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Management is an integral part of any organisation. Without proper managerial skills and management facilities it is not possible to monitor the operations of any organisation. P & O Ferries is one of the leading companies providing ferry services in the United Kingdom. Here, this company and its management issues are taken as the reference to understand the importance of management in any organisation. Before the pandemic the company easily could handle 10 million passengers and 15 percent of total freights in the United Kingdom. In this report, a few dynamic forces influencing the organisation and society will be discussed. At the same time, equal importance will be given to the relationship between these dynamic forces and strategic decisions of any organisation. On the other hand, responses of the P & O ferries will be mentioned in this report. At the same time, a few decision making tools will be used for better presentation. Effect of corporate responses to such contemporary issues will be noted down as well.
Drivers of change in P & O Ferries strategic decisions
Drivers of changes are nothing but a framework that actually influences the operations of some organisation. Its influence is huge enough for the organisation, that the changes can actually rearrange the internal system of any organisation. P & O Ferries is a leading ferry service provider in the United Kingdom. The company currently has shown management issues by paying less wages to its workers. The national wage per hour is about 8.91 British pounds for workers who are above 23 years old. The company has decided to pay only 5.50 British pounds to each of the workers. Some drivers influence this change in the strategic decision. Globalisation of the operations of P & O Ferries and sustainability issues during the pandemic period are the most important drivers of this mismanagement (P & O Ferries, 2022).
Globalisation
For any organisation, globalisation of the operations is a huge issue itself. To cope with the expansion of operations, every company requires to globalise its operations. Expansion of the work is required for the growth of the organisation. Same way, P & O Ferries started to globalise its functions and it received Globe Travel Awards in 2016, 2017, and 2018. With 4000 staff the company covers the North Sea, Irish Sea, and the English Channel. During this time of globalisation, the company automatically cut down the hourly wages of the workers. At the same time, they have sacked around 800 employees who used to receive around 36,000 British pounds annually. The chief executive of the company simply put the blame on the globalisation procedure which had made them to make such decisions. The workers are working on the international routes which are governed by the International Transport Workers’ Federations. As per the law of the Federation, the company is paying above the minimum wage of the company. The companies are registered in some other countries and they can thus easily be exempt from the employment law of the United Kingdom. At the same time, operating routes from the country to other nations help the company to pay less as per the rule of the International Transport Workers’ Federation. P & O Ferries while trying to globalise actually made a mistake after sacking those skilled employees from the company (Du Plessis et al., 2018).
Environmental impacts on the organisation due to the driver
Globalisation helps P & O Ferries to expand its operations across other nations. The company right now is sailing in the North Sea, Irish Sea, and the English Channel only. With globalisation the company will be able to explore more water bodies. At the same time, it significantly enhances the amount of revenue. More customers show their interest when the company decides to globalise its operations across the world. Due to globalisation, the company faces a few problems. The cost of infrastructure increases significantly when the ferries are sailing for long distances. At the same time, the volatile nature of the price of crude oil is a huge weakness for the company itself. The company has to train its employees while globalising its operations across the world (Orlova, 2021).
Globalisation will actually help P & O Ferries to explore more options while expanding its operations. It will help to grow the revenue of the organisation. At the same time, it will help to expand the operations while new strategies can be implemented. The company can collaborate with other companies while working in other countries. The rules and regulations of different countries may affect the operations of the ferry company At the same time, different countries may have different employment laws which need to be abided by P & O Ferries while globalising its operations (Budiartha, 2018).
