Issues in Global Business and Strategic Concepts Case Study Analysis of Hewlett-Packard (HP)
Executive Summary
In the contemporary business environment no organization is left untouched by the impact of globalization. Globalization is both a blessing and curse for organizations. It is mainly because with globalization companies are offered a number of scopes to expand and gain long term sustainability. But at the same time it raises a number of global issues that act as hindrance and thus adoption of successful strategies to overcome the same are highly critical. In this paper the case of Hewlett-Packard (referred to as HP from now on in this paper) is discussed in details with regards to global issues faced by the company, solutions crafted by them to overcome such issues, evaluation of solutions and finally proposing suggestions based on analysis. Based on analysis it was discovered that the major issues confronted by HP are four-fold. They are namely, ineffective strategic expansion through inorganic measures, cultural diversities, inabilities to cope up with changing nature of global business and lack of innovation and entrepreneurship skills. In order to combat these issues, HP has resorted to a number of strategies. Some of these strategies were successful like management of cultural diversities whereas others failed to achieve desired objectives. Upon in-depth analysis it was also revealed that mostly it is internal inabilities of HP that prohibits the company from overcoming global issues. The study finally proposes that HP needs to pursue turnaround strategy along with adoption of practices like lean management, transparent communication systems, whistle blowing and investments in research and development to support innovation for sustaineddevelopment in long run.
Introduction Hewlett-Packard, one of the prominent global IT giant has its roots in a rented car garage in Palo Alto by two Stanford classmates, Bill Hewlett and Dave Packard. Initially, with the impending resources constraints, the firm instigated with audio oscillators required in sound engineering but gradually over the years, through innovation and leadership, it developed a product portfolio encompassing hardware, software and allied services to an expansive clientele of both large and small and medium sized enterprises from public and private sectors across the globe (HP 2015) . From its inception in 1939, the company has evolved across seven business vertices: “Personal Systems, Printing, Enterprise Group, Enterprise Services, Software, HP Financial Services and Corporate Investments” and ranks 35 th in the latest list of most valuable brands of the world by the Forbes Magazine (Forbes 2015) . The firm is currently being spearheaded by Ms. Margaret Whitman as the CEO (Forbes 2015) . However, HP has its share of hardships and challenges as well especially emerging from the globalized economic business landscape where markets are approaching saturation, competition is getting intensified and technology is evolving at a rapid pace. Innovation is regarded as the sole saviour (Gault 2010; Atkinson & Ezell 2012) . This report presents that key strategic issues confronted by the IT titan and how the firm has succumbed to its wrong decisions and dubious strategic moves. The report explores each of the issue in-depth while critically analysing the firm’s subsequent strategies based on a thorough secondary investigation based on management theories and business information.
Background to Case Study
5 | Page As per the reports of Gartner (2015) , HP was the global number one firm in personal computer manufacturing from 2007 to the second quarter of 2013. It was then, Lenovo surpassed it. This is just the tip of the ice berg. The problems at HP are much graver. Strategic management has emerged as one of the most critical functions of contemporary organisations. Top level managers make strategies to tackle issues and complexities imposed by the excessively dynamic and complex businesses environment (SRINIVASAN 2014; Hitt et al. 2012; Orcullo 2008) . The decisions firms make for business have repercussions for years (Hitt et al. 2012) . HP is no exception to this. Firstly, it acquired Compaq Computer in 2001 in anticipation of leveraging the PC market globally and outshining the Asian counterparts. Strangely, the decision makers ignored the by now matured PC market and absence of internal innovation system at Compaq. Further, in 2010, HP again acquired financial crisis stricken Palm as a gateway to the emergent mobile devices market. This served no purpose as HP was a follower of Apple and Palm brought its own plethora of issues. Similar blunder was acquisition of software company Autonomy. HP wanted to ride on external sources of innovation and ignored the importance of internal innovation practices (Mourdoukoutas 2011) . Other strategic issues were that CEOs were getting changed quite often (four CEOs in seven years); HP’s tablet PC was a total flop and uncertainty about the key business segment: personal computers. There was a lot of internal unrest, feuds and scams etc. that made HP miss out on business opportunities. This led to the trajectory of declining revenues and bereaved market share (Bandler 2012) . These issues clubbed with extravagant acquisitions led to a massive downsizing initiative. This was also attributed to unnecessary focus on cost-cutting rather than innovation (Kalb 2012) . The case report explores these issues in light of the strategic management literature to bring out the impact of the strategic decisions that led to the misery of this renownedIT firm and also
6 | Page focusing on remedial measures through which HP can regain its glory through innovation for which it is was always known.
Methodology of Analysis The case is analysed on the basis of the data and information acquired from the secondary sources like published journal, article, books, literature review, articles published in magazines and newspapers. Only popular and authentic sources of information have been referred and duly acknowledged in the paper. Blogs and unworthy websites, books, journals have been ignored. Facts and figures are reported only based on company’s website, newspapers, business consultancies and government’s official websites. The analysis of the issues have been done through the case study mechanism where each issue is explained, linked with relevant theories and literature and then a solution is proposed based on the inferences.
Issues and Problems Out of a number of issues faced by organizations like HP while undertaking business in a global platform some of the most critical ones are identified and discussed in this section. These issues primarily relate to four major areas strategic expansion through acquisition, cultural diversities, changing nature of global business management and innovation and entrepreneurship.
