Oishi: Strategic Marketing Plan

Oishi: Strategic Marketing Plan Part 1 Oishis Strategic Marketing Plan 1 Introduction Oishi is the leading snack food manufacturer in China. Since its establishment in 1993, Liwayway Holdings Company Limited, owner of the Oishi brand, has been in the cutting edge of innovation and aggressive marketing activities. The company rapidly expanded across the country and established a large distribution network. The Oishi brand has also become one of the most recognized snack food brands in China. Children have been the main consumer group of the Oishi products. However, market changes in the perception of snack food have occurred. Childrens parents become wary of the growing obesity problem among the children. The obesity dilemma has been attributed largely to salty snack foods being consumed by children. Numerous studies were conducted showing the direct relationship between â€Å"junk foods† and obesity. Parents are now shifting to healthier food for their children. The market for the traditional salty snack food and other similar food will be affected significantly by this change in consumer behavior. Hence, Oishi should develop a new marketing strategy to maintain its leadership and overcome the threat of its consumers changing or shifting to other food. In this marketing plan are proposed steps to improve its current marketing activities and provide new and additional alternatives. The development of a marketing mix geared toward manufacture of new food products that satisfy customer needs and wants is the major proposition in this marketing plan. A shift in target market segment is also recommended, identifying the young adults (ages 18-34) as the new primary consumer base for the Oishi brand and products. 2 Background Oishi is a leading snack brand in China manufactured in more than 100 variants of snack foods. The brand is manufactured under various product lines of salty snacks such as potato chips, prawn crackers, peanut crackers as well as other snack food including cookies, popcorn and corn curls, cereals, and marshmallows. Among Chinas vast market, Oishis principal consumers are children. The Oishi brand is owned by Liwayway Holdings Company Limited (LHCL), which traces its roots to the Liwayway Marketing Corporation (LMC) established in the Philippines in 1946. Carlos Chan, owner of the LMC, embarked on an ambitious expansion plan in China in 1984 and set his attention to Shanghai. Nine years later, Chan established the LHCL to manufacture, distribute and sell Oishi products in the country. The company aggressively marketed the Oishi brand targeting the children segment of the market as its primary consumers. LHCL grew rapidly in the following years by expanding outside Shanghai and building manufacturing and distributing facilities in other parts of China. The company established sales and distributions across the country, which included urban cities and smaller inner towns. LHCL was able to establish a network of more than 400 dealers nationwide. Due to the aggressive marketing strategies and strong management capabilities of LHCL, the Oishi brand became a famous snack brand in the country. Oishi was eventually recognized as a Shanghai Famous Brand in 2001 and was awarded as a China Famous Brand in 2006. The company took bolder steps and entered the market of Vietnam in 1997 and Myanmar in 2006. At present, expansion in Thailand and Indonesia is under development (Oishi.com.cn). 3 Strategic Objectives The creation of strategic objectives of the marketing plan is necessary, as it will serve as the companys guide and measurement in achieving its goals. The firms strategic objectives will aid it in gaining competitive edge in the industry and maintain its leadership. The primary objectives for this marketing plan are the following: To be the industrys leading manufacturer and seller of healthy and quality snack foods Deliver customer satisfaction and establish long-term relationships with customers Improve production and distribution process by establishing long-term relationship with both suppliers and distributors Increase profitability by providing quality snack food with added value but at lower costs In order to achieve these strategic objectives, the following specific marketing objectives and strategies will be employed: Raise market share to 20% for the next five years Increase advertising and promotional activities by utilizing all forms of media communications broadcast, print and electronic (primarily the Internet) to increase greater awareness of the Oishi brand and its products Augment and amplify nationwide presence by establishing more distribution points and getting more sellers and distributors Increase production and offer more product variants that use health-enhancing ingredients to capture other segments of the market Improve worker productivity The above strategic marketing objectives will serve as a guide in the creation and employment of a marketing plan. 4 Environmental Scan of Factors that Affect China Snack Industry Competition China is an attractive market due to its large population and strong economic potential. In almost any industry, numerous firms are vying position to become a leading player. The snack market is not an exception to this competition. Chinas snack food industry is highly competitive with various companies seeking competitive advantage. The Chinese snack market is a $3-billion-a-year industry (Terhune, 2005), hence foreign and domestic companies are competing to gain a sizeable percentage of the market share from this profitable industry. 5 Five Forces Model Harvard Business School professor Michael Porter (1998) said that the state of competition in an industry is dependent on five basic forces, which ultimately will determine the profit potential in the industry. These five forces are intensity of industry rivalry, threat of new entrants, and threat of substitute products, bargaining power of buyers, and bargaining power of suppliers. Combined, these forces dictate the profit potential of the industry and its competitiveness. In table 1, a summary of the five forces affecting the industry competition is shown. 