Analysis of New Dawn Drilling Company

Analysis of New Dawn Drilling Company New Dawn Drilling (NDD) is a company focused on identifying, acquiring and exploring gold and platinum deposits. It is also a major player in underground drilling operations on South African land. The company currently has its operation spread over 6 towns in South Africa. This report is produced by carrying out investigative business analysis on NDD and its external environment to determine company position and ability to survive in the competitive mining sector of SA. The analysis will help in developing a long term strategic plan to improve the business of the NDD Company. The good reputation that NDD has developed in the market is used to develop a business strategy to make it a brand for drilling operations and developing a niche market for its drilling operations. The role of an information system in a business and how it can be used to coordinate the paper work, development process and efficient working of the regional offices is evaluated. Use case, activity and class diagrams are techniques used for modeling the information system. The assumptions made can be used to interpret the system in a number of different ways. 1.1 Introduction to Strategic Analysis tools NDD can use several TPI can use several analysis techniques to discover the potency of its business model, while examining the attributes of the business environment in which it operates. The techniques discussed below include SWOT, PESTEL and Porters Five Forces. SWOT (Strengths, weaknesses, opportunities, threats) analysis SWOT analysis is a business tool used to evaluate the companys position in the market and its ability to survive. It helps to predict the capability of the organization. The strengths and weaknesses deal with the internal facts and factors of the business. The opportunities and threats deal with the external factors of the organization. Exploiting the right opportunity and safeguarding against the analyzed threats can set a company apart from their competition. PEST analysis (Political, Economic, Socio-Cultural, and Technological) The PESTEL analyses are used to scan the external environment. The Pestle analysis factors are out of the businesses control as they are always subject to change. Still, they have a significant affect they have on companys performance. They help the businesses to take a pro-active approach and be ahead of these changes instead of hastily changing the products and processes. (Robert Mark Brown) Porters Five forces Porters 5 Forces can be best described by the following figure: Fig: Schematic diagram of Porters 5 forces. (Robert Mark Brown) They are used determine the, expected level of competitive intensity (Grà ¼nig and Kà ¼hn, 2008, chap 11.1). They analysis help to detect which are the dominant forces which can control the business. Using Porters five forces concurrently with SWOT analysis will add more depth to the analysis (Mind tools, 2010) 1.2 PESTle Analysis: PESTLE Analysis factors How does it affect NDD Potential Impact: Importance Political: 1.There is an increasing black unionism which has caused a significant change in South African politics leading to reforms in legislation. 2. The Government has employed policy reforms which allow foreign direct investment in Africa resulting in transfer of new technologies for exploration and drilling services, skills and production methods for efficient use of the mineral resource. 3. The government has introduced ABET (Adult basic education and Training) to improve the skills and literacy of the people. 4.The Management of Health and Safety at Work Regulations (1999) is been continuously updated by implementing more stringent rules making it more difficult for companies to adhere to them. (Rapidbi,2010) Employees of NDD are benefitted. NDD can contact foreign companies for partnerships. More skilled labour to hire from. Additional costs might have to be incurred Medium Medium Low High Important Critical Unknown Critical Economic 1. South Africa is in a recession leading to low long term interest rates. The economic crisis had led to reduced tariff, taxes and fiscal deficit. 2. The production of many big mining companies was halted due to accidents on site owing to reduced activity on the mining front. The gold and other prices also dropped owing to reduced growth. 3.Global recession has weakened the rand has led to South Africa becoming a competitive place to perform drilling operations for mining industry.(Robert Mark Brown) 4.The mining employers are investing and spending less as the banks have reduced the lending tightened their budgets because banks are controlling lending more strictly. 5. Presently, the drilling, exploration and any mining company for that matter has been faced to spend the 5 to 10% of their payroll in the skill and development programmes required for their perspective operations.(Rapidbi.,2010) Capital crunch Less Business to do. Increased rivalry Cant borrow Money for expansion. Reduced profits High High High Medium Medium Important Unknown Critical Important Important Socio-cultural 1.South African mining sector has lower levels of skilled employees than other sectors in the economy. But still they have strong mining culture which helps them produce new ideas. 2. South Africa has a large presence of HIV/Aids epidemic and is high amongst young SA population. The mining sector is the deeply hit industry as the labor required by them is mostly young as the work required is physically taxing and dangerous. 3.NDD has to keep in mind that when they expand their business locally or internationally they have to consider the local preferred way of living and doing things. 4.South Africa has growing ethnic, cultural and gender diversity leading to new opportunities as well as challenges.(Rapidbi,2010) Labour with Strong mining background. Deal with discrimination which is bound to happen. Carrying out extensive research of demographic where they enter. Management Challenges Medium High High Medium Important Critical Important Critical Technological 1. Alternative cheaper and inexpensive sample retrieval techniques other than diamond drilling can be used ex.RVC Drilling 2. The implementation of information systems to the mining companies has helped them to mine site production reporting and accounting. It also helps them to calculate their raw material requirements and helps in creating wok purchase orders. 3. South Africa has a huge science base invested in improving Mining operations. They are continuously pushing the boundaries to automate most of the processes involved. It would help the companies to reduce labor cost. 4. The lack of investment in Research and innovation in the Mining sector has generally contributed to lower levels of operational productivity compared to its strong global competitors like China and Australia.