High Performance Working in Data Connection and Flight Centre - Iloka Benneth Chiemelie

0.1 INTRODUCTION

Increased pressures caused by globalization, high shareholders demand, changes in demographics and advancement in technology have result in organizations constantly searching for new elements that constitute continuous organizational change (Andre´ and Mariam, 2009). As a result, numerous literatures in recent years have focused their discussions on elements that constitute high performance (Collins, 2001).

But, there are two common issues with these literatures. Firstly, most of them tend to focus on elements that results in high success without considering the resulting effects is high success is not achievable. Secondly, most of these researches have been done in developed economy, with most of them covering only one aspect of high performance (Chakrabarti et al., 2007; Deshpande´ et al., 2004; Huang, 2000; Khanna and Palepu, 2006; Khumalo, 2001; Needles et al., 2007; Sull and Escobari, 2005; Sull and Wang, 2005).

Thus, this research paper will take into account the first issues highlighted above by focusing on both success and failure aspects of high performance working in organizations, but it will be in line with the second issues by attempting the study a developed economy. Therefore, the objective of this research is to study two UK companies that practices high performance working and understand the pros and cons of such companies within the company.

With the objective already highlighted, it has to be said that this research paper is basically divided into three sections. The first section takes a look on the background literature of high performance working and what constitutes organizations that practices HPW. The second section involves critical analyses of the two chosen organizations (Data Connection and Flight Centre), and also presents a comparative analyses of both companies to understand their success and failures in relation to HPW. The final section is the concluding section with balances proposal on ways to overcome their failures and enhance their success factors. This section also illustrates the limitations associated with this research paper.

1.0 WHO IS A HIGH PERFORMANCE ORGANIZATION?

A high performance organization can be defined as an organization that is capable of achieving both financial and non-financial results over its competitors within certain period of time of at least five to ten years (de Waal, 2008). Based on the definition, researcher undertook a five-year study to review over 280 publication on studies undertaken within a period of 30 years, in order to highlight what constitutes a high performing organization (Andre´ and Mariam, 2009).

The common elements that influences high performance in organizations as found by studies were tested in over 2,500 organizations within the non-profit and governmental organizations. These organizations were compared with their peers in the same industry using correlation and factor analyses and the 5 factors with the highest influence on organizations were noted and described as the HPO factors. The study also found relation between high performance organization and competitive performance (Andre´ and Mariam, 2009). The five factors of HPO are:

1.1 High management quality – high performing organizations combines numerous elements to build trust and loyalty with their stakeholders by valuing people, and creating and maintaining individual relationships with employees. Their managers live with integrity, honesty, sincerity, commitment, enthusiasm and respect (Andre´ and Mariam, 2009).

1.2 Transparencies with action orientation – HPO have an open culture within their system and utilize this transparency increase dedication and achieve result. They value opinions of employees are valued and they are always implemented in the organization whenever necessary (Andre´ and Mariam, 2009).

1.3 Long term commitment – long-term commitment is very important in HPO, because they value satisfying their stakeholders by all possible means. High performing organizations engage in long term commitment goals of constantly satisfying their customers, returning investment to shareholders and helping employees advance their career and realize personal dreams (Andre´ and Mariam, 2009).

1.4 Focus on continuous improvement and renewal – HPO adopt strategies that will differentiate them from their competitors by developing many options and alternatives to compensate for their dying strategies. The organization does everything with their power to protect their products and retain their customers through quality improvement (Andre´ and Mariam, 2009).

1.5 High workforce quality – high performance organizations ensures that it organizes a broad and complementary management system and workforce, and indulges in recruitment of workforce with high flexibility, to help detect the complexities within the organization and provide creative solutions for the problems (Andre´ and Mariam, 2009).

The above definitions have been successful in explaining what constitutes a high performing organization, and these definitions will be adopted in the analyses of the two chosen company. As part of the objective which is to understand the positive and negative elements associated with high performance in organizations, the research paper will evaluate all area of high performance working within the organizations studies.