5.1 Industry Rivalry The Chinese snack market is composed of domestic and international players competing for a share of the market. Among the major competitors of the Oishi brand are foreign companies like Pepsi as well numerous local firms such as Wangwang, Master Kong and Dali. These competitors offer almost similar products but of different brands or trade marks, making the industry highly competitive. Due to the highly competitive characteristics of the industry, the there are many companies competing. It will be too costly as well to leave the industry and change products. However, despite the number of companies competing, Chinas large population with an increasing number of people capable of purchasing the snack food, the China market remains competitive and is far from maturity or being exhausted. 5.2 Threat of New Entrants The threat of new entrants is high as barriers to companies entering the competition are relatively low. Government regulations on the formation of companies entering the snack market are not too strict. Even community-owned companies can enter into the competition. Capital requirements for entering into the snack food industry do not need to be large. However, if a new company wishes to compete with the largest companies, this will serve as a barrier to them. As stated earlier, product differentiation is not present. Although brand identification is an important barrier to new competition, smaller Chinese companies can easily set up business although at a local level. As such, many smaller firms manufacturing and selling snack food are being set up across the country. 5.3 Threat of Substitute Products Substitute products for salty snack foods are foods manufactured with health-enhancing ingredients. Consumers, most especially the health conscious parents, can easily shift to these products for their children. The prices of the substitute products are also almost the same with the traditional snack foods being sold. Thus, consumers will not hesitate to buy substitute foods that are enriched with healthy ingredients. The USDA Food and Agricultural Service stated in a report that youth perception in food consumption is changing toward a healthier diet, especially those living in Shanghai (Global Agriculture Information Network [GAIN] Report 3). 5.4 Bargaining Power of Suppliers Suppliers can possess significant bargaining power with regard to the pricing of their products if they act as a group dominated by a few companies and they more concentrated than the industry they sell to (Porter, 1998). However, in the case of China, suppliers are scattered around the country and are not acting in a group. They also do not offer unique or differentiated materials to sell to the industry players. Suppliers also do not possess that capability to integrate forward into the industry. Thus, suppliers do not have sufficient bargaining power in the Chinese snack food industry. 5.5 Buyers Bargaining Power Porter (1998) said that buyers can exert influence in the industry if the following characteristics are met: They act as a group, Purchase in large volumes, The products are undifferentiated, forms component form of the product and represents a significant portion of the cost, The quality of the product is unimportant to the consumer, The product does not save the buyer a money, The buyers pose a credible threat of integrating backward to make the companys product. Except for the products being undifferentiated, buyers do not possess the capacity to exert influence in the industry since most of the characteristics mentioned above are not present. Hence, Chinese consumers are not significant in influencing the industry players. However, with the recent trend of the changing consumer perception and demands on higher quality products, the consumers are now looking for healthier snack foods. Thus, they are beginning to acquire power to influence the manufacturers of snack food to create health-enhancing processed food. In sum, the Chinese snack food industry is highly competitive but is far from maturity. Profitability is still achievable at a high rate due to the large market of China. However, with the numerous companies jockeying for position in the industry and the changing consumer needs and value perception on snack food, LCHL needs to adopt a new strategic marketing plan in order to sustain its current leadership. 6 SWOT Analysis After identifying the factors affecting the competitiveness of the industry, an analysis of the organizational strength and weaknesses is also necessary in order to determine the aspects it needs to improve and alter. The identification of opportunities and threats is also important to aid the organization in drafting a marketing plan and identify the areas it needs to put focus on. A summary of the SWOT analysis is shown in table 2. Table 2 SWOT Analysis on LHCL Organization Strengths * Strong brand recognition * Good reputation in the industry * Adequate access to raw materials * Numerous varieties of products to choose from * Good networking and distribution system Weaknesses * Lesser appeal to the other segments of the market, especially the young adults * High cost structure * Insufficient patent protection Opportunities * Large portion of domestic market still not saturated * Shift or diversification to health-enriched food ingredients * Potential of expansion in the international market * Advancement in technology * Loosening up of international trade barriers Threats * Shift in consumer choice from traditional snacks to health-enhancing snack food * Emergence of new products * Flood of substitute products * Growing number of smaller firms entering the industry 6.1 Strengths The companys primary strength is its strong brand recognition across the nation. Oishi is a nationally recognized brand being awarded numerous titles. LHCL also has built a good reputation in the industry through its organizational management and innovativeness. The company has adequate access to raw materials and developed a good relationship with its distributors and sellers. Another strong point of the Oishi brand is the wide selection of product variants. Customers can choose from a range of products that suit their needs. 