CHANGING EXTERNAL ENVIRONMENT OF ORGANISATION

kmart

Executive Summary

This report gives detailed information on Kmart which is a leading retail company of Australia Kmart is a clothing company in Australia. This report provides brief information about Taylor's theory of Scientific Management. There is a detailed discussion of how the company has implemented its various technological trends in the light of this theory. Moreover, this article explained the leading competitors of the company. It also gives broader information on what steps the company has adapted to beat those competitors effectively.  Besides, the article discusses the meaning of the concept of social responsibility in the context of organisational operation. In this regard the two sections of Sustainability Development Goals are discussed and how Kmart Company has performed to achieve those objectives in 2019. In the last part of the article the concept of the managerial role as stated by Mintzberg. The concept has been thoroughly analyzed and discussed. This discussion will enable a sufficient understanding of the concepts. The article has a lot of information that provides a transparent view of the present situations of Kmart in the Global market. This article also lays an alignment of the scientific management theory with various concepts such as technological trends and sustainability goals and its effectively real-life implementation by a leading organisation like Kmart. 

1.0. Introduction 

Kmart is one of the leading stores of Australia dealing with clothes, jewellery, appliances, shoes being an applicant for a graduate post at the organisation this report will provide an understanding of different concepts related to management and its application by Kmart (Kmart 2020). This report contains four main topics which are the application of management concepts to explain the influence of technological trends on organisation, to explain the competitors of the organisation, to explain the social responsibility of an organisation, and to analyse the managerial job role. These four topics will be discussed in detail along with its application by Kmart. This report will show how Kmart has responded to different aspects of management in the years 2019 and 2020. This report is provided with the application letter.

Task 1: Influence of technological trends on business organisation by using management theory

1.1.  General Environment

The general environment can be defined as the sociocultural, technological and legal or political trends, which affect every organisation indirectly (Williams, McWilliams & Lawrence 2019, p. 38). 

As for example, when the rate of prime lending is decreased by a central bank of any country, it will be beneficial for most of businesses as the companies of credit card and banks can offer the rates of lower interest to their consumers for loans (Williams, McWilliams & Lawrence 2019, p. 40). Thus, customers can easily spend cheapest cost for buying their cars, homes, TVs, refrigerators and many more. General environment plays a crucial role for the growth of an organisation.

If the technological, political or legal trends of any business are affected by the general environment positively, then it will be helpful for the development of the business. Even if any external force tries to affect the business, the managers can easily short out the issue so that the business can easily achieve its growth (Anzoategui et al. 2019, p. 68).

1.2. Technology

The technology can be defined as a technique, tools and knowledge that are used for transforming any input into some output (Williams, McWilliams & Lawrence 2019, p. 112). 

If the technology of a company is changed certainly, then it will be helpful for the company for the improvement of its products and services (Stone 2017). 

All companies should be embraced some new technologies and should find some effective ways for using those technologies that will help the businesses in growing up by improving their services and products as well.   

1.3. Impact of Technology on Kmart

With the advancement of technologies, different technological trends are opted by Kmart to sustain in the global market. The different technological trend has made it possible for the organisations of the country to lead the global economy firmly. The tech business of Australia named Cohesio is fitting solutions of robotic voice in the centres of Kmart that will be beneficial for the organisation to meet consumers’ demands for the e-commerce (Derrin 2020). The technology helps the employees of the organisation’s distribution centres to listen and maintain instructions properly.This technology refers to a branch of science that deals with creating technological products incorporating human intelligence within them(Built-in 2019). 

The technology of Blockchain refers to a system of data storage that cannot be changed, hacked, or utilized for fraud (Euromoney 2020). This technology in the retail market has valued USD 113.72 million in 2019 and is estimated to increase in the coming five years (Mordor intelligence 2020). The technology refers to as a system of inter coordination within the computer or any other devices, animals, humans, and any things that have a common identity and can transfer information without human interaction or help (McClelland 2020). Due to covid-19 pandemic situation, the technology of Kmart affects very badly. But now, the situation is getting well day by day.  

