Турук Management

BUSINESS CASE STUDY

rather than expenditure. With this in mind, a private limited company, Dome Leisure Management, was formed to oversee the commercial viability and day-to-day running of the project.

Doncaster Metropolitan Borough Council (DMBC) recognised that it required the highest levels of commercial management and decided that a ’stand alone’ operation, whereby a Private Limited Company runs the concern for the Council, provided the best opportunities for success. A similar strategy is illustrated by the success of the council-owned, privately-run, race course in the town.

The Marketing Strategy

When the Dome first opened the marketing of the Centre as a whole, and of specific events, was of prime importance. Without a high company profile and influx of customers, the Dome would fail to satisfy its aims and objectives. Due to this, the management enlisted the specialist skills of Colbear Dickson, an external marketing agency, to work with a group of managers including the General Manager and the Marketing Department. They would identify promotions and initiatives for the coming months for the Marketing Plan.

Each year the Marketing Department has had a different goal to reach in promoting The Dome. In its first year it aimed at creating a corporate identity, in a bid to get the name of The Dome known throughout the region, if not the country. In the second year, its task was to promote day-trip business and the third year concentrated on promoting corporate business.

Market research is carried out periodically to ascertain the needs of the market. Access and Visa customers are sent mail shots with information regarding future events, but no system is set up as yet to monitor the success of this initiative.

The role of the Marketing Department focuses very much on the promotion of The Dome and public relations activities. In addition, several sales methods have been constructed as a result of market research, such as offering joint tickets to both the water and ice facilities, as well as a Kids Club aimed at the younger, energy-packed visitor.

Now that the Leisure Park has an established track record. The Dome Management rely to a certain extent on the name and The Dome’s reputation to do much of the marketing and selling for them. A large amount of the Dome’s publicity comes in the form of press releases focusing on specific events and new initiatives being launched, in the hope and expectation that local newspapers will use the story, thus providing the public with information about the centre. This tactic enables the Dome to reach a large audience at little or no cost.

Local press and radio advertising tends to focus on specific high profile events, such as forthcoming concerts and basketball matches. Leaflets advertising the general facilities offered by the Dome are displayed in tourist office’s throughout Yorkshire and Humberside.

The Business Operations of the Dome

Apart from being successful in attracting customers, the Dome also needed to be seen as having a strong corporate identity, in order to give the confidence of potential investors in the area. After all, it is to a large extent the Dome’s customers that feed all the other commercial developments on the site. To this end, the Dome needed a resourceful management and competent staff.

Senior management posts were filled largely with personnel from outside the local community with experience of the leisure industry, whereas positions lower down the hierarchy were filled from the large pool of labour available locally. This enabled the Dome to find an acceptable balance between experienced, specialist staff brought into the area, and personnel from the local community.

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Any senior positions becoming available now are advertised internally in the first instance. This offers several advantages to the company, in that it motivates staff as they believe that they have a chance to succeed in the organisation. Also, the induction period (the first few weeks in the new job) is made smoother as the employee is already familiar with the working environment, its people and its policies. Disadvantages of promotion from within are that no new blood is brought into the company which could lead to a lack of innovative new ideas.

If internal advertising for management level positions fails to provide suitable candidates, the Dome management prefer to ‘headhunt’ in order to save time and expenditure involved with advertising externally. The headhunting process involves contacting people known to the staff who are working in, or have worked in, a similar position within the leisure industry. They can be attracted to the Dome by offering larger salaries, additional benefits, or better future prospects. Headhunting is particularly suited to senior positions or ones where the post holder requires specialist skills or knowledge.

The Dome management place great importance on the induction, training and development of all staff. Every employee within the organisation receives an induction period upon taking up employment. The amount of time taken in induction will depend on the position within the organisation. An annual appraisal system is used thereafter to assess an individual’s overall performance. This gives employees a formal opportunity to discuss with their managers their role within the company, where they think their job is going, and how it could be improved to the benefit of themselves and the organisation as a whole.