6.2 Weaknesses A weakness of the Oishi brand is its lesser appeal to the other segment of the market, most especially young adults in the range of 15-25 years old. This segment comprises a significant portion of the population and can increase the revenue substantially. LHCl also has a high cost structure, by having numerous facilities and employees. Although this characteristic can be considered as strength that the company possesses over its smaller rivals and in order to achieve a greater market share, this could be a potential weakness in terms of reacting rapidly to strategic market changes. The company also has insufficient patent protection. Protecting the companys formulas and ingredients in creating products is an advantage over competitors. This provides differentiation for the Oishi brand over other brands in the market. 6.3 Opportunities A large portion of the domestic market in China is not yet fully saturated, thus providing core opportunities for LHCL to grow. The company can still expand its operations inside the country to reach more consumers, especially in the inner towns. The advancement in technology such as the increasing utilization and importance of the Internet also provides opportunity for the company to have greater access to consumers. Technological advancements also offer improvements in the manufacturing processes of the company and in research and development area to improve its products. There is also a potential to expand in the international market as developing countries become more responsive to globalization. The relaxing of trade barriers in many countries such as tariffs due to globalization provides an opportunity for Oishi to penetrate overseas markets. 6.4 Threats The biggest challenge that company faces is the changing consumer taste in snack food. Consumers are now more conscious about their health, most especially parents of children that eat or consume the products. Numerous studies show that â€Å"junk foods† such as salty snacks are a cause of obesity. Marshall et al (2007: 175) suggested that parents overindulgence to their childrens whims such as requesting so much junk foods cause obesity, thus they recommended that parents should not give in to their childrens requests. With this changing consumer perception is the emergence of new snack food products that are enriched with healthier ingredients. Substitute products are now also flooding the market due to the growing awareness on obesity among children. These serve as threat to Oishis traditional snack food products. Also, the increasing number of smaller firms poses a threat to the company as they can eat up a significant portion of market. Although they operate on a smaller scale, they are numerous and present in every market where LHCL operates. 7 Marketing Plan Strategy involves the creation of a plan that integrates the organizations objectives, principles, policies and decisions and sequences of action into a cohesive whole (Proctor, 2000). A marketing plan is a strategic plan of action that an organization develops and employs to achieve its strategic goals as well as deliver customer satisfaction. Strategic marketing is therefore a challenge upon organizations to manage marketing complexities, satisfy customer and stakeholders expectations and reconcile market changes with the organizations resource capabilities (Bradley, 2003). Hence, the creation of a strategic marketing plan will provide definite and measurable steps that an organization can take to achieve its objectives, gain competitive advantage and deliver customer satisfaction and meet stakeholders expectations. Various forms of marketing methods can be applied in the development of a marketing plan. One form of marketing technique is the marketing mix. The 4Ps (product, price, place and promotion) of marketing mix is designed to develop a mix or package of products that meet the customers needs and wants. 7.1 Products As stated earlier, consumers are now changing their perceptions on snacks. The consumers, particularly the mothers of young children, are more conscious about the health benefits they or their children could get from the products they buy. A very important question here is, â€Å"Does the company produce the products that the consumers want?† It is not the company who will dictate what products it would sell but the consumers should dictate what products they should buy. Hence, it is necessary for LHCL to manufacture snack food products that satisfy the desires of their consumers. The firm should start using health-enhancing ingredients while minimizing the changes it could make to the products. It is also necessary to create product differentiation. The Oishi brand should be differentiated with other brands by the adding more characteristics to the products, such as lowering its costs or providing incentives to consumers and customers. 7.2 Price The prices of Oishi products should be competitive in order to attract more customers and consumers. At present, the prices of the Oishi snack food are competitive. However, the firm can add more value to the products by giving freebies or additional benefits to loyal customers. This will ensure that loyal customers will not shift to other brands. It will also entice new customers, particularly those in the areas not yet covered by the company. 