In this report I will be help the owners of Bingham’s Bakehouse Ltd to realize how they can improve their business and the way they manage it, this will help stop the decline in there cash flow as well as hopefully reduce their staff turnover rate. Then after this report I will be preparing a presentation on change management as to help the Bingham’s understand how the process of change will be pursued.
Throughout the years the businesses staff turnover rates has risen significantly having a whopping 60 percent staff turnover rate for the outlet managers. I believe this is due to the sudden change in management style but I will discuss that in more detail later on in the report.
One massive change that I noticed while looking through the data was that the amount of peripheral workers has went down significantly and in contrast the amount of full time workers has risen significantly. This is not particularly a bad thing it just means that the businesses overheads are higher while is a contributor to the issues with their cash flow. But they could take advantage of the full time staff and use succession planning to reduce the staff turnover rate for the outlet manager. If an employee is promoted for their hard work because of succession planning then it may motivate them to not only stay in the business longer but also to put more effort into improving the businesses processes which gets two birds with one stone.
That was one way of countering the recently problematic high staff turnover rates, another one is to encourage the use of quality circles within the business. This would be a way of making the outlet managers ignore the autocratic management style the Bingham brothers are taking on and take a paternalistic approach with the employees of their outlet. This would not only improve the quality of all the products within the business but may also make the employee’s including the outlet managers feel more comfortable in the workplace.
The sudden change of management styles within a business can be a massive shocker to a lot of people which may make them feel uncomfortable which would either decrease their motivation and therefore their productivity but as is obvious in the data it is also making people leave the business. If everyone was used to a paternalistic style of management where everyone supported each other and they were rewarded when they performed at their best it would most likely be difficult to work under the less free and stressful autocratic management style.
I don’t think there is any way that they can keep it going with the autocratic management style because it won’t stop demotivating people any time soon. My suggestion is that they try to take on more of a democratic management style because the employee’s may feel under less stress and they will also be able to make suggestions and ask for improvements which may improve the amount of motivation that they have while working.
Another vital factor of why I think the Bingham’s should go for a democratic management style is the fact that the experienced employees that worked alongside their father will be able to give them a lot of help and suggestions when it comes to the businesses processes. It is an effective way of not only helping the employee’s get a bit of self-fulfillment from helping the business evolve but also a way to improve the quality of the business.
The democratic approach was one option another option is to go back to their father’s paternalistic approach, this may cause some of the experienced employees who left dissatisfied because of the change in management style to come back which would be a very big win for the Bingham brother’s. The only big issue I have with this issue is that if the rewarding of staff is excessive it could increase overheads even more which is the main issue when it comes to the businesses finances.
Importance of Business Vision and Values
The lack of business vision and values the Brothers have is alarming, this is because of what effect vision and values can have on the employee’s and the external image of the business. Having a business vision can give the employee’s a goal to work towards which if a person works objectively can greatly increase a person’s motivation and in turn the quality of their work. Not only is it important to have an overall business vision but I believe that it would be greatly beneficial to the business if they would have internal competitions between branches. A bit of friendly competition is what some people need to maximize their productivity and work ethic. One issue with this suggestion is people could get overwhelmed or demotivated if they do not win the competitions.
The Brothers should also encourage all their employee’s to do CPD, this will help each of the employee’s realize what skills they have but also may want them to increase the range of skills they have instead of staying with what they currently have a high aptitude in. It will also help the outlet manager’s spot any gaps in skill’s which would help them to request possible recruitment or upskilling.
Now we get to values within a business, these are what shape a business’s public image. Every business claims to have good ethic’s but not every business has proof of that. It would be advisable to have value’s that will keep employee’s working at their best and keeping up customer satisfaction as if a business has a good public image and reviews on websites it will be a good way of attracting customer’s which will lead to revenue which is always a good step towards improving a business’s net profit.
After looking at the financial data given in the table I can instantly tell that the biggest issue is their overheads, I did this by comparing the gross profit to the net profit. In 2015 Bingham’s Bakehouse Ltd had £2,101,200 in overheads which is 30.9 percent of their total revenue in that year. One recommendation I would make is to change suppliers, the business may already have trusted suppliers but I believe that their suppliers will take the chance to take advantage of the situation and up the prices. I believe new management often leads to new relationships and this would be the perfect stage to make them. If the business could find new suppliers that have great values as to not damage the public image of the business and they can procure the products at cheaper products it would not only help attract new customers but it would also reduce overhead’s and help the issue at hand.
Another more risky approach would be to reduce staff wages slightly and instead of that introduce a yearly staff bonus. The bonus could counteract the demotivation that the wages decrease would cause and instead cause employee’s to work at their greatest potential so they can get the yearly bonus.
In conclusion it is my belief that the business requires a complete overhaul of their brand image and the Bingham brother’s management style. The changes will not be a quick process and they may have to ease in to it step by step so that if they spot any problems in the process they could readjust their plans in an attempt to alter the plan slightly.