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Fun facts about Africa

2012-11-20T07:13:00.000-08:00

Fact 1:
Egypt is the most popular tourist destination in Africa, attracting around 10 million visitors per year.

Fact 2:
Africa is the second largest continent in the world.

Fact 3:
There are fewer people with Internet access in the entire Africa than in New York City alone.

Fact 4:
The lowest point in Africa is Lake Assal in Djibouti which lies 155 meters below sea level.

Fact 5:
Africa is the home of the Human species, which developed there about 5 million years ago.

Fact 6:
More people are killed in Africa by crocodiles than by lions.

Fact 7:
The world's largest desert, the Sahara, is located in Africa.

Fact 8:
There are over 1,500 different languages in Africa.

Fact 9:
The Nile is the longest river in the world, flowing through Uganda, Ethiopia, Sudan and Egypt.

Fact 10:
Nigeria is the most populated country in Africa with an estimated population of 125 - 145 million people.
source: http://www.10-facts-about.com/Africa/id/17S

Fun facts about USA

2012-11-18T16:15:00.000-08:00

Fun facts about USA

Population: 296,483,000

Capital: Washington, D.C.; 4,190,000

Area: 9,826,630 square kilometers (3,794,083 square miles)

Language: English, Spanish

Religion: Protestant, Roman Catholic, Jewish

Currency: U.S. dollar

Life Expectancy: 77

GDP per Capita: U.S. $36,300

Literacy Percent 97

· Industry:

o Petroleum, steel, motor vehicles, aerospace, telecommunications, chemicals, electronics

· Agriculture:

o Wheat, corn, other grains, fruits; beef; forest products; fish

· Exports:

o Capital goods, automobiles, industrial supplies and raw materials, consumer goods, agricultural products

The United States is divided into 50 states. However state each varies in size considerably. The smallest state is Rhode Island with an area of just 1,545 square miles (4,002 sq km). By contrast the largest state by area is Alaska with 663,268 square miles (1,717,854 sq km).

2) Alaska has the longest coastline in the United States at 6,640 miles (10,686 km).

3) Bristlecone pine trees, believed to be some of the world's oldest living things, are found in the western United States in California, Utah, Nevada, Colorado, New Mexico and Arizona. The oldest of these trees is in California. The oldest living tree itself is found inSweden.

4) The only royal palace used by a monarch in the U.S. is located in Honolulu, Hawaii. It is theIolani Palace and belonged to the monarchs King Kalakaua and Queen Lili'uokalani until the monarchy was overthrown in 1893. The building then served as the capitol building until Hawaii became a state in 1959. Today the Iolani Palace is a museum.

5) Because the major mountain ranges in the United States run in a north-south direction, they have a large impact on the climate of the country's various regions. The west coast for example has a milder climate than the interior because is moderated by its proximity to the ocean, whereas places like Arizona and Nevada are very hot and dry because they are on theleeward side of mountain ranges.

6) Although English is the most commonly spoken language used in the U.S. and is the language used in government, the country has no official language.

7) The tallest mountain in the world is located in the United States Mauna Kea, located in Hawaii, is only 13,796 feet (4,205 m) in altitude above sea level, however, when measured from the seafloor it is over 32,000 feet (10,000 meters) high, making it taller than Mount Everest (Earth's tallest mountain above sea level at 29,028 feet or 8,848 meters).

8) The lowest temperature ever recorded in the United States was at Prospect Creek, Alaska on January 23, 1971. The temperature was -80°F (-62°C). The coldest temperature in the contiguous 48 states was at Rogers Pass, Montana on January 20, 1954. The temperature there was -70°F (-56°C).

9) The hottest temperature recorded in the United States (and in North America) was in Death Valley, California on July 10, 1913. The temperature measured 134°F (56°C).

10) The deepest lake in the U.S. is Crater Lake located in Oregon. At 1,932 feet (589 m) it is the world's seventh deepest lake. Crater Lake was formed via snowmelt and precipitation that gathered in a crater created when an ancient volcano, Mount Mazama, erupted about 8,000 years ago.

From Amanda Briney

http://geography.about.com/od/unitedstatesofamerica/a/unitedstatesfacts.htm

and

National Geographic Atlas of the World, Eighth Edition

Fun facts about India

2012-11-18T15:46:00.002-08:00

India is the world's largest, oldest, continuous civilization.
India is the world's Largest democracy.
India never invaded any country in her last 1000 years of history.
India invented the number system. Zero was invented by Aryabhatta.
When many cultures were only nomadic forest dwellers over 5000 years ago, Indians established Harappan culture in Sindhu Valley (Indus Valley Civilization)
There are 300,000 active mosques in India , more than in any other country, including the Muslim world
Sanskrit is the mother of all the European Languages . Sanskrit is the most suitable language for computer software - a report in Forbes magzine July 1987.
Chess (Shataranja or AshtaPada) was invented in India.
India is one of the few countries in the world, which gain independence without violence.
India has the second largest pool of Scientist and Engineers in the World.
India is the largest English speaking nation in the world.
India is the only country other than US and Japan, to have built a super computer indeigenously.
India has the largest number of Post Offices in the world
One of the largest employer in the world is the Indian Railways , employing over a million people
India was one of the richest countries till the time of British rule in the early 17th Century. Christopher Columbus, attracted by India's wealth, had come looking for a sea route to India when he discovered America by mistake.
The Baily Bridge is the highest bridge in the world. It is located in the Ladakh valley between the Dras and Suru rivers in the Himalayan mountains. It was built by the Indian Army in August 1982
The Vishnu Temple in the city of Tirupathi built in the 10th century, is the world's largest religious pilgrimagedestination. Larger than either Rome or Mecca, an average of 30,000 visitors donate $6 million (US) to the temple everyday.
Varanasi, also known as Benaras, was called "the Ancient City" when Lord Buddha visited it in 500 B.C., and is the oldest, continuously inhabited city in the world today.
Martial Arts were first created in India, and later spread to Asia by Buddhist missionaries.
Yoga has its origins in India and has existed for over 5,000 years.

Source

http://www.facts-about-india.com/amazing-facts-about-india.php

Facts about Nepal, Nepal

2012-11-18T15:33:00.001-08:00

Language: Nepali (official) & 20 other languages divided into numerous dialects. Derived from Sanskrit, Nepali is related to the Indian language, Hindi, and is spoken by about 90 percent of the population in either native or second language fluency. Many Nepalese in government and business also speak English.

Time Zone: 5 hrs 45 min ahead of GMT

Currency: 1 Nepalese Rupee (NR) divided into 100 paise Exchange Rate: 78.5 NR = 1 US Dollar

International Calling Code: 977 + city codes (Kathmandu 1, Pokhara 61)

National Calendar: The Nepali year begins in mid-April and is divided into 12 months: Baisakh, Jestha, Asadh, Shrawan, Bhadra, Aswin, Kartik, Marga, Poush, Phalgun, Chaitra. Saturday is the official weekly holiday.

Unification Day: 1768 (by Prithvi Narayan Shah - First King)

Constitution Birth: November 9, 1990

National Anthem: "May Glory Crown Our Illustrious Sovereign"

National Motto: "The Motherland Is Worth More than the Kingdom of Heaven."

National Bird: Danphe

National Flower: the spectacular rhododendron 'gras' in Nepali

Land:

Area Total: 140,800 km2, Area Land: 136,800 km2

Land use: arable land: 17% permanent pastures: 15%
forests and woodland: 42%

Geography: landlocked; strategic location between India and Chinese-occupied Tibet; extremely diverse terrain ranging from fertile plains and broad valleys to containing eight of the world's ten highest peaks.

Climate: Nepal has a climate that ranges from subtropical summers with mild winters in the southern lowlands to an alpine climate with cool summers as well as severe winters in the mountains. Average annual precipitation decreases from 1,778 mm (70 inches) in the east to 899 mm (35 inches) in the west.

People:

Ethnic Groups: Among the earliest inhabitants were the Newars of the Kathmandu Valley and aboriginal Tharus in the southern Terai region. The Indo-Nepalese migrated from India and are ancestors of the Brahman and Chetri caste groups, which account for nearly 80% of the population. The Tibeto-Nepalese account for the remainder and trace their origins to central Asia and Tibet, including the Gurungs, Magars and Tamang in the west, Rais and Limbus in the east, and Sherpas and Bhotias in the north.

Religion: 90% Hindu (official state religion) 5% Buddhist, 3% Muslim, 2% Other (Christian, indigenous & animistic practices) While Nepal is the only Hindu country in the world, Hinduism has synthesized with Buddhism in Nepal. As a result, Buddhist and Hindu shrines and festivals are respected and celebrated by all.

Population: 23,200,000 (2001 census)

Population growth rate: 2.27% (2001 census)

Kathmandu Valley Population Growth: 6%+ (2001 census)

Birth rate: 33.83 births/1,000 population (2000 est.)

Death rate: 10.41 deaths/1,000 population (2000 est.)

Infant mortality rate: 75.93 deaths/1,000 live births (2000 est.)

Life expectancy at birth: total: 57.84 years
male: 58.3 years, female: 57.35 years (2000 est.)

Total fertility rate: 4.68 children born/woman (2000 est.)

Sex Distribution: 49.5% male, 50.5% female (2001 census)

Distribution: 15% Urban, 85% Rural (2001 census)

Note: refugee issue over the presence in Nepal of approximately 96,500 Bhutanese refugees, 90% of whom are in 7 United Nations Office of the High Commissioner for Refugees (UNHCR) camps

Issues: Illegal trafficking in women is one of the biggest issues facing Nepal today. Lured by promises of employment in big Indian cities like New Delhi, Mumbia and Kolkatta, large numbers of Nepali young girls are smuggled by flesh traders and forced into prostitution. The flesh trade is made simpler due to the open border ensuring free movement of people. Nepali NGOs estimate that hundreds of thousands of Nepali women, mostly teenagers are forced to work in brothels in India. The United Nations has expressed concern over the growing trafficking and urged the Nepali and Indian authorities to initiate action to curb this trade.

Economy:

GDP: $US 27.2 billion Rank: 77 / 191 countries (2000)

'Real' GDP per capita: $1,101 Rank: 159 / 191 (2000)

GDP Composition: agriculture: 41% industry: 22% services: 37%

Nepal is among the poorest and least developed countries in the world with nearly half of its population living below the poverty line. Agriculture is the mainstay of the economy, providing a livelihood for over 80% of the population and accounting for 40% of GDP. Industrial activity mainly involves the processing of agricultural produce including jute, sugarcane, tobacco and grain. Production of textiles and carpets has expanded recently and accounted for about 80% of foreign exchange earnings in the past three years. Apart from agricultural land and forests, exploitable natural resources are mica, hydropower and tourism. Agricultural production is growing by about five percent on average as compared with annual population growth of 2.5%. Since May 1991, the government has been moving forward with economic reforms particularly those that encourage trade and foreign investment.

The government has also been cutting expenditures by reducing subsidies, privatizing state industries and laying off civil servants. More recently, however, political instability—five different governments over the past few years—has hampered Kathmandu’s ability to forge consensus to implement key economic reforms. Nepal has considerable scope for accelerating economic growth by exploiting its potential in hydropower and tourism, areas of recent foreign investment interest. Prospects for foreign trade or investment in other sectors remain poor due to the small size of the economy, its technological backwardness, its remoteness, its landlocked geographic location, and its susceptibility to natural disaster. The international community funds more than 60% of the development budget and more than 28% of total budgetary expenditures. Remittances from Nepalese working abroad, nearly $1 billion in 1997, continue to be a significant source of foreign exchange.

Economic Performance: Nepal experienced positive upswings in most economic sectors during the past fiscal year of 1999/2000, growth of just under 11%, and projected to achieve a growth rate of six% in 2000/01. Much of this growth was spawned by the growth in the agriculture sector. Inflation declined in the first half of 1999/2000 reaching 2% in Dec 2000 as food prices stabilized.

Trade: Exports rose 28.6% between 1999 and 2000 while imports also rose 27.64%, the largest rise in many years.

Inflation rate (consumer prices): 11.8% (98/99 est.)

The agriculture sector in Nepal contributes 41% of the GDP and employs an estimated 81.2% of labor. The primary food crops produced are barley, coconuts, coffee, maize, potatoes, rice,
soybeans, sugar cane and wheat. The primary meat products are beef and veal, buffalo, chicken, duck, lamb and pork. The largest agricultural exports in 1998 were sugar cane, lentils, pulses, oilseed and nutmeg, mace and cardamon. Agricultural exports in 1998 was $72.2 million, while agricultural imports in 1998 was $156.5

Labor force: 10 million (1996 est.) severe lack of skilled labor

Labor by occupation: agriculture 81%, services 16%, industry 3%

Unemployment rate: substantial underemployment (1999)

Energy

Nepal has no reserves of oil or gas, and only small coal reserves. Commercial energy consumption in Nepal is made up of hydroelectricity, coal, and oil products. Noncommercial energy sources, such as wood, animal wastes, and crop residues, account for a significant share of the country's total energy consumption. Nepal is a net energy importer. Oil is the main import and in 1998 it is estimated that Nepal imported 10,000 barrels of oil per day for products such as kerosene, diesel, jet fuel, gasoline.

Swift rivers flowing south through the Himalayas have massive hydroelectricity potential to service domestic needs and the growing demand from India. Hydropower exports are one of the major domestic resources which can fuel economic growth in Nepal, but development of these resources requires significant capital investment.Nepal's installed electric generating currently is around 300 megawatts (MW). Only a small share (around 1%) of Nepal's potential hydroelectric power capacity currently is being exploited. Potentially, Nepal could be a large net power producer and exporter and private investment in hydropower development is growing rapidly. Hydro projects currently under construction in Nepal should nearly double the country's total generating capacity over the next two years. At present, however, the country faces frequent power outages and shortages (yet another obstacle to economic growth), while only around 15% of the country's population has access to electricity.

Renewable energy, including micro-hydro, biomass, solar energy, etc. are gaining popularity in Nepal, particularly in remote regions of the country. Rural electrification is a main priority of Nepal's current Five-Year Plan. This will involve expanding the country's transmission and distribution grid, and possibly installing thousands of solar power units -- particularly in remote areas of the country -- over the next several years.

Environment

Nepal's environmental challenges are largely a consequence of its dependence on fuel derived from wood, and the expansion of agricultural lands through non-sustainable development methods. This includes removing trees without measures for replanting, which results in widespread deforestation and soil erosion. Water pollution and contaminated water also presents human health risks.

Major natural hazards in Nepal include severe thunderstorms, flooding, landslides, drought, as well as famine resulting from the timing, intensity, and duration of the summer monsoons. Nepal is also an earthquake prone area due to the Himalayas.

Government:

Executive branch

Chief of State: Baburam Bhattarai, Prime minister

Born in 1947, Gyanendra is the younger brother of the late KingBirendra, who died in a shooting incident at the royal palace on 1 June 2001. He was crowned king on the 4th after Birendra's son, Dipendra, who had been declared king immediately following Birendra's death, died of injuries sustained during the palace shooting.Gyanendra is thought to be a more forceful man than the late Birendra, even, some say, an advocate of a return to absolute monarchy. However, shortly after his ascension to the throne, he has declared his support for the continuity of Nepal's constitutionalmonarchy.

Educated in India and Nepal, Gyanendra is well known in Nepal for his conservation work. He is also interested in developing the kingdom's tourism potential. A successful businessman, he has interests many ventures throughout the kingdom. Most will be divested in the near future to avoid any appearance of impropriety.

Gyanendra is married and has two children. His youngest son, Paras, who is now considered the crown prince, leads a controversial lifestyle and has been at the center of numerous DUI fatalities including a very popular singer who died last year.

The late King BIRENDRA Bir Bikram Shah Dev succeeded to the throne 31 January 1972 following the death of his father King MAHENDRA Bir Bikram Shah Dev, and crowned king 24 February 1975. The late Crown Prince DIPENDRA, King for two days while he lay in coma after the shooting incident, was thought to be the gunmen who massacred nine people in his family before turning the gun on himself.

Head of Government: Prime Minister Sher Bahadur Deuba
Cabinet: appointed by the king on the recommendation of the PM

Legislative branch

Bicameral Parliament consists of the National Council (60 seats; 35 appointed by the House of Representatives, 10 by the king, and 15 elected by an electoral college; 1/3 of the members elected every two yrs to serve six-yr terms) and the House of Representatives (205 seats; members elected by popular vote to serve five-yr terms)

Judicial branch

Supreme Court (Sarbochha Adalat), chief justice is appointed by the king on recommendation of the Constitutional Council, the other judges are appointed by the monarch on the recommendation of the Judicial Council.

Political parties and leaders:

Nepali Congress (Girija Prasad Koirala, party president)Communist Party of Nepal / United Marxist-Leninist (Madhav Kumar Nepal, general secretary)Marxist-Leninist (Sahana Pradhan, chairman) Rastriya Prajantra Party (Surya
Bahadur Thapa); Nepal Sadbhavana Party (Gajendra Narayan Singh, president) Nepal Workers and Peasants Party (Narayan Man Bijukchhe, party chair) Rastriya Jana Morcha (Chitra
Bahadur K. C., chairman) Samyukta Janmorcha Nepal (Lila Mani Pokharel, general secretary)

Media

Press laws restrict reporting on the monarchy and national security, and journalists have reportedly been detained after covering alleged police abuses and corruption. However, the press is considered to enjoy a fair amount of freedom. A range of publications, from Maoist to monarchist, carry criticism of the government. In January 2001, private FM stations were prohibited from airing news broadcasts, but the decision was contested. Radio broadcasting started in 1951, while TV did not begin until 1986. Only about 10% of the population has access to television - only 14% have electricity.

Newspapers: The Kathmandu Post (Eng) / Kantipur (Nep) The Rising Nepal (Eng) / Ghorkhapatra (Nep) state owned, Nepal's oldest newspaper, Space Time (Eng/Nep) and numerous other Nepali dailies. Nepali Times (Eng) Weekly

Television : Nepalese Television Corporation (NTV) and SpaceTime Network (began satellite transmission in June 2001)

Radio: Radio Nepal (state-run) Hits FM (commercial) andHimalayan Broadcasting Co. HBC 94 FM. Private FM radio stations include Radio Sagarmatha, Radio Kantipur, Image Channel, Music Channel, Classic, Good Night.

Sources: CountryWatch, BBC, IMF

“A study into the present status of customer loyalty towards the Irish banking sector and in particular ‘Allied Irish Banks’”

2011-08-07T21:03:00.000-07:00

“A study into the present status of customer loyalty towards the Irish banking sector and in particular ‘Allied Irish Banks’”

Abita Baral

Declaration

I certify that this dissertation which I now submit for examination for the award of BA (HONS) in Management is entirely my own work and has not been taken from work of the others save and to the extent that such work has been cited and acknowledged within the test of my work.

This dissertation was prepared according to the regulation of the University of Wales and has not been submitted in whole or part for an award in any other institution or University.

The University has permission to keep, to lend or to copy this thesis in whole or part, on the condition that any such use of material of the thesis is duly acknowledged.

Signed _____________________________________ Date __________________________

Acknowledgement

I would like to express my gratitude to all the people who have given their heart whelming full support in preparation of this dissertation.

First of all I would like to thank the God ‘the father of all’, for giving me the strength and motivation to complete this dissertation.

It is pressure to thank my family, mom and dad for their inspiration and motivation. And I would like to give special thank to my sister Sabita for her support and supervision, this dissertation would not have been possible without her help and guidance.

I would also like to thank my friends Porshia and Sujan for their special support.

I would like to express very special thanks to my supervisor Mr. Charlie Dayman for his guidance, encouragement, motivation and support from early stage to concluding stage.

Finally, I would like to express thanks to Ms. Tracy, all lectures and management team of Grafton College, Dublin.

ABITA

Abstract

Purpose: Building customer satisfaction and loyalty is the prime goal of service industry. Customer satisfaction essentially converts into loyalty. The purpose of this research is to find out the level of customers satisfaction, dissatisfaction and loyalty to AIB following the bailout.

Design/ methodology/ approach: The quantitative research method is used to carry out research, where a series of questionnaires will be distributed to a random sample of 50 customers of AIB, whereby they will be selected on the basis of their knowledge and familiarity with the product and service offered by the bank.

Finding: The level of the customer satisfaction has decreased, dissatisfaction has increased and loyalty has decreased towards AIB following the bailout.

Research limitation: The research does not include the entire Irish Banking sector, it is only limited to the AIB. It does not include how brand attitude affect customer loyalty and satisfaction.

Practical Implementation: AIB and other members of the Irish banking sector may apply finding of this survey, regarding customer satisfaction, dissatisfaction and loyalty.

Paper type: Dissertation

Table of contents

Chapter 1

1.Introduction

1.1. Allied Irish Bank (AIB)

1.2. Methodology

1.2.1. Structure of the dissertation

Chapter 2: Literature Review

2.1. Customer satisfaction

2.2. The Expectation-confirmation theory

2.3. Brand attitudes and satisfaction

2.4. Merits of customer satisfaction to business

2.5. Customer loyalty

2.6. Building loyalty

2.7. The Satisfaction-Loyalty Relation

2.8. Switching costs

2.9. Loyalty program

Chapter 3

3. Aims and Methodology

3.1. Introduction

3.2. Research question

3.3. Research objective

3.4. Research Strategy and Methodologies

3.5. Method Employed

3.5.1. Secondary Research

3.5.2. Primary Research

3.6. Limitation of Research

3.7. Ethical issues

Chapter 4 Context and Finding

4.1. Introduction

4.2. Context of the research

4.3. Observation 1:

4.4. Observation 2:

4.5. Observation 3:

4.6. Comment from some respondent during the survey:

Chapter 5 Discussion, graph and analysis

5. Quantitative Research finding:

5.1. Figure 1: How long have you had the account with AIB?

5.2. Figure 2: Why did you open an account with AIB?

5.3. Figure 3 would you say that you are very satisfy, satisfy, not sure, Dissatisfied or very dissatisfied with service of the AIB

5.4. Fig 4: Are you a loyal customer of AIB:

5.5. Figure 5: Before the problems were identified with the banks were you a loyal customer of AIB

5.6. Figure 6: Do you think the government bailout of the banks was a good idea:

5.7. Figure 7: Do you think the banks should have been left to sort it out themselves

5.8. Figure 8: Do you think the AIB would have been able to sort it out without the government help:

5.9. Figure 9: Do you think AIB’s reputation has been damaged due to the issues with the banking sector and the need for government assistance:

5.10. Figure 10: Do you think the need for the Government support has affected the loyalty of AIBs customer:

5.11. Figure 11: If you had the opportunity to switch banks would you:

5.12. Objective one:

5.13. Objective two:

5.14. Objective three

5.15. Discussion

5.16. Limitation and Future Direction for Research

Chapter 6 Conclusion and Recommendation

6.1. Conclusion

6.2. Recommendations

Bibilography

Appendix

Chapter 1 1. Introduction

The aim of this research is to establish the level of customer loyalty towards Allied Irish Bank (AIB) following the Irish banking sectors bailout by the European Central Bank (ECB) and International Monetary Fund (IMF). The research will address the impact of the bailout on the Irish Banking sector by the European Central Bank and International Monetary Fund in the mind of customer, and identify the reasons that have caused satisfaction and dissatisfaction to customers. The study will investigate the level of customer loyalty towards AIB following the bailout.

The research objectives of this study are to identify:

· The level of customer satisfaction with AIB following the bailout;

· The level of customer dissatisfaction with AIB following the bailout;

· The present level of customer loyalty to AIB following the bailout.

