The research report below focuses on EZ Learning Company supplying hearing aids. It has conducted a PESTEL analysis to determine the areas to focus on as the company’s ownership and management changes. It has proposed factors to pay attention to in order for the company’s endeavor to grow and expand to be achieved effectively and efficiently. It has proposed various positions that ought to be created. The report has determined existing positions ought to be increased and the new positions to be created. Consequently, it has discussed the proposed succession management process applicable in ensuring EZ Learning Company thrives and expands. Lastly, the report has discussed future trends to be considered during the succession management process. More so, it has discussed key risks to be considered in order for the succession management process to be effective and efficient.
EZ Learning Company was set up in 2000. It focuses on sale of learning aids to children across offices in the Austin, Texas area. The company’s business mainly comes from books although it sells a range of games, jigsaws, and puzzles to retailers without directly getting in touch with members of the public. EZ Learning Company comprises of three managers namely, the Chief Executive Officer, an office manager, a sales manager, and a warehouse manager. The office manager ensures three administrative staffs are responsible. The sales manager on the other hand ensures six field sales persons, one customer support officer and a marketing assistant meet and fulfill their duties and responsibilities effectively and efficiently. Lastly, the warehouse manager ensures four warehouse men and five drivers undertake their roles and responsibilities in effort for the company to achieve its goals and objectives. Although the company has been growing quickly since 2000, up until 2014 it has been heavily dependent on corporate memory, skills, and experience of the manager. The manager, Sam Thompson is also the brother of the founder of the company, Walt Thompson. Sam Thompson has therefore been responsible for all functions and operations undertaken by the company since it was founded in 2000. He has held diverse positions with an intimate understanding of the organization’s historical operations while maintaining a direct line of communication with the CEO, his brother Walt Thompson.
On September 18th 2015 however, Sam lost his life after being involved in a fatal car accident on the highway. His death has greatly affected the company and shocked his colleagues. This is because his death occurred before he was able to document the organization’s operations and functions and pass his knowledge to his colleagues. As a result, Walt Thompson has decided to retire and sell the company to Chuck Johnson who desires to invest largely in order for the firm to expand its operations. The following research report is therefore authored to assist Chuck to achieve his dream of expanding the EZ Learning Company.
A PESTEL analysis refers to the concept applying marketing principles to develop tools companies utilize to track the environments they are or planning to operate in or launch new projects, products, and services. In regard to EZ Learning Company, the PESTEL analysis will be expanded in form of the firm’s political, economic, social, technological, legal, and environment aspects. The analysis will therefore give an overview of the whole environment from diverse angles crucial in checking and keeping the company’s ideas and plans in track. Consequently, it will assist in identifying firm operations and functions that ought to be amended, eliminated, or introduced in order for the company to expand and fulfill Chuck’s investment ideas and hopes (McDonald, & Wilson, 2013).
The political factors in a PESTEL analysis refer to how the government can influence companies to achieve its social-economic goals and objectives. In regard to the EZ Learning Company, political factors have been determining the extent to which the government can influence the economy and the industry. In Austin Texas, new taxes and duties are often imposed in attempts to generate revenues while changing structures of organizations in the area. For example, State Law asserts some products and services ought to be subjected to state sales tax although they can be exempted from all local sales taxes. The city, county, and transit authority in Austin also voted that, sales tax ought to be imposed with local sales tax being limited to telecommunication services within locations in Texas. The Texas Comptroller of Public Accounts affirms that, all cities within the Texas State according to local taxing jurisdictions are imposed sales and use tax of up to two percent. The Texas tax and fiscal policies as well as trade tariffs are applied by the government during fiscal years. Chuck should therefore understand that, they have been affecting the EZ Learning Company business environment. This is because the firm has had to ensure it meets its responsibilities by paying taxes and levied tariffs. Chuck should therefore ensure the company continues to pay all the taxes it is required by the government. This will protect the company from being sued for failing to meet its responsibilities allied to payment of taxes and tariffs. Consequently, the company can feel free and liberated to pursue its endeavors to expand (McDonald, & Wilson, 2013).
