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As a business development manager in the Salfodia contracting management/ contracting company i am asked to produce report on the development t
Salfordia is a medium sized construction management / contracting organisation based on the traditional procurement methord of construction . The company was established in the year 1975 and is run by family members with four out of six as the board members ..
The company is now looking forward for a strategic change by moving from the traditional form of procurement methord to a better and much efficient method .
About the company
Salfordia construction will supersedeour clients expectation and quality ,budget and services.Thus ensuring Salfordia is always our clients first choice for future projects .
History of the company
Salfordia is a medium sized construction management / contracting company established in the year 1975.Salfordia works on construction projects mostlt in the noth west regions which are obtained through the traditional form of procurement .Salfordia is run by family members in which four out of six as the board members .The company is now looking forward for a strategic change to increase the turn over and share price of the company .
Key employees in the company
Salfordia is run by family members in which four out of six as the board members .Yhey already hold specific positions such as CEO ,CFO , contract director, business planning director ,industrial build director etc .And one manager in charge of the human resource .
The company does not employ any direct labours because all works are done by sub contracts many of them has been working with Salfordia for several years on multiple projects.
The company takes up work in the north west regions mostly both with the public and private sector clients .The company has a small head office which is owned by them .
PEST Analysis- Political , environmental , socio - cultural and legal
According to Marchington and Wilkinson (1996 , p8 ) this in the environment in which an organisation or company works .This analysis is helpful in finding out the outside influences which affects the organisation .PEST analysis is useful to finding out the basic picture and the current environment in which the organisation is working. The main and primary objective of PEST analysis is to find out the external environment of the company and it si also also used for a strategic planning .
SWOT analysis helps to find out the present situation of the company and what will be the future of the company .
Political - government stability , spending , inflation and taxation .
Economic - inflation ,profit or loss , interest rates.
As we can see from the company profile the turn over of the company has became 10 millon from 17 million in a period of 4 years and the loss is 78000, and the current economy of the UK is rising competition , so the company will have to change its strategy or procurement pattern (traditional ) to any better means (to develop profit) because it ended up in the lose to the company in this year and may be more worst in the coming years .
Socio cultural - demographics , income distribution
The socio cultural factors are much not affected in the company because all the works are done by contractors so the company is not employing any direct labours . But the family nature of the company may have slowed down the company progress in achieving greater targets ,because it is conservative .
Technology - knowledge , technological development .
The company has to be updated by new software ,now the company is run by in house it systems for both software and hardware which was updated 5 years back . This can also be a cause of the slower growth or the huge loss of this company this year .
SWOT Analysis - Strength Weakness Opportunities and Threat .
Strength - The main strength of the company is that it is run by family as the board members and the chief executive is also a family member , so that they may have a proper co - ordination and mutual understanding about the procedure and process of the company . The company has a very established procedures for the last 10 - 15 years and the company s resistant to the organisational and cultural change .
Weakness - For the past decades the company is run by the traditional form of construction and it is rather resistant to organisational and cultural change .The company is a flat structure ie.the company is run by a single person as the md .
Opportunities - Salfordia has the history of producing quality work which they procured through the last 15 years and yet to grow bigger if the company is ready to change the strategy and organisational pattern .
Treats - The major threat of the company is running on a huge loss in the year 2010, may be because of its traditional form of construction .If the company is not willing to change the procurement system it will end up in a worst situation than before .
Advantages of proposition?
USP's (unique selling points)?
Resources, Assets, People?
Experience, knowledge, data?
Financial reserves, likely returns?
Marketing - reach, distribution, awareness?
Location and geographical?
Price, value, quality?
Accreditations, qualifications, certifications?
Processes, systems, IT, communications?
Cultural, attitudinal, behavioural?
Management cover, succession?
Disadvantages of proposition?
Gaps in capabilities?
Lack of competitive strength?
Reputation, presence and reach?
Own known vulnerabilities?
Timescales, deadlines and pressures?
Cashflow, start-up cash-drain?
Continuity, supply chain robustness?
Effects on core activities, distraction?
Reliability of data, plan predictability?
Morale, commitment, leadership?