Remarkable service quality and satisfaction has been identified as a key antecedent of customer loyalty in banking as well as in other service industries (Dick and Basu, 1994; Lewis, 1993). Customer loyalty in service industries is more dependent on the development of interpersonal relationships (Berry, 1983), moreover in the case of the service industry the influence of perceived experience is greater, because customer loyalty acts as a barrier to customer switching behaviour (Guiltinan, 1989; Klemperer, 1987; Zeithaml, 1981). Intangible aspects such as reliability and confidence act a key role in building and maintaining customer loyalty in the service sector (Dick and Basu, 1994). The level of loyalty in the banking sectors can be measured by “tracking customer’s accounts over a defined time period and noting the degree of continuity in patronage” (Liljander and Strandvik, 1995). Meidan (1996, p. 31). In the service industry commitment plays a central role (Morgan and Hunt, 1994; Shemwell et al., 1994). Commitment is a long lasting desire to maintain a valued relationship. According to Bloemer, et al (1998) commitment is a necessary condition for customer loyalty to bank.

1.1.Allied Irish Bank (AIB)

Allied Irish Bank (AIB) was incorporated in Ireland in September 1966 as a consequence of the merger of three well established banks: the Munster and Leinster Bank Limited (established in 1885), the provincial Bank of Ireland Limited (established in 1825) and the Royal Bank of Ireland (established in 1830). From that time, AIB has developed to be the largest Irish based banking group on the basic of market capitalisation at 31^st December 2008 (www.aib.ie, 2011)

Since September 2008 AIB has been on a financial life-support system, following the crash of the Irish property market, when the government stunned the financial world by announcing the liabilities of Irish-controlled banks would be subject to the newly introduced ‘Government Bank Guarantee Scheme’. The purpose of the government guarantee was to cover the losses incurred by the banks generated by the incapability of banks to repay their foreign borrowings.

The reasons for the losses, by the banks, were due to the size of the respective bank borrowing on the international money markets. This borrowing, funding the excessive growth in property development around Ireland, was in turn was fuelled by the ‘Celtic Tiger’ and the growth in the overall prosperity of those working in Ireland (Honohan, 2009).

The fundamental reason for the difficulty was the extent of the domestic mortgage lending (funded by the massive foreign borrowing by the banks) into an uncontrollable property market which saw house prices rise on a daily basis and planning permission being granted for developments far in excess of the population. The other main cause of the banks problems was a serious breach of protocol regarding the issuing and approving of mortgages with some banks providing up to 130% mortgages on the basis of future growth potential of the property (Honohan, 2009).

The root cause of the financial problems may never be known but it is generally accepted that the cause of the financial crash was driven by the collapse of ‘Lehman Brothers’ in America (due to excessive Prime Lending) and issues at ‘Fanny Mae/Freddie Mac’. The downside for Ireland was the inability of Irish banks to borrow from the larger investment banks and the overall drop in the housing market. The fall in the housing market resulted in the banks overall asset value being reduced and their debt increasing. Like any business the banks owed more than they were worth.

The Irish government realised that a strong financial sector is essential to any economy and took the decision to guarantee the ‘toxic’ loans at each bank. The plan was to transfer the toxic debt from the banks to the newly formed National Asset Management Agency (NAMA) thereby right sizing the asset to debt ratio and allowing the banks to raise borrowing from the international money markets.

NAMA was proposed in the April 2009 Irish Budget (Money Guide Ireland, 2009). The Government states that NAMA is a management agency which will be dealing with the problems caused to the Irish economy by the assets transferred from the Irish banks. NAMA aims at buying all of the land and property development loans from the banks. The total value of loans is €77 billion (Brian, 2009). By doing this, the Government hopes to put the banks in a condition where they can resume lending. In future, this will make NAMA the biggest landowner in Ireland.

The Irish Government realized the Irish banking sector needs more direct involvement of institutions in finding a solution to the crisis (Hennigan, 2011). Therefore, on Nov, 2010 the European Union and Euro zone finalized plans for Ireland financial Bailout. The International Monetary Fund (IMF) bailout loan for Ireland was approximately Euro 85 billion ($ 115 billion) with interest rate of 6.7% (Froymovich, 2010).

Today, the reputation of the banking sector has been damaged – through a combination of unsustainable practices and behaviours – and the sector has consequently lost the trust of stakeholders including the public. People feel let down by the banks. This is expressed in understandable anger and frustration on a daily basis (Farrell, 2010). Public think that, they have to pay tax to bailout reckless banks to compensate bond holders who were paid to take risk.

The purpose of this research is to determined level of customer loyalty towards the Irish banking sector and in particular ‘Allied Irish Banks’ and ‘the level of customer satisfaction and dissatisfaction with banking service of AIB.’

1.2.Methodology

The primary research will be carried out in order to find present level of customers’ loyalty to Allied Irish Bank (AIB) following the bailout. The research will be quantitative in nature, where a series of questionnaires will be distributed to a random sample of 50 patrons of AIB, whereby they will be selected on the basis of their knowledge and familiarity with products and services offered by the bank; in order to have an accurate analysis of their opinion regarding the level of customers’ satisfaction, dissatisfaction and loyalty with AIB following the bailout. The research data will be generated by means of quantitative research method via questionnaires. The reason behind using the quantitative research method is to provide a true reflection of general perception based on the findings rather than using secondary research method.

1.2.1. Structure of the dissertation

The dissertation will have a total of six chapters, it will start with an Introduction; second chapter covers ‘Literature Review’ which identifies reviews and critiques the literature; third chapter covers ‘Aim and Methodology’ which outlines the research aims and describes and justifies how these are to be met; fourth chapter covers ‘Context and Finding’ of the research; fifth chapter covers ‘Discussion and Analysis’ which discusses the finding in the context of the literature reviewed; finally the last chapter covers ‘Conclusion’ followed by Recommendations, Bibliography and Appendix.

Chapter 2: Literature Review

2. Introduction

The aim of the literature review is to create a basic understanding of the customers’ satisfaction dissatisfaction and loyalty, and also to obtain familiarity with recent literature on the topic and related topics. In addition to literature review of customers’ satisfaction and dissatisfaction and loyalty, different theories and model will be examined in order to establish how the bailout of banking sector affects the level of customer loyalty.

The topic ‘customer satisfaction and loyalty’ has drawn the attention of major literature and textbooks and considerable amount of research has been conducted to understand the concept of customer satisfaction and loyalty.

2.1. Customer satisfaction

Oliver (1997) defined customer satisfaction as a “pleasurable fulfilment response toward a product, service, benefit, or reward.” Customer satisfaction is an overall evaluation which signifies a sum of subjective reactions from a customer regarding products and service with varied attributes (Czepiel, et al 1984). Muller (1991) argues that customer satisfaction will become a key factor to the determine success of a business in the future. Satisfaction can be viewed as contentment, more of a passive response that consumer may associate with a service. It can be associated with feeling pleasure for a service that makes the consumer feel good which is associated with a sense of happiness (Zeithaml et al, 2006).

According to Kotler et al (2006) the satisfaction of a customer with a purchase depends upon the product’s performance relative to the buyers’ expectations. The customer might experience various degree of satisfaction. If the products performance fall shorts of expectations the customer is dissatisfied. If performances match expectations, the customer is highly satisfied or delighted. Customer satisfaction is a primary indicator of customers’ retention, positive word-of-mouth, improved profits, and lower marketing expenditures (Anderson et al., 1994; Oliver, 1999; Palmatier et al., 2006). Achieving customer satisfaction should be a primary goal for most firms, particularly service delivery organizations that organized intangible and assorted assets (Cronin & Taylor, 1992).

Ostrom and Iacobucci (1995) also believed that customer satisfaction is a multiple-item dimension which evaluates such items as product price, service efficiency, service personnel attitude, overall business performance, and ideal business service. From integration of various theories Kotler (1996) forward satisfaction as a difference function between perception and or disappointment. Consequently, customer satisfaction is an expression of pleasure or disappointment rising from compares and contrasts between perception and expectation of product or service function/effect. From compare and contrast between pre-consumption expectation and post-consumption perception, customer satisfaction as a subjectively positive or negative feeling arise.

2.2. The Expectation-confirmation theory

The confirmation and /disconfirmation theory (Churchill and Surprenant, 1982; Oliver, 1980) justifies that satisfaction is attained when a customer’s expectation is confirmed (fulfilled); positive disconfirmation will result in enhanced satisfaction and negative disconfirmation of expectation will consequence in dissatisfaction.

http://www.istheory.yorku.ca/ect.htm

Expectation-confirmation has four main parts in the model: expectations, performance, disconfirmation and satisfaction. An expectation is a sign of expected behaviour (Churchill and Suprenant, 1982). They are predictive, demonstrating belief in the product and service qualities at some range in the future (Spreng et al. 1996). Expectations serve as the judgment standard in this theory: with what customers judge performance and outline a disconfirmation judgment (Halstead, 1999). Disconfirmations are considerations which affect satisfaction, through positive disconfirmation resulting towards satisfaction and negative disconfirmation resulting towards dissatisfaction.

There is a major debate in the literature concerning the effect of disconfirmation on customer satisfaction. The debate’s problem lies in the definition of predictive expectations comparing standard for perceived performance. The confirmation of negative expectations may not lead to satisfaction (Santos and Boote 2003).

2.3. Brand attitudes and satisfaction

Brand attitudes and satisfaction are considered as different models in the literature of customer satisfaction (Oliver, 1980, 1997; Yi, 1990). According to Oliver (1981), customer satisfaction is comparably changeable and is specific on consumption, whereas attitudes are comparably long lasting. Westbrook and Oliver (1981) argued satisfaction is an evaluation of the sum of purchase conditions related to the expectation of customer, while brand attitude is a preference for the product/service which lacks the aspect of comparison. Applying a path-analytic model, Oliver (1980) found that satisfaction acquired from past experience precedes and impacts on after-purchase approach. Bolton and Drew (1991) believed attitudes as an outcome of satisfaction. Sometime, attitude can possibly develop on the basis of indirect experience and understanding (such as: concept from advertisement or corporate image).

2.4. Merits of customer satisfaction to business

According to Lovelock, Patterson, and Walker (1998) businesses can have advantages from customer satisfaction in many ways. Satisfaction is accordingly connected with customer loyalty and relationship commitment. Customers who are highly satisfied and pleased with a service or a product spread positive word of mouth and in consequence it becomes a walking, talking advertisement for an organization. Highly satisfied customers may be more forgiving. Customers who had taken pleasure of a good service delivery in past are more likely to suppose, that service failure (disappointment) is a deviation from the norm. Accordingly if there is more than one unsatisfactory incident or matter for strongly loyal customers, subsequently customer may not change their views and think about switching to alternative brand or supplier. And happy and delighted customers are unsusceptible to competitive offerings (Ndubisi, et al 2009).

Customer satisfaction is significant for the service industry. Customer satisfaction depends on an individual judgment of services, which is one of the excellent bases for evaluating services. Regarding the service quality customer satisfaction has been accepted. Due to the Intangibility (cannot be seen, tasted, felt or smelled before purchasing); Inseparability (production and consumption from provider); Variability (service quality depends on who provides and under what conditions); Perish ability (Cannot be stored for resale or later use) features of services, it is complicated to maintain consistent service performance (Cronin & Taylor, 1992; Dobholkar, Shepherd, & Thorpe, 2000; Parasuraman, Zeithaml, & Berry, 1994, kolter et al, 2009).

Wakefield and Blodgett (1996) examine the connections between consumers’ service quality perceptions, customer satisfaction, and repurchase purposes across the service industry. The result was that customer satisfaction with the service atmosphere had an important effect on repurchase intentions in all settings. Customer satisfaction is not only a principle to evaluate service quality, but is also a forecaster of repeat sponsorship and investment.

2.5. Customer loyalty

Customer loyalty is an outcome of satisfaction and brand attitudes (Oliver, 1999). Dick and Basu (1994) defined loyalty as a behavioural response that is expressed over time through the decisions that are made among alternatives. Oliver (1997) defined loyalty as a sincerely held commitment to re-purchase or re-patronize a favoured product or service in the future. In this research, similar to Oliver’s (1997, 1999), customer loyalty is concluded from re-purchase intentions of customer. Despite the fact, brand attitudes may persuade re-purchase intentions all the way through impact on attitudes towards the behaviour of re-purchasing (Ajzen & Fishbein, 1980), the degree of this impact may be affected by consequence of social norms, budget, valuation of costs, inconvenience, inaccessibility and lack of choice. Selnes (1993) indicates that customer loyalty associates the likelihood of future consumption, sustained service contracts, decreased likelihood of brand change, and provide positive public recommendation and suggestion. According to Jones and Sasser (1995) the desire of customer to continue consuming a specific service or product is customer loyalty.

According to Jones and Sasser (1995), there are two types of customer loyalty, namely long-term and short-term. The long-term loyal customer is honest and real, which signifies that a customer will not willingly turn to another business operator/supplier. The short-term loyal customer may not be honest, which signifies that likely to switch to a different business operator/supplier for a superior equivalent service. Customer loyalty depends on a customer willingness to purchase a product/service from same operator/supplier, which is regarded as a competitiveness of a business the market. In general consideration, a very loyal customer is likely to bring more potential customers to the business through positive word of mouth, many industries including the service industry highlight customer loyalty as one of their main business goals (Tsai, Tsai and Chang, 2010).

Fornell (1992) recommends a technique to determine customer loyalty in the course of repeated purchase intention and price acceptance. Similarly Jones and Sasser (1995) and Oliver (1999) classify loyalty into two types: short-run and long term. However, Oliver determines short-run customer loyalty as word-of-mouth, post-purchase recommendation behaviour, and complaints. While, long-term loyalty is determined by four different phases: cognitive, affective, conative, and active.

A quick observation of customer loyalty is repeated purchase (Ball et al., 2004; Copeland, 1923; Newman and Werbel, 1973; Tellis and Chandy, 1998). In practical terms, firms want repeated purchases mainly because such behaviour can:

· Reasonably indicate the customer favour for a brand or product (Bowen and Shoemaker, 1998);

· Indicate a customer’s purchase intention (Mellens et al., 1996); and

· Probability can increase and maintain profitability (Reichfeld and Sasser, 1990; Rust et al., 2004; Reinartz et al., 2005) by increasing market share (Chaudhuri and Holbrook 2001).

Dick and Basu have categorized such loyalty as spurious (false) loyalty or loyalty by inertia (disinterest) because it only signals behaviour as a customer response. The consideration of attitudes in behavioural representation, makes loyalty not only richer conceptually but also more useful for practical purpose such as influencing customers both attitudinally and behaviourally (Dick and Basu, 1994; Jacoby and Chestnut, 1978; Jacoby and Kyner, 1973; Oliver, 1999; Olson and Jacoby, 1971).

Attitudinal loyalty reflects customer’s cognitive, affective, and conative willingness to carry on connecting to the brand or company which is often related to customer commitment or, trust, after an initial experience of customer satisfaction (Oliver, 1999, Bravo et al. 2005; Vasquez-Parraga and lonso, 2000; Zamora et al., 2004, Bloemer and Kasper, 1994; Morgan and Hunt, 1994; Solomon, 1992).

Consequently, true loyalty (behavioural and attitudinal) is more commanding and powerful, not only in influencing the foundation line but also the reconciling processes towards the foundation line such as:

· The personal intention of customers to favourably recommend the brand or company to others (Getty and Thompson, 1994);

· The positive horizontal communication (mouth to mouth or customer to customer) in particular (Gremler and Brown, 1999; Reynolds and Arnold, 2000; Srinivasan et al., 2002);

· customer’s resistance to competitors’ offerings (Gundlach et al., 1995) and persuasive tactics to attract new customers (Dick and Basu, 1994); and

· Buzz marketing (Grifiin, 1995).

Finally, loyalty is often regarded to be a forecaster of the firm’s financial performance. The relationship, however, is often established as part of a triple: customer satisfaction customer loyalty will evaluate the firm’s performance (Reichfeld and Sasser, 1990; Zeithaml et al., 1990; Anderson et al., 1994; Storbacka et al., 1994; Rust et al., 1995; Hallowell, 1996; Fornell, 1992)

2.6. Building loyalty

For customer- centred companies, customer satisfaction is both a goal and a marketing tool. Companies need to be especially concerned today with their customer satisfaction level because the internet provides a tool for consumers to spread bad word of mouth- as well as good word of mouth- to rest of the world.

2.7. The Satisfaction-Loyalty Relation

Primarily an overall evaluation of personal consumption experience influence past experience which represent consumer satisfaction. Previous research has found that customer satisfaction persuade and influences loyalty. Satisfaction is directly based on past experience; therefore it is likely to be attainable and to accept behavioural intentions of other concerns. Numerous studies and research carried out by (Bagozzi, 1981; Bagozzi, Baumgartner, & Yi, 1992) have come up with the idea that past behaviour has straight effects on intentions which are not determined by attitude. According to Bagozzi et al. (1992), ““past behaviour serves as one type of informational input to the decision to act …”. Customer satisfaction has direct impact on intention which detains nature of behaviour as an outline of the consumption experience. However research carried by (Jones & Sasser, 1995) has shown customer satisfaction essentially converts into loyalty. Oliver (1997) argued that even loyal consumers depend on situational factors such as competitors’ sales promotion, coupons or price cuts; therefore satisfaction may not be the sole reason of loyalty (Reichheld, 1996). According to (Mittal & Kamakura, 2001) the normal satisfaction ratings into re-purchase behaviour depend on customers’ demographic characteristics. Furthermore, other variable such as brand attitudes may mediate the customer satisfaction and loyalty (Oliver, 1980; Yi, 1990).

The translation of average satisfaction ratings into repurchase behaviour can depend on consumers’ demographic characteristics, such as age or education (Mittal & Kamakura, 2001). Mittal, Kumar, and Tsiros (1999) argued that product and service satisfaction jointly determine repurchase intentions. Other variable s can also mediate the customer satisfaction-loyalty link. For example, brand attitudes, which are likely to be a consequence of customer satisfaction (Oliver, 1980; Yi, 1990), may in turn be a determinant of repurchase behaviour (Ajzen & Fishbein, 1980).

2.8. Switching costs

Porter (1980) defined switching cost as the cost involved in shifting from one service supplier to another. Other than monetary measurement of cost, switching costs may also affect time and psychological attempt concerned in facing the uncertainty of dealing with new service provider (Dick and Basu, 1994; Guiltinan, 1989). Quinlan (1991) argues that for some services and products which are in high competition (e.g. fast food restaurants, retailers such as Tesco, Dunnes) switching costs are low for the mass of identified and unidentified customers. In contrast, switching costs for services which are fundamentally difficult to evaluate, or for which there are only limited number of suppliers and less competitive market (e.g. banks, legal services, medical services), are high (Brown and Swartz, 1989; Patterson and Johnson, 1993). For instance: Switching behaviour in banking service is low. Switching from one bank to other bank may involve forgoing points (Dick and Basu 1994; Patterson and Smith 2001) such as: time and efforts spend in signing up for a new account, customize PIN numbers, re-applying for credit card, loan and mortgage, the history of credit card, mortgage, and bank loan and the subject related to direct debit. According to Ausubel (1991) ‘switching costs may explain the high interest rates on credit card balances’. Many consumers show psychological obstacles against changing the bank; i.e. switching costs are perceived to be high (Jones and Sasser, 1995). It shows there is a positive connection between the switching costs and customer loyalty in services industries.

The research shows that there is link between switching cost and satisfaction–loyalty. When switching costs are high; the switching processes are particularly painful and even dissatisfied customers will continually maintain relationships with existing service providers and refuse to discontinue the relationship (Jackson, 1985; Port, 1980). Research has shown that switching costs can show a significant consequence on customer loyalty through satisfaction (Kim, Kliger and Vale, 2003).

2.9. Loyalty program

According to (Gruen 1994; Yi and Jeon 2003), customers generally take part in loyalty program to obtain economic advantages (discount), emotional advantages (sense of belonging), reputation or recognition, and/or to access absolute treatment or service. Frequency programs and club marketing programs are the customer loyalty programs that companies can offers (Kotler et al 2009). Frequency programs are designed to provide rewards to customers who buy often and in considerable amount (Dowling and Uncles, 1997). Service industries such as hotel and airlines companies adopted frequency programs, followed by banks which issues credit cards.

Many super market and retail store offers club marketing programs which can be open to anyone who buy a product or service, or can be limited to an attraction group. Club cards attract and keep those customers who are responsible for largest portion of business. Club cards of play station of Sony and Harley-Davidson motor car are example of highly successful club (Kotler et al 2009).

Prior research done by O’Malley (1998) suggests that loyalty programs work effectively with those customers whose psychological connection to brand is comparatively low. On the other hand, highly committed customers are expected to be more loyal to their brand despite of the advantages and benefits offered by the company reward program.

Perceived switching cost and loyalty program are linked to customer participation in the loyalty program. Switching costs increase when loyalty programs are involved. Offering smart and attractive loyalty program, firms can enhance barrier to switching cost. According to Wirtz, Mattila and Lwin (2007) high switching cost connected with loyalty program, encourage customer to stay with a specific brand in spite of low attitudinal loyalty.

Chapter 3 3. Aims and Methodology

3.1. Introduction

This chapter aims to describe the research objective and methodology used during this dissertation. Quantitative research and analysis has been chosen as the primary method of collecting and analysing the information. By employing quantitative methods a greater emphasis can be placed on the quality of the potential information collected. In this manner, this dissertation attempts to achieve an in-depth analysis of customer satisfaction and loyalty toward the AIB following the bailout rather than just a broad understanding of customer satisfaction and loyalty.

3.2. Research question

According to Malhotra and Biks (2003), ‘research questions are refined statements of specific components of the problem’. Research questions serve to collect specific information when analysed will answer the research problem and test hypothesis. The main focus of this study is to examine the degree of customer satisfaction and loyalty towards AIB following the bailout in November 2010 (Froymovich, 2010). This study will also expect to analyse the activity of switching from one bank to another due to dissatisfaction. In this respect, the dissertation will aim to answer/address the following question:

· What is the level of customer satisfaction with AIB, following the bailout?

· What is the level of customer dissatisfaction with AIB, following the bailout?

· What is the level of customer loyalty towards AIB, following the bailout?

3.3. Research objective

The purpose of this study is to demonstrate how the bailout has effected in the level of the customer satisfaction and loyalty towards AIB. This study will involve an in-depth examination of customer satisfaction and loyalty following the bailout.

3.4. Research Strategy and Methodologies

The survey strategy has been carried out as the main research strategy for the purpose of this dissertation. Saunders et al, (2007) stated ‘the survey strategy is usually associated with the deductive approach.’ A survey strategy attempts to gather quantitative data which can examine quantitatively using descriptive and inferential statistics. It is a popular and common strategy in business and management research and is most frequently used to answer who, what, how much and how many questions. It is therefore tends to be used for exploratory and descriptive research. The data gathered by the survey strategy is not likely to be as widespread as those data which are gathered by other research strategies (Saunders et al, 2007).

This study will obtain its data through theoretical sampling; Mason (1996) describes the link between sampling and theory as follows:

Theoretical sampling means selecting groups or study on the basis of their relevance to your research question, your theoretical position... and most importantly the explanation or account which you are developing. Theoretical sampling is concerned with constructing a sample.... which is meaningful theoretically, because it builds in certain characteristics of criteria which help to develop and test your theory and explanation (Mason, 1996).

According to Kirch (2008) the aim of quantitative research studies is ‘to quantify attitudes or behaviours, measure variables on which they centre, compare and point out correlations.’ Quantitative researches are generally carried out through survey on sampling; therefore the outcomes can be concluded to whole population studies. It requires the development of standardized measurement instruments such as questionnaire (Kirch, 2008).

Myers (2009) stated that, quantitative research is the best method to address the large sample size and can be generalized to the large population. The objective of quantitative research is to examine a particular topic over the large number of people or organizations. The major drawback of quantitative research is that many social and cultural aspects are lost and are treated in a superficial manner. The context of quantitative research is treated as ‘noise’ (Myers, 2009). However due to its nature quantitative research can be useful and applied to measure the level of customer satisfaction and loyalty following the bailout of the banking sector.