(Robert Mark Brown) Considerably reduce operation costs. Help manage Paper work efficiently. This can help reduce the labour costs Due to this NDD cannot compete with the inter-national local big players High High High Medium Critical Important Unknown Unknown 1.3 Porters Five Forces: Threat of New Entry It is unlikely that there is a threat of new entry as the capital required to set up a business similar to NDD is quite high. This can only be afforded by companies with huge balance sheets and strong set of contacts. The industry is highly regulated which makes it difficult to enter. Few, but not all, exploration and drilling companies have established co-operation with mining companies to remain in business and these contracts are not easily awarded Competitive Rivalry: There are 25 local competitors of which few have thrice the turnover of NDD. This shows that NDD is a small/medium player in a saturated market. As the South African rand has weakened the mining operation have been slowed down resulting in increased competition to land the existing few projects. and will not be able to benefit from the economies of scale of the larger mining sector. Some local rivals have partnerships and acquisitions with the larger mining groups based locally or internationally. The companies cannot win the contracts by keeping their prices low as the cost of materials is going to increase due to recession. Bargaining power of Buyer: The negotiation strength of the customers is high because, for example, a gold mining company will try to merge with its larger counterpart involved in gold, diamond, platinum, etc and this may offer us to have a larger share of the market. Though switching from one buyer to another is difficult NDD can be able to exercise its market power. Threat of Substitution The threat of substitution is a harsh reality NDD has to face. But the organizations out there which might perform operations similar to that of NDD are substantial but limited. There are no new companies entering so the threat of substitution tends to be low. Bargaining power of Supplier: The bargaining power of the supplier will be high. Drilling operations are going to remain consistent and they are going to need materials from suppliers. Due to the current economic conditions it has lead to prices rise and inflation which have made prices of the commodities required a bit unaffordable (oils, grease).This has threatened the supply-chain relationship. 1.4 SWOT Analysis (Intelligence Phase) Strengths 1. NDD is a company targeting copper, gold and platinum metal ores in Orkney, Randoftein, etc which the rich mineral belts of South Africa are. 2. It has a consistent underground drilling business which will continue to be as the companies are obliged to carry out core sampling for safety reasons. (New Dawn Drilling, 2010) 3. Their management team is good competent, experienced and have set of technical expertise. (New Dawn Drilling, 2010) 4. Surface exploration lends itself well to a high degree of automation which can help reduce labor cost and improve production rates. 5. South Africa is a low risk sovereign country.NDD has focused its exploration and drilling operations only in South Africa which is justified by the past economic global events. 6. Amalgamation of the orders at the central offices enables the company to buy at cheaper rates from suppliers. (New Dawn Drilling, 2010) Weaknesses 1 The exploration business is extremely sensitive so it requires a strategic business plan to survive and flourish.NDD does not have any sort of plan if they were going to lose a significant amount of business. 2. In the current situation, NDD cannot track whether excessive replacements of parts are taking place at certain project sites. 3. NDD has poor communication channels. The absence of centralized management system restricts the main office from accessing information in real time. They have to wait for the regional sites to compile the information and mail it to them. 4. NDD is dependent entirely on its underground drilling operations for profit as surface drilling business is merely making a profit. 5. NDD has not yet ventured into the mining sectors internationally. (Helix Resources Limited, 2010) Opportunities 1. South Africa has been long involved in mining and it has a promising geological setting for other minerals. They can start applying for projects which include exploring and drilling for minerals like nickel, Rare earth elements (Rees), etc. 2. To enter into international markets preferably starting from the African neighbors. 3. The current shortage of high quality deposits has caused a huge market interest in new exploration activities. This can be a great opportunity to rope in a few extra projects from companies. 4. Opportunity to merge with other companies in the mining industry, to benefit from shared knowledge, economies of scale and offer more services like competitors. 5. NDDs major chances of success lie in proving a reserve. This can be achieved by implementing latest or alternate drilling and exploration techniques. 7. NDD can use farm-in-opportunities in regions which they think have potential for copper, gold or any other mineral. 8. A new employee shift system can be implanted to ensure drilling operations at non- peak times. (New Dawn Drilling, 2010) Threats 1. Exploration is inherently a risky business as it is very difficult to predict and only handful of exploration operations turn into production. 2. Regulatory risk- If any changes happen to the health and safety rules or environmental laws and regulations, it would result in company bearing additional costs. 3. Challenges from local and foreign companies performing the similar services are high. 4. Over reliance on technology The PCs at the project sites will be linked to the server at Johannesburg for access to the application software and database. So if the system is down it can bring the working of the business to halt. It is critical that the servers are running for the activity based costing system to function efficiently since the business is based in two geographical locations. (New Dawn Drilling, 2010) 1.5 Conclusion of the strategic analysis techniques The strategic analysis from the SWOT, PEST and Porters five forces indicate that the strengths of the company are outweighed by its weaknesses and threats. The business which the company is operating is very sensitive and strategic analysis of NDD helps us to conclude that the existing business policy will not help it to survive in the long term. The opportunities presented to NDD through the SWOT analysis suggest how the business could target a specific segment in the market, rather than the mass market which is saturated as overseas manufacturers enter the industry in the UK. A major strength of NDD is the reputation and a small but strong foothold in the gold and platinum ore bodies of mining industry. This opportunity can be exploited to the fullest by branding itself and using a the existing projects as a leeway to obtain new projects in the other mineral ore bodies like nickel or even the rare earth metals (REEs).NDD has a good working relationship with its mining employers and it is possible that the company can use this strength to carry out Research Development to implement new and latest drilling and exploration technologies. This might also help in finding and serving a gap in the current drilling services provided by the companies if it exists. (Helix Resources Limited, 2010)(Fin Metal Mining Ltd, 2010) The greatest weakness of NDD is a fact that it is a small player in a competitive South African mining industry dominated by larger organizations and also will not be able to compete on cost with their Asian counterparts.NDD needs to implement a management information system and streamline its operations so that it can track the cost of drilling, keep a record of excessive replacement of costly parts and identify operations where costs are exceeding the income. The Management information system being implemented in the form of an activity based costing system can help to carry out the price fixing exercise with the mining companies. 1.6 Five year Business plan: The draft of the five year business plan for NDD is developed on the basis of the conclusion of the strategic analysis of NDD using PESTEL, Porters Five Forces and SWOT. In the current situation NDD does not have any Strategic plan and their business is hugely sensitive depending upon the local and global market events. If NDD were to lose their current share of business they would have no way forward. Therefore, NDD needs to weigh its options locally as well as internationally as there are other countries too those are involved in mining. Branding, though quite rarely used in mining industry it is becoming an upcoming trend for companies to differentiate themselves from their rivals. They can concentrate on a particular market; make changes to their employee work pattern and their business plan for the future 1.6.1 SWOT-Design Phase: Weaknesses 1. They dont have a system in place to estimate correct contract rates. Even if slight changes occur in the contract rates they seriously impact the income stream. 