The Modeling Organisational Operations

The managing director of the national chain of retail food stores must conduct research in order to educate his decision-making process regarding the fictitious practical situation. Reorganizing operations with the goal of boosting performance appears to be the answer to the declining market share and the narrowing profit margins (Henson & Humphrey 2009, p.29). As the managing director's personal assistant, you must conduct thorough research that includes an analysis of the organizational environment, operational procedures, and legal viewpoints on liabilities and accountability concerns. On these grounds, the paper focuses on providing a report based on PESTLE analysis, company policy, efficiency, and effectiveness in its operations.
Task 1. Report on the Organisation's Environment, Operating Methods, and Legal Perspectives
In this section, the report focuses on the features of the organisation that affects its relationship with the environment. It also explains the differences in operating methods in public-private and voluntary institutions. Finally, it captures the legal perspective in view of how roles, liabilities, and accountabilities vary between an independent corner shop and a food store chain.
Features of an Organisation which affects its Relationship with the Environment
The national chain of retail food stores reflects an input-output system in which some products and services are remitted back to the environment (He, Qiao, and Wei 2009, p.177). For instance, technology, workforce, and capital jointly function to determine the output to the society. The environment of an organisation refers to the internal and external factors or forces that influence or are influenced by the organisation. The organisational features such as management systems, production process, and service provision approaches among others have noticeable impacts on how it relates to its general and competitive environment (Fiss 2011, p.396). In the case of chain food stores, adopting new technology that meets the demand of customers may change the general perception and increase market share. It will also affect the competitive landscape and prompt its peers to develop new approaches to meet the prevailing conditions. Additionally, the interaction between the customer service agents and the customer affects the resulting relationship. For example, if the management adopts adequate training and build competence among its workforce, the productivity level will increase, and positive cash flow realised. However, when there are minimal training and development for the employees shrinking profit margins due to reducing customer base are common outcomes (Aithal 2015, p.3). Therefore, internal factors within the organisation often influence its output and shape its relationship with the environment.
Other aspects involving external features such as advertising campaigns or changes in prices hugely affect the organisations' relationship with its environment (He, Qiao, and Wei 2009, p.176). Due to the increased health consciousness among consumers of processed food, advertisements have become an invaluable tool that can be used to win customer confidence concerning the commodities. Notably, retail food stores have an obligation to demonstrate their stand against the lifestyle diseases as a way of widening customer base. On the other hand, a pricing strategy that is employed in the market significantly influence customer choice of the products (Fiss 2011, p.401). The national chain of retail food stores requires an understanding of its customer preference and the new trends in the industry to build a positive relationship with customers which is an integral part of the external environment. Moreover, its distributors are part of the outside force that determines the level of effectiveness in the delivery of goods and services. There are also macro environment issues that such demographics and the economic conditions that cannot be directly be influenced by the organisation. Most the organisational features are due to its response to the external environment (Yuksel 2012, p.53). For instance, the management determines the existing corporate structure as a critical feature that will assess employee attitudes and motivations. The overall results measured from the return on investment and increased customer base.
Operating Methods in Public, Private and, Voluntary Organisations
The differences in operation between the public, private, and voluntary sectors is based on the objectives, resources as well as the formality of the atmosphere (Surbhi 2015, n.p). In most cases, public entities focus on the general service to the citizens of their fundamental objective while the voluntary organisations pursue the fulfilment of mission in accordance with the established values and in a specific way for the good of the community. On the other hand, private institutions embark on profit generation as the fundamental driving force behind its operations. Therefore, while the private organisation focuses on quality deliverables, public entities focus on fulfilment of its mandate with little concern for quality while the voluntary organisation emphasises values in executing their duties. Notably, the objectives determine the course of action that executives employ in accomplishing the desired goals (Surbhi 2015, n.p). Therefore, the operating method must differ when there are no universal objectives between the private, public, and voluntary organisations.
The resource base is also a key determinant in the method of operation in the various organisations (Surbhi 2015, n.p). In most cases, human capital, finances, and technological capabilities jointly function to yield the desired output under the guidance of management. It implies that the operation methods in an organisation are determined by the availability and sources of its resources. In public set up, tax, penalties, and duty are the main ways of raising money. As a result, it has a comprehensive source of income. Private institutions rely on loans, shares, and debentures to raise funds pointing out the relatively limited resource base. The voluntary organisations depend on donations, grants, and charity to run their activities. The nature and source of income in the various businesses play a crucial role in determining the budget limits. For instance, availability of adequate finance will enable public entities to outsource valuable skills. However, due to disinterest in the quality of services, reward systems only rely on seniority levels (Surbhi 2015, n.p). Moreover, the limited budget in voluntary organisations also prevents the application of costly operations due to financial constraints.