A common training theme runs throughout all levels of the hierarchy. In 1992, for example, training concentrated on improving quality; whereas in 1993 training aimed at improving sates techniques. In addition to this themed training, job holders also receive a training programme tailored to their needs. Most training is carried out in-house, giving the advantages of minimal time spent away from the workplace and avoiding the expense of hiring an external training agency. The Dome is currently carrying out a Training Needs Analysis, which is partly funded by the Doncaster and Barnsley Training and Enterprise Council ‘TEC’.

Due to the dynamic nature of the leisure industry, the Dome management need to effectively manage change in order to maintain their competitive edge. most changes implemented tend to be customer led. The ethos is that if customer demand is sufficient, the management will try and ensure that the facility or activity is included.

It is not just current customers’ wishes that need to be met, however, in order to sustain the growth needed to meet the council’s expectations. If the Dome is to live up to all of its original aims, it must evolve to become a Leisure Park large enough to pull visitors from further afield. With a proposed Channel Tunnel Terminal being sited at Doncaster, it is now feasible to expect visitors from France and the rest of the EU. Because of this the council is continually updating its proposed expansions of the site. Current initiatives involve the development of an artificial lake for water sports, a business and office complex, a holiday village, and an all-seater sports stadium. If it is to continue to attract private sector development, it must continue to invest in, and expand on, the current provisions offered.

Such a large scale development is obviously likely to upset some people in the local community, due to problems such as increased traffic, noise, litter etc. Dealing with such groups is seen largely as a public relations exercise. If the Dome management and the council give them a fair hearing and lay down the basis of, and advantages of their proposals, or even bow to the wishes of local groups where this seems to be the best strategy, the council will maintain the much needed respect and support of the local residential and business community.

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Private Sector Investment

For the Dome to provide maximum benefit for the local community, and Doncaster as a whole, it needed to attract private sector investors to the area. This was the best way for the DMBC to recoup their initial investment, as they sold off land to companies attracted to the area. The revenue from land sales far outweighs profits obtained from the operations of the Dome. This has already paid off in the form of a 50 bedroom Campanile Hotel situated in two acres of land. The French hotel chain has the scope to add another 50 bedroom annexe to their existing £1.2 million development. Just prior to the official opening of The Dome, Keith Brown Properties Ltd opened a £1.5 million Ten Pin Bowling Alley covering one acre and providing 60 jobs. In 1990 an Asda Superstore opened covering 12 acres. Warner Brothers soon followed with a multi-screen cinema development situated on a six acre site at a cost of £6.5 million and providing 100 jobs.

The 500 full time jobs and 100 part time positions created by the £55 million worth of private sector investment in the first phase of the Park’s development has given a boost to other commercial concerns in the local economy. Unemployment has fallen, spending power has increased, and this spending has led to further employment in other businesses.

The council are hoping that further development of the park will transform this area of Doncaster into a role model of private and public sector co-operation in economic revival.

Conclusion

The Doncaster Dome was never intended to be a means to an end. It was never intended to be merely a leisure park. It was intended to trigger new hope and investment for the town. So far it seems to have worked.

The General Manager of the Dome was right when he said “The Dome is a household name on nil regional lips, is well known in the Leisure industry, is admired by its rivals and is the envy of other Borough Councils”. It is certainly that, and to the people of Doncaster, much more besides. It has provided hope in what was otherwise a seemingly bleak future for a town where traditional industries (e.g. mining and engineering) are in sharp decline.

Questions for discussion

1.Why do you think that the Doncaster Metropolitan Borough Council decided that a stand alone operation, whereby a Private Limited Company runs the concern, provided the best opportunities for success? What alternatives were open to the Council?

2.What are the strengths and weaknesses of the Dome’s marketing strategy? What improvements could be made in marketing both the Dome, and the Leisure Park as a whole?

3.Explain the links between the Public and Private sector that have emerged as a result of the Leisure Park’s development. What benefits has each received as a result of this co-operation?

4.What benefits has the Leisure Park’s development brought to the town of Doncaster? Are there any groups in the community that may feel threatened by the development?

5.What were the “opportunity costs” of the Dome? How would you justify the expense to opponents of the Dome’s development?

6.Conduct a S.W.O.T. (Strengths, Weaknesses, Opportunities, and Threats) Analysis for the Dome Leisure Park. From your findings, do you feel that the Council were justified in investing £25 million in the project?

