Assignment Sample on BUSM4305 Individual Written Report for Diageo Plc.
Introduction
Corporate Entrepreneurship Audit (CEA) is an analytical tool which is used by organisations to measure the internal and external performance of the company. The main aim of this report is to evaluate the four pillars of CEA used in chosen UK based company Diageo PLC. The first section of the report is to briefly discuss the four pillars under CEA. The second section of this report comprises recommendations for four pillars of CEA. New and innovative strategies for each option are suggested to Diageo PLC.
Four Pillars of CEA for Diageo PLC
Leadership is an important function adopted by an organisation for planning and executing functions for maximizing profit. As per the views of Shafique (2018), leadership pillar under CEA Model focuses on the leadership strategies used by a company to fulfil its objectives. The chosen organisation Diageo PLC is a British multinational company involved in manufacturing of alcohol and beverages (DIAGEO, 2021). Executives and senior managers of the company have targeted manufacturing sustainable items for consumers in the beverage industry. According to Coker et al. (2017) leadership within a company can be effectively achieved if senior managers listen to employees in terms of maintaining good relations with the workforce. The vision of the organisation is to promote positive drinking in the beverage market. Executive Directors of Diageo PLC had adopted a strategy of “Sustainable Developmental Growth ” (SDG) for maintaining consistency in business (DIAGEO, 2021). Employees of the organisation can approach senior managers through their compliant portals available for all staff and employees (DIAGEO, 2021). Senior managers of the company provide guidance by reconciling conflict arising within the workforce.
Senior Managers of an organisation would be required to clarify uncertainties and focus on effort in finding solutions. As observed by Felix et al. (2019) senior managers need to possess self-awareness of the market and build a relationship with the staff. Diageo PLC have provided an inclusive environment within the organisation to reduce cultural diversity. Senior managers of the company are consistent in behaviour with their staff where team working is highly encouraged (DIAGEO, 2021). Team working can be enhanced by performing cross functional leadership programs. This helps leaders and senior managers to think and act strategically for developing better leadership strategies for team management.
Diageo PLC had focused on “championing inclusion and diversity” for creating a high performing culture within the organisation. Information and knowledge within the organization is shared through their management team of regional departments (DIAGEO, 2021). The organisation had gained advantages in taking immediate decisions based on the regional situation for avoiding delay in action and results in effective decision making. Majed (2019) explained that senior managers empower staff and employees to deal with problems and opportunities. Diageo PLC promotes equality of experience among employees and empower investors to advocate moderation.
Culture of Diageo PLC
Work Culture within an organisation determines the efficiency of a business and how it influences the performance of staff. As per the views of Stuetzeret al. (2018) empowering and innovative culture influences the internal growth of an organisation. Diageo PLC had opted for “Transformational leadership” for empowering innovation and growth of new business ideas within the company. This company values innovation and creation among the workforce and increases their performance through reward packages (DIAGEO, 2021). Senior managers within Diageo PLC encourage staff to build relationships with management. Management of Diageo PLC seeks ideas and concepts from diverse work cultures and mutually maintains relationships at all levels. According to Njoku (2020) for maintaining a stable work culture, an organisation would need to encourage continuous innovation. Companies performing in large scale economies would be required to perform innovative strategies for sustaining in the competitive market. Diageo PLC is involved in “Personal Development” programmes for staff that are organised by the management (DIAGEO, 2021). This company is able to provide employees with effective training and facilitate delegated decision making by application of this strategy.
Egalitarian Organisations involved in providing management and workforce with equal rights and opportunities for growth. Diageo PLC shapes a broader “societal change” by promoting equality among the work force and setting up management teams by appointing leaders representing all regions. This strategy helps the company to build networks of relationships with external people and organisations under the international alcohol industry. As asserted by Swanson (2017) organisational performance can be increased through continual learning processes in internal and external departments. Companies are able to focus more on people and enhance teamwork through open communication. Diageo PLC fosters entrepreneurial spirit within the organisations by promoting their agenda of “freedom to succeed” (DIAGEO, 2021). Managers of the company encourage strategizing policies by deriving ideas from the feedback of employees during operations.