3.5. Method Employed

The research method chosen is affected by the nature of the research questions and the theoretical perspective. In this study both primary and secondary methods will be employed as a means of complimenting one another. The information presented in this study has been collected from both primary and secondary sources.

3.5.1. Secondary Research

A number of secondary sources of information were used in completion of this study. Secondary data include both raw data and published summaries (Saunders et al, 2007). Byrman (2001) offers a number of advantages of conducting secondary analysis: access to high quality data at a lower cost, opportunity for longitudinal analysis, opportunity for cross- cultural analysis, more time for data analysis, broader scope of information. However, secondary information was examined in relation to all of the research questions; it proved most useful for the study of customer satisfaction and loyalty.

Furthermore, Byrman (2001) does also offer a number of limitations of secondary data analysis such as: lack of familiarity with data, complexity of the data, no control over the quality of the information, and the absence of key variables.

The sources of secondary information included in this study were industry reports, books, journal, research paper, computers files, various internet websites and trade newspapers. Secondary data had main advantage for this study of providing a broad overview and understanding of customer satisfaction and loyalty. Furthermore it allows the relation between customer satisfaction, loyalty and switching cost in relation to service industry such as bank.

Secondary data includes both internal and external data, all of which have been outlined in the bibliography section accompanying this dissertation. This source of information was readily accessed and publically available. As it does not apply exactly to researchers’ discussion and can become quickly outdated more systematic primary sources needed to be examined.

3.5.2. Primary Research

In order to address the problem of secondary data analysis, particularly the issues of inaccuracy, inadequacy and bias, primary data was collected. Primary research is collected in order to investigate deeper understanding of a specific research (Malhotra and Birks, 2003). The ‘primary research objectives’ were achieved through the use of questionnaires.

For this purpose a series of questionnaires were distributed to sampling of 50 customers of AIB. This method was chosen in order to identify the level of customer satisfaction and loyalty to the AIB following the bailout. Participants were selected randomly, whereby they were selected on the basis of their knowledge and familiarity with products and services offered by bank.

Questionnaire contains 17 standard set of question in order to obtain the related information regarding customer satisfaction and loyalty. A copy of questionnaire can be found in appendixes accompanying this report.

The reason for using questionnaire as survey instrument is that it has many advantages. Downs and Adrian, (2004) stated the primary advantage of questionnaire are it is ‘efficiency, large sample size, cheap costs assured confidentiality, sampling of many topic, and having a permanent original copy of the responses’. Furthermore it can be disturbed to all participants at the same time frame; therefore it is the best means of gathering information (Downs and Adrian, 2004).

3.6. Limitation of Research

The outcome of the research cannot form a definite stand on level of customers’ satisfaction and loyalty following the bailout as only 50 customers of AIB participates in research, which cannot reflect the true level of customer loyalty of entire customer of bank. However, it will provide a guideline through the sample of customers.

3.7. Ethical issues

In agreement with law which aims in protecting the grace and privacy of each individual who participate in research, customers are not requested to make available their commercial and valuable information for making research successful. The researcher has to notify some information to individual before an individual become a subject of research which are:

· The main purpose, benefits and possible risk of the research.

· The individual right to decline from participate and right to bounce at anytime of participate.

The researcher cannot force anyone to become a subject of research until an individual agree to participate. Any kinds of pressure cannot be applied by researcher to make an individual part of research. The researcher have to convince the customer their personal information such as their personal detail, account name, account number, branch code will not be included in the research paper.

All the information of participants, which were obtained in time of research, will be kept confidential. And at the end, any information which discloses the identity of an individual who are subject of research will be destroyed. Any information concerning to identity of an individual shall not be included in final report, unless an individual has given permission in writing to its inclusion beforehand.

Chapter 4 Context and Finding

4.1. Introduction

This chapter examine the subject matter which is under survey, which is based on primary and secondary data collected.

4.2. Context of the research

AIB customers comprise the study's population. The research requested AIB’s customers to take part in the survey and also encouraged them to complete and return the questionnaire. The exercise was conducted over period of two weeks. Of the 48 customers who accepted to take part in the survey, 26 finished and returned it. Yet, only 20 were usable for this analysis: 6 were not included either because of incomplete data or because of useless information. This resulted in 42 percent response rate.

Observation

The analysis observed some of the result matter during the survey before the actual outcome was obtained which is present as observation.

4.3. Observation 1:

The analysis observed that the bailout has not affected the level of customer satisfaction in AIB. The only thing that makes them disappointed with the bank is the crashing of banking sector in the nation. The level of customer satisfaction might have decreased, but they are still satisfied. The reasons for satisfaction are:

· AIB provide good customer service, with fast response to enquiries of customer.

· Friendliness of the employee

· Additional service it provides such as internet banking.

4.4. Observation 2:

The analysis observed most of the respondents are disappointed with the Irish banking sector, which definitely indicate that the level of loyalty to AIB will also decrease. Customers are disappointed to the Irish banking because they believe:

· Banking sector is the one which brings a crisis in the nation.

· Irish citizen and taxpayer are the one who are suffering from recklessness of the banking sector.

· Irish citizen and taxpayer have to bailout the banking sector.

· The economic crisis and recession are the result of careless of the banking sector.

4.5. Observation 3:

The analysis observed that most of the respondents are against the bailout of the banking sector. The following are the reasons why customers believe the bailout was not good idea:

· Banks are the private company therefore they should be treated as such.

· When bank are not loyal to the nation, why should the government bailout.

· Customers believe the Government can invest that money to create some employment in country than to bailout the bank sector.

4.6. Comment from some respondent during the survey:

· Do you think the government bailout of the banks was a good idea?

“Definitely not: It has crippled the country. It is unbelievably unfair why the tax payer should pay for the negligence, stupidity, profligacy of greedy, amoral bankers, developers and politicians. It is a rip-off.”

“it increased the burden of the nation due to huge interest”

“As anyone can see, this money only serves the purpose of going back into German banks' coffers. Why on earth should Irish taxpayers pay the bill of German banks, suffering years of high taxes and low growth to compensate for reckless lending of those banks? To add insult to injury, the lenders are bullying the Irish government into raising the corporate tax rate: this will certainly bury any possibility of an Irish revival.”

“There was no other option, Government was compelled”

“Government help is a much needed help for AIB’s faster banking recovery”

Comments from questionnaires show, customer are not happy with the bailout of the banking sector. Some participants believe that the banking sector bring the crisis to the nation. Furthermore, the respondents asked ‘why should taxpayer pay for the mistake of the banker?’

On the other hand, other respondents argue, there was no option for the Government, they have to support the banking sector because if the banking sector collapse the economy will collapse.

· How can AIB restore customer confidence and loyalty?

“It can’t, they are damaged beyond repair. Its lifeblood is/was mortgage lending. And look at the pain that has brought people.”

“It is impossible, if you are loyal to a bank, you need to your head examined”

“Importance to have national source, show loyalty to Irish people, the bank have a bad figure so have to be taken by international bank but we should have some control for it.”

“Through ensuring customer that if we stay together happy days will come back”

Comments from the questionnaire shows, customers lost their trust to banking sector. Some participants believe AIB cannot restore the confidence and loyalty of customer because it is beyond the ability to restore. Furthermore, customers believe only ill people can be loyal toward the banking sector in current situation.

On the other hand, other respondents assumed the banking sector should be loyal to the Irish people by ensuring customers all should stay together in bad days, and then happy days will come back soon.

Chapter 5 Discussion, graph and analysis

5. Quantitative Research finding:

The charts below indicate the results of the finding based on the questionnaires distributed to different customers of AIB. The results are used to find out level of customer satisfaction and loyalty following the bailout.

5.1. Figure 1: How long have you had the account with AIB?

Note: X-axis: number of year, Y-axis percentage of customer.

Figure 1 indicates that about 45% of the customers have been banking with the AIB for more than 10 year, 30% of the customers have been banking with the AIB between 5 and 10 years, 20% of the customers have been banking with the AIB between 1 and 5 years and 5% of the customers have been banking with the AIB for less than 1 year. The main concern is has the bailout affect customer loyalty toward the AIB. The AIB has get customer in less than one year which is after bailout of the banking sector. But the trend of customers banking with AIB has decreased significantly looking at the figure last 10 years.

5.2. Figure 2: Why did you open an account with AIB?

The alphabet in y axis indicates followings:

a. My employer banks with AIB + My salary is paid direct to my bank

b. My family bank with AIB

c. I know someone who works in AIB

d. The bank was the closest to where I live/work

e. The bank give the best student loans

f. My mortgage is with AIB

g. It is so long ago I don’t remember

h. AIB was recommended to me

i. Other

From figure 2, it shows that most of the customers open an account with AIB because the bank was the closest to their house/workplace and another reason was their employer bank with AIB and salary is paid direct to their bank. It is noticed; some customers open an account for multiple reasons.

5.3. Figure 3 would you say that you are very satisfy, satisfy, not sure, Dissatisfied or very dissatisfied with service of the AIB

Figure 3 indicates all participate are satisfied with service of the AIB. The research shows good customer service, friendliness of staff, quick response to customer inquiries were the main reason for satisfaction. Furthermore, some customers even compare AIB with its competitors such as bank of Ireland, Anglo Irish Bank, and specify the service of AIB is better.

5.4. Fig 4: Are you a loyal customer of AIB:

Figure 4 indicates 60% of the total customers of the AIB prefer to say they are loyal customer; in contrast 40% prefer not to be loyal. According to Lovelock, Patterson, and Walker (1998) satisfaction is linked with customer loyalty and relationship commitment, however this research shows that most of respondents are satisfy with the service of AIB but still only 60% of respondents consider themselves as loyal towards AIB. Customers clarify the reason for their loyalty is, they believe it is the best bank in the present time and they prefer to do their all transaction with the same bank. Furthermore the high switching cost of the bank is another reason for their loyalty. According to Dick and Basu (1994) switching activity involves forgoing points such as time and effort in signing new account, credit card, mortgage, direct debit bills, history of credit and loan; which act as psychological obstacles against switching the bank.

On the other side, the reasons for customers not being loyal to AIB are AIB has damage their reputation and the trust. Furthermore customers argue ‘when the banks are not loyal to their country and customer how can we as a customer be loyal to bank’.

5.5. Figure 5: Before the problems were identified with the banks were you a loyal customer of AIB

Figure 5 indicates 90% of AIB customers were loyal to the bank before the problems were identified with the bank. There is 30% decrease in the customer loyalty after the problem was identified. The analysis assumed the reason behind the decrease in the level of the loyalty is lack of relationship commitment and trust.

5.6. Figure 6: Do you think the government bailout of the banks was a good idea:

Fig 6 indicates about 60% of the AIB customers are against the idea behind the bailout. Customers believe banking sector is the main reason of economic crisis in the nation. Customers express their anger towards the banking sector. Here are some comments from the customer which was express when bailout came in Ireland:

“I am appalled and outraged by the bail-out of greedy, selfish bankers and developers who will get away completely with their destructive selfishness while ordinary working people in Ireland will suffer hugely by the draconian cuts. Those who fuelled the reckless lending should be made to pay for their behaviour. And the markets should be made to wait as long as it takes to get their money to give the Irish government a chance to reboot the economy. The budget cuts will do nothing to develop recovery. In fact they will make it take even longer and be far more painful than it needs be. The wealthy will always protect its own, and politicians will make sure they don't have to pay.”

“The government should never have bailed out the banks. Every time the government pumps taxpayer money into the banks, their share prices go up only to fall again. Some people out there are making a lot of money”.

“We have a severe winter ahead with many hardships and a country reeling and shuddering from calamity to calamity. Terms and conditions that are part of any bail-out will have to be severe and so should be the treatment of unbelievably irresponsible so-called bankers.” (www.bbc.ie, 21 November 2010)

5.7. Figure 7: Do you think the banks should have been left to sort it out themselves

Figure 7 shows about 60% of the customers believe banks should have been left to sort it out themselves. Customers assumed they were private companies and should have been treated as such. On the other hand, some customers believe that the Government is there to help them, if bank collapse, the economy collapse, therefore government must help them.

5.8. Figure 8: Do you think the AIB would have been able to sort it out without the government help:

Figure 8 shows that 100% of the respondents believe AIB would not have able to sort out the problem without government help. It indicates customer does not trust financial ability of the bank. About 60% of respondents argue that bank should have been left to sort it themselves, when they are already sure AIB would not be able to sort it out without government help. The question is: Do customers want bank to collapse or they only want government to bailout only their bank ‘AIB’.

5.9. Figure 9: Do you think AIB’s reputation has been damaged due to the issues with the banking sector and the need for government assistance:

Figure 9 shows 100% of customer believed the reputation of the bank has been damaged due to the issues with the banking sector and the need for the government assistance. Respondent assumed the Irish banks are a sick joke. The reputation of the Irish banking sector has been damaged; the trust of the customer has already been ruined.

5.10. Figure 10: Do you think the need for the Government support has affected the loyalty of AIBs customer:

Figure 10 indicates the need for the financial support from the Government has affected the loyalty of AIBs customer. The research show 35% of respondents assumed their loyalty is affected by the financial aid; in contrast 65% of the respondents assumed their loyalty has not affected by the financial aid. Customers argue ‘the loyal customer stay loyal but they lose their trust towards banking sector.’ Furthermore customers argue they are relaxed because the Irish Government and EU have guaranteed their savings. Customers suppose financial support has not affected their loyalty.

On the other hand, other respondents showed their anger towards bank, ‘when there is no trust there is no loyalty. Banks are not loyal with customers so customers are not loyal, why should customer bother.’

5.11. Figure 11: If you had the opportunity to switch banks would you:

Figure 11 indicates that 15 % of the respondents want to switch their bank. Those customers want to switch in particular to Ulster Bank. According to them, Ulster Bank is recommended by government official and they believe it can do better job than AIB.

As mentioned before, the objective of this survey is to examine the level of the customer satisfaction and loyalty toward the Irish banking sector in particular to AIB following the bailout.

Looking at the result from the survey, it shows the bailout of the Irish banking sector has effect loyalty to some extent.

5.12. Objective one:

The level of customer satisfaction with AIB following the bailout;

The result from the survey shows, there is no decrease in level customer satisfaction with AIB following the bailout. All the respondent of the survey, are satisfied with service of AIB. Good customer service, friendly of staff, quick respond to the customers inquires, providing accurate information and good internet banking are the reason for customer satisfaction.

5.13. Objective two:

The level of customer dissatisfaction with AIB following the bailout:

The survey indicates the level of customer dissatisfaction with AIB is same; there is little increase in customer dissatisfaction. Although every respondent assumed they are satisfied with service of the bank. About 15% respondents want to switch to another bank, although switching cost is high; which indicate slight increase in level of customer dissatisfaction with AIB.

5.14. Objective three

The present level of customer loyalty to AIB following the bailout:

The survey indicates the level of the customer loyalty to AIB following the bailout has decrease. About 90% of the customers were loyal to AIB before the bailout; but the present level of customer loyalty toward AIB following the bailout is 60%. Therefore the level of the customer loyalty to AIB following the bailout has decrease by 30%.

5.15. Discussion

The purpose of this study was to examine the level of the customers’ satisfaction, dissatisfaction and loyalty to the Irish Banking sector in particular to AIB following the bailout. Through the information which was gather from primary and secondary research, an effort has been made to identify the antecedents and consequences of satisfaction, dissatisfaction and loyalty in the context of banking sector; hence the author supposes the study makes a significant contribution to the literature in different ways. First, the study contribute to the marketing literature by identifying relative impacts of both service spectator satisfaction, and ultimately on behavioural intentions. Second, the study contributes to identify relation between satisfaction and loyalty, by recognizing how customer satisfaction and dissatisfaction impact to loyalty. Third, the study contributes to identify the relationship between switching cost and customer satisfaction, dissatisfaction and loyalty in relation to the banking sector.

5.16. Limitation and Future Direction for Research

Several limitations and assumption may have prejudiced the study’s results. The first limitation might be the omission of important variables. For example, this study did not include the entire Irish Banking sector to find out the level of the customer satisfaction, dissatisfaction and loyalty following the bailout. It is only limited with AIB. Furthermore, this study did not examine the moderating effect of the customer satisfaction, dissatisfaction and loyalty toward the banking sector. Second, regarding the exploratory analyse of the brand attitudes; the survey did not analysis how brand attitude affect the level of customer satisfaction, dissatisfaction and loyalty toward service industry such as the banking sectors. The third limitation is in relation to respondent applicant in survey. Author target to request 50 customers to participate to take part in survey, 46 take part, and only 20 were useable one; which cannot reflect the true level of customer satisfaction, dissatisfaction and loyalty toward the AIB.

At minimum, the current study offers new ideas regarding knowledge of the level of customer satisfaction, dissatisfaction and loyalty to AIB following the bailout. The propose study also serves to advance the study of the marketing sector of bank by examining the impact of the bailout on customer mind. This is particularly important in relation to conflict management. The proposed study and recommendations for future research provide numerous opportunities to continue advancing knowledge for the marketing of banking sector.

Chapter 6 Conclusion and Recommendation

6.1. Conclusion

In conclusion customer satisfaction is most important for service industry. Customer trust and loyalty are consequences of the customer satisfaction. When customers are more satisfy with bank, their level of trust toward the bank is high as well as they are more loyal to the bank. While if they are not satisfy with services their level of trust decrease and they are not loyal towards the bank. Most of the firms give more attention to their market share than customer satisfaction, which may be mistaken. According to Kotler (2003) ‘market share is a backwards- looking metric; customer satisfaction is a forward-looking metric’. If the levels of customer satisfaction start falling, then market share will decrease soon. Customer satisfaction is connected with loyalty and commitment. Highly satisfied customers are loyal and spread a positive word of mouth.

Customer loyalty is a sign of revisit on relationship which is revealed the idea of "lifetime value of customers,”. Furthermore, it reflect the idea, ‘it costs 5 to 10 times more for a firm to find a new customer as it costs to keep an existing customer’ (Gummesson, 1999).Customer loyalty in service industries is more dependable on progress and development of interpersonal relationships; additionally in the service industry the influence of perceived experience is superior and greater, because customer loyalty acts as a barrier to customer switching behaviour.

The purpose of this study was to find out the level of customer satisfaction, dissatisfaction and loyalty with AIB following the bailout. The outcome of the research showed that most of customers are satisfy with the service of AIB; however some of the customers are dissatisfy with the service of AIB.

The study also showed the level of customer loyalty has decrease by 30% to AIB. Before the bailout 90% of customers assumed they were loyal to AIB. After the bailout only 60% of customers assumed they are loyal to the bank. Customers who assumed they are not loyal to bank also do not want to switch their bank to another bank. Therefore, author supposes that high switching cost may the reason behind the loyalty of the customer. High switching cost increase loyalty and put existing customer.

Although the switching cost of bank from one to another is high; 15% of the customers want to switch to another bank which indicates they are not satisfied with the banking service of AIB. Despite the fact that the entire banking sector in Ireland are in same condition, some of customers like to switch over to another bank. The outcome of research showed, 100% assumed that they are satisfy to bank, however 15% of they still want to switch. From this circumstance the conclusion is 15% of the customer are dissatisfied.

6.2. Recommendations

In the current situation of economic crisis, building customer satisfaction and loyalty is the challenging job for AIB and other Irish banking sector. After the bailout, AIB has lost their reputation and trust significantly. Following are the recommendation for AIB

· All satisfy customers of AIB are not loyal toward the bank. Through research and development (R & D) the bank has to find out the specific reason behind it.

· Customers specially want to switch their bank account to Ulster Bank; AIB has to conduct research to find out the reason, ‘why customers particularly want to switch to Ulster Bank’.

· Still most of the existing customers of AIB are loyal. Therefore, AIB should identify the actual need of the customer and try to find out different alternative to increase loyalty.

· From this research it is observed that customers are angry with AIB because of the bailout, but in fact they are angry with government than with the banks. Therefore, AIB has to conduct a press release and public relation (PR) program to inform the customers; about important of the bailout to the Irish banking sector. Furthermore has to inform them, in fact the bailout has strengthened a financial ability of AIB as well as other Irish bank. So that, AIB could inform all merit of the bailout to customers to rebuild the loyalty.

· Bank should promise to customer from today bank will never repeat such mistake, for this AIB should make some changes in mortgage and loan lending policy.

· Bank should show their and respect loyalty toward the nation and its customers to restore the loyalty of customers.

· AIB should start taking feedback from customers about the problem with service and how can improve service. As per research, most of the customers are happy with customer service of the AIB. Therefore AIB should maintain their services through regular training and development of employees.

· AIB may follow the personalized banking system which involve individual marketing, so that an individual needs of customer can be fulfilled, which can increase loyalty.

· AIB should use customer relationship management (CRM) as a tool to increase customer loyalty and satisfaction.

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Appendix

Research questionnaire

1. Do you have a bank account with AIB?

a. Yes

b. No

If yes how long have you had the account?

a. Less than 1 year

b. Between 1 and 5 years

c. Between 5 and 10 years

d. More than 10 years s

2. If your account is less than a year why did you open account with AIB?

__________________________________________________________________________________________________________________________________________

3. If your account is more than a year, why did you open an account with AIB?

a. My employer banks with AIB + My salary is paid direct to my bank

b. My family bank with AIB

c. I know someone who works in AIB

d. The bank was the closest to where I live/work

e. The bank give the best student loans

f. My mortgage is with AIB

g. It is so long ago I don’t remember

h. AIB was recommended to me

i. Other

Please explain

______________________________________________________________________________________________________________________________

4. Would you say that you are:

a. Very satisfy with the service of AIB

b. Satisfy with the service of AIB

c. Not sure

d. Dissatisfy with the service of AIB

e. Very dissatisfy with the service of AIB

5. In relation to question 4 above could you explain your choice:

_______________________________________________________________________________________________________________________________________________________________________________________________________________

6. Are you a loyal customer of AIB:

a. Yes

b. No

Please explain

__________________________________________________________________________________________________________________________________

7. Before the problem were identified with the banks were you a loyal customer of AIB:

a. Yes

b. No

Please explain __________________________________________________________________________________________________________________________________

8. Do you think the government bailout of the banks was a good idea:

a. Yes

b. No

Please explain

____________________________________________________________________________________________________________________________________

9. Do you think the banks should have been left to sort it out themselves:

a. Yes

b. No

Please explain

______________________________________________________________________________________________________________________________________

10. Do you think the AIB would have been able to sort it out without the government help:

a. Yes

b. No

Please explain

______________________________________________________________________________________________________________________________________

11. Do you think AIB’s reputation has been damaged due to the issues with the banking sector and the need for government assistance:

a. Yes

b. No

Please explain

________________________________________________________________________________________________________________________________

12. Do you think the need for government support has affected the loyalty of AIBs customer:

a. Yes

b. No

Please explain

______________________________________________________________________________________________________________________________________

13. Has the need for financial aid affected your loyalty to AIB:

a. Yes

b. No

Please explain how _________________________________________________________________________________________________________________________________________________________________________________________________________

14. How can AIB restore customer confidence and loyalty?

15. If you had the opportunity to switch banks would you:

a. Yes

b. No

16. If your answer to question 15 was yes which bank would you go to:

a. Bank of Ireland

b. Ulster Bank

c. Permanent TSB

d. Anglo- Irish Bank

e. Other

Please specify _________________________________________________

17. If you chose a bank in 16 above could you explain why you chose that bank:

Assignment Topic: Report on BBC (British Broadcasting Corporation)

2011-08-07T20:59:00.001-07:00

Strategic Management

Assignment Topic: Report on BBC (British Broadcasting Corporation)

Baral Abita

Abstract

British Broadcast Corporation (BBC) was found in 1922 with a vision to inform, educate and entertain public. The BBC expands with real confidence and inaugurates its empire. BBC expands its services to radio broadcast, television, satellite and internet across arts, education and news. This report is related with the external and internal environment scanning of the BBC. The report explain short history of the BBC and what are the possible opportunities and threat for the BBC in current situation; and how can the BBC overcome with threat and utilize its strength to minimize weakness.