2. NDD is relatively a small/medium player with a turnover of up to 20 million dollars. NDD cannot have the same level of resources that are available to their big competitors Strengths They can keep focusing on gold as it is a flourishing business. 2. The company has a healthy pipeline of projects in hand with in minerals ranging from gold, copper and platinum spread over six geographically different areas. 3. The annual price fixing of the contract enables the company to assess its variable costs in relation to the existing economic conditions. Opportunities NDD can brand itself for operations they are currently performing. They can implement Management information system to track materials and calculate contract pricing. They can enter the stock market making the private business public. . A new employee shift system can be implanted to ensure drilling operations at non- peak times. Threats 1. Economic Factors: interest rates, political decisions, inflation al affect the mining industry very badly. 2. Lack of Skilled workers Although the number of people entering the mining sector is high in SA, many lack the specialist skills required to carry out specific operations. 1.6.2 Using Branding as Business Strategy: NDD already has a reputed name as it is involved in projects spread over six geographically different towns in SA. This means that company can use some form of marketing strategies to establish itself as a brand in the services and operations they are performing. For branding NDD needs to consider two basic strategies. The first is to be different from the others and stress on the distinctive feature that NDD offers when it is employed by the organization. Every employer is willing to consider something different which is profitable for them. This can be a different work roster or an innovative system to perform operations required. The second will be to put through the NDDs vision, values and culture. While doing this if we stumble upon that a certain aspect of the company is not worth publicizing then we can always focus on the strengths we have derived from the SWOT analysis. This is a long term solution which will make the Company competitive as it will take some time for mining employers to develop confidence in them. Also, an important advantage is the fact that the amount of resources required for branding an organization go on decreasing with time as more and more Companies start noticing. (Helix Resources Limited,2010)( Fin Metal Min ing Ltd,2010) 1.6.3 Targeting a Niche Sector in Mining Sector; NDD is currently working on 9 shafts related to gold. This can use as an advantage by NDD by targeting all the gold shaft related projects. Most of the companies are focused on platinum markets which can help NDD reduce some of the perceived threats to its business by targeting the gold market. The mining sector is becoming increasingly competitive and there any many big multi-nationals out there ready to put small/medium industries out of business.NDD can use the contacts from the existing gold mining employers to farther there ambition. They can even enter into partnerships with their current employers and sign future gold shaft contracts and ensuring a stability of income to their business. Due to NDDs previous and present track record the companies might consider entering into partnership. Even though there have been global recession, the gold production and mining hasnt been affected badly. They can also venture into international markets for gold related projects. They can star t with applying for contracts in Zimbabwe and Tanzania which are also rich for gold deposits and less competitive than South Africa.NDD compared to other companies in these countries can be termed as Medium/Big player which help give them an advantage. The labor and operating costs will also be low compared to SA. Thus targeting gold related operations can prove to be a huge safety net in these uncertain times. Though it cant be neglected that the Pestle analysis are going to dictate the income and pricing for the contracts. (Fin Metal Mining Ltd. 2010) (Otjihase and Matchless Mines). 1.6.4 Operating Strategic plan For NDD: NDD can focus their existing strategy on the finding out near surface targets for gold (niche) or the other two minerals they are operating. This will allow them to perform underground drilling operations on surfaces which are suitable for open cut mining operations. This focus on areas which have a rich history for previous success, for example, targeting projects in areas of Kimberley Reef group will keep the income cash flow constant in these current economic conditions. (Otjihase and Matchless Mines). NDD can also enter into drilling projects for minerals other than gold, platinum, copper .NDD can try uranium, nickel or the Rare earth elements (Rees).For uranium they can focus on exploring areas like Gauteng in Witwatersrand basin which are rich in content ensuring underground drilling operations to be performed on them for the mining employers to start their mining production. Similarly for Nickel which is even easier as Phalborawa where they are currently operating are rich in Nickel deposits. They can acquire projects related to them as they are already well-known in that area. They can NDD can prioritize their accepting of surface exploration projects in the following sequence: In areas requiring near surface exploration with mineralization targets not more than 70 m below which are extremely high potential for Mining operations. Targeting areas which have a mining history Areas which have not been mined previously but seem to have potential for underground mining They can also undertake projects from companies which require refurbishment for their shafts. The refurbishment for the shafts will include an underground drill program to take rock sample from the shafts and perform tests on them. This will allow the mining companies to help estimate the amount of mineralization left in the foots or hanging walls of these shafts. These contracts will not require any new technologies and investment from NDD as it is already doing it for its current employers in some way. This can be a way to expand their business. (Exploration Strategy, 2010) (Otjihase and Matchless Mines). 1.6.5 Alternative operating technique: NDD can also try out a different operating strategy for underground Drilling. At present, Diamond drilling is used for retrieving core samples which is expensive and time consuming. Instead of this, NDD can implement RVC drilling which give small rock samples instead of a solid core which are easier to look under microscope. Figure: Rvc Drilliing (Delta Mine training center, 2010) RVC drilling requires a bit larger equipment but it has high rate of penetration and low cost per foot. This makes it faster and inexpensive than diamond drilling. This can help NDD reduce its operational costs. (Trevor Fletcher) (Otjihase and Matchless Mines). 1.6.6 Going Public: The other strategy NDD can adopt is making the private company go public. This will help it enter the South African stock exchange where people can buy NDDs Shares. This will also automatically serve as a purpose of branding as it will help the company get noticed. This will also help them to get international recognizition.They can enter into partnerships with the foreign companies which are looking to invest in Africa due to new FDI Policy implemented by South African government. This can serve as an opportunity for NDD to get projects locally as well as internationally. 