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Supplementary Reading

(Дополнительное чтение)

What is management?

Unit 2 explained that managers are an important group involved in business activity. It is difficult to define exactly what is meant by ‘management’. However, many agree that managers are responsible for ‘getting things done’ – usually through other people. The term manager may refer to a number of different people within a business. Some job titles include the word ‘manager‘, such as personnel manager or managing director. Other job holders may also be managers, even though their titles do not say it.

It could be argued that managers:

–act on behalf of the owners – in a company, senior management are accountable to the shareholders;

–set objectives for the organisation, for example, they may decide that a long term objective is to have a greater market share than all of the company’s competitors;

–make sure that a business achieves its objectives, by managing others;

–ensure that corporate values (the values of the organisation) are maintained in dealings with other businesses, customers, employees and general public.

The functions of management

Henri Fayol, the French management theorist working in the early part of this century, listed a number of functions or ‘elements’ of management.

Planning. This involves setting objectives and also the strategies, policies, programmes and procedures for achieving them. Planning might be done by line manners who will be responsible for performance.However,adviceonplanningmayalsocomefromstaffmanagementwhomighthaveexpertise in that area, even if they have no line authority. For example, a production manager may carry out human resource planning in the production department, but use the skills of the personnel manager in planning recruitment for vacancies that may arise.

Organising. Managers set tasks which need to be performed if the business is to achieve its objectives. Jobs need to be organised within sections or departments and; authority needs to be delegated so that jobs are carried out. For example, the goal of a manufacturing company may be to produce quality goods that will be delivered to customers on time. The tasks, such as manufacturing, packaging, administration, etc. that are part of producing and distributing the goods, need to be organised to achieve this goal.

Commanding. This involves giving instructions to subordinates to carry out tasks. The manager has the authority to make decisions and responsibility to see tasks are carried out.

Co-ordinating.Thisisthebringingtogetheroftheactivitiesofpeoplewithinthebusiness.Individuals and groups will have their own goals, which may be different to those of the business and each other. Management must make sure that there is a common approach, so that the company’s goals are achieved.

Controlling. Managers measure and correct the activities of individuals and groups, to make sure that their performance fits in with plans.

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The management process

Peter Drucker worked in the 1440s and 1950s as a business adviser to a number of US firms. He is credited with the idea of MANAGEMENT BY OBJECTIVES, used by some businesses today. Drucker grouped the operations of management into five categories.

–Setting objectives for the organisation. Managers decide what the objectives of the business should be. These objectives are then organised into targets.

–Organising the work. The work to be done in the organisation must be divided into manageable activities and jobs. The jobs must be integrated into the formal organisational structure and people must be selected to do the jobs.

–Motivating employees and communicating information to enable employees to carry out their tasks.

–Job measurement. It is the task of management to establish objectives or yardsticks of performance for every person in the organisation. They must also analyse actual performance and compare it with the yardstick that has been set. Finally, they should communicate the findings and explain their significance to others in the business.

–Developing people. The manager should bring out the talent in people.

Every manager performs all five functions listed above, no matter how good or bad a manager, Drucker suggests. A bad manager performs these functions badly, whereas a good manager performs them well. He also argued that the manager of a business has a basic function – economic performance. In this respect the business manager is different from the manager of other types of organisation. Business managers can only justify their existence and authority by the economic results they produce.

Being a manager

IncontrastwithFayolorDrucker,CharlesHandyarguedthatanydefinitionofamanagerislikelytobe sobroaditwillhavelittleornomeaning.Insteadheoutlinedwhatislikelytobeinvolvedin‘beingamanager’.

The manager as a general practitioner Handy made an analogy between managing and staying ‘healthy’. If there are ‘health problems’ in business, the manager needs to identify the symptoms. These could include low productivity, high labour turnover or industrial relations problems. Once the symptoms have been identified, the manager needs to find the cause of trouble and develop a strategy for ‘better health’. Strategies for health might include changing people, through hiring and firing, reassignments, training, pay increases or counselling. A manager might also restructure work through job redesign, job enrichment and a redefinition of roles. Systems can also be improved. These can include communication systems, reward systems, information and reporting systems budgets and other decision making systems, e.g. stock control.

