OCR A2 Economics Unit F585 June 2013 | AQA A2 BUSS4 | AQA AS Applied BS03 | IB B&M Royal Danish Bearings | OCR AS Business F292 | OCR A2 Business F297 | OCR AS Applied F242 | OCR A2 Applied F247
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From the employer's point of view, a zero hours contract is a great example of the benefits of the flexible labour market. They allow the employer to change the number of hours an employee works each week, with more shifts offered when they are busy, and fewer when they are not; costs can therefore be controlled and matched more exactly to revenue. They are particularly popular with the fast food outlets like McDonalds and Subway, and high street chains like Boots and Sports Direct. Those employers draw heavily on the younger end of the labour market, with many of their staff being students who are looking for flexible shifts that work around their study hours; for them a zero hours contract may work well. However it is also important to consider whether this will have a detrimental effect on the business's culture; with a high proportion of staff working irregular hours it may become much more difficult to instil a culture and sense of identity with the organisation.
We've previously highlighted the arrival of Harriet Green as the new CEO of Thomas Cook as a great research example for business students. New CEOs - particularly those recruited externally - tend to dive straight into "strategic reviews" which then result in changes in strategic direction, disposal of non-core businesses etc. Harriet Green is no exception. And in this YouTube clip, she outlines her proposed strategy for the ailing travel industry business.
The clip is almost two hours in length. However, it is the first section (from about 3 minutes 30 in) which is particularly interesting and relevant for business students. You get a strong sense of Harriet Green's personality from the presentation and a clear statement of her strategic objectives for the business.read more...»
Can Apple's CEO Tim Cook provide the right leadership to sustain the firm's reputation for innovation?
That's the question posed in this short Businessweek article which looks at three key factors which may determine whether Apple's innovative culture can be sustained and nurtured.
It's a good piece and well worth reading not just as an example of analysis and evaluation!read more...»
Students looking for a great example of how a UK business can transform its fortunes by focusing on the opportunities in emerging markets need look no further than JCB.read more...»
It is now six years since the global financial crisis triggered a prolonged downturn in economic activity. The UK economy, like other developed economies, has struggled to escape from a period of stagnant economic growth.
However, despite the weak economy, many UK firms have succeeded in significantly growing their revenues and profits.
Here are three examples of such businesses. Their strategies for success are different – but there are also some similarities.
Can you compare and contrast these three – and also identify some other businesses that have enjoyed similar success despite the tough economic environment?
You might also consider:
- What factors have driven revenue growth at each of the three
- Has their growth strategy been based on organic or external
- To what extent has their growth been driven by international
- Do you think their recent success can be sustained?
- What factors might that continued success depend on?
This new blog entry from the HBR is useful research material for students wanting to develop the link between organisational culture and competitive advantage.read more...»
Students attending our BUSS4 exam coaching workshops on Organisational Culture will be familiar with Jeff Skilling - the former CEO of Enron which collapsed so spectacularly over a decade ago.
The Enron collapse was closely linked to a strong, through ultimately toxic organisational culture that developed at Enron, which was an online energy trading business that rose quickly to become the 7th most valuable firm in the US.
The culture at Enron, described so powerfully in the film The Smartest Guys in the Room (and Broadway play of the same name) was a tough culture - a VERY tough culture. Students may recall the infamous policy of "rank and yank" in which 15% of Enron staff were dismissed each year as a result of Jeff Skilling's PRC (Performance Review Committee).
Skilling rose to the position of CEO in 2001 only to abruptly resign six months later. Soon after that, Enron collapsed in one of the most notorious corporate scandals of all time.
Jeff Skilling was sentenced to 24 years imprisonment back in May 2006 after he was found guilty on 19 counts of securities fraud, conspiracy, insider trading and lying to auditors.
However, it now looks likely that Skilling will end up serving only 10-11 years of his sentence. The news clip below explains why in more detail as does this news article from the BBC.read more...»
Online Clinic to Provide Support for BUSS4 Section A Research on Organisational Culture
Wednesday 22 May 2013 9.00 pm
We're holding a free online research clinic to support students completing their research on the BUSS4 Section A research theme of Organisational Culture.
This one hour session will just focus on Section A - not the other topics in Section B which we will cover in a later session in June.
Students - in order to participate (i.e. ask a question; comment on discussion threads) you will need to be logged in using your Facebook or Twitter account when the online revision clinic goes live at 9.00 p.m. on Wednesday 22 May 2013 - here on this blog entry.
- We cannot guarantee to answer all questions submitted
- Only submit one question at a time: multiple submissions of the same question will lead to you being blocked!