1.6.7 Employee shift system: At present the company operations on site are carried out 7 days a week and 3 x 8 hour shift basis. This can be replaced by be 2 x 10 hour shift on a continuous basis. Often the drill started on one shift ends on anothers shift. This can sometimes cause delays. New shifts will minimize these chances and also save time. The overtime will be calculated above the set 10 hours reducing the costs incurred by the company. This will also help in decreasing the non-productive hours. (Shift Schedules, 2010) (Otjihase and Matchless Mines) 1.6.7 Role of the director managing the future: NDD cannot change its operating strategies overnight. It will require a step-by-step process form the management personality (1 director) which is experienced and has a proven field experience. He will also play a major role in evaluating pricing for tenders, contracts and acquiring the projects. The employees are going to face a lot of social difficulties while trying to operate with new information systems at offices and also new operating techniques on site. Therefore, the management has to solve the problems on site or the glitches in the information systems by appointing people for that purposes. Later, when the plans work he has to dedicate funds for their maintenance and continuous improvements. He will have to combine the top officials from NDDs regional offices and work together for better future of the company. 1.6.8 Legal Factors to be considered: The stringent health and safety rules mean that NDD will face legal challenges to make sure the company and staff have been vetted by the government and have obtained a level of safety clearance deemed fit to carry out its drilling operations.. The company must follow The Management of Health and Safety at Work Regulations (1999)which stated that the work equipment should comply with the strict and complex safety control procedures necessary for mine related operations. They must also have evacuation methods in place in case a catastrophe occurs. The business of the NDD is susceptible to a number of risks and hazards which involve labor disputes, on-site accidents, unforeseen geological and environmental conditions, cave-ins or even earthquakes for that matter. This can cause damage to the company equipments, properties or even death of the employees which can get the company into a legal mess. Therefore, NDD must have an insurance policy to cover itself if these calamities were to o ccur.. Companies providing insurances for mining industry generally at high premium costs. Losses from these events might be difficult to recover from for NDD so they need to have them even though it is not on their terms. Chapter 2 2 a) Use case Diagram: 2 b) Class Diagram: Class Diagrams: Activity Diagram: 2 c) Activity Diagram: 2 d) Architecture of the Information System: The Johannesburg office has a server and 2 computers which are connected using a switch. This switch is used to create 2 subnets of which one contains the server while the other contains 2 pcs. This will assist in management and maintenance of the information systems and also help in future expansion. The switch is connected to the router which is in turn connected to the internet through a firewall. This firewall will protect the internal network and also handle the VPN connections from the regional offices.The regional offices will use local internet providers to connect to the internet. This will be much cheaper and flexible than having private dedicated lines from the regional offices to the main office. Network connections: An Ethernet cable is used to connection between the PCs and the router and the router and the server is carried out using an Ethernet cable. All pc at the regional offices will have internet connection so that they are connected to the server in Johannesburg. As a security measure firewall will be placed between the internet connection and the server. Barcode readers will be made mobile by connecting them to the pc using a wireless connection.. Virtual private networks (VPN) will be used over the network connection for the pcs to communicate with the server in Johannesburg (Beynon-Davies) Software required Windows NT is used as the operating system and server software. The software will have applications such as purchasing, word processing, activity based costing system, and stock control .The pcs at regional offices will have installed the windows operating system and must log in to the server to use the applications. Pcs will be equipped with software linked to the server for barcode reading procedures. (Beynon-Davies) Security A firewall is in place to stop any unauthorized access. There is log in system available on each pc to restrict it to only employees of the company.VPNs are used by the regional offices to connect to the Johannesburg server over any other unsecured network connection. (Beynon-Davies) Chapter 3 Conclusion The report gives a wide perspective by carrying out analysis of NDD and how developing and implementing a strategic business plan can help the NDDs business to survive and grow in a competitive environment. It is extremely vital to understand that decisions made using the strategic analysis techniques are based on assumptions for, e.g. will the investment be made by the company venture into international markets, or will they invest in the equipments necessary for exploring minerals ore bodies other than gold, copper and platinum, train its employees for this purpose and also finding and providing drilling services which are yet not out there in the maket.NDD must also be willing to spend to buy new automated drilling machines if they are available or invest in automating their existing machines NDD must understand that the analysis techniques have their limitations and realize that committing itself to sudden change by undertaking projects for different minerals or REEs might be risky, although the risk can be well afforded as it is likely that if the business continues to function as it is of now it would be pushed out of the mining sector by local and overseas competitors entering the South African mining industry. Moving into exploring and drilling for other mineral ores such as nickel,REEs,etc or expanding into foreign markets can have their share of threats as it is likely that there are specific companies who will have built a great deal of experience in the field and have long term strategic contracts with their customers. New players like NDD, may be ignored by customers in the international or local untried mineral markets because they may be perceived to not have the necessary skills to serve the industry

De Las Casas

In Bartolome De Las Casas’s â€Å"from The Very Brief Relation of the Devastation of the Indies† a lot of descriptive verbiage is utilized to paint a distinct picture of good vs. evil in an unjust world. Referencing the Spaniards as Christians is done with a great deal of anger, and sarcasm. These Spaniards performed many acts of evil as they brutally tortured, killed, and enslaved the Native American peoples.According to De Las Casas â€Å"they attacked the towns and spared neither the children nor the aged nor pregnant women nor women in childbed, not only stabbing them and dismembering them but cutting them to pieces as dealing with sheep in a slaughter house†. (40) This was such a gruesome, cruel, and violent act of murder, without regard to even those we view as pure innocence such as that of a child.This provokes the reader to feel an intense sorrow and heartache for these innocent Native Americans. De Las Casas portrays the Native American people as innoce nt, gentle prey to the Spaniards, thus referring to them as â€Å"sheep. † They were deemed weak in their efforts to fight back, and they were unable to seek refuge in the mountains where they tried to flee. This piece incorporates multiple biblical representations throughout as well.The â€Å"sheep† biblically represent the followers of Christ, and they are submissive followers with little to no resistance like that of the Native American peoples. However, the so-called Christian Spaniards acted like ravenous, greedy animals rather than human Christ like leaders. De Las Casas, Bartolome â€Å"from The Very Brief Relation of the Devastation of the Indies. † The Norton Anthology of American Literature 8th ed. Ed Nina Baym et al. Vol. A. New York: Norton, 2012. 38-42.