Managerial dilemmas. Handy argued that managers face dilemmas. One of the reasons why managers are paid more than workers is because of the dilemmas they face.

–The dilemma of cultures. When managers are promoted or move to other parts of the business, they have to behave in ways which are suitable for the new position. For example, at the senior management level, managers may deal more with long term strategy and delegate lower level tasks to middle management more often. If a promoted manager maintains a ‘culture’ that she is used to, which may mean taking responsibility for all tasks, she may not be effective in her new position.

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–The trust-control dilemma. Managers may want to control the work for which they are responsible. However, they may have to delegate work to subordinates, trusting them to do the work properly. The greater the trust a manager has in subordinates, the less control she retains for herself. Retaining control could mean a lack of trust.

–The leader’s dilemma. In many firms, junior managers often want to work in project teams, with a clear task or objective. This can mean working ‘outside’ the normal bureaucratic structure of a larger organisation. Unfortunately, there can be too many project groups (or ‘commando groups’) for the good of the business. The manager must decide how many project groups she should create to satisfy the needs of her subordinates and how much bureaucratic structure to retain.

Managerial roles

Henry Mintzberg suggested that, as well as carrying out certain functions, the manager also fulfils certain roles in a firm. He identified three types of role which a manager must play.

–Interpersonal roles. These arise from the manager’s formal authority. Managers have a figurehead role. For example, a large part of a chief executive’s time is spent representing the company at dinners, conferences etc. They also have a leader role. This involves hiring, firing and training staff, motivating employees etc. Thirdly, they have a liaison role. Some managers spend up to half their time meeting with other managers. They do this because they need to know what is happening in other departments. Senior managers spend a great deal of time with people outside the business. Mintzberg says that these contacts build up an informal information system, and are moans of extending influence both within and outside the business.

–Information roles. Managers act as channels of information from one department to another. They are in à position to do this because of their contacts.

–Decision making roles. The manager’s formal authority and access to information means that no one else is in a better position to take decisions about a department’s work.

Through extensive research and observation of what managers actually do, Mintzberg drew certain conclusions about the work of managers.

–The idea that a manager is a ‘systematic’ planner is a myth. Planning is often carried out on a day-to-day basis, in between more urgent tasks.

–Another myth is that a manager has no regular or routine duties, as these have been delegated to others. Mintzberg found that managers perform a number of routine duties, particularly ‘ceremonial’ tasks.

–Mintzberg’s research showed that managers prefer verbal communication rather than a formal system of communication. Information passed by word of mouth in an informal way is likely to be more up to date and easier to grasp.

Leadership

The ability to lead within organisations is of growing interest to businesses. This interest has resulted from the need to lead companies through change, brought about by an increase in competition and a recessionary climate in the late 1980s and early 1990s.

Earlier in this unit it was shown that a manager might have a leadership role. To be a good leader in business it has been suggested that a manager must know what direction needs to be taken by the

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business and plan how to achieve this. Leaders will also be able to persuade others that the decisions that they have taken are the correct ones.

Leaders are often thought to be charismatic people who have ‘something about them’ that makes them stand out from others. It has been argued that there are certain personality traits that are common to leaders. However, studies have failed to prove this is the case.

In order to identify ‘leadership’, studies have shifted to examine what leaders, and in particular managers, do – that is, what behaviour is associated with leadership. This is dealt with in the next sections.

The qualities of leadership

One approach to find out what makes good leaders is to identify the qualities that they should have. A number of chàãàñteristics have been suggested.

–Effective leaders have a positive self image, backed up with a genuine ability and realistic aspirations. This is shown in the confidence they have. An example in UK industry might be Richard Branson, in his various pioneering business activities. Leaders also appreciate their own strengths and weaknesses. It is argued that many managers fail to lead because they often get bogged down in short term activity.

–Leader need to be able to get to the ‘core’ of a problem and have the vision and commitment to suggest radical solutions. Sir John Harvey-Jones took ICI to £1 billion profit by stirring up what had become a ‘sleeping giant’. Many awkward questions were raised about the validity of the way things were done, and the changes led to new and more profitable businesses on a world-wide scale for the firm.

