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FACTORS INFLUENCING CUSTOMER RETENTION IN SUDANESE MOBILE PHONE SECTOR TESTING AN INTEGRATED MODEL
FACTORS INFLUENCING CUSTOMER RETENTION IN SUDANESE MOBILE PHONE SECTOR: TESTING AN INTEGRATED MODEL
CHAPTER ONE
Introduction A firm’s value is derived from its financial, physical and intangible assets. With physical and financial assets fast becoming obsolete, firms are turning to intangible assets as a way to gain advantage over competitors. Intangible assets give an organization a competitive advantage because they are hard to duplicate and imitate. Having realized the importance of human capital, customer capital, social capital, and intellectual capital, companies are embracing different strategies with the aim of improving the welfare of their employees. A good example is the Southwest Airlines which emphasizes on training and development to provide its employees with skills to perform multiple jobs. By enhancing its human capital, Southwest Airlines has achieved a competitive edge over other airlines that have similar or even greater levels of financial and physical assets. Companies such as Southwest Airlines have also developed a culture in the work place that encourages employee’s sense of ownership through shared decision making and leadership (Bauer & Erdogan 2009). In addition, such organizations have developed proper compensation programs to motivate their workers.
Background
Starbucks Corporation was started in 1971 but it has since expanded to more than 16,000 locations in 50 different nations. The company was started by Jerry Baldwin, Zev Seigel and Gordon Bowker, who were lovers of fine coffee and exotic teas. Initially the business was registered as Starbucks Coffee, Tea and Spice but it was later renamed Starbucks Coffee Company. The company concentrates on selling high priced quality coffee to urban dwellers and those seeking sophisticated lifestyle experiences. From a humble beginning Starbucks Corporation has become one of the most rapid growing corporations in America. The company is not only renowned for its quality coffee but also its quality customer service and quality environment. As per April 2010, the company had 142,000 employees, worldwide (Booth & Strudwick, 2012).
The company depends on innovations to reduce transaction times. Some of the notable innovative products that the company has introduced include automatic espresso machines, pre-paid cards, and wireless internet service. The organization is very efficient and has registered monumental financial growth since its inception. Its strong financial performance allows it to create a positive working environment to the employees. In addition, the company uses its financial assets to pay its employees higher than the industrial standards. The company has also invested heavily on research and development and to expand its operations to foreign countries.
Although the company has registered huge success in the past, it relies heavily on its home market. This is an indication that the company needs to transform itself into a global organization in order to improve its revenue. At the same time, the company relies on a rather narrow product. In this regard, the company offers beverages as the main product. This is detrimental because relying on one product group makes the corporation vulnerable to changes in customer preferences. The corporation can address these threats by increasing its international presence. By so doing, the corporation should be able to tap into the still growing market for specialty coffee. In this regard, the company is already considering increasing its presence in BRIC countries where there is a sizable share of upper and middle classes.
Despite these opportunities, the corporation faces stiff competition from other players that are entering the coffee market. Already, Starbucks faces huge threat from McDonald’s which has established McCafes in numerous countries. Lower-priced competitors such as McCafe and Dunkin’ Donuts are no doubt likely to negatively the original Starbucks brand. In addition, unlike Starbucks, McCafe and Dunkin’ Donuts focus on multiple products which make them less susceptible to the escalating prices around the world. The company has also acquired a negative image from the media, a situation that is likely to affect its attractiveness especially to the young consumers. Most importantly, the 2008 economic crisis led to lower consumer spending for upscale goods including coffee. It is expected that the company could leverage on its workforce to increase the quality of products and services. To increase the working conditions of its employees Starbucks has initiated several strategies which will be evaluated in the rest of the paper.
Employee engagement
Weber (2005) defines employee engagement as the degree to which employees are fully involved in their work and the company. When employees become highly engaged, firms benefit from higher productivity, better customer service and lower turnover. Unfortunately, a survey conducted by Hilton (2008) indicates that in the U.S., 13% of the employees are disengaged, 76% are moderately engaged while 11% have high levels of engagement.
Employee engagement is influenced by many factors some of which are detailed below.
Team work
In each store, employees work in groups of three to six. Working together allows the employees to better serve the customers. The small teams of three to six, enhances communication while reducing role ambiguity. Small teams at the Starbucks also work well for the employees because they are able to arrive at the right decisions as fast as possible. Having a small number of workers in each store is also advantageous in that the intra-team conflict is minimized. All the employees within each Starbuck’s store work towards one common goal and as such the chances of natural disagreement and personal frustration are minimal. In addition, working in small teams reduces tension and unhealthy competition. This is important given that Starbucks Corporation relies heavily on good reputation to win over customers.
Improving team-work in the company
Although Starbucks continues to provide quality services to its customers through small teams of three to six workers, this strategy has led to work overload. To improve the situation there is need for the management to increase the number of team members in each store. Alternatively, the corporation could create a network of well trained baristas for temporary deployment on a need-to-need basis. The baristas could be sent to stores where workers are overloaded or where there is a temporary shortage of staff members. Finally, in order to improve the experiences of the team members there is need to give the managers the autonomy to devise their own training and development programs. However, these programs should meet the standards and guidelines set by the corporate headquarters.
Corporate culture
Starbuck’s corporation respect for workers is reflected in one of its six mission statements which is “…to provide great work environment and treat each other with respect and dignity.” (Serwer, 2004). The management always strives to have a satisfied workforce by holding constant meetings with the employees. When the workers have any grievances they can easily approach the management for remedy. On a more important note, Starbucks’ employees play an important role in the decision-making process. In particular, the employees are allowed to make decisions without needing any clearance from the management. Open communication in the company is encouraged by the matrix organizational structure. This flatter organizational structure in the company ensures information is easily communicated between the existing levels.
The management is required to treat the workers equally. In order to create a culture of cooperation and enhance interaction, the managers are required to co-work with the basic level staff in the front line. Constant interaction allows the management to identify any needs that the workers might have. The suggestions of the employees in every store are appreciated when formulating policies and plans to achieve their goals. Most importantly, the leaders help the employees to enrich their careers.