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Global Issues Affecting HP
Management of Cultural Diversity in Workforce
Frequently Changing CEO’s and Focus on Cost reduction against Innovation
Mass- Customization due to dynamic customer tastes and preferences
Ineffective Strategic Alliances and Acquisitions
Figure 1 Global Issues Affecting HP Source: Author
Strategic expansions are a road to market development and product development which helps companies to diversify their risks by thus gain long term sustainability. HP too in lieu of diversifications and expansions underwent a number of strategic alliances. But these alliances and acquisitions in many circumstances left the company in utter dismay (Bandler & Burke 2012) . A number of acquisitions by HP namely of companies like Autonomy, EDS, Palm, and Compaq resulted in huge losses for the company within a short span of time. The consequences were downfall of company’s market value. Though HP paid out 25 billion USD for acquiring Compaq but had to write it off in only 1.2 billion USD (Nuttall 2012) . Similarly, in 2012, in spite of the fact that HP paid 14 billion USD for acquiring EDS in 2008 but it was written off for only 8 billion USD (Nuttall 2012) . These two instances depict inability of HP to take right decisions to support strategic expansions through strategic alliances.
The second issue that was faced by HP in global arena was managing with dynamic consumer tastes and preferences. For companies in order to excel in global markets standardization is generally considered to be a preferable option (Powers & Loyka 2007) . But as HP planned to cater international markets, it was challenged with the problem of customized consumer requirements. The consumers not only sought for quality products but they also wanted tailor- made products that too with faster deliveries (Feitzinger & Lee, 1997 ; Huang et al, 2015) . Tailoring of products for consumers which are spread across the world at cost effective prices was highly challenging for HP. These changing customer requirements affected all business lines of HP ranging from computers to printers to medical related products. Thirdly, while operating successfully in international markets, HP has been also exposed to issues related to cultural diversities and business ethics. During its initial period, HP was facing problems related to understanding and managing diversities among employees culture that was prevalent within the company. It was mainly because people from differing cultures, origin and expertise from across the world were working for HP (Kamal & Ferdousi 2009) . Presently the organization employs more than 3 lakh people across the world and thus management of diversity is highly critical.
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Figure 2 Number of employees in HP between year 2001 to 2014
Source: (Statista 2015)
Another major issue faced by HP is related to entrepreneurship and innovation. Being in an industry that is exposed to dynamic business environment and is completely driven by technology, innovation is the key to its success (Brem & Voigt 2009) . But in many instances, it has been observed that the policies of HP were more driven by cost minimization rather than focusing on innovation (Kalb 2012) . As a result of which HP’s investment in research and development was reduced to a large extent. The major reasons put forward for the same was enhancement of organizational efficiency through massive cost reductions. Even Chief Executive Officers (CEOs) in HP have been changed very frequently which has affected its operations in global markets to a greater degree (Thibodeau 2012) . It is due to this a number of investors have switched over dumping HP’s share resulting a loss of approximately 60 billion USD in two years between 2010 to 2012 (Hartung 2012) .
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Solution To recover from problems identified above that have affected HP vehemently since a long time, the company has undertaken a number of steps to overcome the same. It is due to these measures that HP has been yet able to manage its position within top 10 among Fortune 500 companies (Bandler & Burke 2012) . For overcoming issues related to mass-customization through minimized costs, HP set up manufacturing and designing units in economies where cost of production is low primarily due to abundance availability of resources at lower costs (Porter 2008) . These countries were mainly those who belonged to Pacific Rim along with Indian subcontinent (Pearson Higher Education n.d.) . This helped the company to produce customized computers and servers at lower prices by capitalizing on costs related to human resources, taxes and impediment in shipping. Further such set ups helped HP to enhance efficiency in form of augmented production along with innovative designs, quality development and effective distribution mechanisms. Such activities helped HP in overcoming wastefulness that was acting as a hindrance in organization’s global operations ultimately resulting in enhancement of competitive edge (Porter 2008) . Management of diversity in HP has always been a major concern. With changing times and dynamics of diversities in workforce, HP has also been responsive towards them (refer annexure 1) and designed new strategies to cater diversities as depicted in figure below.
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Figure 3 HP Way of Diversity Management Source: (Kamal & Ferdousi 2009)
In order to support a strong work culture in HP that is free from all diversities related issues the company designed ‘open corporate policy’, ‘management by objectives’ and ‘management by walking around’ (Menke et al. 2006) . These policies were also adopted by the organization to support development of a culture that would in turn support innovation. Though HP has been suffering from a number of issues but under the leadership of its new CEO, Meg Whitman, the company has been able to stabilize its activities (Merchant 2012) . The company has enhanced efficiency and has been able to minimize costs also. Further under new leadership the organization has adopted ‘Turnaround’ strategy that will fetch HP with long term profitability and sustainability (Merchant 2012) . It is this innovation that motivated company to depart from its core business and venture into markets related to cloud, solutions and software were expected to fetch the company with higher profitability through increased margins (Dediu 2013) . Innovation has always been the driving factor for HP which is the reason behind emergence of Silicon Valley but then the same needs to be revived. Thus under the new strategic
12 | Page orientation, HP would focus on HP Multi Jet Fusion Technology and Sprout that will aid the company to rejuvenate its existence and thus gain long term sustainability (Moorhead 2014) . The benefits from these innovative technological solutions are yet to be realized (Moorhead 2014) . Irrespective of this fact, these innovative approaches are expected to revive HP’s declining position.
Evaluation The present position of HP can be evaluated using the (Boston Consulting Group) BCG Model. The model is a matrix of 2×2 which depicts the position of a firm / product / service in terms of market share and market growth as depicted in diagram below.