–Studies of leaders in business suggest that they are expert in a particular field and well read in everything else. They tend to be ‘out of the ordinary’, intelligent, and articulate.

–Leaders are often creative thinking and innovative. They tend to seek new ideas to problems, make sure that important things are done and try to improve standards. One example might have been the restructuring of BHS by David Dworkin so that unsold stock did not remain on the shelves.

–Leaders often have the ability to sense change and can respond to it. A leader, for example, may be able to predict a decline of sales in an important product or the likelihood of a new production technique being available in the future.

Leadership styles

Another approach is to examine different styles of leadership. There is a number of styles that managers might adopt in the work setting. Table 1 shows the different ways in which leaders can involve others in the decision making process.

Autocratic. An AUTOCRATIC leadership style is one where the manner sets objectives, allocates tasks, and insists on obedience. Therefore the group become dependent on him or her. The result of this style is that members of the group are often dissatisfied with the leader. This results in little cohesion, the need for high levels of supervision, and poor levels of motivation amongst employees.

Autocratic leadership may be needed in certain circumstances. For example, in the armed forces there may be a need to move troops quickly and for orders to be obeyed instantly.

Democratic. A DEMOCRATIC leadership style encourages participation in decision making. Managers may consult employees or could attempt to ‘sell’ final decisions to them. It is argued that, through participation and consultation, employees know and believe the objectives of management because

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they have had some involvement with it. This will result in employees being more motivated and willing to work harder.

Democratic leadership styles need good communication skills. The leaders must be able to explain ideas clearly to employees and understand feedback they receive. It may mean, however, that decisions take a long time to be reached as lengthy consultation can take place.

Laissez-faire. A LAISSEZ-FAIRE type of leadership style allows employees to carry out activities freely within broad limits. The result is a relaxed atmosphere, but one where there are few guidelines and directions. This can sometimes result in pool productivity and lack of motivation as employees have little incentive to work hard.

				Table 1
		Leadership style
	Autocratic	Democratic		Laissez-faire
Type of	Autocratic	Persuasive	Consultative	Laissez-faire
leadership
	Leader makes	Leader makes	Leader consults	There is no
	decisions	decisions alone.	with others before	formal structure
	alone.	Others are persuaded	decision is made.	to decision
Method	Others are	by the leader that the	There will be group	making. The
	informed and	decision is the right	influence in the	leader does not
	carry out	one, i.e. leader ‘sells’	final decision, even	force his or her
	decisions.	the decision to the	though it is made	views on others.
		group.	by the leader.

Factors affecting leadership styles

The type of leadership style adopted by managers will depend on various factors.

The task. A certain task may be the result of an emergency, which might need immediate response from a person in authority. The speed of decision needed and action taken may require an authoritarian or autocratic style of leadership.

–The tradition of the organisation. A business may develop its own culture which is the result of the interactions of all employees at different levels. This can result in one type of leadership style, because of a pattern of behaviour that has developed in the organisation. For example, in the public sector leadership is often democratic because of the need to consult with politicians etc.

–The type of labour force. A more highly skilled workforce might be most productive when their opinions are sought. Democratic leadership styles may be more appropriate in this case.

–The group size. Democratic leadership styles can lead to confusion the greater the size of the group.

–The leader’s personality. The personality of one manager may be different to another manager and certain leadership styles might suit one but not the other. For example, an aggressive, competitive personality may be more suited to an authoritarian leadership style.

–Group personality. Some people prefer to be directed rather than contribute, either because of lack of interest, previous experience, or because they believe that the manager is paid

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to lake decisions and shoulder responsibility. If this is the case, then an autocratic leadership style is more likely to lead to effective decision making.

–Time. The time available to complete a task might influence the leadership style adopted. For example, if a project has to be finished quickly, there may be no time for discussion and an autocratic style may be adopted.

Why do leaders adopt different styles?

A number of theories have been put forward to explain the most appropriate leadership style when dealing with certain situations or groups at work.

Fiedler. In l976, F. Fiedler argued that it is easier to change someone’s role or power, or to modify the job he has to do, than to change his leadership style. From his 800 studies he found that it is difficult for people to change leadership styles – an ‘autocrat’ will always lead in autocratic style whereas a leader that encourages involvement will tend to be ‘democratic’. Different leadership styles may also be effective depending on the situation. He concluded that, as leaders are unable to adapt their style to a situation, effectiveness can only be achieved by changing the manager to ‘fit’ the situation or by altering the situation to fit the manager.

