人才一词尤其在本文中代表了专业知识或通过经验获得的知识 – 特定领域的专家技能或经验/知识。通过人才管理这一术语，作者指的是管理以下过程的四个阶段。首先，根据组织对技能的需求选择和雇用熟练的个人，其次，为他们提供一个环境，使他们能够在实践中运用他们的技能来改善雇主的业务绩效，第三，发展他们的才能，以进一步支持组织的商业计划，第四，保留这些个人，或保留他们的知识。本文的下一部分将详细介绍这些过程的调查和相互依赖性。

1. Introduction

The word talent represents, in particular in this essay, expertise or the knowledge gained through experience – expert skills or experience/knowledge in a particular field. By the term talent management, the author refers to managing the four stages of the following process. First, selecting and employing skilled individuals according to the organisation’s need for skills, second, providing them with an environment in which they can apply their skills in practice with respect to improving the employers’ business performance, third, developing their talent in order to further support organisation’s business plan, and fourth, retaining those individual, or retaining their knowledge. The next part of the essay presents the investigation of these processes and interdependence between, in detail.

In this essay, the author illustrates the great interdependence between the continuous improvement of the four stages and success of talent management. The two key objectives of this essay are, first, to investigate the concept of talent management, in detail, and second, to present insights into the relationship between talent management and leadership/management development.

2. The concept of talent management

Talent Management has been the cornerstone of Human Resource Management (HRM) strategy in many organisations for over a decade. Sparrow et al. (2014) affirm that although, over a decade, talent management has been considered an important factor in advancing business performance, the concept of talent management has not been precisely defined, nor it received a theoretical development. For that reason, success of applied talent management has not been agreed upon. Barlow (2006) explains that most of organisations focus on the leadership roles or employees who have the potential for such roles and do not have a certain clarification of what they consider talent. She adds that the talent management practices and Human Resource activity, in these organisations, become alike and interchangeable terms.

Lewis and Heckman (2006) remark that this uncertainty and confusion exists for the reason that various terms are used interchangeably with regards to different elements of talent management (such as, Human Resource Planning or Succession Planning), although each has specific practices mostly different than the other ones. Davis (2007) describe that talent management is strategic corporate approach which comprises interdependent processes of first, employing individuals who have talent(s) required for a particular employ, second, retaining those employees and third, further developing their talent to achieve preferable business performance, consistently. He explains that achieving optimum business performance through these three processes of talent management would be feasible, only if the management itself is talented.

Davenport, et al. (2010) explains that analysing, for example supply chain management or customer relationships is very similar to analysing talent, for the reason that they have comparable analysing process from the start to the end. They explain that analysing talent begins with clarification of identity – individuals’ professional background – and ends with aligning changing needs of the organisation with real-time deployment of talent.

3. Four stages of talent management strategy

3.1. Sourcing talent

The two methods of sourcing talent are internally – selecting current employees within the organisation who have the required talent and can shift position or department or employees who , for example, can participate in more than one project – and externally – looking for talent outside the organisation. Sourcing talent internally has significant priority. One of the first criteria that each corporate assigns to sourcing talents, as Davis (2007) suggests, should be assuring that the needed talent does not exist or is not available within the corporate, for the reason that, current employees have a better understanding of the business through experience and also the corporate has a clear understanding of its employees’ profiles. Knowing that, either sourcing internally or externally requires adopting an appropriate sourcing talent technique. He remarks that one of the most important elements of a reliable technique is to clarify the skills or personal qualities the source needs to have to deliver what is required, rather than focusing on the job description. In other words, how individuals accomplish specific tasks should receive more attention than the number of tasks they can maintain.

In order to specify the skills required for a certain job in the organisation, the author suggests applying cross-functional decision making concerning talent. Cross-functional collaboration literature (e.g. Levy, 2011; Hislop, 2005; Slagter, 2009)suggest that the main advantage of bridging HRM and the function within the department, which requires the talent, gives the experts in both departments to set the most feasible talent selection criteria. Davenport, et al. (2010) describe that analytical HR consist of collaboration between HR and other functions or departments. This collaboration will result in optimum talent management through which the organisation would benefit the most from its intellectual capital. They explain that Analytical HR integrates individuals’ performance data with organisational objectives which be followed by better understanding the areas which need talent development. This shows the great interdependence between this element of talent management and talent development.

3.2. Work environment

In this part of the essay, the author investigates the relationship between work environment/climate and successful talent management from two parallel perspectives. Firstly, the impact of work environment on employee satisfaction and productivity is non-negotiable and its influence on success of talent management, in term of retention, is considerable (Botha, et al., 2011). In order to maximise the performance of talents, providing motivational features embedded in the design of work environment followed by satisfying talents need – where they can elicit their skills fully – is as critical as a competitive salary is for attracting and retaining talents. For example, as Yeh (2007) expresses, HR especial practices for highly mobile talents has positive impact on minimising turnover and maximising employee satisfaction. On the other hand, HR acculturation practices prepare a work environment, especially for entry level employees, in which employees will have the opportunity to better understand organisational beliefs and work towards its goals.

The second perspective is the impact of work environment on knowledge elicitation and transfer between experts and other employees or functions within one organisation (Botha, et al., 2011; Hislop, 2005; Hofer-Alfeis, 2008). There is another great interdependence between two stages of talent management, motivational work environment and retaining expert’s knowledge. The author investigates this element in detail, in section 3.4.

3.3. Talent development

Education and training

In the process of talent management, continuous talent development plays an important role. Davis (2007) affirms that one of the fundamental talents required in advancing talent management is learning ability of candidates. Moreover, education element of this process is not limited to academic degrees. It includes professional workshops, certain courses and so on. Skilled workers will have the opportunity to further develop their knowledge and learn about the current works in their area of profession.

Communities of practice

Hislop (2005) defines that community of practice represents a group of people who, to some extent, have shared identity, common knowledge and overlapping values which results in creating social conditions conductive to knowledge sharing. Motivating communities of practice, and in particular the ones including skilled workers, to actively participate in sharing, creating and utilizing knowledge will be followed by individuals’ talent development. Significant advantage of this element is increase in the transfer of experts’ knowledge to other employees followed by reducing the impacts of leaving experts and its risk for the organisation. . Fisher and White (2000) emphasise that supporting effective communities of practice networks have significant motivational role in retaining experts and as a result, reducing knowledge loss.

Cross-functional practices

As mentioned in section 3.1, talent management advances through collaboration between functions from the start point of the process. Promoting cross-functional experts’ collaboration will also create an opportunity to better identify the areas that needs further talent development. The author suggests shifting from centralized to cross-functional (decentralized), for example in HR practices, assist the performance of talent management, and illustrated the details associated with this method in Figure 1.

Figure 1: Cross-functional communication chain

3.4. Retaining talent/knowledge

One of the most influential HRM practices for retaining talents or at least their knowledge, suggested in Human Resource (HR) literature, is motivation. Motivation is foundation of almost all other strategies required for talent retention, for example reward systems (Menon & Pfeffer, 2003). Reward systems are, in fact, a major factor motivating employees to collaborate efficiently and effectively (Droege & Hoobler, 2003). Winkelen and McDermott (2008) report that not many organisations employ proactive strategic approaches to prevent talent loss, instead most of them seek ad hoc and reactive approaches.

After investing time and money in addition to sharing corporate strategies with talents, the main concern for any organisation would be retaining talent as long as possible. Although the organisation does benefit from this investment in terms of overall performance improvement, every organisation wants continuous profit from this investment. If the talents leave the organisation then not only the whole process needs to be repeated resulting in extra investment but also, particularly in the cases that talents shift to competitors as they take their knowledge of the corporate with them which is higher in risk than any other expenses the organisation might face. Hofer-Alfeis (2008) characterises leaving experts/talents a significant challenge for HRM more than any other function within an organisation. He explains that retiring, shifting positions within an organisation or shifting to another organisation raises the need for approaches through which the organisation, at least, retain the experts’ knowledge when retaining the experts themselves is not possible.