In current situation HP which is predominantly operating in markets of personal computers is considered to be a market experiencing lower growth. In order to compete in the same, HP resorts to lower profit margins for sustaining competitive pressures (Kalb 2012) . Based on such facts it can be stated that presently HP is operating in the Dog category. This indicates presence of very minimum scope for the company in future if continued to do business in the same
13 | Page segment. The company is having a tough time in surviving with such a product portfolio. Further when the main priority of HP should be adoption of retrenchment strategy, HP on the contrary has been resorting to growth and diversification strategies. It is evident from the number of strategic acquisition that has been executed by HP. Retrenchment strategies provides an organization with opportunities to condense organizational operations and thus concentrate on selected few that will support company with long run financial stability and sustainability (Schermerhorn 2010) . In addition to the above without innovative approaches, it is almost impossible for HP to revive its position in such industry. The organizational system of the company is very intricate making it difficult for CEOs to understand the same (Enderle 2011) . Before they are in a position to understand and act, a new CEO emerges which has adversely affected HP’s growth and culture. Thus the major issue that is affecting HP is lack of effective leadership. None of the entrepreneurs so far who have been leading the organization have been able to prove their entrepreneurial skills as classified by the entrepreneurship model depicted below.
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1.1 AC 1.1 Explain the importance of strategic human resource management in organizations Strategic human resource management is related to the development of human resources strategies in synchronization with the mission, vision and objectives of an organization in a way such that the organization’s goals are accomplished. An organization should have the ability to frame such human resource strategies which will enhance the overall productivity of the organization (Durai 2010) . The strategic human resource management in Tesco has been like the backbone of the company in achieving success at the time of diversification into different sectors for business activities. The organization through its strategic HRM has been able to develop its business embedded with technical expertise, integrity and customer oriented globally (MacLachlan 2009) . For developing a vibrant strategic linkage of human resource with its corporate strategy the company had designed a transformational coaching programme for the growth and capability development of its mangers followed by an effective feedback procedure. The programme aimed at communicating business priorities of the organization to its personnel and building effective leaders as its competitive advantage (Churchard 2010) . In order to augment the customer value the organization invests highly on recruitment, employee’s training and infrastructures (TESCO 2012) . Tesco maintains a healthy relation with its union partner and believes in employee’s participative decision making process for the accomplishment of organizational goals (Wilton 2010) . With a change in organizational culture Dell has been able to build a strong position in the market. The company shifted its focus from just attaining growth to talent management, leadership building and framed global vision (Scott 2006) . Dell strives for building a competitive strategy for becoming a low cost player in the market. To have an alignment with
its business strategy the company renders its human resource services with the help of technology that is through web. Through the company’s intranet its HR team have been able to carry out various HR activities with the help of a variety of web applications such as hiring applications or tools, management reports, automatic employee reference system, updating of employee’s information to cite a few. This has helped the organization to increase the performance of its employees in many ways such as development in productivity, self-service, outsourcing as well as self-service. Along with these the company has been also able to reduce its cost of carrying out human resource operations as less manpower is required in performing automated activities and it is less time consuming as well (Gary & Varkkey 2010) .
1.2 AC 1.2 Assess the purpose of strategic human resource management activities in an organization (Siemens case study) The key purpose of developing a strategic human resource management is to have an alignment between the human resource strategies and organization’s business strategies. Such integration will help an organization in attaining sustainable competitive advantage. Integration in human resource signifies an alignment between the human resource policies and the policies of other business operations in an organization such as finance, informational technology, marketing, production to cite a few (Vedd 2003) . However, the purpose of designing a strategic human resource management is not only having an integration between HR and corporate strategy rather the aim is also to have an integration between decisions regarding the organization’s personnel with the expected output of the organization. An organization need to align human resource management with the corporate planning system, focus on the human resource activities that will help in the accomplishment of organizational goals and should undertake actions that will help in building strong personnel-management relationships (Dhar 2008) .
The main purpose of Siemens behind designing a strategic human resource management is to meet global challenges. Siemens operates in highly competitive technological market which is continuously developing which makes it imperative for the organization to have an effective HR strategy so as to develop and grow its personnel on continuous basis through frequent trainings. Various trainings imparted by the organization are like class room training, apprenticeship training to cite a few. The organization also organizes management development and education program so as to keep its employees up to date regarding the changing market trends and requirements. Siemens encourages global team work as part of its human resource strategy. The employees in the organization are expected to understand work and perform across every departments, disciplines and regions. The main purpose of Siemens behind such strategy is to enable its employees to handle multiple responsibilities in the global market and infuse a feeling of oneness and a vital part of corporate among its employees. In order to compete in the global market Siemens also redesigned its performance management system which constitutes of assessing its employee’s performance on regular basis followed by an effective feedback system. This will help its employees to augment their competencies and potentiality. The management will also be in a position to identify the existing competency gap and the remedial measures that needed to be taken to bridge such gap. The organization believes that in order to attain long term growth and increase shareholder value it is inevitable to build a motivated and satisfied human resource pool. Therefore Siemens provides career development and growth opportunities, fair compensation benefits, cordial work culture to cite a few to its employees by developing a strategic human resource policies and practices. This will in turn help the organization to prosper in the market. To gain success in the global market it is vital for an organization to have an effective cultural diversity management system. Therefore Siemens promotes a culture of transparency, openness and fairness in its organization to deal with the culturally diversified workforce in its system (Bhatia 2005) .
