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The modern competitive era has brought forward the issue of business sustainability. In lieu
of improving quality of products, productivity and the speed, businesses have started to adopt
new practices such as reengineering, benchmarking and Total Quality Management (TQM).
Tremendous alterations have happened to the operational business plans but with little
success to earn profitability in a sustainable manner. This tools and methods have steadily
moved towards the role of strategy. When the management focuses on improving the overall
activities of their firm, the emphasis on competitiveness of the company is lost. Concentrating
on operational aspects of the firm is not adequate because though it necessitates better
performance, it is very much easy to mimic them. In disparity, strategy means selecting a
unique precious state based on the system of functions that are not matched easily (Harvard
Business Review Article).
TASK 1
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Figure 1- (Source: http://www.google.co.uk/imgres)
Operational or Functional Level:
It is the third level in strategies. As the name suggests it is at the organisation’s operational or
functional end. This reflects the effectiveness of the implementation of the first two levels of
strategy, that is, corporate and business. Operational level strategy operates with the help of
people, processes and resources. In fact, the level of success of the business level strategy
depends on the efficiency of the operational plans. Hence, integration of the corporate,
business and operational level strategy is very much significant for the successful
implementation of overall strategies (Gerry Johnson et al, 2008).
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The concept of purchasing the different components from various suppliers’ spread around
the world, results in problems such as logistics, support and service issues. Shering followed
the philosophy of reversing the trend prevailing in industry by developing facilities to design,
manufacture and serve themselves. This enabled Shering to have uniqueness, flexibility and
capability, facilitating control over their future and develop innovation in products which
would be of supreme quality and revolutionary. This further would bring outstanding
financial and operational advantages to their customers
(http://www.shering.com/history.htm#).
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All these aspects involve change and affect the organisation in one way or the other
(http://findarticles.com).
TASK 2
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(A) COSTS OF QUALITY
The information relating to cost of quality depicts how the business profit is affected by
quality. It enables a business to recognise the activities that are obsolete. The costs of quality
is mainly categorised into two:
• Cost to Attain Good Quality: This refers to the costs which aim at attaining better
quality of products and services. This can be classified as prevention costs and
appraisal costs.
o Prevention Costs- Preventive costs are those expenses incurred so as to
prevent the level of quality falling below the standards. These are incurred in
order to keep the costs of failure to the lowest possible amount. Examples of
those are market research, quality enhancement projects, consumer surveys
etc.
o Appraisal Costs- These costs are related to the measurement, evaluation or
audit of products and services to ensure that it meets the standards specified.
Calibration costs, internal audits and procedure evaluation etc. are instances of
appraisal costs.
• Cost of Poor Quality: Costs of poor quality refers to the costs or expenses incurred
owing to poor quality standards of the products and services. This is divided into two,
namely, internal and external failure costs.
o Internal Failure costs- This cost is incurred when there is failure of the
product or service before it is handed over to the customers. Examples of these
could be scrap, rework, downgrading, excess inventory etc.
o External Failure costs- This cost incurs when the product or service fail to
meet the expected quality and it happens at the customer’s end. This is in
terms of claims for warranty and loss of reputed status etc. Dissatisfaction of
customers, loss of market share, costs of warranty, etc.
(http://www.authorstream.com).
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• Excessive wear and tear of vehicles due to huge traffic on daily basis.
• Customer dissatisfaction due to less reliability of maintenance service.
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As per the details given in the case study Shering Weighing Group has a number of features
which helped it gain the ISO 9001 standard certificate. They are as follows:
• Design with patent which is fully technology based.
• Telemetry communication and tamper proof instrumentation weighbridges that are
electronic.
• Restrain post system with patent, which prevents damage and shocks. It has a Unique
Impact Damage Eliminator “IDE” Restraint Post System.
• Safe and durable designing and coatings on surface.
• Supreme quality products and services.
• Software upgrades on the latest installations for enabling condition monitoring
process from Scotland.
• It has proven its structural strength and reliability of services.
• The cables used are water proof and also protected from rodents and is very much
flexible.
• Also it possesses a long term system of protecting materials from corrosion.
All these helped Shering Weighing Group to attain the accreditation from ISO 9001. Along
with ISO 9001, they were approved by the stringent European Weights and Measures
Standard EN 45501.
TASK 3
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Shering Weighing Group introduced electronic weigh bridges in the year 1991. If this would
have actually involved the group to bring about a major organisational transformation, it
would have resulted in major confusions and chaos at the side of employees.
Employees may have had that panic of being confronted to an entirely new system, and
would have shown hesitations to work. The major employee problems would be lack of
familiarity to managing the new technological devices or processes. The employees would
have a feeling of awkwardness and ill at ease. People always emphasises on what they have to
sacrifice rather than concentrating on what they have to do. The employees would be at
various levels to accept change.
The management should take adequate measures to tackle with the changes brought about in
the organisation. They must provide proper training to staff and familiarise them with the new
processes and procedures. They should have informed the employees well in advance of the
organisational change so that they have enough time to make themselves prepared to accept
the change. Thus, in fact any change within the organisation can be managed efficiently if
proper steps are taken by the management.
CONCLUSION
Strategy is thus an inevitable part of organisational management at all levels. The three levels
of strategy are needed for the business to be successful. Strategy if formulated and
implemented properly would result in better organisational results and performance.
Managing with the changes in the organisation is also vital from the perspective of the
management. Dealing with safety and security and the health of employees is also important
from the point of view of the management. Shering Weighing Group’s case study was also
discussed above which threw insights into aspects such as their strategic decisions, costs of
quality, after sales service, ISO 9001 standards, etc.
REFERENCES
1. Harvard Business Review Article, “What Is Strategy?” by Michael E. Porter,
21 Pages, Publication Date: Nov 01, 1996. Prod. #: 96608-Pdf-Eng.
2. “Strategy Definition & Fundamentals”, available at http://www.easy-
strategy.com/strategy-definition.html [Accessed on 17/01/2011].
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3. Gerry Johnson et al (2008), “Exploring corporate strategy: Text and cases”, 8th
Edition, published by Prentice Hall.
4. “Shering Weighing- History”, available at http://www.shering.com/history.htm#
[Accessed on 17/01/2011].
5. “Business Publications: Process Change”, available at
http://findarticles.com/p/articles/mi_m0DIS/is_4_6/ai_n15759771/ [Accessed on
17/01/2011].
6. http://www.authorstream.com/Presentation/Hassanasif-493959-cost-of-quality/
[Accessed on 17/01/2011].
7. http://benefitof.net/benefits-of-customer-service/ [Accessed on 17/01/2011].
BIBLIOGRAPHY
1. Tony Morden (2007), “Principles of strategic management”, 3rd Edition published by
Ashgate Publishing Ltd.
2. http://www.change-management.com/change-management-process.htm
3. Steve Brown (2005), “Strategic operations management”, 2nd Edition, published by
Butterworth-Heinemann.
4. http://www.referenceforbusiness.com/small/Op-Qu/Operations-Management.html
5. http://www.bized.co.uk/fme/5-1.htm
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