The Culture of the Business Organization - Research Paper Example

? CADBURY of the School: Background Information The company was founded way back in the 1824 by John Cadbury. The company leads globally in the market of chocolate confectionery. The company is subsidiary of Kraft Foods and it has its headquarters at Cadbury House, London in the United Kingdom. As of 2008, the company had total revenue of 5,384 million pounds. The operating income was 388 million pounds, with a net income of 364 million pounds. The company has over 80,000 employees worldwide. The company is the second largest after Mars incorporated in the whole world. The company operates in more than 50 countries globally. The company is ahead of other food companies like Nestle and Swiss conglomerate. Though the company has been facing stiff competition from small producers who advocate for healthy eating, the company has made it to thrive and it still performs well financially. Many British consumers love the company and its products. The main products of the company are fruit sweets, toffees, pastilles, bubble and chewing mints. Macro environment Those are the external and factors which cannot be controlled that influence the decision making of an organization. The macro environment also affects the strategies and the performance of the organization. The macro environment includes such factors as the economic factors, social conditions, and demographics, political and legal conditions within the organization. The other factors may include the natural factors, and changes in technology. The micro environment has influence on competitors, changes in the cultural tastes, disastrous weather, changes in the government regulations and changes in interest rates. Key Performance indicators These are indicators which measures the extent to which an organization has accomplished its objectives. They are the tools that many organizations use in order to track and keep record their progress and the success they have achieved in the organization. They consist of asset of measurable objectives which are predetermined for a specific organization and the indicators can involve any aspect of the organization which is considered to be important. For an organization to come up with an effective performance indicator, it must stipulate the mission of the organization first which would clearly define the goals and the objectives of the organization. The goals set out by the organization should be measurable and all the stakeholders in the organization must be involved in formulating such goals. The performance indicators can be presented in form of charts or reports. The key performance indicators provide an insight into the strengths and performance of an organization which is usually based or determined by the predefined measures specified by the organization. The method that an organization may chose to display the performance may vary, as it largely depends on the objective that was being measured and the audience which was targeted. Key performance indicators are different for each and every organization since they depend on the type of the business or organization and the specific objectives being measured. The objectives of any given organization can either be non financial or financial. In our case for the Cadbury, the organization uses number of sales made as the key performance indicator. The Cadbury Company also uses the comparison between different trading years profit with a target of the percentage they want in each and every year. Once a company or organization comes up with a specific key performance indicator, it becomes very hard to change it unless the goals of the organization change. The key performance indicator should be maintained stable so that the progress of the organization can be efficiently and effectively monitored. The Cadbury Company has tried to maintain its performance indicator for many years and this has enabled the company to monitor its progress against other competitors in the industry. This has also enabled the Cadbury Company remain the second largest company in the world after Mars Company. Another key performance indicator that the Cadbury Company has applied is the comparison of performance of its products in different countries that it operates in the word. The company has identified that the market of its products are strong in the Western markets, and the management has strengthened the diversification of the company’s operations to those markets. This has enabled the company to stay ahead of its competitors such as Nestle. The company has established markets in Latin America and India where the company’s products are in high demand. The other key market indicator of the company performance is the comp0arison of the sales of its products. The company has realized that Cadbury Dairy Milk sales more than the other products and the has increased its production of the product. The company has also been producing its products in ethical and sustainable manner thus increasing its sales amidst tight competition. How the organization may adapt and respond to the market forces The market force refers to the interaction of demand and supply in a market situation which gives a shape to the market economy. The term also refers to any given process which affects the production, management and development of material wealth. The Cadbury Company should closely monitor the demand and supply of its products. The company should increase the supply of the products in the areas with high demand such as India and Latin America. The company should also increase its Cadbury milk which has got higher demand in all areas more than the other products of the company. The managers of organizations should recognize early the changes in the marketing environment and the changes in the market forces so that they can prepare to capitalize and take advantage of the marketing opportunities. The managers should also be prepared to cope up with the threats and which may be created by the changes in the market forces. The managers should therefore monitor the market and which is crucial responsibility so that the organization may survive both in the long term and in the short term. The organization can also be in a position to achieve the goals. How an organization may achieve competitive advantage When an organization creates a competitive advantage, it usually receives many customers, the profit of the company becomes continuous, and the organization gains the surety of long term viability in the market. An organization like Cadbury can establish a long term comparative advantage through employing the following strategies. Cadbury can establish a brand loyalty whereby by it can give all of its products on name or one brand name. The company can also develop quality products and also build a quality character which would not be comparable