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Primary issue of Randstad

Question:

Discuss about the Identifying and Preventing Complacency.

Randstad opened a new branch in Singapore market in October 2012. The primary issue was to become a more competitive player in the Singapore market. The market value in Singapore was 2.65 billion dollars spent on the recruitment service, while the country has almost 3.3 million people so the spent is huge (YouTube 2016). At that time there were 2800 companies in Singapore so one agency for every 20 people were already present. Differentiation is the key strategy for most organization. As a global company Randstad had to be one of the top three companies in the market. However the company was at the eighth position for their market performance at that time. The company had to grow more than 8 % as the market was growing by 8%, so the company had to perform more than 8% in order to stay ahead in the competitive market. At that time Ranstad was growing by 5% so they were losing their market share to their competitor companies. Randstad is one of the Fortune 500 companies, so it was expected that they would grow double or at least 50% above the average market rate (Fortune.com 2016). At that time Singapore’s market was growing really fast compared to the global scale, so the company had great opportunity to enhance their organizational performance. The company was also struggling to move from 8th position to 3rd position and moving the people together working to improve brand image, market positioning, increasing quality activities on a daily basis to turn the employees more productive and lead the company believe in the change was challenging for the company.

The Randstad company management was suffering from complacency issues from 2010 to 2012. The growth was not improving for that period. The company was satisfied with the result and did not explore the outside market opportunity and did not develop internal infrastructure to utilize such outside market opportunities (Drucker 2017). The company did not do extensive market analysis of its competitors before starting the business venture in the highly competitive market of Singapore. Therefore the company failed to understand the growth rate of its competitors. The competitive companies’ structure and achievement were also unanalyzed by the company. The company fails to explore their best organizational part which they can use in the business strategies to outperform them. This led the company to perform alright for a long period but not achieve the high performance which was desired.

Competition in Singapore market

The organization was not growing as fast as expected but it was growing and every organizational activity appeared orderly from surface but the leaders were expected to analyze every activities or employee performance minutely (Southwick et al. 2017). The leadership failed to get the granular details about how the company was operating from a client, candidate or consultant perspective.

Individual drive and collective aspiration were missing in the organizational performance (Katzenbach and Douglas 2015). The employees were unsure where they would see themselves in a year or where the company is actually headed.

The organization was purely focused on generalized recruitment. The generalized recruitment was based on individuals who would be doing everything from finding out forklift drivers to find sales professionals and to CEO that made the job complicated (Youtube.com 2016). As the country had low unemployment rate, the company had to work hard in order to find good and skilled people. The shift from to Singapore market was also large for Randstad as the Singapore government is trying to push the country towards higher qualified jobs, so the environment was shrinking for such companies.

Alternatives

Merits

Drawbacks

Measure customer satisfaction and employee job satisfaction

Employees serve the clients directly so their satisfaction will ensure better performance.

Wrong measurement my lead to a wrong direction.

Continue re-innovating - service and strategies

Randstad follows the same traditional practice of their home country in the host country as well, the re innovation of certain strategies will help them to surpass their competitors.

Proper market analysis and research on the competitors needed before implementing innovative strategies.

Admitting the issues and offer compensations. Implementing a formal process for learning from those mistakes.

The wise thing for Randstad would be moving on and offering compensation in the forms of rewarding the employees and offering discounts to the customers.

Admitting the flaws might affect the Randstad’s reputation. More money needs to be invested for the rewards.

Leadership needs to be more attentive to the details.

The leadership will challenge the status quo of the company. As his lack of attention to detail has already affected executive presence it will help him to meet the growing demand of complacency (Llopis 2014 ).

This might create tension between the management and the employees.

As an organization of twenty first century Randstad is focused on profit sustainability and longevity. The company is working in an environment that is focused on global expansion, process innovation and increasing market pressure. The company is seeking to step ahead from their competitors in the foreign market. Compliancy has always been an issue for large industries, like in the financial company’s crisis (Harraf, Soltwisch and Talbott 2016). Complacency can be found in four areas of people, culture, structure and process. The complacency of top managers can lead the company into risky investments. The organizational complacency can affect the organizational performance in various ways. The complacency of processes leads to environmental scanning that is not sufficient. The company fails to react to the external changes. The overconfidence results in lack of effective decision making process, even when it is needed (Tsai et al. 2017). The complacency of the management people encourages little liability among them. It has also been observed that the complacency is used as the justification for retaining the leadership that is not effective enough. The complacency in the structure makes it cumbersome and the resources get wasted. The complacency leads to an organizational culture that does not encourage challenging procedures, processes in order to achieve high standards. Critical analysis at regular interval is necessary to minimize the complacency otherwise organizational failure can occur (Clancy, Hanover and Masini 2013). The business world has experienced how the complacent characteristics had led to organizational failure for such companies like Kodak, Blackberry, Circuit City, Borders and Block buster (Linkner 2012).