De Long and Davenport (2003), Levy (2011) and Winkelen and McDermott (2008) affirm that the fundamental step in any talent retention strategy should, first, include identifying talents critical to business performance and, second, using tools and techniques assuring transfer of their tacit/undocumented knowledge to other employees within the organisation. Among the HR practices, Hofer-Alfeis (2008) suggests, job rotation is one of the most reliable ones in terms of spreading the knowledge and making the organisation less dependent on talents. Slagter (2009) adds that network building and conducting seminars facilitates knowledge elicitation and transfer between experts and other employees. Hislop (2005) affirms the interdependence between recruitment and selection process and retaining knowledge. He explains that selecting and recruiting talented individuals with compatible values to those of existing culture of the firm, and the ones who are willing to engage in knowledge transfer practices, will further facilitate the process of talent management.

3.5. Summary

The four stages of talent management strategy investigated in section 3.1, 3.2, 3.3 and 3.4 is summarised in Table 1.

Talent management stages	Method	Elements
Sourcing talent	Internally/externally	Candidate identityExperienceExpertiseQualificationsOrganisational critical needs
Work enviroment	N/A	Work cultureWork performance reviewHR and employees communication waysAddressing employees’ concernsEmployee welfareSalariesRisk of job loss
Talent development	Internally/externally	EducationTrainingCommunities of practiceCross-functional collaboration
Retaining talent/knowledge	N/A	Opportunites for employee career developmentCompetitive employee supportKnowledge elicitation and transfer

Table 1: Four stages of talent management

4. Concluding marks

The qualitative analysis in this essay highlighted that talent management is not limited to HR practices. It showed that to succeed in talent management, a strategic approach, involving many functions within a firm, is a necessity and it will benefit from covering all the four stages of strategic process of talent management proposed, in parallel. Moreover, findings of detailed investigation of elements of each stage revealed that there is a strong interdependence between all the stages of talent management strategic processes and there is a great need for continuous improvement of the process to achieve advanced business performance. The author concludes that talent motivation – such as providing great place to work at, opportunities for developing career and so on – has the greatest effect on success of talent management and especially retaining experts or expert knowledge. Furthermore, talent management strategy that aims at improving business competitive performance needs professional leadership and management talents.

Works Cited

Barlow, L., 2006. Talent development: the new imperative?. Development and Learning in Organisations: An International Journal, 20(3), pp. 6-9.

Botha, A., Bussin, M. & de Swardt, L., 2011. An employer brand predictive model for talent attraction and retention. SA Journal of Human Resource Management, 9(1).

Davenport, T. H., Harris, J. & Shapiro, J., 2010. Competing on talent analytics: What the best companies know about their people – and how they use that information to outperform rivals. Harvard Business Review , 88(10), pp. 52-58.

Davis, T., 2007. Talent Assessment A New Strategy for Talent Management. s.l.:Gower Publishing Limited.

De Long, D. W. & Davenport, T., 2003. Better practices for retaining organisational knowledge: lessons from the leading edge. Employment Relations, 30(3), pp. 51-63.

Droege, S. & Hoobler, J., 2003. Employee turnover and tacit knowledge diffusion: a network perspective. Journal of Managerial Issues, 15(1), pp. 50-64.

Fisher, S. & White, M., 2000. Downsizing in a learning organisation: are there hidden costs?. Academy of Management Review, 25(1), pp. 244-251.

Hislop, D., 2005. Knowledge management in organisations: A CRITICAL INTRODUCTION. s.l.:Oxford University Press.

Hofer-Alfeis, J., 2008. Knowledge management solutions for the leaving expert issue. Journal of Knowledge Management, 12(4), pp. 44-54.

Levy, M., 2011. Knowledge retention: minimizing organisational business loss. Journal of Knowledge Management, 15(4), pp. 582-600.

Lewis, R. E. & Heckman, R. J., 2006. Talent management: A critical review. Human Resource Management Review , Volume 16, p. 139–154.

Menon, T. & Pfeffer, J., 2003. Valuing internal versus external knowledge. Management Science, 49(4), pp. 497-513.

Slagter, F., 2009. HR practices as predictors for knowledge sharing and innovative behavior: a focus on age. International Journal of Human Resources Development and Management, 9(2/3), pp. 223-249.

Sparrow, P., Scullion, H. & Tarique, I. eds., 2014. Strategic Talent Management: Contemporary Issues in International Context. s.l.:Cambridge University Press.

Winkelen, C. & McDermott, R., 2008. Facilitating the handover of knowledge. Knowledge Management Review, 11(2), pp. 24-27.

Yeh, Y., 2007. A renewed look at the turnover model for accounting knowledge work force. Journal of the American Academy of Business, 11(1), pp. 103-109.

各种学者提供了大量风险定义，其中一些以特定的商业环境为中心，另一些则是风险的更通用的定义。围绕业务环境定制的全面风险定义可以定义为可能导致组织大量损失的事件，也可能因风险事件发生的可能性而变得更加危险（Harland，et al。， 2003）。此外，英国牛津词典将风险定义为“涉及危险的情况”或“可能发生令人不愉快或不受欢迎的事情”。（牛津词典，2015）

Introduction

A variety of academics have provided numerous definitions of risk, with some being centred around a specific business environment and others being a more generic definition of risk. A comprehensive risk definition that is tailored around the business environment can be defined as an event that will likely lead to substantial losses for an organisation, which could also be made more dangerous by the likelihood of the risk event occurring (Harland, et al., 2003). Furthermore, The English Oxford Dictionary defines risk as “A situation involving exposure to danger” or “The possibility that something unpleasant or unwelcome will happen”. (Oxford Dictionary, 2015)

Kaplan and Garrick (1981, p. 12) provide a simple equation for risk, which is “risk = uncertainty + damage”. They believe that it is irrelevant as to what context risk exists in, and that the same equation can always be used to identify and manage risk. However, risk can still be categorised differently depending on what facet of the organisation it is affecting. For example, supply chain risk can be defined as “”the variation in the distribution of possible supply chain outcomes, their likelihood, and their subjective values” (March & Shapira, 1987, p. 1404). This is quite different to other, more generalised definitions of risk.

Risk Management

Before a risk management strategy can be decided upon, the risk event must first be identified. An organisation should conduct three steps before deciding on the best risk management strategy to use. As risk management can use a substantial amount of resources, clarification and direction should be decided upon before conducting risk management. The three factors are (Stanleigh, 2015);

• Identification of the risk: The organisation should first review all of the possible risk sources. Furthermore, they could use a risk assessment tool to identify the risk event that may occur.
• Assessment of the possible risk event: Once the organisation has identified the risk, they must assess the potential damage that the risk even could case. As previously stated, the severity of the risk is an extremely important factor for an organisation to consider, as it will help shape and design any relevant risk management strategies.
• Develop an educated response to the risk event: After the risk has been successfully identified and assessed, the organisation can begin to decide what resources may be needed to limit or completely negate the potential risk event.

Once an organisation has identified any unexpected risk events that may occur, they must focus all their resources of deciding which risk event should be tackled first. Most organisations will have a limited amount of resources, and will only be able to tackle one of two risk events at a time. If a plethora of risk events are likely to occur, this means prioritising which ones to minimise. This means that companies have to assess the impact that a risk event can have on an organisations financial and market performance, and focus all their resources to eliminate the most dangerous risks first.

Risk management is imperative, and executing it unsuccessfully can have severe impact on an organisation. The extent of the consequence for not managing risk will be dependent on the risk event, but can have impacts such as; financial loss, employee injury, business interruption, damaged reputation or failing to achieve corporate objectives (SCU, 2015). There are a plethora of other potential consequences for not managing risk, all unique to the particular risk event, but none will other anything positive to business performance. This highlights the significance for an organisation to conduct risk management successfully.

There are a few different frameworks and ideas that exist to help an organisation prioritise which risk event they should focus on minimising. One of the most comprehensive frameworks for prioritising risk is the probability and impact framework. This framework depicts independent, variability and ambiguity risks, and measures the probability that these risk events may occur and the severity they may have for the organisation if they were to ever occur. These findings can be summarised in a probability-impact matrix which is where “the probability and impacts of each risk are assessed against defined scales, and plotted on a two dimensional grid” (Hillson, 2001, p. 237).

Furthermore, there are a few other methods for prioritising which risk event to tackle. Risk events can also be ranked using multi-attribute techniques. For companies that want to adopt a more adaptable risk priority technique, the multi-attribute method would be preferred. This is because the attributes of interest can be selected based on the interests and prioritisation of the organisation and any relevant stakeholders. This has many similarities to a probability impact matrix, but offers a more creative and free way to define variables that will be used to prioritise risk. There are variations of this technique, including a bubble chart, risk prioritisation chart, uncertainty-importance matrix and high level risk model (Hopkinson, et al., 2008).

