HAIGH'S CHOCOLATES: MANAGEMENT ANALYSIS (Case Study Sample)

Haigh’s Chocolates: Management Analysis Name: University: Course: Tutor: Date:  Haigh’s Chocolates: Management Analysis Introduction This paper provides an insightful analysis of the management of Haigh’s Chocolates. Various aspects of the company’s management practices will be evaluated against established management theories. In addition, these practices will be evaluated for sustainability. Finally, appropriate recommendations will be provided. Company Background Haigh’s Chocolates is a premium confectionary powerhouse located in Adelaide, South Australia. It was established in May 1915 by Australian entrepreneur, Alfred Haigh at 34 King William Street (Haigh's Chocolates). The business was moved to the Beehive Corner in 1922. After his death in 1933, Alfred Haigh’s business was taken over by his son, Claude Haigh (Haigh's Chocolates). However, it was his grandson, John Haigh, who set the company on a remarkably successful path when he took over its operations in 1946. Consequently, Haigh’s Chocolates grew to become the oldest family owned chocolate making business in Australia. Currently, the company is jointly managed by Alister Haigh and Simon Haigh, Alfred’s great grandsons, while the board of directors is chaired by John Haigh. Importance The global chocolate market is filled with several big players offering an array of products for various segments around the world. According to industry analysts’ predictions, the market is poised to grow to $98.3 billion in 2016 from a 2010 baseline level of $83.2 billion (Candy Industry, 2011). While competition is high, certain brand names have dominated the market for a considerable period of time. This includes Nestle, Cadbury’s and Mars Inc. Haigh’s Chocolates has not had a significant impact on the current state of affairs in the global market from a sales perspective. On the local front, Haigh’s Chocolates has attained national recognition as a manufacturer of premium brands whose popularity cuts across both corporate and retail clients. The company currently employs more than 400 people and has an estimated annual turnover of $30 million (Steffens, 2012). However, even in light of this achievement, the company still faces stiff competition in Australia from Cadbury’s, Mars and Nestle in its attempt to maximize market share in the country’s chocolate and confectioneries market, which is estimated to be valued at $3.1 billion (Steffens, 2012). Role of Organizational Behaviour Sustainability has become a buzzword in corporate circles over the past few years. Every enterprise actively engaged in business on a global scale is intent on adopting practices that can be perceived as sustainable in the long run. One major determinant of sustainability within any entity is its organizational culture. The policies, values and practices that constitute this culture are vital in determining whether the company is on a path towards sustainability or not. The validity of the link between organizational culture and sustainability is grounded in scholarly research (Linnenluecke & Griffiths, 2010). Haigh’s Chocolates is alive to the need for a coherent set of policies and values that are geared towards realizing a sustainable future. This is reflected in its application of systems theory in its organization behaviour. The reality of the modern business environment is that companies have to take stock of how they influence the communities around them. It is crucial for business ventures to gain the goodwill of their consumers and their communities if they are to maintain their financial positions in the market. One key element of systems theory is that organizations are perpetually engaging with their environments, thereby necessitating the need to be flexible with a view to adapting to emerging challenges (Walonick, 2008). Further, organizations gain a sense of legitimacy by and social support by engaging with their environments (Shafritz, Ott, & Jang, 2015). This means that organizations have to explore ways and means through which they can add value to their environments so as to sustain this mutually reinforcing relationship. Accordingly, Haigh’s Chocolates has initiated involvement in an array of initiatives that are aimed at giving back to the community. For example, the company has financially supported institutions such as Zoos South Australia, Foundation for Rabbit-Free Australia, Variety Children’s Charity, Theatre Organ Society of Australia and Community Achievement Awards Australia. Such initiatives highlight a consciousness to societal needs, an aspect of management that is consistent with systems thinking. Financial support to such institutions raises the company’s brand awareness and increases brand loyalty in the long term. Therefore, it goes a long way in contributing towards the company’s sustainability. Another key area through which Haigh’s Chocolates seeks to achieve sustainability is environmental management. This involves several initiatives. First, rain water is collected in underground tanks and used for production purposes, thereby minimizing water loss (Haigh's Chocolates). Secondly, packaging processes are tailored to meet environmentally acceptable standards. For example, chocolate containers are made to be recyclable while wrappings used in Haigh’s Chocolates stores are biodegradable (Haigh's Chocolates). Finally, green printing is utilized in the company’s newsletters. All these initiatives are indicative of an environmentally-friendly policy that is particularly relevant in the current age of concern over global warming. It should be noted that efforts undertaken to achieve corporate sustainability have a positive impact on an organization’s performance and processes (Eccles, Ioannou, & Serafeim, 2014). In view of this, it is in the company’s best interest to continue along this path. Human Resource Management The need for sustainable human resource management policies and practices cannot be overstated. Such policies and practices speak to a need to extract the optimal performance from the employed human capital. Every business has to refine its human resource processes in such a way as to ensure that the best talent is recruited, supported and retained. This way, the marginal product of labour can be maximized thereby resulting in the required levels of output. Research indicates that the level of commitment by employees is negatively correlated with turnover intention (Arocas & Camps, 2008). Such commitment is primarily underpinned by job satisfaction. This means that initiatives undertaken to maximize job satisfaction are guaranteed to minimize employee turnover rate when all other factors are held constant. Therefore, if businesses are to achieve sustainability, they have to align their human resource management practices to the needs of their employees. This is in line with the Ability-Motivation-Opportunity (AMO) theory as applied in Human Resource management. Haigh’s Chocolates incorporates the AMO framework in its human resource management practices to ensure the continued success of its business. For example, once the right employees are hired, they are taken through continuous training in their areas of expertise with a view to enhancing their abilities. Competitive pay packages and benefits are offered so as to motivate them into giving their best to the company. Finally, learning participative opportunities are always availed to the employees to enable them not only maximize their skills and career progression, but also to provide useful insights to management on how best to conduct the business. These human resource management practices contribute to sustainability in the sense that they create a space where committed employees can offer vital input for the betterment of the company. It is worth noting that this corroborates research which indicates that human resource development can have a significant positive impact on sustainability (Garavan & McGuire, 2010). Role of International Business While Haigh’s Chocolates does not have a significance presence in the global chocolate market, it still experiences international business on the supply side in terms of the markets where it sources its cocoa beans for chocolate production. Trends within the international cocoa market, such as adoption of Fair Trade principles, definitely have an impact on the company’s business model. By and large, even though the relationship may not be that overt, such trends also have a bearing on the company’s sustainability as will be described hereunder. Fair Trade is the policy which requires manufacturers to evaluate their supply chains with a view to ensuring that exploitation and unfair business practices are avoided. This policy is enforced by both international lobby groups and enlightened consumers. So massive is the growth of this policy that it has been labelled the “new globalization” (Raynolds & Murray, 2007). At the heart of this movement lies the goal of fostering ethical consumption by empowering the primary producers at source (Raynolds, 2012). The impact of this is that manufacturers have to comply with Fair Trade principles if they are to retain a competitive edge in the market. For example, research indicates that a significant portion of chocolate consumers in Europe are willing to pay extra for the product if its production complies with Fair Trade principles (Poelmans & Rousseau, 2016). Moreover, psychological research indicates that globally-aware consumers, those who strongly identify themselves with a global viewpoint, are more likely to choose a Fair Trade product than a conventional one (Reese & Kohlmann, 2015). In addition, it has been asserted that social or self-image concerns may cause individuals to be willing to pay high premiums for fair trade chocolate over conventional chocolate (Teyssier, Etile, & Combris, 2015). All these factors combine t...