The UK Retail Industry: A Case of TQM at Tesco Supermarket
Origin and development of TQM. Provision of high quality services is at the top of the agenda of any form of senior management. Quality is used as a strategic weapon that companies use to compete within the current markets. Quality pleases the consumers who are the most influential people for any business whether in the service sector or the manufacturing sector.
Therefore, for a company to have the advantage over other rival companies, it has to identify and develop quality of its products and services and specifically compete on this dimension. When companies are able to produce goods and services of a high quality, they not only please the consumers but also put themselves in a position where they achieve internal effectiveness and reduce their cost of operation. Using the techniques of total quality management, several companies in the UK service sector have been able to achieve success.
The philosophy of total quality management began as a result of dramatic changes in the business environment. The philosophy itself began in the early eighties when the global economy experienced a recession similar to the recent one in 2008. Several companies experienced this changes which were characterized mainly by factors such as low cost of competition, globalization, rapid technology transfer, and increased consciousness of quality by the consumers. The recession affecting several national economies as well as the global economy; as a result development of policies on quality could easily be blocked. But, companies that consider quality of the product and services they give to consumers can use the idea as a way of being competitive in the market. There are several techniques for quality management that have been used to achieve quality of products and services, but, the most effective technique has been total quality management (TQM).
Total Quality Management in the UK retail industry It is hard for a company that intends to compete effectively to ignore the use of total quality management. Based on empirical evidence, the technique of total quality management has proven to have a significant effect on the general output or result of a company. It is for this reason that business should not fail to ignore implementing policies of total quality management. Hence, total quality management can be defined as a means of seeking excellence in all functions of business in order to prevent possibilities of errors or mistakes and to create optimal customer satisfaction. The customer satisfaction is achieved when the output is free of errors and it is only through efficiency and effectiveness that defects can be prevented.
Depending on the whether a firm is one the service industry or the manufacturing industry, the techniques for total quality management will vary. The most common characteristics that cause this difference is the fact that in the service industry, the product is intangible compared to manufacturing of tangible goods. The manufacturing industry was the first to experience success in the application of total quality management techniques. Because of this of this success, TQM techniques had to be made to fit into the service industry. The financial industry is in the service industry and supermarkets and financial investment firms belong to this industry . In as much as its resources, time and system are used for cash and asset management, the supermarket has also devoted all its resource in management of its customers as well as its services.
Unlike most supermarkets, the system is designed to satisfy the customers and not to control any of the clients. In the old traditional retail systems, every product set up focuses mainly on the convenience of the supermarkets rather than the convenience of the customers. Several large supermarkets may have more than one vice president whose responsibility is focused on the asset management and guarding of the company’s assets.
However, it is a common this to also find that lack of a vice president whose responsibility focuses on customer relation management. For the rare cases where a supermarket can focus its resources on customer relationship management much priority is usually not given on CRM. The customers usually hold the lifeline of any business irrespective of the sector it deals with. It does not matter whether the business is in the service industry of manufacturing industry. Customers would always seek for quality in order to be satisfied. When it comes to the service industry, customers undoubtedly become sensitive to quality of service compared to the manufacturing industry. The reason is because of the fact that interaction between customers and the companies occurs with frontline representatives of the company.
The use of TQM techniques by Tesco to improve efficiency and effectiveness.
Tesco is one of the most successful retain supermarket chains in the UK. This is because of its service and product quality. Tesco was started as a retail company in 1920s and since then it has expanded and grown to become among the world largest companies in the retail industry. In terms of the revenue base, the company comes second after Wal-Mart which is a US based company.Ever since it began, Tesco has continued to introduce new products and services to satisfy the needs of its customers. Currently it mainly deals with production and sales of food items, groceries, cloths, and electronics among other items. In addition the company also deals in sales of houses, internet services, financial and insurance services. These are among its latest business ventures.
The company has used the concept and philosophy of quality management to maintain its position as the leading supermarket in the UK. It goes the extra length not to increase quality of its services but also to maintain the quality for customer continuous satisfaction. The main focus in quality assurance for the company is to provide customers with products and services that will meet their needs as well as providing products and services that are free of accidents, wastes or defects.
Quality performance objective is the most prioritized objective above all other business strategic objectives. The company uses various strategies to achieve this goal of quality. The company dedicates a highly skilled human resource to maintain and improve the quality of services offered to its customers. Every single day, the company’s management staff has to attend a meeting with the main agenda being total quality management. The staff discusses ways in which every business function can be integrated or adjusted to meet quality. The company has a quality improvement team that deals with ensuring maintenance of quality in all the goods the company sells in its stores as well the services it provides to its loyal customers. In addition the quality improvement team is charged with the responsibility to identify ways of improving the quality of service to its customers every day. This team meets on a weekly basis to lead and monitor the process of quality assurance.
In addition to the dedication of human resource to customer service management, the company also has principles and policies used to govern quality assurance.
The first policy is that, it is a mandatory for all employees to meet the requirements of the customers all the time.
Secondly the policies also focus on prevention of defects in its products and errors during the process of customer service. The goods sold in Tesco stores must meet certain standards and this means that total quality management according to Tesco involves also the supply chain management. Suppliers of goods are not expected to deliver goods with defects which would cause the customers to raise complaints.
Thirdly, the policies also focus on the verification of processes to measure whether they are meeting the right standards for quality. Speed performance objective. The condition for food preparation has to be hygienic The company also considers the quality management system of all its suppliers before getting into business with them Cost performance objective
Human resource management. The company has policies that ensure its team of workers is treated with the respect it deserves Improving quality in the products is achieved in several ways. Tesco as a company produces its own products. Being a retain chain with stores online and in several other location in the UK, the company gets to sell products produced by other manufacturing companies. The company subjects all its products to testing in order to meet the required standard of quality. It inspects all its products at every point during the process of production.
Hygiene is maintained especially for production of goods that require cleanliness. Food products and pharmaceuticals are just but the example of products that require high sensitivity to cleanliness. Therefore, a part from employing skilled workforce, the company ensures that the people handling products that require high sensitivity to cleanliness maintain a certain level of hygiene to mitigate errors and complains. If customers who use the food court at any of the company’s stores complain of about the quality of food, then this would affect the business and cause customers to develop mistrust for the company. However, when customers enjoy the food produced by Tesco because of the quality, then they would undoubtedly develop a habit of buying food at Tesco’s stores.
Products sold at the stores have to have marks indicating the date of expiry. This includes both the products produced by the company and the products produced by other companies. When a good is about to expire after staying on the shelf for too long, the quality assurance and improvement team ensure that they are removed from the shelves and disposed properly. The goods which are shelved on Tesco’s stores have to be fresh. As such, the company has found it highly possible to make sells of items such as groceries and meat fresh meat products. Perishable goods are sold within the stores on a daily basis and replenished on a daily basis. It is hard to find highly perishable products being shelved after 24 hours.
