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The recent trouble at the Co-Op Bank Group highlight numerous weaknesses amongst the management which have damaged its ethical reputation and USP. “Friendly” banks – that is, a wide variety of types owned by members and customers rather than shareholders – are hugely popular around the world, with an estimated 20 per cent of the market for deposits and loans in Europe alone.read more...»
Tucked away in a dark corner of the #buss3 syllabus is a topic entitled ‘Competitive Organisational Structures’. It is my experience that there is a temptation for students to be fooled into thinking that this is simply a re-hash of the content they considered during #buss2. For most it probably is, but for those wishing to buy a ticket to ‘Success Ville’ and ride the A-train all the way to June 2014 the topic is, in fact, completely different.read more...»
Last week The Queen and the Duke of Edinburgh visited One Angel Square in Manchester to open the world's "greenest" office, the new £100 m 14-storey headquarters of The Co-Operative Group. Yet within 72 hours, celebrations turned to dismay when The Mail on Sunday printed a story linking The Reverend Paul Flowers, a former Co-Op Bank Chairman with illicit drug use.read more...»
"The 20th Century was about dozens of markets of millions of consumers. The 21st Century is about millions of markets of dozens of consumers."
So said Joe Kraus, founder of a search engine called Excite in the middle of the 1990s. Never heard of it? That's not surprising; in 1999 it was a $6.7bn enterprise with hundreds of employees, but a year later the dot-com bubble burst and it disappeared from the market place. But this quote is one of in an article about Peter Day's Radio 4 Archive programme to be broadcast tonight, and already recommended by Michael Owen in his blog below; forgive me for this repetition, but this is such a brilliant article that it really merits a second look, and hopefully between us we will convince you of that!read more...»
Innovation turns business markets upside down, it alters the price and use of resources, it creates and destroys revenue flows and profitability as well as the way we work.
Peter Day a former BBC presenter considers a significant changes in a BBC Radio 4 series this weekend. Consider how the internet, search engines and 3D printing or additive manufacturing might alter market production processes, job opportunities marketing and economies.
There is much to discover and discuss in his superb introductory article linked above. The broadcasts are linked here.
Over the summer I’ve kept spotting reference to an article that appeared in The Economist that has caused me to smile and reflect. With a busy term coming up, the advice seems very welcome: the biggest problem in the business world is too many distractions and interruptions, too many things done for the sake of form, and altogether too much busy-ness.
I’m well aware of my own time wasting habits, and I see plenty of it going on around me too. Here are some of the key points that are raised:
I've just come across a web page that steered me onto one of my favourite topics (see below). I started putting links together here which I intended to be about management in general, but the list has become dominated by an issue that I find particularly interesting: how the physical design of the workplace influences the performance of organisations. This is a debate that you can take in so many different directions, from organisational structures through to motivation and workforce performance.read more...»
The Co-Op has keen to highlight their ethical credentials as a key part of its marketing and positioning strategies. Supporters claimed that its mutuality was a more desirable form of ownership than PLCs.
The Banking Division has run into difficulties, and there have been significant changes in personnel within the last few weeks, in part as a response to major financial problems. On Friday there were reports that it had stopped offering loans to new business customers, and today The Independent on Sunday reported that The Co-Op Group's Finance Director Steve Humes had resigned. This followed the recent resignation of Brian Tootell after Moody's downgraded the Bank's bonds.
Mr Humes The Group Finance Director for the last two years, had been involved in managing the Co-Ops food operations, and may have had insufficient experience of its banking operations. Euan Sutherland the Co-Op's new CEO who was appointed in May, could be about to make significant changes in other key management positions.
The decision to stop lending to new business customer may imply that the there may be insufficient capital to support current obligations let alone new loans. The ethical bank may be about to meet its most serious crisis.
A couple of topics here: I’ve chosen to make the main focus one of stock control, but this blog is obviously about the rise of the online economy too.read more...»
The organisational structure and organisational culture at John Lewis Partnership, based around employee ownership, is distinctive and highly successful. But why? What is it about the "partnership" model at JLP which drives sales and customer service so high?
