London Academy Of Learning Marketing Business Essay

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1. Strategy has to be clear, provide unambiguous direction, and set priorities. Otherwise, it will never provide the common direction that employees need and will become the source of endless debate among managers. General Electric has always been clear about it stated objectives - to be first or second in its individual markets and to focus relentlessly on operating efficiency. A major shortcoming of most current approaches to strategy formulation, including Michael Porter's five forces model, is that they rarely generate such clear, durable strategic prescriptions. The competitive imperatives that underlie strategy formulation can lead to the kind of clarity that characterizes GE and also generate novel insights into a firm's strategic possibilities.

2. Commodity businesses have only one strategic choice - efficiency. No one expects farmers to have business strategies. They cannot worry about dominating markets or outthinking competitors. Instead, they must operate as efficiently as possible: control costs, select appropriate mixes of crops to plant, and resist the temptation to invest resources in wasteful activities. Yet, in an important sense, this is a strategy. It sets clear priorities: operate as efficiently as possible; do not be distracted by dreams of market domination. The same rules apply to all commodity businesses, like oil, steel, mining, computer memory chips, and other products that are widely available, uniform, and trade in densely populated markets. Even the largest companies, like ExxonMobil, cannot worry about manipulating other world oil producers to their advantage or controlling distribution. Instead, they focus on being efficient throughout all their activities.

3. Many differentiated businesses are in the same boat. The critical factor in markets is not uniformity versus differentiation, but the process of entry and/or expansion by competitors. Even in the highly differentiated market of luxury cars, powerful brands like Cadillac are ultimately driven to the edge of profitability by new entrants. First the European car makers and then the Japanese entered the U.S. market for a share of the juicy profits that Cadillac and Lincoln had been earning. Even without undermining prices, this entry reduced both sales and margins. With fixed costs spread over fewer units, GM and Lincoln, like commodity producers, had to seek salvation in a relentless drive for efficiency. The process was repeated in Europe to brands like Mercedes and Jaguar. In general, without barriers to entry, an endless stream of potential and current competitors will undermine the profitability of even the most highly differentiated product. Moreover, the ever expanding list of competitors in these markets will make managing specific competitors both impossible and useless. Like more obvious commodity businesses, these are markets in which efficiency is the limit of strategy.

4. Barriers to entry are the most crucial determining factor in defining the kind of market in which a business competes. Only in markets with barriers to entry are strategic choices (other than efficiency) necessary and possible. Understanding barriers to entry is the essential starting point for strategy formulation.

5. Competitive advantages and barriers to entry go hand in hand. Barriers to entry, in turn, depend on competitive advantages that incumbent firms enjoy over potential entrants. If incumbent firms are not able to do economically valuable things that competitors cannot match, then they will operate, by definition, on a level competitive playing field, one with no barriers to entry to keep out other competitors. Identifying the existence and nature of competitive advantages is where strategy proper begins.

6. There are three types of competitive advantages. First, an incumbent firm may have a lower cost structure, i.e. supply advantages, than competitors, due either to proprietary technology or special resources that cannot be hired away. Second, the incumbent firm can have unmatchable access to customers, i.e. demand advantages. Customers may be captive due to habit, the cost of searching for better alternatives, or the cost of switching to those alternatives. Finally, if economies of scale exist, then an incumbent firm that is able to defend its greater market share (this requires some degree of customer captivity or at least inertia) will enjoy the scale advantages of lower costs, or with network effects, greater demand. Economies of scale produce the most durable competitive advantages. Resource and technology advantages will disappear with technological change. Captive customers ultimately pass on to other markets; they move, age, or die. The key to sustainability is a competitive advantage in acquiring new technologies and/or new customers, and here economies of scale are essential. Intel has dominated the market for CPU chips over many generations because it is many times the size of competitors like AMD and so can spend much more on R&D in pursuit of each new generation of chips. The same process applies to Microsoft and to Coca Cola (with advertising replacing R&D) in the race for new customers.