Diageo PLC ensures that each employee is being valued and employee relations and commitment towards organisation increases accordingly. Lounsbury (2019) explained that external parties like customers and suppliers influence the external growth of an organisation. Diageo PLC has started promoting a “Positive Drinking” campaign for creating health awareness among customers. Sustainable supply chains are maintained by introducing “Sustainable Development Goals” (DIAGEO, 2021). This assists companies to meet regular demands in the liquor market and grow in a sustainable manner.
Structure of Diageo PLC
Corporate Entrepreneurship prevalent within an organisation leads to a better performance by developing an efficient organisation structure. Yaluner (2019) noted that an organisation which is divided into small sub structures would likely mitigate problems arising from the ground level. Diageo PLC had structured its main organisation among 12 subsidiaries and 172 executives (DIAGEO, 2021). Executive Directors and Departmental Heads of the company make the internal decisions which are not hierarchical or bureaucratic. As per the views of Hoyte (2019) structures developed in an organisation is required to be flexible for adopting to recent environmental change. Diageo PLC divides its responsibilities under “Governing Departments”, “Audit Departments” and “Assurance Committees” to handle operations under different market situations (DIAGEO, 2021). This company is able to participate in a number of professional networks by having a good internal governing control and maintaining tight accountability.
External Corporate Venturing supports expansion of business functions by formation of “intra corporate frameworks”. Corporate venturing helps companies to collaborate with similar organisations and identify opportunities for expansion of business in a market. Diageo PLC follows “Intrapreneurial” concepts for maintaining cross functional ventures and maintaining professional relationships among subsidiaries. Subsidiaries of the company such as “Guinness Overseas holding Limited”, “Grand Metropolitan Limited” and “UDV(SJ) Limited” are relatively autonomous (DIAGEO, 2021). This structure encourages the primary and subsidiary departments in forming strategic alliances and joint ventures through partnership in the beverage industry. Diageo PLC performs “crowdsourcing” techniques to acquire news ideas and concepts of business functioning to encourage innovation (DIAGEO, 2021). This structure has guided companies to facilitate continuous innovations and provide resources for activities in new corporate ventures.
Research and Development Department (R & D Department) of an organisation helps in developing strategic decisions for utilization of resources and ensuring maximum profitability. According to Beer (2019), R&D Department monitors the suppliers and manufacturing units of a company and manages risks associated in the supply chain management. Suppliers and brands of Diageo PLC have expertise its brand quality and craftsmanship in barrel making and copper smithing (DIAGEO, 2021). This company is benefited by suppliers in creating designer packaging and manufacturing premium alcoholic items.
Strategy of Diageo PLC
Organisations are required to develop strategies to perform managerial decisions, branding and induce a learning behaviour among the different departments. As asserted by Evans (2020) a company needs to develop “core values” within the organisational structure to achieve a set of internal objectives. Core values of Diageo PLC include “sustainability”, “smart investment”, “championing inclusion and diversity” and “promote positive drinking” (DIAGEO, 2021). This company performs with clear “core values” that underpins all the activities performed within the organisation. Companies would be able to maintain continuous innovation in improving production and sales and reducing costs and losses incurred. Diageo PLC had developed strategic objectives under “sustainability” by simplifying activities, focusing on resources and applying data analytics to drive efficiency (DIAGEO, 2021). Staff and management of the organisation is encouraged to spot commercial opportunities for the company and plan strategies accordingly.
Strategy Planning Process helps organisations to perform resource allocation and understand the threats and opportunities in a market. Garud et al. (2018) explained that companies would be able to gain competitive advantage under different markets. Diageo PLC had performed strategic planning of modern technologies used for manufacturing alcoholic beverages with a sustainable approach (DIAGEO, 2021). This company has been successful in understanding the core competencies and how maximum profitability can be gained through cost effective manufacturing. As per the views of Balocco (2019) consumer satisfaction acts as an important aspect of organisational strategy for fulfilling market demands. Diageo PLC had started to promote “positive drinking” among liquor consumers through the “Guiness Clear” moderation campaign in UK (DIAGEO, 2021). This company was benefited by quick identification of risks associated in the liquor market by acquiring responses from customer feedback.