2.0 CASE STUDY ANALYSES

2.1 COMPANY OVERVIEW

2.1.1 FIRST COMPANY - DATA CONNECTION UK

Data connection is one of the world's most successful companies in the communications and technology industry, and its recorded performance is outstanding. The company has consistently achieved over 20% profit of its operating revenue from since the past 22 years. The company achieved its outstanding performance with the combination of quality services, innovative products and high skilled workers (Johnny and David 2011). The company deals on information and communication technologies products such as chips, computer accessories and phone products.

2.1.2 SECOND COMPANY - FLIGHT CENTRE UK

Flight Centre began operating in the UK in 1995 as a low cost travel specialist, and the business has grown rapidly since then. By 2004, the company has expanded its high street shops with a total of 500 staff, something that is considered unusual during the time of intense competition in the flight and travel market. The intense competition was as a result of the 9/11 attack on the US that made travellers less willing to travel, and airline industries stopped payment of the usual 10-15 commissions to agents. Thus, this made repositioning a must within the travel and tourism sector (Johnny and David 2011).

2.2 HIGH PERFORMANCE ANALYSES

The high performance of both companies will be analysed by adopting the five elements which were discussed above in the literature review. These elements will aid in visualizing to what extent both companies have implemented their high performance working and how the implementation was undertaken.

2.2.1 HIGH MANAGEMENT QUALITY

Data connection UK

As Johnny and David (2011) highlighted, the management system of Data connection is centralized, and this platform offers the company the ability to control all business undertakings within a single unite. In terms of high performance, it ensures consistency and reliable management system based on set and internalized systems within the company.

Flight Centre UK

Unlike data connection, the company operates a decentralized management systems, whereby each stores have full decision making rights. However, the standards of operation are centralized. This implies that the company adopts the same operation standards in their stores (Johnny and David 2011). On the side of Flight centre, adopting decentralized management system allows each store to gain full advantage of the local market, while adopting the same operations offers the company needed expertise in the sense that any of their staffs can work in any of their stores, and they can open a new store for existing staffs without having to teach them any of the management skills as the same operation standard is adopted throughout its companies.

2.2.2 TRANSPARENCIES WITH ACTION ORIENTATION

Flight Centre UK - Every Employee Runs the Business

The company wanted to create a fun and hardworking culture within its system, and the way they adopted for such strategy is to decentralized the management structure and make ownership central to what the company does. Thus, instead of being centrally organized, each shop is given full decision making power and can decided on amount of money needed to run their shop on a daily bases and how these money will be spent (Johnny and David 2011).

High performance is incentivized in the system, and business decision making proceed is tailored down to each employee. Every single employee have a target to reach, and must contribute my managing share and improving sales (Johnny and David 2011). All the shops also have set targets, thus each manager has the responsibility to ensure that every employee is down to business in order for the shop to reach their set targets. Reviews are conducted on quarterly bases, and rewards are presented to the best shops and best employees within the shops.

Data connection UK – Each Employee Works in All Departments

Transparency in data connection is brought about by the fact that the company trains all the employees in all departments, thus ensuring flexibility and transparency within the system (Johnny and David 2011). For instance, when the company recruits a new accountant, the accountant is meant to work in all other departments such as engineering, IT, HRM and Marketing. Through this means, the accountant is able to see through other departments, get to know employees, procedures and undertakings within other departments and eventually make the organisation transparent in the sense that every employee is aware of the business running in all these departments.

2.2.3 LONG TERM COMMITMENT

Data Connection – Profit Sharing and Performance Reward

The company has a very candid way of sharing generated profit. Data connection's employees own the company through their employees' benefit trust. At the end of every fiscal year, the company rewards its employees handsomely for a bringing in profits years after year by distributing the majority of the profits earned within that year to the employees.

The share of profit received by each employee depends on the employee's contribution, and the contributions are measured every six months. The contribution is determined by its influence on the department and overall influence on the company's performance. As the company has been generating at least 20% of profit per year for the past 22 years, sharing the profit based on employee's performance has been essential in motivating each employee to commit more efforts and time in their work (Johnny and David 2011).