7. Strategy concerns markets. Business strategy must be formulated on a market by market basis. Strategies are about competition, and competition exists within markets, not across all the lines of business in which a company may participate. As General Electric has long recognized, strategy is a matter of dominating a particular market, either alone or in concert with a limited number of competitors. The key to such dominance is superior technology, customer captivity, and ultimately economies of scale.

8. Identify advantages, strengthen them, deal with identifiable competitors. If, in a particular market, a company can identify advantages that it enjoys over competitors, then it should design a strategy that makes the most of those advantages - maintaining its cost advantage, strengthen customer captivity, and paying attention to limiting potential entry or expansion by small competitors. It also has to consider a wary cooperation with equally advantaged firms, especially taking steps to avoid costly price wars. If it cannot identify its competitive advantages, then efficient operation is the only strategy. If it turns out that other firms enjoy these advantages and the company does not, it should have the discipline not to enter or expand in this market, no matter how lucrative it may appear.

9. Think local; limited markets are easier to dominate. An implication of this emphasis on barriers to entry is that narrowly defined, local markets, are likely to be far more strategically attractive than broad ones. Large global markets will usually accommodate a number of competitors at efficient scale and therefore are not ones in which a small number of firms can reserve scale advantages for themselves. Small local markets, local in either geographic or product space, can be more easily occupied and dominated. Expansion at the edges of these markets, to which the basic scale advantages may be extended, becomes a sustainable and profitable growth strategy. This is precisely the course that the great value creators of the recent past, Microsoft, Intel, and Wal-Mart, have pursued in stark contrast to the broader strategies of less successful competitors like Apple, Texas Instruments, and Kmart. And it almost certainly accounts for the greater success in telecommunications that local companies, such as the former Bell operating companies, have achieved, when compared to national competitors like AT&T and MCI.

10. Services are largely local; in a global economy, well run services businesses have the potential to be islands of profitability. Economies of scale in functions like advertising, distribution, management supervision, and service networks are inherently local; expansion beyond the region requires another round of capital investments. And knowledge of customer-client-patient tastes and needs is also rooted in a local presence. As services become ever more dominant in developed economies, the prospects are bright for those firms that can establish a local dominance and satisfy their customers.




ATHE REG. NO.: 482289

TASK 1: "Critically analyse and interpret a set of company accounts and evaluate the financial performance of the company and suggest how it may be improved."

Task 2: "Discuss the best way for the management of the company in task 1 to decide whether to make a new investment."



Financial information is always prepared to satisfy in some way the needs of various interested parties (the "users of accounts"). Stakeholders in the business (whether they are internal or external) seek information to find out three fundamental questions:

(1) How is the business doing?

(2) How is the business placed at present?

(3) What are the future prospects of the business?

For outsiders, published financial accounts are an important source of information to enable them to answer the above questions.

The Key Questions

To some degree or other, all interested parties will want to ask questions about financial information which are likely to fall into one or other of the following categories, and be about:

Performance Area

Key Issues


Is the business making a profit? Is it enough?


Is the business making best use of its resources? Is it generating adequate sales from its investment in equipment and people? Is it managing its working capital properly?


Is the business able to meet its short-term obligations as they fall due from cash resources immediately available to it?


What about the long-term prospects of the business? Is the business generating sufficient resources to repay long-term liabilities and re-invest in required new technology? What is the overall structure of the businesses' finance - does it place a burden on the business?

Investment Return

What return can investors or lender expect to get out of the business? How does this compare with similar, alternative investments in other businesses?

The Main Tools of Review

The answers to the questions above (and others) will come from a careful, analytical review of financial information:

Area for Review


Review of the Business; Chairman's and CEO's Review

The accounts of all quoted companies (and many private companies) include some commentary from senior management on the strategy and performance of the business. This is often the most useful place to start. The statements (usually one each from the Chairman, CEO and Finance Director) will reveal many "qualitative" things about the business. These include a description of the business activities, objectives, developments and competitive environment. Political, environmental and macro-economic issues may also be raised.

Cash flow statement

The cash flow statement will reveal where the company's resources have come from and how they have been applied during the year.