Sustainability
Sustainability is another huge issue for any organisation. With proper strategies of sustainability, no company can last for a long time in the relevant industry. Sustainability is nothing but an ability to maintain a stagnant rate of growth. Same way, P & O Ferries also tried to maintain sustainability to stick to the industry. In the meantime, there are multiple players in the ferry industry who are continuously capturing the market. On the other hand, the pandemic issue started to impose various rules and regulations which adversely influenced the operations of the company. In this situation, to sustain and grow the company decided to sack around 800 employees. As per the prediction of the executive chief of P & O Ferries, the company has no future and it has not yet increased or decreased the value of the organisation. The executive chief is trying to achieve sustainability in the organisation by cutting down the workforce. In the meantime, he has thought about another plan to reduce the minimum wage of the current workers. He thinks that paying 5.15 British pounds per hour will be the right decision as most of the ferry companies across the world work in this way only. To attain sustainability, the company has taken a few decisions which may have some adverse effects on the decisions taken by P & O Ferries (Näyhä, 2019).
Environmental impacts on the organisation due to the driver
Sustainability ensures the enhancement of the organisation. At the same time, this factor helps P & O Ferries companies to take strategic decisions that are immensely helpful for the organisation. Sustainability is designed to help the organisation with a proper framework to sustain the market actively (Barbu and Militaru, 2019). To achieve sustainability P & O Ferries had to cut down the workforce. This has a negative impact on the operations of the company. At the same time, the work process becomes slow as there are not many skilled employees to handle the workload.
Opportunities may arrive with the framework of sustainability in P & O Ferries. With more sustainability, the company will get more growth in the industry. The more sustained the company will be, it will get more exposure to the relevant industry. Investors will show interest in the company (Agarwal, and Al Qouyatahi, 2018). While achieving sustainability the company may face a few threats. These threats may lead to some loss for the organisation. P & O Ferries may face some controversies while trying to attain sustainability. Their process of sustainability may be a subject to discuss. Pollution done by the ferries of the company can be a huge threat while trying to attain sustainability.
Evaluation of implications of strategic decision on operations of P & O Ferries
P & O Ferries in 2022, has taken a few strategic decisions to cope up with the globalisation process. At the same time, the company has decided to sustain its activities of the company at any cost. While looking forward the company actually made a place on the headlines of various newspapers for its wrong strategic approaches. To attain sustainability and globalise its operations the company fired around 800 skilled employees. At the same time, P & O Ferries has decided to make the hourly wage around 5.50 British pounds for every worker. Both of the decisions help to come to some conclusions (Engen and Lindøe, 2019).
Real-term pay cuts of the workers
The strategic decisions taken by the company actually have negative impacts on the payment of the workers. As per the employment law of the United Kingdom, the hourly wage of a person who is 23 years old or older than 23 years, is 8.91 British pounds. The company after the pandemic situation has decided to make it 5.50 per hour. This is quite an absurd pay cut witnessed in recent years. The chief executive of P & O Ferries company also announced that in the coming days, the hourly wage will be 5.15 British pounds. It will surely demotivate the workers. Though the excuse of such a pay cut was that the company is paying higher than the rates decided by the International Transport Workers’ Federation (Carminati, 2018).
Increase in rate of unemployment
On the other hand, to attain sustainability in the operations of the company, this year, P & O Ferries has fired around 800 people. At the same time, those employees were skilled enough and their average wage per year was 36,000 British pounds. The chief executive confessed that if they would not fire 800 employees, then they would have to fire 3000 people at the same time. Seeing the changes in the company, it is quite sure that due to this problematic situation people working in the company may face unemployment issues soon or later. The rate of unemployment will increase because of the sacking process of the company (Gorynia, 2019).
P & O Ferries is on the verge of closing
To attain sustainability in the company, P & O Ferries management already got rid of 800 employees. Their average income was 36,000 British pounds per year. At the same time, the executive chief of the company confessed that if not for these 800 employees, then the company would have had problems with 3000 employees. The chief executive when asked about the future of the company, he also confessed that there is no future for the company. P & O Ferries is on the verge of being bankrupt. To save the business, the company heads have chosen such strategies. On the other hand, the chief executive also confessed that the company lost a significant amount of money in deals. Most of the time customers are canceling the services as they have to book any service of P & O Ferries two weeks prior. At Dover-Calais the company is facing a huge decline in the number of customers. This also proves that the company is on the verge of being bankrupt (Barbosa et al., 2018).