In these JLP videos, the partners themselves explain their perspectives on the business benefits of partnership in a highly competitive retail environment. The business benefits of the model are examined in more detail in the second video.
Some fantastic insights into culture here as well as the motivational impact of employee ownership.read more...»
Perhaps we’re all guilty of picking up on ideas or stories that support a particular view that you feel is right. Ever since I began reading about doubts over the benefits of outsourcing and offshoring I’ve seen more stories on the same theme. There was Bob, who had outsourced his own IT job to China. Then came a special report in The Economist that asked some searching and detailed questions too (you can read more here).
And now the definitive proof - the "Nation's Noodle" is coming home. Golden Wonder's pot noodles are currently made in China and shipped 10,000 miles to the UK, but the 191-year-old British company that makes the product has cancelled its Chinese contracts in favour of making its own noodles in Leeds.read more...»
Bureaucracy. It’s a pretty unloved word these days (not least because it’s quite tricky to spell). It suggests red tape, barriers to action, paperwork, process, and lethargic responses to change, with petty jobsworths hindering progress. It’s anti-innovation, it’s a means of state control, it’s a Kafka-esque, rule-based system ignorant of common sense. We talk of companies that have become too slow and have a deeply entrenched bureaucratic or role culture, and need slimming down to become more responsive to the market. We’re told it’s a bad thing.
Or is it?read more...»
Teleworking is a great concept to discuss in Business Studies, as the topic covers everything from organisation to leadership, motivation and business culture. Recently I wrote about trouble for teleworkers, following after the findings of a report that suggested that many potential teleworkers fret that time away from the office means missing out on promotion opportunities. Apparently, the report by the London Business School finds that companies still reward ‘presenteeism’; telecommuters are less likely to be promoted because they aren't present in the office.
Now we learn that Yahoo are to place severe restrictions on opportunities for teleworking, promoting more interesting debate and coverage. For one thing, the boss of Yahoo is female. You might think this point irrelevant, but to many commentators, this is yet another angle to a fascinating debate….read more...»
Could businesses rediscover an enthusiasm for mergers, which was largely lost after the last merger bubble burst in the run up to the financial
crisis of 2008?
According to The Economist, some of the right conditions are in place. Interest rates remain very low, and most mergers are built on the back of borrowed money. At the same time (to the surprise of many) a lot of firms are sitting on vast cash reserves. Perhaps all that is needed now is the appetite for risk that is probably behind many of these bold moves, at least in the past.read more...»
I've been researching the rapid growth of Chinese technology firm Huawei this week and came across a feature of Hauwei#s leadership structure which stopped me dead in my tracks. Most big companies have one CEO (Chief Executive Officer). But, Huawei has decided to do things differently. It has decide to have three!read more...»
If you had lasagne last night you might be wondering if it was the last remains of the non-running hurdler "100% Pure Beef". Findus have a major problem to resolve after tests showed that their lasagne had been made from horsemeat.
The central thrust of their argument is that the advantages of offshoring work (outsourcing overseas) are falling, fast. The logic of returning work to the developed economies looks fairly convincing.read more...»
Here’s a funny story to accompany a more serious post about the future of outsourcing – which is where a firm hires the services of outside companies to perform a business process currently completed ‘in house’.
Apparently one US worker hired people in China do his work. Having outsourced his job, 'Bob' would spend the day at work browsing sites on the internet. (If you believe it), the US-based software developer has been caught outsourcing his work to China for less than a fifth of his six figure salary - while he spent his time messing around on Facebook, LinkedIn, eBay and Reddit.read more...»
The important concept of limited liability is explained in this revision presentationread more...»
This revision presentation examines the choices of potential business structure for a startup.read more...»
Decision-making in business is about authority. A key question is whether authority should rest with senior management at the centre of a business (centralised), or whether it should be delegated further down the hierarchy, away from the centre (decentralised) - a question addressed by this revision presentation.read more...»