The company has been struck with business issues in recent years following the development of software in developing countries. Companies from developing countries increase the competitiveness because they can offer same quality at a lower price due to low production cost. Thus, data collection is no longer capable of holding a great amount of the market share with its brand image alone. The company has responded by creating a new marketing team to market their products in both the UK and the world at large.

Flight Centre - Leadership, Unity and Egalitarian Treatment

The company operates a flat decision making power between their travel consultants and the management and operations departments. Leadership by example is an integral part of the company, thus both managers and consultants wear the same uniform, undertake the same task and have decision making rights. The reward system is also based on the same package not withstanding an employee's position in the company. Such a culture promotes transparency and makes the managers more accessible (Johnny and David 2011). 

2.2.4 FOCUS ON CONTINUOUS IMPROVEMENT AND RENEWAL

Data connection - Continuous Improvement through Innovation

Besides the recruitment of the very best employees, the company also uses its brand name to gain competitive edge, and invest in research products to design future products for customers. This has increased their innovativeness to a great extent and Data Collection currently have customer from all areas of telecommunication demands (Johnny and David 2011).

Continuous development is an integral part of data connection's culture, and every manager has a role to play at such. New recruits are given a mentor to provide them with advice and guidance. More importantly, every single employee has a personal individual development plan and the progress of such development is recorded every three months. The development includes both technical improvement and personal skills. In addition to this, every employee is reviewed every 9 months, and the company allocates only 4 to 6 employees per manager to ensure that the manager can fully put them together and produce the most efficient result possible (Johnny and David 2011).

Flight Centre - One Best Way

Just like most of its competitors, Flight Centre prides itself on one-stop package and guaranteed cheapest flights. Executives at the company organizes all travelling aspects such as hotel booking, flights, tourism area, visa and insurance, but the company differentiates itself from other travel agency by exceeding customers' expectations in order to build loyalty (Johnny and David 2011). In order to increase its revenue, the company operates on both local and global services, but being part of the globe comes with its own cost due to the fact that Flight Centre has shops all around the UK. Thus, the come adopts a system known as the "One Best Way."

One Best Way is the mode of operation for all Flight Centre shops, and it involves adopting a common system that is guaranteed to offer customers similar or exact experience no matter where they book their flights. Once an innovative new idea is discovered in one of their shops, this idea will be tested over time and if found useful will be integrated in all their shops across the globe. Besides being beneficial to the customer experience the one best strategy is also essential for flexibility within the system. Employees can move from one branch to the other or even open their own branch under Flight Centre without much difficulty, as they have a common mode of operations (Johnny and David 2011).

2.2.5 HIGH WORKFORCE QUALITY

Data Connection - Recruitment of the Very Best To Become the Best

Founded in 1981 by Ian Ferguson, the company has attracted a long list of international clients such as British Telecom, General Dynamics, Lockheed Martin, Nortel, Siemens, Cisco, IBM, NEC and other international giants. Due to the high competitiveness of the communication industry across the globe, Ferguson adopted a strategy built around recruitment of the very best personnel as he believed that only the best will bring the best result. This strategy has also been fruitful as thought, with staff numbers increased up to 290, of which 217 are software engineers and the company's profit also grew on equal notes to $12 million in 2002/2003 statement (Johnny and David 2011).

Because data connection functions around teams, the company also recruits its staffs based on team demand. Historically, its staffs are students with academic performance of grade "A" in all subjects or summation of studied courses. Besides that, applicants have to undergo numerous processes to be hired at data connection. The company has over 3000 job applications for its 20-25 open positions, and applicants must first attend a preliminary interview that last the whole day and involves solving technical problems. Candidates invited back for the second interview will face another task of attending a social gathering organizes on their behalf, and they are put through another interview with one of the senior managers after the gathering. It is only after the second interview that the company will decided whom to hire for a permanent position (Johnny and David 2011).

Flight centre – Standardization of working process

The company operates with the same standards in all their shops across the globe and this is a unique organizational system as it offers each employee the capability of working in any of their outlets across the globe (Johnny and David 2011). This creates a sustainable workforce as they don't need to train employees that are transferred into other outlets because these employees are already used with their system of operations in their respective department and the system of operation is the same in every department.

