Functional Area Interrelationships: Kudler Fine Foods Charles Burt, Megan Engelking, Lou Gamache, Rebecca Lanham, and Julie Lee University of Phoenix BUS 475 July 24, 2011 Phyllis Koch Functional Area Interrelationships This paper is based on the Kudler Fine Foods (KFF) virtual organization scenario presented in University of Phoenix Business 475 course (Apollo Group, Inc. , 2009). The following topics will be covered about KFF; the main motivation for the KFF existence from analyzing the vision, mission, values, goals, and the basis for the type of managerial structure employed by KFF.
We will identify the key positions that support that organizational structure; explaining all steps of the collaboration process among the serviceable sections that must be employed to accomplish organizational aspirations. An action arrangement is to execute the collaboration process, giving an example of the use of lateral and vertical collaboration within KFF will be given. Another topic will be identifying the key stakeholders and their roles needed to achieve the executive goals, and recommend the collaborative interactions among the significant stakeholders to facilitate the organization's accomplishments.
Reason for Existence Analyzing the strategic plan of KFF reveals the primary reasons for the organization’s existence, and that key components are established for the future success of the company. The mission statement is one of those key components. The mission statement states that the organization is committed to customer satisfaction by providing the finest of foods coupled with knowledgeable, experienced, and helpful staff (Kudler Fine Foods – Our Mission, 2003, Para. 3).
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The purpose for a mission plan is to provide guidance for the actions of an organization and to help direct decision-making. The mission plan will further identify organizational goals along with the responsibilities that exist to the customer and other stake-holders. KFF has established a mission statement that identifies strong commitment to company goals and values. Another key component to strategic planning is the vision. A vision statement provides a final objective or goal for the organization.
Furthermore, it identifies the future result when objectives found in the mission statement are met. Although little is mentioned in the virtual organization link for customers to see about a specific future vision for the company, one may gather the future expectations highlighted in the mission plan. Visionary thoughts include the expectation for KFF to be “the purveyor of choice for customers aspiring to purchase the finest epicurean delights” (Kudler Fine Foods – Mission Plan, 2003, Para. 3).
However, strategic plan the vision Is stated for internal use that “Kudler Fine Foods will be the premiere gourmet grocery store for those savvy shoppers who are searching for the finest meats, produce, cheeses, and wine” (Kudler Fine Foods – Strategic Plan, 2003, p. 3). The values and goals of KFF contribute to the strategic plan of the organization and identify further reasons for the existence of the organization. The people at KFF understand the high standards that exist in providing quality food. Furthermore, they understand the responsibility to the community and their employees.
By taking extra measures, KFF fulfills this responsibility with its Social Responsibility Statement. In an effort to contribute to the local economy, buyers will seek to purchase from local organic farmers when high standards are met. The bakery takes extra steps to ensure healthier baked goods through the use of unbleached flour and seeing that ingredients have no preservatives. Additionally, and certainly noteworthy, KFF rotates food from the shelves and donates food still in “good” condition to local homeless shelters and food kitchens (Kudler Fine Foods – Strategic Plan, 2003, p. ). These efforts demonstrate the commitment to values and the identified social responsibility. KFF reveals many reasons for the organization’s existence through its use of the company’s mission, vision, values, and goals. Organizational Structure A business’ organizational structure is critical to the business and the employees. An organizational structure is “the manner in which an organization arranges (or rearranges) itself” (Fontaine, 2007, p. 6). At Kudler Fine Foods (KFF) the organizational structure that they operate under is a functional structure.
A functional organizational structure is a structure where the position and function of employees are clearly specified. The business is divided into separate departments with specific tasks (Pearce ; Robinson, 2009). KFF has a hierarchy of authority, which defines who is in charge of which fundamentals and who reports to whom. The decision making, ideas, and plans come from the top hierarchy, in this case Kathy Kudler, the president of KFF. KFF has a vertical dimension with several levels of management. Kudler Fine Foods has a total of three stores that make up the framework of the organizational structure.