In most cases, they are entirely sold out within the time period of 24 hours. The company also has a policy where once perishable goods such as groceries begin to show signs of defect, they are automatically removed from the shelves and donated to homes where they can be used immediately. The team charged with the responsibility of quality control and assurance ensures that only products that meet the required standards are shelved.
Quality control is therefore majorly achieved through two main methods: inspections and testing. It is a technique that is applied during the entire process of production. It is applied before the finished product is produced and also after production. The raw materials have to be subjected to standard testing. It cannot use raw materials that will not yield the expected quality. Therefore selection of materials to be used in production is an crucial aspect of quality that the company emphasizes on. Every product of the various stages of production has to be tested to meet certain standards.
Speed is an notable emphasis in the company when it comes to performance objective. This implies the time taken for delivery of an item once the client places an order. Customers are highly valued and none of them is expected to wait longer than the required time for delivery. The company simply tries to reduce cases of customer complaints by ensuring that they get value for their money. A customer can get what he or she needs whenever they need it; and hence it is only through speedy delivery of products that this objective can be achieved.
Speed is used when handling customers. The store customer attendants are taught to be very prompt as they attend to customers. The company has noticed that customers can be frustrated by long queues especially when making payments. This frustration can cause the customers to opt for other stores or supermarkets with shorter queues. In response to this need, the company has ensured that delivery of service at the teller points is very fast and efficient so that customers do not have to waste their valuable time.
When speed is achieved in the operations of the company, then all the other departments will be impacted to incorporate speed. Communication of information is done with the same necessary speed for effectiveness. Speedy communication helps in proper record keeping. It helps throughout the entire process of supply chain management and inventory management. Quality in communication however is only achieved through proper IT system that integrates all the business functional units for smooth flow of information. The company has an enterprise resource planning system that helps to improve the quality of internal and external communication in the company. The system enhances smooth and quick flow of communication throughout the process of supply chain management.
The human resource management affects quality of the products. HRM is one other area that the company stresses on when it comes to ensuring quality of service delivery. Customers have to be treated with value and esteem when they interact with the company . Human resource is valued since the company has realized the role human resource plays in ensuring effectiveness and efficiency of operations. Tesco has devoted to treating its associates with the respect they deserve and in effect this has yielded fruits in the company’s general output.
The associates and employees need to be motivated to work harder and be at their best. The human resource team at Tesco has ensured that the best potential of every employee is produced. For instance, the company has dedicated substantial amount of its vast revenue and profits to employee reward and compensation system. The packages provided to employees for their work is worth it since at the end of it all the employees are motivated to work for the best of the company. The organizational culture created by the human resource team is one that is aligned to the strategic objectives of the company. Quality assurance is among the strategic objectives of the company.
Tesco has low cost policies. This performance objective depends on the efficiency of the internal operations of the company. When the company is able to be effective internally, then it implies that it uses less money in running its operations. As a result the company will be in a better position to provide its customers with high quality goods and services at a reduced cost compared to its competitors. Resources are usually wasted or spent unnecessarily when trying to repair products or correct errors made. Such cost has been avoided by the company because of its effectiveness in its internal operations.
The effectiveness has been reflected in the cost of its products. UK companies have been experiencing effects of the recession for the fourth year now since 2008. However, Tesco is among the few companies in the retail industry that has continued to experience increased revenues and profitability despite the effects of the recession. With the low cost policy customers are still able to maintain their shopping volume.
Adjusting to the recession required flexibility as form of performance objective. The company has been able to achieve this objective and as a result maintained its competitiveness in the market. The market has a lot of changes and diversification. The company changes its marketing strategy to suit the opportunities available in the market. For instance, during the peak of the recession in 2008, customer purchase behavior changed drastically. This meant that the company had to adjust to the purchase behavior of that moment. It required constant updated analysis of the market situation and considering the four elements of market mix to identify ways in which they can be adjusted to fit the needs of the markets. In this way the company managed to maintain its sales volume, revenue base, and profit margins.
Flexibility also entails introduction of new services and products to enhance the experience of the customers when they visit Tesco stores. The latest products introduced by the company are mainly in the service industry. They include sales of houses, financial, insurance, and internet services. Another example of a new product is the Irish yoghurt. This was introduced with the realization of consumers appreciating natural products. In order to reduce the cost incurred through the process of product distribution, the company decided to have its own products that are used domestically on daily basis. This includes items such as milk, bread, butter, jam, ice cream etc. all these products bear the brand name of the company and they retail at cheaper prices compared to other brands produced by other companies. Approaches to Improve TQM and customer care There are numerous approaches that can be adopted in order to improve the quality of customer experience in an organization.
Leadership in a company needs to be active and involved in all aspect of business function. Leadership inspires success and it is therefore recommended that effective leadership and managerial skills be employed. The kind of leadership required is one that envisions quality of customer experience as means that would make a difference in the company intended impact to the consumers. Anybody can offer leadership, but the leadership needs to be vital to cause positive change in the organization. It is a practice that has to be adopted if companies want to improve the quality of customer experiences of its products and services).
The other solution to effective improvement of customer care is through a joint ownership of a company’s essential business function. Marketing, human resource, and customer service are important business functions of any company such that whenever a problem occurs with one of the function, there is need to have a collective ownership by all the three departments in order to fix the problem. When such a problem is solved by the triad, then effectiveness of the solution is optimized. There is also need to focus on strategically important customers. A company needs to collect data of all its potential customers and develop strategies of attracting them and sustaining their loyalty.
Conclusion
Total quality management can be defined as a means of seeking excellence in all functions of business in order to prevent possibilities of errors or mistakes and to create optimal customer satisfaction Quality is used a strategic weapon where companies use to compete within the current markets. Quality pleases the consumers who are the most important people for any business whether in service sector or deals with production of goods.
This document has provided a critical analysis of case studies that focus on how the UK based Tesco supermarket has introduced and developed a holistic system total quality management. Throughout the entire paper, it is apparent that techniques of TQM are important for a company to succeed and remain competitive in the marketplace. The techniques of TQM are applied on every essential function of a business including, Human Resource Management, Supply Chain Management, CRM, and marketing.
6 Ekim 2019 Pazar
Strategic Planning
Strategic planning is an organization's process of defining its strategy, or direction, and making decisions on allocating its resources to pursue this strategy. It may also extend to control mechanisms for guiding the implementation of the strategy.
Strategic planning became prominent in corporations during the 1960s and remains an important aspect of strategic management. It is executed by strategic planners or strategists, who involve many parties and research sources in their analysis of the organization and its relationship to the environment in which it competes.
