This memo is addressed to you, sir, following the recent event that was broadcasted in various media houses pertaining the poor performance of the company in both the area of human resource management as well as poor performance of our products in the market in comparison with other substitute products. This memo will address these issues by providing viable ways that the company can use to address these issues.
In order to successfully come up with this, the solutions of it were crucial for us as a team to conduct research regarding the reasons behind these poor results in these two areas. After conducting our studies we realized that the company negative performance was due to poor management within the department of human resource as well as marketing department. We embarked on a research to determine which theories of management could be applied in the company to address the problem. We arrived at two crucial theories, one under each area of concern after comparing our problem with other companies which had experienced the same problem like the one that the company is faced with.
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In the area of human resource we arrived at employee empowerment theory and, on the other hand, in addressing the problem in the area of marketing we arrived at the theory of penetration pricing. The reason behind applying these two theories in addressing the problem facing the company was that they adequately addressed all management issues related to the problems faced by the company. The theories had also been successfully applied in Ford and Nike to address similar problems that our company is faced with.
Sir, the theories lead to the following specific actions in the company that we researched on. On the area of human resource as well as moving towards the direction of empowering employees, it is important first of all to understand what the term employee empowerment means. Employee empowerment can be defined as the act of giving employees’ powers and further allowing them to make decisions and choices without necessarily waiting for approval of the senior management. It is important also to note that the level of authority that is given to the workers is usually regulated by the management.
The company that we come across that applied the theory of management on empowering employees is Ford. The company had a similar problem where by the area of human resource were issues such as low levels of satisfactions among the employees, poor overall performance of the company and finally the presence of strong workers’ unions within the company. These issues prompted the management to empower employees whereby it lead to the culture of employees making decisions without having to consult the management. This leads to high level of satisfaction among the employees of the company, high level of creativity were witnessed in various areas of operations and finally the company overall performance improved greatly.
The application of the theory of empowerment of employees in the area of human resource management did lead to the following specific courses of actions within Ford. Participative management was employed as a mean of managing the company. The employees were given a room to make decisions without having to wait for authority from the senior management. This actions led to improvement of the poor results that the company was earlier recording. Thereby, sir, this theory can be applied in our company to address the problems being experienced in the area of human resource.
As a senior manager in the company I would have regulated the power given to the employees. This would help manage the actions of the employees that would lead to misuse of the company finances.
The other theory that can be applied in this case could be theory X and Y. The theory encourages the managers to apply participative management in dealing with employees who like their work and, on the other hand, apply authoritarian management style to those employees who do not like their work. This would help to reduce chances of misusage of the company resources by some employees especially who do not like their work. At the same time it would motivate employees who like their jobs to continue working hard thereby improving the company’s overall performance.
Sir, in the area of marketing we arrived at Nike Company which had applied the theory of penetration pricing to address the challenges that it had. Penetration pricing theory can be said to be the act of charging prices that are low for new products in the market with an aim of attracting customers, build the company’s market share as well as increase the company’s sales volumes. The strategy is very crucial as it helps in keeping the competitors from entering the market and it also helps in building a good image of the company among its customers. Nike was faced with the problem of low sales volume, poor images of the company among its customers and finally it market share was small compared to its competitors.
Application of the penetration theory in the company marketing strategy leads to the following specific actions. The company lowered the prices of the new products that it was launching with around $ 20 each. The company embarked on the campaign of informing the customers of its new products and finally the company offered discounts to customers who purchased more products.
Through the application of this theory the company, firstly, was able to achieve the following results; first, the company becomes one of the world leading sellers in sport shoes due to its lower prices that attracted many customers across the globe. Secondly, the company market share increased compared to its competitors. Thirdly, the company market share improved by 30% following the application of this theory as its new marketing strategy. Finally the company image among its customer greatly improved. Due to this improvement its customers become loyal to its products, whereby they prefer products from Nike in comparison from similar products offered by different manufacturers.
If I was a senior manager in this case I would have come up with the specific goals on the sales volumes that were to be achieved following the application the penetration pricing. I would also ensure that the market share to be achieved is specific in order to encourage the marketing department to work harder to achieve better results.
Another theory that can be applied in this case would be quality circles. The management can encourage employees to improve the quality of the products being produced in order to create a good image of the company among the costumers.
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