Table of Contents

1. Introduction

2. Culture of the BBC

3. Organization structure of BBC

4. Environment Scanning of the BBC

4.1 PEST

4.2. Porter 5 Competitive Force Analysis of BBC

4.3 SWOT Analysis

5. Product life cycle:

6. The Boston Box

7. Value chain analysis

8. Conclusion

Bibliography:

Appendix

1. Introduction

The British Broadcasting Corporation (BBC) is the leading broadcasting organization in the world (Crisel, 1997). It was established by Royal Charter and is overseen by license fee which is paid by UK families. The BBC offers eight national TV channels, including regional programming, 10 radio stations, 40 local radio station and widespread websites. The BBC World Service provides news and current affairs programmes to the world and broadcasts on radio, TV and online, offering news, entertainment and information in 32 languages and operating in many countries (http://www.bbc.co.uk/aboutthebbc/).

Due to developments in technology and changes in viewer preferences the Government came under pressure to establish a viable alternative to the BBC, this occurred in 1955 when the Government established the Independent Broadcasting Commission who made available licences to the newly established Independent Television (ITV). In the latter half of the 20^th Century both the BBC and ITV stations have come under more competition due to the launch of BSKYB which brought a completely different approach to broadcasting due to its ‘Americanised’ style of news journalism and available exclusively through satellite. The other major difference with BSKYB was that they charged the viewer a monthly fee.

As a result of this increased competition the BBC has literally needed to reinvent itself while also ensuring its traditional beliefs remain. According to James Wood (2000), no other international broadcaster has placed as great an attempt as the BBC to support its public in the broadcasting of fact:

“Free and untainted information is a basic human right. Not everyone has it but everyone wants it. It cannot by itself create a world, but a world cannot exist without it. However the reputation and respect which the BBC world direct all over the world is due to principle to be a non partisan organ and free of government control and approach of management.”

2. Culture of the BBC

a. Mission Statement

“To enrich people's lives with programmes and services that inform, educate and entertain.” ([1])

b. Vision statement

“To be the most creative organisation in the world” (2)

c. Values

“The BBC values in trust (independent, impartial and honest), customer oriented, taking pride, quality, creativity, respect and team work” (3)

d. Aim

The aim of the BBC is sustaining citizen, encouraging education and learning, motivating creativity and best culture, getting UK in world and world in UK, representing UK, delivering emerging communication and technologies (4)

3. Organization structure of BBC

Hit Ireland Hoskisson, (2003)

Fig. 1: Organization structure of the BBC

The organization structure of the BBC is a centralised structure and is highly bureaucratic. In the BBC, Board of Governor and Director General make decisions and passes those decisions to the managers at divisional level ensuring in each operating level follows the policy.

4. Environment Scanning of BBC

The environment scanning tool helps to understand external forces of change and internal changes, so that management can improve their position in the future (Chun Wei Choo, 2005). The environment scanning tools are PEST, Porters 5 competitive forces and SWOT analysis which are used to scan the environment of the BBC.

4.1 PEST

PEST is a tool for scanning a general environment. PEST stands for Political, Economic, Social-cultural and Technical environment (appendix 1). PEST is a useful strategic planning tool which helps to indentify changes in competitive business environment (Kotler, 1998).

4.1.1 Political

Political factors bring threat to the BBC. The BBC has a global presence in terms of news reporting and broadcasting. Therefore, the diverse geo-political environment can itself be consider as a political threat for the BBC because not all fairly reported news is acceptable for those diverse group of people. Truth is always bitter, people do not want to hear anything bad about them, even though that is truth or fairly reported news. And same things happen in case of government too. Another political threat of the BBC comes from news collection. The life of the news reporter is always at risk in some countries of the world. Extrusion, intimidation, abduction, and kidnapping are common problem or threat to the news reporter around the world mainly from active terrorist group. However, In case of domestic market political environment possess comparatively low degree of threat. Currently the BBC is facing political threat related to license fee. According to Davies (28^th Aug, 2010), former Chairman of BBC, "Greatest strategic threat for the BBC is that the licence fee will be 'top sliced'. Because its competitor BSKYB start raising the issue to license fee (http://www.bbc.co.uk/news/entertainment-arts-11111001)

4.1.2 Economic

One of the major economic threats for the BBC in domestic and international market is economic recession. World economy is facing a severe economic downturn because of that consumers are curtailing their expenses. Many residents of UK are losing their job because of the recession, due to high unemployment resident cannot afford to pay expensive license fee. Therefore, most notably customers are decreasing their entertainment expenses and leisure time expense which is domestic threat to the BBC.

4.1.3 Socio-cultural

One of the major socio-cultural threats in domestic and International market is huge cultural diversity with multi religion and multi language among the people. Though BBC does not broadcast only in English language, it cannot run all its programs on all of the language simultaneously to satisfy all kinds of people who believe in different culture and like to speak their own language. Besides this socio-cultural threat for the BBC in terms of news collecting and reporting is that not all people in the world speak and understand English language creating the need of language interpretation which is not always easy. Due to the change in customer preference and lifestyle of viewers, they are demanding for more better and diverse programmes with more variety which is socio-cultural threat to the BBC.

4.1.4 Technological

For approximately 60 years, the BBC enjoyed one method of broadcasting: traditional approach on T.V. and radio. Since late 70s’ and 80s’ satellite T.V. has allowed more competition to enter market offering a wider range of T.V. and radio programme. In Initial stage, BBC refused to air on satellite T.V. but pressure from viewer who purchased satellite system, finally force the BBC to give in. Now the BBC finds itself to re-invest allowing development in internet technologies and live streaming. However, the BBC is finding hard to compete against its competitors because of their innovative technology. Although the BBC provide satellite to viewers, it competitors BSKYB provide a wide range of service through a package. Package offers wide range of programme and viewer can choose their channel according to their preferences and choice. Therefore, technological threat that BBC is facing is advance and innovative information technology which its competitors are using such as digital T.V. and radio, satellite broadcasting. Beside this, fastest growing means of communication such as internet also replacing the news channels like the BBC.

4.2. Porter 5 Competitive Force Analysis of the BBC

According to Porter (1980), the capability of a company to gain a satisfactory breakeven depends on five forces:- the ability of new competitors to enter the industry, the threat of substitute products, the bargaining power of buyer, the bargaining power of suppliers and the rivalry among existing competitors(appendix 2). Porter (1985) believes that the collective strength of five forces determines industries profitability.

4.2.1 Threat of New Entrants

Threat of new entrance to the media industry could possibly come from newly opening news channels, both locally and internationally; thus the overall threat is relatively low.

The start-up costs for entering the industry create a serious barrier. Brand awareness and establishment cost would be higher due to the customer loyalty on existing news channels. Expensive licence fee and high capital investment with long payback period is another barrier for new entrance. In this industry, the barriers to entry is really high and the barriers to exit is low, therefore only the few companies can maintain their position in the market, while others companies could give up altogether or are merged with bigger firms.

In the news channel industry, currently there are fewer but more powerful companies, therefore strengthening the barriers to new entrants, and weakening the potential for new entrant success.

The BBC is already well established company in media; BBC has been around with its customer since long time and BBC has segmented its market in such a way that satisfy the need of each customers; which is the key factors that create the more band loyalty of customers towards BBC.

4.2.2 The Bargaining Power of Supplier

Suppliers’ power generally depends on volume purchase by companies. The more powerful suppliers are, the less profitable the industry is. Suppliers for the news channel industry come from both international and local dimensions, and each group holds different level of powers. Since the different countries have different rules and regulations regarding information they want to publish. International suppliers have more bargaining power than national suppliers.

The bargaining power of suppliers has medium high to medium low bargaining power, depending on the experience, popularity and demand of viewers/listeners. For example: if big celebrity such as Angelina Jolie, Brad Pitt, Tom Cruise, Metallica, etc are supplier then supplier would have high bargaining power, mean while if supplier are common actors, journalist, fresh graduate, product maker or have less experience, than supplier will have low bargaining power.

4.2.3 Bargaining Power of Customer

The bargaining power of customers of news channel industry is relatively higher due to the intense rivalry with in the news channel industry and substitute products are available in the market with lower price.

The bargaining power of customer of the BBC is relatively high. The reason why customers bargaining power is high is that the BBC cannot force customers only to watch their channel. Though the BBC is free in UK, they still have to pay licensing fees for TV and beside the BBC Customers have numerous choices to watch. At the same time ITV, Channels 4 and Channel 5 are also free in air. Further, viewers can get bigger package of channel when they subscribed in with BSKYB which increase the bargaining power of the customers.

4.2.4 Threat of Substitutes

The substitute products of news channel industry are news paper, magazines, internet, movies, social networking sites and others. The threat of substitutes to news channel industry is high due to many factors. To begin with, the same news and information are easily available from different substitutes with more convenience and low cost. Another reason is that switched over cost from news channel industry to its substitute is low.

In present situation biggest threat is social networking sites in which user can registered to create personal profiles and puts the blogs, video and songs, link to other users and communicates with them. Therefore the threat is a substitute product is relatively high.

4.2.5 Intensity of Rivalry among Competitor

The news channel industry has few competitors, most of whom hold significant percentages of market share. BBC basically competes with American news channel and other national channel such as ITV, BSKYB, and CNN. BBC is the leader in the news channel industry, which accounts for 40% of total market coverage in UK market. The company is able to leave its competitors behind by not changing any fees to its customers.

The intensity of rivalry among competitor is relatively high because the industry is slow growing market with few strong competitors. Even though customer loyalty is typical for industry, all companies are concentrated on implementing new competitive strategies, diversification, and distribution capabilities.

4.3 SWOT Analysis

SWOT analysis (strength, weakness, opportunities and threat) is a suitable tool to summaries the internal and external matters and to identify the expansions which are most likely to be profitable (Boddy, 2008).

4.3.1 Strength

The strengths of the BBC are:

· The BBC is a well known brand in the world of news, media and entertainment with powerful brand identification. (Alvesson and Thompson, 2004).

· Qualified human resources

· Strong supply chain both in domestic and international market

· Clear strategies and strongly focus on objectives and goals

· Image: The BBC (British Broadcasting corporation)

· Financially well-built and is proficient of introduction motivated campaigns.

· Well diversified products to meet requirement of each customer.

· It is run through government

4.3.2Weakness

The weaknesses of the BBC are:

· Out dated technology.

· Later adopter of innovative ideas and product offering.

· Provide fewer packages in satellite channel.

4.3.3 Opportunity

The opportunities of the BBC are:

· Expansion opportunity to developing countries such as Brazil, China and India.

· The BBC can extend all the service in internet targeting different group of viewers/ listeners.

· The BBC can extend its product line both in domestic and international market.

· The BBC can enhance its revenue by advertisement.

· The BBC can target niche market and youth viewers/listener.

· Placement in market as a powerful brand identity with loyal customer.

4.3.4 Threat

The threats of the BBC are

· Heavy competition with CNN, Fox News and other local media companies such as BSKYB, ITV, etc (Alvesson and Thompson, 2004).

· Possibility of new entrance from international brand.

· Threat to BBC’s source of revenue (currently greatest strategic threat for BBC is that the licence fee)

· High threat of substitute product such as Times newspaper, online news, internet, social networking sites, etc.

5. Product life cycle:

Every product has lifecycle. The life cycle starts from launch of new product and ends to the final withdraw of product. Product life cycle (PLC) have four phases, they are introduction, growth, maturity and decline (Gort & Klepper, 1982).

Though every product/service has life cycle, phases of life cycle of one product may vary from another product. For example, some product/services may go through introduction, growth, maturity, and decline stage while some other product may reach decline stage after the introduction stage. Similarly, media group also has its own lifecycle within a broadly defined market of televisions, radios, satellite, internet programmes. The evolution of mature media industries may therefore, significantly depart from the product life cycle of other products in general (Albarran et al, 2008). The product life cycle can be applied to whole industry, single business, and single business unit.

The BBC is in the mature stage of product life cycle, while its business units are in different stage of product life cycle. Currently BBC has following business units: BBC radio, T.V., satellite, internet and digital (T.V. and radio). The figure 1 shows the different stages of BBC’s business unit. Digital radio and T.V. of the BBC are in an introduction phase of product life cycle, satellite and internet division are in growth phase, and the BBC radio and T.V. division are in mature phase of product life cycle.

T.V. and Radio

Digital (T.V. and Radio)

Satellite and Internet

Fig. 2 product life cycle of different business unit of the BBC

Different products (programmes) which operate under broadcast radio and television business unit are in different stages of product life cycle. For instance:

· The program such as Wallander introduction and Criminal Justice are in introduction phase.

· The program such as Little Britain, Absolutely Fabulous, Strictly Come Dancing are in growth phase.

· BBC news at 9 O’clock, Match of a Day is in mature stage now.

· Program such as Olympic live, the Princess Diana funeral are decline.

6. The Boston Box

The Boston Box is a tool of portfolio management and also known as Growth Share Matrix. The Boston Box measure the position of company’s product according to market share and growth prospective. The product life cycle can be clearly linked to the Boston Box, which offers a way of examining a company portfolio. In Boston Box there are four boxes which represent position of product depending on stage of product life cycle. : Question mark denotes introduction of new product, Star denotes products which are in growth phase of product life and generate cash, cash cow denotes products in mature stage and generate cash, and Dog denotes products in decline phase. And there are two axes on the matrix; vertical axes indicate market growth which shows the potential and attractiveness of the market and the horizontal axis indicates market share which shows competitive position of the product in market.

In case of the BBC the Boston Matrix can be used to analyse portfolio of whole business, different business unit and product.

The BBC is in Cash Cow in Boston matrix which is in mature stage of product life cycle and has high market share and relatively low market growth.

Business units: The BBC TV and radio is in Cash Cow of the Boston matrix which have high market share and relatively low market growth. Satellite and internet are in Star of the Boston matrix which has relatively high market share and high market growth. And digital (T.V. and radio) is in Question Mark of the Boston Matrix which in introduction stage of Product Life Cycle and has high market grow and relatively low market share. Fig 3 shows Boston box of BBC business units.

Fig 3: Boston Box Matrix of the BBC units

Product: Programme such as Little Britain, Absolutely Fabulous, Strictly Come Dancing are in Star of the Boston Matrix which has relatively high market share and market growth. The BBC 9 O’clock News, Match of the Day is in Cash Cow of the Boston Matrix which have has high market share and relatively low market growth. Wallander Introduction and Criminal Justice are in Question mark of the Boston Matrix which in introduction stage of PLC and has high market grow and relatively low market share. Princess Diana Funeral, live match of world is in Dog of the Boston Matrix which has low market share and market growth. Fig 4 shows Boston box of programs that BBC offer.

Fig. 4 Boston Box Matrix of the BBC products line

Through the Boston box analysis, the BBC can identify different opportunities open to a company as a profile of core capability and how the BBC can developed to sustain certain existing business and leveraged to create a new business opportunities. For example to start more entraining and innovative programme such as strictly come dancing, little Britain, strictly fabulous and so on will create more opportunities for the BBC (Gary Hamel and C K Prahalad).

7. Value Chain Analysis

“Value chain is a tool that divides the firm into the discrete activities which the firm performs in designing, producing, marketing and distributing product and services” (Lee & Yang, 2000). It is a basic tool for diagnosing competitive advantage and finding a way to enhance it.

7.1 Primary Activity

BBC’s supply chain supports all of its business locations in 193 countries. The BBC clearly understands their mission is to enrich people's lives with programmes and services that inform, educate and entertain. All of their primary activities are concern to provide quality programmes and services which add value to customers.

a. Supply chain management

The BBC encourages procurement opportunities with a diverse community of suppliers all around the globe to provide diversified programmes and to make those programmes more informing, educating, and entertaining. It makes valuable contributions to the global economic growth educating the people about business, lifestyle, economic situation, and others. The raw materials for the BBC are raw news, innovative idea for program, conflict reports, and new story of the environment. BBC broadcast all their news from London as a central hub; therefore all those news are supplied to London.

b. Operation

The major business units of BBC are radio, T.V., satellites, and Internet. BBC’s main operation focuses on the events, happenings, phenomenon and cases which are occurring anywhere in the universe. Journalist, reporter, videographer, camera man, writer and other news collectors scattered around the world and they work as a complete team to convert events, wars, natural disasters, political matters, and business happenings into viewable news, and present those through their media to the public. The whole system works in network where all the players (journalist, managers and technicians) work in extremely furious and timely manner.

c. Distribution

After editing the raw news, conflicts reports, and innovative programme, distribution is carried out by the BBC. The distribution of the BBC is support by the head office and other unit of localized broadcasting channel of country in which BBC is operate.

d. Sales and Marketing

Marketing is carried out simply through brand positioning and advertising. The BBC has always been committed about maintaining customer loyalty. Because of free and untainted information broadcasting, viewers/listeners are loyal toward the BBC. The BBC does marketing in its own channel. For example: For 9 O’clock news, headline of the news is shown 24 hours on the bottom page of TV screen, which adds value. Further if the BBC launches any new programme it informs, persuades and reminds viewers though advertisement in its own broadcasting media which add value to viewers/listeners as well as for BBC.

7.2. Support activities

All those primary activities of BBC depend on the support activities. The support activities are:

a. Infrastructure

The digital infrastructure of the BBC is run through Leitch's NEO platforms which run all the channels and the BBC news digital video server system and its wider analogue environment. The infrastructure of the BBC is accommodating by NEO's through course-plotting, supplying, clock and signal reference products, etc.

b. Human resources

The BBC has high qualified human resources. Professional on research and development and expert on collecting and disseminating qualitative information are key success factor for bringing success to the BBC. Recruiting of high quality human resources with innovative and creative ideas bring more value to the BBC.

c. Technological development

The development of fast and innovative technology adds value to the BBC. With the change in preference of viewers/listeners, they are demanding for more better and diverse programme. Therefore the BBC has adopted the innovative technology to add more value to customers. For example: demand for the BBC satellite from viewers force the BBC to catch of the innovative technologies which add value to customers.

8. Conclusion

BBC has been proving itself as a successful business since its first establishment in 1922. Although, the BBC has faced different political, socio-cultural, economic and technological challenges and issues, it has overcome those challenges through its innovative ideas, culture and specialized human resource. Through environmental scanning tools, it is identified that the BBC is currently facing the threat of license fee and heavy competition. Viewers/listeners are demanding for multi-cultural and diversified programs. One of the major threats of the BBC is that it has heavy competition with CNN, Fox News and other local media companies such as BSKYB, ITV, etc and there is the possibility of new entrance from international brand in the market where BBC is currently dealing with. Not only this, but also there is the threat in BBC’s source of revenue. One way to minimize the impact of these threats or to mitigate their impact, BBC can expand its services offerings into emerging global power like Brazil, China and India. In addition to this, the BBC can extend all its services in internet targeting different group of viewer/listeners. And to tackle its threat related to its revenue, it can turn around and do more advertisement so that it can generate additional revenue to compensate its possible revenue loss from the licensing loss in the future. However, in order to maintain its current market share and to be more competitive BBC may have to prepare itself for more technologically adoptive company by quickly adopting any technological change in the market place along with introducing itself as a first mover in innovative ideas and product or service offerings.

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(15 Nov, 2010) online available at
www.bbc.co.uk/news/entertainment-arts-11111001 - Cached

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(28 Oct, 2010) online available at

www.bbc.co.uk/info/ - Cached - Similar

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Appendix

Appendix 1: PEST Analysis

Domestic market	International market
Political · environmental legislation, · governing of employment rights, · health and safety practice for employee (insurance policy for employee), · public expenditure control, · government stability, · employment law, · company law, · business regulation, · EU laws, · media law, etc	· political stability of the country, · patent and intellect property policy, · government attitude to foreign investment, political systems (democracy, totalitarianism or communism), · tariff policies and trade agreements, · employment protection · law company taxation policy.
Economic: · viewer/listener confidence towards it · the wages rate · interest and inflation rate in country · the number of viewer with in UK · the business cycle · unemployment	· exchange rate, · currency stability · relative growth rate of economy · rules on repatriating company income
Socio-cultural · changing lifestyle · attitudes towards work and leisure, · changing taste and preferences of the consumer, · time that consumer spend on leisure and how, · the immigrate that are migrating in UK · their level of education ·	· religion · cultural differences · education level and policies · differences in customer habits · preferences and value · attitudes towards foreign staff and companies, · working practices and working hours · workplace diversity
Technical · changing communication technology, · new production of digital media and technology, · rate of technology transfer, · emerging technology, · alternative means of providing service	· telecommunication systems, · volume and stability of power supplies, · transport infrastructure for country, · availability of competent local suppliers, · emerging technology

Appendix 2: Porter 5 Competitive Force Analysis of BBC

Forces	Magnitude of Forces	Conclusion
Intense Rivalry	Strong	Strong rivalry decreases the profit potentials of the industry.
Suppliers power	Moderately weak	Weak bargaining power of the suppliers increases the profit potentials.
Buyers Power	Moderately Strong	Strong buying power of the buyers decreases the profit potentials.
Threat of Substitute Products	Moderately strong	Strong threat of substitute products decreases the profit potentials.
Threat of new entrance	Weak	Weak threat of new entrance increases the profit potentials.
Comment	Industry is well established with numerous recognized brands. Buyers’ power is moderately strong which reduce the profit potentials. Industry has threat from other substitute industry. Industry may be slightly affected by new entrance of existing brand.

[1] (http://www.bbc.co.uk/aboutthebbc/purpose/) (1, 2, 3, 4)

Assignment Topic: ‘Creating, establishing and running a small business require different skills, approaches and management styles from those required to operate large ones.’

2011-08-07T20:56:00.001-07:00

Assignment Topic: ‘Creating, establishing and running a small business require different skills, approaches and management styles from those required to operate large ones.’

Baral Abita

Getting engage in businesses involve working with different types of legal entity with appropriate development of business plan (particularly if finance needs to be raised) and market research. And many aspects of operating and running a business need to be always under control. The aspects which needs to be under control are sales promotion, pricing, merchandise control, accounting, cash flow reporting, strategies for increasing (profit), taxation, insurance and computing systems. Different skills, approaches and management styles are requires for creating, establishing and running businesses. But the approaches, style and skills required for creating, establishing and running small business and large business are different. Different ideas, sources of finance, market analysis, management structure, communication structure and so on are followed by small and large business. However, many of large business such as Mac Donald, Wal-Mart, Tesco, etc first started as a small business (Michael Hannan 2003).

A small business can be defined differently depending on a number of factors, including the employee, revenue flow, annual turnover and current value of capital investment. Different countries have different consideration of these factors. For example, according to European Union, small business should have employees from 0 to 49, turnover of 10 million Euros and balance sheet of 10 million Euros. And in USA the small business may have 1 to 200 employees while in United Kingdom small business may have 1 to 50 employees (University of Toronto). Similarly, large business is defined differently depending upon factor such as number of employee, revenue flow, annual turnover and current value of capital investment. For large business, different countries have different criteria. (Carter and Jones-Evans, 2006)

Idea generation for creating business comes from identification of business opportunity. The business opportunity can generate from many sources. The sources can be business owner themselves, hobbies, interaction in groups, changing pattern of customers taste and preferences, new product, changing life style of consumers, etc. Generally speaking the idea for creating small business is emerged from willingness and preference to self employment nature of the small business owners. Therefore, business owner/ entrepreneur are one who generates idea for creating business. The idea generation for large business start from team or group of people involves in accomplish business together. However, the idea for large business may generate from small business. Initially large business starts as a small business starting from one roof in one locality to enlarging itself to thousand of roofs in many localities and many countries operating as an international and multinational company. For example: Adidas a sport brand was first open by two German brother as a small business in their garage, but now Adidas is expanding its brand in different countries and it is one of largest sport brand in the world.