Calculation of significant ratios between figures in the accounts

Ratio analysis is an important tool for understanding and comparing business performance. However, ratios and other financial calculations are rarely useful when looked at in isolation. it is important to carry out calculations of ratios and other significant financial figures with previous years (many companies publish five or ten year summaries as part of their annual reports) in order to identify positive or adverse trends). Comparison with other, relevant competitors and industry "norms" is also important.


The Usefulness of Formulas for Accounting Ratios

Most successful business owners understand financial statements, beyond their use as summary reports of all accounting transactions that transpired during a particular accounting cycle. They contain data that could be translated as useful guides, in making monetary decisions and business projections. The use of financial accounting ratios can reveal certain industry trends, to determine profitability and cost-efficiency. Rather than rely on flimsy speculations and popular leanings, it would be best if you knew how to analyze business trends to determine, which of them can go from good to bad.

The following sections contain compilations of common formulas for accounting ratios, according to their reasons and functions.

(1) Liquidity Ratios

In examining financial statements, determining a business entity's liquidity can be first priority. The ability of a company to meet its current and immediate financial demands, is an indication of a smooth and profitable operation. The company may have a substantial amount of cash on hand and in banks, but this is not the only indication of liquidity. Unless the relevance of the cash balance to all other accounts had been evaluated. A brief glance at financial data will not suffice, to ascertain the liquidity of a company or entity. Knowing the company's sources of funds, is vital before making any investment decisions. Hence, the following financial accounting ratios may be used as tests of a company's liquidity:

Current Ratio Formula

Current Assets ⁄ Current Liabilities

This measures the proportion of an entity's current assets against current liabilities. A resulting one-is-to-one ratio would mean that, for every dollar of the total current assets, there is an equivalent one dollar short-term liability. For a current ratio to be favorable, the current asset proportion should be higher than the current liability. To illustrate, Current Assets of $ 50,000 vs. Current Liabilities of $ 50,000 means there is a one-is-to-one ratio (this can be expressed as 1:1) . There is little room for growth in this kind of financial condition, since funds are as good as tied-up to pay-off liabilities that are about to become due. An investor cannot expect dividend appropriations from a company who finds it difficult to improve this kind of ratio. Hence, to be favorable, the current assets should be much higher than the current liabilities.

Quick Asset Ratio Formula

(Cash+ Accounts Receivable+ Short-term Investments) ⁄ Current Liabilities

Unlike in current ratio, the current assets to be considered here are those that can be readily converted into cash with a considerable amount of certainty. Merchandise inventory and prepaid expenses are not included since there is greater uncertainty as to when it can be converted into actual funds. The objective is to determine the ability of the company to settle short-term obligations at any time that its settlement is demanded. Again, a ratio of more than 1:1 would be favorable.

Defensive Interval Ratio Formula

(Cash+ Accounts Receivable+ Short-term Investments) ⁄ Average Daily Expenses

Average Daily Expenses=(Cost of Goods Sold + Total Operating Expenses) ⁄ 365 days

The objective of this ratio is to determine how fast the quick assets can be converted into cash, since the shortness of time is essential to its conversion. The answer to this formula is expressed in terms of days.

(2) Profitability Ratios

After determining if the company being evaluated is liquid, the next issue at hand is the profitability of the business entity, in as much as profit is the ultimate goal when investing. Included as among the common formulas for accounting ratios are the formulas used when converting the regular financial reports into common size financial statements. These type of financial reporting measures the trend in income generation, and how such trends have affected the growth of the company's resources or assets. In addition the following financial accounting formulas are used to determine the profitability of an entity:

Gross Profit Margin Ratio Formula

Gross Profit (Revenues - Cost of Goods Sold) ⁄ Net Income (Gross Profit-Total Operating Expenses)

The resulting ratio will reveal the allowable margins, by which a company profits for every dollar invested in goods manufactured or sold. Hence, total sales of $200,000 divided by a net income of $50,000 will reveal a ratio of 4:1. To interpret this ratio, it means that business was able to meet other operating expenses necessary within a comfortable margin and still realize a fair income. The significance of this ratio becomes evident when compared to previous year's trends. Any decrease or increase in gross profit, would also mean possible increase in cost of goods sold, increments in mark-ups, price mark-downs or rising overhead costs.

