Value Creation in an Organization
Introduction
Effective competition in the contemporary world’s business environment demands the creation of value to the stakeholder’s involved in a cost-effective manner. Through this, all systems and procedures within an individual organization have to be aligned to the specific objectives and goals in a manner that creates value for all stakeholders. Heytsbury Holdings Limited has aligned its systems and procedures to create value to different stakeholders involved. Similarly, Ambrosia Company has also streamlined its systems and procedures to create value to its stakeholders. The surging competition witnessed in the global arena drives organizations to utilize different strategies to enhance their competition levels (Anand & Daft, 2007). This study will primarily concentrate on exploring how the different systems and procedures within these two companies create value to their stakeholders.
Values propositions of Heytsbury Holdings Limited and Ambrosia
The value proposition in of Heytsbury Holdings Limited
The existing value proposition in Heytsbury Holdings Limited is quality products and services through the creation of an emotional attachment between individual consumers and the company. This can be seen by the organization’s strategy of acquiring the best individual retailing businesses within specific industries. This ensures the organization maintains high-quality products and services by creating an emotional attachment between consumers and the company since the majority of the retail businesses acquired by Heytsbury Holdings Limited are well conversant with the unique characteristic of their consumers including their culture. Moreover, its structure allows for outsourcing of skills and expertise in enhancing the quality of its goods and services (Globerman & Vining, 2017). Similarly, the outsourcing of skills and expertise also helps individual employees in gaining new skills and expertise that can be essential in enhancing the quality of the company’s goods and services. Through all these, quality is key for the company and it ensures all systems and procedures are structured meet it value proposition in this regards.
The value proposition in Ambrosia Company
On the same note, Ambrosia Company also shares the same value proposition as Heytsbury Holdings Limited. It also stresses on quality services to all its customers through innovation. The organization operates in the healthcare industry, which has intense competition. Through this, Ambrosia Company has utilized innovative healthcare service delivery as its primary competitive edge and its strategy for enhancing the quality of its service. This has ensured its customer receive superior services and its employees develop their skills and expertise.
Interactions of key dimensions and organizations’ value propositions
Structure and people management practices within these two organizations
- Heytsbury Holdings Limited
The company primarily utilizes a cross-functional design, which dictates the manner in which information flows within the organization and groups different functions together in the company from top to bottom. The company also has in place a centralized operations framework in which major business decisions are made by the central office. Through this, the company has integrated all its franchising departments, retails and portfolio management.
Well-constructed communication framework as a result of the cross-functional design used by Heytsbury Holdings Limited is an essential tool in ensuring quality products and services while creating an emotional attachment between individual consumers and the company. It ensures clarity of instructions from the senior managers in an organization down to individual employees needed to perform specific duties. Clarity promotes observation of details and instruction. These are essential in meeting individual consumers’ expectations, thereby creating an emotional attachment between them and the company (Anand & Daft, 2007). It also encourages transparency and accountability. Transparency is always essential in the identification of possible problems and the generation of viable solutions that can be applied in dealing with them. Through this, the organization enjoys well-enhanced products and services with superior quality. Similarly, accountability ensures stakeholders within the company are held responsible for the decisions they make, which promotes evidence-based decision making, thereby resulting in quality products and services. These ensure increased job satisfaction among employees as a result of positive feedback from highly satisfied clients.
- Ambrosia Company
The company utilizes a divisional organizational structure. Through this structure individual divisions are responsible for making their own decisions in the manner they feel is right to enhance the company’s innovative approach in the healthcare sector. Divisional structure primarily emphasizes the creation of a culture of autonomy. This runs down from top managers to individual employees while performing their duties. Through this, individual employees can utilize different innovative approaches in undertaking their duties while ensuring quality service provision as long as they follow the require standard procedures. Autonomy is an essential tool for enhancing the motivation levels among individual employees in an organization, which also ensures they innovate new systems and procedures that can help them enhance the quality of their services and products while they meet the company’s objectives (Globerman & Vining, 2017). Consequently, consumers derive value from the company’s services through the quality they receive.
Marketing and financial management practices
- Heytsbury Holdings Limited
The organization’s structure primarily requires a centralized execution of projects and strategies. Through this, the marketing practices of each business unit and franchises are carried out by the head office. Similarly, the financial practices of individual businesses and franchises are also carried out by the head office. These are essential in the standardization of systems and procedures within the organization. Standardization ensures all stakeholders operate with a predetermined set of procedures which helps them in solving challenging situations like ethical dilemmas (Balandi, 2016). Standardization also encourages evidence-based decision making, which is essential in handling different financial activities and ensuring efficiency and effectiveness within a company’s systems and procedures. Additionally, standardization also ensures products and services maintain quality, which is essential in enhancing a company’s competitiveness.
Standardization also ensures the organization conducts a single marketing and advertisement exercise that covers several products and services from different retail business. This will ensure Heytsbury Holdings Limited procedures are cost-efficient as a result of the individual retail businesses sharing the cost used in advertising and marketing. Cost-sharing also ensures effective utilization of the available scarce resources by dedicating a significant number of resources in acquiring equipment that can be used by employees in enhancing the quality of the goods and services they produce.