For instance, the president is at top working with the three store managers. Each store has the same structure hierarchy beginning with the store manager. Under the store manager is the assistant store manager and continues to branch out to the four different department managers – produce and foodstuffs; spirits, cheeses, and wine; meats, and seafood; bakery, and pastries. The key positions that hold the structure together is the administration staff consisting of the president, director of administration and human resources, finance, and accounting, and store operations.
Many levels of management exist in the structure. Every employee has a defined role, all of which with the common goal of meeting the needs of the consumer. Kudler Fine Foods operates in a centralized manner allowing KFF to have more upper management control. With a functional structure every employee’s role is important to the vision and goal of the business. Collaboration Process “Today's enterprises are striving to create more specialized features through globalization and collaboration” (Park, 2003, p. 5). Several steps are in the collaboration process.
The first step is for all the people in the process to come to an agreement on the collaboration process. The second step is for all the people involved in the process to understand the need of reaching the same goal. The third step in the process is for all people involved to work together and share the responsibilities in making the decisions. The fourth step is to make sure all people have resources, which they intend to share with the others involved. The fifth process is making sure everyone knows that with the shared responsibility, during the collaboration, each person is also responsible for the outcome.
The final step in the collaboration process is establishing trust among everyone involved. Trust is a huge factor into how well a team performs. After working out all the details to the steps in the collaboration process, the members must make sure the schedule and guidelines are discussed and followed. Developing guidelines is a way to make sure all people involved are held accountable for the inactions or actions within the group. Kudler Fine Foods has started the collaboration process and the first KFF needs to do is have the purchasing and inventory manager’s start the process.
The largest success of Kudler Fine Foods is the customers continuing to shop at the stores. To keep the customers coming back to Kudler Fine Foods, the collaboration team needs to consider the needs and wants of the customers. The inventory manager will assist by advising the team what products are selling and what products are not. The product manager may determine a better position in the store to make sure the non-selling items sell or the two individuals may cut back on that particular product to lessen the overhead.
Kudler Fine Foods will need to implement an action plan to keep customers coming back, but also to introduce new products to the customers. Kudler Fine Foods has initiated a frequent shopper program, which enables customers to earn rewards with purchases. Rewards are coupons or a certain dollar amount off the entire shopping order once a certain level of purchases is met. KFF must also increase the marketing of the company and the rewards program to make sure the customers aware of the program.
The marketing manager can collaborate with the inventory and purchasing managers to discuss how to best implement a successful marketing plan. Setting these processes in motion will give KFF an advantage above the competition Lateral and Vertical Collaboration Lateral collaboration occurs between the equivalent level of employees within the organization, and vertical collaboration would be between employees with a superior and subordinate relationship. An example of vertical collaboration occurred when Kathy Kudler coordinates the selection of sale merchandise with the store managers during the weekly operations meetings.
Kathy has oversight of the entire organization and directs the merchandise and sale processes with her subordinate store managers. Good lateral collaboration is illustrated by cooperation between store managers in facilitating resupply of advertised merchandise between stores, to the stores with a higher demand. Kudler Fine Foods has no consistent purchasing procedure. The three department managers at each store independently place orders with suppliers based on the department manager’s subjective assessment of store requirements.
Further, the onus is on the department manager “to obtain the best pricing, quality, and delivery possible” (Apollo Group, 2009, Supply Chain Overview, para. 1). This purchasing structure lacks both vertical and lateral collaboration and relies on the individual department managers to take additional steps to coordinate purchasing with other department managers. No mechanism for department managers to compare or discuss store needs among counterparts and no consistent pricing structure between store locations. A vertical disconnect is evident in that Kathy Kudler also places orders independent from the store managers.
An action plan to improve both vertical and lateral collaboration within Kudler Fine Foods involves improvements to the purchasing process. Department managers would be required to have a department manager weekly review meeting where store merchandise needs, trends, and purchase requirements would be compared, discussed, and coordinated laterally into a purchase order plan. This purchase plan would be submitted vertically to a central purchasing agent at the administrative level who would facilitate the negotiation and purchase from suppliers to ensure the best pricing and quality.