Organisational Strategies help companies in achieving “year to year growth” by managing operations in the product and consumer markets. Diageo PLC had started to promote objectives like “grain to grass sustainability” to utilize resources and manufacture products in a sustainable manner (DIAGEO, 2021). This company has been able to incorporate environmental developments for regulating business activities in a successful manner.
Recommendation section:
Problem statement of Diageo PLC
“Problem Statement” are derived by companies to identify the issues that are required to be addressed and in developing better management strategies. As per the views of Huq (2017) the main objective of the problem statement is to allow the management to execute the improvement process by identifying loopholes. Diageo PLC has faced limitations in aligning their activities with market trends as their allocated resources are insufficient. This aspect had negatively impacted the overall performance of the company by loading its competitive advantage against competitors like Carlsberg, Bacardi in the liquor market. Problem statement benefits a company to analyze the external environment and its effect on determining long term growth of the business. Diageo PLC poses a deficiency in sourcing of resources and have faced challenges by new entrants in the liquor market. This company possesses limited success outside the core business of manufacturing liquor items and have been unable to expand its business in an Internal level outside UK and Europe.
Companies generate problem statements to resolve the issues arising in human resource management, change resistance innovation occurring within the organisation. According to Bernard (2018) organisations can analyze their performance and current state in the market by preparing an effective problem statement. Diageo PLC spends less involvement in Research and Development (R&D) department which had obstructed the company to compete with leading liquor companies like Bacardi and Carlsberg. This company faces limitations in maintaining a consistent rate of profitability due to the rising rate of raw materials. Diageo PLC had adopted a motto of organising a sustainable manufacturing process which had been unable to meet the rising costs of raw materials. Irregular supply chain management development by a company would create a negative impact on its investors and can decrease profitability. Diageo PLC lacks in maintaining regularity in supply chains which obstructs it from identifying economic fluctuations in the international liquor market.
Description of Options
CEA model adopted by companies helps in segregating business functions among four pillars like “Leadership”, “Culture”, “Structure” and “Strategy”. As per the views of Chang et al. (2017) leadership pillar under CEA refers to the modules of management followed by the leaders of an organisation. Diageo PLC divides the authorities of the company among senior managers among “Board of Directors”, “Finance Department”, “Supplier and Product Department” and “Corporate Relations Department” (DIAGEO, 2021). Division of authority and management responsibilities among different departments have helped this company to incorporate effective decision making. Boone (2019) explained that the “Culture” pillar under CEA refers to the management policies followed by an organisation in maintaining the workforce. Culture pillar had positively impacted the organisation of Diageo PLC, where the company had decided to develop an inclusive business environment (DIAGEO, 2021). This company has benefited by promoting equal job experience for all employees and reducing cultural diversity prevalent among the workforce and business.
“Structure” pillar under the CEA model develops the organisational structure of a company by determining its “core values and objectives”. According to Hoyte (2019) organisations are required to divide their activities among departments for handling operations under different markets. Diageo PLC follows a “distributive structure” for its organisation where power and authority is distributed among different departments (DIAGEO, 2021). This company is involved in developing structures for new ventures available in the international liquor market for enhancing business expansion. “Strategy” pillar under CEA helps organisations to adopt effective business plans for increasing employee performance thereby enhancing business productivity. According to Garud et al. (2018) strategy pillar determines the targets under manufacturing, delivery and customer service. Diageo PLC had introduced learning programmes among staff and employees through training and development agendas (DIAGEO, 2021). Development of “product” and “market portfolio” by Diageo PLC had helped the authorities to allocate specific tasks in different departments and meet targets under specific market segments.
