Organisation and management in the network era Essay
Organisation and management in the network era
The following report contains a brief look into MAS holdings, the company’s history, how they have grown and developed and how they have succeeded in numerous ventures. The report then goes on to address the following questions:
1. Outline the key leadership issues confronting MAS Holdings. 2. In terms of this case, how can the CIO assist in gaining senior management support for IT initiatives? 3. In reviewing an organisation of your choice, discuss the role played by the CIO and CEO when leading an IT initiative within their respective company
An introduction to MAS Holdings
MAS holdings, which was established and led by progressive and visionary leader Deshamanya Mahesh Amalean, MAS Holdings pioneered and perfected the manufacture of garments including fine lingerie in Sri Lanka. The company started with a single factory and staff of 60, today MAS Holdings now is one of Sri Lanka’s largest apparel manufacturers. They produce apparel, performance wear and swimwear in the world with a net $1 billion annual turnover. MAS Holdings now has 38 world-class apparel facilities that spread over 14 different countries and employing more than 55,000 people, they have grown from a small company to an international powerhouse in manufacturing due to their sound business model and visionary, diverse development.
MAS Holdings are not only the leading strategic partner for Victoria’s Secret (VS) but also effectively serve numerous global brands including Triumph International, Marks & Spencer (M&S), DIM Branded Apparel, Nike, Speedo, Adidas, Reebok, GAP and Banana Republic. The for mentioned companies are known for quality and excellence throughout the world and this is in many ways attributed to MAS Holdings dedication to their brands and commitment to provide an excellent service to their customers.
Design and product development has evolved to become a key part of the business – an area in which MASHoldings has excelled. In addition to working with traditional vendornetworks, concepts and design briefs in order to create new product ranges, MAS Holdings also works to create new technology and products that will be a source of competitive advantage, this is done in a bid to redefine the industry Innovation is second nature to MAS Holdings. From working with Victoria’s Secret on fast replenishment models to lean manufacturing with rapid product changeovers, the company’s fully-integrated model allows it to innovate across the value chain. Products
MAS Holdings comprise of four business units: MAS Intimates, MAS Active, MAS Fabrics and MAS Investments, a separate non-apparel business. The MAS Holdings Intimates department designs and manufactures niche-market lingerie for high-street fashion retailer and brands, while MAS Active supplies leading brands in competition sportswear. MAS Fabrics, made up of manufacturing facilities for elastics, warp-knit fabric, lace, intimate apparel accessories and moulded bra cups, it is here that we see many of the innovative products MAS Holdings produce coming together.
MAS fabrics also complements the Intimates and Active divisions. Through the integrated business model, MAS Holdings innovates new and exciting solutions from state-of-the-art silicon-embedding technology toorganic and fair-trade products. Some innovative products include the Speedo Fast SkinFS-Pro swimsuit which was controversially worn at the2004 Olympics, and subsequently banned. Another innovative product produced by MAS Holdings was the Nike Revolutionary Support Bra – the highest-selling sports bra in the USA – worn by international tennis playersand athletes.
In 2007, MAS Holdings launched its own intimate apparel brand, Amanté, which targets the Indian market. MASInvestments oversaw a diversified portfolio of investments including the development of integrated apparel and fabric parks in the region, retail and outsourced information-technology services. The divisions are brought together under a common vision and corporate governance by MAS Corporate Solutions.A successful spin off from the apparel market was MAS Investments which include two IT consulting companies, the Corporate Branding and Retail unit and a diversified investment portfolio. A brief history review shows that in 1990, Mast Industries entered into a joint venture, setting up shadow line.
The next big leap for MAS Holdings came in 1992 when it entered into a joint-venture partnership with Triumph International and Mast Industries to set up Bodyline, which continues to be its single largest plant for manufacturing intimate in the area. Slimline, a company which emerged in 1993 as a joint venture with Mast Industries and Courtaulds Clothing (UK), has been a key sourcing arm of M&S and went on to establish benchmarks for excellence in employee relations and put MAS Holdings firmly on the global map.
The first overseas venture for MAS Holdings was Linea Clothing in the Maldives in 1996. Since then, the group has continued to make strategic investments overseas with operations spanning five countries. MAS Holdings initiated vertical integration within the Sri Lankan apparel industry with its joint venture with Mast Industries and Charnwood Elastics (UK) to establish Stretchline, the country’s premier supplier of elastics, in 1996. Stretchline is now a globally recognised brand for narrow performance elastics with a global manufacturing base. A partnership with NoyonDentelles of France in 2004 created South Asia’s first lace manufacturing facility, Noyon Lanka.
