Friday, August 30, 2019
Ã¯Â»Â¿Riordan Manufacturing Strategic Plan Essay
Strategic managers have responsibility to both the employees and stakeholders of the organization. Engaging in strategic management decisions should include ethics and social responsibilities. The expectation of such responsibilities from stakeholders is to fulfill legal and ethical economic decisions. Satisfying the purpose of the strategic planning process for Riordan Manufacturing, the management team has taken into consideration the economic, legal, ethical and discretionary responsibilities. According to Wheelen and Hunger (2010), the ethical and discretionary responsibilities are also known as social responsibilities. Ethical responsibilities require decision-makers to follow expected behaviors of society and the community. Riordan may take substantial risk by upsetting customers by failing to meet existing ethical values. Understanding the existing ethical values and standards of Riordan, the management team will assist senior leaders in planning and committing to social respo nsibilities. Why a Strategic Plan? A strategic management plan will focus RiordanÃ¢â¬â¢s objectives, goals, and efforts on long-term performance and sustainability. Managing short-term goals and successes is relatively uncomplicated and easily attainable, yet longevity is much more difficult to accomplish. Strategic management lays the framework for lasting success. Corporations can no longer sustain profitable business activities by simply maintaining a business as usual or status quo strategy. As the world and economic markets continue to evolve, companies must also transform to accommodate an ever-changing environment. During such transformations, managers should be careful to implement change that is consistent with the companyÃ¢â¬â¢s core mission and objectives. Strategic planning assists in effectively accomplishing these changes and provides business owners and managers the opportunity to induce innovative thinking to preserve competitive advantages. Riordan, like other companies, needs a strategic plan. The plastic injection molding company uses modern design capabilities to provide innovative plastic products to national and international customers. Riordan advertises that Ã¢â¬Å"attention to detail, extreme precision and enthusiastic quality controls are the hallmarks ofÃ Riordan ManufacturingÃ¢â¬ (Apollo Group, Inc., 2004, Internet). By setting such high standards in a lucrative and competitive industry, it is imperative to RiordanÃ¢â¬â¢s success that they implement a strategic plan to manage long-term profitability and sustained growth. Ethical and Social Responsibility To understand the role that ethical and social responsibility considerations occupy in the development of RiordanÃ¢â¬â¢s strategic organizational planning, one must first recognize what these concepts mean. According to Merriam-Webster (2011), ethics is Ã¢â¬Å"the discipline dealing with what is good and bad and with moral duty and obligationÃ¢â¬ (para. 1). Outside of this general definition that ethics are standards for morality, researchers and philosophers have actively sought for many years for a comprehensive and all-encompassing explanation of what is and is not ethical. Many factors contribute to the meaning of ethics and corresponding behaviors, including but not limited to culture, religion, societal influences and pressures, and various stages of moral development. Though social responsibility works hand in hand with ethics, it does possess unique implications. Wheelen and Hunger (2010) describe that Ã¢â¬Å"the concept of social responsibility proposes that a private c orporation has responsibilities to society that extend beyond making a profitÃ¢â¬ (p. 72). This notion exists because the decisions and actions of a business or organization often are far reaching and affect many others beyond the boarders of the companyÃ¢â¬â¢s facilities and operations. Management has a responsibility to balance that which is good for the business and for the surrounding communities and affected parties while formulating strategic plans. Experts in the fields of corporate ethics and social responsibility argue that profitability is not the only duty to be satisfied by a business. For example, William J. Byron believes that Ã¢â¬Å"profits are merely a means to an end, not an end in itself,Ã¢â¬ and Archie Carroll suggests that corporations Ã¢â¬Å"have four responsibilities: economic, legal, ethical, and discretionaryÃ¢â¬ (Wheelen & Hunger, 2010, p. 72-73). Riordan is much more likely to experience success and provide greater returns to stakeholders if a well-rounded business approach is adopted, as opposed to a strictly profit-oriented method. An ex tensive internal and external environmental scan will help Riordan determine what ethical and social concerns to incorporate in the companyÃ¢â¬â¢s strategic plan. ForÃ instance, considering present concerns with environmental pollution, including the over-use of plastics and the toxic air pollution created by manufacturing facilities, Riordan should take a proactive stance in environmental sustainability efforts. Riordan operates in a changing world, and if the company chooses not to pay attention to and participate in the vigorous worldwide environmental conservation activities, they may find themselves out of business and in financial ruin. The ethical and socially responsible role of Riordan affects customers, employees, stakeholders, local and international communities, and future generations. If these parties are not satisfied with the companyÃ¢â¬â¢s efforts and actions, Riordan may be at risk for potential failure. Competitive Advantages and Strategies Riordan presently utilizes an industry standard Six Sigma competitive strategy, along with their customization of innovative products and sale of quality items to a select market of specialized buyers. The manufacturer also takes advantage of high-volume production methods to generate elevated profits. They provide plastic products, including bottles, fans, heart valves, medical stents, and custom parts, to customers in bulk amounts