A brief introduction here to the concept of delayering - which involves the removal of layers in the organisational hierarchy. Delayering is a key tool or approach in strategic HRM.
I've had a long running interest in the office of the future and closely follow the debate about how we might be motivated by our workplace surroundings. As it gets more wintry, many of you might be thinking even about the practicalities of working from home. Some people even consider taking a sickie.read more...»
Royal Mail has reported a huge increase in half-year profits as growth in parcel deliveries made up for a continued fall in the number of letters being sent. This is something of a surprise to many as the business had looked to be in long term decline. The chief executive has summed up the way in which the firm has found success: "Royal Mail has experienced the negative impact of e-substitution, which is driving the structural decline in the traditional letters market. Conversely, we are seeing the positive impact that online retailing is having on our parcel volumes”.
Now that operations are in profit, this might speed up the business’ move from the public sector and into the private sector – a move referred to as privatisation. A future for the Royal Mail in the private sector was referred to in a previous blog. Here’s an update, and a reminder of some of the strategic issues at stake.read more...»
I was once told a story about a manager (but I don't know if this is an urban myth) who had a particular method for short-listing candidates for jobs. This manager would take the top half of a pile of applications and put them in a shredder and then state that the company should not employ anybody so unlucky.
Whilst the 1990s was awash with stories of the use of graphologers making judgements about candidates based upon their handwriting (I never use a little circle to dot my 'i's any more - this indicates an untrustworthy personality, apparently), the modern method is the use of software to score potential employees. In an era of high unemployment and therefore large numbers of applications this would seem to be a logical, if slightly 'big-brother' move forward.The BBC have put an interesting report on their website today that discusses the rise of the use of such software to short-list candidates and, as well as being useful to students studying recruitment they may find the tips on how to improve job application success very valuable.
Twenty years ago the Co-op had a share of the grocery market similar to Tesco’s. Then Tesco took off and left it behind. This isn’t so much a blog on the rise of Tesco, but picks up on a few ideas about where the Co-op may have gone wrong, and some indications that the co-operative ‘movement’ is fighting back.read more...»
Homeworking, teleworking or telecommuting – various terms are used to describe the phenomenon of working away from the traditional office. It’s a great Business Studies discussion point, because there’s so much you can consider in terms of business organisation, leadership, management and motivation. It’s probably fair to say that the idea has (so far) failed to reach the level of acceptance that boosters promised twenty years ago.read more...»
Anything that mentions former England Rugby Union supremo Sir Clive Woodward and his suggestions for good management of people is always worth a read and this article in the Harvard Business Review should be included.
In this blog from regular contributor to the HBR, Michael Schrage, he discusses Woodward's view that good managers can be improved by having good employees and learning from their activities. The article also got me wondering about how I much I have learnt about good teaching practice by observing the methods of the more able students or watching how savvy students use technology to communicate and attempting to mimic this with classroom activities or VLE resources.
Please remember this is an article written by an American who may not quite understand the intricacies of one of our most popular sports - either that or I have forgotten when the British Lions won the Rugby World Cup.read more...»
According to Robert Peston of the BBC the BAE EADS merger proposal has failed. Analysts, shareholders, staff and suppliers amongst others expect BAE's board to find a new strategy.read more...»
As the October 10th deadline approaches, the board of BAE face significant difficulties to
complete the proposed merger with EADS.
This simple idea can be used as a quick starter or plenary to review key terms in relation to ownership or converted to other topics.
This energetic revision activity covers knowledge but also removes students from their comfort zones and improves fitness. Warning: clasrooms may not be big enough and please remember health and safety.
This mini case study activity deals with the subject matter of ownership status but is more focussed on developing students skills at writing answers for Business Studies and demonstrating that business is not an exact science.
South Korean car makers Kia and Hyundai have both decided to stop night shifts in their factories, in response to demands from local trade unions. Yet just the opposite is happening in Europe and North America. What does this tell us?read more...»
This version of our Wipeout Challenge lesson starter asks students whether they can identify the names of real business format franchises from those listed.
