Grade my 18 marker? (AQA BUSS 3)Watch
"To what extent do you think that Scott Electronics plc’s current human resource strategy is effective? (18marks)
I think that Scott Electronic’current human resource strategy is effective because it has enabled them to cut costs, thereby increasing their competitiveness. This is because their annual training budget is 50% of the industry average, presenting a significant cost saving for Scott Electronics over competitors. This has enabled their real unit cost to be 8.7% lower than the industry average. As a result of this, Scott Electronics have been able to benefit from higher gross profit margins or have been able to pass this cost saving onto consumers, meaning they have been able to compete more effectively on price, selling more phone units. Given that price is considered the most important factor in deciding on a smartphone for their new proposal, this provides Scott Electronics with a significant competitive advantage as a result of their efficient human resource strategy.
However, I think that their current human resource strategy is ineffective because it is contributing to producing lower quality products. The human resource strategy is heavily focused on targets and has little means of quality control. This is shown by the fact that there are only 2 kaizen groups within the business, whilst their pay is linked to targets twice as much as the industry average. This means that employees are not concerned with the quality of their work and are more motivated by meeting targets in order to get their bonus. This has potentially resulted in staff being careless and rushing their work, culminating in the fact that the business has twice as many defective products as the industry average.This shows that the human resource strategy is not effective as this could damage Scott Electronics reputation for reliable products, encouraging customers to shop elsewhere.
Overall, I think that Scott Electronics human resource strategy is ineffective because it’s focus on targets and lack of focus on quality has led to the number of defective products being double the industry average. This could have had a terrible impact on their brand image, which could result in lower sales. In an industry which is as competitive as smartphones, Scott Electronics may struggle to regain lost sales. Although there are cost savings for Scott Electronics by using this HR strategy, this is more of a short term benefit; I feel that the long term consequences of having target driven bonuses and a lack of kaizen groups could be more damaging for the success of Scott Electronics."