Market Analysis is the ideal guideline for all strategic planners, market analysts, and marketing researchers (E. Stevens et al, 1993). For the market analysis of small business, the entrepreneur or business owners with two or more members describe and conduct research in target market with customers. Marketing research for product and service is tested with family and friends. Secondary data are usually the marketing research information for the small business product or services offerings which are further compiled by the research team of small business as per the requirement of the business. In case of the large business, different marketing research groups conduct market analysis in which research information are compiled from wide range of primary data and secondary data. In that research analysis a detailed description of the major benefits to consumers provided by new product or service should be included. One of the reasons of such intensive research carried out by the big business is that they need the detail description of the major benefit of their product or service offerings to their target customers. To achieve this need, each market is analysed, segmented, positioned, and targeted even considering the need of small niche market if necessary.

The main source of finance for start-up of small business is someone’s own resources and from family and friends or via personal saving. Other sources of finance are bank loan, bank overdraft, commercial credit union, supplier through late payment, etc. According to Barclays bank (Bank of England), 64 percent of start-ups use personal funds as an initial source of finance. Further, it is equally common for micro enterprises to do their banking through a personal account rather than to have a proper business account (Westall et al, 2000). The main sources of finance for start-up for large business are investor, shareholder, long-term bank loan, issuance of bonds, debenture mortgage, suppliers and so on. The small business has to invest relatively low sum of money for creating, establishing and running the business but the profit margin of small business is high; while large business need large sum of money for creating, establishing, and running business and profit margin is relatively low. Since large business need huge sum of long term borrowing, payback period of large business is high compared to small business and vice versa. For small business, source of capital is usually a bank loan and loan amount is also not too high. Hence the weighted average cost of capital is also low for small business, while the large business has multiple alternatives to create funds. Therefore, cost of capital of large business is payment of interest for bank, bond holders, and debenture holders, dividend for shares holders. Therefore the weight cost of capital is high for large business.

Small business owner-managers often run sole proprietorship or partnership which increases the riskiness of the business as it is owned by the relatively small number of the people sometime single ownership. Sole trader partnerships have a personal liability to creditors’ limited companies and company can be run by only two people. Not only this, but also small business is highly risky while comparing with that of big business because it is relatively less diversified in terms of product and services offerings and market exposure. And small business owners have a legal obligation to its creditors. While in case of the big business, riskiness of the business is comparatively low due to huge diversification in terms of product and service offerings and market exposure. Beside this, big business is a legal entity which is why the owners or the shareholders have no legal obligation.

The main difference in strategic planning of a large business and a small business is normally a matter of resources availability. Generally the larger businesses have huge source of financial resources and can afford to bring an expensive consulting team to lead the effort and mange the process for these periodic planning activities. Smaller businesses often rely upon its internal resources, especially human resources or personnel resource to do the job and thus must be more direct and efficient in executing the process (Richard E. Hall, 2005).

The executive differences are usually in the scope and depth of the analysis required to produce a reliable end product. As an example, most small businesses do not have an extensive product line, with broad international distribution and competitive issues that are typical of larger corporations these days (Richard E. Hall, 2005). Big business has wide array of divergent product and service offerings to the huge target market, generally speaking a global market place but reverse is true in case of small business which might have few product or service offerings to the limited number of customer base some time may be a small community or locality.

The small business follow simple management structure in which owner as a manager makes all major decisions and monitors all business activities. The owner/manager uses combined management practices. S/he supervises and handles all the function of organization such as function of human resource department, operating department, finance department, marketing, etc. The management structure of small business is characterised as informal relationships, few rules, limited task specialization, and unsophisticated information systems. Frequent and informational communication between the owner/manager and employees make coordinating the work to be done relatively easy (Hitt et al, 2009). Large businesses follow functional, multidivisional and decentralized structure of management. The functional structure consists of a chief executive officer, corporate staff with functional line mangers in an organisational area such as production, accounting, marketing, operational, human resource, etc. The structure allow for functional speciation. Formal and hierarchal structure of communication is used between management and employees (Hitt et al, 2009).

In small business planning activities are done by owner/manager. Usually, planning of small business is short term. Time frame of planning for small business may vary from two months to maximum of one year. In large business planning activities are done in different level of management and in different functional area. Thus planning procedures is long in large business. Time frame of planning for large business may vary from one year to 10 years and more. Operational level managers involve on operational planning and usually time frame of operational planning is within one year. For example: HR manager plan about recruitment and selection of employee for company. Middle level managers involve on planning which usually have time frame of two to four years. Top level mangers involve on corporate level planning and time frame of corporate planning is usually five to ten years depending on mission, objectives and goal of company. Example of corporate level plans are expansion of company’s product line, going for related and unrelated diversification, launching of new product to new market or existing market, segmenting and targeting of products into new market, etc.

In small business the owner/manager involve on planning activities and actively engaged on implementation of those planning. Hence, Implementation of planning is easy and fairly straight forward. Once planning is done implementation of that plan is most likely to be happened. While in large business planning is done by different personnel in different level of management and those plans are implemented in different level of management by different people. Therefore, implementation of that plan is very complex and some of the planning of large business may not even implement. Usually planning is done in top level in the form of vision, mission and goals, different methods are prepared in middle level to execute that plan in the form of strategies and objectives, and plan is actually execute in lower level. Planning is difficult for small business while implementation is difficult for large business.

In small business owner/manager performs all the function of leading. Owner/manager is a leader and s/he exercises all powers by herself/himself, all the final decisions are made by owner and usually group approach is used for running organization where authorities are centralized to owner. So usually in small business autocratic leadership style is used where employee are under the direct supervision of owner/manager. While in large business leadership role have different hierarchical level and usually decentralized approach of leadership is used. Decisions are made by several top, middle, and operating level mangers in their respective level within the authority and responsibility being delegated to them. Employees are responsible for their immediate supervisor or manger and they report to their supervisor for their concerns and issues and supervisors and managers are accountable towards the job done by their followers. For example, HR manager perform leading role for human resource department and solves all the issues and concern related to human resource department. Usually, formal approach of leadership is used in larger business. Beside this difference, in small business, owner or the manager is all in all with unlimited authorities regarding his/her business and literally he/she can to anything in his/her will. However, in big business, leaders or the managers have concrete authority and responsibility which clearly explains what he/she can and cannot do. Controlling function in small business is done in informal manner. Manager or the owner does controlling in each and every aspect of the business. He/she controls the behaviour of the employees, set goals or the objectives for the employees and compares his/her predetermined set of standard goals with that of actual goals achieved by the employees and immediately communicates his response to the employee’s performance. Therefore, in small business, controlling is direct and prompt. The action of the leader or the owner of the business is concrete, bold, and straightforward with direct linked with result or the outcome. However, in big business there is formal mechanism of controlling. In almost every organization, there is standard approach of employee’s performance appraisal. Employees performance is compared in systematic manner within certain timeframe and result of such appraisals are communicated to the employees for corrective actions. In some big organization, employees are categorized as per their performance appraisal and those appraisals results are used to promote the employees.

In small business, an individual small business owner is responsible for decision making. Small business owner make a choice about all the aspects of the business from planning, organizing, leading, managing and controlling. In small business programmed and non-programmed decision are taken by individual business owner. And risk taking is generally low in decision making in small business. In large organisation, decisions are made by more than one people in their organisational roles in different layers of the organization and in different functional areas. They are still individual and will often be part of a decision making- but the decision is often made within the common wisdom of the organization following the organizational decision making criteria, procedures, guidelines and policies of each functional areas. Generally programmed decisions are well structured and can be taken in different level of organisation by different level of manager base on authority granted to them. And non-programmed decision are to deal with situations which are unstructured and require a unique solution, therefore it is taken by top level and middle level management of organisation. The risk taking in decision making is high.

Problem solving in small business is generally done by owner/manager, and hence problem solving is short and quick. Problem solving in small business may lack creativity and innovation and have may have a bias. In large business, problem solving is complex and takes long producers. Some problem may pass through different level of hierarchy, for the best solution and implementation. For example: if there is any issue in business, small business’ owner/manager himself/herself tries to solve the problem because it covers small market and has small scope. While problems of large business are complex as large business operates in different countries. Different country has different business environment, market, lifestyle and rules and regulation. Therefore large business has to find solution to problem depending on different country, market, based on lifestyle and environment. Beside this they have multilayered decentralized organization structure which lowers downs the role of central power or top level managers in decision making process.

Usually, in supply chain management, large businesses perform all the functions of designing, manufacturing and delivering. The role and function of large business come first in supply chain. Generally speaking small business has the end responsibility in the supply chain management. It is because; small business usually performs retailing functions of the business. For example, a small grocery store sells different products produced by hundreds of companies around the world to the consumers. Therefore, they are the end players who have direct linked to the end users of the product. Sometime, small business may be establish or created as a franchise and may get license of retailer of large business. Large business may create new product or new service and let other supply chain players to do other role in supply chain such as wholesaler and retailer. However they sometime play multiple roles in supply chain as wholesaler and retailer by opening their own retail store in the mall or shopping complex.

Communication is skill which is required in all aspect of the business. Business has to interact with its customer, suppliers, employee, shareholders and other stakeholder. Effective communication (including non-verbal and verbal) skills are required to run business effectively. For running small business, owner/manager should have concept of combined managerial skill. And s/he should perform all managerial functions through two way effective communication. In general, small business has top-down communication process where manger communicates all major information to employees. While, in large business, the functional department are separate. So the expert in different field should have different communication skills. For example: expert in marketing department should have communication skills of informing and persuading customer, expert in finance and accounting department may not need persuading communication skills. Usually large business has both top-down and bottom-up communication process depending on the nature of business. For example, in government organization top-down approach of communication is most common while in privately own organization both the approach is common.

In conclusion, it can be said that both small and large business posses some similar business approaches and styles which are necessary for management of the overall business functions and activities. However, there are some functional differences which are widely prevailed among big and small business around the globe. But within those functional differences, one should not forget the fact that most of the large and multinational businesses of today were started as the small business. For example, world largest fast food restaurant MacDonald, one of largest sport brand Adidas, etc were established as a small business. But when the size of business increases the structure become complex and multifaceted. The complex structure of management, wide focus mission and vision, long term plan, wide target market are the factor which differentiate large business from small one. As small business has simple structure of management with narrow target market and small scope vision and mission. Beside this, some other functional difference between small and big business lies in the core managerial functions such as marketing research, human resource, and communication. However, the management function that is required to run the small business is the same for the large business also but the difference in two lies in the scale of operation. For example both small and big business does planning. Small business does planning in simple unstructured and informal manner. However, big business does the same thing in structured, formal and specialized manner.

Beside the functional differences, some other key differences in between big and small business lie in the employees or work force mix within the company. Small business is the work place for few but unique kind of people. However, in the big company organizational cultural and rules compels people to homogenise themselves. Another major difference is in the structure of the company where big companies always have comprehensive job descriptions, HR handbooks, and management hierarchy which are missing in case of small business.

Word count: 3111

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Assignment Topic: Project Planning

2011-08-07T20:52:00.001-07:00

Assignment Topic: Project Planning

Baral Abita

Table of Contents

Introduction

Project life cycle

Project defined

What is Project planning?

Technical Requirements

Limits and exclusions

Creating the work breakdown structure (WBS)

Decision making/ Cause and Effect

Conclusion:

Introduction

For the success and further development of organization project management plays an important role. Some large and small organization have project management department which plays a significant role for success of organization. The process of innovating new technology in organization; producing new product; organizing function, etc are done by project management department. Project management is application of knowledge, skills, tools and techniques for managing project activities to achieve its requirement. Project management is accomplished through the application and integration of the project management process of initiating, planning, executing, monitoring and controlling and closing (PM book, 2004, pg 8).

According to Marion E. Hynes, 2002 project management focus on a project. A project is a procedure that has a starting and finishing point, and run to meet target goal within estimated budget, schedule, and quality by managing risk. Project management gather and optimize the resources essentials for completing the project successfully. Skills, talents, cooperation of stakeholder, tools and equipment, etc are includes in resources.

Project life cycle

Project life cycle consist of four stages (i.e., definition, planning, execution and delivery stages). Project effort starts slowly, builds to a peak, and then declines to delivery of the project to the customers which can be shown in fig 1.

Fig 1Project Life Cycle

jimowenspmp.wordpress.com

The phases of project life cycle are:

· Defining Phase: Defining phase is the first phase of project. In this phase, the project is defined; its objectives and goals are set; project teams are formed and major responsibilities are assigned (PM Guide, 2004)

· Planning Phase: Planning phase is the second phase of the project. Planning is done to decide the steps of project, schedule, time, scope, budget, risk and communication of project (PM Guide, 2004).

· Execution Phase: Execution phase is the third phase of the project. In this phase the project managers have to make sure and check whether project is on correct schedule within the cost, budget and meeting qualifications. And also have to test if any transformations are required for project (PM Guide, 2004).

· Delivery Phase: Delivery phase is the last phase of the project life cycle. In this phase the project is handed or delivered to the customers (PM Guide, 2004).

Project defined

The United Nation Organization (UNO) has donated $7.5 million to provide houses to 50 families living in Kathmandu. On 5 March 2003, UNO signed a contract with the SAM construction to implement the project. The following terms were set in the contract:

1. The houses should meet conditions in line with government rule.

2. The head of each of the 50 families should be given skill improvement training in small business development; in order to certain sustainability and affordability for the 50 families. To make sure that the families will be able to pay for rent and maintain their expenses.

3. The project must be finished within three years of time.

What is Project planning?

Planning is the second phase of project management. Project planning is the process of determining in advance the work to be done on a project, and scheduling specific times or dates to work (Gergory T. Haugan, 2001).

Planning is all about “What to do," "When to do," and "How to do." It is a comprehensive method, which includes procedures such as defining, developing, organizing, forecasting, coordinating, and scheduling the activities. Planning is developing the standard for the project which shows the path for the future and detail of hoe to execute the project. Without proper planning a project cannot move ahead.

Project Scope

A project's Planning Process begins with the planning of its scope. According to (Kathy Schwalbe, 2009) scope refers to all the work involved in creating the products of the project and the process used to create them. Furthermore it refers to the limitations within which project has to confine and achieve its aims. The main aim of scope is to conclude the path as well as the goal of the project. It acts as a tool, which help to measure the output of the project (PM Guide, 2004). Many methods, tools and techniques are used to manage the scope. The project scope includes project objective, deliverables, milestones, technique requirement and limitation.

Project Objective

To build houses for 50 families in the Kathmandu of cost $7.5 within time period of 36 months.

Deliverables

Deliverables are the expected result over the lifetime of the project – what is going to be delivered from project. The deliverables of the above project are:

· Finished homes for 50 families lay down by the SAM construction.

· Provided skills development and training for the head member of each 50 families

Milestone

“Milestone is a strategic plan for a project, defined in terms of intermediate products or results to be achieved.” (Turner, 2009, pg 110) Milestone is used to represent a group of activities in a project. The milestone schedule shows key section of job, time, budget, schedules and resources for the project. Milestones are control points in the project. The milestone plans of above project are:

1. Organize authorization:06/02/2004

2. Foundations poured : 09/03/2004

3. Block laying: 08/11/2004

4. Plumbing, electrical :14/06/2005

5. Furniture fitting:11/11/2005

6. Final inspection of houses:30/12/2005

7. Tendering for training: 05/03/2006

8. Event management: 24/12/2006

9. Hand over house: 21/03/2007

Technical Requirements

The requirements that project have to meet to ensure the best performance. The technical requirement of given project are:

1. Build house should meet up government qualifications and local building policy.

2. 50 trainees (head of the families) should be given standard certificates after completing their training.

3. The SAM construction should hired civil engineer to audit the project

Limits and exclusions

The limit and exclusion are factors which can be done and cannot be done during the project. Failure in limiting can lead to irrational outlook and the wastage of time, money and resources. The limits and exclusions of above project are:

1. The homes will be built to the specifications and design of the original blueprints provided by the UNO.

2. Contractor of SAM Construction are responsible for job done by subcontractors.

3. Field work restricted only on weekdays Monday to Friday, 8:00am to 6:00pm

Creating the work breakdown structure (WBS)

After identifying scope and deliverables, the work of the project can be subdivided into smaller work elements which are work break down structure. Work break down structure is the method of grouping activities by coding (Reiss, 2002). All steps that form WBS are called work packages. It is very functional because the formation clearly directs what has to be done and in what series. It separates the work and duty into individual work packages which help project manager to manage and supervise the performance for the project (PM Guide, 2004).

FIG 2: Work Breakdown Structure of project

Final project Deliverables

Product 1

Organize authorization

Set Foundations

Block lying

Plumbing

Fixing electricity

Sheathing (layer, covering)

Fittings (furniture)

Final Inspection

Product 2

Tendering for Training

Skills Training

Product 3

Tendering for events management

Event Management

Appoint training provider

Handover houses

FIG 1 is the work break down structure of the project. The total work of the project is total break into three parts which are product 1, product 2 and project 3. Each product is further break down in different structure.

Network Plan

In order to plan, schedule, monitored project improvement project network tools are used. Gathering the information from Work Breakdown structure (WBS) the network diagram is developed. The network illustrates the project performances which should be concluded with the series (steps), the mutual relation between each series and the critical path. Critical path is the activity to begin and end along the longest path throughout the network plan. (PM Guide, 2004)

The network specifies the outline which facilitate by project managers to create decision related to time, cost and performance of project. In summary, the network plan assists the following:

• Programmed labour and equipment.

• Provide effective communication which brings all teams and team leaders together in gathering the time, cost, and performance goals of the project.

FIG 3: Network plan

Task 4

Task 14

Task 13

Task 11

Task 10

Task 9

Task 6

Task 8

Task 7

Task 5

Task 3

Task 2

Task 1

Task 13

In fig 3 number of task represents the task of the project in series which are in project schedule.

Project Schedule

Project schedule is a planned and a significant means used by project manager's for directing a project productively to its objective and goals (Edwards, 2010). Project schedule allow project managers to assist and supervise resources more efficiently. Further it facilitates effective communication between stakeholders with regular feedback and so on (Edwards, 2010). Table 1 is the schedule of the project.

Table 1

Tasks	Start Date	Duration	End date
1. Begin	06/02/2004		21/03/2007
2. Organize authorization	06/02/2004	31	08/03/2004
3. Set Foundations	09/03/2004	243	07/11/2004
4. Block laying	08/11/2004	217	13/06/2005
5. Plumbing	14/06/2005	140	01/11/2005
6. Fixing electric	14/06/2005	140	01/11/2005
7. Sheathing (layer, covering)	14/06/2005	140	01/11/2005
8. Fittings (furniture)	01/11/2005	89	29/01/2006
9. Final Inspection	30/12/2005	64	04/03/2006
10. Tendering for Training	05/03/2006	51	25/04/2006
11. Skills Training	26/04/2006	165	08/10/2006
12. Tendering for events management	09/10/2006	75	23/12/2006
13. Event Management	24/12/2006	56	18/02/2007
14. Project hand over	19/02/2007	30	21/03/2007

Table1 Schedule of the project

Grant Chart

Fig. 4 Grant chart is the tool of project scheduling. In Fig .3 task number represents the task name which are in table 1.

Budget

Budgeting is the cost planning which involves predicting the way money will be spent on the project in order people can decide whether to proceed or not, and arrange to have the cash ready at right time (Reiss, 1999). According to (Thomsett, 2009) budget is finally stated goal which serves two purpose: measuring of expense throughout project and measure the performance of project manager. Correct work break down structure help in making accurate cost estimate. Project manager estimates the cost of project at work package level. The cost components of the project are:

· Direct cost: Direct costs are cost which are chargeable to each individual working. Direct cost include the cost of labour, materials, plant and equipment, etc

· Project overhead Cost: Project overhead cost are usually calculated as the proportion of total costs (Lock, 2007). Over head cost includes the cost of bonds, equipment cost, insurance, rents, taxes, etc. Overhead costs are fixed cost of the project (Spreiregen & Paz, 2005)

· Management and administrative overhead cost: This cost includes the cost of people and resources to direct the project. According to (Tuner, 2009, pg 162) these costs are attributable to the project, but not specific tasks and consist of the cost of the managers, team leaders, project support system, project management information system if necessary and temporary site service.

Methods of estimating cost

Top Down estimate: Top down estimate come from the idea that the estimate is made at the top level of the project. In this estimation certain sum money are allocated to complete the project and money has to be divided among the sub projects. The allocation is based on senior management’s or the use of target costing. (Newell, 2002)

Bottom-up estimates: In this method each work items or activities are added to get a total of project. The estimates of individual work level of the work breakdown structure are complied and added together by each level of supervisor in project hierarchy. (PM Guide, 2004)

Analogous estimates: Analogous estimates also called top-down estimates; in this method actual cost of a pervious project are used as the basis for estimating the cost of the project. This method requires a good arrangement of expert judgment. (Schwalbe, 2009)

Parametric Estimates: The process of parametric estimating is accomplished by finding characteristics of the project being estimated that changes proportionately with project cost. Mathematically a model is built base parameters. When the values of parameters are enters into the model, the cost of the project result. (Newell, 2002)

SAM construction has used parametric estimates method of estimating.

The budgeting of SAM construction

Amount Amount

Labour Cost (24%) 1,725,000

Materials Cost (40%) 3,000,000

Machinery (13%) 975,000

Tax (17 %) 1,275,000

Profit (7%) 525,000

GRAND TOTAL 100% 7,500,000

Stakeholder

A stakeholder can be defined as parities who are directly and indirectly involved in the project. Project manager, customers, employees, share holders and other parties who are using project are the stakeholder of project. Table 2 shows the potential stakeholder of project.

Table 2: Potential Stakeholder of Project.

Potential Stakeholders

· Employees

· Project Managers

· Management Team

· (Owners) Share holders

· Resource providers (suppliers)

· Customers

· Governments

· Media, etc

Stakeholders of the project signed by SAM Construction are:

· Project Manager: Individual who is responsible for managing the project of SAM Construction

· Employees: Workers who are working for building house For example: floor worker, painter, plumbers and other several team workers.

· 50 families who are going to be given the houses.

· Sponsor/ Shareholder: United Nation Organization

· Suppliers and contractors: Construction companies who supply equipment, contractors equipment , small contractors , etc

· Media: are news reporters of project.

· Government agency

Communication

Communication is the course of establishing link between two points for information exchange. It is through communication that people add value in innovation, quality, and delivery and cost (Boddy, 2008). According to John E. Barbuto, 2000 understanding communication processes is a most important path for future leaders and managers to travel. In project management and planning communication play significant roles. Through communication, stakeholder can discuss about the project, communicate about the project plan. According to (Turner, 2009, pg 83) the role of communication in project management can be:

· To increase the awareness about the project and to gain responsibilities from key stakeholder.

· To report to other organization and promote key messages about the project and display the planned performance enhancement.

· To make two way communication (with regular feedback); to ensure a mutual understanding of the project plan and its objectives to discuss contract with the stakeholders.

· To maximize benefits from project by having each person functioning for its victory.

According to (PM Guide, 2004) Project communication management is made up of the following processes:

· Communications planning: For transforming the information and determining need communication to stakeholders.

· Information Channel: Providing the necessary information available to project stakeholders in an updated approach.

· Performance reporting: Assembling and broadcasting performance information of the stakeholder and project.

· Managing Stakeholder: For managing the communications to influence the requirement and solve issues and problem with stakeholder. For example: arranging meeting with stakeholder.

Communication planning is often tightly linked with project input, tools and techniques and outputs and stakeholder.