Starbucks Corporation always strives to create a culture that respects diversity and inclusion. The need to respect the values of its employees has become necessary because the organization has established its presence in many diverse countries. To promote the culture of inclusion among its leaders and its employees, the corporation uses the help of the following partner groups: Starbucks Access Alliance, Armed Forces Network, Black Partner Network, Asia Pacific Network, Pride Alliance Network and Women’s Development Network.
The corporation’s culture stresses the importance of people over profits. This aspect of the company’s culture was evident during the incident that happened in 2004. At the time, three employees were killed during a robbery at a Starbucks in Washington. The employees get to learn about the company’s culture through training programs. As a sign of being remorseful to the victims, the CEO declared all future profits from that store to be channeled to charities involving burglary investigation. The philosophy of respecting people over profits is also evident in the way the company deals with the protesters. Cases of discontentment among its workforce are always solved by positive agreements between the affected employees and the management. Becausing of respecting and constantly engaging the dissatisfied workers, Starbucks has been listed as one of the “100 Best Companies to Work For.” In order to pass over its culture, Starbucks readily embraces leadership development to identify future leaders and managers. It is also worth noting that the company is an Equal Employment Opportunity Employer and all partners are treated equally during the recruitment process. This process also applies during transfer, promotion, compensation, eligibility for promotion and termination.
In order to improve the relations between the employees, the corporation has a comprehensive Anti-Harassment and Anti-Retaliation Policy (Dexter, 2007). The workers are required to use the established “Reports Complaints” process to report abusive behavior to their store managers, district managers of the partners’ resources manager for the region (Pressman, 2007). This procedure is important in the workplace as it protects the integrity of the workers and assures them of their safety. Obviously, commitment from the employee to the employer is likely to improve only when a safe working environment is maintained. To further promote the satisfaction of its employees, the corporation regularly conducts Partner Voice Surveys. Through such surveys the management is able to address areas of concern while improving the employees’ working conditions.
Human resource strategies
According to Boulton, Libert and Samek (2000) human resource strategies refer to practices that are used to influence the employees’ behaviors, attitudes and performance. These practices are pivotal in attracting, motivating, rewarding and retaining workers. Some of the common human resource strategies that are commonly used include recruiting employees, selecting employees, work design, compensation, developing good labor and employee relations and training and development (Cateora & Graham, 2007). The following section will discuss how training and compensation have been used to improve the employees’ working environment at Starbuck’s corporation.
Training and development
According to Serwer (2004) the corporation is revered for its training and development programs. Before any training program is conducted, a need analysis is conducted. After a need a need analysis is conducted, the trainers choose an appropriate instructional technique and then use it train the employees. The employees require the training experience so that they can settle on their jobs well. After the training is conducted, an evaluation is performed by the HR department to assess the program’s strengths and weaknesses for future adjustment. Every employee in the corporation starts his job in paid training known as the ‘First Impressions.” During this sessions the employees how they can create a positive experience for customers.
The employees in the corporation are refereed to as partners. Employees are provided with adequate training in order to produce quality products and services. Training is uniform across all individual stores. However, employees moving from one store to another may face difficulties adapting to the new location because practices sometimes vary. Training is particularly beneficial to the transferred and borrowed partners. Remember also, the recruitment process is sometimes informal which means that recruits must be imparted with the necessary skills before they can start performing their duties. The orientation is carried out by the line management and partner resources department.
One of the common training programs that are tailored for the employees in the Starbucks Corporation is the Barista 100 training program. The Barista 100 training consists of internships, computer aided instruction, internet-based training, and on the job-training. The programs are particularly important to employees who switch primary store locations his program particularly targets the baristas. Another program is the Partner Café, and it a great learning resource for the current Starbucks partners. Through this program employees acquire new knowledge and ideas through formal learning and individual development discussions. The employees are trained by the store managers and established baristas. The Partner Café program is very personalized to meet the individual needs of each employee. According to Tharenou (2001) the first portion of training surrounds first impressions, customers while introducing the employees to the Starbucks experience. Afterwards, the barista then receive the Whole Bean, Brewed Coffee and Tea, and Food Case Training. As part of the program, 16 hours are dedicated towards training employees about bar practices, machine use and drink standards.
Continued training
The baristas undergo continuous training. In this regard, the corporation has a store portal, which has pertinent information about the recipes, tips and news about the company. Alternatively, baristas undergo further training during promotional periods, when a standards change occurs or when products and services are introduced. In this regard, in 2004, the corporation introduced the Coffee Master Program for the staff to learn more about the particularities of coffee. The program uses a blended training approach consisting of on-ob training, online portal work and classes. On-job training entails showing the employees how particular tasks are performed, after which the supervisors diminishes his or her role in training. On the other hand, internet-based training provides the employees with generic information and initial instruction. This form of training advantageous because employees can review the course contents from virtually anywhere. The Starbucks training programs not only gives the employees the necessarily skills to perform their jobs effectively, but all workers are treated equally. Just to illustrate, both the part-time workers and the corporate employees take up similar courses at the start of their career. In this case, if you apply for a managerial position at Starbucks Corporation, you must undergo immersion training which involves working in a Starbuck’s store and learning how to make coffee just like the baristas. To further enhance the skills of the employees, the corporation dedicates a whole day each year during which all stores all closed for training purposes.
Improving training and development programs
Although the available programs are effective for training and development purposes, the employees find it difficult to relate to the traditional idea of Starbucks. In order to address this problem, there is a need to come with more exciting programs. In this regard, the organization should consider initiating an exchange program and it expected that this new initiative is likely to increase motivation.
Another major problem with the current training programs is that they do not address the needs of the transferred and borrowed partners. To address this problem, it is important for the HR department to establish an electronic record detailing the training and performance of all its employees. For borrowed partners, they should report to their temporary stations before the required time, so that they can receive the necessary orientation.