Strategy has many definitions, but generally involves setting strategic goals, determining actions to achieve the goals, and mobilizing resources to execute the actions. A strategy describes how the ends (goals) will be achieved by the means (resources). The senior leadership of an organization is generally tasked with determining strategy. Strategy can be planned (intended) or can be observed as a pattern of activity (emergent) as the organization adapts to its environment or competes. Strategy includes processes of formulation and implementation; strategic planning helps coordinate both. However, strategic planning is analytical in nature (i.e., it involves "finding the dots"); strategy formation itself involves synthesis (i.e., "connecting the dots") via strategic thinking. As such, strategic planning occurs around the strategy formation activity.
Strategic planning is a process and thus has inputs, activities, outputs and outcomes. This process, like all processes, has constraints. It may be formal or informal and is typically iterative, with feedback loops throughout the process. Some elements of the process may be continuous and others may be executed as discrete projects with a definitive start and end during a period. Strategic planning provides inputs for strategic thinking, which guides the actual strategy formation. Typical strategic planning efforts include the evaluation of the organization's mission and strategic issues to strengthen current practices and determine the need for new programming. The end result is the organization's strategy, including a diagnosis of the environment and competitive situation, a guiding policy on what the organization intends to accomplish, and key initiatives or action plans for achieving the guiding policy.
Michael Porter wrote in 1980 that formulation of competitive strategy includes consideration of four key elements:
Company strengths and weaknesses;
Personal values of the key implementers (i.e., management and the board);
Industry opportunities and threats; and
Broader societal expectations.
The first two elements relate to factors internal to the company (i.e., the internal environment), while the latter two relate to factors external to the company (i.e., the external environment). These elements are considered throughout the strategic planning process.
Inputs
Data is gathered from a variety of sources, such as interviews with key executives, review of publicly available documents on the competition or market, primary research (e.g., visiting or observing competitor places of business or comparing prices), industry studies, etc. This may be part of a competitive intelligence program. Inputs are gathered to help support an understanding of the competitive environment and its opportunities and risks. Other inputs include an understanding of the values of key stakeholders, such as the board, shareholders, and senior management. These values may be captured in an organization's vision and mission statements.
Activities
Strategic planning activities include meetings and other communication among the organization's leaders and personnel to develop a common understanding regarding the competitive environment and what the organization's response to that environment (its strategy) should be. A variety of strategic planning tools may be completed as part of strategic planning activities.
The organization's leaders may have a series of questions they want to be answered in formulating the strategy and gathering inputs, such as: What is the organization's business or interest? What is considered "value" to the customer or constituency? Which products and services should be included or excluded from the portfolio of offerings? What is the geographic scope of the organization? What differentiates the organization from its competitors in the eyes of customers and other stakeholders? Which skills and resources should be developed within the organization?
Outputs
The essence of formulating competitive strategy is relating a company to its environment. The output of strategic planning includes documentation and communication describing the organization's strategy and how it should be implemented, sometimes referred to as the strategic plan. The strategy may include a diagnosis of the competitive situation, a guiding policy for achieving the organization's goals, and specific action plans to be implemented. A strategic plan may cover multiple years and be updated periodically.
The organization may use a variety of methods of measuring and monitoring progress towards the strategic objectives and measures established, such as a balanced scorecard or strategy map. Companies may also plan their financial statements (i.e., balance sheets, income statements, and cash flows) for several years when developing their strategic plan, as part of the goal-setting activity. The term operational budget is often used to describe the expected financial performance of an organization for the upcoming year. Capital budgets very often form the backbone of a strategic plan, especially as it increasingly relates to Information and Communications Technology (ICT).
Outcomes
Whilst the planning process produces outputs, as described above, strategy implementation or execution of the strategic plan produces Outcomes. These outcomes will invariably differ from the strategic goals. How close they are to the strategic goals and vision will determine the success or failure of the strategic plan. There will also arise unintended Outcomes, which need to be attended to and understood for strategy development and execution to be a true learning process.
Tools and approaches
A variety of analytical tools and techniques are used in strategic planning. These were developed by companies and management consulting firms to help provide a framework for strategic planning. Such tools include: PEST analysis, which covers the remote external environment elements such as political, economic, social and technological (PESTLE adds legal/regulatory and ecological/environmental); Scenario planning, which was originally used in the military and recently used by large corporations to analyze future scenarios. The flowchart to the right provides a process for classifying a phenomenon as a scenario in the intuitive logics tradition.
Porter five forces analysis, which addresses industry attractiveness and rivalry through
the bargaining power of buyers and suppliers and
the threat of substitute products and
new market entrants;
SWOT analysis, which addresses internal strengths and weaknesses relative to the external opportunities and threats;
Growth-share matrix, which involves portfolio decisions about which businesses to retain or divest;
and Balanced Scorecards and strategy maps, which creates a systematic framework for measuring and controlling strategy.
Responsive Evaluation, which uses a constructivist evaluation approach to identify the outcomes of objectives, which then supports future strategic planning exercises.
Simply extending financial statement projections into the future without consideration of the competitive environment is a form of financial planning or budgeting, not strategic planning. In business, the term "financial plan" is often used to describe the expected financial performance of an organization for future periods. The term "budget" is used for a financial plan for the upcoming year. A "forecast" is typically a combination of actual performance year-to date plus expected performance for the remainder of the year, so is generally compared against plan or budget and prior performance. The financial plans accompanying a strategic plan may include 3–5 years of projected performance.
McKinsey & Company developed a capability maturity model in the 1970s to describe the sophistication of planning processes, with strategic management ranked the highest. The four stages include: 1. Financial planning, which is primarily about annual budgets and a functional focus, with limited regard for the environment; 2. Forecast-based planning, which includes multi-year financial plans and more robust capital allocation across business units; 3. Externally oriented planning, where a thorough situation analysis and competitive assessment is performed; 4. Strategic management, where widespread strategic thinking occurs and a well-defined strategic framework is used. Categories 3 and 4 are strategic planning, while the first two categories are non-strategic or essentially financial planning. Each stage builds on the previous stages; that is, a stage 4 organization completes activities in all four categories.
For Michael C. Sekora, Project Socrates founder in the Reagan White House, during the cold war the economically challenged Soviet Union was able to keep on western military capabilities by using technology-based planning while the U.S. was slowed by finance-based planning, until the Reagan administration launched the Socrates Project, which should be revived to keep up with China as an emerging superpower.
Criticism
Strategic planning vs. strategic thinking
Strategic planning has been criticized for attempting to systematize strategic thinking and strategy formation, which are inherently creative activities involving synthesis or "connecting the dots" which cannot be systematized. Strategic planning can help coordinate planning efforts and measure progress on strategic goals, but that it occurs "around" the strategy formation process rather than within it. Further, strategic planning functions remote from the "front lines" or contact with the competitive environment (i.e., in business, facing the customer where the effect of competition is most clearly evident) may not be effective at supporting strategy efforts.
