The Relevance and Importance of the Concept of Global Business Fitness - Assignment Example

GLOBAL BUSINESS FITNESS                                                   Introduction     Even during the economic crisis with falling GDP and highinflation, tackling with critical global issues and adopting stakeholders focus; existence of short term organization still prevails. Negligible focus was drawn on shareholders value maximization despite of the significance of corporate responsibility been publicly recognized; that emphasized the obsolete business replica. For better controlling the globally issues, leaders should not only take global approach, but should also broaden ahead of organizational and national boundaries. Such approach need to be holistic in nature comprising of corporal, intellectual, spiritual, group and societies. (The Global Business Framework, 2011)  Globally Responsible Leadership Initiative (GRLI) had rightly marked the need of responsible leadership for sustainable growth that has been reduced due to financial crisis. Leaders face many challenges while taking the company ahead. Leadership is focused on the team, career, company and shareholders. Career success leadership involves leading one’s own path or the direction to proceed. It also concerns developing flexibility, evaluating work-life, physical and emotional strength, solving problem and time management skills. Leading a team comprises of selecting the right practices, human resource management, developing the team, conflict management, effective technology consumption and helping the team members to develop simultaneously. Leadership in company focuses on the possible outcomes to attain sustainable strategic mission success through entrepreneurship, strategic thinking, organization control, external consciousness. Strategic advantage leadership deals with increasing the shareholders value to gain high return on investment through global-scenario planning. (Mastering the Leadership Challenges of the New Global Competitive Economy, n.d) Spiritual leadership is a mixed concept for positive leadership that engage motivating and inspiring workers through a inspirational  idea and a customs based in philanthropic values to produce a better dynamic workforce. This leadership also includes ethics, attitude and behavior required to motivate one and others to build sense of spiritual survival. This theory also entails the concept of positive human fitness and emotional well-being through advancement in workplace spirituality, optimistic psychology, character ethics and faith. Besides increasing the employee empowerment, dedication and knowledge, it also focused on the human health enriching approaches that benefit both the employees and the business. . (Matherly and Fry, 2006 p.6-9)   Kingfisher Plc Kingfisher plc is one of the European leading home retail companies acquiring third position in the world. It is established in 1982 by a takeover of British Woolworths succession by Paternoster Stores Ltd. Main brands of this company are Brico Depot, Screw fix, Castorama and B&Q. The company also has a joint venture business with Koctas Group in Turkey and has a strategic alliance with a Germany’s leading retail sector; Horn Bach. The esteemed company has also been included in Dow Jones Sustainability and FTSE4Good indexes. It has its global branches of 900 stores in eight countries with nearly 6 million customers and about 80 thousand employees generating sales of £10.4 billion. It has branches in China, Turkey, France, Ireland, UK, Poland, Russia and Spain rendering sales of about 1.9 billion internationally. Its main objective is to be a leading local home retail industry in the world by providing the consumers with better and sustainable home services. The company also focuses in providing high class services to the consumers; provides the shareholders with high return and bright career opportunities to the young society. It also commenced a seven point ‘Delivering Value plan to grant maximum profits to shareholders. With the increase in population, people are more concerned about the housing sector. Kingfisher focused on the market that can yield consumer with long term benefits. The company achieved global business strength by operating in a partnership with the world’s paramount suppliers to offer customers with quality products at the best price and convey long-term mutual growth. The company also concentrated in the field of environment; constructing eco-friendly houses controlling global warming. It also endow with bright careers and personal development for the employees over the eight countries. As it is one of the multinational company having employees over many countries, cultural diversity plays an important role among the work force. The international business yield more revenue and profit than the domestic business, from the countries of like France, Turkey, Ireland and Spain that has generated potential profit. In the year 2011, the company focused mainly on its management, capital and returns. Recently the company is rewarded with ‘Prestigious Platinum plus Standard’ by Business in the Community that distinguish company leading on sustainability agenda. (Kingfisher –at a glance, 2011) Global Business Fitness       Increasing global issues, world crisis and threat caused disruption in the future generation, especially to the individuals, group and the world. Such issues related to physical disorder, family and society getting spilt, wealth exploitation, scare resources, global warming, distinction between religions. Global business is the business that operates across domestic boundaries. Such business can be of 4 types like overseas trade, trade in services, portfolio investments and direct investments. In order to acquire fitness in the global market, the companies should be successful in acquiring the market share among all its competitors. (Smith and Rayment, 2011, p.11-12) The