1.3 AC 1.3 Evaluate the contribution of strategic human resource management to the achievement of an organization’s objectives (Siemens case study) Siemens has repositioned as well as redesigned its organizational and human resource strategy which contributed significantly in meeting the business objectives. Siemens has divided its business strategy into organizational strategy and human resource strategy in which human resource strategy has been framed in alignment with the organizational strategy. While the business strategy of the organization was framed to augment the organization’s capabilities, the human resource strategy was framed in a way to guide the actions of the organization’s personnel and maximize the human potentialities so as to achieve competitive advantage. For an effective execution of human strategy the company has divided human resource activities into design and consulting services, service centres and strategy. The service centre of human resource is concerned with carrying out daily human resource functions effectively. The strategy and design division of human resource is responsible for conducting an external environmental analysis. Based on such analysis the group is expected to carry out the human resource activities such as recruitment, communications, and appraisal to cite a few in a way so as to have a considerable contribution on the organizational success. The consulting service group provides guidance to the organization in respect to the formation and implementation of organizational strategies (Chanda 2007) . The human resource strategy of Siemens consists of imparting frequent training and education to its personnel which is based as per the business requirements of the company for building and developing competencies of its employees globally. This strategy acts as a pillar of global success for the company (Siemens 2015a) . To have a strategic recruitment process
8 Siemens PLM software has strategic affiliation with various organizations to build up the future engineers, technologists and leaders. By this way Siemens will be able to recruit highly skilled and qualified personnel in future which will in turn enhance the quality of business of the organization hence leading to success (Siemens 2015c) . Siemens had realized that recruiting right candidate, imparting training and retaining talent is imperative to achieve success. Siemens therefore to have a valuable top-notch recruitment, compensation, employee development, performance evaluation and retention process to cite a few globally collaborated with the success factors solution. With these the organization has been able to standardize and integrate its human resource process. Collaboration with success factors solutions has enabled the organization to have global insight for growth and human resource planning. Through these cross border managers are being able to exchange information globally and take quality business decisions (Siemens 2015b) .
1.4 AC 2.1 Analyse the business factors that underpin human resource planning in an organization (Either dell or tesco) Human resource planning constitutes of application of planning procedure to the human resource requirements of a firm. In order to have an effective human resource planning the plan should be linked with the operational and strategic planning process of a company (Prasad 2012) . The main objective of a human resource planning is to motivate personnel in an organization, enhance customer experience quality and focuses on enhancing creativity, commitment and development in an organization. Human resource planning enables an organization in determining the future demand for labor as well so as to meet the projected needs of an organization (Deb 2006) . Various factors related to the external environment of an organization may influence the objectives of an organization and the human resource requirements to meet the organization’s
9 objectives. Some of the factors related to the business of an organization which acts as influencing factors are like governmental control, economic circumstance of a place, and prevailing competition in the market and changes in the labor force. Governmental control includes rules and regulation framed by the state or local government. Economic condition of a place implies the recession, inflationary condition, level of employment to cite a few of a place. The prevailing competition refers to the major players or the number of exits and entry of players in the market and business that strives for absorbing the same workforce whereas changes in the labor force implies the composition of labor or supply and demand of labor in a particular market (Byars & Rue 2008) . One of the major objectives of human resource planning at Dell is to assist the organization in the accomplishment of goals and attain competitive advantage thus enabling the organization to beat various external and internal business factors. The organizational human resource planning (OHRP) process has been the key factor behind the success of Dell. The organizational human resource planning process enables Dell to forecast the demand for labour well in advance so as to augment the growth of the organization. The human resource planning process of Dell engages in identifying the vacancies for key jobs in the organization well in advance. Along with these the process also involves competency mapping which is done by measuring the performance and quality of the organization’s high performers. This enables an organization in deciding what kind of skill sets can be expected from the new recruits. The organization implements flexible deployment of its human resource personnel for an effective operation of OHRP process. During the lean time of recruitment and peak time of sales the recruitment team is deployed in the sales and customer service team to contribute in the sales of the organization (Rao 2010 ; Holzner 2006) .
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Assessment Criteria 1.1 Explain how models of organization culture can be used to achieve organizational objectives. Siemens in order to achieve its strategic and operational objectives of expansion into automation and digitization need to enhance its corporate culture as well along with other business strategies. The company can consider the various dimensions of culture as proposed by Geert Hofstede (Browaeys & Marie-Joelle, n.d.). As per Geert Hofstede there are five cultural dimensions which are: Power distance: the power distance is defined as the extent to which powers are dispersed unequally in the organization. As per these dimension Siemens need to develop a culture of cordial relationship between superiors and subordinates bridging the status gap. Managers should not be viewed as dictator by its subordinates. Individualism vs. collectivism: In case of Individualism culture employees are more self centered and maintains less interpersonal relationship with others in the organization whereas in a collectivism organizational culture group integration is of high importance. Siemens through effective training and development should try to promote group cohesiveness in the organization. Masculinity – Femininity: This dimension is related to the gender discrimination in terms of values. Siemens should maintain a balance in distribution of job roles, responsibilities and remuneration between its both male and female workers. Uncertainty Avoidance: This relates to the tolerant point of a member to face any uncertain circumstances in the organization. Siemens through its tactful operation strategy need to develop a culture of low uncertainty avoidance. Long-Term vs. Short-Term Orientation: A long term orientation values job more than customs and relations whereas organization inhibiting short term orientation values its worker and its belief system. Siemens need to be sensitive towards its organizational as well as employee’s value system.
Assessment Criteria 1.2 explain the difference between organizational and national culture Germans believe in focusing on the task assigned to them. One of the dominant issue and central part of all business interactions is the performance of the task. German culture also defines the type of communication. The relationship level takes up a more subservient role in proficient life. Additionally, there are numerous bylaws, regulations, techniques and methods in the German companies. Written agreements and contracts are preferred by the German business people. Non-compliance to these rules and regulations may invite
3 penalties and rigid consequences. Though this culture foster consistency and mutual obligation yet it leaves no room for suppleness and individual fortitude (Expatica Germany, 2014) . Siemens also follows the same corporate culture of their home country to a great extent.