7.3 Place LHCL should expand its presence all over the country to include more inner townships and communities. The current distribution network of the company, which comprises large distribution enterprises and small family businesses, can be enlarged to include community-owned enterprises as well as direct sellers. In places where there are no available distributors, the company can put up its own distributing centers. The Internet is also another place for distribution or can be used to enhance the current distribution system of the company. Orders can be placed online and a tracking system can track the progress of the orders. Retailers can and wholesale distributors can use this facility with regard to their purchase orders. 7.4 Promotion Promotional or advertising programs are necessary to increase consumer awareness on the Oishi brand and its products. In increasing consumer-awareness, the company should increase its advertising and promotional activities. The company should put significant investment in advertising so that revenue-generation can be increased even more. It can enhance increase sales by 20-50% and entice more customers thereby increasing market share. All forms of media must be utilized such as the traditional advertising facilities in the print and broadcast media. The Internet is another major tool for promoting the product. Presently, the companys website provides basic information on the products. The website can be enhanced by adding more information such as the health benefits that the products can offer to the consumers. The US FAS said that young adults or the 80ers (those belonging to the 18-34 year-old range) are increasingly using the Internet in buying snack food. Thus, LHCL can use the I nternet to increase its sales and attract these â€Å"high-tech† consumers. 7.5 People In order to implement the marketing mix program, a creative marketing department or team must be established. The creative team will be responsible for the development of creative advertising materials and promotional tools. They will do further market research to identify which segment of the market is most receptive of the products and to identify more specifically the consumers needs, desires and buying behaviors. 8 Market Segmentation Market segmentation is necessary to identify the specific consumer base of the company. As stated by Proctor (2000: 189), segmentation is a powerful component of marketing strategy. The Chinese snack food market is composed mostly of young adults and children as the main consumer groups. Traditional consumers of the snack food belong to these generations. With the inclusion of parents as guiding their children in selecting snack foods, the Chinese snack food market is a $3-billion industry. Previously, Oishi is targeted towards children. Children below 15 years old were the previous main consumer group for the Oishi products. However, numerous studies (Mrshall et al.; Curtis McCluskey; French et al.) show that children are becoming obese due to eating â€Å"junk foods† such as salty snacks, potato chips, and other similar products. Parents are already concerned about this rising obesity trend on their children. Further, the US FAS also reports that young adults, particularly in Shanghai, are changing their perception on food consumption. The report states that the Shanghai youth are more likely to purchase high-quality food products such as fresh milk and organic produce (GAIN Report 3). LHCL should therefore target these consumers to be its main consumer base in the near future. The marketing mix design provided earlier specifically addresses this issue. The marketing mix is focused on attracting the young adults and health-conscious consumers. They will be the primary consumer base of the Oishi brand. Part 2 Report Marketing concerns satisfying customer needs and wants and in doing so paves the way for achieving the organizations objectives (Proctor, 2000). This is a general principle applicable to all organizations in the business community. Since the opening up of China in the global market, numerous companies have put their investments in the country in the hope of establishing a leading position or at least take a substantial portion of the large Chinese market. Due to the unprecedented increase of foreign firms, domestic competition in every industry has intensified. However, local or domestic brands are still preferred by Chinese consumers at the expense of foreign multinational brands (Ewing et al, 2003: 84). Nevertheless, the presence of global corporations in China provides competition against domestic companies. Developing an appropriate marketing strategy that will satisfy customer demands should be the goal of every organization in order to achieve competitive advantage and attain the organizations objectives. As Proctor (2000) stated, marketing is about the competitive positioning of products and services in the minds of the customers. It is also about the communication of messages and images (reflecting product and service positioning) and the means which are used to convey these messages and images to the customers. Although there is a preference for local brands by the Chinese, the presence of foreign companies are to be considered a major threat as they are capable of creating products and services that meet the needs and wants of the consumers. It is important that every organization should analyze the market conditions and the relationships that exist within the market in order to identify which segment of the market to target. Market segmentation is therefore another crucial factor in the creation of a marketing strategy. Proctor (2000) points out that market segmentation amounts to partitioning a market into a number of distinct sections, using criteria, which reflect different and distinctive purchasing motives and behavior of customers. Separating the market into various segments or groups helps companies determine their specific market and establish a loyal