The formality of the working environment that is the culture also influences the operating methods in various organisations (Fiss 2011, p.398). The set up in voluntary associations is relatively informal allowing for a closer relationship between seniors and juniors. On the other hand, public entities are subjected to stringent bureaucracies involving reporting and regular supervision by the government bodies. Individuals who design the prevailing work environment suitable for particular business activities manage the private sectors (He, Qiao, and Wei 2009, p.176). Therefore, depending on the policy guidelines guiding the employee relationships, reporting, and the overall behaviour, the operating methods vary across the organisations.
Variations from a Legal Perspective how Roles, Liabilities, and Accountabilities between Independent Corner Shop and Food Store Chain
An independent corner shop owned by one person as well as a food store chain aims at achieving the established food safety standards in accordance with the law (Henson & Humphrey 2009, p.29). However, the extents of responsibility vary significantly. The independent owner has a limited liability, which narrows to the general food regulations to ensure the safety of the consumers. In most cases, they serve other duties such as being their drivers and are not subjected to many transparency concerns. Nevertheless, the sole proprietors are liable for paying the debts of the business even to the extent of using personal property because they are legally part of the entities. The formation process is considerably simple when it comes to the corner shop because they only seek for the permit to operate. Besides, they are not obligated to pay corporate tax except for the operating license.
The food store chain is accountable for both consumer safety as well as the other parties in the supply chain. For instance, they have to ensure medical fitness for their drivers, adequate maintenance of the company vehicles as well as different private standards. Due to the fact such businesses are usually large in size, their formation structures can be that of a company. Therefore, the owners of the enterprises are often not liable for the debts of the firm. However, the owners remain accountable to the running of the organisation through the management because they have to pay corporate taxes (Henson & Humphrey 2009, p.29). Concerning organisational roles, the owners are not directly involved in the operations of the corporations as for the case of the sole proprietors who have to undertake the daily activities.
Task 2: PESTLE Framework for the National Chain of Retail Food Store
In order to efficiently understand the macro environmental conditions and situation of the national chain of the retail food store, PESTLE is a relevant analytical tool to employ (Yuksel 2012, p.52). The emphasis in this section is on the political, economic, socio-cultural, technological, environmental, and legal factors affecting the organisation.
Political
The increased concern for food safety has forced the organisation to abide by both international and national standards of operations (Schmieder-Ramirez & Mallette 2015, 124). In the case of a federal chain of the retail food store, several stakeholders, especially the government agencies enforcing the established policy determine the success of the organisation. Increases in taxation and strict standard measures will negatively affect the business outcomes. On the other hand, stable political environment enables business growth and smooth running of the commercial activities in the food supply chain.
Economic
The economic factors, in this case, include inflation, interest rates as well as credit availability. When the interest rates are favourable, and credit is available, the level of consumption will increase resulting in improved business outcomes (Aithal 2015, p.8). On the other hand, the high cost of resources limit resources available for the organisation. The success of the national chain of retail food store depends on the customer income and resource availability, which are both determined by the economic conditions.
Social
Demographic characteristics reflect positively on the business, especially regarding the market availability. Meanwhile, health consciousness is a critical social issue that will affect decision making to change customer perceptions and attitudes in the market. The anticipated future increase in the population indicates additional customer bases that are vital for organisational success. On the contrary, demand shifts, especially toward organic food, will affect the food stores negatively.
Technological
Investment in appropriate technology yields positive outcomes in undertaking commercial activities. Changes in technology define the competitive landscape in the food production industry. Improvement in technology will increase profit margins and enhance effectiveness in service delivery (Schmieder-Ramirez & Mallette 2015, 124). The organisation will also require resources to acquire and use improved technology to meet the prevailing standards.
Environment
Concerns for healthy environment often influences organisational performance. The food industry pursues favourable environmental policies as a social responsibility in order to improve their relationship with the customer and government agencies. There is an ample opportunity for the organisation to participate in environmental protection and leverage its competitive efforts.