Return on Asset (ROA) Ratio Formula

Net Income ⁄ Average Total Assets

Average Total Assets = Present Total Asset + Previous Year's Total Asset ⁄ 2years

This ratio indicates the profit realized for every dollar value of asset owned and harnessed.

Return on Equity Ratio Formula

Net Income ⁄ Average Stockholders' Equity

Average Stockholders' Equity= Present Stockholders' Equity + Previous Year's Stockholders' Equity ⁄ 2 years

This ratio is indicative of the profit realized for every par value of shares of stock invested in the company.

(3) Activity Ratios

Activity ratios are those used to measure the efficiency by which the company's management conducts its business operations and harness its resources to optimize the earning potentials of the business. These ratios include but are not limited to the following:

Inventory Turnover Ratio Formula

Cost of Goods Sold ⁄ Average Inventory

Average Inventory = Present Year's Inventory Balance + Previous Year's Inventory Balance / 2 years

The result of this ratio will be interpreted as the number of inventory unit sold as against the number of inventory units left unsold. Hence if the company's cost of goods sold is $100.000 and the average inventory on hand is 20,000, the resulting ratio is 5:1 on the average scale. It means that for every 6 units of goods held for resale, 5 units were sold during the year and an average of 1 unit remains on hand.

Days Inventory on Hand

365 days ⁄ Inventory Turnover

This is an estimation of the number of days that a non-performing inventory is held. A high number would mean inventory management needs improvement, while stock held as inventory should be examined. A high ratio may be indicative that a substantial amount of funds is being tied down by slow moving stocks.

Accounts Receivable Turnover Ratio Formula

Revenue from Sales ⁄ Average Accounts Receivable

Average Accounts Receivable = Present Year's Accounts Receivable Balance + Previous Year's Accounts Receivable Balance / 2 years

The resulting ratio will be interpreted as the amount of goods sold in cash versus for every unit sold on credit basis. It is important that the average balance of accounts receivable is minimal to achieve favorable results. To illustrate an unfavorable AR Turnover ratio: Revenue from Sales $200,000, average receivable balance for two years is $ 115,000 and the resulting ratio is 1.74: 1

It reveals that for every dollar of sales made on credit, there is only an equivalent sales of $ 1.74. This means a large part of the sales efforts go into receivables instead of cash.

Days Sales Outstanding

365 days ⁄ AR Turnover

This will provide the number of days it takes the company to collect from the customer.

Accounts Payable Turnover

Purchases on Credit ⁄ Accounts Payable Balance

The resulting ratio will reveal the ratio and proportion of a credit purchase to its remaining balance, to indicate the company's ability to pay for its stock inventory during a year. To get the days payable, the number of days in a year will be divided by the AP turnover.

(4) Cash Flow Ratios

These ratios will measure the ability of the company to operate its daily operations, pay maturing debts and make major purchases from out of the funds projected from cash flows . This is liquidity based on cash management in as much as major expenses are incurred only if they have been properly projected through the cash flow system.

Cash Flow Solvency Ratio Formula

Actual Cash Flow from Operations ⁄ Total Liabilities

A high cash flow solvency ratio indicates the company's ability to generate funds from operations to settle due and maturing obligations on time.

Cash Flow Margin Ratio Formula

Actual Cash Flow from Operations ⁄ Revenues from Sales

This ratio indicates the company's ability to generate funds from its operations, which could be used to meet the day to day operational costs of a going concern.

Cash flow ROA Ratio Formula

Actual Cash Flow from Operations ⁄ Average Total Assets

Average Total Assets = Present Year's Total Assets + Previous Year's Total Assets ⁄ 2 years

A company that has high Cash flow ROA ratio has the ability to augment its funds from business operations, which can be used to purchase or pay for capital expenditures.