model of Global Fitness Framework illustrated the global issues identified relevant to acquire global leadership. (Smith and Rayment, 2011, p.53)   The above model demonstrated the organic level, old and new paradigm. Organic level highlights the leaders, managers, organization, nation and the society. Fitness plane explain the action managers take to make their decision better. It highlights the spiritual power, energy and flexibility or suppleness. Suppleness is construed as the lack of power, idea, resilience that can lead to rigid and inflexibility. Spiritual strength comprises of the obligation, confidence, and belief, whereas stamina involves the power to act and maintain the long term consistent belief. Suppleness involves acceptance of the true beliefs and approaches, convincing the followers and alteration of thoughts and idea. Holistic depth concerns the physical, intellectual and spiritual suitability. Physical involves body, assets, resources and weapons while mental involves decision making, analytical and logical and spiritual involves everything other than mental and physical. Physical and mental fitness is positive whereas spiritual fitness can also be negative. Spirituality is the experience that aims to provide people with direction, meaning, understanding, connectedness and support. Connectedness implies interaction with community, creation, God or any other paranormal power. The framework further demonstrated the category of mis-leadership in an organization and the need for worldwide fit management where the elements of such leadership push the effective leadership towards the diabolic leadership and global fit elements pushing the elements to a higher fit leadership that is interpreted as the actual leadership to be achieved to gain success. Effective leadership can help the mangers to take better decision and solve the global problems. (Smith and Rayment, 2011, p.135-136).The problem faced by the Global Fitness Model is that it mainly focuses on the spiritual leadership. But there are other styles of leadership like participative, autocratic, transformational, transactional those are not highlighted. The model lacks the clarity of interpretation relating to the global business strength. The model focuses on the spiritual strength not putting much stress on the primary physical and mental fitness. Kingfisher Plc has maintained all such strength in its company as a whole. As an organization, it is operated as a home improvement retail store through its subsidiaries by benefiting the customers with garden, kitchen, bathroom, bedroom and DIY products. The chairman marked strength of the company to survive successfully during the financial crisis. Its subsidiaries are having strong retail brands even during the bad times that are yielding enough sales and profit outside the boundaries of UK. The respected company also has a strong management team that has helped in taking prompt decisions. (Chairman’s statement, 2011) The company has maintained standardized quality in all products and services. It has helped customers and the society in reducing the environmental footprints in their house by providing them innovative and reasonable products and services. Most of its subsidiaries are providing eco products to the consumers in the stores. Eco products are those products that reduce the ecological impact and are made of recycled items. Kingfisher classified eco products as saving water, energy, nature, recycling and creating a healthy home. It maintained the spiritual fitness plane by acting on their beliefs, supporting the environment in making it a greener world. It aimed in saving energy and water by using low-energy light bulbs, insulation, energy resourceful appliances and aerating taps and showers. It also protected nature through bird feeders; promoting timber products, harvesting own seeds, producing bags by limiting the use of synthetic bags and using macrobiotic fertilizers. They also created the house healthier with minimal voc paints and eco-cleaning products. (Our products & services, 2011) The holistic depth can further be explained through a model below:- AGE PHYSICAL MENTAL SPIRITUAL 0-10 10 5 5 10_20 20 10 5 20-30 50 20 5 30-40 40 25 5 40-50 30 30 20 50-60 20 35 30 60-70 15 15 5 (Fitness levels of individual, 2011, p.64) The model above illustrated the levels of fitness an individual can have in an organization. It can be easily drawn from the chart that young people of age ranging from 20-30 can exert more physical strength in their work but people around 50s and 60s are having ill health. But the spiritual strength is high for the aged people compared to the young ones. Ages ranging from 20-50 are having an average mental strength in them with varied physical and spiritual fitness. Very low percentages of people are having spiritual leadership shown in the graph. It is figured out that till the age of 40, people are unaware about the spiritual strength. It can sited from the above chart, that an increase in the power of spirituality can lead to improved decision making that help an organization in accomplishing profitable results.   