Processes and systems, etc?
Management cover, succession?
Industry or lifestyle trends?
Technology development and innovation?
New markets, vertical, horizontal?
Niche target markets?
Geographical, export, import?
Tactics - surprise, major contracts, etc?
Business and product development?
Information and research?
Partnerships, agencies, distribution?
Volumes, production, economies?
Seasonal, weather, fashion influences?
Competitor intentions - various?
New technologies, services, ideas?
Vital contracts and partners?
Sustaining internal capabilities?
Loss of key staff?
Sustainable financial backing?
Economy - home, abroad?
Seasonality, weather effects?
Value Chain Analysis
The value chain is a systematic approach to examining the development of competitive advantage. It was created by M. E. Porter in his book, Competitive Advantage (1980). The chain consists of a series of activities that create and build value. They culminate in the total value delivered by an organisation. The 'margin' depicted in the diagram is the same as added value. The organisation is split into 'primary activities' and 'support activities.'
Forces for and against change- These are the forces which act for and against changes . It helps to weigh the importance of each of the factors and by considering that its easy to find out whether it is worthy or not .
Better procurement method.
To improve market share and profit.
Since the company was run by traditional procurement method from when the company was established , it may create some objection by the clients or by the contractors .
The company has to develop its office building and update the softwares which will be a huge expense , and huge risk without knowing the response from the cliens .
Drawbacks of traditional form of construction
Design cannot be practical always .
The completion of the building may take a longer time .
The budget can be higher than the fund.
The project may overrun contract time .
Legal liabilities can be confusing .
Critical success factor analysis
Critical success factor analysis helps us to find out the areas in which the company is more successful in achieving its objectives .
Successful in meeting clients demands
Successful in completing project with clients expectation , quality ,budget and time.
Maintains long time relationship with clients
Division of work ie. Industrial and commercial building.
Macroenvironment can be also known as the external or internal factors affecting the development of the company
Government action - Government actions are not much influences in the growth of the company . But the company should develop themselves to improve the market share and make it profitable .
Socio Cultural -
Technology - The company should develop its technology as it is run by softwares which were last updated three years ago .
Economic conditions - The current economic conditions of the company is that it is in a loss of 78000 pounds . The company should swap its procurement type to a better type there by changing the profile of the company and resulting in the growth of the company .
Labour market - The company is not appointing any direct labours or taking up direct contracts . If the company has the infrastructure to take up contracts too the development can be made much more fast but the risk factors will be much more .
Competition - The competitors in the field of construction and project management is increasing day by day so the company should develop a competitional strategy in order to compete with those companies and make profit .
For example the company should be specialised in any of the fields such as technology , human resource , speed of construction or services etc .
Capital Market - The maket price of the company is much now now . We should find out a solution to raise the market price and make the profitable because the company is nunning is very bad situation now .
Decision making accountability DMA
It is just like DNA in a human body .It maps the path to health and effictiveness . In doing the DMA analysis we will be able to find out the excess number of decision makers in an organisation .
What is an organisation
According to Jay Galbraith (2005) an organisation is a combination of process structure and management . The primary focus should[d be on designing the structural framework of the company .
It is the study of the attitutudes of the people and groups in an organisation . This can be helpful in finding out a solution or a change which is needed in an organisation .
According to Bernard Burnes in his book a strategic approach to organisational dynamica he said tha ththa the organisational thery is a science which is an outcome of observation , experiment and experience and there is only one best universal organisation to form all bodies.
Classic approach - It is the main and more influencing in understanding the strategy of the company .It is based on quantifiacation and analysis and the main aim of it is to make maximum profit for the organisation . It states that the managers or the people at the hiher level of the company can understand the ups and downs of the market and market shares and change the organisation according to that to make the maximum profit from it for the company .
The evolutionary approach -The evolutionary approach mainly depend on the external and internal environment of the organisation .
It states that the the organisation depends on the market and the companies with which they are competing .The company can either survive or dissolve according to the change in the market trends .Those companies which can change the organisational structure according to the market trends can make a huge profit or survive against the competitors.