Joint-venture partnerships with Prym Intimates (Germany), Dogi International FabricandTextprint SA (Spain) consolidated the regional supply base for intimate apparel accessories, warp-knitted fabrics and fabricprinting capabilities. This diversity in the supply chain has helped position Sri Lanka and the regional centre of excellence for apparel and sportswear. MAS Linea Aqua, a partnership concern with Speedo International, is one of the first dedicated swimwear plants in the world excelling in performance swimwear. As previously mentioned, it has been MAS Holdings dedication to innovation that has propelled it to the forefront of its industry.
Q1. Outline the key leadership issues confronting MAS Holdings. As mentioned above, the history of MAS Holdingshas played a role in key leadership issues that confront MASHoldings today.There are several key leadership issues confronting MAS Holdings. Due to the diverse nature of MAS Holdingsoperations and its decentralised structure, it would be difficult to have a specific company- wide leadership in place. Malesh Amalean, chairman of MAS Holdings has to deal with the vertical integration of MASHoldings. At the beginning, he succeeded in creating his own company and orienting its company strategy to an export-oriented strategy.
First, he managed to secure contracts with European and American retailers such as C&A or Calvin Klein. Secondly, he organized a first joint venture with a big American retailer, MAST, which allowed him to gain his first contract with Victoria’s Secret and a strong reputation in women’s lingerie manufacturing. Unfortunately, the sudden increase of work for thecompany led to some leadership problems,the need of seasoned professional managers. MaleshAmalean has to lose a part of his control over the company by sharing his control over the business to young and unknown managers. He has to trust them in order to take advantage of this situation.
The next joint ventures, with Triumph, Noyon or Sara Lee, amongst others, have further increased the issue of control and trust. Although MASHoldings can continue to develop while being part of a large company, they must learn to adapt and compromise to suit partner firms. This may involve accepting new systems, processes and procedures such as the ones instituted by Triumph. However this deal was not one sided as MAS Holdings had to learn to share their own technologies and knowledge with their partner. This can lead to some loss of control within the company if not managed correctly.
In order not to lose too much power, MAS Holdings was only signing joint-ventures with companies in which they established a trusting relationship, with strong dialogue and a personal relationship, they also protected themselves by never committing 100% of their production capabilities to one particular company. Furthermore, the company clearly outlined in each contract that MASHoldings were responsible for managing the businesses from taking the order stage and MASHoldings also clearly defined the responsibility of each participant in the joint-venture. This specific repartition of tasks allowed MAS Holdings to build a specific structure for all their different tasks which they maintained a desired level of control over.
Due to a desire to succeed with this new decentralized structure; MaleshAmalean made a decision to allocate leaders to each structure, segmenting the leaders from each other. MAS Holdings run the risk of deviating from its core business model as a result of this. This is one of the reasons why MAS Holdings managed to deploy its IT systems to improve knowledge sharing and information management capabilities across the organization.
As the company develops and grows, they are faced with the issue of loss of control. They attempt to counteract this by implementing strategies to prevent it. Q 2. In terms of this case, how can the CIO assist in gaining senior Management support for IT initiatives? The Chief Information officer (CIO) of an organisation is the person responsible for the information technology and computer systems that support the organisation’s goals and objective (TechTarget). This position is intended to bridge the gap between information technology and the business.
It is an evolving role related to performance, evaluation, and turnover. For IT initiatives to be successful, a team approach is essential at the senior level in the organization. Therefore the CIO must try to provide a link between the IT department and the company’s senior managers (Hunter, 2010). The following paragraphs would discuss ways the CIO can assist in gaining senior management support for IT initiatives in MAS Holdings. Communication
At MAS Holdings, the senior management is aware of the flexibility and competitive advantage IT initiatives can bring to the organisation in a rapidly changing market. However, to assist in gaining senior management support, communication is key. The CIO must communicate in the language of business, as this is important to enable the senior management make IT funding decisions as well as strategic and business decisions. Therefore, the key information on what the IT project will enable MAS Holdings to accomplish should be stated in clear, concise, and real business terms.
