Sustainability-Oriented Management of Retail Stores

Executive Summary of Kmart Business Report

The current study has conducted a detailed analysis of the responses of Kmart to its environment. The technological environment of the organisation has been analysed and the performance of Kmart according to this has been evaluated. Along with this, the response of the organisation to its competitors have also been analysed and evaluated. Additionally, the social responsibility of organisations and specifically of the Kmart has been analysed. The role of the managers in interactively coordinating the aforementioned aspects of organisation has also covered in the current study.

Table of Contents

Introduction.

Task 1.

Task 2.

Task 3.

Task 4.

Conclusion and recommendations.

Reference List

Introduction to Kmart Business Report

The concept of management is dealing with the administration and coordination of the organisational tasks by guiding people to achieve some certain organisational goals. The administrative tasks of a manager include developing and using strategies and coordinating the efforts put by the staff members so that the specific goal can be achieved effectively. The current study will focus on the management of different aspects of Kmart, Australia based on the environment influences such as technological trends, competitors, social responsibilities and personal experiences in management.

Kmart Business Report - Task 1

1.1 Definition and explanation of the influence of technological trends on organizations

There are mainly two kinds of environment that impact upon the organisations such as general environment and specific environment. General environment consists of the technological trends, legal trends, social trends and others.

As per the punctuated equilibrium theory depicts that organisations experience a long and simple stable periods, followed by small and fundamental changes or revolution and it finishes after returning to stability (Mai & Phuong, 2013). Therefore, the merging technological trends are likely bring small and fundamental changes to the organisations and may lead to more stable and long stand simple period of stability. Technology consists of techniques, tools and inputs such as raw information and materials using which products or services are produced.

The changes that technology brings into an organisation are likely to improve the quality of output or end product and increases efficiencies in producing and reaching to the customers with the products. For instance, Internet of Things (IoT) provides opportunity to gather customer related information based on which the products are developed to meet the customer needs and expectations (Aloysius et al., 2018).

1.2 Analysis of the trends in Australia in 2019/20 and evaluation of the response by Kmart

Technological trends are ever-changing which influences the organisational performance in different manners. Industries have been observed to be eager in employing IT professionals into tech support so that the skilful conduction of the technological equipments can become possible and it has increased up to 82% (Kovacs, 2017). Major improvement in the technological infrastructure could have been identified where technological budget has grown to 2.1% in corporate and government sector. As mentioned by Inside Retail Australia (2018), most of the Australian companies have reached the level of digital maturity point. These include robotic process automation (RPA) and digital transformation which is observable in different areas of business starting from customer orders to payment methodologies. These are mostly focused on improving the customer experiences. Apart from that, Australian businesses are also focusing on the customer security system in the context of payment transfer and Information and communication technology to create the business word more coordinated (Reinartz, & Imschlo, 2017). The collaboration between the government and the Australian businesses has led to up-skills and re-skill the Australian workforce using which the technological improvement in the businesses have been achieved.

Since the year 2001, Kmart is involved in revolutionary technological practices with an aim to improve the customer experiences (Duran, 2019). This organisation has made an investment of $270 million into the technological infrastructure improvement (handheld computers and wireless LAN devices) to create a pace for the future business success. Recently Kmart has started using real-time data from the point-of-sale to improve the machine learning models that are capable of predicting style, size, colour and volume of cloths possibly selling each of its 230 stores (Crozier & Crozier, 2020). This has provided high efficiency in observing the customer behaviour and predicts the purchase intention of the customers effectively. A major boost around supply chain has also been observed due to the Kmart’s parent company Wesfarmer’s $230 million move for e-tailer Catch (Crozier & Crozier, 2020). In the year 2019, Kmart has also launched a mobile augmented reality campaign for advertisement through which the customers can view the furniture’s and home décor products in real life context (Duran, 2019). Therefore, these are the responses Kmart has made to the changing technological business environment of Australia.

Kmart Business Report - Task 2

2.1 Definition and explanation of organisation’s competitors and company’s response to them

In order to improve the business outcomes and maintaining profitability, organisations are required to remain resilient to the competitors. As mentioned by (Williams & Chuck 2019), competitors are the organisations that belong from same industry and sell similar products to customers. Additionally, the success of a business is highly dependent upon the company’s performance against its competitors in providing better services to its customers. Therefore, company’s such as Kmart are required to closely monitor the movements of the competitors so that the organisations can effectively perform against the competition. Managers are responsible for identifying the competitors, classifying them, anticipate the moves they can take against Kmart and determining the strengths and weaknesses of the competitors are necessary to perform (Inside Retail Australia, 2018).

