Identify the key external and internal strategic issues and forces impacting upon WGF.
William Garden Furniture is a small business that is owned and established by Martin William twenty years back. Since its origin, Mr. William is the managing director and sole owner of the business. William Garden Furniture principally serves the high-end customers and manufacturers up-market wooden chairs, tables, and benches for gardens. William Garden Furniture had fought very hard to develop a sound market reputation, and the underpinning factor for its success is its highly skilled craftsmanship. Unfortunately, after 8 years of its start-up, William Garden Furniture started encountering a number of internal and external strategic issues that are still affecting its business productivity, competitiveness, profitability, and its market reputation (Hitt et.al, 2012, p. n.d).
While talking about the internal strategic issues, one of the biggest concerns of William Garden Furniture is related to the authority delegation and confrontation/conflict among the workforce and between management. Initially the functional activities of marketing, finance, and marketing were solely under the control of Mr. William; however, the fast pace of business growth and changing business dynamics forced him to develop a formalized organizational structure for authority/responsibility delegation. But ill-advisedly, William failed to determine the most effective way to organize the changing market condition and business growth and therefore, the sudden implementation of formalized organizational structure shortly turned out as a stiff and an inflexible hierarchical structure. Since employees were habituated of performing their job task informally, they started finding themselves clamped between rigid job descriptions and stern administrative procedures (Wheelen et.al, 2015, p. n.d).
This also resulted in confrontation among the employees and management, as well as, functional managers faced consistent interferences issues by Martin as he never allowed them to relish complete decision-making authority, and rather insisted them to ultimately verify every decision that is purportedly delegated to managers. This problem actually stems from the authoritative and reluctant behavior of Martin who is actually quite reluctant to listen and value other’s perspective and does not truly delegate the decision-making authority to the staff so they can make efficient decisions on time. Martin’s behavior is resulting in shrinking flexibility within the system and organizational operation and therefore, causing low productivity and performance. This gradually builds up discontent among the managers, as well as, the workforce. The entire situation is posting deteriorating effects to employee productivity level, job engagement; while also resulting in declines productivity, wastage of raw material and complaints in customer service and product quality (Chintakananda et.al, 2015, p. 56).
While considering the external factors, the competition within the industry is intensifying with every passing day and due to internal organizational issues, William Garden Furniture is failing to meet the market pace and demands. Technological developments have taken the industry by storm which allowed key market players and business rivals of William Garden Furniture to take advantage of new areas of development and reducing their operational costs to a greater extent. The usage of modern technology factors also enables them to develop a perfect blend of human craftsmanship while exploiting the best of automated machine and reducing their reliance on the human factor. In the meantime, William Garden Furniture keep mourning about its dilapidated condition of obsolete machinery and production mechanism.
Another external factor affecting William Garden Furniture business capabilities is the uncertain economic conditions. The economy of United Kingdom is encountering the increasing pressure over domestic rates of interest. Although Martin was aware of the rising interest rates trend; however, he failed to analyze the forthcoming consequences for the business. Currently, the business is heavily relied upon external financing depending on the significant amount of long-term financial loan and extended overdraft.
Additionally, the business failed to address effectively the external legal forces. For instance, failing to communicate effectively with the customer, William Garden Furniture made some false claims related to the product that as a result dragged them to some lawsuits under Civil or the Criminal law with which Martin was actually unfamiliar with and therefore, the adverting was made regardless of such law (Morden, 2016, p. n.d). Likewise, the business did not notice the constraining and enabling force of legislation like Single European Market (EC 1992) and continued to operate irrespectively. On the whole, WGF is currently impacted by both internal and external forces, accompanied by demotivated workforce and financial dependency. The company has also lost interaction with external forces, that all together dragging WGF towards somber losses and ultimately bankruptcy or liquidation (Barney & Hesterly, 2015, p. n.d).
How might the owner-manager effect a longer-term orientation to the management of WGF as a basis for sustainable development?