Prp Theories

HUMAN RESOUCE MANAGEMENT CONTENTS 1. Introduction1 2. Literature review2 2. 1Emergence of PRP2 2. 2Concept of PRP3 2. 3Relevant theories of PRP4 2. 3. 1Maslow’s hierarchy of needs & Herzberg’s motivational theory4 2. 3. 2Equity theory in PRP5 3. Case study6 3. 1Case one: â€Å"Why Do Companies Use Performance-Related Pay for Their Executive Directors? † (Bender, 2004)6 3. 2Case two: â€Å"Evaluating performance-related pay for managers in the National Health Service† (Dowling & Richardson, 1997)9 4. Analysis and Evaluation of PRP Theory in Business Organisations11 4. 1Comparison11 4. Contrast12 4. 3Performance related pay theory in business organizations13 4. 3. 1Motivates employees and improve their performance14 4. 3. 2Facilitates change to organizational cultural14 4. 3. 3Encourages the internalization of performance norms15 4. 4Problems of PRP in practice15 4. 4. 1Setting performance objectives16 4. 4. 2Assessment and ratings17 4. 4. 3Reward17 5. Concl usion18 Reference19 Appendices21 1. Introduction Nowadays, Human Resource Management has become a strategic and coherent approach more than just managing the competencies and skills of employees in an organization. Armstrong (2002) noticed that HRM is much more focus on people not jobs, and so does business organization (Lewis, 1998). Yet, people have been placed as an important role of business. To this extent, this essay will take a critical look at PRP which is based on people, and also considered as an essential and sensitive part of the HRM in organizations today. The paper starts with a brief review of recent literature which reports studies of PRP systems. It continues with describing two case studies related to the practical discrepancy to PRP theories. It goes on to our own independent critical analysis by comparing the PRP theories and practice in real world. Finally, there are conclusions being drawn about the appropriateness of PRP in a research environment. 2. Literature review 2. 1 Emergence of PRP Performance-related pay (PRP) emerged in the early 1980’s which attempts to relate individual performance at work to reward, aiming to motivate people ad develop performance-oriented cultures. Besides business organisations, some public institutions such as governments and universities also adopt PRP as an essential level for championing values. By comparing with other payment schemes, the PRP idea was whole-heartedly accepted by employers and played a much more positive effect on improving employees’ behaviour and organisations’ culture. According to the IPD research into performance management practices in 1997, 43 per cent of respondents had PRP; additionally, IBS research in 1998 showed that 61 per cent of answers satisfied their merit pay. These figures make it easy to see that PRP have been widely applied among organizations whatever businesslike or public facility (Armstrong, 2002). There are a variety of reasons why organization may applied PRP. Armstrong and Murlis (1994) stated that ‘it is right and proper for people to be rewarded in accordance with their contribution’. According to Pilbeam & Colbridge (2002), there are a number of factors contributing to the emergence of PRP, which is identified in Figure 1. The Thatcher legacy and ‘enterprise’ values in the public sector Increasingly competitive environment and concern with employee performance Unitary and neo-unitary employment relations perspectives Reassertion of the ‘right to manage’ and increasing managerial control Influence of HRM demagogy & Strategic integration of reward Trends towards individualism and the weakening of collectivism Emergence of PRP Figure 1: Factors contributing to the emergence of PRP (Pilbeam & Corbridge, 2002) 2. 2 Concept of PRP ACAS (1990) defined individual performance-related pay (PRP) as â€Å"a method of payment where an individual employee receives increases in pay based wholly or partly on the regular and systematic assessment of job performance†. Additionally, Murlis (1996) claimed a significant distinction between the use of PRP to managing performance straight from the motivational stimulation of financial rewards (motivation) and the use of PRP to identify different levels of performance (reward). Based on these points, PRP can be commented as a combination of three key factors: motivation, performance and rewards, which work in two ways that motivating people to achieve expected performance; and rewarding these people who have achieved successful performance. Based on these three factors and their relationships, Pilbeam and Corbridge (2002) identified three stages for PRP application: Firstly, setting individual performance criteria by imposition, discussion or agreement firstly; secondly, assessing performance against individual performance criteria which established in stage1; thirdly, allocating pay to the assessment of performance by the exercise of managerial prerogative. 2. 3 Relevant theories of PRP 3. 2 2. 3. 1 Maslow’s hierarchy of needs & Herzberg’s motivational theory in PRP Maslow’s (1943, 1987) hierarchy of needs and the two factor theory of Herzberg (1959) indicated that pay can be considered as the most effective way to satisfy human’s need and further to motivate people to work more effectively, which means appropriate payment can stimulate employee to achieve successful performance that maximizing organisation’s benefits. Kessler and Purcell (1922) noted that employees will be easily motivated if there is a direct and close relationship between performance and reward. Therefore, PRP schemes could motivate the employees to increase their efforts to accomplish good performance. 2. 3. 2 Equity theory in PRP The Equity theory of Adams (1965) identified that employees have a strong need to be treated fairly which can be balanced by an equity between their input like work performance and output like rewarding. Compared to other types of pay like non-incentive pay which is based on collectively-negotiated rule, PRP associates employees’ productivity with their behaviour, rewarding employees for their successful performance, which is much more fair and reasonable. From these theories, we can see that PRP has brought a lot of potential benefits on improving HRM efficiency of organization. However, there are some shortages in PRP application in practice, which will be discussed in following two empirical case analyses. 3. Case study 3. Case one: â€Å"Why Do Companies Use Performance-Related Pay for Their Executive Directors? † (Bender, 2004) The paper focused on the issue of rewards to the listed companies’ executive director. There are variable ways to pay the rewards. Thus the performance-related pay introduced to this paper. At the beginning of this paper prior research introduces three types of theory to explain why companies use performance-related pay: agency theory , motivation theories (expectancy, equity), and institutional and legitimacy theories. Research designing utilized 12 companies’ interviews with 35 persons who stand in different positions. These interviews lasted for two years from December 2001 to May 2003. The interviews reflected different opinions about the influence of PRP. Some of the answers demonstrated PRP could motivate people to do work well: Alan Wilson, chief executive of Skandia UK regarded pay as a motivator; a HR director thought if everyone was paid the same base salary, they would always do the same. But a part of the respondents denied that PRP made an effort in motivating people in the work. A CEO argued that whether PRP works depends on which market you were in