Strategic planning became prominent in corporations during the 1960s and remains an important aspect of strategic management. It is executed by strategic planners or strategists, who involve many parties and research sources in their analysis of the organization and its relationship to the environment in which it competes.
Strategy has many definitions, but generally involves setting strategic goals, determining actions to achieve the goals, and mobilizing resources to execute the actions. A strategy describes how the ends (goals) will be achieved by the means (resources). The senior leadership of an organization is generally tasked with determining strategy. Strategy can be planned (intended) or can be observed as a pattern of activity (emergent) as the organization adapts to its environment or competes. Strategy includes processes of formulation and implementation; strategic planning helps coordinate both. However, strategic planning is analytical in nature (i.e., it involves "finding the dots"); strategy formation itself involves synthesis (i.e., "connecting the dots") via strategic thinking. As such, strategic planning occurs around the strategy formation activity.
Strategic planning is a process and thus has inputs, activities, outputs and outcomes. This process, like all processes, has constraints. It may be formal or informal and is typically iterative, with feedback loops throughout the process. Some elements of the process may be continuous and others may be executed as discrete projects with a definitive start and end during a period. Strategic planning provides inputs for strategic thinking, which guides the actual strategy formation. Typical strategic planning efforts include the evaluation of the organization's mission and strategic issues to strengthen current practices and determine the need for new programming. The end result is the organization's strategy, including a diagnosis of the environment and competitive situation, a guiding policy on what the organization intends to accomplish, and key initiatives or action plans for achieving the guiding policy.
Michael Porter wrote in 1980 that formulation of competitive strategy includes consideration of four key elements:
Company strengths and weaknesses;
Personal values of the key implementers (i.e., management and the board);
Industry opportunities and threats; and
Broader societal expectations.
The first two elements relate to factors internal to the company (i.e., the internal environment), while the latter two relate to factors external to the company (i.e., the external environment). These elements are considered throughout the strategic planning process.
Inputs
Data is gathered from a variety of sources, such as interviews with key executives, review of publicly available documents on the competition or market, primary research (e.g., visiting or observing competitor places of business or comparing prices), industry studies, etc. This may be part of a competitive intelligence program. Inputs are gathered to help support an understanding of the competitive environment and its opportunities and risks. Other inputs include an understanding of the values of key stakeholders, such as the board, shareholders, and senior management. These values may be captured in an organization's vision and mission statements.
Activities
Strategic planning activities include meetings and other communication among the organization's leaders and personnel to develop a common understanding regarding the competitive environment and what the organization's response to that environment (its strategy) should be. A variety of strategic planning tools may be completed as part of strategic planning activities.
The organization's leaders may have a series of questions they want to be answered in formulating the strategy and gathering inputs, such as: What is the organization's business or interest? What is considered "value" to the customer or constituency? Which products and services should be included or excluded from the portfolio of offerings? What is the geographic scope of the organization? What differentiates the organization from its competitors in the eyes of customers and other stakeholders? Which skills and resources should be developed within the organization?
Outputs
The essence of formulating competitive strategy is relating a company to its environment. The output of strategic planning includes documentation and communication describing the organization's strategy and how it should be implemented, sometimes referred to as the strategic plan. The strategy may include a diagnosis of the competitive situation, a guiding policy for achieving the organization's goals, and specific action plans to be implemented. A strategic plan may cover multiple years and be updated periodically.
The organization may use a variety of methods of measuring and monitoring progress towards the strategic objectives and measures established, such as a balanced scorecard or strategy map. Companies may also plan their financial statements (i.e., balance sheets, income statements, and cash flows) for several years when developing their strategic plan, as part of the goal-setting activity. The term operational budget is often used to describe the expected financial performance of an organization for the upcoming year. Capital budgets very often form the backbone of a strategic plan, especially as it increasingly relates to Information and Communications Technology (ICT).
Outcomes
Whilst the planning process produces outputs, as described above, strategy implementation or execution of the strategic plan produces Outcomes. These outcomes will invariably differ from the strategic goals. How close they are to the strategic goals and vision will determine the success or failure of the strategic plan. There will also arise unintended Outcomes, which need to be attended to and understood for strategy development and execution to be a true learning process.
Tools and approaches
A variety of analytical tools and techniques are used in strategic planning. These were developed by companies and management consulting firms to help provide a framework for strategic planning. Such tools include: PEST analysis, which covers the remote external environment elements such as political, economic, social and technological (PESTLE adds legal/regulatory and ecological/environmental); Scenario planning, which was originally used in the military and recently used by large corporations to analyze future scenarios. The flowchart to the right provides a process for classifying a phenomenon as a scenario in the intuitive logics tradition.
Porter five forces analysis, which addresses industry attractiveness and rivalry through
the bargaining power of buyers and suppliers and
the threat of substitute products and
new market entrants;
SWOT analysis, which addresses internal strengths and weaknesses relative to the external opportunities and threats;
Growth-share matrix, which involves portfolio decisions about which businesses to retain or divest;
and Balanced Scorecards and strategy maps, which creates a systematic framework for measuring and controlling strategy.
Responsive Evaluation, which uses a constructivist evaluation approach to identify the outcomes of objectives, which then supports future strategic planning exercises.
Simply extending financial statement projections into the future without consideration of the competitive environment is a form of financial planning or budgeting, not strategic planning. In business, the term "financial plan" is often used to describe the expected financial performance of an organization for future periods. The term "budget" is used for a financial plan for the upcoming year. A "forecast" is typically a combination of actual performance year-to date plus expected performance for the remainder of the year, so is generally compared against plan or budget and prior performance. The financial plans accompanying a strategic plan may include 3–5 years of projected performance.
McKinsey & Company developed a capability maturity model in the 1970s to describe the sophistication of planning processes, with strategic management ranked the highest. The four stages include: 1. Financial planning, which is primarily about annual budgets and a functional focus, with limited regard for the environment; 2. Forecast-based planning, which includes multi-year financial plans and more robust capital allocation across business units; 3. Externally oriented planning, where a thorough situation analysis and competitive assessment is performed; 4. Strategic management, where widespread strategic thinking occurs and a well-defined strategic framework is used. Categories 3 and 4 are strategic planning, while the first two categories are non-strategic or essentially financial planning. Each stage builds on the previous stages; that is, a stage 4 organization completes activities in all four categories.
For Michael C. Sekora, Project Socrates founder in the Reagan White House, during the cold war the economically challenged Soviet Union was able to keep on western military capabilities by using technology-based planning while the U.S. was slowed by finance-based planning, until the Reagan administration launched the Socrates Project, which should be revived to keep up with China as an emerging superpower.
