Discuss about the Global Business Management and Managing Diversity.
This study is focused on Australian Paper which is the only manufacturer of papers for office, packaging and printing purposes in Australia. The current headquarters of the company is situated at Melbourne in Australia. Australian Paper is operating its business for more than 100 years. The company was established in the year of 1895 and currently it is having near about 1300 employees (Australianpaper.com.au 2016).
The mission of the company is to produce and deliver sustainably produced paper, pulp and the packaging products to the customers. The vision statement of the company states that the company aims to provide the best practice in the world through continuous improvement. The management of the company is highly concentrated on the sustainability or sustainable development of the business. The economic contribution of the company as per the latest report is $754 million and 5928 full time jobs. The company is currently producing Olympic stationery products, Reflex copy paper, postpeed, Australian copy paper, Tudor envelop, Saxton and Tudor. The company is very concerned about the flexibility of line function and staff functions because the overall manufacturing process of the company depends on the flexibility of the line and staff functions (Australianpaper.com.au 2016).
The value chain system at Australian Paper is much improved and it contributes to a large extent in achieving the sustainability of the company. If the value chain system of the company is analyzed with the help of Porter’s Value Chain Model, then it can be identified that the company is very concerned about its support activities and primary activities (Peters et al. 2015). The company has applied the lean management technique for improving the inbound and out bound logistics. The application of lean management helped the organization to reduce the waste level and add extra value to the organizational system. The company has applied the advanced technologies in the operating process. This helps the company to involve less time in manufacturing 1 unit of product. Australian Paper has recruited highly skilled and experienced people in the marketing and sales department so that the marketing department can apply improved strategies to increase the customer base (Australianpaper.com.au 2016).
The infrastructure of the company is much advanced. The line function of the company follows a systematic way that starts from collecting the raw material from the suppliers and ends up by transferring the finished goods to the store. In each step there is a supervisor, who takes care of the process. The company applies 360 degree performance appraisal technique in every 6 months to improve the staff quality. The company also improves its technology on time-to-time basis (Australianpaper.com.au 2016).
At Australian Paper, currently three major issues have been identified. These three issues are – excess time in manufacturing per unit of paper, high cost in distribution, high labor cost (Australianpaper.com.au 2016). These three issues are affecting the current production system at Australian Paper. In order to solve the issues, the organization has adopted different strategies.
In order to solve the excess manufacturing time related issue, the company has appointed more skilled and experienced labor. The company has already adopted and applied the lean management strategy but it was lacking behind because of the low skilled labor in the basic manufacturing level (Othman 2016). Due to this, the process was involving excess time to produce one unit of paper. In comparison to the competitors in the international market, the manufacturing system of the company requires some improvement. However, to compete in the market the company has focused on the quality of the products. It purchases the raw materials from the best suppliers so that the quality can be maintained. In order to solve this particular issue, the company must verify the information related to the standard production time for producing one unit of paper and the standard cost for the process (Sutheewasinnon, Hoque and Nyamori 2015). These two information is very important while preparing the manufacturing budget.
The company has tried to solve the second issue that is high cost in distribution the company has taken the strategy to build new manufacturing units near the distribution stations. This strategy of the company will help the company in lowering down the distribution cost (Akhtar and Mittal 2015). If the company applies this particular strategy, then it can achieve cost advantage in the international market, which will help the company to get a better position in the market. In order to solve this problem, the management needs the information related to current cost of distribution and the expected cost of distribution if the company sets the manufacturing unit near the distribution stations (Chua, Lowe and Puxty 2015).
The third issue is high labor cost. In order to solve this issue the management has taken the strategy to purchase and use the machineries that can produce more quantity but requires less physical labor. If the company applies this strategy, then not only the labor cost will reduce but the total cost of the company will reduce also (Adekola and Sergi 2016). This will help the company to position itself at a better place in the market. However, for this the management will require the information related to the cost of the machineries and cost of the physical labor at the time of preparing the manufacturing budget.
Recently, at Australian Paper, some controlling issues have been found out. Among all other issues, two major issues are – shortage of raw materials in the stores, excessive inventory (Australianpaper.com.au 2016). In order to solve these two major issues, the management of the company has prepared different plans for these two different issues.
For the issue of shortage of raw materials in the stores, the management has planned to arrange for a meeting with the suppliers so that they can identify whether the suppliers are facing any problem in dealing with the company. Along with that, the management has also planned to investigate on the transporting process that goes on to bring the raw materials from suppliers to the stores of the company (Australianpaper.com.au 2016).