and also on when the people were on flat salaries. Also another respondent held a neutral idea on motivation of PRP to managers. A CEO categorized his employees into two types: one type chased money and the other worked for vocational interests and he realized that PRP was in a position to exert influence on those who chased money and not on employees worked for vocational interests. At the end of this part the author reaches the conclusion that lack of money is a de-motivator. Furthermore, interviews demonstrated some different ideas: a) Payment represents personal value of employees. The more contribution you have made, the more you can earn; b) Focus and fairness: according to the answers from interviewees, we can find that the company adopts PRP with the intention to make executives focus on their work efforts and fairness can improve employees’ performance; c) The need to provide alignment: here is a large number of factors influence performance in long-term and some of those cannot be observed currently; d) Other reasons to introduce performance-related pay: the requirement of government to adopt PRP and because of everybody has it so you has to have it; e) Problems with performance-related pay: a consultant pointed out that PRP system would bring unpredictable problems especially in long-term and it is difficult to select appropriate measure and tar gets. Market Practices Need for Legitimacy Need to Attract and Retain Implement a performance-related reward scheme Set performance measures and targets and use it to communicate strategy Directors’ actions and behaviours Business performance Performance-related award Monetary award Increased human capital for future negotiations Effect on individual’s self worth Figure 2: Why Companies use performance-related pay (Bender, 2004) In the final part, the author summarizes this case study according to three theories mentioned at the beginning of our description and draws figure 1 to show why companies performance-related pay. . 2 Case two: â€Å"Evaluating performance-related pay for managers in the National Health Service† (Dowling & Richardson, 1997) This paper includes 4 sections. Section 1 explains the NHS system which means the performance related pay system for general management in 1989. Section 2 concludes the evaluation criteria and explanatory framework. PRP is introduced on the initiative of management. According to Cannel a nd Wood’s survey, PRP could be introduced to overcome problems with existing systems, o encourage employees’ motivation, to improve communication with work force, to reduce problems of recruitment. Kessler suggested that the PRP might also be used to improve the fairness of a payment system, to reduce union influence and the importance of collective bargaining, can also give additional influence to line managers. The purpose of PRP is said to reward those manage who achieve a more than competent standard of work and motivate managers to perform better. Section 3 values the efficiency of the scheme and four measures are utilized to check the outcome of the scheme. Managers had to be assessed by their supervisors and receive reward based on their performance if they had finished targets set at the beginning of the year. In NHS, the HR department designed the PRP system in order to motivate managers. However, through self-reported data from the managers covered by the PRP system, a majority of respondents saw the scheme as having little or no effect on their motivation to do their jobs well. Also the authors did not found solid evidence to show that there are corresponding negative consequences of PRP. The initial examination of the raw data clearly suggests that the three elements of the scheme achieved different degrees of success. The objective-setting elements seemed to be widely supported. It could be observed that the scheme's rewards were either not appropriate or not sufficiently attractive to act as a motivator. PRP include the way in which performance standards are set and monitored. Section 4 explains the effects of PRP in the NHS. About 85% respondents showed satisfaction with the objective –setting process. Furthermore, they also agreed that the challenge offered by the objective measures increase their determination to achieve their goal set before. On the other hand, there was also much critical comment on reward system such as subjectivity and appraiser bias. In addition, the PRP reward system was always cash limited. 4. Analysis and Evaluation of PRP Theory in Business Organisations 2 3 4. 1 Comparison Both of the two cases are involved in the topic of PRP, and focus on the effectiveness of PRP scheme. In addition, both of the researches partly agree that PRP is successful in some areas or in some extend, however, PRP is still not a perfect scheme due to various reasons. As what has been pointed out to be the problems in PRP, among all of the reasons mentioned in the papers, the objective-setting process has been pointed out in both of the researches, which indicates that this might be one of the key points which should be considered to improve PRP scheme. What is more, both of the papers mention that PRP is introduced in order to â€Å"attract and retain executives with the potential of large earnings†(Bender, 2004) and â€Å"to improve the fairness of a payment system, to generate employee commitment† (Dowling and Richardson, 1997), which can be considered as the positive points of PRP. 4. 2 Contrast The methods used in the research in the two cases are different. The case about PRP in the National Health Service used both quantitative and qualitative date from a questionnaire survey (Dowling and Richardson, 1997). While, the case conducted by Bender (2004) used qualitative date from an interview survey. Moreover, the perspectives used in the two papers also vary. As to the reasons why PRP is not more successful, Dowling and Richardson (1997) consider that there are three kinds of employees as being particularly important: firstly, those who think that the objective-setting process of PRP is coped with terribly; secondly, those who think the assessments are handled badly; lastly, those who believe that the rewards are not attractive enough to encourage their motivation. They hold the opinion that PRP has a less important influence on these people, which indicates that the improvement of objective-setting process, assessments and rewards might lead to improving the effect of PRP. While, the paper conducted by Bender (2004) indicates that the reason that PRP is not so successful is also related to the market in which directors are. Besides, salary and rewards are not the only recourses that could motivate managers. For instance, leisure can also play a significant role in the performance of managers. Additionally, PRP scheme has less important impact on those people who mainly work for vocational interests. Meanwhile, this paper (Bender, 2004) pays more attention to the reasons that PRP is used by companies. The writer points out some more reasons from interviews with directors other than the strong points of PRP which have been mentioned above. To be exactly, pay can be deemed as a symbol of worth and how much one can earn is associated with the self esteem for the executives. In the end, we can see from the two papers that PRP has developed successfully from 1997 to 2004 because what are reflected in the papers shows us that PRP has been used much more and been recognized in a wider range. As a result, we can conclude that with the use of PRP, this scheme has become and also will become more and more mature and contribute a lot to business organizations. 