Contingency Theory Of Management Essay

Question:

Discuss about the Contingency Theory of Management.

Answer:

Introduction:

Recently the issue of data stealing has been acknowledged by Domino’s in France. In France, hackers had stolen data from 592,000 French customers and 58,000 of Belgian customers. The stolen data included all the personal details of customers like full names, addresses, phone numbers, email and their passwords, delivery instructions and also favourite pizza toppings. Hackers demanded a ransom amount of €30,000 (?24,000) and same was posted by them on a site named Pastebin (Letts & Morgan, 2017). Same was admitted by management on their official Twitter account that their encryption data system in France has been hacked by seasoned professional. As hackers were in a position to decode encryption including passwords thus customers were suggested to make quick modification in their personal details (David & David, 2016). This was the major weakness of company as their reputation was adversely affected due to blunder in online transactions. Further, they have to bear financial loss to prevent legal claim and make changes in their operational activities.

The issue of underpayment has been identified in the audit of various franchises of Domino’s. By considering management strategies, it can be noticed that company have conducted programs for focusing on the issues of underpayment to staff members in various franchise stores. However, the programs implemented by business were not successful to the full extent as there is still $770,000 unpaid wages and superannuation in which only 15 store audits were finished and audit of 41 stores are still pending (Letts & Morgan, 2017). In addition to that, they recovered $249 million regarding unpaid wages through reviewing 55 complaints. This issue is creating a threat to business as it is reducing the morale of employees and affecting work environment in an adverse manner.

Domino’s slow sales Growth:

According to Mr Meiji, growth in the past year is very difficult to match. The company had attained commendable growth due to various acquisitions and takeovers. These strategies had executed in Germany, Japan and also bought Sprint Pizza (Melnykn et.al, 2014). This approach had inflated the growth of previous year due to which growth of previous years is not compatible. It is very difficult to match that pace of growth without acquisitions and take overs in future years. This approach is a strength as well as an opportunity for the company as they can their business on an international level by resolving operational activities (Otley, 2016). Further, the company can also raise investment as they are having significant positive growth in which will influence for shareholders for investment. As this year the total sales rose by 15 percent, and for the first time, it exceeded $1 billion. In this financial year, the firm growth expectation was scaled back from 13.6 percent in Australia and New Zealand in 2017 to 7-9 per cent (Letts & Morgan, 2017). Mr Meiji further explained that it would still be a strong result and these extraordinary numbers are being rolled off, as it is a business of maturity.

SWOT analysis of Dominos

Strengths

· Dominos major strength lies within its quick service and diverse menu; it also has a high brand recall because of its constant marketing (Fullerton, Kennedy & Widener, 2014).

· Marketing strategy has created self-awareness and guarantee from the brand in the marketplace.

· Dominos also has an outstanding channel network, with 9000 franchise in over 60 countries (Smith & Driscoll, 2017).

· Low prices in order to attract more of customers and effective supply chain management

Weaknesses

· Company lack operational framework, as it has many outlets and it is difficult to address operations, thus it results in hard to maintain quality.

· Reduced sales in principle market, due to the increase in consciousness of health and security concerns (McLaney & Atrill, 2014).

· Dominos also has low staff maintenance; it is because their employees lack proper guidance and training.

Opportunities

· Dominos has an opportunity that is the market is expanding increasingly; the company can implement the strategy by target developing economy.

· Dominos can increase revenue by reinforcing the outlet network by penetrating the existing market (Fullerton, Kennedy & Widener, 2013).

· The company can introduce Health conscious that contains low fat as it will result in increased revenue.

· Another opportunity for Dominos is that it can establish restaurants by this company can achieve greater heights.

Threats

· The major threat for Dominos is increasing competition, as it can affect directly to the sales of the company.

· Changing demands and eating habits of the customers, as a consumer is now more conscious towards their health thus this affects the marketing of dominos (Laudon & Laudon, 2016).

· Managing of cash flow and costs tends to be difficult to the business, as the operating costs rise, the company has to change its pricing structure, and it will affect the sales of the company.

· IT hack in France as it had affected their market reputation in an adverse manner.

Recommendations for identified issues

As a management consultant of Dominos, it is significant to assess the SWOT analysis of Domino’s before making consideration of any company recommendation. For achieving effective strategies, it is necessary for a business to make consideration of strength, weakness, opportunity and threats. Strengths which must be marked in the business of Dominos is supported by the fact that stores are owned by the business that is situated in more than 60 countries and includes an entrenched network connection business segments which are owned and authorized (David & David, 2016). Domino’s is one of the most well-known and primary pizza deliveries corporate within US borders and approximately employs 10,500 employees.