in any way to its competitors. The products and services of the Cadbury Company should be reliable. The company management should also make good decisions in order to respond to both the external and internal factors which may either have a negative or positive impact o the organization. In order to achieve the competitive advantage the management must understand both the external and internal business environment. The management should be aware of what is happening in the world and inside their respective organizations. Through following the above strategies Cadbury Company can e3stablish a sustainable competitive advantage and stay ahead of its competitors. PESTEL Analysis The analysis refers to the study of an organization terms of political, Environmental, Social, Technological, Economic and Legal factors that affect a company or a given organization. Political Factors The political factors always have a huge impact and influence upon the way businesses are regulated and the spending powers associated with the consumers of the products. In political factors, government issues such as the tax rate, the governments stand on the marketing ethics and practices are put in to consideration. Other government issues include the stability of the political environment and the influences of the government policies on the relation of the business. The other issues are the government policy on religion and culture, and the government involvement in trading agreements. The political factors may influence the business in many ways. One way, the government can create either opportunities or advantages for the organization. On the negative way, the government can also place duties and obligations on some organizations. Economic Factors All organizations get affected by the global economic factors within the industry. The economic factors can either be the fiscal policies or the global interest rates. The climate or the status of the economy in the country that an organization operates determines how suppliers, customers and other stakeholders in the organization will behave in the society they live. When the economies change, all the organizations are affected not only in the countries they operate but all over the world. An organization which is distributed globally has to be aware of the economic conditions in all the countries it operates. Such an organization should put in place mechanisms or strategies that will protect the business or organization in case of economic crisis in the countries that the business operates. The managers of the organization should be cable of promoting the organization in case of economic crisis. Examples of economic factors which may affect an organization on national levels include the exchange rates, taxation, wages and salaries of the employees, inflation, the financial health of the economy of the nation, and the stage of the business life cycle. The economic factors may affect the living standards of the people which may in turn affect their consumption rates. It is true that the political changes are related to economic changes, which both relate to the influence of the changing environment. A perfect example is whereby there can be a change labor to a conservative environment. This would have a great impact on the taxation policies which in turn would affect the cost and price of chocolate production in Cadbury Company. If the tax rate increases in the countries that Cadbury Company operates, there would be an accompanied increase in the cost of production and thus an increase in the prices of the chocolate. This would affect the consumption of the product by the consumers. Social Factors The social factors mainly affect the culture of the business organization. The social factors include such issues as the lifestyles, values, and attitudes of the business organization. The social factors affect the consumer behavior in the product differentiation process. An increase in ethnic diversity affects the organization; the raise in divorce rate is another social factor. In our case, the Cadbury Company may be affected socially in the reduction of sales of its products since some customers may prefer to consumer products which are healthier and the ones which do not contain a lot of sugars. This may be so because of the different lifestyles that people may have. Social change can result to tremendous sales for the Cadbury Company if it may produce healthier products which can be consumed by everyone. The company can also operate in countries which are not affected by the lifestyles of the consumers. It is very crucial for all the organizations to value the different societies they may come across in the different countries that they operate. Cadbury Company should not engage in corruption practices so that it can enter and thrive in an international market. The company should not give any form of bribes in order to succeed in a given country. Cadbury Company should use white symbols in their advertising since the symbol is associated in pureness in the Western countries. The company should also deal with the products which are culturally acceptable in the areas that the company operates. Technological Factors Cadbury Company should be ready to invest in new technology. The company has to make quick and fast decisions. The company should apply the internet in most of its operations so that it can reduce on the operation costs. The company should put in to use the internet in the areas of searching for suppliers, handling of orders from the customers and consumers and the actual sales work. Through the application of the internet Cadbury Company has been able to create new products, it has reduced its production costs, it has also improved the quality of its products, and the com0pany has been able to innovate. Both the company and the consumers have benefited from the use of the internet. Legal Factors Since many countries differ in the laws and regulation, every organization or business wishing to enter in to the market should make sure that he or she understands well the laws of that country. A perfect example is the Cadbury Company where the managers of the organization conduct an extensive research before starting operations in the international markets. This has made the organization to venture in many countries and also expand its operations. References Randall Mork (2005). A History of Corporate Governance Around The World: Family Business Groups To Professional Managers. New York: University of Chicago Press. John Bradley (2011). Cadbury’s Purple Reign: The Story Behind Chocolate’s Best-Loved Brand. New York: John Wiley & Sons Nicole Lorat (2009). Market Audit and Analysis. Munich: GRIN Verlag Tony Bovaird, Elke Loffler (2009). Public Management and Governance. New York: Taylor & Francis. Cornelius Herzog (2010). 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