Evaluation of Each Option
Four Pillars such as “Leadership”, “Culture”, “Structure” and “Strategy ” present under CEA possess relevance in developing the operations of an organisation. Evans (2020) explained that leadership structure positively impacts an organisation creating motivation among the workforce and developing a professional relationship between managers. Senior Managers of Diageo PLC had maintained a consistent relationship with staff by interacting with them during training and development programmes (DIAGEO, 2021). Leadership pillar had helped Diageo PLC to encourage their individual performance of employees through motivation and reward programmes. According to Beer (2019) leadership pillar poses limitations during management as decision making policies often remain concentrated among senior managers. Diageo PLC had adopted strategies in dividing decision-making authority among governing bodies, stakeholders and investors of the organisation (DIAGEO, 2021). Division of power and authority had benefited the company in deriving alternative business strategies that are planned from different perspectives of the liquor industry.
“Culture” pillar present under CEA encourages entrepreneurial risk taking by encouraging the growth of innovation among an organisation. As per the views of Balocco (2019) organisational culture helps senior managers to maintain consistency in employee performance and perform conflict resolution. Diageo PLC poses an inclusive culture within the organisation that is built upon respecting all cultural values for increasing commercial performance (DIAGEO, 2021). Collision of values and beliefs arise as limitations of inclusive work culture. Management of Diageo PLC may face difficulties in developing strategies for regional departments cultural changes often resist business activities in a particular region. “Structure” pillar of CEA helps organisations to build professional relationships among different departments. Diageo PLC is benefited by organisational structure in developing a better understanding of the functions performed in different departments and how specific market issues can be addressed. As observed by Boone (2019) “strategy” pillar falling under CEA concentrates on building objectives for addressing market issues. Diageo PLC had been involved in delivering performance ambition in acquiring maximum consumer satisfaction in the liquor market through a sustainable approach.
Final Recommendation
Situational Leadership
“Situational Leadership Model” helps organisations for fulfilling developmental needs by increasing the performance level of employees. According to Bosse et al. (2017) situational leadership model is divided into four levels determining “Low Directive” and “High Directive” values of different situations. Implementation of this leadership style would help Diageo PLC to identify the changes in the current work environment and modify its leadership objectives. Leaders of this company would benefit by delegating the decision-making process among different departments and participate in effective team management.
Hofstede’s Cultural Dimension Model
“Hofstede’s Cultural Dimension Model” helps in identifying the cross-cultural differences arising within the diverse workforce of an organisation. As per the views of Taras (2017) cultural differences under Hofstede’s Model are divided into “power distance”, “uncertainty avoidance”, “orientation”, “individualism” and “masculinity”. Diageo PLC would be able to identify the cultural differences arising in different segments of regional liquor departments by applying this cultural strategy. Dimensions of Hofstede’s Model would help this company to reduce the cultural differences among workforce and management and in developing an inclusive business environment.
Changing Organisational Policies
Organisational Policies and norms are essential for modifying organisational structure as per the current requirements of a business. According to Njoku (2020 “functional organisational structure” divides operations among each department as per the company’s policies. Diageo PLC can achieve specific market goals and business objectives by applying functional organisation structure. Allocation of work under main and regional departments would guide this company to handle operations without creating confusion and delay in decision making.
Cost Effective Strategies
Cost effective Strategies benefit organisations by providing them with a sustainable approach in manufacturing and supply chain management. Yaluner (2019 explained that cost effective strategies create centralized labour, develop a cost management program and develop a strong infrastructure. Diageo PLC would be able to maintain its “sustainability policy” by implementing cost efficient strategies in procurement of raw materials for liquor manufacturing. It may benefit from cost effective strategies during the COVID 19 crisis and overcome the losses incurred during the pandemic situation.
Conclusion
CEA helps companies to promote innovative thinking among internal departments by analysing the four pillars such as leadership, culture, structure and strategy. Diageo PLC would be required to perform leadership management for delegating the decision-making process. Leaders and senior managers of the company are recommended to follow Situational Leadership style for leadership management. Under the culture pillar, Diageo PLC is recommended to opt for Hofstede’s Cross-Cultural theory. This strategy would help the company to reduce the diversity among the workforce and introduce an inclusive environment. Diageo PLC would be able to sustain in the competitive environment by modifying its policies as per the current consumers and supplier requirements. Thus it can be concluded that cost effective strategy would help this company to maintain its sustainable objective and derive maximum consumer satisfaction in the international liquor and beverage market.
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