Here is a version of our popular Give Me 5 lesson activity which can be used as part of teaching about franchises. The PowerPoint file provides instructions.
Often students are looking around to see how firms are affected by the legal environment that they operate in. All UK firms, big and small, are influenced by health and safety regulations, which might be starting to change.read more...»
Almost exactly a year ago we were asking if Apple was the world’s biggest company and 12 months later, perhaps it’s the biggest of all time.read more...»
Moya Greene, the CEO of Royal Mail, describes the currently net profit margin of the business as “skinny” and at a level that is unworthy of a commercial business. So it seems that she still has some way to go in her turnaround strategy for the Royal Mail before the privatisation process is completed.read more...»
The business news is full of stories covering the retrenchment strategies of various private sector firms such as Nokia, Sony, Thorntons, HP and others.The large job losses involved generate lots of headlines and in-depth analysis of whether the retrenchment strategy will work. We’ve been tracking some of these stories for students using our ResearchBuster on Retrenchment.
However, students need to be aware that retrenchment strategies are not just reserved for the private sector. Public sector organisations have been affected just as much by decisions to reduce and change the scope of operations and activities. Here are a few useful research examples to add to student notes.read more...»
I was reading today that BMW i8 engines are to be built in Birmingham. Why would the German-based car maker want to produce engines in the UK? What’s brought them here?
I often find this is a great induction session for students who are new to Business Studies, or those progressing from AS to A2 and are looking to apply their knowledge and understanding.read more...»
For most teachers and students, the Public Limited Company is seen to be the dominant type of private sector firm in the economy. But could that cease to be true? It’s not just the disappointing launch of Facebook as a PLC that has dented enthusiasm for this form of legal structure. A recent Economist article argues that the PLC may already be some way into a long term decline.read more...»
A big hat tip to Bill Bethell for spotting this fascinating insight here in this new BBC video about how Google organises the workplace to encourage innovation and productivity. Packed full with superb business studies insights…
When it’s summer, the office or classroom looks less and less inviting as the outdoors calls to us. It’s also a Business Studies classic discussion topic: designing an effective work place and contemplating the office of the future.
Then there are attempts to motivate people with a wacky workplace. I’ve come across a new video clip to bring this story up-to-date.
This updated revision quiz provides questions on franchises and franchising. Each time you take the quiz, 10 questions are drawn at random from the database of revision questions about franchising.
Students familiar with the concept of delayering will know that the benefits of successfully reducing the number of layers in the management hierarchy are not just limited to lower costs. Of course, there can be significant cost savings from delayering, particularly if the roles concerned are highly-paid. However, the strategic rationale for delayering is also usually linked with the need to improve the effectiveness of decision-making and making the business more responsive to customer needs.
There is a great example of delayering which was in the news yesterday (19 April 2012) concerning a decision by insurance firm Aviva to remove an entire layer from their organisational structure.read more...»
An excellent video here - part of Al Jazeera’s recent series on co-operatives, Sonia Gallego reports on a grassroots movement in the north of England, that provides an alternative to the dominant grocery supermarket and convenience store chains. Its goal: to provide fairness for both buyer and supplier, since it opened 15 years ago, this co-operative store has turned out profits and fair business practices as well.read more...»
A business studies lesson gem from an unusual source here - the politics team at the BBC! Germans use the word “mittelstand” for the millions of middle-sized companies that form the backbone of their booming economy, and some in Britain reckon the model could teach UK industries a few lessons…read more...»
Last Wednesday, Vestas the leading supplier of wind turbines posted a substantial operating loss of €166m on its operations. This has led to the resignation of the Chief Financial Officer Henrik Norremark, and the Chairman Bent Carlsen and two other main board directors. Norremark was about to be promoted to Chief Operating Officer, in control of the firm’s manufacturing operations.read more...»
You’re probably aware that the John Lewis department stores and Waitrose supermarket chain are doing very well at the moment, with sales figures rising strongly whilst retailers elsewhere are struggling. Several commentators have been keen to go beyond the marketing factors behind their success, instead paying closer attention to the firm’s unusual model of ownership and control.read more...»