(Cheng & Seeger, 2011) carried out a study to assess the corporate culture of two different countries and find out whether the incompatible cultures may lead to synergy effect or not. He found out that understanding of cross culture is indispensable for mergers and acquisitions. Siemens is considered as the model of German engineering expertise. It has long-standing custom of worker synchronization and influential employee’s assemblies. Siemens also follows the German pattern of following standard operating procedures and processes. Moreover, Siemens observes a systematic process for decision-making and lay emphasis on detailing and performing task in order assigned.
As per the report of (CGMA, 2014) , Siemens have executed transparency in their meetings by encouraging uncluttered debates on moral issues and the ways to handle them. Such unambiguousness includes the exterior reportage of obedience linked progresses (Passport to trade 2.0, 2014a) stated that the Germans have inclination to be extra casual about time and constantly make certain they can manage time for the purpose of marketing. It also asserted that Germans are culturally aware and they have anticipations that others should understand them as an independent country. They are straightforward in their language and interpersonal communications in the organizations are largely belligerent and emphatic. Hinner (2009) stated in Cheng et al (2011) that Germans think that trivial talks are spoiling time activity as it has nothing to do with the work they are doing. German executives tend to offer their views in more of an argumentative style and open vocal belligerence appear to be endured more in the German society.
Germans observes low degree of flexibility and spontaneity in attitudes and values. They have clear demarcation between the things and people which enable them to live an organised life. Unexpected changes in the transactions in the business are not welcomed by them even if it is beneficial for them and they abhor absurdity in business as they take it very seriously. Moreover, colleagues do not require or presume to be admired is the corporate culture of Germans (Passport to trade 2.0, 2014b) . Siemens observes the culture of maintaining quality in their organization. Executives and employees in the organization are highly motivated and work towards improving the quality standards. In addition to this, ownership and equity culture prevalent in Siemens nurture a sense of belongingness among the employees of the organization. Thus, Siemens’ culture and German culture are more or less same and quite well aligned.
Assessment Criteria 1.3 analyze the corporate cultural profile in an organization
4 Siemens is one of the most successful companies of Germany in the field of worldwide electronic market. It attained such a respectable position by delivering sustainable value to their customers (Siemens, 2005) . Siemens was formed in 1847 in Berlin by two men namely Telegraphen-Bauanstalt von Siemens & Halske. It emerged as one of the most successful and highly reputed company of Germany. Siemens attained a leading position with the invent of telegraph, dynamo and primary x-ray machine for the human beings (Simens, 2008) .
Siemens is one of the premier corporations of Germany. It is one the giant corporate in the field of electrochemical and electronics. Like any other German Export firms, Siemens AG also targeted U.S. markets. Investments in research and development have been made by Siemens aggressively. It has a remarkable position amongst companies of U.S. as the recipient of copyrights and donor to prominent American universities and academies for co-operative research plans. It’s because of qualified German public and training system which facilitated in essential human capital required by Siemens to be at leading position in highly competitive electrochemical industry (Siemens, 2009) . As per the report of (IBEF, 2013) , Siemens is international participant in integrated circuit technology, engineering and electronics. A SMART strategy was launched by the company in 2009 focussing on affordability, reliability timeliness and maintenance free perspectives of the products. Additionally, the company transformed from being workforce-centric from consumer-centric. The company claims of having highly contended employees. Siemens stands as the largest technology company of the world. It has made many technological modernizations in the areas of power, healthcare, engineering and substructure (Siemens, 2014b) . One of the key strategic step taken by Siemens is the localization which is the key behind is success all over the world. Strategic initiatives taken by Siemens and launching at appropriate time, emphasis on the workforce and escalating sales channels leads to the prosperity of the company (SMC, 2015) . Compliance with the internal and external rules and regulations of the company is required for the achieving full social potential of corporate responsibility. Observing compliance with the law and regulation is seen as the part of their self-image and corporate culture by Siemens. The company finds the need to outlook acquiescence as a face of their corporate values and as fragment of a dynamic company and administrative culture. This modification is buttressed by the Compliance Program of Siemens, which is alienated into the following three mainstays: Prevent, Detect and Respond (Siemens, 2013c) . Siemens is of the view that a company cannot reap the benefits of its outstanding strategies if they lack in strong culture. The company therefore aims towards fostering ownership culture which encourage every employee of the organization to strive towards long term success of the company (Siemens, 2014b) . Siemens has a culture of strict adherence to company policies and values. The analysis also provided that the company lays high emphasis on duly complying with its corporate social responsibility. In addition to this,
customers are the most important stakeholder in company’s culture. But there are inherent loopholes in the company relating to leadership gaps and communication gaps. Assessment Criteria 1.4 Discuss the impact of an organization’s corporate culture in achieving its objectives An organization’s cultural climate has significant impact on the way it attains its objectives in the short-run and long-run. Siemens aims at customer satisfaction, quality maintenance, strict policy adherence and stakeholder development (Siemens, 2011) . As per the report of (Siemens, 2011) , the quality culture prevailing in the organization pay emphasis on the customer as the key factor for the continuous success of the organization. They are keen in incessant enhancement of their quality as a part of their top priority. A satisfied customer is fundamental to success of any organization. He expects the quality for the price paid by him. In Siemens, executives are aware of importance of maintaining quality and workforce are categorized by their extraordinary mind-set of quality control. Managers of Siemens are of view that success of their organization is reliant on their inventive fortes and exceptional quality of their merchandises and solutions. In the report presented by (Siemens, 2014b) , the ownership culture is widespread in the organization which is responsible for the sustainable business practices prevalent in the company. In Siemens, every individual assumes that fulfilling his or her responsibility is imperative for the success of the company. Right from the board of director to trainee embrace the culture to treat the company as of their own and act accordingly. The company rely on strong culture for its long term success and believe that worker stakeholders perform sensibly and are focused on to the long term when they unswervingly contribute in their company’s achievement. People oriented approach adopted by Siemens nurtures diversity of experience and expertise and is reflected in their success and they have versatile workforce which through their knowledge and expertise strive for high productivity and profits. Siemens believe the company is obliged that it has employees that identify with the organization and are highly committed towards the positive development of the company. The equity culture is prevalent in organization which fosters the sense of belongingness and responsibility towards the organization. Siemens believes this culture to be decisive for the long term success of the company (Siemens, 2014a) . Assessment Criteria 2.1evaluate the existing climate of an organization Organizational climate is defined as the perception of an employee regarding an organization’s policies, values, practices, behavior and environment to cite a few. A crucial relation lies between organizational climate and individual’s performance and behavior (Srivastava, 2005) . Siemens global business strategy of sustainability forms the core aspect of its internal and external organizational climate. Siemens internal organizational climate is build of integrity in its business operations as it follows legal and ethical code of conduct in dealing with internal as well as external business partners.