Stating the alignment with strategies and objectives
Information technology and business alignment refers to demonstrating concise business related value from IT and coordinating the capabilities of IT with the objectives of the organisation (Hunter, 2010). In order to do this, the CIO needs to understand the strategies and objectives of MAS Holdings. Strategies of MAS Holdings include a coalition of companies, Backward Vertical Integration, and streamlining the supply chain. The specifics of potential IT initiatives should be clearly stated and explained how it may be strategically applied to accomplish the MAS Holdings’ goals and objectives. In cases where IT projects are not aligned, but may still be important, the CIO needs to tell senior managers why and how. Alignment is usually facilitated through communication. Specifying the anticipated benefits
Usually senior management do not specifically care about the technology itself, but how it would enable the organisation accomplish its goals. MAS Holdings work with a coalition of companies, so apart from competitive advantage, IT initiatives would provide a transparent model which allows information and knowledge to flow within the MASHoldings group companies and through the value chain, from customer down to various suppliers.
This would make the retail business more efficient; cost competitiveness and speed would be enhanced, while providing flexibility. MAS Holdings biggest customer, Victoria’s Secret needed to shorten the concept-to-market time of its products. An ERP solution would help produce a demand-planning system that would have “the right product on the shelf at the right time”. Showing the focus on MAS Holdings’ top priorities
The CIO must understand the organisation’s priorities, and the identified IT initiatives must address these priorities. MAS Holdings priority is to understand how each of their partners work, what is important to them, and what their expectations are. Therefore in order to gain senior management support for IT projects, the CIO should show an understanding of the culture of the MAS Holdings and its partners, and to provide the IT solution that would support that.
Q 3. In reviewing an organisation of your choice, discuss the role played by the CIO and CEO when leading an IT initiative within their respective company. The company we have chosen to review is Marks and Spencer. We feel this is a specifically good fit as they fall under the MAS Holdings umbrella of brands. Marks & Spencer CEO Marc Boland: Marc Bolland, originally from Holland is the current CEO of Marks & Spencer’s. He was noted in 2010 as one of the most influential people in business and in 2011 he was named as “most admired business leader” in the UK by Management Today magazine.
He worked for Heineken and Morrison’s before Marks & Spencer’s. When Marc took over at Marks and Spencer in 2010, he faced the challenge of improving sales and increasing profits. His aim was to do this through using the most up to date and innovative technology. Marks and Spencer set Cheshire Oaks as their flagship technology store. “Cheshire Oaks is the first Marks and Spencer store to make extensive use of all the latest technology and innovations in multi-channel to create an enhanced, more convenient and inspirational customer shopping experience.”
The Cheshire Oaks and subsequent stores have adopted and utilised technologies : HD screens throughout the stores showcase the latest looks offered. Browse and Order screens allow catalogues be viewed and ordered from. Staff equipped with iPads to assist customers with item searches Leading technology such as the ‘Virtual Makeover’ and ‘Duvet and Pillow Selector’ keep Marks and Spencer at the forefront on technology. QR codes and free customer Wi-Fi also feature throughout the store.
It is essential that Marc Boland works with the CIO when he is implementing or improving any information technology process or policy. Collaboration between CEO and CIO is essential. Marc’s role is to approve of and support IT initiatives. Backing the technology and using his expertise and resources efficiently will help any implementation succeed. Marc must be an informed leader and ensure that the team and himself keep up to date with the constantly changing world of E-Commerce and technology. Being an informed leader will help Marc in his role of ensuring Marks & Spencer’s keep up to date with their competitors. Customers value and demand the newest and most up to date technology. Providing services that meet the demand is a key role in Marc’s goal of improving the situation Marks & Spencer found themselves in when he acquired the C.E.O. role.
Marks and Spencer CIO – Darrell Stein Darrell Stein is CIO of Marks & Spencer’s and he plays a crucially important role in leading I.T. initiatives throughout the organisation. Although Chief Information Officers will always be involved in I.T. initiatives, Steins vision, enterprising spirit and ambition ensure many successful I.T. projects under his tenure.
Stein is the key man that led I.T. change within Marks & Spencer resulting in it being a very successful organisation today. Stein was initially brought in as an I.T. director with some responsibilities for logistics, however he moved away from the logistics side so he could give his full attention to I.T. Using his knowledge and experience, he shortly found himself overhauling the I.T. systems company wide, no easy task for an organisation with over a thousand stores and almost £10billion in annual revenue.
Stein learned lessons from recent high profile disasters in the retail sector, and his approach is to look at all aspects of a project while planning the project, he is also involved in getting the right people in place and employs a tactic of not moving too fast, his successful techniques have been proven with the high success rate of projects which he has co-ordinated. Crucially, he also realises how much that I.T. projects which don’t work, hurt the organisation on a day to day basis. Perhaps the most rewarding I.T. initiative that Stein was a leader in implementing was the roll out of SAP software within the company. SAP was initially rolled out in the finance department, and after its initial success, it was expanded to other departments within the core business system.