The final technique that will be covered for prioritising risk is the use of quantitative models and techniques. These methods are not as rigorous as the previous methods, however they do still offer a few benefits for a company. The main reason a company will use a quantitative risk priority method is because it is an incredibly cheap method, that requires little, to no, preparation and planning. (Hopkinson, et al., 2008). This means that a quantitative risk priority method will be preferred for companies that want to prioritise risks efficiently, at a cheap cost, and using the least amount of resources as possible.

Once the risk has been successfully prioritised, it must also be thoroughly assessed. There exist a few different methods of assessing risks, with two prominent methods of risk assessment being quantitative risk assessment and comparative risk assessment. Quantitative risk assessment “relates to an activity or substance and attempts to quantify the probability of adverse effects due to exposure”. In contrast, comparative risk assessment “is a procedure used for ranking risk issues by their severity in order to prioritize and justify resource allocation” (Hester & Harrison, 1998, p. 2).

Furthermore, comparative risk assessment is becoming the preferred method of risk assessment for many companies across the world. This is because a comparative risk assessment has been found to be more thorough and rigorous and pinpointing the details and severity of a risk event. Furthermore, a comparative risk assessment aims to identify the more serious risk event, before moving onto tackling any other risk events. (Finkel, 1994, p. 337).

There is also one other method for assessing risk events. This is through the use of the comprehensive outsource risk evaluation (CORE) system. This is a tool developed by Microsoft and Arthur Anderson to aid a company in identifying, assessing and preventing any risk events. (Michalski, 2000). The tool identifies a total of 19 risk factors and categorises them into four different sub-categories; infrastructure, business controls, business values and relationships. This gives organisations a lot of freedom, as each individual company can decide on the importance of each factor, dependent on the significant it has towards the day-to-day activities of the organisations operations. Furthermore, after the risk has been successfully assessed through the use of CORE, it is analysed objectively through the organisations financial data and subjectively through the measurement of relationships and integration within the firm.

It becomes quickly apparent that the majority risk assessment methods and techniques share a common theme, predominantly the measurement of the probability and impact of potential risk events that could occur and effect an organisations daily operations (Yates & Stone, 1992; Hallikas, et al., 2002). This highlights the importance of risk assessment, and why it is an imperative skill that a risk manager should become adept at utilising.

There is also one other factor that may be taken into consideration when deciding on a risk management strategy, that is the character and personality of the manager. Certain managers will follow traditional methods and not take advice from others, which also means they will not be willing to adapt to a risk management strategy they are unaware of, even if it proves to be more successful.

After a company successfully completes the three steps mentioned above, identification, assessment and development of a response, they will be able to proceed with the fourth step. The final stage is deciding and implementing the preferred risk strategy, which has been decided through the aforementioned three steps, to best limit or negate the potential risk event.

A risk management strategy is “focused on identifying and assessing the probabilities and consequences of risks, and selecting appropriate risk strategies to reduce the probability of, or losses associated with, adverse events. Risk mitigation focuses on reducing the consequences if an adverse event is realised” (Manuj & Mentzer, 2008, p. 141). Although there exist a plethora of risk management strategies, with some being more beneficial dependent on the situation, three key risk management strategies are (Norman & Jansson, 2004; Juttner, et al., 2003)

• The Avoidance Strategy: There are two main types of avoidance strategy. The first type is where an organisation will attempt to drive the probability of a risk event occuring down to zero, or as close to zero as possible. Furthermore, the second type of avoidance strategy is where an organisation is attempting to predict the risk event. This will allow them to set in place any contigency plans to try and limit the impact to zero or as close to zero as possible. Both of these strategies have a considerable amount of uncertainty about them, as it can be very hard for an organisation to predict the details of a risk event, or the implications that one might hold for the company.
• The Security Strategy: A risk management security strategy seeks to minimise the risk of any event occuring. This is very similar to the avoidance strategy, however it acknowledges the fact that a risk event is going to occur, and merely tries to protect the organisation as much as possible from any effects the risk event may cause. Implementing a security strategy can be achieved via number of ways, including working closely with any local governments, proactively complying with regulations or ensuring internal security over the organisation and its resources.
• Control/share/transfer: This strategy can take the form of vertical intergration. This furthers the ability of a manager within an organisation to control more processes, systems methods and decision. Having greater control of the day-to-day operations of a company can help minimise the probability and impact of risk. This is because it can help spread the risk over many operations, and thus reducing the severity of the risk event. However, the need for greater control can also cause the need for greater side intergration (Anderson & Gatignon, 1986), which can be difficult for companies to achieve.

If the risk event will cause significant issues for an organisation, and is considered a ‘high risk’, then a company should aim to utilise an avoidance strategy. This would be best because it would minimise or completely deplete the probability of that risk event occurring. However, this can come at a huge expense to the organisation, and consumer a substantial amount of resources. On the other hand, if the risk event will have a limited impact on a company’s performance, and is considered a ‘low risk’ event, then a security strategy may be more suitable as it will protect the company’s operations and resources from the risk event.

Deciding on the most optimum risk management strategy to use can be an incredibly difficult job for any manager to accomplish. If the manager chooses the wrong risk management strategy then the risk event could cause substantial problems towards the organisations financial and market performance. One of the most significant factors that can affect the decision of which risk strategy to pursue is the severity of the risk (OSBIE, 2015).

Conclusion

There are a variety of steps that a risk manager should go through in order to successfully implement a risk management strategy. One of the most importance stages of this process is to spend ample time identifying and assessing the risk, so that a clear and concise strategy can be decided upon. If the risk manager acts without knowledge, then they could implement the wrong risk manager strategy, thus wasting resources and still allowing the risk event occur.

Furthermore, the risk manager should attempt to utilise an avoidance strategy in most instances, by predicting any likely risk events that may occur and putting in place any relevant contingency plans to handle these events. However, due to a number of factors including limited resources, it is not always possible for a company to do this, in which case they should focus on a risk management strategy that limits the effects of the risk event, instead of avoiding it completely. The majority of risk events can be spotted with careful planning and analysis, and some sort of action can be put in motion to at least limit the effects of the risk event that will occur.

Bibliography

Anderson, E. & Gatignon, H., 1986. Models of foreign entry: a transaction cost analysis and propositions. Journal of International Business Studies, 17(3), pp. 1-26.

Finkel, A., 1994. Worst things first: The debate over risk-based national environmental priorities. 1st ed. Washington: Resources for the future.

Hallikas, J., Virolainen, V. & Tuominen, M., 2002. Risk analysis and assessment in network environments: a dyadic case study. International Journal of Production Economics, 78(1), pp. 45-55.

arland, C., Brenchley, R. & Walker, H., 2003. Risk in supply networks. Journal of Purchasing & Supply Management, 9(2), pp. 51-62.

Hester, R. & Harrison, R., 1998. Risk assessment and risk management. 1st ed. Cambridge: Royal Society of Chemistry.

Hillson, D., 2001. Extending the risk process to manage oppurtunities. International Journal of Project Management, 20(3), pp. 235-240.

Hopkinson, M., Close, P., Hillson, D. & Ward, S., 2008. Prioritising Project Risks: A Short Guide to Useful Techniques, Buckinghamshire: Association for Project Management.

Juttner, U., Peck, H. & Christopher, M., 2003. Supply Chain Risk Management: Outlining an Agenda for Future Research. International Journal of Logistics : Research & Applications, 6(4), pp. 197-210.

Kaplan, S. & Garrick, J., 1981. On The Quantitative Definition of Risk. Risk Analysis, 1(1), pp. 11-27.

Manuj, I. & Mentzer, J. T., 2008. Global Supply Chain Risk Management. Journal of Business Logistics, 29(1), pp. 133-155.

March, J. & Shapira, Z., 1987. Managerial perspectives on risk and risk taking. Management Science, 33(11), pp. 1404-1418.

Michalski, L., 2000. How to identify vendor risk. Pharmaceutical Technology, 24(10), pp. 180-184.

Norman, A. & Jansson, U., 2004. Ericsson’s proactive supply chain risk management approach after a serious sub-supplier acciden. International Journal of Physical Distribution & Logistics Management, 34(5), pp. 434-456.