In business it is often difficult to change the situation. Fiedler suggested that a business should attempt what he called leadership match – to choose a leader to lit the situation. Leaders can be either task orientated or relationship orientated. So, for example, a business that faced declining sales might need a very task orientated manager to pull the business around, even if the tradition of the firm might be for a more democratic style of leadership.

Hersey and Blanchard. P. Hersey and K.H. Blanchard argued that a leader’s strategy should not only lake account of the situation, but also the maturity of those who are led. They defined maturity as the ability of people to set targets which can be achieved and yet are demanding.

A leader will have task behaviour or relationship behaviour. Task behaviour is the extent to which the leader has to organise what a subordinate should do. Relationship behaviour describes how much support is needed and how close personal contact is. Together these will decide which of the following leadership styles will be used.

–Delegating leadership is where a leader allows subordinates to solve a problem. For this type of leadership style to work, subordinates need to be mature and require little support at work.

–Participating leadership is where a leader and subordinates work on a problem together, supporting each other. In this situation subordinates are slightly less mature than when a leader delegates and so need more support.

–Selling leadership is where a leader persuades others of the benefits of an idea. Workers are likely to be only moderately mature and require a great deal of support.

–Telling leadership is where a leader tells others what to do. Workers are fairly immature. They are told exactly what to do and little contact or support is needed.

Wright and Taylor. In 1984, P. Wright and D. Taylor argued that theories which concentrate on the situation or maturity of those led ignore how skilfully leadership is needed.

They produced a checklist designed to help leaders improve the performance of subordinates. It included the following.

–What is the problem? An employee may, for example, be carrying out a task inefficiently.

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–Is it serious enough to spend time on? This could depend on the cost to the business.

–What reasons may there be for the problem? How can it be solved?

–Choosing a solution and evaluating if it is the most effective one.

–Evaluation of the leader’s performance.

This can be used to identify the most suitable leadership style in a particular situation. For example, if the problem above is caused because the employee has been left to make his own decisions and is not able to, a more autocratic leadership style may be needed. One the other hand, if the employee lacks motivation or does not have the authority to make decisions, greater discussion or delegation may be needed.

Key terms

Autocratic leadership – a leadership style where the leader makes all decisions independently. Democratic leadership – a leadership style where the leader encourages others to participate in

decisionmaking.

Laissez-faire leadership – a leadership style where employees are encouraged to make their owndecisionswithinlimits.

Management by Objectives (MBO) – a management theory which suggests that managers set goals and communicate them to subordinates.

Summary

1.State 5 functions of management.

2.Briefly explain the process of management by objectives.

3.Give 3 examples of a managerial dilemma.

4.Why might a good manager not always be a good leader?

5.Briefly explain 5 qualities of leadership.

6.Under what circumstances might an autocratic leadership style be useful?

7.State 6 factors which might affect the choice of leadership style.

8.According to Fiedler’s theory, why should a business attempt a leadership match?

HUMAN RESOURCE MANAGEMENT

Managing people in business

Since the mid-Eighties the term ‘Human Resource Management’ (HRM) has replaced ‘Personnel Management’ to describe the function within business which focuses on the employment, training, use and welfare of people. What does this signal about human relations in industry?

For people to be referred to as ‘human resources’ sounds mechanical and yet the objectives of the approach are precisely the opposite. The intention is to emphasise a total strategy related to a firm’s most valued resource rather than the set of functions which a personnel management department was commonly expected to undertake.

The process begins with effective workforce planning which links intentions related to employees with the internal organisation and the overall objectives of the business. This sees employees not simply as people who perform a set o functions, narrowly contained within a job specification, nor as groups catered for by collective agreements with unions. Rather, it stresses the extent to which employees will have an active role within most of the decision making which surrounds their ‘job’ in the firm. One of the best examples of this which you will be familiar with is the approach summed up in the phrase ‘quality circles’. Employees are considered to be part of a team and not simply individuals working for the firm.

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