Alternatives

In a recent survey, maximum numbers of the respondent who are company executives believe that their companies are not engaged in a strategy that has winning quality (Harraf, Soltwisch and Talbott 2016). There are long gap between the expectation and execution. The company needs to combine strategy with execution in everyday practice. Most company establishes a mission and vision statement that is simple yet deep. The aim that the company aspires for must be communicated through the message and is delivered to employees effectively (Gordon 2017). The management of successful companies should be engaged with market reality.

For a company like Randstad the management leadership needs to be exposed to the foreign market. An effective leader assesses the organizational activities at regular interval along with the self assessment. This helps him to identify the flaws in the organizational performance and the needs. The leadership is engaged in effective communication in every level of the organization (Hackman, Michael and Johnson 2013). The leaders have to get involved in everyday activities so that the “okay standard” of the surface level gets addressed and the better options are searched for.

Ranstad has to apply decision criteria before reaching any decision. Decision criteria can be defined as the characteristics or variables that are significant part of organizational decision making process (Yu 2013). And the final decision making is the selection of the most appropriate variable suitable for the organization.  

Decision Criteria

Weight

Evidence

Implementing innovative strategies

25%

Randstad is suffering from various management and performance related issues. Setting up core values and effectively spreading the objectives among the employees. New effective strategies can eliminate the complacency issues successfully.

Customer satisfaction

25%

The company is initiating in the “Voluntary Service Overseas (VSO)” that helps the company to include local communities and support from Singapore market (Ir.Randstad.Com 2015).

Employee satisfaction

15%

The company has been engaging in enhancing the labor market relationships, participating in social dialogs with employees.

Ethics

25%

The company has been practicing ethically since its inception however the management must be careful that the ethical conducts must meet the host country’s rules and regulations.

Leadership

10%

The leadership of Randstad is incorporating ambitious strategies, great execution, and agility and combining the ability to “think global and act local”.

The problem has been identified as the difference between the existing and desired state of the organization (Velasquez, Mark and Hester 2013). The problem in the case of Randstad is the complacency or the overconfidence of the management even when trying to establish a new branch in Singapore. The company has been working in a comfortable environment and failing to establish a successful business and complacency has been identified as a major problem. The leadership then frames the problem definitely so that the decision can be made accordingly. The direct and indirect competitors are Ranstad not only has to consider the direct competitors but also the competitors who are working from outside of Singapore. Randstad has to identify whether the changes initiated by its competitors are strategic or tactile. The company has to identify if the competitors are often engaging in big changes or mainly staying in their current state.  How the target market, cost structure, market share have affected the company after implementing the strategies must be identified by the company as well. Few factors are important to identify the decision criteria like facilities, opportunity to progress that are suitable.

Decision criteria

The annual report by Randstad in 2015 the company has discussed various strategies that the company is implementing for enhancing the performance. The company has set their core values as knowing, serving, trusting, striving for perfection and promoting all interests. Therefore it can be noticed that the company has been giving much importance to knowing the other culture and its competitors. The message of “Good to know you” is highly effective for spreading the message of collaboration. The company has been engaging in enhancing the labor market relationships, participating in social dialogs with employees. The company is initiating in the “Voluntary Service Overseas (VSO)” that helps the company to include local communities and support from Singapore market (Ir.Randstad.Com 2015). The past experience has taught Randstad management about the static performance so the management is implementing newer technologies to their service to enhance the performance. The leadership of Randstad is incorporating ambitious strategies, great execution, and agility and combining the ability to “think global and act local”.

Randstad has to address the issues related to its complacency and look for resources that are already available for resolving the issue. Randstad did not conduct a market survey before the business venture that result in negative impact. Therefore before the development f solutions the company has to analyze the competitors’ strategies into their strategies.