Legal
Legal factors refer to the policy frameworks that guide the business operations. Favourable policies promote commercial activities. The increasing concerns over safety standards point to the future existence of stiff regulations in the food supply industry. The impacts will vary depending on the organisation's efforts to meet the policy requirements.
Task 3: Impacts of Policies and Procedures on the Organisational Goals
Establishment of contentment among the customers, staff, and shareholders requires a strategic policy approach in the organisation. According to Pache and Santos (2010, p.465), creating value for stakeholders involves consideration of the relationships and interests of the various groups which are likely to conflict. Policies demonstrate business responsibility in view of the ethical issues and relevant business environment. Notably, retail food chain store operates in a highly dynamic environment involving demand shifts, employee turnover, and unstable prices. It implies that implementing policies and procedures will play a central role in the achievement of the corporate goals. In this case, policies and procedures will focus on critical areas such as:
Sales;
Marketing;
Employee training and development.
Sales event is a critical aspect of food chain stores. The revenue generating activity benefits shareholders through the increased value of shares (Pache & Santos 2010, p.457). It also informs the decision in implementing reward system policies through various motivations such as commissions or even promotion. Safety of the food products and services offered to customers is a vital competitive tool that is beneficial to all stakeholders. In the case of retail food chain, sales will be guided by:
Employee hygiene policies.
Provision of personal and protective equipment..
A comprehensive food safety program
The stated safety policy approaches have noticeable impacts on the contentment goals of the organisation. For instance, implementing the employee hygiene policies and a comprehensive food safety program that meets the internal and national standards will require resources (Cannuscio et al., 2014, p.19). Acceptable levels of personal hygiene are essential in preventing diseases and food contamination thereby meeting the desire of both consumers and employees. The staff will need training on diagnosis and reporting in order to avoid contamination. On the other hand, an overall food safety policy that guides producers of inputs and suppliers is an expensive undertaking. The employers also have the responsibility of providing personal protective equipment such as gloves and uniforms as part of the policy to enhance safety. In all these cases, financial resources are needed in both preventive and mitigation stages (Reisch, Eberle, and Lorek 2013, 26). In as much as these policy approaches are beneficial to the stakeholders, the cost involved reduces the amount of revenue to the organisation.
Pursuing safety standards for employees and consumers result in conflicts in the following ways:
It will not suit the profit maximisation goals of the organisation. It implies that part of the revenue will be ploughed back into the food safety program. As a result, returns on shares will be reduced creating discontentment among the shareholders.
Failure to implement the food safety programs in accordance with the legislation will make the organisation less competitive resulting into reduced income. In this case, the interest of the customers will not be adequately met, thus, leading to reducing the client base.
It also increases the chances of reduced productivity due to circumstances of illness that come from lack of personal protective equipment in the workplace. The organisation will lose its critical workforce, which is necessary for the service and production processes. It implies that staff will not be contented with their roles and managerial designs.
Pache and Santos (2010, p.470) argue that in consideration of the conflicting demands of the organisation, it is prudent that the management makes policies that guide the operations and suit the prevailing conditions regarding stakeholder's interests. The policy issues concerning marketing involve:
Entering into contracts with approved suppliers
Advertisement budgets and,
Information management systems
It implies that the quality control will have the mandate to seek for approved suppliers to regulate risks that result from incoming goods. Additionally, the advertisement is necessary for improved customer relationships as well as providing information concerning the product component and service details (Reisch Eberle, and Lorek 2013, 27). Sound information management is part of the policy issue that enables the organisation to receive reliable feedback for decision-making processes.
In order to meet these goals, employees must be trained on the new policies and procedures alongside competence. Training and development result into:
Increased productivity.
Improved performance.
Satisfaction in work roles.
Efficiency and high level of motivation.
In as much as both marketing and training policies are in line with the organisational goals, they are also the source of conflicting interests (Aung and Cheng 2014, p.175). As stated before, shareholders and the executives emphasise on increases in profit margins. Both marketing and employee development are costs to the organisation. Additionally, workers anticipate the reward system to relate to their skills. Therefore, as they become more efficient through the skills gained in training, they begin to demand an increase in payment. It is through such differences between employees and the management that turnover results into loss of critical labor force (Wilden et al., 2013, p.78). Policies and procedures should balance the interests of the stakeholders in order to achieve the organisational goals.