Criticism
Strategic planning vs. strategic thinking
Strategic planning has been criticized for attempting to systematize strategic thinking and strategy formation, which are inherently creative activities involving synthesis or "connecting the dots" which cannot be systematized. Strategic planning can help coordinate planning efforts and measure progress on strategic goals, but that it occurs "around" the strategy formation process rather than within it. Further, strategic planning functions remote from the "front lines" or contact with the competitive environment (i.e., in business, facing the customer where the effect of competition is most clearly evident) may not be effective at supporting strategy efforts.
Total Quality Management
Total quality management
Total quality management (TQM) consists of organization-wide efforts to "install and make permanent climate where employees continuously improve their ability to provide on demand products and services that customers will find of particular value."
"Total" emphasizes that departments in addition to production (for example sales and marketing, accounting and finance, engineering and design) are obligated to improve their operations; "management" emphasizes that executives are obligated to actively manage quality through funding, training, staffing, and goal setting. While there is no widely agreed-upon approach, TQM efforts typically draw heavily on the previously developed tools and techniques of quality control.
In the late 1970s and early 1980s, the developed countries of North America and Western Europe suffered economically in the face of stiff competition from Japan's ability to produce high-quality goods at competitive cost. For the first time since the start of the Industrial Revolution, the United Kingdom became a net importer of finished goods. The United States undertook its own soul-searching, expressed most pointedly in the television broadcast of If Japan Can... Why Can't We?.
Firms began reexamining the techniques of quality control invented over the past 50 years and how those techniques had been so successfully employed by the Japanese. It was in the midst of this economic turmoil that TQM took root.
The exact origin of the term "total quality management" is uncertain. It may have been first coined in the United Kingdom by the Department of Trade and Industry during its 1983 "National Quality Campaign". Or it may have been first coined in the United States by the Naval Air Systems Command to describe its quality-improvement efforts in 1985.
In the spring of 1984, an arm of the United States Navy asked some of its civilian researchers to assess statistical process control and the work of several prominent quality consultants and to make recommendations as to how to apply their approaches to improve the Navy's operational effectiveness. The recommendation was to adopt the teachings of W. Edwards Deming. The Navy branded the effort "Total Quality Management" in 1985.
From the Navy, TQM spread throughout the US Federal Government, resulting in the following: The creation of the Malcolm Baldrige National Quality Award in August 1987 The creation of the Federal Quality Institute in June 1988 The adoption of TQM by many elements of government and the armed forces, including the United States Department of Defense, United States Army, and United States Coast Guard. The US Environmental Protection Agency's Underground Storage Tanks program, which was established in 1985, also employed Total Quality Management to develop its management style. The private sector followed suit, flocking to TQM principles not only as a means to recapture market share from the Japanese, but also to remain competitive when bidding for contracts from the Federal Government since "total quality" requires involving suppliers, not just employees, in process improvement efforts.
There is no widespread agreement as to what TQM is and what actions it requires of organizations, however a review of the original United States Navy effort gives a rough understanding of what is involved in TQM. The key concepts in the TQM effort undertaken by the Navy in the 1980s include: "Quality is defined by customers' requirements."
"Top management has direct responsibility for quality improvement."
"Increased quality comes from systematic analysis and improvement of work processes."
"Quality improvement is a continuous effort and conducted throughout the organization."
The Navy used the following tools and techniques:
The PDCA cycle to drive issues to resolution
Ad hoc cross-functional teams (similar to quality circles) responsible for addressing immediate process issues Standing cross-functional teams responsible for the improvement of processes over the long term Active management participation through steering committees Use of the Seven Basic Tools of Quality to analyze quality-related issues While there is no generally accepted definition of TQM, several notable organizations have attempted to define it.
These include:
"Total Quality Management (TQM) in the Department of Defense is a strategy for continuously improving performance at every level, and in all areas of responsibility. It combines fundamental management techniques, existing improvement efforts, and specialized technical tools under a Development in the United States Features Notable definitions United States Department of Defense (1988) disciplined structure focused on continuously improving all processes. Improved performance is directed at satisfying such broad goals as cost, quality, schedule, and mission need and suitability.
Increasing user satisfaction is the overriding objective. The TQM effort builds on the pioneering work of Dr. W. E. Deming, Dr. J. M. Juran, and others, and benefits from both private and public sector experience with continuous process improvement." "A management philosophy and company practices that aim to harness the human and material resources of an organization in the most effective way to achieve the objectives of the organization."
"A management approach of an organisation centred on quality, based on the participation of all its members and aiming at long term success through customer satisfaction and benefits to all members of the organisation and society." "A term first used to describe a management approach to quality improvement. Since then, TQM has taken on many meanings. Simply put, it is a management approach to long-term success through customer satisfaction. TQM is based on all members of an organization participating in improving processes, products, services and the culture in which they work.
The methods for implementing this approach are found in the teachings of such quality leaders as Philip B. Crosby, W. Edwards Deming, Armand V. Feigenbaum, Kaoru Ishikawa and Joseph M. Juran." "TQM is a philosophy for managing an organisation in a way which enables it to meet stakeholder needs and expectations efficiently and effectively, without compromising ethical values." In the United States, the Baldrige Award, annually recognizes American businesses, education institutions, health care organizations, and government or nonprofit organizations that are role models for organizational performance excellence.
Organizations are judged on criteria from seven categories: 1. Leadership 2. Strategy 3. Customers 4. Measurement, analysis, and knowledge management 5. Workforce 6. Operations 7. Results
Example criteria are: British Standards Institution standard BS 7850-1:1992 International Organization for Standardization standard ISO 8402:1994 The American Society for Quality The Chartered Quality Institute Baldrige Excellence Framework
Total quality management. How do you obtain information on your customers’ satisfaction relative to their satisfaction with your competitors?
How do you select, collect, align, and integrate data and information for tracking daily operations?
How do you manage your workforce, its needs, and your needs to ensure continuity, prevent workforce reductions, and minimize the impact of workforce reductions, if they do become necessary?
Joseph M. Juran believed the Baldrige Award judging criteria to be the most widely accepted description of what TQM entails. During the 1990s, standards bodies in Belgium, France, Germany, Turkey, and the United Kingdom attempted to standardize TQM. While many of these standards have since been explicitly withdrawn, they all are effectively superseded by ISO 9000: Total Quality Management: Guide to Management Principles, London, England: British Standards Institution, 1992, The European Centre for Total Quality Management closed in August 2009, a casualty of the Great Recession.
TQM, as a vaguely defined quality management approach, was largely supplanted by the ISO 9000 collection of standards and their formal certification processes in the 1990s. Business interest in quality improvement under the TQM name also faded as Jack Welch's success attracted attention to Six Sigma and Toyota's success attracted attention to lean manufacturing, though the three share many of the same tools, techniques, and significant portions of the same philosophy.