Economic factors refer to determinants of economic performance directly impacting companies with resonating long term effects. Recently, the Chambers Economic Indicators Report in Texas affirmed various economic activities are taking place on either monthly or quarterly basis affecting personal income levels. For example, in 2014 personal income levels grew by at least 3.3 percent. In Austin area however, the growth was slightly higher as it was estimated at 3.9 percent. The real per capita growth in Austin however, was at 0.9 percent. The region is still struggling to ensure the per capita personal income increases. The efforts have been challenged by the one percent nation real per capita income. The economic factors in Austin, Texas have therefore been affecting EZ Learning Company’s efforts to price its products. This has further affected the purchasing power of consumers in the state as the demand and supply models have also been changing. Interest rates, economic growth patterns, and inflation rates have therefore been influencing the company’s economic activities and efforts. Chuck should therefore ensure that, the company expands in line with the state demand and supply models. Chuck will also have to ensure as the company expands it identifies new market opportunities. This is vital as the expansion plans ought to be complimented with new market opportunities guarantying the company will have the power to produce and supply hearing aids to the newly identified consumers. Consequently, it will increase sales and generate more revenues fulfilling the investor’s requirements (McDonald, & Wilson, 2013).
The social factors of the PESTEL analysis refer to determinants influencing the market. They include cultural trends, population analytics, and demographics as they influence the buying trends. For example, United States records high demand levels for foodstuffs during the thanksgiving holiday. Conversely, Austin, Texas area records high demand levels for hearing aids when schools are reopening. EZ Learning Company therefore strives to ensure it supplies hearing aids in large quantities when schools are reopening as the sales are often high during such seasons. To achieve Chuck’s dream of expanding the company, the following aspects have to be evaluated. Foremost, the company’s expansion plans should be in line with the cultural trends in Austin. Consequently, the company should continue operating and functioning in line with the state’s buying trends. The company should therefore avoid expanding beyond the region’s population analytics and demographics as the expansion will be costly without investment returns to match the overheads incurred (McDonald, & Wilson, 2013).
Technological factors pertain to innovations affecting the operations of a company or industry. The factors can be favorable or unfavorable depending on the automation, research and development of technological awareness. In regard to EZ Learning Company, it strives to identify technological transfers improving access to reliable and low cost digital hearing devices. The company has been producing hearing aids that are solar powered as well as those that require to be plugged to light sockets in order to recharge. This is because it acknowledges supplying hearing aids using batteries will be too costly especially to the students as they will have to replace the batteries often incurring extra costs. As the company plans to expand, it has to acknowledge that it has to rely on technology transfer. The technology transfer should involve sharing of product specifications and manufacture knowledge with producers. This will ensure high quality hearing aids are produced and supplied. More so, the products will not incur high maintenance costs. Consequently, the company will need to address straightforward licensing agreement requirements (McDonald, & Wilson, 2013).
The legal factors in a PESTEL analysis refer to laws affecting the business environment externally and internally. In Austin, Texas there are certain policies companies are required to maintain for themselves. For example, companies in the state ought to provide life insurance policies to employees. The life insurances ought to protect employees’ families after they pass away as they cover costs either liabilities or debts in regard to income, burial costs, and education expenses. Texas federal laws also assert that, companies ought to incorporate drug testing policies. This legal requirement is crucial as it ensures employees are safe while maintaining healthy workplaces as they ought to be drug-free. The EZ Learning Company therefore takes into account that legal strategies in regard to Texas legislations such as consumer laws, labor laws, and safety standards are upheld. As it expands, Chuck should ensure these requirements and standards are upheld. The company however will have to incur increased costs in order to ensure legal factors support the firm’s endeavor to expand (McDonald, & Wilson, 2013).