Task 4: The Organisational Structure in the Food Store
In view of Mintzberg's classification, the manager's decision to centralise the customer service, a human resource as well as marketing department as elaborated in Appendix 1 reflects a diversified approach. In this case, the organisation deals in various food supplies. It also has different subsidiaries located in several regions. The central department will be charged with the responsibility to support decision-making processes while maintaining the grand organisational strategies. Notably, the central departments undertake different roles but are linked toward a common purpose. For instance, the human resource will be in charge of the training and development for customer service agents as well as the line managers in marketing (Maria & Martinez 2011, p.543). Feedbacks from the customers will follow a definite channel and reach the executives who are responsible for decision making in a particular division.
Accountability and room for control is the primary merit of the suggested structure in the food store (Luneburg 2012, p.5). Notably, a plethora of standards is necessary for the delivery of safe products. Having a single centralised decision would make it difficult to observe the requirements thoroughly. With the diversified structure, line managers will be more accountable for the product and service outcomes because they are empowered to make binding decisions in their capacity. The design also creates room for the top executives to focus on the broad organisational needs by establishing the needed support structures. On the contrary, the diversified structure has its weaknesses including resource duplication and conflict of interest. In the case of a food chain retail store, headquarter is charged with the responsibility to provide resources to the various centralised departments (Luneburg 2012, p.15). It creates an environment whereby the departments pursue their separate interests allowing for competition for the limited resources.
Other relevant structures that are applicable in the case of the food stores include the team and matrix structures (Willem & Buelens 2009, p.156). According to Mintzberg, the two models are part of adhocracies, which aims to decentralise power depending on the prevailing needs. In team structures, the organisation will be composed of groups that are responsible for their performance. It lacks a chain of command, and each team is supposed to work efficiently to achieve the set objectives. In some cases, there are group leaders who guide the activities within the units. Whole Foods Market, Inc. is an example of team model whereby store team leaders manage a group of 10 persons. The structure is useful in responding to change. However, they are prone to conflict of interest due to power ambiguity. The food store can also adopt the matrix structure whereby the management use the specialists from different functional department to accomplish a particular task (Willem & Buelens 2009, p.154). In most cases, organisations outsource relevant skills on a contract basis to assist in undertaking new projects. The advantage of using matrix structure is its ability to establish a talent pool, which enables an organisation to be highly flexible.
The current organisational trends require that management structures are susceptible to change. In the hierarchical set up such as the divisional structure suggested by the managing director, dealing with change is relatively tricky. The authority and power vested in the line managers and the executive act as an obstacle to effecting modifications that may enhance organisational performance. Meanwhile, the adhocracies that comprise team and matrix structures are highly flexible and less stressful to employees in the event of a change (Wilden et al. 2013, p.90; María Martínez-León and Martínez-García 2011, p.543). Therefore, they provide an opportunity to attract and maintain critical skills for organisational development.
The nature of the centralised divisional structure proposed will require that each of the departments separately contribute to the overall performance of the food store (Cannuscio et al. 2014, p.16). The human resource will be responsible for talent identification, acquisition, and maintenance. For instance, it will set the recruitment procedures, schedule interviews, and develop the workforce through training. Human resource manager will be accountable even for the employees in the other two departments. Customer service will play a critical role in linking the clients with the product and services. It serves to build relationships and provide feedback that informs decision making in both marketing and human resources. Finally, the marketing department will identify market opportunities and develop strategies to generate sales for the company. Revenue from sales will determine the reward system that applies to customer service and human resource departments. Therefore, there is a chain of interdependence in the suggested structure.
Conclusion
In an effort to increase market share and the profit margins in the national chain of the retail food store, the managing director must make necessary changes based on informed research information. Reporting on the organisational environment, operating methods and legal perspectives reveal that it is an input-output system that is highly interdependent. The PESTLE framework explains the macro environmental and situational factors that influence the success of the food store. Meanwhile, the third section provides notes on impacts of policies and procedures on organisational goals. The key policy areas such as employee training and development, sales, and marketing have a noticeable effect on the performance of the organisation. Finally, the intent to establish three central departments that are customer service, human resource and marketing is a reflection of diversified structure that ensures sufficient accountability and control among the line managers. There are other relevant structures such as team and matrix, which emphasise in developing the talent base and creating an opportunity for flexibility in the face of change.

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Appendix 1