Compensation
The corporation’s philosophy is to reward the outstanding employees. Starbuck’s corporation total package is known as “your special blend” and it offers a competitive pay, bonuses, paid time off, equity in the form of discounted stocks, adoption assistance, domestic partner benefits, free coffee and retirement savings plan (Thompson, Strickland & Gamble, 2007). The partners are also free to join numerous clubs and programs such as the Thrive Wellness program, Elite Athlete Assistance Program, Internal recognition program, and Career sabbaticals (Thompson, Strickland & Gamble, 2007).
One of the biggest challenges for the company has been to maintain a high level of employee performance, to attract a young workforce and give provide the part-time workers with an enabling working environment. To motivate these workers, the CEO thought it wise to extend the health benefits to all employee groups. It was expected that doing so would improve the employees’ confidence, reduce turnover and reduce hiring and training costs. Another important element of the Starbuck’s compensation program is the stock option plan. This initiative was introduced in 1991 by the CEO, Mr. Howard Schultz. By investing in the company, the employees are motivated to increase the sales in order to earn more dividends.
Beside the base pay, and the corporations, gives the employees financial incentives such as stock options, employee discounts and cash bonuses for stores going above the target sales. Although the corporation offers good benefits, it has decided to reduce some of them. This was the case in the UK at the end of the 2012 when the corporation resolved to cut the paid lunch breaks, sick leave and maternity benefits for thousands of British workers. The new contractual terms removed cash incentives and the bonus scheme for women returning from maternity leaves. The move was highly criticized by the workers, trade unions and the UK government. Workers were forced to sign the revised employment terms. This move affected 7,000 coffee shop staff across 750 stores and according to Booth and Strudiwick (2012) who work as reporters for the Guardian, the new changes were being affected in response to an increase in company’s tax bill. Although the revised terms and conditions could be considered necessary under the circumstances, workers were no doubt de-motivated in the process. It is also worth noting that Starbuck employees are not unionized. If problems arise in the work places, the employees are required to adhere to a formal grievance procedure. This has not gone down well with the employees, because they feel they do not have a viable channel through which they air their grievances. The corporation has also been at logger heads with different trade unions all over the world due to its unfair labour practices. A case in point was on 18th August 2007, when the Industrial Workers of the World (IWW) held widespread protests against the corporation. There is also a perception that its employees are dissatisfied and under-appreciated which poses the danger of negative service impairment.
In another different incident, on July 15th 2011, Starbucks’ workers in Chile staged huge protests seeking pay and benefits increases. The strike paralyzed its operations in its 31 cafes in Chile. The strike which was organized by the baristas drew huge support from the Chilean Labour Agency. To prevent such strikes in future maybe the corporation should increase the number of workers in order to reduce the workload.
In America the corporation has been accused of punishing workers for engaging in the activities organized by the Starbucks Workers Union. A case in point was in 2005 when Daniel Gross and another union activist were fired for engaging in protests against the corporation. The corporation has also been by its employees for unfair labour practices in Grand Rapids and Michigan. The corporation has been accused of failing to provide workers with good working conditions, guaranteed work hours and poor pay.
Despite Starbucks anti-union stance, some of its employees in the recent past have successfully become members of the Industrial Workers of the World. A case in point was on June 16th, 2006 when Starbucks employees in Manhattan announced their membership in the IWW Starbucks Workers Union. Similarly, in August 29th 2006, employees in Chicago’s Logan Square Starbucks filed declared their union membership.
Conclusion
The Starbucks Corporation has enhanced employee engagement by initiating extensive training and development programs. In addition, employee engagement has been achieved by increasing the frequency, quality and the number of workplace learning opportunities and employee orientation programs. The training programs and job design creates equality between those in front-line management and low-skilled workers. The culture at the Starbucks encourages interaction and communication between the management and the other employees. By increasing the level of communication throughout the existing hierarchies, the decision-making process and employees’ motivation has been enhanced. Employees’ motivation has also been achieved by giving all employees an attractive pay, stock options and numerous benefits. As a result turnover rate of Starbucks is much lower than other industries on average. However, in the recent past, the commitment of the employees has been affected by the company’s anti-union stance, lack of guaranteed work hours and work overload. The management needs to address these concerns by employing more employees and encouraging the employees to join the IWW Starbucks Workers Union.
References
Bauer, T., & Erdogan, B. (2009). Organizational behavior (1st ed.). New York: Flat World Knowledge
Booth, R. and Strudwick, P. (2012). Starbucks to slash paid lunch breaks. The Guardian
Boulton, R.E.S., Libert, B.D., & Samek, S.M. (2000), A Business Model for the New Economy. Journal of Business Strategy,
Cateora, P. R., Graham, J. L. (2007). International Marketing. New York: McGraw-HillIrwin.
Dexter, R. (2007). Forbidden Starbucks. Business Week Online, July, p.14.
Pressman, P. (2007, August 19). Archrivals Storm Starbucks. Business Week Online,p. 24
Serwer, A. (2004). Starbucks Taking on the World. Strategic Direction, vol. 20, issue7, 13-5
Tharenou, Phyllis. “The relationship of training motivation toparticipation in training and development.” Journal of Occupational and Organizational Psychology. 74. (2001): 599-621
Thompson, A. A., Strickland, A. J., & Gamble, J. (2007). Crafting and Executing Strategy: Text and Readings. Boston, MA: McGraw-Hill/Irwin.
Weber, Gretchen. “Preserving the Starbucks Counter Culture”. Workforce Management, February 2005, pp. 28-34
Family Heritage And Self Identity
Family Heritage And Self Identity
Many people in the United States or in other parts of the world have given attributes because of the influence of their family heritage (Collins 40). It is obvious that an Indian in from India subcontinent will have religion affecting their self identity than individuals from America. There are various literary works that address the issue of family heritage. Among them, is digging by Seamus Heaney and people in me by Robin Kelley. The indication from both works is that family heritage has an effect on the self identity of individuals. Various ethnic groups in United States have a stereotype that is common and unique to them as a tradition (Sutcliffe 21). This has the meaning that family heritage can either inhibiting or contributing to the self identity of an individual.