(5) Solvency Ratios

Solvency ratios are the measure of the company's resources to pay-off long term debts and are expressed in terms of percentages or ratios. Investors in shares of stock make use of these common formulas for accounting ratios as a final test of the company's strong showings as a worthy investment. Long -term debts are related to future projections; hence, a test of all its resources to match all other obligations is also necessary. Final decisions are made by making sure that there are minimal risks involved, should the stockholder continue to place his money in the business being evaluated.

Percentage of Debt to Asset Formula

Long Term Liabilities ⁄ Total Assets x 100%

The resulting percentage represents how much of the total assets will be used to pay-off long-term debts in case of dissolution or liquidation.

Debt to Equity Ratio Formula

Total Liabilities ⁄ Total Equity

The resulting ratio indicates the proportion of all existing liabilities to equity or business ownership. Since the fundamental accounting equation is Asset = Liabilities + Capital, the ratio will indicate the proportion of the company's asset composition.

There are more accounting ratios used in analyzing the financial data of an organization, entity or institution but the compilations presented in this article, represent the most common formulas for accounting ratios you can utilize. They are useful as simple tools for analysis, to measure the liquidity and performance of a business.




ATHE REG. NO.: 482289

"Examine the application of one theory of organisation and analyse the linkage between this and the structure and culture of the business, with particular reference to team-working."



Organizational culture can be defined as the institutionalizing processes which regulate cognitive, affective and self-presentational aspects of membership in an organization. These processes also govern the means by which thought, perception, feeling and expression are shaped and hence encompass various auditory, textual, symbolic, physical and narrative forms. Examples of such means would include: organizational modes of communication (memoranda, telephone, email, internet, meetings, etc.), rituals, ceremonies, stories, myths, jargon, gossip, jokes, physical architecture, office layout, decoration and prevailing modes of staff dress.

As one might infer from this definition, the concept of 'organiza-tional culture' is somewhat nebulous. It can appear so vague and all-encompassing as to be meaningless or, at least, coterminous with the concept of 'human organization' itself (a problem that has dogged the field of social anthropology for many decades). Nonetheless, through the eyes of the beholder, it remains the case that organizations seem to vary in terms of the climate and 'feel' that pervades them and the kinds of 'signals' that they give off. To that extent, it can be useful to have recourse to a term - however provisional or unsatisfactory - for referring to this common experience of interpretative organizational difference.

The concept of culture has a long and rich tradition within social anthropology. Interestingly, its appropriation by management and organization theory is by no means a recent phenomenon. Several authors (Martin 2001; Parker 2000; Schwartzman 1993), for example, provide comprehensive accounts of the historical influence of social anthropology on the field. With regard to the Hawthorne Studies, so seminal to the human relations movement, Elton Mayo was personally acquainted with the anthropologists Malinowski and Radcliffe-Brown, whilst Roethlisberger and Dickson sought the direct assistance of W. Lloyd Warner in their interpretation of group behaviour. The Hawthorne Studies, which drew attention to the previously unrecognized importance of the informal workgroup, in turn, had a clear historical relationship with later and more explicit invocations of 'culture' in, for example, the writing of Eliot Jacques (1951). One of the earliest writers on culture in management studies, Jacques defined an organization's culture as its

customary and traditional way of thinking and of doing things, which is shared to a greater or lesser degree by all members, and which the new members must learn and at least partially accept, in order to be accepted into the services of the firm. (1951:251)

Other lines of emergence may also be traced. The heritage of organizational culture was not solely anthropological. The psychological rendition of organizational culture provided by Harrison (1972), for instance, informed the widely cited fourfold functionalist typology offered by Charles Handy (1977), which classifies culture according to power, role, task and person.

