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Contemporary Business Management Practices

Discuss about the Competitive advantage and motivating innovation.

The following report provides a detail analysis of business management practices of Aurecon Group Pty Ltd located in Singapore. Business management skills are a significant contribution to any organization, as they should be designed and developed to their full potential for the organization to be successful. Due to technological advancement today, business management practices are developed to become more market centric, which means that the practices are determined based on how the market responds. Moreover, because of the rapid development in the business practices, small and medium sizes firms find it easy to maintain a rapid growth.  In the previous century, the firms with traditional business practices had to wait for years to reach the break-even point and the profits were miles away to achieve. However, in the 21st century, SMEs like Aurecon Group Pty Ltd is the perfect example of achieving growth in the shortest time with advanced business management practices. Nevertheless, business practices are not robotic evolution that they would always work in logical manner.

The marketers often have to modify the practices based on recent market situations. Business management is a continuous process with ever-increasing competition among firms leading them to problem situations.  To protect the business from such situation, the management of the firm should take control of the situation. As the market environment is rapidly changing, approaches that are more dynamic should be adopted to maintain a smooth and efficient growth in business. Thus, this report discusses the business management challenges of Aurecon Group Pty Ltd and identifies the areas in management that need to be resolved. The report provides a detail literature review to find out the contemporary management challenges. Based on the analysis, appropriate management approaches have been suggested to Aurecon Group Pty Ltd.

A study conducted on management practice by Lauvie et al. (2011), indicates that a widely known and significant business skills that can be considered in the business practice is “rare sense”. According to this author, rare sense enables people to consider things in a level-headed manner and obtain insights that are surrounded by facts and that create path for major breakthrough.

. The author insisted on this particular element because it provides firms with the opportunity to stand on the growing edge of technology, which further helps to achieve a greater level of success than the rivals do. On the other side, Tonidandel, Braddy and Fleenor (2012) mentioned about another significant element that marketers or the business managers should attempt to possess “effectiveness”. Moreover, when this element is implemented perfectly, it generates a positive influence on every business and the business transaction made in terms of all aspects of the firm. A latest research conducted on management practice by Smilowitz, Nowak and Jiang (2013) reveals that input of workforce, raw materials and capital can be production without the catalyst of management. If this statement can be taken into the consideration, then it is a proven fact that management is a dynamic life-giving element in an organization.

Business Management Challenges of Aurecon Group Pty Ltd

As revealed by “EA Consulting Group” in the recent report, the dilemma that organizations face is,  whether to invest more money and time in developing their recruitment strategy or to pay additional attention to retain the talent, which they already have (Kippin and Clark 2012). As put forward by Jiwa et al. (2012), recruiting new staff is expensive and time-consuming. When an organization has skilled staff, the firm needs to ensure that they stay. Thus, in order to avoid the huge costing of recruitment, the FMCG firm Unilever for example, provides advantageous element such as providing employees and their family members with free medication coverage (Chiedu, Long and Ashar 2017). Deery and Jago (2015) in their management study, mentioned that retention should be considered as the process of re-recruiting the workforce.  

The author has also mentioned that organization needs to identify the fact that what attracts an employee to particular job often remains different from what that person there. Here, Oladapo (2014) also mentioned that while salary remains as the significant consideration for the key employees; paying them alone will not help in keeping them in job. This is certain that advantageous elements besides a strict compensation could help to attract employees. Therefore, the e-commerce giant Amazon offers medical 401k savings plan, resource to improve employee wellbeing (Kantor and Streitfeld 2015). Likewise, Apple offers corporate gifts such as iPhone, iPad and other tangible gifts (Dustin, Bharat and Jitendra 2014). A recent study conducted by Purce (2014), on human resource management reveal that today, the employees often look for a career package along with a comfortable firm culture, work-life balance and diversity in the responsibilities. Following are some of the methods found in a study carried out by Elnaga and Imran (2013), for the employers who can implement them to keep employees satisfied.

Training: As put forward by Noe et al. (2014), providing employees with training and development program reinforce employees’ sense of value. This means via training, the firms help employees to achieve goals and make sure that they have a proper understanding about the job requirement. For example, as discussed above, the large FMCG giant Unilever provides its employees with years of training and development program, until they properly understand the job requirement (Chiedu,  Long and Ashar 2017).

Mentoring: A research performed by Men (2014) on employee retention mentioned that a mentoring program collaborated particularly with a goal-oriented feedback method provides a structured mechanism for forming a strong relationship within the firm. The author mentioned that it remains as an intact foundation for employee growth and retention.

Development of a positive culture: According to Edmans (2011), the organizations should develop some set of values and consider them as the major base for culture like honesty, attitude , teamwork and superiority.  