1.4. The respond of Kmart to technology

Kmart is a leading retail group in Australia has adopted the technological trends and it has sent its nearly 1400 employees AWS program for pursuing cloud training and machine learning which shows its inclination to AI (Barbascho
w 2019). The company has applied the POS learning model to determine the style, size, volume, and color of the clothes that are subjected to sale in their 230 stores (Crozier 2019). Kmart has a different E-commerce segment called Kmart Solution and Electronic Commerce to unite all its computing and internet activities (InformationWeek 2020). This will help the company to coordinate and observe the online operation under a single system. In 2017 it has been reported the POS system has a malware attack that is said to have compromised customer’s credit card information which they eradicated as soon as possible (Schwartz 2017). The Company then felt the significance to adopt a strict secured system like a blockchain to minimize such instances. Now the company should focus on improving the e-commerce system as the demand of this is increasing rapidly daily among the consumers.  

Task2: Competitor analysis by using management theory

2.1. Specific Environment

Specific environment can be defined as advocacy groups, industry regulations suppliers, competitors and the consumers, which are unique to the industry of any organisation and directly affect the business of the organisation (Williams, McWilliams & Lawrence 2019, p. 41)

After twenty million unsafe toys (most are produced by the factories of China) and more were recalled, the industry of toy has spent an amount of two hundred million dollar for increasing safety products (Williams, McWilliams & Lawrence 2019, p. 41). As this is the example of changes of specific environment but not the general environment, so the retailers were badly affected. Not only the retailers but the manufacturers were also affected. 

The organisations should implement more effective strategies and try to improve its structure and services as it will help those organisations to achieve market growth.

2.2. Competitors

Competitors can be defined as an entity or a person, which or who are rivals of each other in the business market (Business Dictionary 2020). 

Every organisation should face intense competition in the business market with its rivals that can affect the growth of the business (Zhang & cheng Guan 2019, p. 214). 

The organisations have to face the rivals directly to know about the current position of those organisations in the business market. After knowing this, every organisation can improve itself according to the current condition of its rivals. With the rapid advancement of technology, companies can use Big data analytics to identify its potential competitors automatically (Guo et al. 2017, p. 740). 

2.3 Impact of technology on Kmart

Every company needs to analyse its competitors’ strengths and weaknesses in order to develop some strategies through which an organisation can achieve business growth (Pakes 2017, p. 244). Kmart being the leading retail group in Australia is exposed to competition in both the national and global markets. The leading competitors of Kmart are Big W, Harvey Norman, and Target. Kmart has advanced far leaving behind its competitor (Owler 2020).  The reasons for this progress are as follows: 

Kmart has left the traditional market model and focuses on giving significance to the customer's changing requirements. They opt for promotion through advertising on social media to get access to more and more customers. In this prospect, Kmart has left its competitors backward.

 In 2008 the company stood where most of the retail store of Australia stands in recent times. They kept on stocking and discontinuing products that smartened up their pricing of the product and reduced its volume. The company targeted mainly the mother and the children population and made their products considering their requirements.  The company does not favour seasonal sale and sale 75% of its products of their brand which enable it to sell its product directly without any supplier cost (Transformco, 2020). Thus, the products are cheaper compared to the other companies. Their product framing changes according to the changing demands of the customer. So, Kmart believes in renovating the brand whenever necessary.  

Kmart knows its target market much better than its competitors. Competitors like Big W have a confusing price structure due to the indefinite targeted market. Kmart having clarity of its targeted market and so their products and pricing are accurate. 

2.4. Respond of Kmart to the impact

The marketing strategies of Kmart have placed the organisation in a leading position in the Australian business world (Mitchell 2019). They have mainly adopted the policy of putting its customer in the driver's seat. They have left the traditional business model which is static and is not objected to any change. Kmart has also moved forward by renovating its brand products and prices frequently according to changing priorities of the consumer (Mitchell 2019). Moreover, the theory also speaks of systematic functioning with coordination in operating. Kmart has proved this point by its transparent perspective towards the targeted market. Their clear perception is the outcome of an efficient market survey by the company. Besides, they sell mostly their home brand products. This enables them to sell things directly to their customers which has two positive impacts – cheap priced products due to nonexistence of any middle source and easily access customers for knowing their requirements and priorities as well as review for the product (Mitchell 2019). Kmart company's employees work efficiently and together to apply these strategies effectively.  Thus, the concept of systematic coordination and employee efficiency which are the main proponents of the theory is well justified by the company. The company sent its employees in 2019 to pursue ASW training so that they gain skills in operating by using AI techniques, tools, and methods.  