at affordable prices to sustain the companyÃ¢â¬â¢s revenue stream. Riordan also has a revolving product line, which creates value and sustainability because the products are recycled. These competitive advantages helped Riordan become an industry leader, yet the integration of a differentiation strategy and a lower cost strategy will work to enhance organizational growth. Riordan can improve innovation and sustainability of business operations in the United States and in the global market by implementing a blend of differentiation and lower cost busines s strategies. This arrangement is ideal for Riordan because it caters to the purpose of the manufacturing business, which is to provide valuable products at reasonable costs. Wheelen and Hunger (2010) explain that Ã¢â¬Å"differentiation strategy is the ability of a company to provide unique and superior value to the buyer in terms of product quality, special features, or after-sale serviceÃ¢â¬ and Ã¢â¬Å"lower cost strategy is the ability of a company or a business unit to design, produce, and market a comparable product more efficiently than its competitorsÃ¢â¬ (p. 185). The combination of these two exceedingly effective competitive strategies allows Riordan to introduce innovative and distinct plastic products to theÃ marketplace, creating greater value to customers, in a more efficient and cost-effective manner than competitors. To further guarantee organizational longevity, Riordan should continue to use existing quality improvement processes such as Six Sigma and Total Quality Management, which focus on cost reduction, quality improvement, customer satisfaction, performance improvement, and continual renewal. Measurement Guidelines Using a combination of differentiation and lower cost strategies in the Riordan strategic planning process will help the organization maximize profits through two avenues. The first way the company will adjust the organizational strategy is by using differentiation to sell specialty products to organizations that are willing to pay higher prices for specialty orders. New innovation will increase the sales of the organization. Riordan will use a return on investment (ROI) measurement as a guideline to verify the effectiveness of the innovation strategy. The ROI measurement will look at the profitability of each specialty order and determine if the products are creating enough revenue for the organization. If the products are not meeting a set revenue target goal, then the organization will increase the customersÃ¢â¬â¢ cost. The second way Riordan will stabilize the organizationÃ¢â¬â¢s growth and maximize profits is by using a lower cost strategy. The organization will maintain the existing customer base by selling common plastic products at lower rates. The primary plastic products in this category are beverage bottles, food containers, and common automobile parts. The organization will use a balanced scorecard approach to verify strategic effectiveness of the lower cost strategy. The balanced scorecard will focus on four main strategic goals to determine effectiveness. The first goal is customer satisfaction. Satisfying the customerÃ¢â¬â¢s needs will keep profits growing. The second goal is financial stability and profitability. Financial stability will show stakeholders the company is strong and dependable. This encourages more business from other organizations in the future. The third goal in the balanced scorecard approach is internal perspective. Management will look at successes and failures within the organization and determine corrective actions to improve the organization. The fourth step is innovation and learning within the organization. Managers will look at areas that are not meeting the strategicÃ goals and determine improvements to the strategic plan. The management team will also evaluate ways to improve value of products and ways to cut cost of production. By using the ROI and balanced scorecard guidelines, RiordanÃ¢â¬â¢s managers can effectively evaluate the effectiveness of the organizational strategy. This will allow managers to determine if the strategies are successful in their current form or if adjustments are needed to improve production or profitability standards. Internal Dynamics For Riordan to implement the new business strategies, the internal dynamics of the organization must change. These changes will affect the culture and structural leadership of the company. RiordanÃ¢â¬â¢s current management structure is a matrix structure using the old method management. This means that longevity in the organization is a stipulation for management placement. Each level of manager is put in a position and the job is made to fit the candidate. The company will keep the current matrix structure in place with one major difference. In the new internal dynamics of the company, the requirements of the job determine the eligibility of candidates. New job placement processes will cause the cultural environment to change within the organization. Employees, whom may be waiting for older workers to leave the company, will find it easier to move into new positions without the wait. The most qualified candidate will be eligible for the positions, instead of employees relying on l ongevity. This type of organizational movement will promote innovation through education by placing fresh candidates in leadership positions. This will also help the company avoid downturns in innovation and growth. Organizational managers must determine if the new business strategy will fit the current culture. If the strategy does not fit, managers must decide how to implement the strategy by making changes in the structure. According to Wheelen and Hunger (2010), the management team can try one of four methods to adjust the culture. Ã¢â¬Å"The strategy makers can take a chance and ignore the culture, manage around the culture by changing the plan, change the culture to fit the plan, or change the strategy to fit the cultureÃ¢â¬ (Wheelen and Hunger, 2010, p. 256). The new organizational business strategy must have the support of the stakeholders to which the changes will affect