HI5019 Literature Review Assignment Sample
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Company Analysis
About Holden
Holden is automobile company based in Australia, which set up its operations back in 1856. The Company grew and expanded its products from mere saddles to high-tech automobiles. Currently the Company has ceased automobile manufacturing; however, it continues to import vehicles from parent company General Motors. As of 2013, Holden reported a combined workforce of 2,900 workers. According to the Company’s sales reports, Holden had sold nearly 146,680 units of passenger, light and sport vehicles in 2007, of which 36,534 were exported around the globe (Holden, 2017).
Organisational structure
Holden’s organisational structure is “vertical” or based of a hierarchical system. There may be up to three management layers between the top job of “managing director” and lowest posts. Hence, this structure results in autocratic management at Holden, especially at the higher levels. Operational decisions and key decision-making is isolated to a few individuals, headed by the managing director. As a result, the Company is subject to instances where abuse of power and biases is a common occurrence.
Holden claim that despite this hierarchical structure, communication flows between levels seamlessly. The company points out that their “upward communication” model helps employees at lower levels be heard by higher management staff; thereby, prioritising their needs or difficulties. However, it is questionable if such a model would indeed result in upward communication within an organisational hierarchy. That being said, this vertical structure does benefit Holden by ensuring rigidity and tight control of resources within the firm. This in turn results in increased efficiency and strong human resource management. In addition, it presents a career path for employees, where their dedication and experience with Holden could result in promotions or higher responsibilities.
Products
The Company currently offers 14 different models of automobiles, categorised as small, hatchback, sedan, Suv, family, Utes and 4×4. Their range cars include ‘Astra hatch’, ‘Astra sedan’, ‘Astra sports wagon’, ‘Barina’, ‘Spark’ and ‘Trax’, ‘Equinox’ etc. The Commodore VF II is the latest offering from the popular commodore series. Apart from automobiles, Holden also offers “fleet services”, “servicing” and “automobile insurance services”.
Operations and functionality
2.1 Current Processes
Human Resources Management
HRM at Holden bared similar resemblance to other organisations throughout the Company’s history, until 2013 where manages changes in operations altered the role of HRM completely. Prior to 2013, Holden’s HRM performed procurement, selection, hiring and training to help fill requirements. The Company utilised traditional communication techniques like newspapers advertisements along with more modern techniques like recruitment websites to help procure skilled labour. While, hiring was carried out based on traditional person-to-person interviews at various office locations across Australia. At present, employee benefits like flexible working hours and discounts on Company products is still available. ‘Holden Active’ is the concern stone of the Company’s human resource management, which focus on catering to employee needs, by ensuring top-notch working environment accommodated with modern facilities. While, the Company still carries out hiring, the activity is severely limited, as the focus has shifted to cutting jobs due to suspended production (Willmer, 2017).
Manufacturing
In 2013, Holden had announced its intention of permanently stopping production of its cars. This became a reality in October 2017, when production was finally ceased. Large job cuts resulted in panic and a complete loss in job security among the employees. Now, the assembly lines lay dormant in closed off factories across the Commonwealth. That being said, the Company still maintains these factories in order to keep them in a functional order. This off course results in higher resource costs for Holden, as employees, materials and electricity as being invested without any potential return (Adelaide Now, 2017).
Rebadging
Imports now play an even more important role within the Company’s business operations than it did a year back. With local manufacturing stopping, acquiring manufactured vehicles and rebadging them has become one of the most vital business process for Holden. Imports now make up a large portion of the Company’s profits; hence, achieving efficiency is of utmost importance. The result of production finally ceases has dramatically altered Holden’s supply chain. Procurement of raw materials like iron, leather, rubber and plastics are no longer required. Instead, a steady supply of spare parts imported from manufacturing companies abroad are needed. Hence, the supply chain now follows a pattern of import, warehouse, distribute and retail. In a sense, Holden has become an automobile retailer that sells readymade vehicles belonging to brands like Opel, Suzuki, Isuzu, Chevrolet, Nissan, Vauxhall Motors and Toyota. While, rebadging cars for retail can help reduce the Company’s overall expenditure, several problems are related with the practice. Firstly, Holden cannot alter or modify the models in any significant manner, unless specified by the original manufacturer. This means that Company cannot fix any engineering flaws or design elements without seeking prior approval. Secondly, Holden must ensure that cars meet quality and reliability standards set by the manufacturer, failing to do so could result in lawsuits, which would not fare well for the Company’s Image (New Zealand Herald, 2017).
