Assignment 1 Management principles case study Description Marks out of Wtg (%) Due date Case study 1 Management principles 200 20.00 27 Mar 2017 Objectives This assignment addresses the following objectives for the course as outlined in the course specification: • review and analyse the role of engineers as managers • understand the planning process and distinguish the different types of organisational planning • evaluate the characteristics of effective management control, including elements of operations and financial control. CASE STUDY: Quality can endure despite environmental shocks (Text pp. 84-86) The use of strategic capabilities and dynamic capabilities to achieve success in the corporate arena and to help an organisation cope with exogenous environmental shocks was discussed earlier in chapter 3. Strategic capabilities are very difficult to imitate, better than the majority of the competition, and of excellent value to customers. Six generic strategic capabilities are quality, visionary leadership, innovation, staff with good technical skills, differentiated products or services, and adaptability and flexibility. Three crucial dynamic capabilities are flexible leadership, flexible organisational culture, and strategic thinking about the big picture and the long term, which enable an organisation to quickly reconfigure its resources in uncertain economic times. This is particularly well demonstrated by the Mercedes car group in their production of the legendary Mercedes Benz vehicles. Over a period of about 120 years, Mercedes has consistently developed and manufactured vehicles that are recognised all over the world as quality products par excellence. Having focused on the strategic capabilities of innovation, technical knowledge and safety, the Mercedes Benz is considered to be in the forefront of engineering, technology, comfort and safety. The car’s trademarked emergency sensing brake assist and electronic stability program are designed to keep the occupants out of harm’s way. Furthermore, it is so strongly differentiated through branding that it is really hard to imitate, with the brand having achieved folklore status. A Mercedes was gifted to Nelson Mandela on his release from prison, and the name was even eulogised by the late Janice Joplin in a song entitled ‘Mercedes Benz”. In the film “The Rookie’, Clint Eastwood referred to a Mercedes Benz as a precision engineered vehicle after escaping unscathed from a major crash. Notwithstanding the efficacy of their products, competing cars produced by BMW and Lexus are still not spoken of in the same breath as Mercedes Benz, despite the fact that it is an expensive vehicle. In the boating world, Haines Marine industries is a family business in south east Queensland that produces the Haines Signature range of runabouts and cabin cruisers. It has been doing this for more than 50 years. These boats are known among small power craft operators as the ‘Mercedes Benz of boats’. Compared to its competitors in Australia, Signature boats are much more aesthetic and have better instrumentation and hatches, more comfortable seating and superior finishes. More importantly, the Signature range is differentiated by a trademarked variable deadrise hull. This hull is the result of enterprising work by highly skilled and creative staff in the research and development team committed to producing the most innovative and finest quality trailerable boat in the industry. By definition, the variable deadrise hull is impossible to imitate, but this special feature also makes the craft so stable that small five metre boats are able to operate in the shipping lanes and submarine channels off Australia’s coast. Measures of the Signature’s success are 15 ‘Boat of the year’ awards, including three such awards in 2007 alone from the Australian Marine Industry Federation and, incredibly, a successful sea crossing of a 5.5 metre Signature from Australia to Japan in 1999. This has also differentiated the boat, giving it a brand name that is almost impossible to imitate; just like Mercedes. Also like the Mercedes Benz, it is relatively costly but its strategic capabilities conduce in the end to a quality product that can override price considerations and recessionary conditions. It’s not only ‘traditional’ businesses that are differentiated and adapt well to exigencies. AC/DC is a popular Australian rock band that has experienced enduring popularity around the world since it was formed in 1973. When the lead singer Bon Scott died prematurely in 1980, he was replaced by Brian Johnson who slotted into the group seamlessly; meaning that the fans did not have to adapt to a new ‘sound’. When asked in 2009 if they are offended that people say all their music sounds the same, the band responded that ‘it’s like if you’re baking a cake you know, you’ve got a really good recipe you stick at it’. Not only does the band comprise outstanding musicians and songwriters, but their