TQM lives on in various national quality awards around the globe. The social scientist Bettina Warzecha (2017) describes the central concepts of Quality Management (QM), such as process orientation, controllability, and zero defects as modern myths. She demonstrates that zero-error processes and the associated illusion of controllability involve the epistemological problem of self-referentiality. The emphasis on the processes in QM also ignores the artificiality and thus arbitrariness of the difference between structure and process. Above all, the complexity of management cannot be reduced to standardized (mathematical) procedures. According to her, the risks and negative side effects of QM are usually greater than the benefits.
Total quality management (TQM) consists of organization-wide efforts to "install and make permanent climate where employees continuously improve their ability to provide on demand products and services that customers will find of particular value."
"Total" emphasizes that departments in addition to production (for example sales and marketing, accounting and finance, engineering and design) are obligated to improve their operations; "management" emphasizes that executives are obligated to actively manage quality through funding, training, staffing, and goal setting. While there is no widely agreed-upon approach, TQM efforts typically draw heavily on the previously developed tools and techniques of quality control.
In the late 1970s and early 1980s, the developed countries of North America and Western Europe suffered economically in the face of stiff competition from Japan's ability to produce high-quality goods at competitive cost. For the first time since the start of the Industrial Revolution, the United Kingdom became a net importer of finished goods. The United States undertook its own soul-searching, expressed most pointedly in the television broadcast of If Japan Can... Why Can't We?.
Firms began reexamining the techniques of quality control invented over the past 50 years and how those techniques had been so successfully employed by the Japanese. It was in the midst of this economic turmoil that TQM took root.
The exact origin of the term "total quality management" is uncertain. It may have been first coined in the United Kingdom by the Department of Trade and Industry during its 1983 "National Quality Campaign". Or it may have been first coined in the United States by the Naval Air Systems Command to describe its quality-improvement efforts in 1985.
In the spring of 1984, an arm of the United States Navy asked some of its civilian researchers to assess statistical process control and the work of several prominent quality consultants and to make recommendations as to how to apply their approaches to improve the Navy's operational effectiveness. The recommendation was to adopt the teachings of W. Edwards Deming. The Navy branded the effort "Total Quality Management" in 1985.
From the Navy, TQM spread throughout the US Federal Government, resulting in the following: The creation of the Malcolm Baldrige National Quality Award in August 1987 The creation of the Federal Quality Institute in June 1988 The adoption of TQM by many elements of government and the armed forces, including the United States Department of Defense, United States Army, and United States Coast Guard. The US Environmental Protection Agency's Underground Storage Tanks program, which was established in 1985, also employed Total Quality Management to develop its management style. The private sector followed suit, flocking to TQM principles not only as a means to recapture market share from the Japanese, but also to remain competitive when bidding for contracts from the Federal Government since "total quality" requires involving suppliers, not just employees, in process improvement efforts.
There is no widespread agreement as to what TQM is and what actions it requires of organizations, however a review of the original United States Navy effort gives a rough understanding of what is involved in TQM. The key concepts in the TQM effort undertaken by the Navy in the 1980s include: "Quality is defined by customers' requirements."
"Top management has direct responsibility for quality improvement."
"Increased quality comes from systematic analysis and improvement of work processes."
"Quality improvement is a continuous effort and conducted throughout the organization."
The Navy used the following tools and techniques:
The PDCA cycle to drive issues to resolution
Ad hoc cross-functional teams (similar to quality circles) responsible for addressing immediate process issues Standing cross-functional teams responsible for the improvement of processes over the long term Active management participation through steering committees Use of the Seven Basic Tools of Quality to analyze quality-related issues While there is no generally accepted definition of TQM, several notable organizations have attempted to define it.
These include:
"Total Quality Management (TQM) in the Department of Defense is a strategy for continuously improving performance at every level, and in all areas of responsibility. It combines fundamental management techniques, existing improvement efforts, and specialized technical tools under a Development in the United States Features Notable definitions United States Department of Defense (1988) disciplined structure focused on continuously improving all processes. Improved performance is directed at satisfying such broad goals as cost, quality, schedule, and mission need and suitability.
Increasing user satisfaction is the overriding objective. The TQM effort builds on the pioneering work of Dr. W. E. Deming, Dr. J. M. Juran, and others, and benefits from both private and public sector experience with continuous process improvement." "A management philosophy and company practices that aim to harness the human and material resources of an organization in the most effective way to achieve the objectives of the organization."
"A management approach of an organisation centred on quality, based on the participation of all its members and aiming at long term success through customer satisfaction and benefits to all members of the organisation and society." "A term first used to describe a management approach to quality improvement. Since then, TQM has taken on many meanings. Simply put, it is a management approach to long-term success through customer satisfaction. TQM is based on all members of an organization participating in improving processes, products, services and the culture in which they work.
The methods for implementing this approach are found in the teachings of such quality leaders as Philip B. Crosby, W. Edwards Deming, Armand V. Feigenbaum, Kaoru Ishikawa and Joseph M. Juran." "TQM is a philosophy for managing an organisation in a way which enables it to meet stakeholder needs and expectations efficiently and effectively, without compromising ethical values." In the United States, the Baldrige Award, annually recognizes American businesses, education institutions, health care organizations, and government or nonprofit organizations that are role models for organizational performance excellence.
Organizations are judged on criteria from seven categories: 1. Leadership 2. Strategy 3. Customers 4. Measurement, analysis, and knowledge management 5. Workforce 6. Operations 7. Results
Example criteria are: British Standards Institution standard BS 7850-1:1992 International Organization for Standardization standard ISO 8402:1994 The American Society for Quality The Chartered Quality Institute Baldrige Excellence Framework
Total quality management. How do you obtain information on your customers’ satisfaction relative to their satisfaction with your competitors?
How do you select, collect, align, and integrate data and information for tracking daily operations?
How do you manage your workforce, its needs, and your needs to ensure continuity, prevent workforce reductions, and minimize the impact of workforce reductions, if they do become necessary?
Joseph M. Juran believed the Baldrige Award judging criteria to be the most widely accepted description of what TQM entails. During the 1990s, standards bodies in Belgium, France, Germany, Turkey, and the United Kingdom attempted to standardize TQM. While many of these standards have since been explicitly withdrawn, they all are effectively superseded by ISO 9000: Total Quality Management: Guide to Management Principles, London, England: British Standards Institution, 1992, The European Centre for Total Quality Management closed in August 2009, a casualty of the Great Recession.
TQM, as a vaguely defined quality management approach, was largely supplanted by the ISO 9000 collection of standards and their formal certification processes in the 1990s. Business interest in quality improvement under the TQM name also faded as Jack Welch's success attracted attention to Six Sigma and Toyota's success attracted attention to lean manufacturing, though the three share many of the same tools, techniques, and significant portions of the same philosophy.