Use communication to develop credibility: Irrespective of the size of the firm, communication remains vital to developing and sustaining credibility. As argued by Men (2014), several firms develop communication to “flow up” via an employee advisory committee, which includes employee’s suggestions and opinions and pass them to higher level of management. It is also necessary for the employees to learn that their organization is listening and they positively responding to their queries. For example, Zappos has developed an open culture, where the employees are often involved in the business decision-making process (Warrick, Milliman and Ferguson (2016).

Areas in Management That Need to be Resolved

It has been identified that project management, business planning and engineering consulting companies naturally live on edge. As put forward by Palia, De Ryck and Mak (2014), they face constant pressure to stay steps ahead of the competition and to respond to the ever increasing globalization of supply and demand. Thus, to go with the pace of dynamic environment, the industrial project management organizations should be driven to modify business process and models to remain competitive and relevant. As put forward by Yusuf and Nabeshima (2012), management consulting and project management is observed to be a client-driven industry and clients need change- thus, the consulting firm within this sector should adapt swiftly with respect to service, operation and structure.

Angel and Rock (2017) argued that past few years have experienced a significant transition, especially, with regard to technology, management and regulations, the consulting organizations had to respond fast maintaining their competitive edge and assuring long-term growth. However, Afuah and Tucci (2012) mentioned that the consulting organizations in the recent time are reporting significant growth today with high amount of financial gains. On the surface, scenarios are becoming good for Singapore consulting industry. According to the figures published by Source Global Research, consulting sector in Singapore increases four time faster that the economy observed in 2015, which is 8.5% up from £5.93 billion to £6.56bn. The statistical information shows that the four large firms like Deloitte, EY, KPMG and PWC have outperformed the market but the market is fully surrounded by stiff regulatory environment, particularly in the economic services (Menkhoff,  Wah and Loh 2016). Nonetheless, Christensen, Wang and Van Bever (2013), argued that even though the South East Asia market increased by 8.2% in 2015, Singapore is yet crucial to region’s success as a consulting  market. This is because the year 2015 has proved that smaller nations in the region started to have more of the impact.  According to Menkhoff, Wah and Loh (2016), South East Asia is still expected to be a diverse consulting market.

As put forward by Elnaga and Imran (2013.), retaining and finding talent is a constant challenge in consulting market across the globe; however, it is particularly observed to be difficult in South East Asia because the consulting opportunities started increasing.  For example, Aurecon Group Pty Ltd in its annual report mentioned that is observing the region has a shortage of local talents compared to the significant opportunities (Aurecongroup.com 2018).  This particular issue is currently restricting the degree to which they can expand throughout the markets in Singapore. As there is a potential lack in talents in the growth of consulting pyramid, the organizations in the sector may rapidly have to develop as well as increase local talents to utilize market’s potential in future. 

As put forward by David, Sine and Haveman (2013), the consulting landscape have significantly become more competitive in 2016 and as the consequence, consultants had issues about the increasing pricing pressure. Here, the big firms managed to find ways to deal with this scenario successfully by using the global expertise. Moreover, as some firms pay attention to the strategy of capitalizing, the convergence between conventional service lines enable some firms, particularly, those in the HR space had their talents haunts ground intruded. On the contrary, Westerman et al.  (2012) mentioned about another crucial obstacle facing the engineering and management-consulting industry in coming few years involves the multi-sourcing, which means working with other organizations when complementary expertise is needed. The author also mentioned that the consulting firms are rapidly developing partnership with people outside the consulting sector- such as in digital service providers, academics and technology firms.  The 7s framework tool mentioned in the following helps to understand the problem with respect to retention of key talents in Aurecon Group Pty Ltd.

Workforce Management and Recruitment Strategies for SMEs


Figure 1: 7’s Framework

(Source: Hsuand Peng 2012)

Strategy: This element of the framework is typically developed to gain and maintain the competitive benefits over the competition. However, in the competition of hiring key talents in consulting sector of Singapore, the SMEs like Aurecon Group Pty Ltd does not pay attention to collaboration; the collaboration with other firms is required when there is a shared need. And, here Allred et al. (2011) mentioned that in such collaboration, there is mutual dependencies developed on trust, here all parties pay attention to performing in the best interests of the customers. So, the competitive benefits lies on the fact that large consulting firms find it difficult to involve in such collaboration as they usually want to be control and fence their position considering small agency as the threat.

Structure- Here, structure refers to the way the organization is structured. As put forward by Lee, Olson and Trimi (2012) employees in the consulting firms because they usually have issues with the management and due to management dissatisfaction, they switch to other firms. However, the small organizations could overcome this challenge, as they do not have layers of management, while big firms due to hierarchy of management often are not able to take appropriate care of their employees. Aurecon Group Pty Ltd could develop internal career opportunities programs for the employees or skill development programs but investment on such agenda could be a challenge initially for Aureacon, which is probably the major issue in today’s competitive environment.