- Check whether the question you want to ask has already been answered - particularly if you join us mid-way during the clinic
- A full transcript of the clinic will be available on this blog URL as soon as the clinic has ended
I've become increasingly convinced from recent discussions with major accountancy firms and other major employers that workplace learning is going to challenge the preeminence of universities and colleges when it comes to obtaining higher level qualifications. The emergence of some industrial-strength Higher Apprenticeship programmes recently is a sign of that. And so to is the news that John Lewis Partnership is to extend its programme of workplace learning to offer Level 6 (university degree level) qualifications for some of its management.
This story would provide the basis for some excellent analysis by students exploring how and why John Lewis Partnership has decided to extend its internal training programmes.
Some clues can be found in extracts from the JLP press release: for example;
The so-called "University of John Lewis" will also offer a number of other development initiatives through its ‘skills programme’, which will include training in product knowledge, line management and leadership. read more...»
"Our partners give us our competitive edge, and if we want them to stay with us for the long term, we need to make sure that they have the right skills to meet the challenges we face in an evolving retail environment."
The horrific Bangladesh factory disaster has highlighted a number of business issues and proved a stark reminder of the global effects our purchasing decisions may or may not have on people halfway around the world. Tom White has already put up a blog with some initial thoughts; I thought I’d pose some further questions and examine some of the issues raised in that post.
A great starting point would be to listen to the ever-reliable Business Daily, from the BBC World Service. Their programme In the Balance invites guests to debate a topical business issue, and this week, the Rana Plaza disaster was under discussion.
One of the first questions to ask is to examine the extent to which firms which are supplied by such factories are responsible. There were more immediate causes, of course, such as the owner’s actions and the culpability of local regulation and enforcement (or lack of). But this is not the first time there have been such disasters, nor are the poor conditions in such factories surprising. So is it right that chains such as Primark continue to use such suppliers? Isn’t it their fault, with their demands for low prices and increased flexibility to meet the needs of the fast fashion market? Do they have a responsibility to ensure fair and safe working practices in factories they don’t own and which they are merely customers of? A lot of people would argue that yes, they do. But isn’t that the same as arguing we as consumers should audit the supply chains of the shops which we buy from? Primark is as much a customer as we are.
For Sony's CEO Kazou Hirai - a promise is a promise.
Back in April 2012, when Kazou Hirai took over as CEO from Sir Howard Stringer, he pledged to restore Sony's troubled Consumer Electronics division to profitability within one year.
In a significant programme of retrenchment, Sony has shed over 10,000 jobs (about 6% of the workforce), sold off major property assets and substantially cut production at the heavily loss-making Sony Television business (which is a significant part of the Consumer Electronics division). The result is expected to be Sony's first corporate profit for five years when it reports final result for the year to 31 March 2013 in May. However, the Consumer Electronics division remains unprofitable - Sony has not met its objective.
The reaction by Hirai? It is reported that forty of Sony’s top executives, including Hirai, are to give up bonuses worth between 30 and 50 per cent of their pay. The decision will save Sony around $10m, which is not particularly significant in financial terms.read more...»
How & Why. These are the two important words for students preparing for BUSS4 and as they practice their essay technique.
So, why is that? And how can they be used?
The source of their importance lies in the skill of analysis…read more...»
Many thanks to Joe Corcoran from Greenhead College for this superb advice on BUSS4 essay writing. Well worth putting these tips into practice!
Don't forget that Mark Mitchell, Joe's teaching colleague at Greenhead, has recently written a comprehensive guide to BUSS4 essay writing - which is now also available in a full-colour printed edition from the tutor2u online store! We have a couple of boxes left, so order one soon if you would like a copy in good time for the BUSS4 exam.read more...»
It is often claimed that the organisational culture of a business is formed and developed in the "shadow of the leader". And perhaps nowhere is this more true than the organisational culture of Ikea which was founded by Ingvar Kamprad. Here is a some evidence which helps explain the concept and also tells us more about the core values that have been used to build the Ikea business.read more...»
Let's face it. Nearly all of us associate Ikea with flatpack, affordable furniture. The Ikea brand has become a global success and, as we reported on the business blog recently, the Ikea format is well-positioned to achieve further success in key emerging markets.
However, Ikea's business portfolio is not just about furniture retailing.
In March 2013, Ikea announced that it is to partner with Marriott International to open a chain of three-star hotels. The chosen brand name for this joint venture between Marriott and Ikea is Moxy Hotels.read more...»
A superb article here from Reuters which examines the challenges facing Ikea as it accelerates its expansion into key emerging markets, notably China and India.