Lastly, environmental factors refer to determinants influencing the business environment. They can be climatic factors as well as those influenced by the weather, geographical locations, and global changes. At the EZ Learning Company, the business environmental analysis is mainly in regard to geographic locations and global changes affecting how hearing aids are being manufactured and maintained. The company has therefore been striving to ensure the hearing aids are stored in warehouses with suitable climatic conditions that cannot adversely affect the products. As the company plans to expand, it will have to consider the following environmental factors. Foremost, the company will have to build more warehouses. The warehouses will have to be built in line with the climatic and weather conditions in the area to ensure the products are not adversely affected. Consequently, more drivers will have to be hired in order to transfer the products from the warehouse to consumers. The warehouse manager will also have to hire more warehouse men tasked in controlling operations undertaken in the warehouses (Template-Downs, 2012).
Creating a new position at the company in line with the firm’s plans to expand is a process involving determining what it should be titled. At EZ Learning Company, Chuck is the current owner. The Chief Executive Officer position should therefore be replaced after Walt retires. The firm also lacks a manager capable of managing the administrative, sales, and warehouse staffs. The most crucial position to be formed should therefore be the managerial position. The manager should be reporting to Chuck while undertaking the following specific job responsibilities. Foremost, the manager will have to be experienced as he/she is responsible for hiring available and skilled employees prepared to embrace the leadership culture and practices effective in expanding the firm. The manager will then develop key roles to be undertaken by the newly hired talents. The new manager will therefore develop their knowledge, abilities, skills, and prepare the talents for advancements and challenges as the company changes and expands.
The manager will also have to ensure sales increase by engaging the larger leadership team comprising of administrative staffs, field sales representatives, marketers, drivers, and warehouse men. Chuck will therefore have to hire a new manager able to identify talents with potential to assume greater responsibilities at the company (Lubar, 2006).
Consequently, the manager will be required to provide critical development experiences to employees moving into key roles while engaging leadership to support development of high potential leaders. As a result, two administrative staff positions will be created. Two field sales positions, one customer support position, and two marketing assistant positions will also be created. The manager will also have to ensure warehouse manager creates four warehouse man positions and five positions with roles and responsibilities to be undertaken by drivers. Lastly and more importantly, the manager ought to build a data base. The data base can be utilized in making better staffing decision for key roles. More so, it can be applied by future talents at the company to assist in improving commitment and retention among employees. Consequently, it can be applied to determine applicable measures to undertake to meet career development expectations among employees without increasing difficulties and costs especially as the company continues to grow and expand. The manager will therefore have to ensure an information technology manager is hired. In order for these new positions to be effective in line with Chuck’s desires to expand the company, a human resource manager will be hired. The manager will be required to ensure every employee in each position are committed and dedicated in achieving company’s goals and objectives (Lubar, 2006).
The proposed succession management process can therefore be described as the human resource planning. This is because the process is reviewing the company’s goals by scanning the environment to identify the gaps existing at EZ Learning Company. Consequently, it is identifying new positions to be created in order to develop a plan to measure progress in the company’s efforts to expand in line with Chuck’s desires and will. It has therefore created managerial positions evaluating effectiveness of developed succession and knowledge transfer plans to achieve the company’s goals and objectives (Hannum, & Martineau, 2008).
New positions created during the succession process should ensure the workload is consistent. A consistent work indicates employees need help with firm’s operations, projects, and tasks. Talents hired to fill the new positions should therefore work hard and manage time effectively while increasing the firm’s productivity. Other benefits associated with succession management process include alignment of strategic goals and human resources. This is vital as it ensures the right talents are placed in the right position at the right time to achieve the firm’s desired goals and objectives. The process is also beneficial as it develops qualified pools of staffs willing and ready to fill crucial key positions in the company. The succession process provides stability in leadership hence, sustaining high performing policies and organizational culture (JGC, 2009). Consequently, the need to renew the workforce is identified which is a means of targeting effective and efficient employee training and development practices. The practices should help the talents to realize their career plans and aspirations, improve their abilities to respond to changes, and incorporate knowledge transfers timely while working at the firm. The main advantages of the succession management process therefore ensure the business continues to thrive and grow by eliminating confusion and enhancing peace of mind in the organization at large (Belcourt, Bohlander, & Snell, 2008).