It is not rare that an individual will sit down and ponder about their family. While, in the process, there is surreal nostalgia that takes over. It depends on the growing up that an individual has been enjoying. Personally, it is the memories of visiting extended family, great place, and the regular summer trips. Parents ensure that there is a repetition of such activities until they shaped the tradition of families. In a family, most of the activities that they engage in were the same ones that my father participated in his childhood. According to him, despite various improvements his father and my grandfather was also part of the activities in his youth. I am not sure if my children will pass through the same activities, but there is a strong feeling that it is part of my family. Just like our family name one generation passes family traditions to the next generation.
It is normal within the American society that, in an ordinary day, a father will play catch with his son while the mother teaches were daughter to sew. Most American families engage in the activities without realization that it is a crucial part of the American tradition. Previous generations passed down the activities to the present generation, and that is shaping their tradition and that of the next generation. It is difficult to limit family heritage to singular customs. Family traditions end up limiting the self identity of an individual. When there is the occurrence of such incidences, it is the responsibility of an individual to make a decision on the life that they will lead.
Digging a poem by Seamus Heaney is an example of the way family heritage can either limit or contribute to the self identity of an individual. According to the poem, the grandfather of the persona used to dig for peat. He was skilled at digging and passed down the expertise to his father who initially uses it in his flower garden but later on in his potato farm (Collins 41). It is clear that family traditions contribute to the self identity of his father. Despite the fact that he admires to the work of his father and that of his grandfather, the poet does not allow family traditions to shape his self identity. He chooses to write, unlike his father and grandfather’s profession. However, towards the end there is an indication that maybe there was some influence from family heritage. He indicates that he digs using his pen. An indication that despite that his family heritage does not directly affect his self identity, there is a trace of influence.
The people in me by Robin Kelley is another example of influence by family heritage. According to the author, his family has been living with the question of race for a long time. It is a factor that is evidently affecting the elf identity of the writer (Steen 31). Many people still ask the writer what race that he comes from. Family heritage is not only affecting the writer but his sister and brother. Many people confuse her with people from Sri Lanka, Ethiopian or a Bengali despite the fact that she is an African-American woman. On the other hand, his brother had trouble explaining that he was an African-American because of his appearances (Steen 31). In accordance, this lead to him moving to Japan and married a Korean woman passing for Japanese. This has the meaning that family heritage has an impact on the self identity of the writer and his family.
Family heritage can either inhibiting or contributing to the self identity of an individual depending on the choice of an individual (Steen 31). In digging, personas father made a decision allow the traditions of his family to affect his self identity. On the other hand, the persona does not allow his family heritage to influence him. This is an indication that it is a personal decision the extent unto which heritage affects self identity. On the other hand, there is the people in me by Robin Kelley indicates a family having identity problem borrowed from their families. Contrary to the expectations, these individuals have little, if any, influence of their self identity.
Work Cited
Collins, Floyd. Seamus Heaney: The crisis of Identity. Delaware: University of Delaware Press, 2004.
Sutcliffe, C. Heaney and Clake. New York: Hienemann, 2006.
Steen, Shannon. AfroAsian Encounters. New York: New York University Press, 2006.
Factors Influencing Companies Supply Chain Partnership The Case Of Haier And Gome
Factors Influencing Companies’ Supply Chain Partnership: The Case Of Haier And GomeContents
TOC o “1-3” h z u HYPERLINK l “_Toc376179943” Factors Influencing Companies’ Supply Chain Partnership: The Case Of Haier And Gome PAGEREF _Toc376179943 h 1
HYPERLINK l “_Toc376179944” 1.0 CHAPTER 1: INTRODUCTION PAGEREF _Toc376179944 h 3
HYPERLINK l “_Toc376179945” 1.1 Background PAGEREF _Toc376179945 h 3
HYPERLINK l “_Toc376179946” 1.2 Research rationale PAGEREF _Toc376179946 h 4
HYPERLINK l “_Toc376179947” 1.3 Aim and Objectives PAGEREF _Toc376179947 h 5
HYPERLINK l “_Toc376179948” 1.4 Structure of the dissertation PAGEREF _Toc376179948 h 6
HYPERLINK l “_Toc376179949” CHAPTER 2 LITERATURE REVIEW PAGEREF _Toc376179949 h 7
HYPERLINK l “_Toc376179950” 2.1 Introduction PAGEREF _Toc376179950 h 7
HYPERLINK l “_Toc376179951” The concept of supply chain has different meanings in different times, while the understanding also varies from one research to another (Lemke et al., 2003). In relevant field, researchers illustrated supply chain from different perspectives. However, it is generally believed that formal researches on supply chain started at the 1960s. Stadtler (2005) pointed that Forrester (1961) first used system dynamics model to optimise the dynamic relationship between industrial upstream and downstream and put forward the term of supply chain, so that Forrester is recognised as the father of supply chain. Many modern supply chain design principles can track back to the production distribution system of Forrester. Since the 1990s, researches on the theories and application of supply chain management have attracted wide attention, while, with the continuous evolution of corporate development, there emerged many representative definitions of supply chain (Kopczak and Johnson, 2003; Kulp et al., 2004). Early researches defined supply chain as a network (Lee and Billington, 1992; Christopher, 1994; Ganeshan and Harrison, 1995). Lee and Billington (1992) pointed out that supply chain is a network in which an