Innovation is a business topic in its own right, and it also crops up a lot when there are discussions about the benefits and drawbacks of size – or economies and diseconomies of scale, in syllabus terms. This is a rich thread for evaluation, although it’s probably fair to say that poor rates of innovation and change are often quoted as a classic ‘diseconomy of scale’. In other words, big business is supposed to be bad at it.
But more and more big firms are setting out to challenge this view and prove themselves as innovators. The Economist have also recently added to this side of the argument.read more...»
If we are all to work until our late 60’s, or beyond, how much will the workplace need to be adapted to ensure that older workers can continue to contribute fully to the bottom line of their employers profits? The World at One today carried a 4-minute report from a BMW factory in Germany where works councils, unions and employers are collaborating to ensure that the factory is a healthy place that allows employees of all ages to work at the optimum rate, without holding up the production line and with as little physical and psychological stress as possible.
Sadly I cannot find this as a stand-alone report on i-player. However, the full programme is available here for the next 7 days - this report starts 37 minutes into the programme.
2011 has certainly raised a number of Business issues right to the top of the political and social agenda. One is the gradual realisation that our society is definitely ageing. It’s a cause for great celebration, but one obvious consequence is that we can’t really afford to fund generous pensions for a huge group who may be drawing that pension for thirty years. This means that it’s likely that we will have longer working lives than our parents.
As firms recognise this fact, they too are having to adjust their human resource plans.read more...»
It seems that this debate isn’t going to go away, which will surprise few of you. At a time when the economy is struggling, unemployment is rising and living standards are stagnant, why is one group in society getting so much wealthier? One pressure group, calling itself the ‘High Pay Commission’ (they are obviously trying to draw parallels with the government’s own Low Pay Commission) is in the news for publishing a report describing high executive pay as ‘corrosive’.read more...»
If you’re interested in different types of legal structure for business organisations – or football – you might be intrigued by the decision by football club Tottenham Hotspur to “de-list” its shares from the stock market and “go private”.read more...»
I enjoyed watching this programme last night in which Peter Jones investigated Michelle Mone, founder of Ultimo, and Richard Reed, co-founder of Innocent in order to find out ‘How we made our millions’. The programme looked at their very different characters as Peter discussed with them their childhoods, studied their business models, asked staff what they are like to work for, and considered what it was that drove them to be entrepreneurs.read more...»
An autumnal hat tip to Jill McAloon for recommending this superb edition of The Bottom Line (first broadcast on 3 Nov 2011) which spends the last 10 minutes considering the value of businesses having flat organisational structures.read more...»
This is a good article for students looking at the growth of firms, particularly those firms that have been established for some time but which appear to have got stuck in a phase of mature revenue growth, or worse, declining revenues.
A level business exam case studies often feature family-owned and managed businesses. In the typical scenario, the founder has stayed with the business after an initial period of success and rapid growth, employing other members of the family along the way. Eventually the business finds itself stuck in a rut, lacking ambition, financial resources and clear competitive advantages.
A new survey, reported here in the Telegraph, might help students understand some of the reasons for this problem.
Big firms often face huge organisational difficulties that can slow them down and cause costs and problems to spiral. So I was drawn to a BBC article the big businesses learning how to think small which appeared soon after Steve Jobs’ death. His insistence on “no committees” and talking to everyone at least once a week was, he said, enough to keep Apple focused, efficient and successful.
I don’t know if that’s true, but for big corporations, with their vast resources and bewildering bureaucracy, operating with the attitude of a technology start-up is a distant dream (but with exciting possibilities). Poor communication, low levels of motivation and a shortage of innovative ideas are classic diseconomies of scale that are typical of larger organisations.read more...»
This new revision quiz contains 30 questions about the basics of a business’ legal structure. It covers topics like sole traders, partnerships, limited companies, unlimited and limited liability. Each time the quiz is taken, 10 questions are loaded at random, making it ideal to use for repeated revision practice on a core business studies topic.