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虽然在组织SCM过程中引入新技术可以通过以下方式产生若干类型的组织效益：（a）降低成本，（b）减少时间，（c）减少库存，（d）消除人和（e）增加其他人的数量，这种引入可能是昂贵，复杂和苛刻的（Carter＆Rogers，2008）。在这种情况下，组织管理层应在确定其组织的此类行为的好处后才能引入新技术（Poirier＆Quinn，2006）。

Introduction

This short paper aims to describe the role of technology in supply chains and assess its advantages and disadvantages.

Supply chain management comprises the active management of organisational procurement, logistics, production and distribution activities for the maximisation of customer value and achievement of competitive advantage (Carter & Rogers, 2008). It concerns the effective and optimal management of goods from the procurement of raw materials from basic suppliers to the delivery of products to ultimate consumers, and even beyond in terms of the return or the consumption or disposal of such goods (Carter & Rogers, 2008).

Several developments in recent years have however resulted in significant changes in organisational attitudes towards supply chains, sharply enhanced focus upon the area, and efforts for increasing the effectiveness of the SCM function (Chopra &Meindl, 2012). Various geopolitical and socioeconomic developments like the growth of a unipolar global order, the dominance of market-oriented economic activity, globalisation, economic liberalisation, and tremendous advances in transportation and communication technology, have resulted in enormous expansion of markets and the dispersal of production and manufacturing centres (Chopra &Meindl, 2012)

With organisations engaging in sourcing of raw materials, production, research and development and sales and marketing in geographically distant locations, modern firms are placing great stress upon optimising the efficiencies and cost effectiveness of their SCM functions (Ghorban, 2011). Such organisational focus on enhancement of SCM effectiveness has also led to constant efforts for technological up-gradation and introduction of new technologies for optimisation of supply chain and enhancement of organisational competitiveness (Kremian, 2013).

This paper describes and discusses some of these modern SCM technologies, the reasons for their induction and their merits and demerits. It attempts to detail the advantages and disadvantages of new technological introductions in SCM, making use of theory as well as several practical applications, especially in the area of warehouse management.

Introduction of New Technologies in SCM Activities and Processes

Ghorban (2011) stated that technology has crept into SCM in a gradual and progressive manner, commencing with actions like electronic invoicing, computerised tracking and shipping and automated notifications and moving on to diverse and numerous other applications. Such incorporation of new technologies is being driven by diverse forces, like increasing customer expectations, intensification of competition, increasing fuel costs and greater demand for inventory control and Just in Time (JIT) management (Faze, 1997).

It is important to appreciate that contemporary technology has extensive capabilities, with regard to ensuring organisational production in line with schedules, the anticipation and correction of mistakes and the making of modifications for guaranteeing top quality products (Intermec Technologies Corporation, 2007). Each and every link in a supply chain can be simultaneously monitored and automated notification systems can be used for sending messages to diverse players through different channels (Intermec Technologies Corporation, 2007). Some of the top trends and technologies impacting supply chain operations, spanning production, distribution, retailing and remote servicing include (1) comprehensive connectivity, (2) voice and GPS communication integrated to rugged computers, (3) speech recognition, (4) digital imaging, (5) portable printing, (6) bar-coding advances, (7) remote management and (8) wireless and device security (Cohen & Roussel, 2013). Taking up the case of voice and GPS communication, leading cellular carriers have certified the utility of rugged hand held computers, which facilitate voice communication, data connection and cell phone functionality through one device (Cohen & Roussel, 2013). Stanley Steemer, a carpet cleaning franchisee made use of GPS and real time two-way communication to improve efficiencies, which resulted in the elimination of a fulltime despatch official at each of its branches and greatly reduced the time required for completion of process paper work (Chopra &Meindl, 2012).

Software programme and cloud computing have significantly improved material and product tracking, with real time updates of status now available without difficulty (Vella, 2012). These programmes furthermore allow business firms to adjust production schedules and inventory levels on a real time basis (Vella, 2012). With companies appreciating the advantages of technology incorporation in SCM, several multinational corporations have taken the lead and stand out as pioneers in the area(Intermec Technologies Corporation, 2007).

The John Deere Company made use of sophisticated logistics management software to enhance its onetime shipments to dealers from 60 to 92 percent, even as it reduced its inventory by 1 billion USD(Intermec Technologies Corporation, 2007). Nike worked with DHL Supply Chain to implement radio based product monitoring for warehouse and distribution purposes and real time delivery notifications, thereby reducing costs and increasing efficiencies(Ghorban, 2011). Walmart, the largest global retailer, has long been known for its SCM processes(Ghorban, 2011). The company is constantly engaged in using modern technology and network systems for predicting demand, tracking inventory levels and planning efficient transport routes(Ghorban, 2011).

It is important, in this context to appreciate that the introduction of new technologies has resulted in significant alterations in the conduct of specific SCM functions, like warehouse management (Halldorsson et al., 2007)). Searching for enhancements in efficiency and profitability, modern organisations have adopted various new technologies that have resulted in significant transformations in the management of warehousing functions(Carter &Rogers, 2008). The introduction of wireless technology and mobility has resulted in the development of a range of new products for enhancement of organisational productivity and profitability(Carter &Rogers, 2008). Some of these technological innovations are detailed below:

Warehouse Management Systems

Developments in warehouse management systems are being used to assist business firms in controlling the movement and storage of materials within warehouses (Simchi-Levi et al., 2007). Such systems are being used for diverse warehouse management functions like inventory management, including transactions like receiving, picking, packing and shipping, real-time monitoring of stocks, progression of products through warehouses and ensuring the elimination of obsolescence(Intermec Technologies Corporation, 2007).

Barcode Labels and Scanners

Barcode scanners, which were developed soon after the introduction of wireless technology, have become a common element of warehouse equipment (Vella, 2012). Barcode scanners are hardware devices that enable users to read barcodes, printout labels or product information and log products into the database of the warehouse management system (Vella, 2012). They are available in various types and come with different utilities (Poirier & Quinn, 2006). Barcode label printers are used by warehouse managers for printing product labels, shipping labels and bin labels(Reinertsen, 2009). Easy to use and cost effective, these devices help business firms to enhance the accessibility of management and data and augment productivity(Reinertsen, 2009).

Voice Hardware

Voice technology has recently been introduced in the area of warehouse management (Poirier & Quinn, 2006). These devices are now being used by firms to determine and finalise the amount of goods to be picked up (Vella, 2012). Voice hardware devices are fastened to wireless computers, with the data being transmitted to the device at the time of picking an order to ensure that the picker knows the product and the amount of items to be picked (Simchi-Levi et al., 2007). Several companies have started incorporating voice hardware, despite its costs, in order to save time(Ghorban, 2011).

Mobile Computers

Mobile computers are basically barcode scanners with their own display screens and operating systems(Reinertsen, 2009). The hardware for these products has been designed to ensure that they can function like portable PCs with barcode scanning capabilities(Ghorban, 2011). With mobility becoming increasingly desirable, organisations are adopting mobile warehouse management solutions(Ghorban, 2011). Such devices are proving to be extremely beneficial for organisations wishing to enhance accessibility to real time data and employee productivity (Poirier & Quinn, 2006).

Advantages and Disadvantages of Introduction of New Technology in Supply Chain Management

There is little doubt of the various advantages that can arise for companies from the adoption of new technology (Poirier & Quinn, 2006). Several firms have been able to achieve significant reductions in costs through the use of barcodes, advanced picking and other technologies in order to leverage their warehouse and transportation management systems (Poirier & Quinn, 2006). Several organisations have made use of advanced planning and scheduling systems for bringing about dramatic reductions in inventory levels and improving customer service (Poirier & Quinn, 2006). Pujawan (2004) stated that the introduction of new technology was likely to result in enhanced costs, disruption of work and the need to learn new things and eliminate old practices. He furthermore stated that modern businesses have, despite these challenges, been able to apply technology to convert their supply chain into profit generators through the reduction of costs and inventory levels and the enhancement of customer service (Pujawan, 2004). Coke, for example, upgraded its demand planning and collaboration capabilities into 2005 through the introduction of new inventory management processes, supported by software(Ghorban, 2011). This enabled the firm to improve fill rates by 15% and reduce inventory levels by 50%(Ghorban, 2011). The organisation was able to simultaneously absorb a 300% increase in product offerings, which resulted in a surge in profits through the reduction of assets and the support in enhancement of revenues through greater product availability(Ghorban, 2011).