6 The company maintains ethical standards in its financial activities as well. Siemens have got employees from different cultural background and the company manages diversity through imparting effective training and development program, maintaining a non discriminative attitude towards employees from other nations and providing equitable rights to both men and women (Siemens, 2013b) . The company discharges its social responsibility towards its employees and society by following policy for environmental protection, health management and occupational safety in its business activities (Siemens, 2013b) . To enhance employee’s welfare in the organization Siemens extended the maternity leave period from 120 days to 180 days in 2011 and also adopted work from home policy for employees in 2013 where employees could work from home once per week (Siemens, 2013b) . The company also provides its employees an opportunity to purchase company’s stock. It spent around dollar 42.4 million in 2013 for training and development program to enhance employee’s skill and maintain high performance culture. It also introduced leadership development program to build future leaders for beating global challenges. Siemens was honored as among the Best Companies in People Management practices in 2013 (Siemens, 2013b) . Siemens external organizational climate framework is build of maintaining cordial relationship with its various stakeholders. It provides superior customized service to its customers globally. It maintains amicable relation with its investors by providing quarterly reports, annual reports and other relevant information timely. In order to augment relation with suppliers globally it imparts training to enhance suppliers skills free of cost. Siemens also maintains close contacts with the government, policy makers and other administrators for its organization interests (Sustainability Report, n.d.) . As per the report of (Simenes, 2007) , there are few companies in the world that boasts a long tradition and a corporate culture. Siemens is of one them where management of the organization take due care of the social responsibility while making any corporate decisions. Ever since the company was founded, it has always been committed towards transferring its legacy to the next generation. The company’s culture exhibits itself as a fellow of society and that they are modelling upcoming era not only with their inventions, but also with their instruction and on-going edification. Since long, enduring discourses with inner and outer groups of investors is inevitable part of corporate culture of the organization. Siemens corporate culture encompasses unbiased radical posture, admiring liberty of outlook and regarding the encountered diversity in their overseas undertakings as enrichment of their business as well as corporate culture. Assessment Criteria 2.2 Recommend ways to improve corporate climate in an organization Siemens, the engineering giant manufacturing organization in German faced a scandal in 2006 against bribery. Employees in the organization were accused of paying bribes in millions of Euros to the officials in order to gain contracts from large organizations and even government around the globe. Due to this business irresponsibility and unethical act Siemens lost its creditability and goodwill in front of its investors, employees and society as a whole. The organization was declared incompetent in handling business affairs. As a response to the scandal and to maintain integrity Siemens appointedexternal investigators from New
7 York law firm to carry out a rigorous internal audit in the firm. After the audit process several reasons popped out which were held responsible for the scandal to take place such as a belligerent expansion strategy adopted by the organization due to which employees began to perceive that bribery is a part of the corporate climate to achieve tough performance targets and meet business objectives, complex organizational structure and poor quality of accounting system (Graham & Gillespie, 2012) . Poor leadership quality of the managers in Siemens was one of the greatest reasons for such scandal to take place. In order to enhance the corporate climate Siemens can follow some of the recommendations as cited (George Bradt, 2013) . Siemens need to change its corporate culture and environment due to its rigorous expansion objectives in order to sustain its competitive advantage. Employees in the organization need to be adaptable to organization’s cultural changes which can be developed by imparting effective training and education. Employees should be clearly communicated regarding the company’s value system vital to achieve present and future organization’s success where there should not be any place for unethical behavior. Employees need to develop a responsible and positive attitude towards organization’s culture and enhance skills to maintain good relations with the organization’s various stakeholders such as customers, investors to cite a few. Above all the organization need to conduct effective learning and development session for leadership development in the organization. Employees at all level need to possess a leadership quality to decide upon right and wrong and to meet the business objectives responsibly and ethically. Assessment Criteria 2.3 propose a framework of organizational values that meet the specific strategic and operational needs of an organization The strategic and operational objective of Siemens is to expand into the world of automation and digitization after electrification (The Economists, 2014) . The company aims to reduce the existing bureaucracy in its organization, develop and expand business portfolio and implement projects more efficiently (The Economists, 2014) . In order to meet its objectives the organization has plans to undergo a change in organizational structure with a reduction in number of group divisions and downsizing of employees followed by redeployment of few staffs. Along with a change in organizational structure Siemens believes that a change in organizational culture is essential for effective expansion and operation of business portfolios (The Economists, 2014) . A change in organizational culture would mean a need to introduce new competing organizational value framework to meet the global challenges and change management (Cameron, 2006) . Leaders in the organization need to undertake the responsibility of building value system and diffusing the same into the employees of the firm. Signifying values forms a pillar for any strategic and operational decisions. Values once framed, understood and followed speeds up the business activities and decisions (Madhavan, n.d.) .