Competitors of Kmart Australia include Walmart, Best Buy, Target, Amazon, Costco and others. The competitive strategy of aggressive discounting taken under consideration by Kmart has led this company to become only major departmental store chain. This has enabled the company to gain higher customer satisfaction rate. It has been found that the rate of customer satisfaction in the context of Kmart is 87.6% in the year 2017. This indicated that the store is capable of improving customer satisfaction rate by 1% a year. This organization is now leading Costco whose rate of customer satisfaction is 87.1% (Inside Retail Australia, 2018). Apart from the discounting prices, diversity in pricing has also led the company to achieve high satisfaction rate not only for a specific aged customers but all type of customers. Additionally, Kmart has also performed effectively in style and quality of the products so that the customers can be attracted to the stores.

A sustainable approach to the price and value has also been observed to be taken by Kmart. For instance, Kmart ensures that the customers get the value of their money they are spending on the products offered by Kmart (Bala, Massey & Montoya, 2017). It has also been identified that the current organization is improving customer experiences through the service approaches it has taken. The customers are nowadays likely to respond to new and exciting things and can be considered as well aware and knowledgeable (Rafique et al., 2015). Therefore, rendering the advertisements and satisfying customers through the implementation technology based payment and other systems play a highly significant role in improving Kmart’s competitive position against its rivals.

2.2 Analysis and evaluation of Kmart’s response to competitors

The response of Kmart to the competitors can be evaluated through VRIO analysis through which how the services of the organisation are valuable, rare, inimitable and organised can be understood. The distribution channel of the current organisation is vast in nature and has a nationwide diversified net of suppliers. The effective distribution network of the company is valuable as the company belongs to a key discount retail industry (Williams, & Chuck, 2019). Companies like Amazon and Walmart are famous for their distribution network though these organisations are not famous for their discounted services as much as Kmart, thus rare. The products and services are very difficult to imitate due to price disadvantage. However, the organisational capability is required to be improved in case of maintaining supplier relations.

Kmart Business Report - Task 3

3.1 Definition and explanation of organisation’s social responsibility

The obligation of a business to develop and implement policies and making decisions that is capable of acting for the benefits of the society is the social responsibility of the current organisation (Tourigny et al., 2019).It is very difficult to detect which is the corporate social responsibility and which are not. As per the Shareholder model, the only social responsibility of an organisation is to satisfy its owners or shareholders. It is the only responsibility of the business to maximise the profit. It helps maximising shareholder’s wealth and satisfaction. As per the stakeholder model, a manager’s most important responsibility is to ensure the long term survival of the organisation. This can be achieved through satisfying the interests of the multiple corporate stakeholders (Williams & Chuck, 2019).

3.2 Analysis of the approaches taken by Kmart towards social responsibility

Kmart has demonstrated a highly effective approach towards its responsibility to society, where it has indulged in ethical sourcing. While the organisation strives for providing best quality products at a lowest price, it also protects human rights. This organisation provides utmost importance to the quality and safety of the products complying with the Australian quality and safety standards. For instance, 108,000 children's skate helmets are independently tested for quality and safety assurance. Therefore, it can be stated that the current organisation is highly concerned about their social responsibility and indulge in different activities concerning health of the customers. It ensures better working conditions of the countries and communities from where they source (Kmart, 2020). The cultural program of Kmart “Unwritten Ground Rules (UGRs)” creates high performance cultures and values in the organisation. Kmart ensures safety and quality of the products by implementing standards in Australia that reduces product related injuries and product recall reduced to 4. Improving working conditions ensure ethical compliances.

Kmart has launched a partnership with Red Dust Role Models to support Indigenous communities that also enhances awareness about Indigenous culture within business. It helps the company to collaborate with remote communities to conduct health promotion programs to encourage the Indigenous people to obtain a healthy lifestyle. The company has provided direct community contributions of $1 million (Kmart, 2020) The Company has also increased energy efficiency and reduced energy consumption by 20% in 2020 by using LED alternatives and emerging technologies. Green packaging is used by the company to reduce pollution and ensure long-term sustainability of business.

3.3 Evaluation of Kmart’s responses to the Sustainable Development Goals SDG3 and SDG 12

According to SDG3, the organisations need to strengthen the prevention of the death, injuries and substance abuse in their business to promote healthy living among the employees and community. Kmart has taken some sustainable goals in response to SDG 3 to reduce the wastage in the retail business and provide quality services to the customers. Kmart has taken sustainable measures in which they support low-carbon transport to reduce carbon emission and they take measures to reduce energy consumption by 20%. Alongside, the company has reduced waste to landfill by 30% in 2020 (Kmart, 2020).