Organisational change and transformation
According to porter in his book the management - Organisations can never remain the same because the world and the global market around them is changing faster. Change and managing those change is important .
Forces for change
The main forces for change are
Political and legal development
Social and demographics
This is one of the main force for change . If the economy of the company is going doen the company will have to cut down the number of employees to cut down the companys budget .In the same way if the market is growing the company will have to hire more works to get the work done on time with quality .
Competitors have a main role in the change of an organisation . Most organisations in sensitive to the move of their direct competitors . If the competing organisation is earning more from the market the company will have to look for a better plan and a better option to take advantage from the organisation .
Technological development .
The company will have to date with the technology . But technological development creats both opportunities and treats to the organisation .
Legal and political development
When the government make new rules the companies will have to respond even when the solution or the type of solution that should be made are not obvious.
It is the process in which the company or the organisation can be successful . It is usually the culture of the organisation , structure of the organisation , response to the client , quality of work or the time period of the work . If one is able to find out the causes and solution to these problems the company can grow in the path of success.
According to Gerry Johnson in his book Explorring corporate strategy Organisational knowledge is a collection of shared experience accumulated through system routine and activities of sharing across the organisation .
Projects and Change
According to Eric Verzuh (2005 :1) We live in a world where the change and the rate of change is constantly increasing .In order to survive and prosper organisations need to constantly develop their products and services .Projects are the means by which these innovations are affected
Greater change = More innovations = More projects
In order to survive in this competitive global market organisations must change themselves.The main objective of the project is to give an alternative solution of solution for Salfordia to make it to a healthy organisation . According to Brian Dive in his book Healthy Organisation - healthy organisation is that one meets its mission and objective .
Why organisations are unhealthy -
A bad strategy
Poor organisational strategy
An unclear plan to strategy
The quality of the employee
Bad maintenance of the company
Lack of communication between the managers and the staff
Causes of unhealthy organisation
Lack of dedication to the company
Lack of vision or unclear vision
Duplication of work
Over staffs / lack of staffs
Slow reaction to clients problems
Difficulty in managing rapid growth
Organisational design and environment
Flat And Tall Organisation
Advantages of flat organisation
Disadvantages of flat organisations
1 .Communication between managers and staff will be more .
More than one manger will be there to control each worker.
2. Better team spirit thereby making the work easier and quicker.
Limit the growth of the organisation.
3. Decision making will be easy .
May be more useful in smaller organisation such as private limited company run by partnership .
4. Fewer level of management ie. Benefits such as lower cost as managers are generally paid more than workers
Functions of each person or department could be not visualised properly and and merge into the job role of other .
1. The managers will have a narrow span of control so that the employees can be supervised easily .
Freedom of staffs will be lost.
2. This can create a clear management structure .
Slows down decision making.
3. Clear ladder of progression .
High management cost .
4.Fucntion of each layer can be identified properly Ie. Human resourse , technology etc.
Communication has to take place through the different layers of managers to reach the boss.
Salfordia is a tall organisation ,it has to be changed to a flat organisation to get a better control of the whole company .
Rite now all the family members are on same department even if they are holding different positions .
Each family members should be placed at different departments such as - technology , human resourse so it may give a better outcome .
The company is now acquiring project at the north west region only with one main office there , it has to be changed .The company should try to acquire project all over the UK for a better and faster development , and start offices in almost all the cities .
And each family member should be in charge of each .
Porter Diamond suggests that "there are inherent reasons why some nations are more competitive than than other and why some industries within he nations are more competitive than another "
The growth of the company mainly depend on the procurement method they choose .
Design And Build
The design and build contracts are a unique type of contract which is used in the construction project .
The traditional contract was the design - bid - build , where the client or the owner designs the project by an architect in his choice and when the design is complete the project tender is bidded and the company which gives the lowest tender or the company which has a good profile of making quality projects gets the contract .
In design and build the designing and the construction is given to a single company .When the contract is signed the contractor or the company is totally responsible for the whole project (designining and building ).
Thus this gives the client a flexible option ie . a single point of contact rather than consulting different parties .