Risk management

Risk can be defined as an uncertain result or situation that, if it occurs, may has a positive or negative effect on at least one goal or objective of the project, such as Time, Cost, Scope, Quality, etc (Project Management Institute, PMI). Project risk management is concerned about risk management planning, identification, analysis and responses and monitoring. In project there are two types of risks internal risks and external risks. The risks which come from internal source and are in control of management such as performance of contractors, material wastage etc are internal risk. The risks which come from external source and are not in control of management such as political, new government legislation, new technology, etc are called external risk. The objectives of project risk management are to increase the probability and impact of positive event and to decrease the probability and impact of events adverse to project. Stakeholders of the project are the one who identify the risk of project. (PM Guide, 2004)

Risk identification consists of determining which risks are likely to affect the project and documenting the characteristics of each. For example, the project manager Of SAM construction has to come across each pack in the work breakdown structure and deal with things that will probably be wrong. After this the project manager should build up a plan of how each problem will be solved. (PM Guide, 2004)

Risk is not a one-time event and has to be identification on a habitual basis all the way through the project. Risk identification should address both internal and external risks. Internal risk for project can be safety issue (worker getting hurt), overuse of electricity, more wastage from construction area, etc. External risk can be changes in wages rate; increases in price of construction equipments, change in rules and unpredictable weather. Project manger should always have a contingency plan to avoid the possible risk of the project. (PM Guide, 2004).

The possible internal and external risk of the project are illustrated in table 3

Table 3: Possible risk of the given project

Possible Risks

· Financial Risk: Increase in price of construction materials, labour rates, tax other technology and overhead charge.

· Safety Risk: Any worker may get injure while working in the field

· External Risk: PESTEL (political, economic, socio-cultural, environmental risk technological, Legal) Risk

· Internal Risk: Mismanagement of waste, wastage of finished goods and electric equipment

Decision making/ Cause and Effect

Decision-making is an essential element of project planning. The main idea of decision making is to choose the best idea or solution. Project manager needs to know how to make and implement decision within the context of project. Project manger many use many tool such as fish bone diagram, decision trees, PERT to make a decision making tools.

(Dr. Kaoru Ishikawa, no date)

Fig. 5 Fishbone diagram

After identifying problems it necessary to determines its causes. The cause and effect relationship is at time obscure. Cause and effect analysis uses diagramming techniques to identify the relationship between an effect and its causes. Six steps are which used to perform a causes and effect analysis which are: recognize the problem; select interdisciplinary brainstorming team; draw problem box and prime arrow; specify major categories; identify defect causes; Identify corrective action.

Table 4: example of cause and effect of given project.

Problem	Cause	Effect
Wastage of finished goods Pass of electric current	Mismanagement of materials Mismanagement of electric equipment and lack of training and development	May create financial problem, lack in materials. Worker may get injure and other serious problem may arise

Innovation and creativity: Innovation is inviting something new and creativity is something that is creative. Innovation and creativity in project planning is bringing some new idea for decision. According to Aucoin, 2007 innovation is the interaction of the stakeholder with creative ideas and adaptation or implementation of the ideas which are supposed to have qualities. Innovation produce something worthwhile, creatively and stakeholder have to work together to bring forth something of value.

Conclusion:

Project planning is the root of a project management, therefore it needs to be wisely planned to make certain that the project conclude in to success. Project planning shows the future path for the project. Project manager is the one who design the project and have more influence on the project planning. Therefore project manager should consider the tools of planning. Scope, schedule, stakeholder, communication, risk management and decision making are the tools of project planning. Effective used of these planning tools lead the project towards the success.

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Websites:

1. Image Japanese Fish bone Diagram (online available) (13 April, 10)

Author: Dr. Kaoru Ishikawa.

http://www.envisionsoftware.com/Management/Fishbone_Diagram.html

2. Scope Management (online available) (12 April 2009).

http://www.method123.com/time-management.php

3. Cost management. (online available) (12 April 2009).

http://articles.techrepublic.com.com/5100-10878_11-1061894.html

4. Communication management

(Online available) (12 April 2009).

http://articles.techrepublic.com.com/5100-10878_11-6181834.html

5. Risk management (online available) (12 April 2009).

http://www.mariosalexandrou.com/definition/risk.asp

6. Project management guide (online available) (12 April 2009).

http://www.etu.org.za/toolbox/docs/development/project.pdf

7. PMBOK page 15. Figure 2-1. (online available) (21 April 2009).

jimowenspmp.wordpress.com

Future Options: Aligning your Skills and Aspirations with the External Options

2011-08-07T20:49:00.000-07:00

PORTFOLIO

Future Options: Aligning your Skills and Aspirations with the External Options

Baral Abita

Summary

A portfolio is an assortment of individual skills, attitudes, behaviour and so on which demonstrate the degree of achievement that individual has achieved regarding the goal and vision; and show skills which are undeveloped. I have developed my personal portfolio. The aims of this portfolio are:

· To increase self awareness and personal reflection;

· To be aware of my strong skills, values, traits, behaviours, attitudes, perceptions, needs, interests, motivators, cognition and emotional intelligence;

· To develop undeveloped skills those are important for my career development;

· To plan how to achieve my goal by defending the challenge;

· To analyze the labour market, etc.

This portfolio is completed by carrying out research from different academic and non-academic sources and by using different test list and management tools such as SWOT, SMART, Boston Box Matrix, etc for self analysis.

My long term goal is open my own business in my country Nepal. In order to achieve this goal I will need to achieve some other short term goals such as, to complete my study and gain work experience. I can achieve these goals because I am hard working and aware how to achieve the goal and my goal is SMART

Contents

1. Introduction

2. Personal Skills Review

3. Personal Aspirations Review

4. Labour Market Analysis – Relevant to Aspirations

5. Alignment between Skills/Aspirations/Labour Market

6. Personal Action Plan

7. Conclusions

1. Introduction

Personal Development planning is a plan carried out by individuals to help them develop self awareness and set goals. Personal development planning aims to promote learning and to provide individuals with the knowledge and portfolio of transferable skills that will help them to progress their careers. According to Cottrell (2003) the elements of a personal development plan include developing self management; forward planning; taking responsibility; improving performance; increasing personal responsibility; reflecting on personal skills and skills development. The result of test ‘Do I need Personal Development Planning?’ (Appendix 1) show I need personal Development Planning.

2. Personal Skills Review

Skills can be defined as expertness or experienced capability. Skills are capabilities which are essential to communicate socially, compute and to carry out action. Skills are frequently described in perspective of work production, and are classified into different types such as technical skill, human skill, conceptual skill, design skill, social skill, etc (Carey, 2000)

The reason I am studying BA (HON) in business management is that I was drawn from young age toward business as it runs in my family. And I have emotional connection to business world. My biggest influences are my parents, who have taught me about being independent and self employee. Furthermore my goal and dreams are related to business. I want to be independence; make money; achieve short and long term goal related to business and my natural progression toward business from high school are all factor inside and outside me which encourage me to study a BA (HONS) in business management.

Skills and qualities that I have increased from my experience and my BA HONS are:

Communication skill (competent in technical writing skills, presentation, proficiency in English language, listening, interacting with team and group, team work, interpersonal skill, research, analytical skill, multicultural understanding, empathy, management of learning, leadership, referencing etc)

Technical skill (financial skill, IT skills, marketing, motivation, determination skill, project management skill, initiative skill, business management skills, human resource management skill, etc)

Personal management skill (self awareness, personal values, personal needs, personal perception, personal attitude, personal interest, personal strength, personal weakness, personal opportunities, personal threat, personal personality, etc)

In addition to the skills above, I am confident, punctual, organized, willing to learn, leader, proactive, responsible, time management, team worker, conflict management, negotiation skills( Appendix 10, 11, 15 and 27,). For instance: In first year of studying BA HONS, I got poor marks because of improper communication skill and referencing style, but now I get good mark in research, communication and referencing style. These skills can be transfer in my job related skill for time management, managing large amount of information, working to decline, decision making, and project management. My weak skills are communication (speaking: can’t say certain English words), stubborn, arrogant, stereotyping. So far I am concern these will affect me in professional life and may bring barriers in effective communication.

According to Dr. Scott Williams, the elements of self awareness are values, personality traits, behaviours/attitudes/perception, emotional intelligence, needs, cognitive style. I will be discussing each of these with reference to myself within this portfolio.

Values are a conception, accurate or explicit, distinct of an individual or characteristic of a group, which persuade the segment from available, resources, and ends of achievement (Begley and Johansson, 2003). My strong values are discipline, time management, social rule, respect to elders, ethical principle, family and friends, independent, money, etc. (Appendix 2, 3, 4, and 5). Value of independent motivated me to attain my goal of opening business. And other values which are stated will help to run business in systematic ways.

Traits are informal agents or simple summing up of practical behaviours (Buss and Craik, 1983), Mischel sees a trait as the conditional prospect of a class of behaviour in a category circumstance (Matthews et al, 2003). My stronger traits are confidence, caring, loving, optimist, punctual, trustworthy, positive, social, loyal, and manage and organized (Appendix 11). The advantages of these traits are that I can learn from failure and step forwards in my life. For example: in 1^st year of BA HONS I failed in one assignment, but my trait of confident, optimist and high locus of control allows me to step forward and rewrite assignment.

Attitudes can be described as the degree of positive or negative affect connected with a number of psychological objects. At this point psychological objects refer any sign, slogan, motto, individual, organization, perfect or idea toward which individuals can vary with high opinion to positive or negative effect. (Thurstone, 1946)

Needs can be defined as necessity; but all needs may not be necessary. Needs may differ from each other with factors such as age, sex, personality and family background. Maslow (1970) suggests that needs can be classified into five levels which are physiological, safety, love belonging, esteem and self actualization. The most basic need is physiological. Once that is satisfied, other higher needs arise. Linked very closely with needs are motivations. Motivation is the degree to which an individual wants and chooses to certain specific behaviours (Mitchell, 1982). What I really want in my life is independent, achievement, money, family life and self esteem (Appendix 6 and 7). The value and needs of opening my own business motivates me to struggle and move ahead even in those situations when I feel the journey towards my goals is very hard.

Behaviour is defined as the sum total of psyche which comprise desires, inspiration, wishes, driving forces, characters and passions, which are expressed by a person’s behaviour (Sadock et al, 2007). Behaviour categories from measureable, observable or accidental response; and those aspects may comprise age, sex, health, socio-economic circumstance, time etc (Parrish, 2010). My behaviour is affected by my attitudes, beliefs, traits, needs and values. For instance, I speak with gentle voice because I value in discipline and respecting other.

Emotional intelligence refers to the competence to identify and express emotions, understand emotions assimilate emotions in thought and regulate emotions in self and in other (Lazarus, 1991). According to Goleman 1998 the traits of emotional intelligent are self awareness, self regulation, motivation, empathy and social skills. According to the emotional intelligence test of Goleman, (appendix) I possess traits of self awareness, self regulation and motivation. And I have to develop the traits of social skills and empathy which is related to managing and understanding other emotion. Emotional intelligence traits will help to understand me and my short and long term goals. And self awareness is the beginning of all wisdom.

3. Personal Aspirations Review

A goal represents the foundation of strategies which definitely concludes all subsequent steps as well as the whole methodological framework of conceptual approaches (S. von Wirén-Lehr, 2000). Goals are more associated with practical world and dreams are more associated with angle world and may not be reality (Appendix 23). The Goal should be SMART (specific, measurable, attainable, realist and time).

All these skill and qualification which I achieved from my experience and BA HONS studies are useful for me in my future career and goals. These all skills are very important for my career because my long-term goal is to be set up my own business at home. Further, they are career related skills; and these skills increase my managerial skill, motivation, aspiration, innovation, decisional making, proper conflict management, negotiation skills and conflict management. Further I have developed my job related skill, adaptable and transferable skills.

The skills that are required for my career goal are:

Self awareness, stress/time pressure management, problem solving creatively, communicating supportively, gaining power and influence to people, motivating other, managing conflict, authorizing and delegating , building effective teams and team management, change management, positive leadership, etc (Appendix 10).

Cognition is the development of the ability to recognize, memorize and categorize about the behavioural propensities, motivations, and emotions of other people and self (Brooks et al, 1984).According to cognitive style indicator test (Appendix 12), I have planning Cognitive style. The advantages of the planning style are individual with planning style emphasizes structure, preparation and planning. An individual seeks agendas, well-developed outlines, and clears process. People with a planning style are best at processing range of information and putting that information into a concise, cohesive, logical form. The disadvantages of planning cognitive style are an individual with less inclined toward acquiring information by interacting with people and are more interested in thinking through a logical problem. An individual may resistant to change, intolerant of ambiguity, overwhelmed by chaos, and can’t handle illogical issues. Therefore I have to hire people with cognitive style of knowing and creating.

Generally after achieving long term goal people feel successful. For me, success is never achieved because the more you get, the more you want. The reason for more advancement in the scientific world is because of nature of success. For example, laptops were invented because scientists were not happy with the success of the PC, and they want to achieve more. Internal needs, willingness, desire of achievement are motivational factors for success. Success doesn’t come easily to anyone. We have to make effort for success. In the path of success there are so many ups and downs that a person has to face. For me, the greatest challenge which I am facing now is will I be able to complete my BA (HONS) degree with first class HONS degree.

I have some short term and long term goals. I use SMART management tool for goal setting. I have set some short term goals to achieve long term goals (Appendix 21). My long term visions motivate me to reach my short term goals. I have planned my goals using some management tools such as SMART, Action plan, Force field analysis, SWOT, etc ( Appendix 21, 22, 25 and 26)

My smart goals are to complete BA HONS by July 2011 with first class degree; to do MBA from American University by 2014; and to find a job related to my study by 2015.

I have to go with many challenges to achieve my goals and find out what are my strength, weakness, opportunities and threat regarding my goal. I have used SWOT analysis. And through SWOT analysis my strength, weakness, opportunities and threats are:

Strength: Fresh graduate, global market, flexible field, communication skills, confident, etc.

Weakness: fresh graduate, no experience, managerial skill still undeveloped, communication skill (English is my second language), finance, etc.

Opportunities: Fresh graduate, European degree, global market, etc.

Threat: Non EU, Immigrant, economic crisis, rules and regulation, finance, etc.

4. Labour Market Analysis – Relevant to Aspirations

This section provides a summary analysis of Nepal’s labour market, in the context of a general socio-economic overview. The analysis takes into account existing Nepal demography, employment and skills objectives. According to World Bank, the total population of Nepal is 29,330,505. The main occupation of Nepal is agriculture. About 76% of labour forces of Nepal engage on agriculture, 6% on industry and 18% on service. But agriculture cover only 35% of GDP, 16% is cover by industry and 49% by service sectors. 65% of the population are educated and the employment rate is 54% in Nepal. According to the Nepal Labour Force Survey (2009), labour force participation rate for population aged 15 years and above was 85.2%. Educational attainment of participate workforce is only 48% and still educated people are unemployed because main occupation is agriculture and still tradition system of framing is used

Through the labour market analysis, the main challenges that Nepal is facing is poverty and high level of unemployment and uneducated rate. In Nepal the educated people are also unemployed. And the main source of income for Nepal is agriculture. For opening business in Nepal there are both opportunities and threat. The opportunities are that Nepal is developing countries therefore the level of education and awareness is increasing, labour force for high class and low class job are easily. The changing patterns of lifestyle of people bring other opportunities. The threats for opening business in Nepal are its current political situation, the increasing rates of inflation, undeveloped technology and so on.

For opening business in Nepal I have to consider both the opportunities and threats that labour market brings to me. However I am targeting to open my business in Pokhara which is one of the developed cities of Nepal. Therefore, labour forces are easily available for the business which I want to open. And there is high demand for my product where I am targeting to open.

5. Alignment between Skills/Aspirations/Labour Market

I have already discussed the alignment between my skills and aspirations (please see Section: Personal Aspirations Review). In this Section, I will discuss the alignment between my aspirations and the labour market. I will also discuss the skills that the labour market requires and compare them to the skills that I have developed myself.

The skills labour market require for opening a business in Nepal:

Technical skills (marketing and sales, financial skill, IT skills, marketing, motivation, determination skill, project management skill, initiative skill, business management skill, human resource management skill),

Social and empathy skills (work place diversity, discipline, ethical issues, punctual, creativity, risk taking, innovation, internal locus of control, cultural issues)

Management skills: (Self awareness, stress/time pressure management, problem solving creatively, communicating supportively, gaining power and influence to people, motivating other, managing conflict, authorizing and delegating , building effective teams and team management, change management, positive leadership, negotiation, etc.)

So far I am concern, I have developed some skills from BA HONS which are requires. But I don’t have some technical skills, managerial skills, and social and empathy skill which are required for opening business in Nepal. For developing all these skills, first I will gain some work experience on marketing and sales, administrative, accounting working on different field after my graduation and I will open my business.

6. Personal Action Plan

In 6 months from now I will be preparing for attainting my graduation ceremony

A year from now I will join MBA in University in America.

3 years from now I will finish MBA and search for study related job for developing my career.

5 years from now I will make my business plan and search source of finance (Appendix 22)

7. Conclusions

The portfolio helps to review my strong and weak skills, behaviours, values, attitudes, emotional intelligence. It makes me aware how those skills can be developed and how those skills can be useful for my career goals. Further it reviews my personal aspiration what parts of inside and outside inspire and motivate me and what are my shorts and long term careers goals which motivate me. It consist of labour market analysis of Nepal and what labour skills I have developed and which labour force skill I have to hire for opening my business. And it consists of alignment between my skills, personal aspiration and labour market.

Word count: 2445 (excluding bibliography)

Bibliography

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www.theodora.com/wfbcurrent/nepal/nepal_economy.html - Cached - Similar

4. Cottrell (2003), Skills for Success, England Palgrave Macmillan

5. Cottrell (2008), the handbook of study skill, Palgrave Macmillan

6. Dr Scott Williams, Leader letter Newsletter, Wright State University and

7. Matthews. G, Deary I, Martha, Whiteman (2003) Personality traits, London, Cambridge university press

8. Goleman. D (1998), Working with Emotional Intelligence, Bantom Books

9. Sadock. B, Kaplan. H, Sadock. V (2007), Kaplan & Sadock's synopsis of psychiatry: behavioural sciences/clinical psychiatry, New York, Lippincott Williams & Wilkins

10. Lazarus, R.S (1991),Emotion and Adaptation, Oxford University Press, New York

11. Lazarus, S., (1991). Emotion and adaptation. New York: Oxford University

12. Carey L (2000) Practice nursing London Harcourt publisher

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16. Begley P., Johansson. O, (2003) The ethical dimensions of school leadership (kluwer ademic publisher)

17. Brooks. P, Sperber R, McCauley C., National Institute of Child Health and Human Development (U.S.) (1984) Learning and cognition in the mentally retarded, USA, Routledge

18. Baumeister R (1999_)The self in social psychology USA psychology press

19. Gupton S (2003), The instructional leadership toolbox: a handbook for improving practice New York sage publication,

20. Thurstone, Comment. Amer. J. Social., (1946) the measurement of attitude, Chicago, Chicago University press

21. UNESCO Institute for Statistics Education in Nepal - (16^th Dec, 10) Online available on: www.uis.unesco.org/profiles/EN/.../countryProfile_en.aspx?...

22. Wirén-Lehr (2001) Sustainability in agriculture — an evaluation of principal goal, 15^th Nov, (online available) at:linkinghub.elsevier.com/retrieve/pii/S0167880900001973

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www-wds.worldbank.org/.../21NP0P1040150EVENT0PID0310August02010.pdf

Assignment Topic: Issues of Selective Attention

2011-08-07T20:46:00.000-07:00

Assignment Topic: Issues of Selective Attention

Baral Abita

Total word: 2534

Table of Content

Topic page no

1.1 Introduction...........................................................................................................................3

1.2 What is Selective attention? ...............................................................................................4

2. Issues of Selective attention..................................................................................................4

2.1 Non verbal communication....................................................................................4

2.2 Barriers to communication.....................................................................................4

2.2.1 Semantic barriers...................................................................................................4

2.2.2 Organization barriers.............................................................................................5

2.2.3 Psychological or perception barriers..................................................................5

2.2.4 Physical Barriers.....................................................................................................5

2.3 Bounded Rationality...............................................................................................................6

2.4 Stereotyping..............................................................................................................................6

2.4.1 Gender issue...............................................................................................................6

2.4.2 Racial issues................................................................................................................6

3. How does issue of selective attention affect workplace...?.................................................7

3.1 Real world example of selective attention issues..................................................7

4. How can a manager prevent issues of selective attention from arising?...................... ..8

5. Conclusion....................................................................................................................................10

6. Recommendation.........................................................................................................................10

Bibliography

Abstract

Perceived reality is not the actual reality, and is key issue for misunderstanding behaviour. How an individual perceive others and self is the root of the action and intentions of individual. The issue of selective attention arise from individual perceived and believe about other. Selective attention is one of the key issues in organization behaviour, which often lead workplace to negative path. The issues such as gender stereotyping, racial stereotyping, bounded rationality, barriers to communication, etc are issues of selective attention.

Understanding verbal and non verbal communication, avoiding stereotyping and effective communication help to avoid the issues from arising in an organization.

Key word: Selective attention, communication, workplace, stereotyping, etc..

1. Introduction:

1.1What is communication?

Communication is the process of establishing connection (or link) between two points for information exchange. It is through communication that people add value in innovation, quality, delivery and cost. (David Boddy, 2008) According to John E. Barbuto,(2000) understanding communication processes is a most important path for future leaders and managers to travel. Communication requires at least two people- a sender and receiver. Berlow conceptualized, communication process involved some different phase: message generation, encoding of message, selecting a medium for encoded message, and then decoding of the message (on the part of the receiver). After that feedback may occur in occasionally where the communication runs effectively both ways as the process continues.

“Encoding is the process of organizing ideas into a series of symbols which is designed to communicate with the receiver.” (Andrew .J. Dubrin (2008)

“Decoding is the stage of communication in which the receiver interpect the message and translate it into meaningful information.” Andrew .J. Dubrin (2008)

“Feedback is stage of communication in which the receiver responds to the sender’s message.” Andrew .J. Dubrin (2008)

“Noise is anything which confuses, diminishes or interferes with communication.” (David Boddy, 2008)

Communication is the most important factor in business environment. Not only communication is important in the form of marketing communication mix (advertisement, personal selling, public relation, sales promotion and direct marketing) but also communication in between employee and employer in an organization is important. Because of the workplace diversity people from different country, ethnic background, and culture, manager may have problem in communicating with them. At the same time people from same country, ethnic background, culture and language may also have communication problem because of their differences in education level, family background, personality, etc. To increase productivity and enhance the relationship between the employers and employee, customer, suppliers and other stakeholder; manager should try to reduce the communication barriers. For this reason manager should have knowledge relating to the issues of selective attention in the work place.

1.2 What is selective attention?

“Selective attention is defined as a process by which perception of certain stimuli in the environment is enhanced relative to other concurrent stimuli of less immediately priority.” (Robert A. Wilson, Frank C. Keil, 2001) The issue of selective attention arise from individual apparent and believe. Selective attention is one of matter in organization behaviour, which often direct workplace to unhelpful path.

2. Issues of selective attention:

2.1 Non Verbal communication: Nonverbal communication, consist of our facial expressions, gestures, eye contact, posture, and even the tone of our voice. Non verbal communication occupy from 70 to 80% of the impact. The distant of comfort, touching, eye contact, personal space are the dimension of non verbal communication in a workplace. Non verbal communication may cause the issues of selective attention.

For example: In Spain, Greece, Arab some other countries speaker maintain close eye contact all the time, at the same time Japanese avoid eye contact 90% of time.

Italians and South American tend show their feelings through intense body language, while Japanese tends to hide their feeling through interpersonal communication, which may create issue for selective attention in workplace.

Furthermore, barriers to communication may also cause the issues relating to selective attention on communication.