because a failure to plan and adjust the business strategy effectively could result in failure of the implementa tion process. Business Continuity Business continuity are the activities performed by an organization to ensure that the business functions will be available when needed by customers, suppliers, regulators, and others of Riordan that must have access to those particular functions. Business continuity is performed by members of the company such as management, employees, and its stakeholders. The business functions and continuity at Riordan consist of project management, system backups, change controls, and the help desk. These functions help Riordan maintain service, consistency, and recoverability within the organization. Riordan influences business continuity by supporting items in their mission statement. The influences are geared by Six Sigma and R&D, which is the industry leader in identification of industry trends. RiordanÃ¢â¬â¢s business is also influenced by ISO 9000 standards that define the companyÃ¢â¬â¢s attitude and abilities. Long-term customer relationships and team oriented working environments are significant businesses influences of this company. With a continual focus on achievement and maintaining profitability to ensure sustained growth, financial and human capital availability are identified as ongoing strategic goals and objectives. Assessment and Feedback Controls Riordan provides its employees with well informed and properly supported information that focuses on the long-term viability of the company. The assessment and feedback controls that should be acknowledged in determining the direction for Riordan in the proposed strategic plan are as follows. The assessments will ensure that Riordan examines employee motivation and empowerment, manufacturing and marketing areas, and the structure of performance reviews. Once these areas are assessed, then the feedback process will begin. The management feedback process consists of making sure employees are still being recognized as team players as Riordan is changing the strategy of the company. Providing employees coaching sessions to identify problem areas, implementation of career development opportunities, and instituting a pay rewards system for good performance that supports the companyÃ¢â¬â¢s vision will provide direct feedback to the company. At Riordan, product quality and quantity is a major focus. Establishing an evaluation, control, and assessment process will provide timely feedback to leadershipÃ in anticipation of results or areas of concern. Areas of assessment include employee and customer satisfaction, environmental presence, and environmental scanning for external locations of the manufacturing facilities. Instituting assessment and feedback to determine the profitability and feasibility of the company is established through the strategic process. Management will determine and specify what measurements are necessary, establish standards of performance through specific implementations, measure performance by predetermined controls, and compare desired performance within a tolerance range. Should the performance fall outside of the predetermined tolerance range, leadership will have the ability to take immediate corrective action. Companies may experience fluctuation or desired standards not being achieved. Thi s provides the company with an opportunity to take corrective action and re-evaluate the strategic plan. Should RiordanÃ¢â¬â¢s strategic plan fluctuate or not achieve predetermined goals as according to plan, management would consider altering the specific strategy. Some of the changes to be considered are based on the feedback, but may include the competitive strategies, measurement guidelines, and internal dynamics. These areas provide opportunities for improvement but could also reflect similarities to the original plan with minor adjustments and still provide successful outcomes. Alterations of the strategic plan would be evaluation of: Competitive Strategies Ã¢â¬â In the area of competitive strategies, we will limit the high-volume production methods and not add any new innovation. Measurement Guidelines Ã¢â¬â In the area of measurement guidelines, we will eliminate the differentiation to sell specialty products to organizations for a higher price which leads to return on investment. Riordan will focus on maintaining the product line that already exists. Internal Dynamics Ã¢â¬â In the area of internal dynamics, Riordan could not go forward with the new changes to the company culture and job placement process. Only a few minor adjustments are needed for this particular area. Job placement should be considered upon experience and the company culture should remain the same. If Riordan fails to make these corrections prior to implementation of the new strategic plan, the company could be at risk of losing market share, not having the ability of expanding globally, jeopardizing the relationship with stakeholders, and lose of profitability. Conclusion Companies are respected and rated by their ethical and social responsibilities to the stakeholders and employees. These responsibilities are as important as the ROI. The purpose of business is to make a return on investment, and this factor is used to evaluate the performance of management and offers a market comparison to similar firms and industries. Key performance measures are essential for achieving the desired strategic outcome. A comprehensive plan that includes environmental scanning, strategy formulation, strategy implementation, and evaluation and control processes will provide assurance of a well-developed strategic approach to business strategies and growth initiatives. References Apollo Group, Inc. (2004). Virtual Organization: Riordan Manufacturing. Retrieved from Apollo Group, Inc., Simulation, MGT498 Ã¢â¬â Strategic Management website. Merriam-Webster, Incorporated (2011). Ethic. Retrieved from http://www.merriam-webster.com/dictionary/ethics. Wheelen, T. L., & Hunger, J. D. (2010). Concepts in strategic management and business policy: Achieving sustainability (12th ed.). Prentice Hall.