Advertising
Holden advertising activities are extensive, which span a wide range of audiences across various platforms. The Company’s online presence is notable with a blog dedicated to help discuss and address immediate problems of customers. Holden is also active on social media like Facebook and Instagram, where they update customers and fans with the latest updates, products, campaigns and promotions. Conventional advertising mediums like television and newspapers also help promote the brand. Sponsorship too plays a major role in Holden’s advertising strategy. The Company sponsors players and teams in various sporting events like NRL, AFLW, F1, Golf, Women’s Cycling and Football (Holden, 2017).
2.2 Gaps
The biggest gap between the current strategy and various process is with advertising. The expenditure of undertaking expensive promotion is questionable, especially after the Company was downsized drastically. Earlier, an expensive and widespread advertising campaign was justified due to the increased revenue attained from locally produced cars. However, now, advertising is a huge burden to the Company, as it is increasing the overall cost of production, without delivering substantial returns.
2.3. Specific Issues and measuring criteria
The new system intends to the fix the following Company-related issues:
- Slow import to retail times : criteria used is time in “days”
- High electricity consumption : criteria used is “kWh”
- High carbon footprint: criteria used is “tCO2e”
- Expensive advertising costs : criteria used is “AU $ ”
Information Systems Strategy
An IS Strategy is the comprehensive plan that directs how information is managed within an organisation. This can help develop systems, which can contribute towards overall organisational competitiveness by improving specific processes or increasing efficiency. The key components of an IS Strategy are:
- Strategy: This contains strategic objectives, goals and visions over a specific period. Proposals to change core business process or even governance as listed here.
- Business: The business component primarily relates to identifying company requirements. This may include activities, tasks and information flows that may be needed to improve business processes.
- Systems: This component directly relates to the formation of “systems”, which make up the backbone of an Information System within a firm. The strategy list what systems are needed in order to help meet and deliver organisational requirements
- Technical: This relates the technical requirements like IT infrastructure, communication lines, servers, computers and staff. Moreover, operational standards are also defined within the technical component.
(Teubner, 2013).
It is essential that an IS Strategy be incorporate within the firm’s overall strategy. Ignoring an IS Strategy could result in strategic systems failing to meet strategic vision and improving organisational flexibility in changing markets. As a result, an IS Strategy may affect systems that help directly compete in business, as well as those that are present in an organisation’s value chain. For example, relationships with customers, clients and suppliers can improve only if information is being communicated effectively. As pointed out by Peppard, Galliers & Thorogood (2014), IS strategic planning helps create a IS framework which helps the organisation execute and attain business goals. In addition, IS strategies help deliver systems, which enhance payback and help meet strategic goals.
If Holden successfully incorporates information systems strategy in its main or overall strategy, the following benefits may be realised:
- Communication: Information is continuously flowing within and outside Holden in various forms. For example, customers review the firm’s products on social media services on the net. This information is then received and analysed within the Company. Another example, being the shipment of goods from abroad, where information is sent to Holden regarding size of arriving stock and date. Incorporation of an IS Strategy would significant improve communications between various aspects of the business, while also helping improving professional relationships.
- Operations: Various operations including SCM will become more efficient as information is made available instantly when required. This openness also ensures business operations are aligned with business goals, through the dissemination of information regarding practices, processes and policies.