System:  Here, the system refers to the process of conducting the regular activities that staff members involve in. Managers need to play the role of encouraging employees in conducting the daily activities (Dustin, Bharat and Jitendra 2014). Nonetheless, due to lack of managerial involvement in the work practice, Aurecon faces employee turnover.

Shared values: Aurecon Group did not build any “super-ordinate” goals where its core value should be embedded with the corporate culture as well as general work ethic. This means that Aurecon could incorporate its organization goals with its work culture and corporate principles. This incorporation helps in knowledge sharing.

Style: SMEs like Aurecon should develop a transformational leadership under a flat organizational structure. The present hierarchical management with an autocracy in the leaders practice often create gaps between  between employees and supervisors.

Staff:  Even though Aurecon hire key talents by collaborating with other firms for more required expertise, it may face the challenge of meeting their needs- such as investment on them.  

Skill: Aurecon observes skill gap in its workforce, as it does not provide apprpriat training and skill development programs to its employees.

Strengths and advantages of 7’s framework

This framework helps to insist on organization’s strategy implementation. The framework clearly determines that organizational effectiveness is not dependent on just strategy and structure, which means effectiveness can be increased by paying attention to other variables as well- such as employee skills development, formulation of shared organizational goals and developing a suitable leadership style. In addition, Hanafizadeh and Ravasan (2011) mentioned that 7s framework is the first framework to meld both hard and soft elements of the organization. The framework helps to identify and insists on the coordination of major tasks. In addition to all these, the framework also helps to relate academic studies with the managerial practices.

Employee Retention Strategies

The framework might miss out some particular fine-grained areas, in which the gaps in the strategy can be observed. An empirical study on strategic tools conducted by Hsuand Peng (2012), helps to identify that the framework does not help to adequately assess the extent of suggested management practices. In addition to this, it is also identified that in 7s framework, it could be difficult for the market analysts to specify what should be done executing the framework.

The above presented industry analysis and 7s’ framework tool helps to identify that small and medium organization like Aurecon faces the issues of retention due to increasing consulting opportunities in the sector. Consequently, they find it difficult to attract key talents. Thus, to resolve such issues, the following approaches have been suggested to the consulting firms.

Crowdsourcing: A discussed above, the small and medium firms as Aurecon could come into a collaboration with other firms and this can be done through “crowdsourcing”. Crowdsourcing particularly for consulting helps to source particular consulting expertise from small firms. In this context, Afuah and Tucci (2012) commented that for consulting services, the practice of crowdsourcing provides a good way forward, where the organizations, small in size can be a real threat to the large firms with respect to quality, trust and price.

Valuing expertise: A significant issue for consulting firms to deal with, is an increasing perception of consulting as a series of more commoditized as well as transactional communication. For example, CEO of strategy selection and execution consultancy Skarbek Associates mentions that since technology based work becomes commoditized and margin falls; comprehensive expertise in the sector could be more valued (Skarbek Associates 2018). In addition, there could be an outflow of only technical staff into other sector, because consulting agencies promote those with a broader knowledge of the sector, customers and regions.

The above-mentioned approaches to resolve management issues are appropriate and suitable for small firms in the consulting sector because the analysis implies that consulting sector in Singapore is facing a growing deficiency in local talents. Consequently, some large organizations hire expertise from global environment. However, it is not possible for small and medium size organizations to make large investment to ire global expertise. Thus, the best strategy, the firms could apply is, develop collaboration with other small firms. Thereby, in such context, the crowdsouring practice provides scope to the small organizations to source particular consulting expertise from other small firms. This would be lest costlier compared to hiring expertise from global environment or hiring expertise from large firms. The scholars have also mentioned that under a disruptive business model, crowdsourced consulting agencies are emerging and influencing the industry driven by technology and smarter-clients.

Conclusion

The report provides the fact that even though consulting industry in Singapore has achieved a significant growth in the recent time but such emerging growth would not be transparent in future. The consulting agencies in the sector observed a significant lack in the regional talents. Some large firms started hiring expertise from the internal environment, while small firms are facing the challenge of sustainability and quality of service. Thus, to deal with such challenge few strategies have been proposed but as the market has been in the “changing-state”, the firms need to think of strategies that are more dynamic in future.

Methods of Employee Retention

References

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Allred, C.R., Fawcett, S.E., Wallin, C. and Magnan, G.M., 2011. A dynamic collaboration capability as a source of competitive advantage. Decision sciences, 42(1), pp.129-161.

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