The introduction of new technologies in SCM must however be carried out with great care and thought and in accordance with organisational requirements (Pujawan, 2004). New devices and system are expensive to purchase and install (Pujawan, 2004). Their utilisation furthermore calls for significant training and haphazard and unplanned implementation can result in a number of organisational problems(Carter &Rogers, 2008).

Investigation into the problems and disadvantages of introduction of new technology into SCM revealed that several organisations have faced different types of problems on this account(Carter &Rogers, 2008). A retailer specialising in children’s toys, for example, exceeded both the time schedule and the budget in the implementation of a new fulfilment system(Carter &Rogers, 2008). The occurrence of the Christmas demand spike before the completion of the fulfilment system led to severe challenges in the processing of orders (Sharma, 2010). Whilst organisational employees worked for 50 days at a stretch without holidays to satisfy customers, the firm was forced to delay deliveries till after Christmas to thousands of their buyers(Carter &Rogers, 2008).

SCM experts have stated that the width and scope of common SCM processes, like, for example, warehousing or transportation, are so extensive that the introduction of new technology was likely to involve significant costs, time and challenges associated with organisational change(Simchi-Levi et al., 2007). The majority of new technologies comprisedboth hardware and software and are expensive to purchase and install (Simchi-Levi et al., 2007). Organisations with limited operations and funds may thus not be able to obtain commensurate benefits from the implementation of such technologies by way of cost reduction or enhanced business (Sharma, 2010).

Many of these new systems are furthermore complex in nature and take time to install and operate(Carter &Rogers, 2008). With such installation likely to disrupt existing organisational operations, the managers of firms introducing new technologies have to plan their strategies in this regard with great care to ensure minimisation of operational disruption and customer dissatisfaction(Carter &Rogers, 2008). It is also important to keep in mind that the introduction of new technologies is bound to result in significant changes in operational activities and possibly to redundancy of labour, both of which could result in change resistance amongst employees and to opposition to organisational plans in this regard (Simchi-Levi et al., 2007).

Conclusions

The study reveals that whilst the introduction of new technologies in organisational SCM processes can result in several types of organisational benefits by way of (a) reduction of costs, (b) lowering of time, (c) reduction in inventory, (d) elimination of people and (e) enhancement of volumes amongst others, such introduction was likely to be expensive, complex and demanding in nature(Carter &Rogers, 2008). Organisational managements should, in such circumstances, introduce new technologies only after ascertaining the benefits from such actions for their organisations (Poirier & Quinn, 2006).

Great care should also be taken in the planning, implementation and installation of these technologies, with particular regard to operational disruption and organisational change (Poirier & Quinn, 2006). It has for example been explained earlier that the introduction of new technologies could help in reduction of costs through elimination of people. Such redundancies could however result in employee dissatisfaction and organisational strife. Organisational managements must, when introducing new technologies, take care to consider the various aspects and consequences of such actions and take appropriate actions. Lack of thought and care in these areas could result in inadequate and inappropriate implementation and extremely adverse organisational consequences (Poirier & Quinn, 2006).

References

Carter, C., &Rogers, D., (2008), “A framework of sustainable supply chain management: moving toward new theory”, International Journal of Physical Distribution & Logistics Management, Vol. 38, Iss (5): pp.360 – 387.

Chopra, S., &Meindl, P., (2012), Supply Chain Management, 5th edition, NJ: Prentice Hall.

Cohen, S., Roussel, J., (2013), Strategic Supply Chain Management: The Five Core Disciplines for Top Performance, Second Edition, NY: McGraw Hill Education.

Faze, F., (1997), “A comparative analysis of Inventory costs of JIT and EOQ purchasing”, International Journal of Physical Distribution & Logistics Management, Vol. 27, Iss (8): pp. 496 – 504.

Ghorban, M., (2011), “How Technology Can Ease Supply Chain Management and Mitigate Risk”, Available at: http://www.supplychainbrain.com/content/general-scm/sc-analysis-consulting/single-article-page/article/how-technology-can-ease-supply-chain-management-and-mitigate-risk/(accessed May 27, 2015).

Halldorsson, A., Kotzab, H., Mikkola, J. H., Skjoett-Larsen, T., (2007), “Complementary theories to supply chain management”, Supply Chain Management: An International Journal, Vol.12, Issue 4, 284-296.

Intermec Technologies Corporation, (2007), “Top 10 Supply Chain Technology Trends”, Available at: http://www.mirnah.com/images/White_Papers/Trends_SupplyChain/Top10Tech_wp.pdf

Kremian, Z., (2013), “X Does it Right: Apple’s Supply Chain Management Secrets”, Available at: http://www.supplytimes.com/inventory-management/x-does-it-right-apples-supply-chain-management-secrets/?mode=featured

Poirier, C., & Quinn, F., (2006), “Solid Gains”, Supply Chain Management Review, Vol. 10, Iss (1): pp. 35-41.

Pujawan, I. N., (2004), “Assessing supply chain flexibility: a conceptual framework and case study”, International Journal of Integrated Supply Management, Vol. 1, Iss (1): pp. 79-97.

Reinertsen, D., (2009), The Principles of Product Development Flow: Second Generation Lean Product Development, UK: Celeritas Publishing.

Sharma, S., (2010), Supply Chain Management- Concepts, Practices and Implementation, Oxford: Oxford University Press.

Simchi-Levi, D., Kaminsky, P., &Simchi-Levi, E., (2007), Designing and managing the supply chain, New York: McGraw Hill.

Vella, D., (2012), “Using technology to improve supply chain management”, Available at: http://globalpurchasing.com/supply-chain/using-technology-improve-supply-chain-management

对于一个能够跟上市场变化趋势并依赖创新增长理念的组织而言，内部创业是一个不可避免的方面。组织的研究和开发专家通常会提出创新的想法。但是，组织中充分了解组织目标的员工进行的研究是一种成本和时间有效的方法，可以进入新业务或改进现有产品。作为企业家并研究创新思想发展的员工被称为内部创业者。在多元化和改善其各种商业企业的组织中，内部创业研究人员的作用备受追捧。

Abstract

Intrapreneurship is an inevitable aspect for the success and sustenance of an organisation that keeps in pace with the changing trends in the market and relies on innovative concepts for growth. Innovative ideas are usually suggested by the research and development experts of an organisation. However, research by the employees of the organisation who are well aware of the organisational objective is a cost and time effective method to venture into a new business, or to improve an existing product. An employee who acts as an entrepreneur and researches the development of innovative ideas is called an intrapreneurial researcher. The role of intrapreneurial researchers is highly sought after in organisations that diversifies and improves its various business ventures.

Introduction

Intrapreneurship is beneficial for the performance and revitalization of large organizations and small and medium enterprises. Intrapreneurial research is significant to develop innovative ideas to diversify existing business with the production of new services, products and technologies. Intrapreneurial research also supports the revitalization process such as reorganization, strategy reformulation and organizational change.

Intrapreneurial research is undertaken by an intrapreneur who has inherent qualities like competitiveness, initiative, aggressiveness and the courage to take risk to achieve organizational objectives. The orientation, activities and emphasis of intrapreneurship is similar to the traits required for entrepreneurship as recommended in Schumpeterian innovation. In a general view, the improvement of existing products and services and the use of administrative techniques, markets and technologies to conduct organizational operations such as marketing, production, distribution and sale and establishing a change in organising, strategy and managing competitors are innovations made by the intrapreneurial researcher.

Intrapreneurship is an important attribute that predicts the absolute growth of an organization and overcomes traditional bureaucratic barriers to adhere to high standards for open communications, assessment of business environment and the renewal of business policies to act proactively in the ever competitive marketplace. An intrapreneurial researcher plays a significant role in transition economies to adapt to the changing standards of developed economies to sustain the profitability and growth of existing organizations (Antoncic, B. & Hisrich, R.D. 2001 p.495-527).

Who are intrapreneurs?

Intrapreneurs or in-house entrepreneurs are dreamers and doers who have the capability to accelerate the speed and improve the cost effectiveness of transferring technology to the market place. Traditional research methods ignore the services of the intrapreneur. This method does not yield a good result during product innovation because an outside researcher requires more time to understand the organisational objectives and therefore this kind of research is time consuming and expensive. The size of the budget and the extent of self sufficiency are important factors during innovation.