The design and build contract is usually given to a contracting company , the company then hires an architect to make the design according to the clients requirements .But the client doesn't have any direct contact with the architecture team . Whn the design is approved by the client the contracting company either does the work or gives sub contract to any other companies .
Advantages of design and build
Single point of contact for the client and for the contractor for the design and build.
Client does not have to take up administration or management responsibilities
The contracting company gets a better profit
Contractual and functional relationship of design and build (masterman 2002)
In the case of Salfordia the if the company moves from traditional form of construction to the design and build the company can earn more money .
Unity And Change Of Command
This means that every sub ordinate must have only one supervisor and he hast to take orders from him only .By this the speed of work will increase and the flow of information will be more , and he can be given information for what he has to do .
Chain Of Command
It is concerned with the flow of information from the authorities within the organisation .It means that all the informations should be passes in a heirarchial way without excluding the levels in between . It can be in the opposite direction too from the employees to the supervisors - managers - ceo . In this method the information can be stopped by the level in which it can be resolved before reaching going to the higher levels
As in the case of Salfordia all the board members should be in the top of each departments with managers supervisors and the employees so that the unity and the chain of command may work out in a proper manner . Thus to ensure that the information which is needed only reaches the CEO .
According to Robert.P.Vecchio Functional design is the type of structure where the company is looking for a definite set of goals and objective when the market is stable
But the disadvantages of functional design are
The response to change will be slow and less innovative works
Diagram page no 313
In product design each group is divided into production , management ,development and services .Product design will be much efficient for companies which serve more than one services to the customers at the same time and the main objective is customer satisfaction and serving the clients better . It gives the main priority to the customers or clients .
The main disadvantage of the product design is that it creat competition with in the group which may lead to conflicts .
Product design is not a good option for Salfordia because , the company now takes up only two types of work industrial and commercial .
Diagram pare 314
Hybrid design is a combination of both functional and product design . This structure is usually used by modern and large companies which handle different type of business and development at the same time . For eg Virgin . They are handling many business at the same time such as virgin rail , virgin mobile etc.
In this design will have direct contact will all the department than the vice presidents so that highly specialised works can be done in the company head quarters and the others can be done at there distinctive places .
Diagram page 315
People issues regard the beliefs, assumptions and subsequent behaviors of the constituents of a group that are used for survival and adaptation. Collectively, they make up the culture of the group. Culture has many definitions. The American Heritage Dictionary defines "culture" as "the totality of socially transmitted behavior patterns, arts, beliefs, institutions and all other products of human work and thought characteristics of a community or population." Colloquially, "culture" has been defined as "how we do things around here." Within the context of business, "organizational culture" refers to the underlying values, beliefs and principles that serve as a foundation for an organization's management system as well as the set of management practices and behaviors that both exemplify and reinforce those basic principles.4" The abstract nature of the terms used to discuss the soft side of business such as "values, beliefs, and principles" are, perhaps, the crux of why hard-line numbers people usually ignore organizational cultures when analyzing the deal. How can an M&A experts measure "values" with the same degree of confidence as such accepted numerical measures as "Return on Investment"? And the answer is, "They can't!" but there is a robustly proven tool to assess organizational culture indicators that directly relates to ROI, ROA, ROS and the organizational factors that strongly impact key business ratios and performance measures.
The Organization Change Resources Solution - Quantifying Organizational Analyses
Organization Change Resources (OCR) discovered and began using the Denison
Culture Survey several years ago as a vehicle for quantitatively assessing under-performing
companies and their sub-organizations. We found it to be a powerful vehicle for assessing the nature, scope and significance of cultural issues of both stand-alone organizations, and as a tool to anticipate and prevent functional problems when merging disparate groups. The extensive research and analysis behind the survey made it both a credible and extremely useful tool. Dr. Daniel Denison of the University of Michigan has studied the cultures of high and low performing organizations for nearly twenty years. He has found that the following four culture traits can have a significant impact on organization performance.
Involvement: Building human capability, ownership and responsibility.
Consistency: Defining the values and the organization's systems that are the basis of a
Adaptability: Translating the demands of the business environment into action.
Mission: Defining a meaningful long-term direction for the organization.