On the other side, in order to solve the second major controlling issue that is excessive inventory, the management has planned to improve the selling process. As per the plan, the company will recruit experienced marketing people so that the sales of the company can be increased (Australianpaper.com.au 2016). At the same time, the company will implement the strategy of providing special discount on certain amount of sales. The management believes that this will enhance the sales, which will ultimately reduce the inventory level.
The management of Australian Paper has used the balance scorecard technique to improve the performance management system within the company. The management has tried to improve the financial performance by decreasing the cost level and expanding the business in new areas in Australia (Baggio Czakon and Mariani 2015). The management has used the balance score card to improve the customer management system by implementing strategy of better CRM. The management has started to provide personalized services to the customers, so that the customers feel happy to deal with the company. In order to achieve the goal and managing the performance management system, improving the manufacturing and distribution process is very important (Kirton and Greene 2015). In order to improve the process through balance score card, the management has started to emphasize on the overall controlling and monitoring process (Wellin 2016). Thorough investigation is being done on the entire manufacturing and distribution process. The management has arranged for the training sessions for the performance improvement and learning of the employees. The management believes that improvement in the knowledge and performance of the employees will help in the growth of the company.
Decision-making is the most essential part of the business. In order to run a business successfully, the management needs to take several decisions like, decision related to production; decision related to business expansion, decision related to sales and many others (Sadgrove 2016). Below, two situations are described where Australian Paper needed to make decisions:
Australian Paper needs to raise its fund in order to improve its business operations further. However, identifying the proper source of fund raising is a matter of decision-making. The management of Australian Paper has analyzed the different external sources of finance during the decision-making process. At the same time, the management of the company has also analyzed the internal sources of finance. After analyzing the two types of sources of finance, the management takes the decision to raise fund from the external sources that is taking loan from the bank (Australianpaper.com.au 2016).
There is another situation, in which Australian Paper needed to make decision and that is expanding its business. In order to position itself at a better market place, the company needs to expand its business further. However, the management of the company needed to take decision, whether the international expansion will be fruitful for the company or not (Sadiq and Governatori 2015). The management has conducted the market survey to make the decision-making process easier. As per the market research or survey, the management decided to expand the business nationally because international business expansion requires more investment.
In the report, it has been identified that Australian Paper is trying to improve its value chain system. However, the company is facing several challenges or issues in operating its business and controlling the same. The labor cost and the distribution cost of the company are much higher and at the same time, the company is also facing issues in inventory management and there is lack of proper quantity of raw materials in the stores. However, the management is trying hard to solve the issues. The management has prepared some plans to solve the issues. The management has decided to conduct thorough investigation on the problematic matters and along with that; the management has used the balance scorecard technique to improve the performance of the company. However, the management of Australian Paper can consider the following recommendations to improve its business further:
Reference list:
Adekola, A. and Sergi, B.S., 2016. Global business management: A cross-cultural perspective. Routledge.
Akhtar, M. and Mittal, R.K., 2015. Implementation issues and their impact on strategic performance management system effectiveness–an empirical study of Indian oil industry. Measuring Business Excellence, 19(2), pp.71-82.
Australianpaper.com.au. 2016. Australian made sustainable paper – Australian Paper. [online] Available at: https://www.australianpaper.com.au/ [Accessed 7 Sep. 2016].
Baggio, R., Czakon, W. and Mariani, M.M. eds., 2016. Managing tourism in a changing world: issues and cases. Routledge.
Chua, W.F., Lowe, T. and Puxty, T. eds., 2015. Critical perspectives in management control. Springer.
Kirton, G. and Greene, A.M., 2015. The dynamics of managing diversity: A critical approach. Routledge.
Othman, S.N., 2016. The Value Chain of System of Rice Intensification (SRI) Organic Rice of Rural Farms in Kedah. International Journal of Supply Chain Management.
Peters, D., Low, J., Nyongesa, M., Quinn, S. and Parker, M., 2015. Sweetpotato value chain development in West Africa: matching products with farmer typology. Potato and sweetpotato in Africa: transforming the value chains for food and nutrition security, pp.498-507.
Sadgrove, K., 2016. The complete guide to business risk management. Routledge.
Sadiq, S. and Governatori, G., 2015. Managing regulatory compliance in business processes. In Handbook on Business Process Management 2 (pp. 265-288). Springer Berlin Heidelberg.
Sutheewasinnon, P., Hoque, Z. and Nyamori, R.O., 2015. Development of a performance management system in the Thailand public sector: Isomorphism and the role and strategies of institutional entrepreneurs.Critical Perspectives on Accounting.
Wellin, M., 2016. Managing the psychological contract: Using the personal deal to increase business performance. CRC Press.
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