Relevance of Global Business Fitness   Fitness means one’s health, well-being and strength. Global fitness is the exposure of such strength and power of any issue or organization worldwide. Every organization does not have the ability to build its impression globally, that can be due to limited capital or lack of consumer satisfaction. But globally developing a particular organization not just infers expansion of business but it also includes understanding the diverse culture of the people of different regions. Kingfisher plc is one of the companies that have successfully built its business in many developed countries. It has taught people worldwide to stay and live better by providing many household products necessary in the home for every person. In 2004-2005 annual report, the board of Kingfisher Plc. identifies the matters related to social, environmental and ethical as an important issue. The issue involved the strategic risk management framework. The code of conduct also comprises of the important areas like employees, non-compliance accompanying with disciplinary issue. In relation to that the company launched a program concerning steps to responsible growth the aimed at the improvement of the social and environmental performance in their business. The agenda also involved energy management, stewardship, sustainable operation, and respect for diverse culture people, factory working conditions and store locality. The concerned program are implemented and the progress is been monitored within the company. The company’s viewpoint is that the stores should understand and react to the needs and preferences of the customers and the society. The company also suggested an assortment of support of vast range of local projects to the society in which they operate that involved supporting the schools and community with grants and materials; as B& Q China helped young people with education. It also worked with its partner organization to minimize diversity between the workforces and to provide targeted support. Kingfisher companies in Italy and UK are devoted in providing local DIY training to unemployed people, launching of awareness and prevention seminars inside the stores to reduce local crime. B& Q Taiwan and UK focused on the awareness program of 40s employment policy and on the diversity program addressing disability, age, culture and gender. Kingfisher never fell behind in raising environmental awareness that has been initiated in the stores of Castorama and B& Q offering take back schemes for consumers’ new batteries and through reduction of use of plastic bags by running a pilot scheme. The company also took initiative in planting timber trees to manage the forest, stores like Koctas also instigated FSC products in store promotional material and catalogues during 2004 and Castorama worked with neighbor organizations and suppliers to improve different items of garden furniture sourced from forests. Kingfisher also shore up UK based charity ‘Motivation’ by providing the people of developing countries with wheelchairs. (Social, environmental and ethical report, 2005) The company betrothed developments in standard, mechanism and sustainability by endorsing eco products consulting with the Bio Regional experts. The company also produced long term houses by providing eco information to the customers. B& Q launched an eco house with latest green technologies that helped the customer in understanding the low carbon footprint lodging. In 2010 they developed high class eco products together with the suppliers. It has also initiated carpet with recycled clothing; home paints made of paints gathered from recycling areas and developed garden decking from recycled extended polystyrene. Another subsidiary Castorama has made insulation products with toxic fee recycled Fibre. Brico Depot also developed low cost solar panel kit used to charge electrical devices. Foretica, Spain highlighted the company’s water saving products used for water management. It is also providing the customers with new energy saving centers and eco-shops. The business in association with the regulators, dealers and external technical professionals ensure the requirements of ERP technology. Not only that, Kingfisher has also promoted simple-to-use-products for the older and disabled persons. (Our products & services, 2011)   Importance of Global Business Fitness    In this world of global competitiveness and entry of new companies, it is very difficult to maintain the same goodwill and sustain in the long run.  Michael E. Porter had developed a model for business strategy and industry analysis that helped the managers to take better decisions. The model best illustrate the threat that a company has to face and should be aware of, to fight for those menaces to build them fit worldwide. Porters had described the model with 5 forces that outline the competition within a business.   (Jones and Hill, 2009, p.43) In Porter’s Five Forces model a strong competitive force is interpreted as a threat as it reduces profit whereas a weak competitive force is regarded as an opportunity as it yields greater profits. Managers need to work out proper strategic responses by focusing on the new opportunities and threats. Threats of entrants and substitutes involve the fear of competitors winning the market. These are also many companies that are not into the competition in the market but have the potential capability to do so in future. If the competitors spend more cost to enter the market, the barrier for the existing companies raise that leads to increase in competition. If the competitors provide better service at a reasonable cost, the consumer fall into a dilemma to choose cost over quality or vice versa. Such companies often discourage the existing companies as that may occur in shifting of customers to those companies. Kingfishers also had such few competitors like Gus plc, Metro AG, Tesco Plc, Ace Hardware etc that are also operating in retail sectors. Intense competition can decrease the market share and margin due to price pressures. In every market it competes with other home up gradation stores, eco-friendly products etc. The subsidiaries also compete with the local markets, hardware stores, warehouse clubs and supply stores. Threats also involve the cost conditions. In 2006, Kingfisher’s operating profit was affected due to increase in the price of the major raw materials like steel. This was due to rising of construction projects that had increased the demand for steel. Interest rates also had high impact on housing expense. In the year 2007 due to the economic trends; Bank of England had increased the interest rates that had a huge impact on the household expenses. As a result people were focusing on the