4. 3 Performance related pay theory in business organizations This section conducts analysis of two empirical cases critically and assesses the value of PRP theory and benefits it achieves in business organizations. The whole objective of pay related systems like the PRP and other HRM theories is obviously to bring or add to the value of business organizations. When we take a look at the first paper, it is obvious that on the average PRP increases an organization’s value. The following are the perceived benefits of the PRP theory: 4 5. 1 5. 2 5. 3 5. 4. 1 Motivates employees and improve their performance The human needs hierarchy theory of Maslow (1943, 1987) and the two factors theory of Herzberg (1959) indicate that in modern society satisfying human needs like payment is in a position to motivate people to work harder. Furthermore, in business organisations payment related to performance can stimulate people to accomplish the performance that organizations want. Kessler and Purcell (1992) claimed that if direct relationship exists between effort, performance and reward, employees would be motivated. PRP schemes act exactly as this direct link motivating the employees to increase their efforts. 5. 4. 2 Facilitates change to organizational cultural Kessler and Purcell (1992) argued that PRP refers to flexibility, dynamism, entrepreneurial spirit and careful allocation of resources, leading to a performance-orientated culture. Therefore, the introduction of PRP facilitates change in business organizations culture from collectively negotiated formula to individual contribution, which assists in solving problems, increasing value of organizations, and reducing problems of recruitment and retention. 5. 4. Encourages the internalization of performance norms â€Å"PRP can encourage the internalization of the organisation’s goal or norms of behaviour among the employees of the organization† (Geary, 1992). In the implementation of PRP, the organisation’s norms of behaviour can be enhanced by rewarding congruous work effects and by punishing incongruous performance. Th ereby, it strengthens management control and clarifies job roles within organizations. 5. 4 Problems of PRP in practice Theoretically, PRP can produce many benefits for organizations, which have been demonstrated above. However, there are always gaps between theories and practice of PRP. In this part data from the NHS case will be utilized to illustrate some problems of PRP. Figure 3 above shows that only 2 percent respondents consider PRP as the motivator for them to work harder while respondents with opposite idea accounts for 45 percent. Also 67 percent respondents embrace neutral idea on the question of whether PRP scheme affect motivation to do the job and 77 percent respondents did not feel more co-operation after the introduction of PRP scheme. Question| Negative Positive| Does PRP have effect on your motivation to do the job well? 2| 3| 67| 25| 4| You consciously work harder because of the PRP scheme. | 45| 26| 17| 10| 2| You focus on PRP objectives rather than other activities. | 34| 34| 20| 10| 2| PRP changes co-operation level among colleagues| 2| 12| 77| 8| 1| Figure 3: PRP in the National Health Service (Dowling and Richardson, 1997) 5. 5. 4 Setting performance objectives It is essential for organizations to set up clear and measurable objectives so that the behaviour of employees can be guided by objectives. However, imposition and narrowness of PRP in objective-setting could lead to failure of the implementation. What’s more, short term approach stemming from narrow and misleading objectives could make employees ignore intangible aspects and long-term tasks. Therefore, the weakness of PRP in objective-setting could discourage behaviour that is not financially rewarded and prevent business organizations from functioning well. 5. 5. 5 Assessment and ratings Assessment and ratings are indispensable stage of PRP system. In practice, two crucial elements during these processes, scales of ratings and fair appraisals made by managers are difficult to achieved, which make employees not satisfied with ratings given to them. As Belfield and Marsden (2002) argued that the use of PRP will do more harm than good if the right monitoring environment is not in place. 5. 5. 6 Reward PRP regards reward as the motivator for employees to work hard, which is often not the case in practice. Maslow’s theory of the Hierarchy of Needs (1943) stated that payment is not the only need of human beings. Besides payment, people also have mental requirements such as belongingness needs, esteem needs and self-actualization. 5. Conclusion After critical analysis and assessment we can finally reach the conclusion that in theory PRP is in a position to provide business organizations certain benefits such as motivating employees, improving their performance, attracting executives, facilitating change in organizational culture and encouraging the internalization of performance norms. However, due to imposition and narrowness in objective-setting, unfairness and inaccuracy in assessment and ratings, and diversification of human needs, theoretical benefits of PRP cannot be reached. Therefore, more attention should be paid on the gap between HRM theories and their application in practice so that HRM theories can assist business organizations in increasing their values. Reference ACAS, 1990. Appraisal-related Pay. London: ACAS. Adams, J. S. , 1965. Inequity in social exchange. In: Berkowitz, L. ed. , Advances in experimental social psychology. New York: Academic Press, 267-299. Armstrong, M. , 2002. Employee reward. 3rd ed. London: Chartered Institute of Personnel and Development. Armstrong, M. ; Murlis, H. , 1994. Reward Management, London: Kogan Page. Belfield, R. ; Marsden, D. , 2002. Matchmaking: the influence of monitoring environments on the effectiveness of performance pay systems. Centre for Economic Performance, London School of Economics and Political Science, London, UK. Bender, R. , 2004. Why Do Companies Use Performance-Related Pay for Their Executive Directors? Corporate Government, 12(4), pp. 521-533. Dowling, B. ; Richardson, R. , 1997. Evaluating performance-related pay for managers in the National Health Service. The Intematioruil Joumal of Human Resource Management, 8(3), pp. 348-366. Herzberg, F. , 1959. The Motivation to work, New York: John Wiley. Geary, J. F. , 1992. Pay, control and commitment: linking appraisal and reward. Human Resource Management Journal, 2(4), pp. 36-54. Kessler, I. ; Purcell, J. , 1992. Performance-related pay: objectives and application. Human resource management Journal, 2(3), pp. 16-23 Lewis, P. , 1998. Management performance-related pay based on evidence from the financial services sector. Human Resource Management Journal, 8(2), pp. 66-77 Maslow, A. H. , 1943. A theory of human motivation. Psychological Review, 50, pp. 370-396. Maslow, A. H. , 1987. Motivation and Personality. New York: Harper ; Row. Murlis, H. , 1996. Pay at the Crossroads. London: Institute of Personnel Development. Pilbeam, S. ; Corbridge, M. , 2002. People Resourcing: HRM in Practice. 2nd ed. Harlow: FT Prentice Hall. Appendices Tow papers: Bender, R. , 2004. Why Do Companies Use Performance-Related Pay for Their Executive Directors? Corporate Government, 12(4), pp. 521-533. Dowling, B. ; Richardson, R. , 1997. Evaluating performance-related pay for managers in the National Health Service. The International Journal of Human Resource Management, 8(3), pp. 348-366.