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As the planet continues to warm, the effects of climate change become increasingly apparent, making the need for urgent action and transition to a more sustainable future more pressing than ever. The consequences of inaction are dire, including more frequent and severe weather events, loss of biodiversity, and global food and water shortages. This blog post will discuss the current state of climate change, explore its impacts, and highlight efforts to mitigate its consequences and embrace a more sustainable path.
Climate Change: A Global Concern
Climate change is a global issue, with average temperatures rising at an unprecedented rate due to the increased concentration of greenhouse gases in the atmosphere. This warming trend has been primarily driven by human activities, such as burning fossil fuels, deforestation, and industrial processes. The Intergovernmental Panel on Climate Change (IPCC) has warned that we must limit global warming to 1.5°C above pre-industrial levels to avoid the most catastrophic consequences.
Impacts of Climate Change
The effects of climate change are already evident around the world and pose significant risks to ecosystems, human health, and economies. Climate change exacerbates extreme weather events, such as hurricanes, droughts, and heatwaves. These events can lead to loss of life, property damage, and significant economic costs. As glaciers and polar ice caps melt, sea levels are rising, threatening coastal communities and infrastructure. The increased absorption of carbon dioxide by the oceans is causing them to become more acidic, leading to the decline of coral reefs and other marine ecosystems. Warmer temperatures and changing weather patterns disrupt ecosystems, leading to the extinction of many species and the collapse of habitats. Climate change affects agricultural productivity, causing food shortages, and exacerbating water scarcity in many regions.
Efforts to Mitigate Climate Change
To address the challenges posed by climate change, global efforts have been focused on mitigation and adaptation strategies. Governments and businesses are working to reduce emissions through policies like carbon pricing, renewable energy incentives, and energy efficiency standards. The shift from fossil fuels to renewable energy sources, such as solar and wind power, is critical in limiting global warming. Planting trees and restoring forests help sequester carbon dioxide and protect ecosystems. The adoption of sustainable agricultural practices can help reduce emissions while ensuring food security. Strengthening infrastructure to withstand the impacts of climate change can reduce vulnerability to extreme weather events.
Embracing a Sustainable Future
As the effects of climate change become more apparent, it is essential to transition to a more sustainable future. This involves not only addressing the root causes of climate change but also building a world that prioritizes social and environmental well-being. Some key principles for a sustainable future can a shift from a linear “take, make, dispose” economic model to one that reuses and recycles resources, minimizing waste and pollution. Ensuring that the benefits of sustainable development are shared fairly among all members of society. Protecting and preserving ecosystems, reducing pollution, and promoting biodiversity. Fostering understanding and action on climate change and sustainability through education and public awareness campaigns.
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The outstanding rise of three major Full Service Carriers of the Gulf area, namely, Emirates, Qatar and Etihad; has reshaped entire market of global aviation, especially around Dubai, Abu Dhabi, and Doha. These airlines are adopting diversified means of business strategies in order to meet the increasing global competitiveness. with initiations of these FSCs the Gulf airlines are developing as “global super-connectors” that has the capability of connecting any of the two determined global points, with single stopover in the Gulf (Editorial, 2013, see Figure. 1).
The derivations of Ulrichsen (2015) showed that the culminated achievements of these airlines in Jan. 2015, made Dubai International Airport overtake the Heathrow Airport of London, and thus, it is recognised as the busiest airport in the world. The report added that there is 6% increase in the annual collection of international passengers, which was 70 million (approx.) in the year 2014, as against least increasing rate led by Heathrow operations at near-peak capacity in terms of regulatory and space related constraints. Moreover, the analytical discussion led by Mutzabaugh (2015) states that Emirates, Etihad, and Qatar Airways are much benefited by the absence of any kind of legal or political constraints, as in the “legacy carriers” of Europe as well as the North America. It has been also mentioned that the models of state capitalism, in both economic and political development process, further add to these constraints.
In this paper, the achieve approach is to gain in-depth realisation about the aviation market and the distribution of the major airlines of the world, which are Emirates, Etihad and Qatar. The business models, along with their strategies and networking systems will be analysed for more elucidated understanding of this business domain. The technical, regulatory, and legal concepts of these airlines will be illustrated with the aim of achieving a closer and comprehensive ways knowing their business practices. Significant emphasis has been led over Emirates’ commercial co‐operation, in reference to Qantas joint service deal, Etihad’s investments in multiple carriers from diversified international markets, and Qatar’s participation in the global alliance. These selected commercial strategies get analysed with supportive illustration from Etihad’s approach in particular.
According to the records of CAPA (2013) Emirates is identified for its wide ranged and very broad international connectivity. It is a company that is getting the key position in creating competitive edge for all the other global aviation companies. The report adds that among all the major three Gulf carriers, Emirates comprises of the most mature networking functionality in the entire North American region. This is the reason that this company gains the leverage to have strong hold in aviation industry for a longer duration. the strategic approach of this company depends on its way of managing commercial co-operation with various aviation companies. CAPA (2010), refers to the established carriers networking of this company in European and the Australia market. These deals perceive the strategic approach of Emirates as strong and dynamic in the global carrier business. This happens through the increasing commercial co-operation of Emirates with Europe, North America, Asia and Australia.