TQM lives on in various national quality awards around the globe. The social scientist Bettina Warzecha (2017) describes the central concepts of Quality Management (QM), such as process orientation, controllability, and zero defects as modern myths. She demonstrates that zero-error processes and the associated illusion of controllability involve the epistemological problem of self-referentiality. The emphasis on the processes in QM also ignores the artificiality and thus arbitrariness of the difference between structure and process. Above all, the complexity of management cannot be reduced to standardized (mathematical) procedures. According to her, the risks and negative side effects of QM are usually greater than the benefits.
Mission Vision Ethics
Mission
A mission statement is a brief
description of a company's fundamental purpose. It answers the question,
"Why does our business exist?"
The mission statement
articulates the company's purpose both for those in the organization and for
the public.
Mission statements are as
varied as the companies they describe as you'll see from the examples given
below.
However, all mission
statements will "broadly describe an organization's present capabilities,
customer focus, activities, and business makeup"
Why Having a Mission Statement Is Important
Every business should have a
mission statement, both as a way of ensuring that everyone in the organization
is "on the same page" and to serve as a baseline for effective
business planning.
The mission statement
definition itself is often the result of group consensus efforts; writing a
mission statement is viewed as a valuable team building exercise.
Because mission statements are
part of a company's public face, they are also often used in a company's marketing.
Businesses always include them on their websites, for instance, often in the
'About Us' section.
Sometimes a company's mission
statement even becomes the core of a business's advertising, such as when the
B.C. Credit Unions used the slogan "people before profits" as the
basis of their marketing campaign.
What's the Difference Between a Mission Statement & a
Vision Statement?
A mission statement focuses on
a company’s present state while a vision statement focuses on a company’s
future.
Think of it this way; a
mission statement answers the question "Who are we?" and the vision
statement answers the question "Where are we going?"
The Downside of Mission Statements
Properly crafted, a mission
statement can lend a strategic focus to an organization and motivate employees
to work together towards a common goal.
Unfortunately, mission
statements often consist of the latest buzzwords or business jargon and/or have
unrealistic or unattainable goals, all of which can negatively affect employee
morale.
Having a coherent, realistic
mission statement is fundamental to engaging your employees and fulfilling your
corporate goals.
Ways to achieve this include:
Having employee input/feedback on crafting
the mission statement
Explicitly recognizing the talents and
contributions of employees in the mission statement.
Examples of Mission Statements
Amazon: "To be Earth's
most customer centric company; to build a place where people can come to find
and discover anything they might want to buy online."
Apple: "Apple is
committed to bringing the best personal computing experience to students,
educators, creative professionals and consumers around the world through its
innovative hardware, software and internet offerings."
Virgin Atlantic Airways:
"... to embrace the human spirit and let it fly."
Tata Motors: "A USD 42
billion organisation, Tata Motors Limited is a leading global automobile
manufacturer with a portfolio that covers a wide range of cars, sports
vehicles, buses, trucks and defence vehicles. Our marque can be found on and
off-road in over 175 countries around the globe."
Walmart: "Walmart helps
people around the world save money and live better - anytime and anywhere - in
retail stores, online and through their mobile devices. "
Costco (a Walmart competitor) has
a very similar mission statement, "to continually provide our members with
quality goods and services at the lowest possible prices", which is
enshrined in its code of ethics.
The IRS: Provide America's
taxpayers top quality service by helping them understand and meet their tax
responsibilities and enforce the law with integrity and fairness to all.
The Canada Revenue Agency:
"To administer tax, benefits, and related programs, and to ensure
compliance on behalf of governments across Canada, thereby contributing to the
ongoing economic and social well-being of Canadians."
VISION
What Is a Vision Statement?
A vision statement is like a
photograph of your future business, which gives your business shape and
direction.
A vision statement provides
the direction and describes what the founder wants the organization to achieve
in the future; it’s more about the “what” of a business. It is different from a
mission statement, which describes the purpose of an organization and more
about the “how” of a business.
If you were to take a photo of
your future business now, what would it look like? What do you want your
business to be recognized for one day?
You need to have a crystal
clear vision when you start out, otherwise you can get easily lost in deciding
the best way forward. When you are making strategic decisions for your business
and even daily operation decisions, your vision statement will give you the
inspiration and targeted direction you need.
The Importance of a Vision Statement
Without a vision statement,
your business will lack motivation to keep going.
If you don’t aim for anything,
you might not hit anything. The more specific and clear you are, the better
your chances are at seeing your vision turn into reality.
The importance of a vision
statement cannot be overlooked; not only does it provide long term direction
and guidance, but it also gives you the inspiration and the necessary energy to
keep going when you feel lost.
Always keep your vision
statement alive by revisiting it regularly and communicating your vision with
other members of the team, to inspire and motivate them as well.
How to Craft an Inspiring Vision Statement
1. Dream big and use clear
language
An inspiring vision statement
should inform a clear direction and priorities for the organization, while
challenging all the team members to grow together. Based on our expert sources’
advice, we’ve got some great tips for you:
Imagine how you want the business to be
like in five to ten years.
Infuse the business’ values in the
statement.
Make sure that the statement is implying a
clear focus for the business.
Write your vision statement in the present
tense.
Use clear and concise language.
Ensure the statement is easily understood.
There are many different types
of vision statements and there is no wrong or right way to do it. The most
important thing is to resonate with it. It will always inspire you and give you
a clear targeted direction.
2. Get inspirations from the
successful companies.
Here is a shortlisted 20 good
examples for the new startups:
Short vision statements made
up of a few words only:
Disney. To make people happy.
Ikea. To create a better every
day life for the many people.
Microsoft. Empower every
person and every organization on the planet to achieve more.
Nike. Bring inspiration and
innovation to every athlete* in the world. (*If you have a body, you are an
athlete.)
Ford. People working together
as a lean, global enterprise to make people’s lives better through automotive
and mobility leadership.
Avon. To be the company that
best understands and satisfies the product, service and self-fulfillment needs
of women—globally.
Honda – in 1970. We will
destroy Yamaha.
Nike – in 1960s. Crush Adidas.
Philip Morris – in 1950s. Become
Mentally Stronger!
Grab a FREE Lifehack Guide to
train yourself to be mentally strong and take charge of life! Become Stronger. Knock
off RJR as the number one tobacco
company in the world.
Stanford University – in the
past. To become the Harvard of the West.
Apple. To produce
high-quality, low cost, easy to use products that incorporate high technology
for the individual.
Sony. To be a company that
inspires and fulfills your curiosity.
Facebook. To give people the
power to share and make the world more open and connected.
Walmart. To give customers a
wide assortment of their favorite products, Every Day Low Prices, guaranteed
satisfaction, friendly service, convenient hours (24 hours, 7 days a week) and
a great online shopping experience.
Coca Cola. To achieve
sustainable growth, we have established a vision with clear goals:
Profit: Maximizing return to share owners
while being mindful of our overall responsibilities.