Key Stakeholders Kathy Kudler is the founder of KFF. She is the primary stakeholder, and because the company is a privately owned entity there are no shareholders in the company. The company does have investors who have a stake in the company. The investors or stakeholders are both internal and external and are monitored by the company. The stakeholders include the employees, consumers, suppliers, banks, and Kathy Kudler, and each can have an affect or be affected by the company. When Kathy first decided to create Kudler fine foods, she obtained financing.
This is done generally through banks. Banking institutions will extend credit terms to consumers such as Kathy. Kathy can also go to these banks when she is obtaining funding for new stores or launching new products. Banking institutions can also help with extending the line of credit when peek seasons are low and profits might not be as large. The main point of financing comes from banking institutions. The staff of KFF is critical to the daily operations of the company. These employees have direct contact with consumers and serve as a primary point of contact for Kathy and consumers.
Employees contribute to labor and the expertise to the company. In daily activities these employees are responsible for the growth of the stores, the appearance stores, maintenance in the stores, training new staff, and picking up the slack when other employees are not available. Because Kathy is not available daily to complete these activities it is important for the staff to complete these activities and ensure the success of the company. Consumers are a large part of the company, it is important for the consumers needs to be met, and this is done typically through purchasing goods.
Customers rely on employees and Kathy to provide the goods that they are willing to purchase. Customers’ requests need to be met and Kudler has to decide whether the requests of the customer can be met or are feasible for the company to provide. If the products are not available to the consumer the company needs to look into alternate options to solve the problem and to keep the customer. Suppliers can also play an important role in the company. These suppliers are the backbone of the company and provide all the products necessary for the company to be successful.
KFF have suppliers for wine, cheese, fresh produce, organic meats, and all bakery items. These come from both local and national suppliers. The local products ensure the highest quality of products and these suppliers need to remain on good financial terms to continue to build a business relationship. Conclusion Kathy Kudler has achieved success by hiring managers who take social responsibility seriously because he or she already has firm intuitions about what constitutes ethical and unethical conduct (Heath, 2006).
The success of the company has many factors that contribute. The way that the stakeholders of the company relate and work together are important factors in any companies’ success. KFF has achieved the success the company has because of their ability to interact positively with all the stakeholders in the company. The existence of the company is to serve the customers of the community with the highest quality of gourmet foods. Kathy Kudler’s mission, vision, and values have made the company a success and a reality. References Apollo Group, Inc. 2009) Kudler Fine Foods; 2003 Strategic Plan. Retrieved July 24, 2011 from https://ecampus. phoenix. edu/secure/aapd/cist/vop/Business/Kudler2/intranet/ad/strategicPlan. htm Apollo Group, Inc. (2009) Kudler Fine Foods; Supply Chain Overview. Retrieved July 24, 2011 from https://ecampus. phoenix. edu/secure/aapd/cist/vop/Business/Kudler2/intranet/op/supplyChainOverview. htm Fontaine, C. W. (2007). Organizational Structure: A Critical Factor for Organizational Effectiveness and Employee Satisfaction. Retrieved from professorfontaine. om/files/Organizational_Structure_White_Paper_v7b. pdf Kudler Fine Foods, About Kudler Fine Foods – Our Mission, 2010, Retrieved from: https://ecampus. phoenix. edu/secure/aapd/cist/vop/Business/Kudler2/internet/about. htm Kudler Fine Foods, Strategic Plan, 2003, Retrieved from: https://ecampus. phoenix. edu/secure/aapd/cist/vop/Business/Kudler2/intranet/ad/StrategicPlan2003. pdf Pearce, J. A. II, & Robinson, R. B. (2009). Strategic management: Formulation, implementation, and control (11th ed. ). New York, NY: McGraw-Hill.
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