- Decision-making: Another key benefit would be enhanced decision-making courtesy of well-organised data, from both the past and present. In hindsight, this also helps improve decision making for future direction.
(Janssen, Charalabidis & Zuiderwijk, 2012).
Difficulties of constituting an IS Strategy
- Intangible costs and results: Arguably the benefits difficulty in successfully incorporating an IS Strategy is the problem of estimating costs requirement. This is primarily because IS involves the creation of systems and practices, which bear an intangible costs. Moreover, determining the benefits of implementing an IS strategy is difficult. As a result, it becomes difficult to validate or back IS strategic implementation based on numbers alone. For example, an improvement of relationships with suppliers, because of better communication cannot be measured. This is also a reason why shareholders or investors doubt the credentials of implementing an IS strategy, as no tangible results may manifest. A solution to this problem is partial implementation. In other words, implementing the strategy in select departments or processes on a trial basis. Results from the trial will help construct a detailed understanding into potential benefits and costs related to company-wide implementation (Tam, 1992).
- Selecting appropriate technology: Implementation of information systems requires adoption of new technologies that enhance communication; however, there are countless software packages in the market to choose. Selection of the software package ultimately dictates how well the new system is integrated within the firm. As a solution, companies can select technology and related software based on their budgets, implementation capabilities, skills and requirements. As a result, the most exclusive or expensive technology may not always prove to be the best choice. This is manner, a firm may choose to implement a customised or predesigned IS technologies. Customised technologies are expensive and take time to develop, but they result in enhanced compatibility and functionality. While, predesigned technologies are inexpensive and easy to implement, with the only downside being lack of customisability.
- Managing shared data: Implementing IS changes the way information is shared within the firm. New IS systems change how information is access or made available to various units, employees, departments, offices and branches across the network. The new system must ensure that data is made available, on demand to employees. Hence, if IS designs are not developed accurately, it may result in delays and accessibility issues. A solution would be to create a map of various connection points or share points from which information will be shared (Reichert & Weber, 2012).
- Information security: Arguably, one of the biggest disadvantages of an open-communication system created through IS implementation is the lack of information security. IS improves communication between various business entities through the creation of various communication points, which could act as a gateway for security theft. Apart from hackers or malware attacks from the outside, internal attacks by employees can also occur. These hacks can result in data being copied, manipulated or even destroyed. In order to prevent attacks from the outside, it is recommended that firewalls be incorporated between communication points and information repositories. Password protecting the network gateways is also another solution. Lastly, limiting information to employees based on their job profile and position within the firm will ensure only relevant data is accessed (Takabi, Joshi & Ahn, 2010).
- Human challenges: These are issues related to people within the organisation; namely the employees themselves. A lack in user-education, training and skills can prevent employees from effectively carrying out IS-related activities within the organisation. According to Galliers & Leidner (2014), notable studies in the field of IS studies have suggested the importance of the human factor in successful IS implementation. For example, older employees are reluctant to switch from conventional systems to computer-based systems, because they either lack interest or feel uncomfortable to change their working habits. A solution to this problem would be proactive and encouraging leadership, where managers educate and demonstrate the benefits of switching to the new system, rather than forcing them to change (Kim & Kankanhalli, 2009).
Typical Problems in Information Systems Failure
- Unclear goals: One of most common type of problem is the lack of clarity in project goals. Possessing well-defined and clear goals is essential to IS implementation success. In addition, it prevents confusion among teams, while preventing incorrect decision-making (Heeks, 2002).
Solution – Goals should address what the company wants to be, what it wishes to do and what is wants to have with regard to its strategic direction.
- Blown budgets: As discussed earlier, the intangible nature of the cost of developing an information system is a major challenge. This intangibility often results in IS projects going well over its intended budgets, essentially stopping it as a means of damage control. Hence, investors lose faith in the project and decide to abandon it (Bartis & Mitev, 2008).