CAPA (2013 a) laid focus on the commercial co-operation of Emirates with Qantas and American Airlines. The profitability has been inscribed by this report by stating that in a couple of year there is the transformation programme, whereby Qantas avails underlying profit prior to the tax amounting 192 million AUD (or 172 million USD) for FY 2012-13. Moreover, it is important to note that Emirates still is on the form of offering cooperation rather than getting in to long-term alliances. The research initiative led by Parker and Löfberg (2009) noted Emirates for its anti-competitive elements and the ideology that through alliances, a company tends to gain artificial speed in the business. This can be referred to the relationship of Emirates with American Airlines that was led with the aim of offering more benefits to the consumers through the availability of multiple airlines.
In the same thread there is the codesharing initiated by the Emirates with Malaysian airlines (Cole, 2016). The report by Cole (2016) analyses the purpose of this commercial co-operation of Emirates to the Malaysian airlines and notes that this venture looks forward to offer more seamless kind of travel options to the passengers to 15 Malaysian cities, with convenient connectivity to Kuala Lumpur. On a reciprocate ground these travellers are also benefited by the expanded network, that comprises 90 destinations from the Middle East, Europe, America and Africa.
Though there is no room or extensive alliances led by Emirates, yet even in the future Emirates aims to continue with its strategic approach of offering commercial co-operation to various airlines. As reported by The Emirates Group (2012) the company added seamless connections between Dubai International Airports and Lisbon. It is through the reciprocal codesharing that the customers are availed with the benefit to enjoy single-combined ticket for the Emirates as well as TAP flights as operated from Portugal. Apart from that The Emirates Group (2013) further notifies that Emirates SkyCargo along with Qantas freight are getting into partnership for gaining new trading and business opportunities. This is a partnership that is offering seamless access to the consumers from their network to other networks.
The CAPA (2013 a) report declared that in the FY 2012-13, entire international aviation commercial strategy revamped with and around the co-operations as offered by Emirates. There are competitive platforms marked from Virgin Australia. It is here that the Qantas makes some distinct progress and gains transformational international look in the aviation business, until FY 2014-15. The approach is in terms of putting these commercially equipped partners in the position of preparing extensive expansion of their routes from 2016 (Emirates, 2015)
Following the commercial success of Dubai in the aviation industry, the rulers from Abu Dhabi, UAE, decided to meet the economical gap by the establishment of a flag carrier meant for UAE. As in the year 2002, Qatar gets withdrawn from Gulf Air, the Abu Dhabi rulers planned to establish a new airline (Etihad, 2015 a). Initiated by a royal decree in the month of July 2003, the Etihad Airways had its first flight in November 2003 (Opu, 2010). This airline came with the commercial strategic approach of investing in the venture of getting hold over multiple carriers across the world (UAEInteract, 2003). Since then, Etihad grew with 70 aircraft to meet 80 destinations and designated itself as the world’s ‘fastest growing airline’ (Al-Sayeh, 2014). As recorded by Al-Sayeh (2014) until 2014, this airline was operating to all the continents, with extensive announcement of expanding multiple carriers in the European and Asian nations.
The commercial strategy of making investments in multiple carriers by Etihad Airways offered it with the mode of quick growth scope in a very short span of time (Etihad, 2013). By the last part of 2011 the Etihad Airways decides about increasing its ownerships in the stakes that are spread over multiple international markets. The strategy started by increasing stake ownerships with Air Berlin, and soon covered Aer Lingus (by 3%), Virgin Australia (by 20%), Jet Airways (by 24%) and Air Seychelles (by 40%) (Etihad, 2013). By 2014, this airline acquired 49% of stake ownership over newly re-launched flights of Air Serbia. This is the commercial strategy of Etihad, which allows the company to buy or invest in stakes of multiple carriers, as per ‘craft codeshare agreements’ being in its favour.
Conclusively, obvious rise and development of the three major Gulf airlines, namely Emirates, Etihad, and Qatar get noted in the international aviation market. As a result, of this the global market is in great demand of implementing exemplified or similar commercial strategies for sustainability amidst the competitive platform as created by these Gulf airlines. The study of Emirates’ commercial co‐operation, as through Qantas joint service deal; Etihad’s commercial strategy of investing in global multiple carriers; and Qatar’s decision to be a part of global alliance, show that the airline industry should start functioning in more innovative commercial way. It is highly important for all the international airlines to abide to international agreements and maintain transparent consumer–oriented service deliveries to all the stakeholders of the aviation industry.
As exemplified by the ‘Big Three’ airlines from Gulf, irrespective of operating from closely located hubs, these airlines are successful. The reason is that they follow different commercial strategies of aviation business.
Emirates stands as the pioneer with long-haul network, fiercely dominated competitiveness, along with incumbent carriers in order to connect traffic. The partnership of Emirates with Qantas strengthens this trend of dominance, especially in the routes connecting Australia and European nations.
As for Qatar Airways, it has been a process of meeting a huge ambition and the same gets achieved through its opening up to the global Oneworld alliance. As a result, Qatar Airways transforms its carriers into various connecting routes.
Lastly, the commercial strategic approach of Etihad appears more outstanding. Etihad is a company that joined the bandwagon very late, yet is equally offering aggressive competitive edge to its contenders. Its success is in its decision of investing over multiple carriers with more service-led facilities and offers in both regional networks and long-haul connections, on a parallel basis.
Thus, it is to be noted that to gain positive edge of the global competitiveness, the international airlines must have right commercial strategies, as in case of Emirates and Qatar, to be specific; and follow change in both fundamental as well as strategic approaches. The basic approach of any international airline should be in creating critical customers, specifically assessed destinations, and offering innovative services and products, in order to gain competitive advantage over the selected region and attain upward mode of mobile clientele; as in the case of Emirates, Etihad, and Qatar.
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