Integration of Domino’s Pizza has a powerful brand equity which in turn provides a significant competitive edge. Another considerable change to be considered is the intelligence of marketing services implemented by the company. These marketing strategies have a great contribution to the success and brand loyalty of the company, which contains an influence of initiating maintenance and differentiation (Ahmed, 2015). The company has implemented effective supply chain management that has provided advantages in certifying valuable supply in all the stores of the company. A major drawback which affects the company is the declining or weakening of the bottom line because of low sales and growth in their actual operational activities and security issues.

There are several threats existing in the company which is inclusive of increasing self-awareness of customers on the unsuccessful consequence of fast food which contains high calories and security threat after the tragedy of France. By considering the above-described aspects, the company must focus on growing its network chain in developing countries so as to drive much more opportunities in two developing countries. Dominos has below 2% of stores located in India and China (Laudon & Laudon, 2016). This percentage must be increased to over 20% in upcoming three years so as to fulfil the requirement of company’s strategy of expansion. Next, the company must concentrate completely on consumer satisfaction and brand loyalty in order to ensure that all stores are delivering best of delicacy.


Subsequently, Dominos must make consideration in using their smart techniques of advertising to concentrate on the competitors or rivals in the marketplace rather than only focusing on just one competitor, Subway. After that, Dominos is required to develop its innovative and creative strategies on the basis of market conditions of that particular country and ensuring the effectiveness of online strategies of selling and advertising (DRURY, 2013). Dominos must aim at developing its brand reputation as it is considered to be the major strength company must have (Syed, 2016). This can be attained by continuing reinforcing and making strong the brand in the marketplace. One other essential element that requires being practised by the company is extremely changing social-culture and dynamic lifestyles of the public in the US and around the world as well. Internet is been used by a number of people and the rate of using it is increasing day by day and the growth of the company can be supported by using keen glance at the own store dining strategies. Ultimately, Dominos must consider customer opinions and ratings to improvise their objectives as well as strategies.

Products of the company must represent these changes when the business is to attain continuity. For this aspect example of McDonald can be considered as they focuses on socio-cultural changes that take place and after that guide their employees so as to fulfil the changing demand needs of customers. According to the above recommendations, Dominos must concentrate and provide attention to online marketing and sales and use their result to define their particular in-store dine strategies to counterpart their growth in online sales (Speckbacher, 2017). In order to achieve goals, the definite path is required that must be clearly constructed on the strengths and aimed at company’s opportunities (Melnykn and et.al, 2014). The above recommendations represent existing opportunities and strengths of the company; they are required to address threats and weakness that the company is suffering at present.

References

Fullerton, R. R., Kennedy, F. A., & Widener, S. K. (2014). Lean manufacturing and firm performance: The incremental contribution of lean management accounting practices. Journal of Operations Management, 32(7), 414-428.

McLaney, E. J., & Atrill, P. (2014). Accounting and Finance: An Introduction. Pearson.

Smith, D., & Driscoll, T. (2017). Key skill sets for management accounting. Strategic Finance, 98(12), 62-64.

Fullerton, R. R., Kennedy, F. A., & Widener, S. K. (2013). Management accounting and control practices in a lean manufacturing environment. Accounting, Organizations and Society, 38(1), 50-71.

David, F., & David, F. R. (2016). Strategic management: A competitive advantage approach, concepts and cases.

Ahmed, M. N. (2015). UTILITY OF MANAGEMENT ACCOUNTING TOOLS & TECHNIQUES FOR THE SUCCESSFUL RETAIL OPERATIONS-A THEORETICAL FRAMEWORK. Journal of Management Value and Ethics, 5(2).

Laudon, K. C., & Laudon, J. P. (2016). Management information system. Pearson Education India.

Syed, I. (2016). SWOT analysis and operation management decisions of Domino's pizza.

Speckbacher, G. (2017). Creativity Research in Management Accounting: A Commentary. Journal of Management Accounting Research.

Melnyk, S. A., Bititci, U., Platts, K., Tobias, J., & Andersen, B. (2014). Is performance measurement and management fit for the future?. Management Accounting Research, 25(2), 173-186.

DRURY, C. M. (2013). Management and cost accounting. Springer.

Otley, D. (2016). The contingency theory of management accounting and control: 1980–2014. Management accounting research, 31, 45-62.

Letts, S., & Morgan, E., (2017). Domino's Pizza shares go cold as record profit fails to satisfy investors. Retrieved from < [Accessed on 31th August 2017].

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