Solution – Making cost estimates with a large buffer margin is recommended. This will allow the IS project to continue developing even if it is over budget.
- Deadline failures: Similar to budget issues, failing to meet the allocated deadline can result in a failed implementation. This is mainly due to the speculation created regarding how much more the project would cost the Company with regard to time and money (Fortune & Peters, 2005).
Solution – Set multiple deadlines with each milestone event, building up the final deadline. This way the project team can increase development or implementation speed based on whether or not they meet scheduled milestone events.
- Lack of compatibility: Often IS projects will fail mid-way simply because the technologies or systems being developed is not compatible with the company’s current infrastructure, technology base, skills and capabilities (Yeo, 2002).
Solution – a) invest in customised software packages, b) hire experts and seek their opinions regarding selection and development of an IS network, c) carry out extensive self-assessment to ensure the company possesses adequate technologies and capabilities to support an IS network, and d) invest in the latest information and communication technologies to help aid project implementation.
Reference List
Bartis, E., & Mitev, N. (2008). A multiple narrative approach to information systems failure: a successful system that failed. European Journal of Information Systems, 17(2), 112-124.
Cars. (2017). Holden. Retrieved 15 December 2017, from https://www.holden.com.au/cars
Fortune, J., & Peters, G. (2005). Information systems: Achieving success by avoiding failure. Wiley.
Galliers, R. D., & Leidner, D. E. (Eds.). (2014). Strategic information management: challenges and strategies in managing information systems. Routledge.
Heeks, R. (2002). Information systems and developing countries: Failure, success, and local improvisations. The information society, 18(2), 101-112.
Holden Sponsorship: Junior State of Origin | Holden Australia. (2017). Holden.com.au. Retrieved 15 December 2017, from https://www.holden.com.au/discover-holden/sponsorships
Janssen, M., Charalabidis, Y., & Zuiderwijk, A. (2012). Benefits, adoption barriers and myths of open data and open government. Information systems management, 29(4), 258-268.
Kim, H. W., & Kankanhalli, A. (2009). Investigating user resistance to information systems implementation: A status quo bias perspective. MIS quarterly, 567-582.
Peppard, J., Galliers, R. D., & Thorogood, A. (2014). Information systems strategy as practice: Micro strategy and strategizing for IS. Journal of Strategic Information Systems, 23(1), 1-10.
Rebadging a costly exercise for Holden. (2017). New Zealand Herald. Retrieved 15 December 2017, from http://www.nzherald.co.nz/motoring/news/article.cfm?c_id=9&objectid=3098899
Reichert, M., & Weber, B. (2012). Enabling flexibility in process-aware information systems: challenges, methods, technologies. Springer Science & Business Media.
Takabi, H., Joshi, J. B., & Ahn, G. J. (2010). Security and privacy challenges in cloud computing environments. IEEE Security & Privacy, 8(6), 24-31.
Tam, K. Y. (1992). Capital budgeting in information systems development. Information & Management, 23(6), 345-357.
Teubner, R. A. (2013). Information systems strategy. Business & Information Systems Engineering, 5(4), 243-257.
Why Australia’s car industry died. (2017). Adelaide Now. Retrieved 15 December 2017, from http://www.adelaidenow.com.au/motoring/why-australian-car-manufacturing-died-and-what-it-means-for-our-motoring-future/news-story/0428dc235d1b44639459959f5a3bbf9b
Willmer, K. (2017). Holden’s workforce challenges – HRM online. HRM online. Retrieved 15 December 2017, from http://www.hrmonline.com.au/section/profiles/holdens-workforce-challenges/
Yeo, K. T. (2002). Critical failure factors in information system projects. International Journal of Project Management, 20(3), 241-246.
Zheng, W., Yang, B., & McLean, G. N. (2010). Linking organizational culture, structure, strategy, and organizational effectiveness: Mediating role of knowledge management. Journal of Business research, 63(7), 763-771.
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