The proposed organization chart for the company comprises of the new owner, Chuck Johnson and a new Chief Executive Officer to replace Walt Thompson. Consequently, a manager’s position has to be created to replace Sam Thompson and run the company by applying different strategies and business practices. As a result, more administrative staffs will be recruited. The sales manager position will be maintained but more field sales, customer support, and marketing assistants will be recruited. Lastly, the warehouse manager position will be maintained and tasked in managing a larger number of warehouse men and drivers.
|Chuck Johnson: New Company Owner|
|New Chief Executive Officer|
|New Manager||Admin staffs 5|
|Sales Manager||Field Sales 8|
|Customer Support 2
Marketing Assistant 3
|Warehouse Manager||Warehouse men 6|
|Human Resource Manager|
|Information Technology Manager|
Succession management involves planning and managing risks associated with critical skills gaps to address shifts in demographics coupled with increased employee mobility in order to improve job market conditions. Skills gaps are therefore real risks for business ventures. They can however be managed by ensuring successors are identified with skills to develop workforce plans for future taking into account the firm’s strategies and goals (Jennifer, & James, 2013). Future trends should therefore address the following rules. Foremost, succession planning should positively affect growth of revenues by ensuring key positions to be created or replaced identify potential, skilled, and experienced talents. Organizations should therefore determine the cost of replacing or creating a position and evaluate the overheads to be incurred. The second rule to observe is based on the need for people within the firm with potential to move into critical roles ought to be identified (Ian, 2014). Top performers with competent education backgrounds and probably have held similar roles in the past should therefore be considered as they have high levels of technical competence. Finally, skills should be monitored using the right analytic tools capable of predicting analytics that can determine skills likely to leave next based on past trends. Ultimately, future trends should be based on the fact that, succession can be built into the workforce plans without being managed as a separate process of program (Salvato, & Corbetta, 2014).
Organizations often face challenges in ensuring continuity and consistency in delivering quality products and services due to high employee turnover. The following key issues should therefore be addressed in order to develop strategies concerning succession planning at EZ Learning Company. Foremost, an integrated approach should be developed rather than relying on the just-in-time approach. This is vital as employee morale will be enhanced, retention rates increased, and the environment stimulated to expand innovation in line with organizational changes. Priority should therefore be undertaken in ensuring smooth changes occur during the succession management process. Career planning discussions should also be identified as regular and ongoing performance review procedures in order to assist in assessment of potential turnover (Ibarra, 2005). Thus, succession management process can attribute to increased employee turnover. Some organizations fail to identify how employees are eligible to participate during the succession plan. This adversely affects employees’ commitment levels. They should therefore be allowed to work together with human resource department in developing the succession plan. During succession process, knowledge is often transferred. Lack of written procedures to formalize the knowledge transfer can adversely interfere with employees’ job responsibilities. They should therefore be documented as they can also assist employees in gaining skills they require to assume increased responsibilities as the firm continues to expand (Nemethy, 2011).
In conclusion, EZ Learning Company should therefore adopt the human resource planning succession management process. It is providing EZ Learning Company with opportunities to integrate systematic approaches identifying, developing, and retaining employees to sustain the current and projected business objectives. The process is also keen in developing pools of new talents in order to fill new positions critical in ensuring the company’s functions and operations continue consistently while pursuing long term goals allied to expansion. Chuck Johnson should therefore rely on this report as it emphasizes the need to involve executives, managers, and human resource professionals in guiding employees to adopt business practices ensuring the company continues to grow and expand.
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