Task 3: Social responsibility of Kmart

3.1. Social Responsibility

The social responsibility can be defined as an obligation of business for pursuing policies, taking actions and making decisions, which are beneficial for the society (Williams, McWilliams & Lawrence 2019, p. 71).

3.2. Importance of social responsibility for organisations to act in a socially responsible way

Advantages

Social responsibility affects any organisation by impacting most of direct sales driver and buying decisions of consumers effectively (Cannon et al. 2020, p.87).

Social responsibility can also help an organisation to maintain positive reputation of business, increase consumer loyalty and sales, make better financial performance, helps in organisational growth etc (González-Rodríguez et al. 2019, p. 402). 

Disadvantages 

One of the most common disadvantages of social responsibility is falling of costs on the small businesses disproportionally. 

Shareholders of a company play a crucial role to increase profitability for the company. The management of the company always has a responsibility for its shareholders. But social responsibility opposes this directly. 

3.3. Approaches to Social Responsibility

Reactive

In the case of reactive social responsiveness strategy, Reactive strategy can be defined as the way company is doing its actions which are not able to meet the expectations of its prospective buyers (Williams, McWilliams & Lawrence 2019, p. 70). Hence, it is not suitable for the business growth of a company which is not liable to fulfil the need of its society. 

Defensive

Those organisations, which take stance of defense towards the social responsibility, aren’t responsible particularly. These organisations claim themselves as neutral (Karidio & Talbot 2020, p. 20). They choose profit intentionally rather than performing any action in a way of social responsibility. 

Accommodative

According to stance of accommodate, organisations prefer social responsibility as well as the profit in same way (Park et al. 2019, p.400). Both of these social responsibility and profit are same important for these kinds of organisations. All the legal needs and requirements are satisfied by these organisations and try to meet always ethical standards. No actions are hidden by these accommodating organisations and they always remain open and free so that they can easily take any specific action. 

Proactive 

Proactive organisations are almost same like accommodating organisations. Though there are many cut off happen with these organisations, they cannot ignore social responsibilities (Williams, McWilliams & Lawrence 2019, p. 71). These organisations make some ethics part of the statement of their mission and always try to avoid any kind of harm that affect their employees or their environment very badly. 

3.4. Sustainable Development Goals SDG3

SDG3 is stands for well-being and good health of people. It promotes well-being and ensures healthy lives towards the people of Australia, which is known as the best sustainable development country over the world (Globalization and Health 2020).  

Australia is facing so many issues that prevent the country to make its citizens to being well. So, the government takes some approach to recover this as soon as possible.

For example, an approach is taken by the government body of Australia that is a milestone of 2030, when they target to solve all these issues perfectly to achieve well sustainable development goals over the world (Angus 2018).

3.5. Sustainable Development Goals SDG12

Sustainable development goals 12 stand for a Program’s framework on sustainable production and consumption (Gvi Australia 2020).

Its approach is to take a framework of ten years to implement sustainable production and consumption in all over the world (Gvi Australia 2020). 

For example, harvest and food waste losses must be decreased at minimum 50% within the tear of 2030.    

Task4: Mintzberg’s managerial role and its application

In Kmart, the aspired role is of Product Manager. 

4.1. Three managerial roles

According to Mintzberg the manager of an organization has three main roles – informational, decisional, and interpersonal (Waring 2016).  

Informational – the role of a manager is to observe and monitor the external information and its selection that will be required for organizational functioning (Altamony & Gharaibeh 2017, p. 921). Moreover, the manager supervises and be aware of the team's progress and situation. The manager also controls the flow of outbound data being the leader of a team or department. 