- Ambrosia Company
The company uses a divisional organizational structure, which always encourages autonomy among individual divisions. As a result of this, each divisional branch is free to execute its own marketing strategy as long as the strategy is cost-effective. Giving individual divisions to perform their own marketing strategies in accordance with the organization’s view of value creation through innovation is essential in enhancing the motivation levels among branch managers and their subordinate staff members. Consequently, consumers enjoy quality products and services, which results in increased revenue generation and better performance through effective competition.
Similarly, individual divisions are also free to perform the different financial activities such as projection, acquisition strategies and viable allocations. Leaving these decisions to the hands of individual divisions ensures the company avoids generalization of the factors impacting its business environment. Through this, individual branches will consider all the available factors before choosing the debt/equity mix that they should maintain as well as the best areas that they need to allocate the available scarce resources. Consequently, the division will promote innovation, which will reflect on the enhanced performances of the company (Anand & Daft, 2007).
Resource availability and utilization as well as procedures within these two organizations
- Heytsbury Holdings Limited
Though the company has well-enhanced human resources, its cross-functional design provides room for outsourcing human capital whenever necessary to supplement any deficiency arising in its skill capacity and level of expertise needed for the provision of quality goods and services. These are essential in ensuring its human resource enhance its skill level and capacity. Similarly, the framework allows for team performance and collaboration of different functions within the organization. This is also essential in enhancing the company’s human resource capacity considering that collaboration and team performance allows individual employees to acquire new skills like customer relation and handling techniques in the company. These help in ensuring quality products and services by generating an emotional attachment between individual consumers and the company. Additionally, the head office performs the recruitment process for the company, thereby ensuring the selection of individual employees who are fit and capable to handle the job requirements within the company (Balandi, 2016). This further ensures quality services and products in the company.
- Ambrosia Company
The company’s organization design primarily promotes autonomy among divisions in the organization. Through this, individual divisions can use Strategic Human Resource Management (SHRM) in effectively managing their employees and ensure innovation of systems and procedures to enhance the quality of products and services from the company. Strategic human resource ensures an effective forecast of current and future human resource needs within the company in relation to the existing competition. This forecast takes into account the current and future skills and level of expertise needed as well as the necessary technological resources.
Similarly, it ensures well-constructed job specifications and job descriptions, which have a significant impact on ensuring the company acquires the right employees. These ensure the organization maintains high employee retention rates thereby guarantee the quality of its products and services. The consideration of future human resource needs to ensure the organization streamline its systems to maintain optimal innovation and enhance its quality by satisfying the tastes and preferences among individual consumers.
Internal and external stakeholders of Heytsbury Holdings Limited and Ambrosia
Internal stakeholders
There are specific internal stakeholders that these two organizations share. These include employees, managers and investor. Employees are the individuals hired by these companies to perform the routine activities in the organization. Through this, employees have a significant role to play in the different strategies and operational tactics involved in the company (Balandi, 2016). They derive value through enhanced skills and advancement in their level of expertise. On the same note, managers are individuals charged with determining the specific strategies these organizations are to utilize in maintaining the company’s value proposition and effectively compete within their environment. They derive value through better performance satisfying recommendations from the owners. In most instances, they are always held accountable for every decision made in the company. Similarly, the investors who are also the owners of these organizations derive value through an increase in share price, which increases their total wealth.
External stakeholder
These two organizations also share similar external stakeholder. These external stakeholders include consumers, suppliers, government and the local community. Consumers are the individuals who acquire the goods and services produced by these companies. They basically derive value from quality and healthy products and services that effectively satisfy their tastes and preferences. Suppliers are the individual companies that provide the necessary raw materials needed by these organizations. They derive value from timely payment and long-lasting partnership. Additionally, government as stakeholders provides guidelines and standards that all companies should adhere to. Government derives value from an organization through tax revenues and the employment opportunities created by business organizations. The last eternal stakeholder is the local community. The local community forms the local society from which an individual business conducts its operations. The local community derive value from individual businesses when the systems and procedures in a company ensure environmental conservation. The community also derive value from a company through the availability of quality goods and services at a relatively cheaper price.
Conclusion
Value creation is an essential concept in ensuring effective performances among business organizations. Heytsbury Holdings Limited and Ambrosia Company utilize two different operational frameworks, which ensures each creates value to its stakeholders while they maintain effective performance. Heytsbury Holdings Limited utilizes the cross-functional operation design with a rigid framework and central decision making at the head office. However, the company still manages to create value for all its stakeholders through quality goods and services. On the other hand, Ambrosia Company utilizes the divisional business operation framework, which ensures the autonomy of individual divisions. As a result of this, divisions enjoy high motivation and job satisfaction among employees and intense innovation. Consequently, it creates value for all stakeholders through innovation.
References
Anand, N. & Daft, R.L., (2007). What is the right organization design?
Balandi, I.,( 2016). Harnessing Organization’s Resources, Capabilities, Core Competencies to Develop Business Level Strategy to Gain Sustainable Competitive Advantage, researchgate.net, retrieved from https://www.researchgate.net/publication/311950733_Harnessing_Organization%27s_Resources_Capabilities_Core_Competencies_to_Develop_Business_Level_Strategy_to_Gain_Sustainable_Competitive_Advantage
Globerman, S. & Vining, A.R., (2017). The outsourcing decision: A strategic framework. In Global outsourcing strategies (pp. 27-40). Routledge