A cost effective innovation emerges out of an organization when a person is passionate about bringing out an innovative concept and functions with enthusiasm to develop it using the available organisational system. This gives a new insight for the R & D managers to recognize and understand the significance of intrapreneurs (Pinchot, G. 1987).

Risk and Returns in intrapreneurial research

Intrapreneurial research is carried out by intrapreneurs or employee entrepreneurs or intra-corporate entrepreneurs working within an organisation who risk something of value to achieve a greater objective. The risk may be in the form of the time required to accomplish a preliminary research or a business plan while simultaneously holding the responsibilities as a corporate manager. The risk may also include financial sacrifices in the way of cut down on increments until the successful accomplishment of the new business or a reduction of certain percent of salary until the bonus for accomplishment is declared. The intrapreneur has to negotiate the quantum of risk for each project with the management, since risk is a factor that tests and improves the drive and conviction of the intrapreneur. Further, the organization is bound by an implied contract to abstain from interrupting the actions of the intrapreneur unless in the case of poor performance.

In the course of the product development, the researcher intrapreneur must make use of the opportunity to create a value similar to capital. On successful completion of a research project, the intrapreneur has the right to avail rewards and incentives from the organization based on the completed research which is predetermined by a trusted committee. The amount of reward is calculated either as a fraction of the value of the project or on the basis of accounting systems of the organisation. Other than the cash bonus, the intrapreneur has total control over a specific amount of research and development funds which the intrapreneur can invest on behalf of the organization for future research projects. These funds are called intra-capital (Pinchot III, G. & Pinchot, E.S. 1978).

Who can become intrapreneurs?

Intrapreneurial research is delegated to employees with a good performance record and business acumen during the initial stage of innovation. These traits enable a seasoned manager to face challenges with respect to the new venture efficiently (Pinchot,G. &Pellman, R. 1999 p.33).

When an intrapreneur is given the responsibility in a large organization to work with the internal service intraprise, they tend to show more enthusiasm to achieve their mission because they are responsible to manage the internal profit centres. In the due course, intrapreneurs pay attention to notice the highest revenue generating function and use customer feedbacks to understand their requirements in a better, faster and cheaper manner (Pinchot,G. & Pellman, R. 1999P.36). The creativity in the intrapreneurs enable them to foresee how potential customers would envisage a new product (Pinchot,G. & Pellman, R. 1999P.37). The outcome of delegating responsibility in this manner is a complete intrapreneurial organization that results in new vistas in productivity and innovation.

Support from the organisation

The organisation is also accountable while delegating intrapreneurial research. The organisation has to support the intrapreneurial researcher in terms of periodical coaching in addition to the initial workshop, and allocate essential resources. The extent of progress in the research has to be reviewed after six months and any obstacles identified in the research has to be rectified (Pinchot,G. &Pellman, R. 1999P.36).

Intrapreneurship in research and development requires the intrapreneur to possess different levels of skill from the one possessed as a corporate manager. The strategies of traditional managers to follow existing hierarchical structures with less risk factor and more short term goals inhibits the flexibility, creativity and risk needed to accomplish innovative ventures. Therefore, while setting up intrapreneurship, encouragement from the organization to experiment new concepts together with an environment for voluntary intrapreneurship and the promotion of teamwork is essential. The intrapreneur must work within the organizational structure diplomatically with open discussions and support from team members and must be persistent to overcome unavoidable barriers (Hisrich et al. 2005 p.54). The intrapreneur also avails freedom and privilege in terms of exemptions from controls that exist in a large organization (McKenna, E.F.2000 p.241).

Traits and tasks of intrapreneurs

One of the most important qualities in an intrapreneurial researcher is the awareness about competitors. The awareness that customers have alternatives in the marketplace enables the intrapreneur to research and design innovative products by considering the reality.

Intrapreneurial research entails the researcher to place positive concern over the product, generate leads for the products, ascertain the leads, respond to the needs of customers, explain the product, handle objections, close sale and offer after sale support (Pinchot,G. & Pellman, R. 1999 p.38)

Intrapreneurship in research begins with a business plan. The early stage of a business plan is a mere fantasy which the intrapreneurial researcher has to transform into a reality. In the course of the transition various questions arise about the plausibility and consistency of the innovation. This step is followed by the research to find solutions to complex assumptions. On completion of the process, intrapreneurs observe the fact, and the errors in the innovation plan are then corrected to meet the actual objective of the research (Pinchot,G. & Pellman, R. 1999 p.39).

Intrapreneurship and the organisation

On completion of the research project, intrapreneur has to take the project to the business development stage by testing and validating the new concept. This is called proof of concept. In case the intrapreneur has conducted market testing for a product, the same can be provided as a proof to support the claim that there is market potential for the innovative venture (Alterowitz, R & Zonderman,J. 2006 p.92).

Conclusion

It may be concluded that intrapreneurs are highly motivated, committed and proactive individuals who can sense opportunities in the market and employ entrepreneurial principals in the creation of innovative marketing decisions (Weaven, S.2004). Intrapreneurial researchers persistently reassess the dimensions that forecast, describe and design circumstances in which intrapreneurship flourish (Hornsby et al. 1993). These traits of an intrapreneurial researcher are also observed in an entrepreneur.

References:

Alterowitz, R & Zonderman, J. 2006 Financing your business made easy California: Entrepreneur Press

Antoncic, B. & Hisrich, R.D. 2001 Intrapreneurship: Construct refinement and cross-cultural validation Journal of Business Venturing Vol.16, Iss.5, p.495-527 Available: http://www.sciencedirect.com/science?_ob=ArticleURL&_udi=B6VDH-42JYW56-4&_user=10&_rdoc=1&_fmt=&_orig=search&_sort=d&_docanchor=&view=c&_searchStrId=976947237&_rerunOrigin=scholar.google&_acct=C000050221&_version=1&_urlVersion=0&_userid=10&md5=10e7cdbbcecfa450fc64c7d3d5982cef. Retrieved on August 14, 2009

Hornsby, J.S., Naffziger, D.W., Kuratko,D.F. & Montagno, R.V. 1993 An Interactive Model of the Corporate Entrepreneurship Process Entrepreneurship: Theory and Practice, Vol. 17

http://www.questia.com/googleScholar.qst?docId=5002192997. Retrieved on August 14, 2009

McKenna, E.F.2000 Business psychology and organisational behaviour: a student’s handbook New York: Psychology Press

Pinchot III, G. & Pinchot, E.S. (1978) Intra-Corporate Entrepreneurship Available: http://www.intrapreneur.com/MainPages/History/IntraCorp.html. Retrieved on August 14, 2009

Pinchot, G. (1987) Innovation through intrapreneuring Research Management Volume XXX No.2 Available: http://www.intrapreneur.com/MainPages/History/InnovThruIntra.html. Retrieved on August 14, 2009

Pinchot,G. &Pellman, R. 1999 Intrapreneuring in action: a handbook for business innovation San Francisco: Berrett-Koehler

Hisrich, R.D., Peters, M.P. & Shepherd,D.A. 2005 Entrepreneurship New York: McGraw Hill Professional

Weaven, S. 2004 Intrapreneurial Behaviour within the Franchising Context Marketing Accountabilities and Responsibilities – Conference Proceedings of ANZMAC 2004 Available: http://www98.griffith.edu.au/dspace/bitstream/10072/2340/1/26238_1.pdf. Retrieved on August 14, 2009

本报告概述了合作组员工关于本集团整体道德方向的一些主要关注点。本集团以其对公平贸易的承诺而自豪，无论是在公平贸易，环境或本地采购的领域，然而员工担心这些标准在整个集团内部不一致，因此破坏了该组织的良好声誉。该报告特别批评该集团正在决定出售非公平贸易产品以及集团拥有的公平贸易产品，特别是在国家层面推广这些产品。此外，该报告强调需要与当地社区建立更强有力的联系，以此作为更多地参与该集团运营所在社区的手段，

Introduction

This report outlines some of the key concerns of the Cooperative Groups employees regarding the overall ethical direction of the Group. The Group prides itself on its commitment to ethical business, be it in the fairtrade, environmental or locally sourced areas, and yet it is employees concerns that such standards are inconsistent throughout the Group and are therefore undermining the good reputation of the organisation. This report is particularly critical of the ongoing decision of the group to sell non fairtrade products alongside the groups own fairtrade products, specifically the promotion of these on a national level. In addition, the report emphasises the need to create much stronger links with local communities both as a means of engaging more with the communities in which the group operates, but also to create a more flexible supply structure based on the availability of local products.