lead guitarist, Angus Young, is known right around the world for his trademark school uniform and duck-walk. The band’s Black Ice concert tour of 2008-9 was seen by almost five million people around the world, grossing almost half a billion dollars in revenue. AC/DC merchandise branded with the band’s logo remains hugely popular, and not just at concerts. Stubby coolers, beach towels, key rings, clothing, action figures and even board games all form a part of the familiar AC/DC global brand. In addition, the band’s online fan club which includes access to advance concert tickets and exclusive merchandise demonstrates how a band of the 1970’s, while retaining its trademark sound has been able to adapt to changing technologies in order to remain current for fans both young and old. There are many smaller Australian businesses and enterprises that also adapt or reconfigure in the face of turbulence and / or provide outstanding services or products, delivered with care to their customers. Word of mouth recommendations (and, increasingly, reviews on social networking sites) serve to assist in maintaining business through economic challenges (such as GFC). Such small businesses can often provide superior service that is rendered for a price less than that of their larger competitors because overheads are comparatively lower. Even in instances where small businesses are more expensive than large enterprises, often they are able to withstand tough economic conditions due to positive word-of-mouth referrals (with the ability to receive a more ‘personalised service’ often a deciding factor for consumers). On the other hand, there are restaurants and fast food outlets that are guilty of not adapting to changing times, with many of these consistently displaying ‘staff wanted’ signs in their windows. While it’s likely that some choose to employ school students under casual arrangements, many are simply locked in a time warp of employing casual staff, and cannot accept that employment practices have to suit environmental discontinuities. Even in places like Western Australia with burgeoning demand for resources from China, these businesses insist on casual employment at extremely low wages and no benefits. Meanwhile, it is reputed that workers can earn more than $100 000 a year cleaning dishes in mining companies’ canteens; and hence many of these businesses are understaffed and often face queues of irate customers. References Alan Simon, ‘Resources, Dynamic Capabilities and Australian Business Success’, Journal of Global Business and Technology, vol. 1. No 2 (2010) pp 12-31. Information from, www.mercedes-benz.com.au Information from www.signatureboats.com Answer the following questions about the case study: - Question 1 (40 marks) What elements of the general environment would have most impact on Mercedes cars and Haines Signature boats? Justify your answer. Question 2 (20 marks) What do you feel the cultures of these companies would be like? Question 3 (50 marks) What strategic and dynamic capabilities would you imagine these companies and the band AC/DC possess in order to keep ahead of the competition and thrive in changing economic environments? Question 4 (20 marks) Why do you think the food outlets discussed in the case can’t accept that they have to change their staffing practices in the face of the mining boom? Notes: (i) Marks will be allocated in the following way: Question 1 Maximum 40 marks Question 2 Maximum 20 marks Question 3 Maximum 50 marks Question 4 Maximum 20 mark Written Communication: Maximum 70 marks Total Maximum 200 marks (ii) The required format for the case study is: Title page Executive summary Table of contents Introduction Body of the analysis (Answers to specific questions) List of references Appendices (iii) The answer should be no more than 1500 words in total. This is merely a guide and there is no penalty associated with this word count. (iv) The exact number of words in the report should be reported on the Title Page. (v) The report should be word processed and presented as if it was a professional management consultant report. (vi) Written communication will be assessed in this assignment and will contribute to your overall Communications mark in the course. (vii) Please note that if plagiarism or cheating is detected in this assignment it will result in no marks for the assignment. Students should ensure they clearly understand the meaning of plagiarism and cheating. In particular, students should understand that while they may collaborate with other students on the conceptual ideas in their assignments, the final written report submitted by each student must be unique, and must not contain the written material of any other student in the course, or any other person without due acknowledgement. (viii) All sources of information used in the preparation of the report should be adequately referenced, and you may have to consulted works outside the formal study materials.