On the one hand, Ikea aims to exploit its global brand by applying the core retailing concept (epitomized by the store racetrack layout, flatpack goods etc) and core values that have enabled to it to become the world's largest furniture retailer.
However, Ikea also needs to be sensitive to the specific customer needs and wants in each national market if it is to meet customer expectations and compete effectively.read more...»
Kazou Hirai took over as CEO of Sony on 1 April 2012 replacing Howard Stringer. Hirai inherited a business with many problems and experiencing heavy losses. What has he done in his first year?read more...»
A simply stunning video here from the FT which is perfect for students wishing to gather some evidence on industries, firms and brands that have thrived despite the prolonged economic downturn in developed economies.read more...»
Has Nokia got a problem with its product portfolio? The market seems to think so. Nokia's shares down 13% today on news of disappointing sales for the first three months of 2013.
Nokia has enjoyed some recent success with its Lumia smartphone range. However, sales of its traditional more basic feature phones are very weak and facing intense competition in emerging markets against low-cost competitors.
So, Nokia's smartphones are doing well, but Nokia has only a small market share in a fast-growing market. If we were applying this to the Boston Matrix, Nokia's smartphones would probably be considered to be "problem children" or "question marks".
What about Nokia's feature phones. A falling market share (once the market leader) but in a low-growth market. That looks like a "Dog" in the Boston Matrix - or at least on the way to becoming a dog (maybe a puppy?).
Here is one of my all-time favourite video clips for business studies, featuring one of my business heroes - Herb Kelleher.
You might not have heard of Herb Kelleher. However, I highly recommend that you take a little time to find out more about him and the business he founded - Southwest Airlines. It is a fantastic example of a business which has identified organisational culture as a source of sustainable competitive advantage.
Kelleher identified the need for an employee-centered culture at Southwest as the way in which his airline could deliver outstanding customer service. Put simply, Herb believes that the "business of business is people".
In this short, five minute video, Herb explains why putting employees at the centre of Southwest's culture is so important to him.
About a minute into the video, Herb demonstrates a superb example of "analysis" using a logical chain of argument. The argument goes something like this:
...If the employees come first, then they’re happy…. A motivated employee treats the customer well. The customer is happy so they keep coming back, which pleases the shareholders.
A simply stunning video, that stands the test of time.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...»
Terrific insights here from Andy Street, the CEO of John Lewis Partnership, about how the concept of trust is so important in business success. Some short, sharp points here which help identify elements of the organisational culture at John Lewis Partnership and perhaps point to some of the reasons why JLP has been so successful in recent years despite the economic downturn. Essentially Andy Street sees trust as a source of competitive advantage. But it is hard won, and easily lost! Businesses - take note!read more...»
Our digital resource providing advice and guidance on effective essay writing for AQA BUSS4 has proved very popular with schools and colleges. Hundreds have bought a network licence which allows the resource to be distributed and /or printed to all students this year and beyond.
However, we've also had many requests from students to make printed, individual copies available. So now we have! The printer has just delivered 1,000 copies - which I suspect won;t last very long!
So we've had 1,000 copies printed - and they look great!
This is superb stimulus material for any business lesson strategic change and change management. The short animated video reports back on a recent Economist debate about whether businesses are too slow to adapt to change. It features some of our favourite examples and case studies, including Kodak and HMV. Some great quotes and simple, powerful ideas here.read more...»
An interesting, though obviously positive perspective here on Starbucks' approach to corporate social responsibility in urban America. CEO Howard Schultz also features - as you might expect.read more...»
Teachers who remember CSR as the research theme for Section A will remember Unilever's Project Shakhti as one of the key examples for that research. At the current round of tutor2u BUSS4 Revision Workshops, one suggestion for Section B is that students might research Unilever again to get some WOW examples for essays about CSR.
Students may not be familiar with the Unilever name at first, but will soon find that they are very familiar with many of the vast range of brands in the Unilever portfolio. They will also find that a Sustainable Living Plan is a core part of the Unilever culture, and applies to every stage of their supply chain; I know from one of my former students who is currently on an industrial placement with Unilever during his Business degree, that this starts at the heart of the business by establishing processes and habits in their offices and factories which reduce environmental impact, getting all staff to focus on reducing waste and recycling as much as possible.
Now available from tutor2u - the home of BUSS4! Author Mark Mitchell (Greenhead College) and Editor Jim Riley (tutor2u) provide students with a step-by-step guide to writing high-scoring essays in Section A and Section B of AQA A2 Business Studies BUSS4.
This guide is provided as a 38 page printable pdf document which may be photocopied and distributed by schools and colleges with a network licence.