The human relations thinking of the first half of the twentieth century was later inseminated by sixties humanist ideology to spawn a generation of managerial writings on organizational culture. Conditions were ripe for these ideas. Finding themselves economically threatened by Japanese competition, managers in the USA and Europe were about to make the ironic 'discovery' that the answers to their prayers for corporate control and competitive advantage lay latent in the very social fabric which they had taken for granted. Moreover, this dormant potential could be exploited with minimal capital outlay, and there was no shortage of evangelists available to make the revelation. Perhaps best known of these are Tom Peters and Robert Waterman, whose best-seller, In Search of Excellence (1982), became something of a bible to a generation of culturally inspired managers. According to Peters and Waterman (1982), successful companies possess 'strong cultures' in which employees are committed to a clear set of values that unite and motivate them. In their winning formula, 'Good managers make meanings for people, as well as money' (1982:29). In other words, it is the manager's duty and prerogative to persuade employees of the imperative to buy into organizational values and to express a level of loyalty and commitment that will ensure business success. Similarly, Deal and Kennedy argue that companies with so-called strong cultures 'can gain as much as one or two hours productive work per employee per day' (1982:15). They contend that managers can actively change organizational culture and bring about desired results through the manipulation of symbols, stories, myths, rituals, ceremonies and so on.

Models of 'cultural excellence' have, perhaps predictably, come under sustained attack from a number of detractors (see, inter alia, Kunda 1992; Parker 2000; Reed 1993; Willmott 1993; Wilson 1992) on a variety of grounds, including: (a) conceptual inadequacy; (b) questionable ethics; and (c) lack of feasibility. The managerial consumers of what Willmott (1993) disparagingly terms 'corporate culturism' are in the market for tools which promise to make their lives easier. So, correspondingly, a purveyor of 'culturism' will be obliged to couch his or her wares in the kind of functional language which mirrors such expectations. The cultural excellence literature is often characterized by a systems-orientated reification of 'culture' whereby organizational culture is seen as part of a set of contingencies that are open to simplistic managerial manipulation and control. 'Culture' is often listed alongside other 'variables', such as 'size', 'structure' and 'strategy'. Such reification has led to the vain search for ways in which 'organizational culture' might be operationalized and measured, giving rise to the search for a clear and unambiguous definition. Viewed from a more critical and interpretative standpoint, however, the problem is not simply one of definitional 'accuracy'. Rather, it resides in a mistaken logic of enquiry; a logic which implicitly or explicitly asserts that a performatively workable and accurate definition of 'culture' is, in principle, attainable.

Logical misconceptions, in turn, lead to the construction of spurious models of 'cultural change'. Organizational culture is generalized and reified to the point of meaninglessness, as pointed out by Reed, who offers the following caricature of functionalist prescriptions of the excellence literature:

(a) identify the corporate culture that your company has - preferably using a classification scheme (b) compare this to the ideal corporate culture for the company's particular strategic situation (c) change it or otherwise mould or shape it to optimize organizational effectiveness and (d) success will come your way. (1993:3)

The point is that each of the stages (a) to (c) is in itself extraordinarily problematic, if not unfeasible, in practice. Hence there cannot be a simple panacea for attaining the economic success promised in stage (d).

Kunda (1992), Parker (2000) and Willmott (1993) each attack corporatist conceptions of 'culture' on ethical grounds, challenging the assumed prerogative of executives to impose upon, manipulate and control the lives of others through normative means. Even granting the fact that symbols, ritual, meaning and value can be dictated, controlled or influenced by senior executives, what gives them the ethical privilege to do so and should it be done without the collaborative consent of those implicated in the change process?

A further challenge is posed by Wilson (1992:72), who points to a series of theoretical and empirical grounds for rejecting the corporatist claims of the excellence literature. Perhaps most tellingly, he documents the fact that most of the companies identified as 'excellent' in the Peters and Waterman volume went on to significantly underperform financially when economic conditions changed.