3.0 CRITICAL REVIEW - WITHIN CASE ANALYSES

From the above case study analyses, we have pointed out numerous high performance activities within the companies. However, the analysis was focused on the beneficial aspect of the high performance working in the company and didn't highlight any negativity associated with such activities. Thus, this critical review will provide analyses of those associated negativities as discussed below.

In flight UK, everybody is allowed to run the business and this complicates the management system in the sense that the management doesn't adopt a standard system and it can lead to different managers undertaking the same task differently which can result insufficiencies and inconsistencies within management and subsequently their services. On the side of data connection, while their cross-functional training will be essential in building a strong workforce, it also reduces specialization and efficiency within the system as an employee will have an experience overload and are likely to apply unnecessary skills within their management system due to numerous experiences from numerous fields.

Their continuous improvement are also an area of concern considering the fact that innovation is expensive in the sense of data connection and adopting a one way system is also expensive in the sense of flight UK. Thus, the company has monetary worries as their competitors can take that as an area of advantage in the sense that they can charge at lower prices and just gain price competitive advantage over the companies discussed above.

Besides the two areas highlighted above, the companies' transparency system is also subject to question. It must be acknowledged that their transparency system is essential in making the top management available but it can also reduce their power in the sense that the employees will start to view them as their fellow employee. Thus, it also call a question about their management system in terms of power reduction and biasness as they will likely treat employees' based on their interactions.

Therefore, it can be seen that while high performance working is essential in creating organizational sustainability and efficiency, it can also result in numerous form of management and operation related issue and can eventually reduce the organisation's efficiency and productivity eventually.

4.0 LIMITATION AND CONCLUSION

The main objective of this research paper as highlighted earlier on was to demonstrate the impact of high performance working in two companies within the UK. This objective was hinted on by discussion theories of high performance in organization and linking these theories in the chosen organizations. However, these organizations are from different industries and it can be said that this research paper have certain limitations in that area.

Thus, the limitations of this research work is that the chosen industries are from different business sectors and it can make comparability of the application between organizations in the same sector less reliable and more open to criticism. On the other hand, the research is a desktop study and covers only UK companies, therefore, it is not clear if the factors highlighted within the UK companies can be applied in order companies outside the UK.

In conclusion, it can be said that this research paper has meet the set objectives by demonstrating that high performing organizations have more competitive advantage over their peers within the industry. It also highlighted that high performance in organizations comes at a price and is not a strategy al organizations will be able to adopt. However, high performance is essential nowadays and businesses cannot deny this fact as globalization has brown the business wide open and customers are constantly demanding new features and changing their brands easily when needed.

5.0 BIBLIOGRAPHY

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Collins, J.C. (2001), Good to Great. Why Some Companies Make the Leap . . . and Others Don't, Random House, London.

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Deshpande´ , R., Farley, J.U. and Bowman, D. (2004), ''Tigers, dragons, and others. Profiling high performance in Asian firms'', Journal of International Marketing, Vol. 12 No. 3, pp. 5-29.

Huang, T.C. (2000), ''Are the human resource practices of effective firms distinctly different from those of poorly performing ones? Evidence from Taiwanese enterprises'', Journal of Human Resource Management, Vol. 11 No. 2, pp. 436-51.

Johnny, S. and David, A. (2011), "High Performance Work Practices: linking strategy and skills to performance outcomes." Available at: http://www.bis.gov.uk/files/file9338.pdf [Accessed on: 15-04-2012].

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Khumalo, R. (2001), ''Concern for others. A management attribute of excellent companies'', South African Journal of Business Management, Vol. 32 No. 1, pp. 57-66.

Needles, B.E. Jr, Powers, M., Shigaev, A. and Frigo, M.L. (2007), ''High-performance companies in developing and developed countries. The case of India and the United States'', paper presented during the 4th Conference on Performance Measurement and Management, Nice, September.

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Sull, D.N. and Wang, Y. (2005), Made in China. What Western Managers Can Learn from Trailblazing Chinese Entrepreneurs, Harvard Business School Press, Boston, MA.