Evidence has suggested that long-term orientation serves as a dominant strategic logic for sustainable corporate development. The concept of stewardship theory along with the upper echelon theory rational presents a typology of leadership and managerial responsibilities, which introduce the idea of long-term orientation as a core managerial characteristic which constitutes major driving force behind the development of long-term orientation of management as a foundation for sustainable corporate development. As martin William is the owner-manager, founder and managing director of William Garden Furniture, the business has developed as his family controlled business. According to a research, family controlled firms or those that are being managed by a single owner-manager tend to be more long-term oriented than another type of enterprises (Mellahi & Frynas, 2015, p. n.d).
The concept is simple because firms that are controlled by founders often been linked with long-term orientation's higher degree. Usually, the cost of capital and equity is lower and the risk of default are also lesser. Likewise, William Garden Furniture has observed a long horizon of twenty under the management and control of Martin William. Martin could have used this period to develop sustainable core capabilities which would have, in turn, formed the foundation for competitive advantage for the business. Business experts also argues that business firms that are owned by founder are more resilient during hardships and tend to be more innovative and proactive for the fact that owners or decision makers usually make investments and strategic choices that pay off in long-term bringing out strong and stable performance and financial results (Hill & Jones, 2013, p. n.d).
Unfortunately, in the case of William Garden Furniture, Martin William’s reluctance to listen to other’s perspectives, unwillingness to relinquish his authority, and deficient association and analysis of external business environment post deterring effects on business performance. Martin William could have played a role in inducing and developing sustainable core capabilities that would have brought sustainable corporate development to the firm. In simple words, an owner-manager can not only induce ethical and moral values to the organization, but can also develop collaborative organizational culture, foster creativity, innovativeness and flexibility, delegate autonomy, and develop a workforce that is efficient enough to respond to changing business environment (Kotler t.al, 2016, p.21).
What entrepreneurial opportunities may exist in this sector and what marketing strategies should be implemented to grasp these opportunities?
I completely agree with marketing manager and his idea of shifting from the fire-fighting business management model to a rational business planning methodology. Being disconnected with the political, economic, social, technological, and legal forces present in the external environment, William Garden Furniture failed to acknowledge them, as well as, lagged behind addressing the opportunities in its way (Zietsma et.al, 2014, p.80). Firefighting approach will only provide a solution and resource allocation that will assist in dealing with the situation short-term, but in actual, William Garden Furniture is currently in need of entire organization restructuring (Rothaermel, 2015, p. n.d). Apparently, adopting a rational planning model will help WGF to develop a planning process that will take into a number of coherent strategies and actions.
A rational planning model is usually comprised of 5 steps, which include a definition of goal/problem, identification of policies/alternative plans, evaluation of policies/alternative plans, implementation of policies/plans, and monitoring of results generate from those plans/policies. Additionally, the rational decision-making model should also be adopted by WGF, which is also commonly known as organizational behavior (Hill et.al, 2014, p. n.d). This will help WGF to make logical and sensible decisions while considering the internal and external business settings. Lastly, rational planning and decision-making model will facilitate WGF implementing a multi-step and logical model that will aim at applying an orderly path between the problem identification to the solution. This will help WGF coming out of any other situation like this (Farkas, 2016, p. 17).
Currently, the opportunities available for WGF includes restructuring of the organization while focusing on recollecting its lost marketing reputation, market share, and profitability through effective marketing tactics. WGF should adopt persuasive and differentiating marketing techniques that stimulate sales. It should conduct a comprehensive SWOT and PESTEL analysis to identify core internal capabilities, resource, strengths and weaknesses of the firm, as well as, it should deeply analyze the existing external setting including competition, changing economic and legal situations, legislative guidelines, and technological advancements. In order to get out of a situation, WGF can develop a partnership with a potential investor in order to raise funds. This would help it to come out of the situation.
Apart from this, it should develop an integrated marketing communication with its stakeholders by using different marketing mediums such as social media, website, direct selling, advertisement etc. This would not only help WGF developing improved reputation among its customer but it would also help gaining feedback, addressing complaints and collecting information necessary to understand the customer needs, demands, and expectations. Implementing these strategies can hopefully drag WGF out of this critical condition (David & David, 2016, p. n.d).
References
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