The leader plays a significant role in the process where the leader of the company through his analysis, judgment and experience makes the final decision. The Randstad top management failed to analyze the problems regarding their growth in the initial phase of the business venture. Randstad should run the survey and analysis and the scientific data should be incorporated in the selection of the alternatives.

The organizational complacency is often driven by the inherent human desire for stability and they do not welcome risks. In order to avoid complacency and maintain growth the management needs to establish a “business process management culture” that is aligned to employee efforts (Ir.Randstad.Com 2015). In the process of overcoming organizational complacency the company needs to promote fearless functionality and challenging processes. Randstad management should address that the company is suffering from the complacency issues. The company is Australia based and the new business will be in Singapore. As we have discussed several big company failed in developing a sustainable organizational performance because they failed to maintain their complacency issues. Randstad did the similar mistakes in their initial phase of the business activity in Singapore. The elimination of the self satisfied attitude can prove to be most effective for the company to increase their competitiveness. Randstad could use various media for advertising to attract skilled candidates but that should be rejected as in the country the unemployment rate is low. Therefore even if the company is global and possesses huge reputations outside the regional market it is not effective in this case. Instead the company should focus implementing changes internally to deal with such issues. The complacency issues can be changed by active participation by the management leadership and effective strategies. The implementation of innovative strategies can prove to be most effective in the case of Randstad.

Reference

"Fortune Global 500 List 2017: See Who Made It". 2016. Fortune. https://fortune.com/global500/

"Tech And Touch Annual Report 2015". 2015. Ir.Randstad.Com. https://www.ir.randstad.com/~/media/Files/R/Randstad-IR/annual-reports/annual_report_randstad_2015.pdf

"Video Business Case - Michael Smith; Managing Director; Singapore, Hong Kong, Malaysia; Randstad". 2016. Youtube. https://www.youtube.com/watch?v=C7kffnb5FhU&feature=youtu.be.

Clancy, K., Hanover, A. and Masini, A., 2013. Complacency not an option. Financial Executive, 29(3), pp.24-28.

Drucker, Peter F. The Theory of the Business (Harvard Business Review Classics). Harvard Business Press, 2017.

Gordon, Gus. "Communication, Vision, and Mission." In Leadership through Trust, pp. 63-69. Springer International Publishing, 2017.

Hackman, Michael Z., and Craig E. Johnson. Leadership: A communication perspective. Waveland Press, 2013.

Harraf, Abe, Brandon William Soltwisch, and Kaitlyn Talbott. "Antecedents of Organizational Complacency: Identifying and Preventing Complacency in the Work Environment." Managing Global Transitions 14, no. 4 (2016): 385.

Katzenbach, Jon R., and Douglas K. Smith. The wisdom of teams: Creating the high-performance organization. Harvard Business Review Press, 2015.

Linkner, Josh. 2012. "Forbes Welcome". Forbes.Com. https://www.forbes.com/forbes/welcome/?toURL=https://www.forbes.com/sites/joshlinkner/2012/11/16/palm-kodak-blockbuster-sears-rim-borders-circuit-city-compaq-and-the-only-thing-you-can-do-to-avoid-being-next/&refURL=https://www.google.co.in/&referrer=https://www.google.co.in/.

Llopis, Glenn. 2014. "Forbes Welcome". Forbes.Com. https://www.forbes.com/sites/glennllopis/2014/08/05/the-dangers-of-complacent-leadership/#56e470fb3de5.

Southwick, Frederick S., Brenda L. Martini, Dennis S. Charney, and Steven M. Southwick. "Leadership and Resilience." In Leadership Today, pp. 315-333. Springer International Publishing, 2017.

Taggart, Caroline. Misadventures in the English Language. Michael O'Mara Books, 2016.

Tsai, F.S., Lin, C.H., Lin, J.L., Lu, I.P. and Nugroho, A., 2017. Generational diversity, overconfidence and decision-making in family business: A knowledge heterogeneity perspective. Asia Pacific Management Review.

Velasquez, Mark, and Patrick T. Hester. "An analysis of multi-criteria decision making methods." International Journal of Operations Research 10, no. 2 (2013): 56-66.

Yu, Po-Lung. Multiple-criteria decision making: concepts, techniques, and extensions. Vol. 30. Springer Science & Business Media, 2013.

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