – including clear and enforceable regulatory standards, economic instruments and voluntary initiative – each have a key role to play in promoting the business case for sustainability.Local government influence in a an organisation would include, Planning permission, rent-free facilities and financial assistanceFinning (UK) Ltd. was originally based in Baillieston.

They sold their site in Baillieston, which is now an entertainment complex and leased another site in Blantyre whilst looking for the ultimate site to relocate. The ideal site was found just of the A8 at Coatbridge, ideal for anyone trying to find them, just off the motorway between Glasgow and Edinburgh, a prime location. But this was not to be, after several attempts to gain planning permission and failing they then decided to stay at their leased premises which they eventually purchased and plan to refurbish or rebuild eventually.

Local government has had an influence over where Finning (UK) Ltd. relocated, as had they not been refused planning permission then they would be situated just off the A8, instead they had to move further afield and relocate just off the M74 at Hamilton.

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