Clonyard

a)
i. Skills:

From the scenario, it is needless to mention that Clonyard and Elrig train their
staffs in different ways. Clonyard has emphasized on detailed product knowledge
and focuses on customer needs individually, which is perfectly aligned with the
company that has a special niche market operation.
Whereas, it is clear that Elrig focuses more on profit and pursuing sales rather than
customer needs and satisfaction, and staffs have been trained and developed in
such in such manner where they are more skilled in sales technique rather than
product knowledge. It’s clear that the staffs from Clonyard and Elrig have a
different set of developed skill sets and it is also cleared by the staff of Clonyard
that no effort has been taken to develop the required skills by each of the group
for the goal congruence.

ii. Staffs:
The staffs are being treated differently as per the given scenario. It is also evident
the dissatisfaction amongst the employees of Clontyard, as several managers have
already left the business. Though the employees of the Clonyard are specialized in
customer needs and satisfaction, they are being aligned with responsibilities such
as inventory and shop management and on top of that the focus of the company
has been on developing individual to enhance their range of specialist knowledge.
Elrig focuses more on market share which suggests that the staffs of Elrig’s are
more trained in the field of financial performance and measurement and costings
and their impacts on the decisions being made by the company.

The time the staffs of Elrig’s are spending with the customers also indicate that
they are aware of the time they are spending with each customer and they are
focused on a specific pre-set time per sale they will work towards.

iii. Style:

Style normally refers the existing corporate culture of the organization and how it
represents itself to the outside world. The corporate culture of Clonyard and Elrig’s
are totally different from each other. The hostile takeover of Clonyard implies the
differences of corporate culture of the organization.

The interactions with the customers of Clonyard and Elrig’s staffs are totally
opposite, whereas Clonyard’s staffs would seek to satisfy customer’s specific
requirements and Elrig’s staffs would like to sell a product to the customer with
the minimum time spent on the transaction. Such conflicting style would inevitably
be reflected in the customer experience which would be very damaging for
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Clonyard’s reputation. Customers may feel that there is no longer reason to visit
Elrig’s if it’s main differentiation which was product specification and time spent
with customers has been compromised.

iv. Shared Values:

All the 3 other elements explain that the two companies have very different values.
Shared values should reflect the beliefs of people as to why the company exists and
their responsibilities to others. From their mission statements it is also visible that
their belief is different and the existence reason is quite different. It is clear that the
attitudes and behaviors which reflect these differing strategic approaches are
reflected in the differing shared values of the staff in the scenario.

As Elrig’s objective is that it’s business should only exist to return as much value as
possible to shareholders, and the staffs of the organization should be more focused
on that; they might impose their own business model on a very different type of
business too. Therefore, in terms of Elrig’s values and beliefs, Clonyard should also
accept such values as they have acquired them.

On the other hand, Clonyard’s values are very different and very much depending on
individual’s responsibilities and making decisions accordingly. In terms of pursuing
the things which they feel would benefit both the customers and Clonyard they have
built up such corporate culture among them.

In conclusion it is clearly visible that both of the companies do have their own beliefs
and best interest for their companies. But as an acquirer company, Elrig should have
come across with a common belief where it was needed, it the scenario that was
missing and that have caused employee dissatisfaction. Mckinsey’s 7S model has
been very useful in this case to identify the missing elements for goal congruence.
Elrig should follow up on this and revert to the mission statement of Clonyard and
decide whether it need to be changed or not in the light of the takeover. If Elrig
considers that there’s no need for this, then they should allow Clonyard to operate
the business on their terms which they were doing successfully for the long-term
success of the group.

b)

Enterprise resource planning (ERP) is a process used by companies to manage and

integrate the important parts of their businesses. Many ERP software applications
are important to companies because they help them implement resource planning
by integrating all of the processes needed to run their companies with a single
system. An ERP software system can also integrate planning, purchasing inventory,
sales, marketing, finance, human resources, and more.

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Without an ERP application, each department would have its system optimized for its
specific tasks. With ERP software, each department still has its system, but all of the
systems can be accessed through one application with one interface.

Evaluation of the introduction of an ERP into Elrig’s overall business including

Clonyard:

Advantages:

Businesses employ enterprise resource planning (ERP) for various reasons, such as
expanding business, reducing costs, and improving operations. The benefits sought
and realized by one company may be different from another; however, there are
some worth noting.
By using an ERP system, the problems related with inventory levels and sales
recording would be resolved as it will show the real time information thereby the
actual effect on the inventory level. An ERP will also help to track down the aging of
the deliveries done by the Clonyard and to resolve the delays done by the suppliers
hence improving the supplier relationship accordingly.

For Elrig’s strategy to enhance the market share, the discounting of product lines in
certain areas plays a key part, but as per the sales manager of Elrig it is impossible to
impose such strategy on Clonyard’s old data which is correct. An ERP would ensure
that real time data from a single source can be obtained and an accurate and
complete reporting can be prepared from it by comparing the planned sales of the
report with the past data. Sales manager can also distinguish the data which is not
relevant for him for the discounting report.

ERPs allow businesses to quickly access needed information for clients, vendors, and
business partners, contributing to improved customer and employee satisfaction,
quicker response rates, and increased accuracy rates. Associated costs often
decrease as the company operates more efficiently. The ERP can remove the
responsibility for the ordering of inventory from the employee and undertake this
function based on the minimum inventory levels that have been input for Clonyard.
This would certainly solve the problem of Clonyard employee to not entering
purchase order into the computer system and would ensure that the relevant teams
of the organization are fully aware of the inventory levels.

Disadvantages:

The strategies of the two companies should be aligned initially with a shared
computer system for an agreed information outcome. However, from the scenario it
appears that the director of Elrig’s wants to impose their strategy to Clonyard by the
introduction of the ERP system rather than integration of the both company system.

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Another problem the group might face is that, the introduction of the ERP system
without proper training to the Clonyard’s staffs might appears as another system is
being imposed on them without discussion and agreement. This may effect on their
motivation which might affect Clonyard’s ability to maintain the market reputation
and position, which was the main reason for Elrig’s purchase of Clonyard in the first
place.

From the present information system Clonyard’s been using, it appears that it is
delaying generating useful information which is required for the decision making.
This sub-optimal behavior has perhaps been a reaction by Clonyard staff to the
imposition of Elrig’s systems. Such behavior can be removed by proper discussion
and training before the ERP system is introduced.

It is also naïve to assume that the employees of the Clonyard would accept the
introduction of the new computer system enthusiastically by the Elrig’s director.
From the scenario it is also highlighted that the employees of the Clonyard are not
fully engaged with their own computer system properly, this might be cause of lack
of training. Therefore, the introduction of new and more complex system might be
very threatening to them.

Any new software will cost money to implement, especially when it requires to
upgrade the hardware system as well. And ERP software usually requires some level
of training from the vendor before it can get started. While the training is generally
included in installation costs, it might be a separate fee if needed a lot of sessions.
Any updates to the platform may require additional training as well.

For first time of using a new ERP system, the company have to input their existing
data into the new format. Depending on the industry, this can take a lot of time to
complete manually. The more data the company have, the longer this process will
take. Even digitized data will take time to fit into a new system. The company have to
double-check no data is lost or duplicated during the migration process. Hence this
also requires experienced staffs and time to be done successfully.

The introduction of the ERP system might help the company as per the above
discussion if they can resolve the disadvantages that has been shared for the long-
term business run and overall goal congruence of the company.

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