This week's edition of The Bottom Line, hosted by Evan Davis on Radio 4, is about business turnarounds. The three guests this week have all been involved in rescuing companies and they share
their experiences, in which the culture of the organisation feature heavily. For those who are picking up on the tutor2u 10 companies to study, it is particularly useful as the first of these is Adam Crozier, Chief Executive of ITV
(and former CEO of Royal Mail). Different scale is offered by James Eden, Chief Executive and owner of
clothing brand Private White VC, and Nick Sanders, Head of Portfolio at
private equity firm Better Capital. Well worth getting students to listen and to write some compare-and-contrast notes.
Right. That's it. I'm off to work at Ikea. I just know I'd fit in...read more...»
Royal Mail is fast becoming a must-cover case study for advanced business students. Royal Mail is now well into a significant transformation programme under the leadership of CEO Moya Green. The business is preparing for and approaching privatisation and faces intense competition in the profitable parcels business.
So I thought I'd dig out a few links which might help students get started with exploring the Royal Mail case study.read more...»
Each year we attempt to pick a manageable selection of businesses which enable AQA BUSS4 students to combine their Section A and Section B research.
After prolonged discussion among the team on the BUSS4 exam coaching road show tour, we’ve now come up with our suggestions for 10 firms to follow for A2 business students wanting to deepen their understanding of real businesses as they prepare for their final exam papers this summer.
The tutor2u 10 is chosen entirely subjectively, based on the following criteria:
Each entrant has to have;
- Widespread media coverage
- Good mix of written, audio & visual materials
- An international/global dimension
- Strong potential for compare and contrast
- Strong connections with the AQA BUSS4 research theme for 2013
- Reasonable expectation of examiner familiarity
The list is shown below, with a brief comment on the reason for selection.read more...»
The stated mission, vision and values of a business should (in theory) provide a key insight into the strategy and culture of a business. Of course, it's not always the case that stated vision & values are consistent with the way a company does business (think...Enron). However, for many successful businesses there is a clear and sustained link between the two.
Set out below are a selection of web links that provide insights directly from the featured businesses into their vision, values and culture.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...»
Sony has sold part of its heritage and culture as part of Kazou Hirai's dramatic turnaround strategy with the sale and leaseback of one of its main buildings in Tokyo for 111.1 billion yen (£794m)
According to Sony's official press release regarding the property sale:
"Sony is transforming its business portfolio and reorganizing its assets in an effort to strengthen its corporate structure. This sale was conducted as a part of this reorganization."
This isn't the first time that Sony has opted for the use of sale and leaseback as a way of raising finance. in January 2013 Sony raised $1.1bn from the sale and leaseback of its corporate headquarters in New York.
The asset sales are designed to generate cash and repay Sony's high debts, which in turn are part of a major restructuring programme introduced by Hirai. He came into the job in Spring 2012 stating that "Sony must change: Sony will change".
As we've been preparing our BUSS4 Section A Toolkit, Exam Coaching Workshops and Teacher CPD events, we've come across some terrific YouTube videos that can be used effectively as research evidence and lesson materials for organisational culture.
We've put the best of these videos on a YouTube playlist which is embedded below. Have a browse through the playlist to see if there is anything you'd like to include in your BUSS4 research or teaching.read more...»
We've been focusing on Southwest Airlines during our BUSS4 CPD workshops on Section A Organisational Culture - and in particular on Herb Kelleher, the enigmatic CEO of the highly-successful low-cost airline.
Kelleher's obession with building an employee-centred culture provides stunning evidence for students who want an example of how a positive corporate culture can lead to business success.
Can flying be fun? That's the goal of Kelleher, who is determined to offer reliable on-time service at an affordable price. In this classic archived video from CBS, Steve Kroft profiles the airline president and his innovative approach to the business.
Stick with this video - it is quite long and little dated. But the insights for business students are priceless.read more...»
What is the link between organisational culture and long-term, sustained business success? The evidence of the corporate culture at Germany's mittelstand companies might help answer this question.
Mittelstand firms employ almost two-thirds of workers in Germany, so they are core to understanding the relative success of the German economy.
Most companies in the mittelstand are family-owned. They are "not too big, not too small". Family control enables quicker decision-making and a longer-term perspective to be taken.
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.Below are a three short videos which explain the mittelstand sector in Germany - packed full with useful evidence and insights for students! read more...»
We've had quite a few BUSS4 exam papers now and it is always interesting looking back over the choice of essay titles for Section B to get a feel for the style and focus of what is on offer!read more...»
Johnson & Scholes in their model of the Cultural Web of an Organisation point to the importance of stories as powerful descriptors and shapers of the culture of a business.