enterprise obtains raw materials, produces semi-finished products or finished products and then delivers the products to consumers through sales channels. Ganeshan and Harrison (1995) pointed out that supply chain is a logistics distribution selection network instrument, which enables enterprises to obtain raw materials, transform raw materials into semi-finished or finished products and then distribute the products to consumers. Later, researches defined supply chain as a dynamic process. Kalalota and Whinsto (1996) argued that supply chain is a series of independent steps and enterprises can meet customer needs if following these steps. Harrington (1997) pointed out that supply chain includes product flow, information flow, and capital flow, while supply chain is a two-way process which links all members from suppliers to consumers into a virtual aggregate, while supply chain also links procurement, manufacturing, and product/service distribution activities. At that time, supply chain took suppliers, manufacturers, and customers into account, while the entire supply chain was divided into different organically-linked processes. After 2000, the definition of supply chain emphasised that supply chain is a dynamic process and that the management plan needs to be continuously adjusted. Chopra and Meindl (2001) maintained that supply chain is a dynamic chain of information, product, and capital flow in various stages, while supply chain is made up of the mutual linkage between a series of upstream suppliers and downstream customers. PAGEREF _Toc376179951 h 7
HYPERLINK l “_Toc376179952” 2.3 Supply Chain Partnership PAGEREF _Toc376179952 h 10
HYPERLINK l “_Toc376179953” 2.3.1 Partnership PAGEREF _Toc376179953 h 10
HYPERLINK l “_Toc376179954” 2.3.2 Supply Chain Partnership PAGEREF _Toc376179954 h 11
HYPERLINK l “_Toc376179955” 2.4 Factors Influencing Supply Chain Partnership PAGEREF _Toc376179955 h 13
HYPERLINK l “_Toc376179956” 2.4.1 Enterprise-related Influencing Factors PAGEREF _Toc376179956 h 14
HYPERLINK l “_Toc376179957” (1) Factors Influencing Supplier Selection PAGEREF _Toc376179957 h 14
HYPERLINK l “_Toc376179958” (2) Factors Influencing Vendor Selection PAGEREF _Toc376179958 h 15
HYPERLINK l “_Toc376179959” 2.4.2 Partner-related Influencing Factors PAGEREF _Toc376179959 h 16
HYPERLINK l “_Toc376179960” 2.4.3 Influence of Major Factors on Supply Chain Partnership PAGEREF _Toc376179960 h 17
HYPERLINK l “_Toc376179961” 1) Influence of Organisational Structure on Supply Chain Partnership PAGEREF _Toc376179961 h 17
HYPERLINK l “_Toc376179962” 2) Influence of Organisational Culture on Supply Chain Partnership PAGEREF _Toc376179962 h 18
HYPERLINK l “_Toc376179963” 3) Influence of Organisational Reputation on Supply Chain Partnership PAGEREF _Toc376179963 h 20
HYPERLINK l “_Toc376179964” 2.5 Conclusion PAGEREF _Toc376179964 h 21
HYPERLINK l “_Toc376179965” 3.0 CHAPTER 3: METHODOLOGY PAGEREF _Toc376179965 h 22
HYPERLINK l “_Toc376179966” 3.1 Introduction PAGEREF _Toc376179966 h 22
HYPERLINK l “_Toc376179967” Research Philosophy PAGEREF _Toc376179967 h 22
HYPERLINK l “_Toc376179968” Research Approach PAGEREF _Toc376179968 h 23
HYPERLINK l “_Toc376179969” Research Strategy PAGEREF _Toc376179969 h 24
HYPERLINK l “_Toc376179970” 3.3.1 Case Study PAGEREF _Toc376179970 h 24
HYPERLINK l “_Toc376179971” 3.4.2 In-depth Interview PAGEREF _Toc376179971 h 25
HYPERLINK l “_Toc376179972” (1) Introduction of In-Depth Interview PAGEREF _Toc376179972 h 25
HYPERLINK l “_Toc376179973” (2) Interview Protocol PAGEREF _Toc376179973 h 26
HYPERLINK l “_Toc376179974” Research Method PAGEREF _Toc376179974 h 28
HYPERLINK l “_Toc376179975” Data collection and Analysis PAGEREF _Toc376179975 h 29
HYPERLINK l “_Toc376179976” Limitations of the Research PAGEREF _Toc376179976 h 30
HYPERLINK l “_Toc376179977” Ethics in Business Research PAGEREF _Toc376179977 h 30
HYPERLINK l “_Toc376179978” 3.2Conclusion PAGEREF _Toc376179978 h 31
HYPERLINK l “_Toc376179979” 4.0 CHAPTER 4: DATA ANALYSIS AND DISCUSSION PAGEREF _Toc376179979 h 31
HYPERLINK l “_Toc376179980” 4.1 Introduction PAGEREF _Toc376179980 h 31
HYPERLINK l “_Toc376179981” 4.2 Background of Case Companies PAGEREF _Toc376179981 h 32
HYPERLINK l “_Toc376179982” 4.3 The Current Supply Chain Partnership between Gome and Haier PAGEREF _Toc376179982 h 36
HYPERLINK l “_Toc376179983” 4.4 The Influence of Organisational Structure on Supply Chain Partnership PAGEREF _Toc376179983 h 39
HYPERLINK l “_Toc376179984” 4.5 The Influence of Organisational Culture on Supply Chain Partnership PAGEREF _Toc376179984 h 42
HYPERLINK l “_Toc376179985” 4.6 The Influence of Organisational Reputation on Supply Chain Partnership PAGEREF _Toc376179985 h 44
HYPERLINK l “_Toc376179986” 5.0 CHAPTER 5: CONCLUSIONS AND RECOMMENDATIONS PAGEREF _Toc376179986 h 48
HYPERLINK l “_Toc376179987” 5.1 Restatement of Study Aims and Objectives PAGEREF _Toc376179987 h 48
HYPERLINK l “_Toc376179988” 5.1 The Current Supply Chain Partnership between Gome and Haier PAGEREF _Toc376179988 h 48
HYPERLINK l “_Toc376179989” 5.2 The Influence of Organisational Structure on Supply Chain Partnership PAGEREF _Toc376179989 h 49
HYPERLINK l “_Toc376179990” 5.3 The Influence of Organisational Culture on Supply Chain Partnership PAGEREF _Toc376179990 h 50
HYPERLINK l “_Toc376179991” 5.4 The Influence of Organisational Reputation on Supply Chain Partnership PAGEREF _Toc376179991 h 51
HYPERLINK l “_Toc376179992” 5.2 Recommendations PAGEREF _Toc376179992 h 51
HYPERLINK l “_Toc376179993” 5.3 Research Limitations PAGEREF _Toc376179993 h 52
HYPERLINK l “_Toc376179994” 5.4 Future Research PAGEREF _Toc376179994 h 52
1.0 CHAPTER 1: INTRODUCTION1.1 BackgroundWith the increasingly fierce competition in global market, the growingly short product life cycle, and increasingly high customer expectation, the market demand also becomes growingly individualised. Changes in market frequently expose the disadvantages of traditional operation models, while the competition among upstream and downstream enterprises hinders enterprises in the way of development. Under such situation, more and more enterprises begin to attach importance to supply chain management. Chow et al. (2008) argued that, with the intensifying global market competition and the growing importance of supply chain partnership (SCP), the competition in the strength of supply chains becomes a mainstream tend in market competition nowadays.