Uncertainty in the life of the workers
Due to such turmoil in the company, the workers have to face uncertainty. All the 800 employees of P & O Ferries were sacked without giving any prior notice. Though the company is trying to compensate the families for their losses. After the pandemic, when the economy is about to hit ground, unemployment will create serious issues in anyone’s life. The workers are victims of such problems. In the meantime, the remaining 2200 employees of the company also have to deal with this uncertainty when they are about to get fired. Such uncertainty will have a negative impact on the workers’ life. They are not able to concentrate on their work which in turn will decrease their productivity. Without getting a proper salary from the company, the employees will have to face uncertainty in life (Braccini and Margherita, 2018).
Alternative avenues to explore drivers of changes
Considering the nature of the pressure for changes, the company would have explored a few other alternatives. The main issue is being a top ferry service provider in the United Kingdom, without providing any prior notice, P & O Ferries sacked 800 employees. At the same time, the company has reduced the hourly wage of current employees. At the same time, they have taken a decision to provide 5.15 British pounds per hour. Such inconsiderate decisions are taken by the management actually are not good for the employees. The chief executive of the company has blamed globalisation and sustainability issues for such a huge change in the organisation. At the same time, the chief executive demands that the decision was not imposed by the parent company, DP world. So there are a few alternative drivers that they could have considered while making any random decision (Schulte and Hallstedt, 2018).
Corporate leadership change
To avoid any kind of controversies the company could have utilised the management team to make new changes. Globalisation and sustainability could be easily achieved if the company decided to make changes in its corporate leadership. Clearly, the executive chief was not much worried about the future of his employees. When he was asked about the future of the company or the sacked employees, he could not give satisfactory answers. Changes in leadership would be a good avenue that could be explored by the P & O Ferries. New leadership would bring new changes to the company. At the same time, new strategies would have been implemented which would not sack these employees or reduce their salary of the employees. The current Chief Executive is earning around 325,000 British pounds on a yearly basis but does not want to pay fairly to the employees (Vallejo et al., 2020).
Innovations
The company could have explored the opportunities provided by innovations. P & O Ferries should have built a research and development team to develop new strategies or invent some new technologies. While dealing with ferries, the company has to pay a huge amount of money for crude oil. To deal with the huge workload the company has to pay for good internal infrastructure. At the same time, for IT purposes the company has to bear an amount. Proper innovation could minimise the expenditure. New innovations can enhance functionality at the same time while decreasing efforts and investment. The company should have explored this avenue to expand its business and attain a sustainable business structure (Franciosi et al., 2020).
Demographic change
Fig 1: Capacity of P & O Ferries
(Source: P & O Ferries, 2022)
Demographic change is another way that needs to be explored while the company is trying to globalise its operations. The company right now is servicing the English Channel, Irish Sea, and the North Sea. Changing the demographics of the customers would help them to capture other markets. This means they would have gone to some other waterbody and they would do a good business there. At the same time, enhanced growth of revenue would provide a sustainable structure to the organisation. The company is facing a reduction in bookings on different routes. In Dover-Calais the company has observed a huge decline. So changing the demographics would automatically raise the number of bookings (P & O Ferries, 2022).
Corporate social responsibilities
Corporate social responsibility is nothing but a framework that will guide the company to do something for social purposes. P & O Ferries should associate itself with some social purposes while showcasing its corporate social responsibilities. Globalisation project of the company would easily get exposure if the company engaged itself with some corporate social responsibilities. At the same time, it would place P & O Ferries under the limelight. More investors would come with offers of investments. Associating with some social cause would be helpful for the company and the investors. This way the company would have gained sustainability (Hristov et al., 2019).