People: Being a great place to work where
people are inspired to be the best they can be.
Portfolio: Bringing to the world a
portfolio of beverage brands that anticipate and satisfy peoples; desires and
needs.
Partners: Nurturing a winning network of
partners and building mutual loyalty.
Planet: Being a responsible global citizen
that makes a difference.
Heinz. Our VISION, quite
simply, is to be: “The World’s Premier Food Company, Offering Nutritious,
Superior Tasting Foods To People Everywhere.” Being the premier food company
does not mean being the biggest but it does mean being the best in terms of
consumer value, customer service, employee talent, and consistent and
predictable growth.
The Bottom Line
Remember, always keep your
vision statement up-to-date to direct your company’s actions.
Remember, once you reach your
vision, it needs to be changed. General Motors overtook Ford as #1 automotive
company in the world because once Ford’s goal was reached, they never updated
it.
Keep your vision statement
alive and visibly in front of you, revisit it and let it help direct your
actions and activities. This is the fun part: this is where you get to dream
really big and allow your imagination to fly as high as you want.
Don’t hold back, let your
creative juices flow and give yourself permission to explore what is possible
for your business.
Ethics
Business Ethics means
conformance to accepted professional high standards of conduct.
Most businesses prepare,
document, and publish their company policies derived from their basic beliefs
and philosophies. ,
Integrity and Company Values
Some companies publish theirs,
and some don't.
However, with today's
onslaught of major accounting practice frauds that have obliterated employee
pension funds and investor monies, it has become increasingly more important
for legitimate companies to state their positions relative to ethics.
Companies that do, at least
get categorized as having "good intentions"... those that don't seem
to fall in the other category, in general, of not having "good
intentions"
Business ethics examples cross
many subject areas. Companies based these on broad principles of integrity and
fairness regarding issues such as
accounting practices,
product quality,
customer satisfaction,
employee wages and benefits, and
local community and environmental
responsibilities, etc.
Some reasons to define your Company Values are:
define accepted / acceptable behaviors
promote high standards of practice
provide a benchmark for employees to use
for self-measurement
as an indication of company maturity
A solid ethics statement,
documented as the Company Values Statement, creates team commitment and
understanding relative to how the company desires to operate, and gets you
categorized as having "good intentions". It enables your team to
operationally focus accordingly, and it enables others who read it to
understand how the top of the organization visualizes the ethics of the
company.
Workplace Business Ethics
How do we apply business
ethics in the workplace?
Business ethics examples
include what we think about using company equipment and information that we
have access to as we perform our duties:
What we think about making copies of
personal (non-business) documents on company provided equipment.
What we think about faxing personal
(non-business) documents on company provided equipment.
What we think about making personal
(non-business) telephone calls on company provided equipment.
What we think about sending personal
(non-business) electronic mail messages on company provided computers and
Internet network connections.
These and other non-business
usages and actions can drag company profitability.
Other applications of Business
Ethics in the workplace might be:
Do you copy software to take home for
personal use?
Do you properly dispose of classified
information regardless of media type?
Do you "shoulder-surf" when a
colleague enters his or her password or view sensitive data?
Do you ask those who "tailgate"
upon entrance to the controlled-access office building to see their ID?
Business Ethics Policies
Just as we have federal,
state, and local laws, and business ethics that govern our actions on the big
playing field, we should have company policies that can be seen as the rules that
govern our internal game plans.
For company roles,
we have coaches to interpret the policies
and develop standards
team players to implement the rules through
practices and procedures
referees to act as auditors.
Within each policy, include
business ethics examples so the employees understand the policy.
Most companies formally
prepare, document, and publish corporate policies that provide guidance in
conducting business, serving the customer, and valuing people. Business ethics
examples of some corporate policies might be:
Business Ethics
Business Continuity
Equal Employment Opportunity
Export Compliance
Information Security
Software Compliance
Etc.
A Code of Ethics (Company
Values) go lock step with employee handbooks and other internal and marketing
documents. They portray the culture and ethics that define the expected
behaviors of the company and its employees. They should be the fundamental
principles by which the company conducts its business.
Some policies and details can
usually be found within your Employee Handbook. They emphasize specific topics
like...
Open Door
Sexual Harassment
Substance Abuse
Violence in the Workplace
Employee Code of Conduct.
Clean Desk
Information Handling
Acceptable Internet Usage
Acceptable E-mail Usage.
Employees need to review and
understand company's policies and procedures to ensure they follow the
company's game plan.
Below is a business ethics
examples for a company ethic policy.
"Integrity begins with
the judgments and decisions that each of us make as individuals. How do we
define personal integrity?
First, it means living the
highest standards of conduct, complying fully with the letter, spirit, and
intent of the laws, regulations, and ethical principles that govern us, while
complying with company policies, even when we may not agree with them. In a
worldwide enterprise, legitimate differences of opinion may arise as to the
appropriateness of the corporate policies across our global operations.
While such differences are
understandable, and can lead to a healthy discussion of choices, they do not
excuse us from observing the existing policies. We always welcome to voice our
concerns and to request exceptions for special circumstances through
appropriate leadership when warranted. It is important that we use our judgment
not only to consider the precise meaning of our stated values or policies, but
also the spirit and intended purpose of them as we make these choices.
Second, it means we have a
responsibility to voice concerns when we believe you or fellow employees act
contrary to existing policies.
Collectively, we are the
corporation, and the actions of one individual can damage the reputation of
all. When someone compromises the principles of ethics or policies, we should
either inform them directly, or use other available channels to voice our
concerns.
As the best option, we usually
choose to discuss the situation with a manager. Alternatively, we can bring our
concerns to functional experts such as Legal, Audit, Security, or Human
Resources.
We are dedicated to complying
fully with the letter, spirit, and intent of the laws, regulations, and ethical
principles that govern us. We will protect all confidential information we
receive from our customers or business partners."
Below is a business ethics
examples for law compliance policy.
"To enable compliance
with the law, one must be familiar with the law.
For most employees, advice or
training from experts would be required to understand the law as it pertains to
one’s job responsibilities. Common sense, one’s conscience, and good intentions
are sometimes not enough.
At a minimum, one must learn
enough about the laws and ethics that impact and govern one’s job
responsibilities in order to reveal potential issues, and then follow through
to get direction about the proper way to proceed.
Knowledge enables compliance
with the law, and action usually ensures compliance. This takes a high degree
of cooperation and communication, the essential elements of teamwork. As a
member of the our team, if one thinks some aspect of the business may be in
violation of the law, you should openly, directly voice and dialogue the issue
with their immediate manager, any member of the leadership team, or a
representative from the Legal Staff.
The worst scenario regarding a
potential legal issue is inaction. For one to ignore or to attempt to cover up
a potential problem and allow it to grow more severe over time could result in
negative consequences to the company and to the employee."
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