In supply chain management, partnership between companies is a factor that determines whether the supply chain will succeed or not (Wisner et al., 2005). Supply chain partnership is a tailored business relationship based on mutual trust, openness, shared risk and shared rewards (Lambert et al., 2004). Survey of China Federation of Logistics & Purchasing (CFLP), however, found that the failure rate of Chinese companies’ supply chain partnership has reached 50%-60%, while it remains at a high level and there is a severe lack of stability and duration in supply chain partnership (China Logistics Development Report, 2010). Hence, it is always a focus of Chinese enterprises to find out the factors influencing supply chain partnership and thus establish stable supply chain partnership.
Although the failure rate of Chinese enterprises’ supply chain partnership is rather high, yet there are still lots of successful cases. In the early cooperation stage of Gome and Haier, Gome always adheres to low price, while Haier advocates value war rather than price war, thus the partnership between the two is always rigid. Since 2002, however, Haier has begun to change the strategies and comprehensively cooperated with Gome. With the upgrading of partnership, the cooperation field of the two keeps on expanding. Gome announced that it would no longer charge Haier of non-contractual fees and slotting allowances and gradually realise transparency of transaction between the two. Through logistics system integration, Gome and Haier realised the integration of B2B and B2C business and improved the supply chain efficiency (Haier, 2012). In addition, Gome no longer charged fees which are not stipulated in the contract or slotting allowance, and Gome and Haier has maintained a stable partnership in the past decade (Haier, 2012). The partnership between Gree (Gree Electric Appliances Inc. of Zhuhai) and Gome is a sharp contrast with the partnership between Haier and Gome. Gree is a most successful air-conditioner enterprise in China. Over years, Gree has been a leader in Chinese air-conditioner market and enjoyed good reputation among consumers. However, there are always some conflicts in the partnership between Gree and Gome. In February 2004, Gome (Chengdu) and Gree (Chengdu) had some disputes as Gome (Chengdu) greatly lowered the price of Gree air-conditioner without informing Gree (Chengdu). In March, the supply chain partnership between Gree and Gome further deteriorated due to disputes on price promotion, which resulted in the withdrawal of Gree from Gome. Neither Gree nor Gome made compromise, thus the supply chain partnership between Gree and Gome completely broke (cb.com, 2004). The partnership between Gome and Haier goes form failure to success, thus the influencing factors can be clearly perceived. Hence, this research takes Gome and Haier as the case to study the factors influencing supply chain partnership.
1.2 Research rationaleIn the researches on supply chain partnership, most researches focused on the development process, operation mechanism, and performance appraisal of the partnership (Sodhi and Son, 2009; Kim et al., 2010), while there are only a few researches on the factors influencing supply chain partnership. Bensaou (1999) summarised 6 factors influencing supply chain partnership, including organisational member and skills, market competitiveness, supplier, nature of cross-organisational work, relationship between organisational functions, and partnership benefits. Wilson (2001) pointed out some factors contributing to successful partnership, while partner-related factors include reputation, unrecoverable investment, and performance satisfaction. When studying the determinants of partnership, Sethuraman et al. (1998) pointed out that, from the perspective of manufacturer, the factors influencing partner advantage include: reputation, market penetrability (including skills, professional knowledge of market, inventory management, controllability, and financial capacity), which are the major factors influencing partner advantage. Hence, from the perspective of sociology and economics, this research adopts in-depth interview to discuss the factors influencing supply chain partnership, while this research can serve as an effective supplement to existing researches on supply chain partnership.
In addition, there are relatively rich research results on the relationship between organisational culture, organisational structure, and organisational performance, yet there are only a few researches on the relationship between organisational culture, organisational structure, and supply chain partnership (Bailey and Francis, 2007). This research studies the influence of organisational culture and organisational structure on supply chain partnership and expands the research object from a single enterprise to supply chain partnership, while relevant empirical results can further enrich the research results on organisational culture and organisational theories. At last, under the background of Chinese enterprises’ high supply chain partnership failure rate, this research can provide Chinese enterprises with some suggestions on establishing and maintaining stable supply chain partnership, so that this research is of some practical significance.
1.3 Aim and Objectives
This research aims to analyse the factors influencing supply chain partnership in current context by taking two Chinese enterprises, i.e. Gome and Haier as the case. And the research objectives include following ones:
To analyse the influence of Gome’s and Haier’s organisational structure on supply chain partnership (between Gome and Haier);
To analyse the influence of Gome’s and Haier’s organisational culture on supply chain partnership (between Gome and Haier);
To analyse the influence of Gome’s and Haier’s organisational reputation on supply chain partnership (between Gome and Haier);
Through case study, to provide Chinese enterprises with some suggestions on establishing and maintaining stable supply chain partnership.
1.4 Structure of the dissertationThis dissertation has five chapters. Chapter One is an introduction, which primarily elaborates the research background, rationale, research methods, research objectives, and structure of the dissertation. Chapter Two is literature review, which primarily elaborates the theoretical and empirical support of this research, including the factors influencing SCP from the perspective of manufacturers and the perspective of manufacturer-supplier relationship; while this chapter also analyses the influences of organisational reputation, organisational structure, and organisational culture on SCP. Chapter Three is methodology, which primarily elaborates the research philosophy, research approaches, research strategy, research method, in-depth interview, and data collection and analysis method. Chapter Four is empirical analyses, which primarily processes and analyses the interview data under the guidance of Chapters One-Three. Chapter Five is conclusion, which primarily analyses the research results based on literature review and empirical analysis in Chapter Four and then compares the research results with those of previous scholars, while this chapter also analyses the research limitation and presents some suggestions to future research.