It would be misleading to suggest that populist management writers and positivist academics hold a monopoly over the concept of organizational culture. Whilst relatively dominant, this corporatist line of thinking represents but one strand of development. Many writers in the organization studies field have extolled the virtues of an interpretative appreciation of organizational culture and symbolism (see Alvesson and Berg 1992; Linstead and Grafton-Small 1992; Kunda 1992; Martin 2001; Parker 2000). Commentators on the organizational culture literature have noted a broad structural dichotomy between practitioner orientation and academic analysis. Linstead and Grafton-Small (1992:333), for instance, distinguish between 'Corporate culture [as a] term used for a culture devised by management and transmitted, marketed, sold or imposed on the rest of the organisation' and 'organisational culture [as] more organic, being the culture which grows or emerges within the organisation and which emphasises the creativity of organisational members as culture makers, perhaps resisting or ironically evaluating the dominant culture'. Similarly, Willmott (1993) distinguishes between protagonists of the deliberate imposition and manipulation of organizational ideology - what he terms 'culturism' - and 'purist' concerns with the study of organizational symbolism. Wilson and Rosenfeld (1998), in turn, couch this polarity in terms of 'applicable' versus 'analytical' approaches to culture in order to juxtapose managerial conceptions with more sociologically and anthropologically sensitive accounts of organizational culture.

What is variously presented as a dichotomy, however, might be more fruitfully conceived as a continuum between extremes: purist/ analytical, at one end and practitioner/applicable at the other, with studies and accounts finding a location along an imaginary scale according to the degree to which they seek to engage with a managerial readership. Further dimensions representing other concerns, such as those of critical management scholars, might also be added. For example, Kirton and Greene (2000) identify a growing body of literature that criticizes studies of organizational culture for over-looking or marginalizing the diversity debate within organization studies. It is a criticism, moreover, that could be levelled in retrospect at both the applicable and analytical camps. The concern here is to acknowledge the manner in which discrimination on the basis of gender, race, age, disability and sexuality becomes institutionalized within organizations and the extent to which a deeper understanding of the ethics of managing diversity can be reflected in studies of organizational culture. In the hands of such critical authors, the study of organizational culture becomes a vehicle for sensitizing audiences to institutional discrimination and suggesting ways in which resulting inequities might be addressed.




ATHE REG. NO.: 482289

"Using examples, (hypothetical or otherwise) illustrate the importance of employee motivation and appraisal as part of the planning for a major company involving and implementing change in their workforce, with reference to the classical and scientific schools of management."


In today's turbulent, often chaotic, environment, commercial success depends on employees using their full talents. Yet in spite of the myriad of available theories and practices, managers often view motivation as something of a mystery. In part this is because individuals are motivated by different things and in different ways.

In addition, these are times when delayering and the flattening of hierarchies can create insecurity and lower staff morale. Moreover, more staff than ever before are working part time or on limited-term contracts, and these employees are often especially hard to motivate.

Definition of Employee Motivation

Twyla Dell writes of motivating employees, "The heart of motivation is to give people what they really want most from work. The more you are able to provide what they want, the more you should expect what you really want, namely: productivity, quality, and service." (An Honest Day's Work (1988))

Advantages of Employee Motivation

A positive motivation philosophy and practice should improve productivity, quality, and service. Motivation helps people:

achieve goals;

gain a positive perspective;

create the power to change;

build self-esteem and capability,

manage their own development and help others with theirs.

Disadvantages of Motivating Staff

There are no real disadvantages to successfully motivating employees, but there are many barriers to overcome.

Barriers may include unaware or absent managers, inadequate buildings, outdated equipment, and entrenched attitudes, for example:

"We don't get paid extra to work harder."

"We've always done it this way."

"Our bosses don't have a clue about what we do."

"It doesn't say that in my job description."

"I'm going to do as little as possible without getting fired."

Such views will take persuasion, perseverance, and the proof of experience to break down.

How do you motivate your employees? The Action Checklist for Motivating Employees is designed for managers with responsibilities for managing, motivating, and developing staff at a time when organizational structures and processes are undergoing continual change and can help your organization.

Employee Motivation Action Checklist

This checklist is designed for managers with responsibilities for managing, motivating, and developing staff at a time when organizational structures and processes are undergoing continual change.

1. Read the Gurus

Familiarize yourself with Herzberg's hygiene theory, McGregor's X and Y theories and Maslow's hierarchy of needs. Although these theories date back some years, they are still valid today. Consult a digest to gain a basic understanding of their main principles; it will be invaluable for building a climate of honesty, openness, and trust.

2.What Motivates You?