In Kmart, the retail department manager also monitors the external data and choose relevant that will be effective for departmental activity. Being a manager it's his or her duty to know about the team's condition and situation. In case when data needs to be sent somewhere out of the department the manager being the spokesperson controls the activity.

Decisional – a manager is a leader of a group or team that has to utilize different resources relevant to the concerned projects (Altamony & Gharaibeh 2017, p. 921). The manager negotiates with other parties on behalf of his or her group. The manager solves issues within the group and settles conflict. Moreover, the manager also creates new ideas and innovations which can be effective in accomplishing the task. 

Being a retail department head, the manager must have decision making power in many aspects such as what materials or resources can be implemented to accomplish the task efficiently.  In the case of negotiation, the manager leads from the front.  Within the department, if any issues or conflict arises it is the manager who has to provide a decision to solve it. The manager to accomplish a task with perfection may incorporate new ideas or innovations.  

Interpersonal – this is the leadership role of a manager. Being the head of a team or group he or she acts as a communicator with external parties (Altamony & Gharaibeh 2017, p. 922). As a manager, he maintains a healthy relationship with his or her team member and sees to it that the other members work united and with motivation. In Kmart, a Retail Department Manager is the leader of his or her team. He not only maintains good relations with his or her teammates but also keeps his team united and motivated for achieving the departmental goals efficiently.  He acts as a communication source for his or her team and also on behalf of the team.

4.2. Entrepreneurial role:

The entrepreneur is the head of the business and hence is the suitable managerial role for interacting with stakeholders. The entrepreneur makes the decisions regarding the business or the organization (Nayar 2019). They control the business and the organization. The entrepreneur interacts with the stakeholders of the business. 

Past experiences for the entrepreneurs can help in better understanding of the business and its requirements. Though past experience is not necessary for the entrepreneurs but education and knowledge can be helpful in establishing successful business (Nayar 2019).

Example of this managerial role is that they make the decisions regarding the products that are manufactured or the services provided by the company. Entrepreneur is an example of this managerial role. The entrepreneurs make the decisions regarding the business and its operations (Mindtools 2020). They are responsible for the various activities occurring within the organisation and also responsible for maintain the stakeholders. They are the owners of the business. The entrepreneurs identify the problems in a business and evaluate the problems to find effective solutions. They require having efficient decision-making skills as they are obliged to make the final decisions in the business being the sole owners of the business.

4.3. Decisional role:

The decisional role is suitable for interacting with a vast array of stakeholders as it gives the total decision-making power regarding the resource in a business (Raustiala 2017, p. 18). The resource allocator decides the resources and the materials that are to be used. He is also responsible to maintain the relationships with the stakeholders and interact with them to understand their insights. The decisional managerial role helps in making instant and careful decisions regarding the business with the stakeholders and satisfies the stakeholders by making decisions that are accepted by them (Williams, McWilliams & Lawrence 2019, p. 11). The decisional role supports the managers to make decisions regarding the business operations to help them to deal with the problems in a business for interacting with an array of stakeholder’s decisional role is hence, the most suitable role.

The decisional roles require the understanding and knowledge of the business and past experience can help in making better and efficient decisions.

The example for decisional roles is the resource allocator. The resource allocator is the one who allocates the resources of the organization or the business. They are responsible for allocating the funds, assigning the jobs to the employees and staff as well as other resources of other organization (Mindtools 2020). 

5.0. Conclusion

To conclude, these articles provide a detailed explanation of the company Kmart, which is a leading clothing retail industry in Australia. There are detailed discussions of how the technological trend of Australia has been adapted effectively by the organisation and in this context its effectiveness following Taylor's Scientific Management Theory. Moreover, it also gives information about the competitors of Kmart and what are the strategies that help the company to beat them in the global frame. The article also gives a vivid detail of the company's activities in 2019 and 2020 for achieving Sustainable Development Goals by evaluation. Lastly, Mintzberg’s managerial role is discussed in the context of the aspired role in Kmart as a retail department manager. This section provides a transparent analysis of the roles a manager is required to execute in the specific job designation.