K.D. Koirala,(2006) assumed that different form of barrier might exist in between sender and receiver to breakdown the effectiveness of communication. Barriers could be physical barriers, semantic barriers and psychological barriers.

2.2.1 Semantic barriers: Semantic is the study of word or its meaning. The barriers which are related to language are semantic barriers. The receiver may be from different educational, social and cultural backgrounds. It is also arising due to the language differences of source and the sender, (Koirala, K.D (2005)). Sri Jinkushal, (2009) conceptualized, wrongly expressed word, faulty translation, confuse assumption, use of technical language are the difficulty connected to semantic. For example: In Finland, term ‘glass’ room is used for ‘class room’; we are sitting in Glass room ( class) and ‘trucks’ or trucks; he took two trucks every night.

2.2.2 Organization barriers: Organization structure significantly has effects on potential of the employees so far communication is concerned. According to Sri Jinkushal, (2009), “some foremost organization barriers in path of communication are organizational policies, organizational rules, status relation and complexity in an organization structure, organizational facilities and organizational level in hierarchy.”(Tulsian, (2009).

2.2.3 Psychological or perception barriers: Communication might be filtered or blocked by attitudes, viewpoint and value. Attitudes are picky views of individuals, circumstances and events that are base on beliefs. Most common causes of psychological barriers are problems within communication. Since, it is predictable, everyone has their own viewpoint and options of some sort of selections and interpretation within the process of communication is also expected. According to Sri Jinkushal, (2009), premature evaluation, emotional attitudes, poor retention of information are barriers to communication.

Graeme Burton (1988) convey, factor such as religion or culture are different types of barriers. For example: Sikh tolerates for wearing a turban or an Australian is the ram of joke about kangaroos and beer then it is unfair blaming the turban or kangaroo. The barriers to open and welcoming communication is in brain of people. (Richard Dimbleby and Graeme Burton (1988))

2.2.4 Physical Barriers: Communication may be blocked or filtered by physical factor in the communication process. Kreitner (1988) recommended that communication breakdowns can be found in one of these four stages of communication: distance, idea generation, encoding, selecting a medium, and decoding. Noise and clutter around taking and create a filter within the context of communication. (Richard Dimbleby and Graeme Burton (1988))

2.3 Bounded Rationality: Human beings are imperfect in their capability naturally; and for making rational decision. Each individual lack time and cognitive ability that is required to make a rational choice. Culture, tradition, habit and personality have huge impact on rational decision. Bounded rationality is an issue for selective attention. (Dr. Matt, Grawitch)

2.4 Stereotyping

“Stereotyping is the idea about the characteristics, attributes and behaviours of member of certain groups.” (Hilton and Von Hippel, 1998) Stereotyping may occur on the basis of gender, race and ethnicity as well as many other dimension of diversity.

2.4.1 Gender stereotyping (Issue):

Gender issue is bias in separation of gender in an approach which have preferences for one sex over another. Gender role stereotyping is a very common on in society, which operate disadvantage to women in work place. In the prior studies by (Powell and Butterfield, 1979, 1989) women and men explained that superior manager should have predominantly ‘masculine’ characters which are traditionally associated with males. Thus, women who seek to management position will be victim of common stereotype of being unfit for position. These types of stereotypes are disadvantage to every level of staff. (Margaret, Foregen, Karsten, 2000)

2.4.2 Racial Issue:

Race, the colour a person’s skin, generates a number of grave questions in the work environment. Respect, equal opportunity and fair dealing are the major concerns. A variety of terms such as Asian, white, Anglo American, black are often used to describe like group of people. (Margaret Foegen Karsten, 2000)

According to the University of Notre Dame Counselling “Racial stereotypes are often negative.” Tan, Fujioka, and Lucht, 1997 posit result of a national wide survey showed that Blacks, Asians and Hispanics were considered as junior, lazier, more violent level, fewer eager to be self supporting than whites.

For example: “People consider that Indian are lazy and depend on welfare”, (Tan, Fujioka, and Lucht, 1997)which may not be true because the percentage of Indian who own the business is increasing day by day and this would not happen if they were lazy or depend on welfare. And at the same time, African Americans are stereotypes; they are lazy, stupid and they live off welfare. (How do Americans view one another? The persistence of racial/ Ethnic Stereotypes”, 1998) Barack Obama is a great example to proved it as a false.

Tan, Fujioka, and Lucht, 1997 posit that, due to lack of opportunities to get in touch with other race in thoughtful setting is reason behind the racial stereotype. And at the same time, generalising all people with one concept and word of mouth may be other reasons.

3. How does the issue of selective attention affect the organization?

Human beings are limited with knowledge, skill, educational and they are bounded by cultural, religion, ethical factors and etc, because of these reasons, personality of individual is different which may create problem for communication. This may affect the relation between the employer and employees; for example relation between manager and staff, supervisor and staff, etc, which may affect the productivity of an organization. An organization with well experience and educated staff, enough financial resources and updated technology may not get success in their business career if communication system of the organization is not systematic and properly designed.

3.1 Real world example of selective attention issues:

Disney Company and problem associated with Selective attention

Disney land is one of the famous and big organizations in the world. The issue of selective attention which is written in the paper are notice in Disney cooperation. In Disney land, jobs are given according to the age, appearance, race, etc. For example: The most smart or white people get most admired front line job, old women sell merchandise, old men work in security, Haitian women are given job of housekeeper, African American work as a cook. Ellwood, (1998) And at the same time, the rate of staff turnover is between 200 and 300 percent per year. The prevailing culture of the organization is not employee friendly and have numerous issues, as a result, employee are forced to leave the organization. Human Resource Department in Disney is spending huge sum of money for recruitment and selection, which is costly and time consuming. And at the same, training and development is given to new staff to train them well, but staffs are not happy and they leave the job within a year. Disney land is losing its time, money, and staff which consequences the productivity of the organization. (Human resource practices at Disney, www.chrmglobal.com/.../Human-resource-practices-at-Disney.htm

Issues relating to Selective attention may also affect the relationship between the organization and its stakeholders, for an instant, the relationship between organization and customers, suppliers, government and shareholders. Effective and two ways communication is only the factors which help to maintain superior relation between them and minimize the problem arise.

4. How can manager prevent issues of selective attention from arising?

4.1 Training and development: Training and development reside in its function in transforming the performance potential of employee and manager (Hyman, 1992) and in the way in which it serves to constitute employees as strategic resources as oppose to disposal commodities. (Keep, 1989). The proper training and development aim to build the skill, knowledge, effective communication and good relation between the employer and employee. In addition to this, manger should give training about how to maintain good relationship with co-worker so that issues of selective attention can be minimized or eliminated. Further, manager can classify training and development into different sector; for example:

Training related to dealing with Stakeholder, manager, co-worker, etc

Training related to effective communication, verbal and non verbal communication.

Training related to work place diversity and managing across culture, etc..

4.2 Organization culture: Every organization has its own culture, values, beliefs, vision, mission, goal and objective to obtain. Manger should try to make the employees familiar with the prevailing culture of an organization. To fulfil this purpose, manager should arrange regular meeting, general assembly, organized weekly meeting with employees and other important parties who plays significance role for the development of organization.

4.3 Effective communication: Manager should try to avoid the barriers to communication. Laurie J. Mullins (2007) posits non verbal communication play 70% for effective communication. So manager should avoid the communication breakdown, to stop selective issues from arising. For example:

Telecom in Ireland is chosen as best working place in Ireland 2010, which was published by the Irish independent. The manager of Telecom believes that respect to employees, and honest communications are key reason for their success. For this reason manger should focus on honest communication to avoid selective attention.

4.4 Right choice of medium and place for communication: John E. Barbuto 2000, conceptualized, that medium and place should be suitable for communication, which help the manger to deliver correct message to staff and can get feedback back from staff, which reduced the issues of selective attention.

4.5 Feedback from Employee: Manager should ask the feedback from staffs and other stakeholders like customers, supplies time to time. It may be monthly, every three month, or twice a year. It helps to build the trust between the employer and employee and to minimize issues of selective attention. Joe Duffy CEO, BHY Mellon said to Irish time when his Financial Company was chosen as a best working place in Ireland, “we openly place that trust in our employees. And what we get in return is their trust.” This would probably be the good example employee trust and good communication are key issues for success in an organization.

4.6 Perception: Edward De Bono a psychologist proposed that reversal thinking, attention to particular problem and random thinking help in problem solving and decision making for a manager.

Reversal Thinking: Manager should imagine the opposite attitude of particular issues at hand and using that image to inspire solution and put them in that condition and make decision.

Focus on particular problem: Manager should focus on particular part of the problem, and possibility another may be overlooked.

Random input: Manager can solve the problem of selective attending by viewing the problem completely from another side. (Andrezej Huazynski, David. A. Buchana (2007).

4.7 Used decentralised communication system: Manger should try to avoid using centralized communication, used decentralized communication. In decentralized communication the flow the message is smooth and short. And at the same time it will help to maintain good relation between employer and employee, which avoid the issue of selective attention. Google, Macdonald, etc all the successful organization are using decentralizes communication system; which probably are best working place in the world, where employee are considered as a main resources and assets of organization.

5. Conclusion:

The best workplaces deliver the best business performance even in the most difficult and changeling times. The relationship between the employees and employer, organization and its stakeholder should be smooth, blunder free, and ongoing. The relation can be superior by effective and two way communication. For effective communication manager should try to minimize or eliminate the issues and barriers related to communication. One of the major issues related to communication in an organization is selective attention. Issues of selective attention often have negative impact in workplace. For this reason, mangers have to give special focus to reduce issues in a workplace. The issues related to selective attention are stereotyping, bounded rationality, psychological, physical, organization barriers for communication, etc. Manager can prevent these issues by implementing tool and techniques; such as training and development, effective communication, Right choice of medium and place for communication, decentralized communication system, etc.

6. Recommendation:

Selective attention is the globe issue in workplace. Manager can divide workplace into two small teams for the feedback session or focus group so that variety of perspective and many ongoing issues in an organization can be identified. Manager should schedule regular feedback program from employee for stopping these issues from arising. The manager can schedule meeting and feedback program once a month, in every month three and more. Furthermore, manager should develop the skill of managing across culture in an organization and should be well aware of workplace diversity.

Bibliography

Books:

1. Brian Webb, Frank Schlemmer, Information technology and competitive advantage in small firms. London, Prentice Hall.

2. Boddy David, (2008), Management an introduction, London, Prentice Hall

3. Chitode. J. S., (2008), Communication Theory, Pune Technical publication.

4. DuBrin. Andrew J., (2008) Essentials of Management, Nelson Education Ltd, Canada.

5. Dimbleby Richard, Burton Graeme (1988), more than words: an introduction to communication, New York, London.

6. Ellwood, (1998), Inside the Disney Dream Machine, New York, New International,.

7. Griffin Ricky W., Moorhead Gregory, Organizational Behaviour: Managing People and Organizations.

8. Hilton and Von Hippel, (1996), Stereotypes, Annual Review of psychology.

9. Huczynski Andrzej, Buchana David A, (2007), Organizational behaviour: an introductory text, Pearson education, London

10. Hyman, (1992), The hand book of Human Resources Management, Oxford, Blackwell.

11. Jablin Fredric M., Putnam Linda, The new handbook of organizational communication: advances in theory, Sage Publication, London

12. Keep, (1989), New perspective on Human Resource Management, Routeledge London,

13. Koirala, K.D (2005), Marketing communication, Buddha publisher, Kathmandu

14. Kreitner, R. (1995), Management, (6^th Ed.). Boston: Houghton Mifflin Company, New York.

15. Marley Christopher, Skinner Denise, Timothy Clark, (1998), Experiencing Human Resource Management, London, California, Sage publication,

16. Margaret, Foegen Karsten, (2000), Gender, Race, and Ethnicity in the Workplace: Legal, psychological,

17. M. Lurie. J., (2007), Organization Behaviour, (8^th edition), Prentice Hall, London

18. Moseley James Lee, Designer Joan Conway, (2007), Training older workers and learners: maximizing the workplace performance, New York, Praeger Publicer

19. Powell and Butterfied D.A., (1999), Handbook of Gender and Work, Sage Publication, London

20. Tan, A. Fujioka, Y., & Lucht, N., (1997), Journalism and Mass communication, (no publisher)

21. Tulsian,( 2009) second edition, Business Organisation and Management, South Asia, Pearson

22. Wilson. A., Keil Frank C., (2001), The MIT encyclopaedia of the cognitive sciences, New York, MIT press.

Websites:

1. Article #2-3 (20^thFeb, 10)

John.E Barbuto, (2000)

www.ibam.com/pubs/jbam/articles/vol2/article_12.htm

2. filter theory of selective attention (psychology) -- Britannica ...(21^th Feb, 10)
www.britannica.com/.../filter-theory-of-selective-attention - Cached - Similar

3. Nonverbal Communication Skills: The Power of Body Language( 20^th Feb, 10)

www.helpguide.org/.../eq6_nonverbal_communication.htm

4. The Politics of Emotion: A Feminist Reading of Bounded Rationality(25^th feb,10)

DK Mumby - 1992
www.jstor.org/stable/258719

5. How do American view one another? The Persistence of racial/ethnic stereotypes. (2002) (20^th, Feb)

http://racerelations.about.com/gi/dynamic/offsite.htm?site=http%3A%2F%2Fwww.diversityweb.org%2FDigest%2FW98%2Fresearch2.html

6. Human resource practices at Disney

7 May 2006 (20^th, Feb)

www.chrmglobal.com/.../Human-resource-practices-at-Disney.htm

Journals:

1. Szu-Hsien Chang and Brian H. Kleiner, (2003), Common Racial Stereotypes,( volume 22)

2. Dimitrios Mihail, (2006), Gender-based stereotypes in the workplace: the case of Greece.

Online Newspaper articles:

1. (No author), 2010, Best workplaces in Ireland 2010, Irish Independence, online, (internet) 1^st march, 2010

www.greatplacetowork.ie and www.independent.ie

Introduction What is communication mix? Role of Promotion mix Advertising: Sales promotion: Personal selling Public relation Direct market Criteria for Selecting Right communication mix Change Happening in the media Conclusion

2011-08-07T20:41:00.001-07:00

Baral Abita

Table of Contents

Introduction

What is communication mix?

Role of Promotion mix

Criteria for Selecting Right communication mix

Change Happening in the media

Conclusion

Abstract

Every business organization large or small, product motive or service motive, government or non government, profit motive or non profit motive need to communicate with wide range of stakeholders (Fill, 2005). The reason to communicate may be to get materials and service, understand business or to co-operate with each other with in an organization. For communicating well, companies have to use marketing tools they do this through the communication mix (advertising, sales promotion, personal selling, public relation and direct marketing). Each of these tools plays a significant role while communicating with consumer. Marketers have to make a wise decision while choosing communication mix to communicate and consider the changes that are happen in media. Furthermore companies have to be proactive and consider the change in buyer behaviour.

Introduction

Building excellent customer relationships requires more than making a good product, pricing it effectively and making it available to target customers. (Kotler, Armstrong, Wong, Saunders, 2008) posits, companies should communicate their significance proposals to customers, and should not be left to chance what they communicate. Excellent communication plays a key role in building and continuing of good relation with customer; building a profitable consumer relationship is essential component of the company’s in which it have to focus on. (Kotler et al, 2008)

A business has to communicate not only with consumer but also with intermediaries and variety of public. The intermediaries communicate with their consumers and publics. In the meantime, each group gives comment to each individual group. Therefore, the business has to handle multifaceted marketing communication system (Kotler et al, 2008).

What is communication mix?

Promotion or communication mix is the combination and types of personal and non personal communication that an organization uses to influentially communicate with consumer and build good relationship with them (Lamb, 2008). There are five elements of communication mix; among them advertisement, sales promotion, direct marketing and public relation are impersonal and personal selling is personal.

Fig 1: Element of promotion mix

To communicate well, organizations often employ advertising departments to develop the advertising, sales promotion experts to plan sales encouragement programmes, direct marketing experts to widen database and network with consumers and projection and public relationships firm to expand cooperate images. They guide their sales people to be friendly, helpful and persuasive. (Kotler et al, 2008) assumes that for most of the organizations, the question is not whether to communicate or not; but is how much to spend and in what ways. All attempts for communication should unify into a reliable and corresponding communication programs (Kotler et al, 2008).

Fig. 2 Process of communication

Role of Promotion mix

Lamb, 2008 states that few goods and services, no matter how well developed, priced or distributed, cannot survive in the market place without effective promotion-communicated by the marketer that inform, persuades and reminds potential buyer of the products in order to influence their opinion or elicit a response. At the same time, marketer critics argue that promotion raise the price to be higher than they would be under more ‘sensible’ market (Kotler et al, 2008). For example: differentiated products- cosmetics, detergents, toiletries- consist of promotion and package cost that can amount to 40% or more prices to retailer.

According to (Peter, 2004) overall role of marketing mix are:

Informing: When a company have to introduce a new product in a market, marker used marketing communication mix to inform about the product in the market. Communication mix explain how to product work, suggest new user for a product. For example: Philip’s advertisement for Magnavox flat screen television showed that young, urban consumers trying the flat TV all over the house, including the ceiling. The ad focuses on how to use rather than its technology. (Lamb, 2008)

Persuading: Communication mix build a selective demand encourage the brand by persuading consumer that it offer the best quality for money. For example: after establishing the Sony DVD in market, it began to persuade its consumer that the brand offers the best quality their money which they spend. (Kotler et al, 2008)

Reminding: Communications mix maintains a customer relationship and keep consumers thinking about product. For Example a Nike television ad in which well recognized athletes ‘just do it’ never directly ask for sales, but remind the consumer about the product or brand. (Kotler et al, 2008)

Advertising:

Adverting is a paid form of non personal communication about an organization, its products, services or its activities that is transmitted through mass medium to a target audience.(Koekemoer, 2004) Advertising generally engage mass media such as newspapers, magazines, television, radio, and also include computerized form of communication such as web blogs, CDs, DVDs, etc ( Kurlz, 2008).

The characteristic of advertising are: it is efficient for reaching many buyers simultaneously; efficient way to create a brand loyalty; flexibility in nature; impersonal communication; variety of media to choose. (Peter, 2004)

Role of Adverting:

According to (Saunders, 2008) and (Guinn, 2008) the role of advertisement:

Advertising reach masses of geographically dispersed buyer at a low cost per exposure.

Advertising alter optimistic message about product, company, supplier, size, popularly and success.

· Advertising allow the business to dramatise its goods all the way through crafty use of visuals, print, sound and shade.

· Advertising play a significant task in brand development.

· Advertising can be used to make up a long term image for a product ( such as Mercedes- Benz cars Ads)

· Advertising prompts rapid sales.

· Advertising help the firm to implement market segment, differentiation and positioning.

Despite good advantage advertising have some weakness it reaches to many people who are not potential buyer; subject of too much criticism; people tend to screen out advertisement; and total cost may be high (Peter & Donnelly, 2004).

Sales promotion:

Sales promotion is an activity or a material that offers customers, personnel or reseller a direct inducement for purchasing a product. These inducements which add value or incentive for the product might be in a form of a coupon, sweepstakes, refunds or display (Peter, 2004).

(Peter, 2004) states characteristics of sales promotion which are: hold up short term drops of goods, designed to stimulate require demand of the goods, successful in altering short term performance, simple to connect to other communication; impersonal communication, short term incentives (Peter & Donnelly, 2004).

Role of Sales Promotion

According to (Kotler et al, 2008) role of sales problems are:

· Draw the consumer concentration and offer information which might direct to purchase.

· Sales promotion offer powerful motivations to buy goods by providing motivation that gives extra importance to consumers.

· Sales promotion dramatise offer for goods and enhance the drooping sales.

· Sales promotions encourage and return quick response from consumer. It offers motivation to buy in mean time.

While Donney , 2004 argue sales promotion is the risk which include brand loyal customer to stock up while not influencing other, the impact of the sales promotion may be limited to short-term, it may also hurt the brand image, etc. (Peter & Donnelly, 2004)

Personal selling

Personal selling is face to face communication with prospective consumer to inform individual and influence them to buy an organization’s product. William M Pride, 2008 assume that personal selling is the most adaptable of all the promotion mix because the people who are transforming the message can adjust it to the suit of individual buyer however it is expensive method (Peter & Donnelly, 2004). Avon is an example of personal selling.

Characteristics of personal selling are: sales people can be influential and significant in making customer to buy product; personal selling have two way communications which tolerate for the question and feedback; message can be targeted to definite consumer (Peter & Donnelly, 2004).

Roles of Personal selling

According to (Kotler et al, 2008) role of personal selling are:

· Personal selling encourages all the types of relationships to bounce up, from straightforward selling relationship to individual friendships.

· Personal selling entails communication between two or more persons, so each individual can study the other’s needs and characteristics and create rapid adjustment.

Public relation

Public relation is the non personal form of communication that look to persuade the approaches, feeling and belief of the consumers, non consumers, stock holder, dealer, workforce and political bodies about the company (Pride, 2008). A popular form of the public relation which is non paid form of the non personal communication about organization and its product is transmitted through mass media in form of news story. News (press release), events, written materials, audio visual materials, speech and cooperate identity are the form of mass media in public media (Fill, 2006).

Characteristic of public relation are: cost of public relation may be low; media generated message seen as more creditable than market sponsored message; very little control over the message; impersonal communication (Peter & Donnelly, 2004).

6.1 Role of Public relation

According to (Pride, 2008) & (Kotler, et al 2009) role of public relation are

· Public relation can used to promote people, places, activities, ideas and even countries.

· Public relation gets in touch with many audiences, who stay away from salespeople and advertisements. The message gets to customers as ‘news’ rather than as a sales-directed communication.

· Public relation play up company goods.

· Public relation centre on charming the reputation of the company by making individuals conscious of the company’s brands and by creating specific image of company such as the innovativeness or reliability. For example: Meyers, a Swiss watch company that has lend watches to celebrity like Paris Hilton at the Sundance Film Festival and afterwards auctioned off the return time piece for charity, say any resulting publicity from the attempt can be value a lot as $750,000.

Direct market

Direct marketing used the direct form of the interaction with the consumers. It can take in form of the direct mail, online marketing, catalogue, telemarketing and direct response advertising. Similar to the personal selling it make consist of the interactive, dialogs between the company and consumers. For example Dell, Amazon, DHL (service motive) are doing direct marketing.

Characteristics of the direct marketing are impersonal; flexibility, target ability, measurability, accountability and privacy, promote (Wymer, 2006).

Role of direct marketing

According to (Kotler et al, 2008) role of direct market are:

· Direct marketing is an influential tool for building customer relationship.

· Direct marketing enable company to interact with the customer directly.

· Company can get regular feedback from customer. For example: Nestlé’s baby food records a database of new parents and posts them personalised parcels of gifts and give them a guidance at key phases in baby’s life. As they get in touch with more concerned consumer at the best times.

Despite a lot of advantage direct market have some drawbacks managing and maintaining up to the date database can be costly and often low customer response give response to direct marketing.

Criteria for Selecting Right communication mix

Success of the marketing plan and strategies depends largely on the design, development and execution of effective communication strategy. Developing an effective communication is a challenging task. This task requires the technical support of many creative people. In fact, an effective marketing communication is developed with a combined effort of marketing executives, creative manpower and media personnel. (Koirala, 2005), The criteria for are selecting right communication mix:

Identify the target audience: Target audience may be an individuals, groups, specific public or general public. They critically influence the communication decisions. According to (Kotler et al, 2009) the target audience can be:

· Current buyer: Current user of the product.

· Potential buyers: Have potential to buy the product in future.

· Influencers: Influence buying decision.

· Deciders: Make decision about buying product.

According to (Koirala, 2005) Effective communication can be developed through understanding of the demographic, psychographic and media graphic characteristics of the target audience. In this stage, the marketing firm needs the support of market research to conduct a detailed survey to properly develop a profile of the target audience.