Australian Consumer Law Tutorial Answers Essay - 1541 Words

QUESTION 1 Studmaster Pty Ltd was a landlord that owned a shopping complex in Bourke Street, Melbourne. Mrs Tran operated the â€Å"Vietnamese Lunch Box† outlet in the food court. She had little ability to speak or read English, which the representatives for Studmaster knew about. Studmaster proposed a three year renewal of her lease at $48,000 per annum plus GST for the first year and CPI increments in the second and third years. A representative for Studmaster told Mrs Tran that: †¢ â€Å"We believe the new rent is very reasonable and below the market value†; and †¢ â€Å"The rent is lower than the rental paid by other tenants in the Food Court† Both statements were incorrect. Studmaster gave Mrs Tran 7 days to agree to the lease†¦show more content†¦Law: †¢ Section 18 (â€Å"misleading or deceptive conduct†) †¢ Eveready Australia Pty Ltd v Gillette Australia Pty Ltd OR Taco Company of Aust Inc v Taco Bell Pty Ltd (â€Å"objective test†) †¢ Section 29(1)(k) (â€Å"false or misleading representation concerning the place of origin of the goods†) †¢ Netcomm (Aust) v Dataplex Pty Ltd (p 616 of textbook) Application: †¢ Explain what â€Å"place of origin† means with reference to the discussion at the bottom of p 615 top of p 616 of the textbook †¢ Explain why the label â€Å"product of australia† was misleading as to the place of origin of the jumpers. †¢ Apply the objective test to explain why the woollen jumpers were misleading under section 18. In particular identify the target market and why a reasonable person would be misled about the label â€Å"Product of Australia†. Issue: What are the remedies? Law: †¢ Section 232 (injunction); Section 246 (corrective advertising; management to undertake training); Section 151 (fine); Section 218 (court enforceable undertakings) Application: †¢ Explain that the remedies can be covered in court enforceable undertakings or ordered by the Court. †¢ Explain what an injunction and corrective advertising would do †¢ Explain the maximum penalty of a fine for WWM and why the ACCC can pursue a fine. Conclusion WWM has made a false representation concerning the label ofShow MoreRelatedFaculty of Law and Management: International Marketing10010 Words   |  41 PagesFaculty of Law and Management School of Business Faculty of Law and Management School of Management International Marketing MKT3IMK Subject Learning Guide 2011 Andrew Gilmore Contents 1.0 Subject information at a glance 3 2.0 Subject description 4 3.0 Learning and assessment 4 3.1 Learning objectives 4 3.2 Assessing the learning objectives 4 3.3 Assessment tasks 5 3.3.1 Overview 5 3.3.2 Case Study 6 3.3.3 Final eamination 6 3.3.4 Group assignment 6 3.4 AssessmentRead MoreCase Study : Retails, A Retail Company2240 Words   |  9 PagesFair Trading a. Guarantees, warranties, and refunds - consumers have rights under a national law guarantees consumers’ rights when purchasing goods and services. It also includes the rights to repairs, replacements and refunds. This legislation can be applied even though they do not have a warranty or extended warranty. b. Product safety - an individual business is responsible for ensuring the products comply with Australian product safety laws. This legislation covers safety standards, bans, recallsRead MoreEconomics - Tutorial Answers26233 Words   |  105 Pages1 Managerial Economics 2010 Answers to All Tutorial Questions Topic 1 : What is managerial economics Questions from Chapter 1 of the Text (McTaggart, Findlay Parkin) Review Question 1 (pp. 4) List some examples of scarcity in Australia today. An example of scarcity at the economy-wide level would be people with lower incomes being forced to choose between food and petrol due to high prices for both. An example of scarcity at an individual level would be a person unable to afford bothRead MoreOperational Plan6660 Words   |  27 Pagesimprovement and expunction :Engaging with customers in choice making during Equipment hiring to ensure they are comfortable and well convinced with the product.. | * Ensure a market research is done * Conduct a customer survey in order to review on consumers’ feedback either positive or negative. * Fill in reports to identify and compare areas of concern e.g. after receiving customers feedback on equipment hired | * Check on customers satisfaction * Evaluate marketing data so as to check anyRead MoreHow Big Data And Kaggle Are Changing The World?3043 Words   |  13 Pagespreference for certain contributors and totally integrating market research and innovation by getting customers to submit own ideas and voting on each other’s ideas. Competitions range from predicting the progression of HIV to forecasting travel times on Australian freeways to detecting whales based on their noises. Current challenges include assisting with schizophrenia diagnosis by identifying the condition from MRA neuroimaging data, finding the Higgs Boson amidst the mountains of data collected by CERN’sRead MoreMarketing Communications Notes17720 Words   |  71 PagesChinese managers of SMEs in Hong Kong’ by Au and Tse ‘Ethical issues across cultures: managing the differing perspectives of China and the USA’ by Pitta, Fung and Isberg ‘The myth of the ethical consumer — do ethics matter in purchase behaviour?’ by Carrigan and Attalla ‘Press release’, Hong Kong Consumer Council. †¢ †¢ †¢ Please note that in this course, unless otherwise indicated, ‘product’ and ‘product category’ should be interpreted as ‘product/service’ and ‘product/service category’Read MoreSupply and Demand and Study Guide20292 Words   |  82 Pages Topic 2—Demand and supply Topic 2 introduces the simple market model of demand and supply. This model is used to explain trade between consumers and producers of goods and services. It will show you how to use the demand and supply analysis to better understand economic behaviour in some markets. The demand function represents the choices of consumers while the supply function represents the choices of producers within the market environment. The interaction of demand and supply determinesRead MoreAccounting Standard Setting4104 Words   |  17 Pagescontroversy and debate both in practice and in academic circles Standard Setting Approaches – Why Accounting is Regulated? Theories of Regulation: †¢ What was the reason for government intervention in the market for accounting information? Answer: Three major categories of theories regulation: - Public-interest (market failure theory): accounting standard setting is regulated because of the perception that the market is characterized by departures from the competitive ideal in waysRead MoreNon-Store Retailing9425 Words   |  38 PagesNonstore retailing is a form of retailing in which sales are made to consumers without using physical stores. The non-store retailers are known by medium they use to communicate with their customers, such as direct marketing, direct selling and vending machines or e-tailing. Non store retailing is patronised to time conscious consumers and consumers who cant easily go to stores, or compulsive buyers. Most non-store retailers offer consumers the convenience of buying 24 hours a day seven days a week andRead MoreSolution Manual, Test Bank and Instructor Manuals34836 Words   |  140 PagesJonathan Wickert, Kemper Lewis (SM) An Introduction to Physical Science, 13th Edition _James T. Shipman, Jerry D. Wilson, Charles A. Higgins, Jr (IM+TB+IM for Lab Manual) An Introduction to Programming With C++, 6th Edition_Diane Zak (Solution files+Answer to Review Questions+IM) An Invitation to Social Research How Its Done, 4th Edition _ Emily Stier Adler, Roger Clark (IM) An Object-Oriented Approach to Programming Logic and Design, 3rd Edition_Joyce Farrell (SM+IM) An Object-Oriented Approach