Fair trade and non-fair trade

It is the employees considered opinion that the issue of fair trade and non-fairtrade is a key problem within the group’s grocery stores at present. The ethical stance taken by the group in sourcing all of its own brand products from sustainable farms and fair trade networks is certainly to be commended, however, the wider decision which has been taken to still stock products such as Nescafe and Galaxy and Mars chocolate continues to undermine this decision. The ethics of this situation are clear – either one is for fair trade and the wider benefits which this brings, or one is against it and believes that the free market will provide for all. By stocking and thereby profiting from products which do not take this stance the group undermines its commitment to these causes , particularly given the fact that the groups own products in this area are high sellers and are particularly competitive. A stronger commitment here would do much to boost the ethical background of the group.

It is also the employee’s belief that this could be tied in strongly with the Cooperative Banks commitment to development projects in developing nations. It seems ridiculous to be giving with one hand and taking with the other and therefore the employees would like to see a more explicit and concrete commitment on this level which could be taken across the Group as a whole. Much of the key development literature on the problem of poverty in Sub Saharan Africa focuses on the problem of creating sustained investment and providing important markets for export for products. The Cooperative Group is in a unique position as the owner of a large bank and a grocery outlet to provide this support and could be a real leader in this field. The public relations benefits of such an approach do not need to be laboured but more importantly there is a real opportunity to use the organisation for good in the world. With the growth of ethical consumerism and the notion of green marketing there is a real opportunity to make a difference in this sector.

Becoming truly local

It is the experience of many of the Group’s employees that many customers who come to the Groups grocery stores feel somewhat let down by the failure to push forward with stocking local produce. Many of these have highlighted the fact that larger retailers such as Morrison’s and Tesco have made strong headway on dealing with this issue. This issue is a key one in the sense that it engages with several of the key ethical considerations of the Group, as laid out on the Group’s website. These include the environmental considerations of moving products great distances. There is an important issue here with central distribution centres and the way in which these operate. It is often the case that products will be produced in one area of the country, moved to another hundreds of miles away and then returned via a wagon to a point two villages away. This undermines the credibility of the organisation on an environmental level but also on a local level.

Whilst employees appreciate the fact that such operations are often cheaper and are part of keeping the cost down, it is important to acknowledge the good public relations which could be created through enhancing the Group’s commitment to local job creation. A more dynamic supply network would certainly create this as it would require a significant step up in administration for it to be successful. However, the employees of the Group believe that this would be a significant PR coup and would therefore win the Group significant support, particularly in more rural areas. It would combine to create jobs, reduce the carbon footprint of the Group and also help the Group provide a real service to local people. Most people agree that the fresher the produce, the better.

Moving the organisation forward

Whilst this report is critical of the Group on several levels it must be acknowledged that the Group is to be significantly commended, particularly when one considers the current situation with many of its major competitors in the Grocery market. However, in a constantly changing world it is vital for such organisations as the Cooperative Group to continue to show the lead on issues such as local produce, carbon reduction programmes and ethical consumerism. To that end the organisation needs to examine fully what it believes the next level to be. This report embodies some of the views which should be seen as coming from the ‘shop floor’. They are based on the direct experience and views of the man on the street and from those who work in the Group’s outlets. Doubtless there are greater ethical considerations to be made and doubtless there are significant economic and financial aspects to be taken into account. However, for the Group to continue to pride itself on its ethical commitment it does need to take the next step forward.

This report suggests that looking to make radical changes in the sourcing of produce could provide a significant amount of jobs in the country (through the necessary management and administration structures which would be created), could reduce the organisations carbon footprint and would provide fresher and therefore better produce to all of its customers. This would represents a public relations coup and would fall directly in line with the Groups ethical commitments.

A further step which the organisation would like to see is through the role of the Bank. Once again, this is certainly deserving of significant support and plaudits for the work which it has done but the employees once again feel that a more concrete set of explicit principles could further improve both the reputation of the Bank as well as its ethical standing. These principles would also include a commitment to employees of the organisation but would also include the promise of support to small businesses which would be set up in support of the wider Cooperative Group operations. One example here would be of a small firm of delivery drivers which would be operating in support of rural farms in Northern Scotland. These would directly support the work of the Group in the sense of attempting to make the Group more local through sourcing food more locally and would therefore be supported by the Group knowing that there would be strong business there as the structure of the organisation changed.

The current economic climate and the Group

In making these critical comments of the Cooperative Group the employees would like to stress their knowledge and acceptance of the problems currently associated with the economic crisis within Europe and the wider world. However, it remains their belief that the Cooperative Group can become a beacon of what ethical business operations can do for the communities in which they operate. The employees believe that much of the current economic crisis was caused fundamentally by greed, be it the greed of investment bankers who made investments that they knew would not pay off, or invested in projects which they knew were unethical and which would result in damaged livelihoods. The Cooperative Group can stand opposed to these problems by creating a clear charter that it will not pay Directors hundreds of thousands of pounds in bonuses but will reinvest this money in local communities, supporting local farmers and local transport networks, supporting developing nations and the farmers who work there, helping to build links between the nations. It is the belief of the employees that if the Cooperative Group were to move forward and take on this more advanced ethical stance that it would be financially costly in the first instance as infrastructures would need implementing and there would doubtless be problems associated with this. However, it is also the belief of the employees that many people would support such businesses, particularly where they knew that it was directly affecting local business. It is certainly true that for many consumers the major consideration would remain price. However, the employees firmly belief that with hard work and the commitment of the wider Group, these ethical changes can be implemented in a successful manner.

Conclusion and Recommendations

• A stronger more direct commitment to moving the organisation forward in a sustainable and truly ethical manner.
• The Groups stance on issues such as Fair Trade is commendable and has been an important step in raising the profile of products such as chocolate and coffee and the issues surrounding the sourcing of the key commodities which these require. 
• However, the Group must now acknowledge that the stance which it is taking on this issue is hypocritical – on the one hand advertising its own advocation of ethical sourcing and the importance of a fair price for growers whilst on the other hand continuing to directly profit from products which do not meet these standards. 
• The Group would therefore benefit from a much more clear cut and well defined ethical approach in which its Grocery stores were operated on principles similar if not identical to those of the Food Wholesaler SUMA. 
• The Group should oppose the sale of non-fair trade products under any circumstances and should work to source as many products as it can locally in order to support local industries, provide fresher produce to its customers and to provide greater local involvement. 
• This process will encourage a greater involvement with local communities and will help the Group in becoming a dynamic and ethical supplier to local communities which becomes a part of these communities rather than being another huge chain which rips the soul out of local values and towns. 
• To create an ethical pledge and commitment which will encompass all aspects of the Groups current ethical policies in a much more explicit and coherent way. One key example of this which the employees would particularly like to see is the following – The Group will not only commit itself to sourcing its own brand chocolate from fair trade farms it will actively support such farms with financial assistance from the bank and will undermine the market for non-fair trade products by refusing outright to stock such products.

References and Bibliography

Bevins, Vincent. “Guardian survey reveals shoppers’ green concerns.” The Guardian London: The Guardian, 2010.

Cooperative Group. “Ethical Trading and Fairtrade.” Manchester: Cooperative Group, 2010.

Cooperative Group. “Food Ethics.” Manchester: Cooperative Group, 2010.

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Critically discuss Corporate Social Responsibility (CSR). What are the implications for a firm that does not conduct CSR?

Date authored: 08 ^th August, 2014.

This essay will commence with showing that a definition of Corporate Social Responsibility (CSR) is required and will then provide a definition and an indication of the scope. CSR will then be broken down into groupings and each looked at from a company perspective to show the advantages of CSR and disadvantages when not using CSR. Companies have a choice; and the implications of not conducting CSR will also be considered.

There is very little legislature on the subject of CSR. The nearest available is environmental standards in the UK and Internationally by the International Organisation for Standardization (ISO). (ISO 14000, 2006). The newer Social Responsibility standards (ISO 26000, 2010) are only guidelines, with no fixed rules or framework for an organisation to certify to the standards. It is no surprise, therefore, that many companies define CSR in their own way, and thus can set their own objectives which they can easily attain. When it is born in mind that CSR can have such a wide range of practices that support it, it is easy for a company to pick and choose what it does.