CHAPTER 2 LITERATURE REVIEW2.1 IntroductionThis chapter is literature review and mainly introduces and reviews relevant theories and researches. First of all, this chapter introduces relevant theories of supply chain. Secondly, this chapter introduces relevant researches on supply chain partnership and the influencing factors. At last, this chapter discusses the relationship between organisational culture, organisational structure, and organisational reputation, and supply chain partnership.2.2 Supply Chain ManagementThe concept of supply chain has different meanings in different times, while the understanding also varies from one research to another (Lemke et al., 2003). In relevant field, researchers illustrated supply chain from different perspectives. However, it is generally believed that formal researches on supply chain started at the 1960s. Stadtler (2005) pointed that Forrester (1961) first used system dynamics model to optimise the dynamic relationship between industrial upstream and downstream and put forward the term of supply chain, so that Forrester is recognised as the father of supply chain. Many modern supply chain design principles can track back to the production distribution system of Forrester. Since the 1990s, researches on the theories and application of supply chain management have attracted wide attention, while, with the continuous evolution of corporate development, there emerged many representative definitions of supply chain (Kopczak and Johnson, 2003; Kulp et al., 2004). Early researches defined supply chain as a network (Lee and Billington, 1992; Christopher, 1994; Ganeshan and Harrison, 1995). Lee and Billington (1992) pointed out that supply chain is a network in which an enterprise obtains raw materials, produces semi-finished products or finished products and then delivers the products to consumers through sales channels. Ganeshan and Harrison (1995) pointed out that supply chain is a logistics distribution selection network instrument, which enables enterprises to obtain raw materials, transform raw materials into semi-finished or finished products and then distribute the products to consumers. Later, researches defined supply chain as a dynamic process. Kalalota and Whinsto (1996) argued that supply chain is a series of independent steps and enterprises can meet customer needs if following these steps. Harrington (1997) pointed out that supply chain includes product flow, information flow, and capital flow, while supply chain is a two-way process which links all members from suppliers to consumers into a virtual aggregate, while supply chain also links procurement, manufacturing, and product/service distribution activities. At that time, supply chain took suppliers, manufacturers, and customers into account, while the entire supply chain was divided into different organically-linked processes. After 2000, the definition of supply chain emphasised that supply chain is a dynamic process and that the management plan needs to be continuously adjusted. Chopra and Meindl (2001) maintained that supply chain is a dynamic chain of information, product, and capital flow in various stages, while supply chain is made up of the mutual linkage between a series of upstream suppliers and downstream customers.
Although researches posed different definitions of supply chain, yet the connotation of supply chain can be summed up out of these definitions: Firstly, participants are subjects of different behaviours and including enterprises as well as the departments in enterprises, such as raw material suppliers, manufacturers, retailers, and consumers, while supply chain is the interaction and correlation between these units as well as the cooperation between enterprises and inside the enterprise (Maheshwari et al., 2006). Secondly, specific elements circulate in supply chain, such as logistics, information flow, capital flow, and technology flow. The business flow and operation of supply chain can be analysed from four aspects: work flow (business flow), physical flow, information flow, and funds flow. Information flow in supply chain drives work flow, while work flow determines physical flow, and physical flow feeds back to funds flow (Qiao, 2009). Thirdly, supply chain has specific functions and provides certain products/services. The essence of supply chain is to provide customers with valuable products/services, while supply chain is the business process which links all forces from raw material supply to product/service delivery to terminal customers.
Supply chain is made up of different interest groups, which take actions to maximise their own interest, while supply chain is a typical complicated system. With the transformation of seller’s market to buyer’s market, global market competition becomes increasingly fierce, and new product life cycle growingly short, and customer expectation growingly short. In such context, supply chain management attracts the attention of more and more enterprises, which stimulates supply chain members to think over the operational practice from the perspective of overall supply chain interest, so that supply chain members began to establish strategic alliance with up- and down-stream enterprises or coordinate the operation strategies, so as to improve the competitiveness of the entire supply chain system and realise win-win or multi-win (Simch et al., 2007).
Supply chain management is also a hot topic in the management science field in the past two decades. Combining the actual problems in enterprises’ supply chain management, researchers conducted many researches and obtained lots of research findings, while many theoretical research findings are already used by enterprises and generate significant economic benefit. The major researches in the past two decades can be summed up into: supply chain coordination contract (Chen et al., 2006; Cai et al., 2010); supply chain risk management (Lian and Deshmuk, 2009; Gan et al., 2004); closed loop supply chain management (Li and Cai, 2007; Guide and Van, 2009); supply chain management in context of incomplete/asymmetric information (Azoury and Miyaoka, 2009); integration and optimisation of supply chain operation and other management functions (Caldentery and Haugh, 2009), and decision making behaviour in supply chain (Bolton and Katok, 2008; Shen and Su, 2007).
Although there are many different opinions in the researches on supply chain management, yet the focus is still put on how to stimulate supply chain members to think about the operational practice from the perspective of overall supply chain interest, establish strategic alliance with up- and down-stream enterprises, or coordinate the operation strategies to improve the competitiveness of the entire supply chain system, so as to realise win-win or multi-win, i.e. the focus is put on supply chain partnership. Therefore, this research takes the partnership between Gome and Haier as the case to study the factors influencing supply chain partnership.
In addition, supply chain can also be analysed from the perspective of a single enterprise or from the perspective of supply chain network, while supply chain can be divided into ultimate supply chain, extended supply chain, and basic supply chain. In this research, Haier and Gome share a partnership, which is an extended supply chain in the entire supply chain.