standardized low cost products. This is a great opportunity for the competitors to provide high class services at a cost lower than Kingfisher’s products. The company been the largest home retailer, it has a strong brand portfolio providing outstanding services worldwide especially in Asian markets. Being a market leader it has to face many challenges to establish them as a globally fit organization. It has performed very well in emerging markets of Europe and Asian earning high sales revenue that has offset the weak performance in the domestic market. (Kingfisher Plc, 2008, p.20-29)   Conclusions and Recommendations The report significantly focused on the study of Global Business Fitness concerning the global issues of the organization and the need to adapt the global business framework. The description also enlightened the need for spiritual leadership in an organization and the importance of the spiritual strength, stamina and suppleness. The study also signifies the need of leadership an entrepreneur or a manger should possess in the business. The chapter explained in details the Global Business Framework focusing on the need of spiritual, mental and physical strength in a business, group or society. The study also includes a chart detailing with the fitness levels of individuals and the variation of such level of fitness depending on the ages of the individual. The study also revealed the category of mis-Leadership and the implementation of which can make an organization ignorant of important facts and information. With such models and framework, the company named Kingfisher Plc, is taken as a case to study the relevance and importance of global business fitness. The company facilitated in providing knowledge about the structure, expansion and growth in the global markets. The analysis presented the knowledge of the policies that made it a market leader with a strong brand expanding worldwide and the challenges it faced in tackling with the global issues. The report also illustrated the use of Porter’s five forces model in determining the threats faced by the company. It also highlighted the approach to fight with the global competitors, and with the other substitutes entering into the market. The purpose of the report is to make the leaders and the management aware of the fitness theories so as to apply them while taking significant decision. It is advised to relate the global framework leadership in the process of the business to facilitate decision making and achieving better results. Diabolic Leadership should not be entertained as it involves acquiring of limited information, skills, methods and results. Due to changing environment, inappropriate education, training and work experience and pitiable models, leaders are not able to take prompt decisions. Proper approach can be taken by following the Newtonian and quantum Paradigm that can help the leaders to better deal with global issues that has negative impact on the business. Leadership is not only important to the management, but also to the subordinates or the employees. The application of the global business framework on the employees can help them to yield better results in effective productivity. The Porters model can be relevant to the organization as well as the employees to understand the potential competitors and the substitutes. It also facilitated in acknowledging the reason for price increase and the techniques to make it cost effective. To increase the competitive advantage of the organization, the company has to focus on the needs, tastes and preferences of the customers. To attain a globally fit business, it is always necessary to leave a positive impact on the employees and society. Employees should participate in process and be aware of globalization, economic trends, financial crisis, and stakeholders’ expectations. The report will provide the readers the information required to maintain an organization’s strength globally and enable to attain sustainability in meeting the business needs as well as the customers need.                                   REFERENCES Chairman’s Report (2011), Annual Report and Accounts 2010/11, Available at: http://www.kingfisher.com/files/reports/annual_report_2011/index.asp?pageid=12 (accessed on August 27, 2011) Fitness levels of individual (2011), Cambridge MBA, Available at: http://webcache.googleusercontent.com/search?q=cache:EmUbECDW21UJ:cambridgemba.files.wordpress.com/2011/01/john-rayment-gbf-introduction3.pdf+global+business+fitness&cd=9&hl=en&ct=clnk&gl=in&source=www.google.co.in (accessed on August 27, 2011) Kingfisher-at a glance (2011), Kingfisher, Available at: http://www.kingfisher.com/files/pdf/at_a_glance.pdf (accessed on August 27, 2011) Kingfisher Plc,(2008), Data monitor, Available at: http://favormall.net/clientimages/38996/retailwholeleadcomp-kingfisherplc.pdf (accessed on August 27, 2011) Mastering the Leadership Challenges of the New Global Competitive Economy (n.d.), Masterpreneurship, Available at: http://www.emersonexecutive.com/ (accessed on August 27, 2011) Matherly, L, L, Fry, L, W, (2006), Spiritual Leadership as an Integrating Paradigm for Positive Leadership Development, Washington: Gallup Leadership Summit Smith J, Rayment, J, (2011), Misleadership, England: Gower Publishing Jones, G, Hill, C, (2009), Strategic Management Theory: An Integrated Approach, Mason: Cengage Learning   The Global Business Framework (2011), Alchemy For Managers, Available at: http://www.alchemyformanagers.co.uk/topics/7z6LByF6Rq7ABcBL.html (accessed on August 27, 2011)   Our products & services (2011), Kingfisher, Available at: https://www.kingfisher.com/responsibility/index.asp?pageid=34 (accessed on August 27, 2011) Social, environmental and ethical report (2005), Annual report & financial statements 2004/2005, Available at: http://www.kingfisher.com/files/reports/annual_report_2005/index.asp?pageid=58 (accessed on August 27, 2011)     Read More