Recommendations for ethical sustainability for the organisation
Attaining sustainability and globalising the operations are the main goals of the organisation. Being one of the top ferry service providers across the United Kingdom, the company needs to globalise its operations and expand them as much as possible. This way the company can achieve sustainability. In 2019, the company was taken over by DP world, a company based in Dubai. 270 million British pounds were given to the shareholders by the company in 2020. Due to the pandemic, the operations were very slow in the organisation. After such a turbulent time, without giving any prior notice and without consulting with anyone, the company fired 800 employees. At the same time, they reduced the hourly wages of the rest of the employees while the chief executive is paid around 325,000 British pounds on a yearly basis. Both the incidents are not at all ethical and will provide much sustainability. To enhance the ethical environment in the organisation and attain sustainability a few recommendations are given below (Ariyani and Hartomo, 2018).
Enhancing the internal operations
The company can see significant growth if its internal operations are enhanced. This can be achieved by using the latest technologies and new strategies. The management should be given a deadline to come up with proper strategies to enhance the internal system of the company. P & O these days are getting more cancellations as the customers have to book a service before 15 days. These systems should be changed immediately so the customers can not easily cancel after booking. At the same time, the company can use blockchain technology, and artificial intelligence to enhance internal operations (Hurtado-Jaramillo et al., 2018). They can train the employees to work with advanced technology instead of sacking them from the organisation. At the same time, enhancement of the internal structure will eventually decrease the cost structure required for the internal operations. Manual jobs can be done easily with the help of technology.
Changing the target customers
The company generally serves European countries and tries to follow the employment rules of these countries. But the company failed to attract customers and gain revenue from them. Customers are canceling the services and the company has to deal with the consequences. To change the situation, the company should concentrate on the other customers. Where people should be taking more services from the ferry company, the management team should find out first. With a new marketing strategy, the company should focus on a new demographic where the population needs the services the most. On the other hand, the company should restructure the cost of the services so that the new market can approach the services easily (Wolf et al., 2018).
New leadership approaches
To enhance the business of P & O Ferries, the company should invest in some new leadership approaches. The situational leadership approach will be the right one for the organisation. Situational leadership will devise strategies based on the current situation. For P & O Ferries, this leadership will be able to devise the right strategy to help the employees and the company. At the same time, the operations will be globalised and a sustainable business structure will be achieved. In the meantime, the company should make some changes in the management team. This new leadership will apply some ethical rules and regulations without firing employees or without reducing the wages of the employees. Changes in the leadership will help the organisation to think in a new way and more strategies will be provided for the benefit of the organisation (Mansaray, 2019).
Reducing salaries of higher positioned employees
As per the news, the chief executive of P & O Ferries receives 325,000 British pounds on a yearly basis. At the same time, the chief executive confessed that around 40 people in the company receive more than 100000 British pounds per annum. Some of the sacked employees would earn about 170,000 British pounds on a yearly basis. To enhance the capital of the organisation, the salary structure of the higher positioned employees should be rechecked. It should be reduced to some extent so that the company does not require to cut its pockets to fill its pockets (Schwatka et al., 2020). At the same time, this extra money can be used to help the company to grow. On the other hand, this way the company can attain sustainability. At the same time, the company does not need to fire other employees. They do not need to reduce the wage of the employees. Reducing the salary of the higher-positioned employees will also enhance the operations of the company. At the same time, the company can easily globalise its operations across the world.
Conclusion
This report is solely based on a case study of P & O Ferries and its contemporary management issues. P & O is considered one of the top ferry services in the United Kingdom. Being one of the most important parts of the organisation, management should be monitoring such issues. This entire report explored a range of drivers which initiated changes in the decision-making skills of the company. These drivers for sure have enough influence on the strategies decided by the organisation. At the same time, the implications of decisions made by P & O Ferries are evaluated in this report. Alternative avenues are found through the report where the company can focus and generate more ideas to influence its decision-making strategies. Anytime, the old drivers that brought changes in the organisation may change. The company needs to be well prepared to welcome such changes in the organisation. On the other hand, a few recommendations are added for the ethical sustainability of P & O Ferries. These recommendations will help to reflect on the current structure of the organisation. At the same time, the organisation would receive some ideas to enhance the internal operations.
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