Case Study: Greyhound Corporate Culture Problematic Goals

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[. . .] The majority of these have been bought or developed because they were thought to be profitable, but there is little link between them. It appears that one manager is responsible for overall operations of all these separate businesses. The problem with this is that these separate business are not integrated and there is difficulty in managing these varying businesses effectively. The theory behind this is that this variety of businesses will even out any loss from any individual business. However, a loss in one cuts into profit from the other, so that overall the company is not able to grow as long as all these business are not being managed effectively. There is a need to focus on maintaining the effectiveness and profitability in all these business units. From a resource point-of-view these varying businesses do not allow for effective use of resources. Having similar businesses would allow for Greyhound to make use of informational and human resources for more than one business, thus allowing an overall cost saving.

5. Responsive not Proactive Approach

One of the major problems seen is that the business responds to changes rather than predicting them and taking action in response to them. This is related to the business environment. An organization has two choices in regards to responding to changes in the environment. The first is to predict the changes and alter the organization to respond to the changes. The second is to attempt to change the environment. Greyhound, however, does neither of these. Instead, it waits for problems to occur and then responds to them by selling off businesses that are struggling. This problem has two probable causes. The first being that the organization is not aware enough of its external environment and of factors that may effect it. The second being that Greyhound does not have a forward-thinking philosophy, but instead focuses largely on quick fixes. While these quick fixes may seem like a suitable solution, in most cases they lose the company significant amounts of money. A better solution to these problems would be prevention. Prevention can be achieved by being aware of environmental factors and predicting how they may change so that action can be taken to lessen the effects.

ALTERNATIVES

Combining the five problems identified, several alternative solutions can be described.

Included in the description will be an explanation of which problems the solution is intended to solve. It is also noted that these solutions may be feasible in combination with other solutions. Each solution then is not necessarily a solution to all the problems but may be a feasible solution in combination with others.

Solution 1 - Conduct Comprehensive Analysis on the Organization

We have noted that the organization does not appear to have a clear understanding of itself or its environment. One solution is to conduct a comprehensive analysis with the aim of restructuring the organization. This would involve determining exactly what the company wishes to achieve. It would also involve analyzing the internal and external environment. This would provide the organization the opportunity to better understand itself and to better select appropriate action. The goals of this would be to recognize the culture, the goals and the competitive advantage of the organization. This would then be used to create a defined plan for the organization that incorporates these things. This solution would be a solution to the first three problems noted: corporate culture problematic, goals unclear and lack of competitive advantage.

The problems with this solution is the time it would take to conduct and the lack of immediate financial benefits. The benefits are that it would be a long-term solution that would effectively get to the heart of the problem and allow the organization to proceed on the right track. This solution may be combined with all other solutions.

Solution 2 - Continue With Current Strategy

The second solution is to continue with the current strategy, which involves buying and selling suitable businesses and seeking to purchase profitable businesses. One of Greyhound's advantages could be that they have experience in buying and selling businesses and in diversifying into different areas. Greyhound could make use of this ability, by focusing on making the most of it and continue not to pursue particular areas but just to pursue the purchase of profitable businesses. The advantage of this solution is that it makes use of Greyhound's experience and is an immediate solution. The disadvantage is that Greyhound's businesses may always be threatened by businesses focusing on specific markets that are able to produce cost savings by operating more efficiently. This solution could be combined with solution one, with the analysis focusing on making Greyhound's goal 'purchasing diversified business to increase profit income.'

Solution 3 - Separate Business Units

The third solution is that Greyhound operate its different businesses as separate business units. This would involve having managers responsible for each business unit individually. Each business would then develop its own individual goals, competitive advantage and culture. This solution would mean that individual businesses would be more closely managed and so predicting environmental changes would be improved. This would result in each business operating to its potential, where future problems would be predicted and rectified rather than being reacted to.

The advantage of this solution is that it allows Greyhound to continue with its practice of having varying businesses that reduce its risk, while ensuring that each business has the maximum opportunity to remain profitable. The advantage of this solution is that it would be an immediate fix that would likely please shareholders. The disadvantages are that it would result in control problems and would also mean less efficient use of resources, as the resources of each business unit would be independent of each other.

Solution 4 - Decide on One Business Unit and Sell Off the Remainder

The fourth solution is to retain one business unit and focus on expanding it, rather than focus on expanding into others areas. Based on Greyhound's current situation, it is suggested that the healthcare until would be the most suitable unit, as there has already been a focus on developing this area. The income derived from selling off other businesses would be used to develop and expand this unit. This focused approach would allow for Greyhound to compete more effectively with the larger organizations in the market. The main advantage of this is that it would reduce the problems of integration and would allow for Greyhound to perform to their potential in this market. Expansion in this market would be essentially unlimited due to the number of healthcare products and global expansion is also feasible. This solution allows for Greyhound to develop a distinct competitive advantage. The problems with this solution are that Greyhound would have a new focus on creating value in a business, rather than just purchasing already valuable businesses. Their is also a higher risk with a downturn in this one market having greater effect.

Solution 5 - Move Into New Area

The fifth solution is for Greyhound to move into an area that will meet its requirements. This would involve specifically seeking a market that has the qualities the original Greyhound had in having little competition and an excessive profit margin. This solution focuses on finding a business that suits Greyhound rather than suiting Greyhound to a business. Considering that Greyhound became successful in the beginnings of the transport industry, one possibility is for Greyhound to move into current beginning markets, possible computer or Internet related. The benefits of this solution is that it allows Greyhound to continue with its current culture and goals. The disadvantages is the uncertainty in moving into a new market.

SCENARIOS

1. Environmental - High Likelihood - Global Competition Increases

With the current trend towards reducing trade barriers, increased global competition is almost a certainty for the future environment of business. This will mean that many firms will be better able to expand into new markets instead of expanding into new industries. The end result will be large firms focused on one particular area. With a focus on this one area, they will be in a better position to compete, making full use of their resources.

2. Organizational - High Likelihood - New Management

There is no doubt that in the future the management of Greyhound will move to someone else. We have seen how the organization changed with each manager. With a new manager, new ideas would be implemented and these may focus on a very different aim than the current manager.

RECOMMENDATIONS

The recommended solution is that Greyhound carry out solution 1, conduct comprehensive analysis on the organization and solution 4, decide on one business unit and sell off the remainder. The first part of the solution is a thorough analysis of the company. This analysis would be focused on fully understanding the organization and the environment. This analysis would be done with the understanding that Greyhound would move completely into the healthcare market. The analysis then would have… [END OF PREVIEW]

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Greyhound Corporate Culture Problematic Goals.  (2002, April 20).  Retrieved March 19, 2019, from https://www.essaytown.com/subjects/paper/greyhound-corporate-culture-problematic/5066296

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