Stein’s role was to justify the implementation of the software, as well as convincing the board at M&S that the heavy initial investment in SAP would lead to a bottom line benefit to the company and overall cost savings in the long run. Stein also faced a challenge in integrating SAP into the existing business process and his full support and backing of the I.T. project was key to its success. When Stein initially rolled out the SAP system in the finance department it led to instant savings. Stein cut M&S’s procurement spending by a quarter as a direct result of the implementation of the SAP system (TechRepublic, Top 50 CIO). Due to its success in the finance department, Stein rolled out SAP systems to other business areas including HR, supply chain and the foods division.
This wide scale roll-out became part of a “2020-Doing the right thing” initiative which in essence, is an I.T. &supply chain overhaul that cost £400million in 2011 alone (M&S completes first phase of 3 year SAP rollout, 2010).Steins role in this long term project is key and he is the catalyst for I.T. change within M&S. Stein was also integral in pushing through the I.T. change projects with the goal of lowering overall company operating costs. His ethos “of not seeing himself as a technology person, but as a business person who utilizes technology to benefit the company”, has been fundamental to M&S and its rebranding strategy of “more for less”.
Stein helped reduce running costs through implementing I.T. initiatives, and this led to money being freed up within the business and being invested in other sectors, such as business development projects. It is clear that Darrell Stein has been a fundamental player in leading I.T. initiatives in M&S and his reputation both within the company, and the wider business world, mean the decisions he takes are looked at with optimism and excitement from his colleagues, and with caution from his competitors. Stein has tried to focus on building the trust and strong relationship the M&S brand has with its customers, he sees this as key to keeping “sticky” customers, whose return business is vital to the company’s continuous success.
He has done this through developing feedback channels with customers through more interaction, he has also focused on building the e-commerce aspect of the business, and it is largely due to the measures Stein implemented that M&S has achieved 75% annual increase in its online sales turnover. Stein is now in a position within M&S where he has contributed to them becoming market leaders through, in part, his leadership in pushing through I.T. projects.
As mentioned above, it is imperative that Darrell Stein works in harmony with Marc Boland to ensure that two of the most influential men in the company work together to achieve organisational goals. Key to the pushing through effective I.T. initiatives in M&S was the close professional relationship Boland and Stein had. Both men regularly communicated with each other about implementing change and integrating the I.T. into the business model.
The rich communication channel reinforced any project the men were involved in and made the implementation of technology very smooth. All scenarios involving the new technology would have been talked about prior to its implementation. Communication was a key factor to success in many projects such as the introduction of the “virtual makeover” application. Boland and Stein were also both innovators, they looked to set themselves aside from competition through innovative thinking and applying new techniques in the retail sector. Having a CEO and CIO with such a good relationship was essential to some of M&S’s innovative approaches as technology was a key tool used in implementing the change.
One such project was the introduction of M&S TV online, which promoted customer interaction with the overall aim of boosting sales. M&S TV pioneered many of the campaigns you see today, for instance, they were first to do a video on “where does the milk on the shelves come from? Meet the farmer”. These videos made the customer believe they are shopping local and such ads can be seen today by firms such as McDonalds, for their beef, and Supervalu for their produce.
The dedication both men had to their jobs was also crucial to many successful projects. Both men had a passion for what they were doing and firmly believed all measures they put in place were for the benefit of the company. In conclusion, we feel both Marc Bolland and Darrell Stein added to Marks and Spencer’s success, and their co-operation and partnership has boosted innovative techniques and introduced new technologies to the firm.
References: If necessary – answering a question so not sure? -TechRepublic, CIO 50 most influencial, innovative tech chiefs. www.techrepublic.com/cio50/Darrell+Stein/6385891/ -“M&S completes first phase of three year SAP roll out”, Leo King, Computerworld UK, published May ’10- www.computerworlduk.com/news/applications/20416/marks–spenser-completes-first-phase-of-three-year-SAP-rollout/ References
Brief: How can CIOs improve their presentations to senior management? URL: http://www.rms.net/lc_briefs_cio_present.htm Hunter G. (2010) The Chief Information Officer: A Review of the Role. Journal of Information, Information Technology, and Organizations TechTarget: Definition of Chief Information Officer (CIO). URL: http://searchcio.techtarget.com/definition/CIO .Watson.N,Story.J. (2006).MAS Holdings: Strategic Corporate Social Pesponsibility in the Apparel Industry.3-4.02/2006-5340
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