Determine which factors are important to you in your working life and how they interact. What has motivated you and demotivated you in the past?

Understand the differences between real, longer-term motivators and short-term spurs.

3. Find Out What Your People Want From Work

People may want more status, higher pay, better working conditions, and flexible benefits. But find out what really motivates your employees by asking them in performance appraisals, attitude surveys, and informal conversations what they want most from their jobs.

Do people want, for example:

more interesting work?

more efficient bosses?

more opportunity to see the end result of their work?

greater participation?

greater recognition?

greater challenge?

more opportunities for development?

4. Walk the Job

Every day, find someone doing something well and tell the person so. Make sure the interest you show is genuine without going overboard or appearing to watch over people's shoulders. If you have ideas as to how employees' work could be improved, don't shout them out, but help them to find their way instead. Earn respect by setting an example; it is not necessary to be able do everything better than your staff. Make it clear what levels of support employees can expect.

5. Remove Demotivators

Identify factors that demotivate staff - they may be physical (buildings, equipment) or psychological (boredom, unfairness, barriers to promotion, lack of recognition). Some of them can be dealt with quickly and easily; others require more planning and time to work through. The fact that you are concerned to find out what is wrong and do something about it is in itself a motivator.

6. Demonstrate Support

Whether your working culture is one that clamps down on mistakes and penalizes error or a more tolerant one that espouses mistakes as learning opportunities, your staff need to understand the kind and levels of support they can expect. Motivation practice and relationship building often falter because staff do not feel they are receiving adequate support.

7. Be Wary of Cash Incentives

Many people say they are working for money and claim in conversation that their fringe benefits are an incentive. But money actually comes low down in the list of motivators, and it doesn't motivate for long after a raise. Fringe benefits can be effective in attracting new employees, but benefits rarely motivate existing employees to use their potential more effectively.

8. Decide on an Action

Having listened to staff, take steps to alter your organization's policies and attitudes, consulting fully with staff and unions. Consider policies that affect flexible work, reward, promotion, training and development, and participation.

9. Manage Change

Adopting policies is one thing, implementing them is another. If poor motivation is entrenched, you may need to look at the organization's whole style of management. One of the most natural of human instincts is to resist change even when it is designed to be beneficial. The way change is introduced has its own power to motivate or demotivate, and can often be the key to success or failure. If you:

tell - instruct or deliver a monologue - you are ignoring your staff's hopes, fears, and expectations;

tell and sell - try to persuade people - even your most compelling reasons will not hold sway over the long term if you don't allow discussion;

consult - it will be obvious if you have made up your mind beforehand;

look for real participation - sharing the problem solving and decision making with those who are to implement change - you can begin to expect commitment and ownership along with the adaptation and compromise that will occur naturally.

10.Understand Learning Preferences

Change involves learning. In their Manual of Learning Styles (1992), Peter Honey and Alan Mumford distinguish four basic styles of learning:

activists: like to get involved in new experiences, problems, or opportunities. They're not too happy sitting back, observing, and being impartial;

theorists: are comfortable with concepts and theory. They don't like being thrown in at the deep end without apparent purpose or reason;

reflectors: like to take their time and think things through. They don't like being pressured into rushing from one thing to another;

pragmatists: need a link between the subject matter and the job in hand. They learn best when they can test things out.

As each of us learns with different styles, preferences, and approaches, your people will respond best to stimuli and suggestions that take account of the way they do things best.

11. Provide Feedback

Feedback is one of the most valuable elements in the motivation cycle. Don't keep staff guessing how their development, progress, and accomplishments are shaping up. Offer comments with accuracy and care, keeping in mind next steps or future targets.

More Tips: Dos and Don'ts For Motivating Your Staff in a Time of Change


Recognize that you don't have all the answers.

Take time to find out what makes others tick and show genuine caring.

Lead, encourage, and guide staff - don't force them.

Tell your staff what you think.


Don't make assumptions about what drives others.

Don't assume others are like you.

Don't force people into things that are supposedly good for them.

Don't neglect the need for inspiration.

Don't delegate work -- delegate responsibility.