The more organisations you work in or with, the more you come across stories. They are told about a business to reinforce (or deny) a company's vision, values and way of doing business. Told well (and often) they help send strong messages to those who hear the stories, particularly those who work inside the business or customers who build loyalty to a business & brand.
One of the most famous "stories" in corporate culture is that of the Hewlett-Packard Garage at 367 Addison Avenue, Palo Alto, California. The HP Garage is known as the "birthplace of Silicon Valley".
As HP today describe the Garage:
Tucked away on a quiet, tree-lined residential street near Stanford University, the HP Garage stands today as the enduring symbol of innovation and the entrepreneurial spirit. It was in this humble 12x18 -foot building that college friends Bill Hewlett and Dave Packard first pursued the dream of a company of their own. Guided by an unwavering desire to develop innovative and useful products, the two men went on to blaze a trail at the forefront of the electronics revolution.
Take a look inside the Google campus here in this video which looks at how Google has approached the development of apps for the two key smartphone ecosystems - IOS and Android.
The video provides a useful and fascinating insight into the changing corporate culture of Google and the impact of Google CEO Larry Page who has transformed the business around the vision of innovative design (competing now with Apple?).
A good example of this is how Google redesigned the Gmail app that works on Apple's IOS operating system. It had to look like Gmail (Google) but have an Apple feel!
A real feature of this video is the importance of teamwork in app design - another strong feature of the Google culture.read more...»
Barclays new CEO Antony Jenkins has announced details of his strategic review in the wake of Libor-rigging, the bank's role in PPI mis-selling and other scandals.
Jenkins has pledged to rebuild the bank's reputation by fundamentally changing the culture under which its traders operate, including changes to payment protection insurance selling and staff bonuses.read more...»
Is there a better example of a firm that failed to embrace the need for change in the face of rapid technological advances than Kodak?
Kodak is a great example to use with students to introduce the concept of technological change and this video provides a thought-provoking piece of stimulus material!read more...»
A brief interview here with Stephen Elop in January 2013 which will be useful for teachers & students following the progress of Elop's turnaround strategy for Nokia.
Nokia is currently going through a significant change programme. Elop explains how the firm has focused Nokia employees on three key behaviours that are expected to drive the change in culture that Nokia needs: accountability (taking responsibility), urgency (doing things quicker) and empathy (being less arrogant).
Elop also explains briefly how the external environment is providing increasing threats to Nokia which needs increased planning and thinking.read more...»
When Judith McKenna (COO Asda) joined us for the Business Teacher National Conference in June 2012 I remember noting down how a strong corporate culture was identified as being a key competitive strength of both Asda and its parent company Walmart.
It's interesting looking through a series of useful resources on YouTube how the corporate culture of the firm, now the world's largest retailer, comes through particularly strongly from the annual Walmart "shareholders" meeting.read more...»
The banking sector has come under intense scrutiny in recent years as a result of a series of scandals which have lifted the lid on excessive risk-taking, illegal and unethical behaviour. Corporate culture has been blamed for many of the issues that have come to light.
In this article in the Guardian, five "experts" are asked for their views on how banks can change their culture.read more...»
If there is a better video introduction to the concept of organisational culture than this one, please send me the link!read more...»
The Royal Bank of Scotland has fined been fined £390m for attempting to rig Libor, the inter bank lending rate. The Financial Services Authority says wrongdoing was taking place two years after it was bailed out by the tax payer.
Stephen Hester, chief executive at RBS, said after the settlement: "Libor manipulation is an extreme example of a selfish and self-serving culture that took hold in parts of the banking industry during the financial boom."
The corporate culture inside RBS during the financial boom has certainly been laid bare by the Libor rate-fixing scandal.read more...»
Strong & iconic brands appear to be a big part of the attraction of the corporate culture at Mars, as illustrated in this super short video:read more...»
At times, it seems that Yahoo has had more CEOs than Chelsea FC have had managers. Yahoo has tried several times to change strategic direction through new leadership but has struggled to compete with Google in search engine and email.
However the appointment of former Google director Marissa Mayer appears to be working. Yahoo's share price has risen 30% since her appointment and for the first time in four years, Yahoo's revenues are now growing.read more...»
Usain Bolt will have a new boss to impersonate now. US billionaire John Malone's cable group, Liberty Global, has agreed to buy the UK's Virgin Media in a cash and stock deal worth $23.3bn (£15bn). The takeover will create the world's largest broadband company (with 25 million customers in 14 countries) and a stronger competitor for BSkyB in the UK which is the clear market leader with over 10 million household subscribers.read more...»