As per SDG12 goal, Kmart has intended to reduce 30% of emission of aggregate Greenhouse gas by 2030. In addition the company takes science initiative to improve their product innovation and packaging sustainability. A formal sustainability strategic plan named “Better Together” is developed by the company to increase the proportion of women in leadership roles to 50% by 2025 (Wesfarmers, 2020). The company also intended to create partnership with the suppliers to enhance voice, capabilities and quality of the supply chain workers. The company has also increased Aboriginal and Torres Strait Islander employment to 3% in 2020.

Kmart Business Report - Task 4

4.1 Identification of the type of managerial position in the chosen organisation

As it is a large organisation, it possess different managerial positions such as operations manager, departmental managers, human resource management, personnel management, quality control management, marketing and sales managers, store managers, supply chain managers and others. The company has five operating divisions that includes four geographical areas like International West, Northeast and Southeast areas along with super centre division. The divisions operate 520 stores across Australia and New Zealand with more than 46,000 employees (Wesfarmers, 2020). The executive management team of Kmart chooses the right people and divides the responsibility to increase performance and make necessary strategic changes to gain price positioning.

4.2 Definition, explanation and application of Mintzberg’s managerial roles

 Mintzberg’s managerial roles analyses different managerial roles in an organization that are essential for a company to lead and direct the employees, negotiate new contracts, resolve conflict among the team members. The ten roles of the managers are leader, figurehead, monitor, liaison, entrepreneur, spokesperson, disseminator, negotiator, resource allocator and disturbance handler (Canbek, 2020). Switching after roles is required to maintain basic functions of the manager as per the situation. Therefore it is highly required for managers of Kmart to follow Mintzberg’s roles to manage the production and distribution of the products to the customers in an error free and speedy manner. The managers with the role of leaders, figurehead and liaison conduct interpersonal operations and the managers conduct informational operations by monitoring and disseminating. The managers allocate resources, negotiate and conduct entrepreneurship activities to make effective strategies to maintain long-term Sustainability. It helps them to increase collaboration and reduce conflict between the employees that increases employee motivation and commitment.

4.3 Explanation of the managerial experience

It has been witnessed that Kmart follows the autocratic style of leadership in its management regime. Most of the store managers of Kmart have reported the working environment of the organisation to be non-pleasant owing to the enhanced increment in autocracy. On the contrary, The HR department of the company is excellent in its job aspects as it provides the managers of respective departments with the right kind of employees according to the likelihood of employees. The workplace of Kmart is extremely challenging since there is intense competition among the peers in the company. The competition seems to enhance the work performance of the individual employees. However, the excessive sense of competition among the employees also brings about jealousy and envy among each other which seems to degrade the quality of work required to establish the welfare of the company (Álvarez-Rodríguez, Martín-Gamboa & Iribarren, 2019).

The basic amenities of Kmart have not changed and there has been lesser up vote on employee satisfaction levels. The old thinking has strictly been the barrier for the progress of the company. The new recruits of the company are not able to fit themselves into the purview of the company.

Conclusion and Recommendations on Kmart Business Report

Conclusion

In conclusion, Kmart analyses the technological trends in Australia and uses information technology and Internet of Things to obtain customer related information for operations and supplying products. Proper training and change management procedures are implemented to enhance skills of Australian workforce to increase organizational performance, commitment and point-to-point sales. A competitive strategy of aggressive discounting and price positioning are taken by Kmart to increase customer satisfaction. Community engagement is increased by them by promoting women in leadership and health services in the organisation. The managers take decisions after taking feedback from the employees

Recommendations

It is essentially important that Kmart follows the democratic style of leadership in its management regime. This would provide the interface for all the employees of the company irrespective of their cadre to express their thinking for the welfare of the company. The managers of Kmart need to look into methods such as get together and frequent meetings among the employees in order to bring all the employees under a single shed. This would eventually set the benchmark for closer interaction among the employees. There is also an urgent need to change the basic amenities such as improvement in architecture standards so that the employees feel good regarding their workplace.

Reference List for Kmart Business Report

Aloysius, J. A., Hoehle, H., Goodarzi, S., & Venkatesh, V. 2018. Big data initiatives in retail environments: Linking service process perceptions to shopping outcomes. Annals of Operations Research, 270(1/2), 25–51. Retrieved 25 August 2020, <https://doi-org.ezproxy-b.deakin.edu.au/10.1007/s10479-016-2276-3>

Álvarez-Rodríguez, C, Martín-Gamboa, M & Iribarren, D 2019, ‘Sustainability-oriented management of retail stores through the combination of life cycle assessment and dynamic data envelopment analysis’,Science of The Total Environment,vol. 683, pp.49-60.