2.3 Supply Chain Partnership2.3.1 PartnershipThe definition of supply chain partnership is based on the definition of partnership (Christopher, 2005). So before defining supply chain partnership, this research firstly analyse the content of partnership. Lambert, Emmelhainz and Gardner (1996) argued that, from one-time exchange to multiple transactions, the relationship between enterprises can generally be divided into: arm’s length, partnership, joint venture, and vertical integration. (1) Arm’s length: The seller only provides the standard products/services needed by customers, and the relationship ends with the end of transaction. (2) Partnership: The buyer and the seller carry out transaction based on mutual trust, openness, risk sharing, and profit sharing and emphasis on long-term competitive advantage (Corsten and Kumar, 2005). (3) Joint venture: The seller and the buyer have some ownership of the other, while joint venture is a relatively long-term relationship (Kogut, 1988). (4) Vertical integration: It is closer than the interaction relationship in joint venture.
When defining partnership, most researches focused on information and benefit sharing between enterprises, establishment of common goal or trust, coordination and commitment, and risk sharing (Fynes et al., 2005). Lambert, Emmelhainz and Gardner (1996) pointed out that partnership is a relatively close relationship between two organisations which mutually support each other to attain certain objectives. As for buyers and suppliers, partnership is the promise and agreement formed in a relatively long time, of which the content includes information, and benefit, and risk sharing. That is to say, the concept of partnership must be based on cooperation and trust. Hutt et al. (2000) pointed out that partnership management includes four aspects: professional knowledge, good process, common goals and motivations, and the same views, while these conditions should be available both inside the organisation and between organisations. Trust is a key factor in successful alliance, while trust must be based on the communication and information processing flow between partners (Wong et al., 2005; Gulati and Sytch, 2007; Johnston et al., 2004). Herzog (2001) agreed with the view of Hutt et al. (2000) and pointed out that partnership refers to the strategic relationship of independent entities sharing common goals, working toward common interests, and highly and mutually depending on each other. However, Dwyer and Tanner (2002) emphasised the relationship characteristic in their definition of partnership and argued that partnership is a relationship characterised by mutual commitment, high trust, and common goals.
Summing up the above definitions on partnership, this research argues that partnership refers to a close cooperative relationship between two independent enterprises with common strategic goals, supplementary resources and capacities, compatible organisational culture, organisational structure, and management operation that work together to accomplish the tasks which they cannot accomplish on their own (Douma et al., 2000).
2.3.2 Supply Chain PartnershipSeuring and Muller (2008) pointed out that most traditional enterprises select suppliers based on price and continuously change suppliers to obtain lower price. However, with the competitive environment becoming increasingly fierce, to continuously improve the profit, increase market share, and enhance competitive advantages, enterprises begin to establish partnership with suppliers and gradually change the previous hostile relationship with upstream suppliers (Cousins et al., 2008). However, Saccani and Perona (2007) pointed that the distrust and information asymmetry between enterprises and suppliers has a long history, and enterprises, as buyers, keep on looking for suppliers offering lower price in the market, while suppliers gradually lose their loyalty to and trust in the buyers under exploit. In addition, apart from switching cost, enterprises will also face uncertainties such as time and quality if they want to switch to other suppliers, thus many enterprises find that the traditional transaction-based procurement is no longer efficient (Harrison and van Hoek, 2008). Hence, enterprises gradually cooperate with the major suppliers and begin to establish supply chain partnership (Christopher, 2005).
Supply chain partnership has many names, such as supply chain relationship, supplier-manufacturer or supplier-buyer relationship, supplier partnerships, supply chain alliance, strategic network, and inter-firm network, while most of these terms emerge with the development of supply chain and illustrate the concept from different perspectives (Lu and Yan, 2007).
Currently, existing researches’ definitions of supply chain partnership are based on the establishment of supply chain and partnership (Benton and Maloni, 2005). For instance, Speakman et al. (1998) held that supply chain partnership mainly refers to the relationship between two independent enterprises in the supply chain to achieve certain goals and profits, while these two enterprises are often suppliers and buyers/customers who agree to share information and risks in a certain period and improve financial or operating performance by reducing the cost and inventory. Different from the definition focus of Speakman et al. (1998), Baker (2002) mainly emphasised the durability of supply chain partnership and pointed out that supply chain partnership is a long-term close supplier relationship, in which the parties can negotiate and reach consensus in case of unexpected events. However, Lambert et al. (2004) held the same opinion with Speakman et al. (1998) and maintained that supply chain partnership is a special enterprise relationship based on mutual trust, openness, risk sharing, and benefit sharing.
This research mainly studies the factors influencing supply chain partnership by taking the partnership between Gome and Haier as the case. Hence, this research mainly refers to the definition of Speakman et al. (1998) when defining supply chain partnership: Supply chain partnership generally refers to a relationship between two independent enterprises aiming to attain certain goals and profits, while these two enterprises are often supply and buyer/customer who agree to share information and risk in a certain period and improve the financial or operating performance by lowering the cost and reducing the inventory.
2.4 Factors Influencing Supply Chain PartnershipSince the 1990s, researches have taken great interest in the factors influencing enterprises’ establishment and cultivation of relationship with external organisations, while many researchers have developed scales and conducted empirical researches (Lee et al., 2001). These researches can be divided into two groups: One group studies how environmental factors and enterprise factors affect the relationship by studying the correlation between dependent variables and independent variables and testing the hypotheses; while the other group mainly studies how personal relationship factors influence the relationship by summing up the possible influencing factors through interviews and questionnaire surveys with managerial personnel, while these researches did not put the influencing factors in the uniform theoretical framework not proved whether these factors are complete in logic. According to the research topic, this research mainly reviews the first group of researches.
According to systems theory, system output is the product of the common effects of system elements, element correlation, and external environment, thus the cooperation effects of supply chain system are affected by enterprise quality, node enterprises’ interaction, and external environment (Benton and Maloni, 2005). According to the source and nature of influencing factors, this research divides the factors influencing supply chain partnership into three categories: enterprise-related controllable factors; partner-related coordinate-able factors; and uncertain factors outside supply chain enterprises, such as environment and policy. The third category of factors is highly uncontrollable, thus this res