Determine the communication objectives: Communication objective are desired outcomes or end result to be achieved. The marketers need to design more effective and interesting communication in order to achieved common objectives. According to (Koirala, 2005) the effectiveness of marketing communication is measured in the term of how successful it has been to meet its goal communication is measured in terms of how successful it has been to move of the following goal as prescribed in the hierarchy of communication effects model.

Hierarchy of Effective

Awareness

Knowledge

Preference

Conviction

Purchase

Fig. 4 Hierarchy model

· Brand awareness: Most marketing communications are targeted at achieving recognition and recall of the brand name by buyers. This is the most basic objectives of promotion (Koirala, 2005).

· Knowledge: The second level objective of marketing communication is to provide knowledge to the buyer about the brand’s characteristics, utilities and benefits (Koirala, 2005).

· Preference: The third level of marketing communication aims to develop a positive feeling on a brand aiming the potential buyers to have preference for the brand. (Koirala, 2005).

· Conviction: At the forth level, the marketing communication aims to develop a conviction among the buyers to purchase the brand. Such convictions are measure on buyers’ favourable purchase intention. (Koirala, 2005).

· Purchase: the final objective of the marketing communication is to make the buyers actually purchase the brand. (Kotler & Scheff, 2007).

The AIDA model

Attention

Interest

Desire

Action

Designing the message- Marketer should design the effective message to gain the attention from desired audience. The design message should obtain attention, grasp produce desire and get action (AIDA). AIDA model suggest ideal way of look and buy identify. The marketer should decide the message content and structure and format using the framework of AIDA model (Kotler et al, 2008).

Fig. 5 AIDA Model

Attention: Draw the attention of the customer.

Interest: Raise customer interest by focusing on benefits of the product.

Desire: Persuade customers about desire give confident to consumer product will satisfy their needs.

Action: Encourage the consumer to purchase the good (Koirala, 2005).

Selecting Channels: The channels are the pathways for message transmission. Effective channels should be selected to carry the message. The channel of communication should be selected in term of objectives as different media have varying effectives in meeting the various communication objectives (Koirala, 2005).

Kotler & Scheff, 2007 assumes there are varieties of communication media available to reach to the target audience, which are personnel communication and non personnel communication.

· Personnel communication: Personal communication channel are based on face to face contact, telephone or emails. Indirect personal communication includes communication through expert or communication in service marketing. For example: doctors, beautician restaurant, and opinion leaders. (Kotler & Scheff ,2007)

· Non-personnel communication: Non personal communication carry message without the personal contact or it is one way communication. Non personal communications include the Medias, events, newspaper, radio and television, blogging, etc. Most of non personal communications come from paid media. (Kotler & Scheff ,2007)

Company Philosophy: Choosing best communication mixes also depend on the company philosophy. Company philosophy refers to the company culture and beliefs, companies believe that adverting is best tool for promotion while other may believe personal selling is the best tool. For this reason the best tool for communication mix depend on company.

Skills within the company: Every company have their manpower which company good. For example some companies with well trained salesperson, can used personal selling as the promotion tool and companies with skill advertising campaign, can used advertising as the promotional tool. Depending on the skill manpower companies should choose the promotion tools (Kotler et al, 2008).

Feature of the Product: Choosing effective communication mix depend on the feature of product/ service. Some product may go well with adverting and some with other promotion tools such as sales promotion, personal selling, direct marketing and public relation. For example: For food and baggage industry advertising is best way to promote and for insurance, credit card facilities, etc personal selling is the best way to promote. And at the same for luxurious brand like Tom Ford, Paul Smith public relation may be best idea to promote.

Objective of Campaign: The communication budget is allocated to following tools of the marketing communications: advertising, personal selling, sales promotion, direct marketing and public relation (Kotler et al, 2009).

According to the objective which was determined earlier communication mix is selected. If the objective is awareness building a mixture of publicity, newspaper advertisements, displays and some informative television commercials can be very effective. If the objective is to develop consumer liking for the brand; the mixture of endorsed television advertisement magazine and electronic sign are more effective (Koirala, 2005).

Product life cycle: With the phase of product life cycle the effects of various promotion tools also differ. In introduction phase of product, advertising and sales promotion are good for creating high awareness and sales promotion is useful in reaching early trial. Personal selling effort must be used to get the trade carry to the product. In growth phase advertising and sales promotion persist to have powerful impact whereas sales promotion may not be effective tool. In mature phase, sales promotion plays a significant role relative to advertising. In this phase consumer are familiar with brand, advertising is needed to remind consumers about the product. And in decline phase public relation and personal selling are not necessary, advertising is still needed to remind and sales promotion may be effective way to continue the sales. Marketer should consider phase of product life cycle for using best promotion tool (Kotler et al, 2008).

Fig. 6 Product life cycle

Establishing Budget- Budgeting determines the ultimate limit to spend on communication. According to (Koirala, 2005) the methods for allocating communication budget can be:

· Affordable method: Budget is based on what organizations think they can afford. It is generally based on hunch. It is uncertain.

· Incremental method: A percentage is added to previous year’s expenditure.

· Percent of sales Method: Budget is set as a specified percentage of sales. This is most popular method in practice.

· Competitive parity method: Budget is based on level of competitive spending.

· Objective and task method: In this method: tasks are defined to achieve communication objective and cost are estimated to perform the tasks. (Koirala, 2005)

Change Happening in the media

The moves to segmented marketing and the unstable expansion in the information and communication technology have a remarkable impact on marketing communication. The changing pattern of communication is giving birth to new marketing communication model. The supremacy of television, radio, magazine and other mass media is failing, though they have a significant impact. Promotion mixes are adding up a broad selection of the more specialized and highly targeted media to reach the smaller customer segments with more personalized mass message. The new media scope from especially from magazines, satellites with more programmes and video games, internet catalogues, emailed and online audio sites such as podcasts, social networking sites, viral marketing (Kotler et al, 2008).

Consumers are also changing in the means they consume media. Consumer especially the young one, emerge to be turn-off from traditional media like television, radios, newspaper and other mass media. Young people spend more time online then on watching television. Many television broadcasting are steaming their channel online so that they will not reduce their customer. For example In the UK, BBC and ITV are building audience online through their .com services. (Blevins, 2005)

At the same time, mass communication is moving from internet to social networking sites like facebook, MySpace, Hi5, etc. (Ramo, 2009) assume many of the high school and college student don’t use Web anymore. They use instant messaging, SMS on cell phones, messaging in facebook and MySpace, Twitter and other tools.

This is facebook era; (Shih, 2009) each minute millions of persons are logged into the facebook and renew their status, to interact with people around the world. Companies which want to build their brand should always focus where consumers are and try to raise its number. So it is helpful to spend some time on the f social networking sites such as facebook MySpace, Hi5 etc to create loyal customers. (Shih, 2009)

Social network allows to registered user to create personal profiles and puts the blogs, video and songs, link to other users and communicate with them. Many prominent advertisers such as Toyota and Wendy’s fast food restaurant are using this site. Many more products are using sites to promote the product (Duyn & Birchall, 2006). Marmite Food Company is the first user of the facebook, which use social networking for advertising. Through facebook it has create about million fans and even create new customer. As well as, the luxurious brand like Ferrari which never used advertisement as communication, are using facebook for advertising

Barack Obama’s 2008 president campaign used facebook, MySpace, hi5 and other social networking sites for requesting millions of the supporter and raise rally by $ 1 billion on a grass root campaign contribution. According to Pew (2008) research centre 10% of American and one third of the American under age of 30 used facebook and other social networking sites to get information about the presidential election (Shih, 2009). Then it is usual that the facebook user will used facebook to learn about the product or brand. So it is beneficial to keep the link of the product in facebook or other social networking sites for creating or building brand loyalty.

Conclusion

Promotion is one element of marketing mix. Traditional tool of marketing communication mix such as advertising, personal selling, sales promotion, direct marketing and public relation played an importance role in developing the effective plan and strategies. Not only in product but also in service marketing promotion mix play an important role. Service marketing sale their service and customer service is the main element in service marketing. Promotion tool such as advertisement, sales promotion, public relation, direct marketing and personal selling are used in service marketing also.

Consumer especially the young are moving away from traditional media. They spend more time in using YouTube, using facebook, MySpace, reading instant message, texting. And at the same, they are spending more time online shopping and online booking of flight. At the same time, changes are happening service marketing, it is moving from mass marketing to individual marketing and focus loyal customer and promote them by giving discount voucher, personal selling, direct marketing. Marketer should consider these changes happening in media and used social site, blogs and other tool according to demand of customer as a promotional tool ,whether it is product/ service organization. Furthermore, along with change of technology and pattern of the communication the company should be dynamic and flexible while communicating with the consumer. And the buyer behaviour is also changing with change in technology, therefore companies should be proactive and use aggressive channel of communication and always think of new ideas to pull consumers.

Bibliography

Books

1 Andreas Ramos, Stephanie Cota ( 2008) Search Engine Marketing, London, Mc Graw Hill

2 Charles W. Lamb, Joseph F. Hair, Jr., Carl McDaniel, (2008), Essentials of Marketing, USA,CENGAGE Learning

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7 Gary Armstrong, Michael Harker, Philip Kotler, Ross Brennan, ‎(2009) Marketing: An Introduction, England, Pearson Education

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10 Johan Botha, Annekie Brink,( 2007), Introduction to Marketing, Cape Town , Paarl Print

11 J Paul Peter, James H Donnelly, (2004), Marketing management: knowledge and skills ( 7th edition), China, MC Graw Hill

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(Online available), 7th Feb, 2010

Author: Dave Dolak (2010)

www.davedolak.com/promix.htm - Cached - Similar

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(Online available), 18^th April

www.12manage.com/images/picture_product_life_...

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(Online available), 7th Feb, 2010

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Jay Kandam Pully and Ria Duddy (1999) Competitive advantage through anticipant, innovation and relationship, Management decision MCB University Press
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Assignment Topic: Leadership Principle

2011-08-07T20:35:00.003-07:00

Assignment Topic: Leadership Principle

Baral Abita

Contents

1. Introduction:

1.1 What is leadership?

2. Key contingency of organization:

2.1 Size

2.2 Technology

2.3 Environment

3. Team Support System:

4. Types of Teams

4.1 Formal Team:

4.1.1 Problem-Solving teams:

4.1.2 Self-Managed Work teams:

4.1.3. Cross-functional teams:

4.1.4. Virtual team

4.2. Informal team:

5. Conclusion:

Abstract:

Groups and team are the most significant features of organizational life. From different groups of people the work organization and its sub-units are made up. All the activities of an organization need some degree of coordination all the way through the function of groups and teamwork. Team leader are the one who develop the organizational goal, objective and strategy. For achieving the goal and developing the effective leadership, team leader should identify the key contingencies of organization, support the team and different types of team in an organization.

Key Word: Team, Leadership, leader, team support system contingencies, etc

1. Introduction:

Organizing the performance of employees and directing their attempt in the direction of the aims and goals of the organization, is a vital component of management. This engages the procedure of leadership and the option of a suitable form of the action, performance and behaviour. Leadership is a central feature of organization performance. The manager should understand the nature of leadership power, factors which resolve association with other people and the efficiency of leadership relationship. (M. Lurie. J., 2007)

Leader plays a critical role for future of the organization. They are the one who develop mission, goals and strategies to achieve those goals. Leader determines organization’s inner strength and weakness from the information available inside the organization. At the same time, they analyze and acquire necessary information from outside boundary of organization to grab opportunities and to minimize the threat coming from those environmental forces. In order to identify such strength and weakness within the organization and opportunities a and threat from outside environment, leader should have good understanding of goals, objectives and strategies of the organization and also other important factors such as key contingency factors, team supports and different team types in an organization, employee performance, etc .

1.1 What is leadership?

The process in which an entity member of group or association influences the understanding of events, the option of the goals and plan, the organization of work performance, the inspiration of people to reach the goal, continuation of cooperative relationships, the development of ability and assurance by members, and the mobilization of support and mutual aid from people outside the group or organization. (Yukl’s, 2006).

(Rosabeth Moss Kanter, 2004) argue leadership is not concern about the leader; it is about how he or she put up a confident of everyone else in team. Leaders are liable for both organizations which provide as the keystone of confidence, and for the human contacts which shapes a positive touching atmosphere to encourage and inspire people... Leaders transport confident by supporting high principles in the behaviour they model and recognized proper mechanisms to offer an arrangement for acting on those criteria.

2. Key contingency of organization:

The contingency approach of the organizational design takes a view that there is no best universal structure which can fit in an organization and emphasise the need for flexibility structure. For team contingency is something that leader cannot avoid in an organization and it begins from regular function of organization rather than from emergencies. (Stewart Clegg, 2005) Contingency approaches are based on the concept of an organization interacting with elements in its environment and adapting to them. (Albert J. Mills, 2006)

David Needle, 2004 assumes the contingency approach begins with an investigation of the key variables that figure the organization. It continues with hypothesis that the successful organization are those which adapt key influence and gains some sort of excellent fit with their environment. This approach has been very significant in the area of corporate strategy. The strategist goes along with the environmental opportunities and threats through the organization’s own strengths and weakness to enlarge a best strategy for the firm. (David Needle, 2004)

Some Scholars (Burrell and Morgan, 1979) regard the contingency approach as an expansion of the systems analysis of organizations. While (David Needle, 2004) criticized contingency approach for focusing on a limited series of environmental variable, for being deterministic, and for ignoring both the influence of the organization on its environment and values and behaviour of management and the workforce. Contingency approach present a broad analytical framework, enabling to gain a greater insight into the way business a separate. (David Needle, 2004) The significant contingency variables are size, technology and environment. (Albert J. Mills, 2006)

2.1 Size

Organizational size can be defined as the total number of employees in workplace. According to Mill, 2006 large organizations have different size and structure than small organizations do. As the organization increase in size, it develops further written rules, policy and procedures, and at same time division of labour turn into more specific. Blau and Schoenherr argued that size is a significant issue for affecting the organization design. According to (R. H. Hall Et all, 1972) size is the result, not the cause of structure. The key point is that as the organization turn out to be bigger; they become more bureaucratic, in the logic of being considered by top score on balance which measure the degree of formalization, equality and centralization. (Stewart Clegg, ET all 2006)

2.2 Technology

Technology change is typically a crucial feature of the “knowledge economy” and is another key aspect of the contingencies variable which explained organization structure. The ‘technology-structure’ thesis has sought to analyse technology as an independent explanatory variable. The British academic Joan Woodward, for example, classified production technology into three main categories for analysis: unit production (tailor shop), mass production (auto plant) and continuous production. (Pulp mill) (Albert J. Mills, 2006) The key point is that as organizations adopt more routines technologies- technologies with replication and schedule linked with them-they tend to become self-important and as the time goes on the technology. Along with change in technology leader should give training and development to employees which help them to overcome with technological change. (Stewart Clegg, ET all 2006)

2.3 Environment

The environment is the whole thing outside the organization’s boundary. The cases for the environment essential argue that a huge number of PEST (economic, political, social and legal) factors will affect organizational design. For example: After the attack on the world Trade centre on September 11, 2011, airline travel decline radically around the world, which result in reorganization of many airlines. In essence, the study done by UK organizations renowned five different types of environment sorting from stable to least conventional, and two conflicting models of managerial behaviour and organizational structure: the fundamental and mechanistic structures. (Albert J. Mills, 2006) They further suggest that both structural systems represent a logical form of organization. Insecurity in an external environment causes managers to respond in one of two ways. Manager can redesign the firm to boost flexibility, or can give more information regarding environment. (David Needle, 2004) The key point is that the more certain and conventional the environment in which organizations operate, the more organization will have the bureaucratic structures. (Stewart Clegg, ET all 2006)

3. Team Support System:

Teams perform all the function of the organization. Every function of project management, research, promotion is done by the teams. Therefore team need a support. The team support includes leader support, regular feedback from leader, and goal setting, effective communication system in an organization. Team support system can be formal and informal same as types of team. Team support system is a sustained set of mutually dependent managerial process that improves the ability of team to work collaboratively and successfully. (Rodney L. Lowman, 2002). Hall and Beyerlein (2000) describe nine managerial processes or support systems which impact team performance. Team support systems include conventional human resource management system such as such as assessment and training.

Team Support system provide organizational and team leader’s direction in budding a helpful organization context that can be successful. Further, organization culture, team goal, objective and aim also have big impact on the team support system. Here organizational culture describes values, beliefs, attitudes and behavioural models or rules that guide how teams in association get work done. The study done by Pinto and Prescott (1993) conclude managers need to build up an overruling set of objectives to improve level of cross functional collaboration. Higher levels of the cross functional collaboration will get better efficiency of the team support.

According to Sundstrom, E. D (1999), the types of team support systems are

· Group Design System: The support system is involved in clarifying roles, tasks, and boundary function, and with personnel selection.

· Defining Performance System: The support system is involved in the setting and arrangement of performance-related objectives.

· Information System: The support system is concerned with the instrument for giving the precise information which teams need to make conclusion, correct faults, put work together, and make best use of performance.

· Performance Appraisal system: The system is concerned with the correct recognition and dimensions of performance-related skill, at the same time, the feedback of performance evaluations to team members.

· Integration System: The support system is involved with assuring the connection of mutually dependent performing elements, equally vertically and horizontally.

· Direct Supervisor Support System: This support system is concerned with the growth and operation of suitable leadership, communication and facilitates skills to those who honestly supervise teams.

· Executive and Manager Support System: The support system is concerned with assuring that leaders expand the managerial context which makes successful teams possible.

· Training System: The support system is concerned for producing the machineries for growing the performance- related knowledge, talent and abilities of teams.

· Reward System: The support system is concerned with emphasizing attractive priorities, aims, performances, personality.

According to (Kimball Fisher, 2000) technology is facilitating to supporting team. Today the cost effective technological options such as e-mail, videoconferencing from personal computer, faxes, and internet are supporting team work and involving more team work. Technologies provide substitutions for passing information and co-ordination of role in organization, which let the team to be directed by work and information rather than only by manager.

4. Types of Teams

In an organization there are two types of team formal and Informal team.

4.1 Formal Team:

Formal team are the team which are formally formed in organization. Formal team is a part of organization structure and is an official and planned rational in decision. Primary focus of formal team is in position and it has predetermined goal. It is based on the authority and responsibility behaviour. Rule and procedure of organization guide the team member’s behaviour. Formal team used formal hierarchy communication system for communicating with team and rigid to environmental change. Problem solving team, Self- managed team, cross functional team and virtual team are formal team in an organization.

4.1.1 Problem-Solving teams:

A team of educated employees which is brought together to deal with a specific problem is problem-solving team (William M. Pride, 2008). Size of the team can be large or small according to need and team can use any use any number of method to solve problem. Once the problem is solved, the team normally break up. According to (Ricky W. Griffin, 2009) high-performing problem-solving teams are often cross- functional, meaning that team members come from many different functional areas. Problem-solving teams are teams that make recommendations for others to implement.

4.1.2 Self-Managed Work teams: A self-managed work team is a formally recognized group of employees who are accountable for an entire work process or segment that delivers a product or service to an internal or external customer. Self-managed work groups originated as an outgrowth of job enrichment. According to (Robert J. Hughes, 2009) workers on self managed teams are more motivated and satisfied because they have more tasks variety and job control. On many work teams, members rotate through all the jobs for which the team is responsible. Some organization cross-train entire team so that everyone can perform everyone else’s job. Xerox, Procter & Gamble, Ferrari are the famous companies which used self managed team. (William M. Pride, 2008).

4.1.3. Cross-functional teams: Traditionally, business organized employees into departments based on a common function or speciality. (William M. Pride, 2008) posits a cross-functional team consist s of individuals with altering specialties, expertise, and skills that are brought together to achieve a common task. (James G. Hunt, 2004) argue problem in cross functional units stay focused on matters internal to the functions. In this sense, the functional departments or work units create artificial boundaries which discourage rather than encourage more integrative thinking and active coordination with other parts of the organization.

Member of cross-functional teams can solve problems with a positive combination of functional expertise and integrative or total systems thinking. Member of cross function teams can solve problems with a positive combination of functional expertise and integrative or total systems thinking. (James G. Hunt, 2004)

4.1.4. Virtual team: Virtual team consists of the members who are geographically dispersed but communicate electronically. (William M. Pride, 2008) In fact, team members may never meet in person but rely solely on email, teleconferences, faxes, voice mail, and other technologic interactions. All team can look at the same drawings, print or specification, so decisions are made much faster. (James G. Hunt, 2004) Virtual teams connect employees on a common task across continents, time zones and organizations. (William M. Pride, 2008)

4.2. Informal team:

A team which has informal existence in an organization is called informal team.

It an unofficial and unplanned, the decision is emotional. Informal team don’t have authorized existence in an organization. Primary focus of informal team is on personal goal and focus on the requirement of people not team. Norms guide member behaviour of team. It is based on power and politics of the people. It used grapevine communication system which may not have correct format and adapt the environmental change. It co-exists along with formal team.

5. Conclusion:

Size, environment, and technology are the subject to be change with time. Along with change of these contingencies leader has knowledge and skill which help him her to develop updated strategies such as skills to grab information from outside environment, skill to properly analysis strength of organization. Team plays a very important role in an organization. Every task in organization is performed by team. Mainly formal team plays an important role in an organization. Therefore leader should be able assign a appropriate goal for specific team. Along with formal team, informal team also co-exist with formal team. Informal exist because of different in team member, which may harmful for organization, leader should try to avoid the formation of informal team. Therefore leader have to develop good strategies, have knowledge of key contingencies of organization context (size, environment and technology), team support system (Group Design System, defining Performance System, information System, performance Appraisal system, integration System, direct Supervisor Support System, executive and Manager Support System, training System, reward System) and team types (formal and informal team) for developing effective team strategies. Furthermore, Leader should have information about performance of team, relationship between the team member, power distribution, goal setting information, team building, quality circles, problem-solving and resolution and effective communication for developing effective team strategies.

Bibliography

1. Albert J. Mills, Jean C. Helms Mills, Carolyn Forshaw, John Bratton (2006) Organizational Behaviour in a Global Context, New York, University Toronto Press

2. Belbin. R. Meredith, (1981), Management Teams, New York, John Wiley and sons

3. David Needle ( 2004) Business in Context , London, CENGAGE Learning

4. Gary A. Yukl (2006), leadership in organizations (2006) London, Prentice Hall

5. Hall, C. A. & Beyerlein M. M, (2000), Advances in Interdisciplinary studies of work Teams (Volume 5), Stamford, CT: JAI press

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Assignment Topic: Leadership Principle

2011-08-07T20:33:00.000-07:00

Assignment Topic: Leadership Principle

By: Baral Abita

Contents

1. Introduction:

1.1 What is leadership?

2. Key contingency of organization:

2.1 Size

2.2 Technology

2.3 Environment

3. Team Support System:

4. Types of Teams

4.1 Formal Team:

4.1.1 Problem-Solving teams:

4.1.2 Self-Managed Work teams:

4.1.3. Cross-functional teams:

4.1.4. Virtual team

4.2. Informal team:

5. Conclusion:

Abstract:

Key Word: Team, Leadership, leader, team support system contingencies, etc

1. Introduction:

1.1 What is leadership?

2. Key contingency of organization:

Some Scholars (Burrell and Morgan, 1979) regard the contingency approach as an expansion of the systems analysis of organizations. While (Albert J. Mills, 2006) criticized contingency approach for focusing on a limited series of environmental variable, for being deterministic, and for ignoring both the influence of the organization on its environment and values and behaviour of management and the workforce. Contingency approach present a broad analytical framework, enabling to gain a greater insight into the way business a separate. (David Needle, 2004) The significant contingency variables are size, technology and environment. (Albert J. Mills, 2006)