Bala, H., Massey, A. P., & Montoya, M. M. 2017. The Effects of Process Orientations on Collaboration Technology Use and Outcomes in Product Development. Journal of Management Information Systems, 34(2), 520–559. Retrieved 25 August 2020, <https://doi-org.ezproxy-b.deakin.edu.au/10.1080/07421222.2017.1334494>

Canbek, M 2020,‘Artificial Intelligence Leadership: Imitating Mintzberg's Managerial Roles’,In Business Management and Communication Perspectives in Industry 4.0, pp. 173-187, IGI Global.

Crozier, R., & Crozier, R. 2020. Kmart Australia reckons real-time POS data is just your style. Retrieved 25 August 2020, <https://www.itnews.com.au/news/kmart-australia-reckons-real-time-pos-data-is-just-your-style-535111>

Crozier, R., & Crozier, R. 2020. Kmart, Target to get major digital and e-commerce boost. Retrieved 25 August 2020, <https://www.itnews.com.au/news/kmart-target-to-get-major-digital-and-e-commerce-boost-526559>

Duran, H. 2019. Kmart Australia Launches AR Campaign, Taps Country’s Growing Interest In Tech. Retrieved 25 August 2020, <https://www.alistdaily.com/technology/kmart-australia-launches-ar-campaign/>

Inside Retail Australia, 2018. Competitive advantage...do you even have one? - Inside Retail. Retrieved 25 August 2020, <https://insideretail.com.au/news/competitive-advantage-do-you-even-have-one-201803>

Kmart 2020. Sustainability Performance. Retrieved 25 August 2020, <https://www.kmart.com.au/social-responsibility>

Kmart, 2020. Souring Ethically. Retrieved 25 August 2020, <https://www.kmart.com.au/ethical-sourcing>

Kovacs, M., 2017. Kmart bucks trend to rank number one for discount department store customer satisfaction - SmartCompany. Retrieved 25 August 2020, <https://www.smartcompany.com.au/industries/retail/mk-kmart-ranks-number-one-for-discount-department-store-customer-satisfaction-roy-morgan/>

Mai, N. Q., & Phuong, N. V. 2013. ‘The Impact of External Environment, Technology and Innovation Capacities, and Leadership Development on Organizational Performance in Food Industry: A Qualitative Study of Food Enterprises in Ho Chi Minh City, Vietnam.’, International Journal of Business, Humanities and Technology, vol. 3, no. 4, pp. 49-60, retrieved 27 July 2020, academic source complete.

Rafique, M., Evans, R. D., Nawaz, M. T., & Agha, M. H. 2015. Should Organisations Compete or Collaborate when Absorbing New External Knowledge? International Journal of Advanced Corporate Learning, 8(3), 4–10. Retrieved 25 August 2020, <https://doi-org.ezproxy-b.deakin.edu.au/10.3991/ijac.v8i3.4741>

Reinartz, W., & Imschloß, M. 2017. From Point of Sale to Point of Need: How Digital Technology Is Transforming Retailing. GfK-Marketing Intelligence Review, 9(1), 43–47. Retrieved 25 August 2020, <https://doi-org.ezproxy-b.deakin.edu.au/10.1515/gfkmir-2017-0007>

Tourigny, L., Han, J., Baba, V. V., & Pan, P. 2019. Ethical Leadership and Corporate Social Responsibility in China: A Multilevel Study of Their Effects on Trust and Organizational Citizenship Behavior. Journal of Business Ethics, 158(2), 427–440. Retrieved 25 August 2020, <https://doi-org.ezproxy-b.deakin.edu.au/10.1007/s10551-017-3745-6>

Wesfarmers. 2020. Kmart Group. Retrieved 25 August 2020, <https://www.wesfarmers.com.au/our-businesses/kmart-group>

Wesfarmers. 2020. Kmart sets long-term targets for sustainability. Retrieved 25 August 2020, <http://2016.sustainability.wesfarmers.com.au/case-studies/environment/kmart-sets-long-term-targets-for-sustainability/>

Williams, & Chuck,. 2019. MGMT4. ProQuest Ebook Central, Retrieved 25 August 2020, <http://ebookcentral.proquest.com/lib/deakin/detail.action?docID=6135911 Cengage>

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