So, for a discussion of CSR, a single consistent definition is required. The definition that will be used here is from the European Commission’s 2011-14 corporate social responsibility (CSR) strategy, which defines CSR as “a concept whereby companies integrate social and environmental concerns in their business operations and in their interactions with stakeholders on a voluntary basis” (UK Government, 2014: 3).

According to the Business Minister, Jenny Willott, MP “Corporate responsibility is at the heart of successful businesses.” (Willott, 2014). That means that it refers to a set of actions performed by a company, over and above its normal business, that contributes towards sustainable development.

Corporate Social Responsibility can include a wide range of factors, from ethical and fair trade to reputation and brand management. The UK Health and Safety Executive (HSE, 2014) identifies additional issues as part of CSR, including animal welfare, diversity and equal opportunities, community investment, giving aid to local organisations and communities in developing countries and helping to build the skills of the local people through community based development.

CSR can affect goodwill, employment practices, expansion, stakeholders, company standards, company strategy and much more. One survey on the main reasons that companies engage in CSR puts top management interest as the number one reason, with company reputation, profit, customers’ expectation and attracting employees following close behind (Habisch, et al., 2005).

It is usual to identify these factors in a good light (as a bonus to the companies) and it is common to see CSR statements in companies’ annual reports and glossy handouts. However this can draw attention to a company’s practices and can be disastrous when non socially-responsible practices are exposed in the media. For example Nike when they were accused of using child labour in the production of its soccer balls in Pakistan. (Urip, 2011). Note that Nike went through a huge transformation as a result and are now considered an industry leader in the area of CSR (Ferrell, Fraedrich & Ferrell, 2013).

So CSR has a very wide remit. Buy why should companies take on CSR? To analyse this, it is necessary to group all the parts of CSR so that each one does not have to discussed individually. For the grouping, we use Schwartz (2011), who breaks down CSR into three distinct parts; these being legal, economic, and ethical. Each of these will be addressed in turn.

Addressing those parts of CSR which are covered by UK law, there is limited legislation in the UK on the subject of CSR. One reference is in section 172 of the companies Act, where it says:

“A director of a company must act in the way he considers, in good faith, would be most likely to promote the success of the company for the benefit of its members as a whole, and in doing so have regard (amongst other matters) to … the impact of the company’s operations on the community and the environment” (Companies Act, 2006).

Other countries have more strict legislation, for example in Denmark, there has been an obligation for larger businesses to consider and report on CSR since 2009 (Gorrissen Federspiel, 2014). In California, large manufacturers and retailers have to disclose what actions they are taking to address the risks of human trafficking and forced labour in their supply chains (Altschuller, 2011). It is clear that non-compliance with any legal requirements (whether CSR or otherwise) carries great risk and can cause the company to be prosecuted and potentially put out of business.

The economic issues would appear to make sense in that when following a CSR practice, the company can also save money, which translates to increased profit. One example is hotels that allow you to choose between reusing your towel and having it replaced depending on where you leave it after you have used it. This can save the hotel water and electricity to wash it, while still offering the guest the choice (McElhaney, 2008).

However where Pernecky and Lück (2013) suggest holding Virtual Meetings rather than physical meetings, thus saving travel, meals, hotels, etc. looks like it is a CSR policy that just saves money. However it is important to measure whether the virtual meetings attain the required objectives. Thus it is not always obvious which practices will lead to economic advantages, or which economic CSR approaches will meet the requirements of the business.

The ethical issues, such as a company taking a CSR approach without having to or clearly having economic benefits can also be used to gain positive publicity (Idowu & Filho, 2009), which can raise the image of the company, thus providing longer term benefits, such as increased goodwill. Idowu & Filho go on to say that this can be used for marketing to show that the company is ahead of its rivals due to its CSR approach.

One advantage of CSR is brand demarcation. Many companies look for something which will set them apart from the competition. For example the Excel centre, a large conference venue near Canary Wharf in London has achieved six awards relating to CSR, for example The Sunday Times “Best Green Companies” award (Excel, 2014). If a company is looking for a conference venue in London, and Excel is implementing CSR whereas another venue is not, this gives the client a reason to select Excel, and something extra the company can say on its marketing. So it is an advantage for Excel to support CSR which can lead to directly affecting the bottom line.

Local support and getting licences can be made easier for a company if it has a CSR policy. Such a company is seen locally as a good company and this can improve how the company is seen by locals and can help to provide support for the company’s plans where local support is an advantage (e.g. a new building, opening late into the night).

Having a CSR policy which is implemented and draws people’s attention to it can help to distract the public from other things that could have negative implications for a company. For example if a company have very high board members pay, this can lower the public’s view of the company. However if the company is seen to put the environment first, and it puts resources directly into supporting this, this can overshadow the board members pay (Grayson & Hodges, 2004).

A company that has a CSR policy throughout the company can improve the staff’s attachment to the company. They believe that their work partly helps the community and can do much to improve morale. Also they may be keener to participate in events such as fundraising which they may do in their own time and gain the company goodwill whilst costing the company nothing (ibid).

There is a trend moving towards CSR (Fiorina, 2003). With national and international standards on CSR related issues becoming more common, and laws likely to follow, there is a large bonus in getting CSR well embedded in a company before a law demands it. When laws are passed, this puts a fixed timescale on the changes to CSR. This can cause CSR to be implemented at an inopportune time, and a time when other companies are doing the same, and potentially costing many times more.

However the situation is not all good. There are considered to be disadvantages of CSR and these must be understood and addressed before a company implements CSR. There are those who say that the sole purpose of a business is to make money (e.g. Friedman, 1970). Anything that detracts from that is considered to be a distraction from the business’s core function. This can make share-holders get fewer dividends because the company is involved in a scheme which costs money and resources to implement but does not directly add to the bottom line. This point can be countered by a company implementing CSR policies in order to reduce excessive inputs and wastes in their supply chain, which saves them money (Idowu & Louche, 2011).

To take a more recent example, the Commission for Green Tax Reform in Portugal put forward a proposal on 9^th July 2014 for a package of environmental taxes. These would include additional taxes on fuel, air travel and the use of plastic bags (Lomas, 2014). In fact, Fleming & Jones (2012) claim that CSR is fatally compromised and, when applied to large multinational corporations, does more harm than good. The claim says that many companies are not taking CSR seriously and only implement a few measures that help them make money and stop there rather than implementing a comprehensive CSR approach.

One question is whether a company’s CSR policy should also apply to all of its suppliers down the line. One example of this was in 2012 when Tazreen Fashions factory, a clothing making factory in Bangladesh caught fire and caused the death of 112 workers. The working conditions were appalling. This reflected badly on their customers, such as Wal-Mart and Sears, who sold products made in this factory. In the investigation, it was revealed that neither Wal-Mart nor Sears even knew that the products they sold were being made in this factory (Crane and Matten, 2012).

However in general, CSR is becoming more and more important. If we just take environmental issues as an example, Bowdin, et al. (2006) shows that considerations of environmental issues are increasingly paramount.

Without a set of standards there are no requirements from the government or standards organisations on implementation. Although there are demands from customers for CSR values (ibid), and as has been shown, the benefits are considerable, it falls to the companies themselves to implement CSR. And within the companies, it falls to the management of the company to set a CSR policy and use it to guide them throughout their company.

If management plan and implement a CSR policy, it can be rewarded. For example some companies have CSR targets and executives who deliver or exceed these targets are rewarded (Horrigan, 2010). Alternatively, CSR can be built into the plan right from the start. An example of this is the Olympics, where a philosophy is so much built into the Olympic Games that it is built into their charter. (International Olympic Committee, 2014).

As has been shown after mistakes such as at Nike, it can be critical to implement CSR policy throughout the organisation. Failure to do this can cause problems that can greatly affect the company’s goodwill and thus its sales.

All showing that a CSR philosophy can be vital for organisations and actually implementing the philosophy can lead to rewards whereas failure can lead to disaster.

These days, all major companies have a CSR statement (Musafer, 2014). And their CSR statement is being looked at to see if it is really authentic or just superficial. Musafer (ibid) also claims that if a company is not implementing CSR in a genuine way, it can be very damaging to that company.

To summarise, although CSR is not a panacea for any company, there are many CSR options that can be taken by companies which would benefit their company. In addition a failure to implement CSR approaches can be costly. However each company procedure should be considered as to whether it best suits the company to take a CSR approach depending on the costs and benefits (or risks).

(2,070 [A4] words)

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