customer base. This is particularly important for entering new markets as well as maintaining current position in market. Another significant concept in marketing is the product life-cycle. This concept is a sequence of stages to determine the life-cycle of a product or service. There are four stages, namely introduction, growth, maturity and decline, in the product life-cycle. In the introduction stage, the new products are introduced into the market. An organization will seek to build market awareness on the product and establish a market for it. Once introduced and a market has been established, the product will be marketed and sold and new features may be added to expand its market this is the growth stage. The product will then reach its maturity, and at this stage improvements will be needed to maintain its peak such as lowering its price or new distribution channels are created. When the product saturated its maturity stage, a decline in sales will occur. This is the declining stage. At this point, the company may choose to maintain the product and sell it to a loyal segment of the market or stop its production. The product life-cycle concept is necessary so that LCHL can manage its products and plan for future products or services when the current offerings have reached their declining stages. An important marketing principle as well is the Boston Consultancy Group (BCG) growth-share matrix. This concept is relevant to companies with several portfolios. Under the BCG matrix, a companys different portfolios or divisions growth and market share will be analyzed and categorized into four elements; cash cows, stars, question marks and dogs. Cash cows represent portfolios that generate more profit than the expenses it incurs. Stars generate large amounts of cash, but also consume a large amount of money due to its relatively large market share. Question marks, on the other hand, are portfolios that grow rapidly but generate less income due their low market shares. Dogs, meanwhile, are those portfolios that have low market share and low growth rate, and therefore generate low income. (NetMBA.com). This matrix is particularly important for Oishi brand so that the company can identify which of its product variants are cash cows, stars, question marks or dogs and which portfolio ne eds to be improved. All of the above concepts can contribute to achieving competitive advantage for a company. It is common that every business organizations ultimate and strategic goal is to gain competitive advantage over its rivals. Carpenter et al (2001) said, â€Å"Competitive advantage can arise from satisfying customers better, faster or more cheaply than competitors†. Porter (1998) said that the competitive strategy takes offensive or defensive actions to create defendable position in an industry, in order to cope successfully with competitive forces and generate superior return on investment. He added that the basis of above-average industry performance is sustainable competitive advantage (qtd in 12Manage.com). In the Porter model, competitive advantage has two basic types; cost leadership and differentiation. Cost leadership occurs when a company offers the same product or service at a lower price than its rivals. Differentiation advantage occurs when a company delivers higher quality products or services at the same price as its competitors. A third type, focus, appears as an advantage when a company focused its strategy on a particular or narrow segment of the market to create a loyal base of customer and become the company of choice in the same market segment. In sum, the above marketing concepts help in gaining competitive advantage and profitability for the company. Hence, LCHL should adopt all the concepts stated above and incorporate those in its corporate strategy and strategic marketing plan. It is necessary that LCHL should maintain its current leadership by creating a competitive marketing strategy. Reference About Oishi. Liwayway Holdings Company Limited, n.d, from http://www.oishi.com.cn/en/about.htm. Bradley, F (2003) Strategic marketing: in the customer driven organization. Chichester: Wiley Print. Carpenter, G., Glazer, R and Nakamoto, K. (2001) â€Å"Market-driving strategies: toward a new concept of competitive advantage†, Kellogg on Marketing. New York: Wiley Press, pp. 103-130. â€Å"Competitive Advantage†, 12Manage.com. 12 Manage, n.d. Web. Ewing, M., Napoli, J and Pitt, L. (2003) â€Å"The development of domestic brands in China†, Chinese Economic Transition and International Marketing Strategy, pp. 84-95. French, S., Jeffrey, R., Story, M., Breitlow, K., Baxter, J., Hannan, P and Snyder, P. (2001) â€Å"Pricing and promotion effects on low-fat vending snack purchases: the CHIPS study†, American Journal of Public Health, pp. 112-117. â€Å"Global agriculture information network. Shanghais youth market: changing perceptions in food consumption†, USDA Food and Agriculture Service, People Republic of China Market Development Reports, Retrieved November, 2008. Marshall, D., ODonohoe, S and Kline, S. (2007) â€Å"Families, food and pester power: beyond the blame game?†, Journal of Consumer Behavior, pp. 164-181. Porter, M (1998) On competition, Boston: Harvard Business School Publishing. Proctor, T (2000) Strategic marketing: an introduction, London: Routledge Press. Terhune, C (2005) â€Å"To bag Chinas snack market, Pepsi takes up potato framing†, The Wall Street Journal Online. â€Å"The BCG growth-share matrix.† NetMBA.com. NetMBA, n.d. 360 Degree Feedback: Analysis 360 Degree Feedback: Analysis 1. Introduction The researcher has highlighted the research question, aim and objectives, before the specific introduction to give a clear picture of the dissertation. 1.1 Research Question To ascertain whether 360 degree feedback could prove to be a promising appraisal mechanism for the staff motivation and development in the current economic crisis and funding cuts? 1.2 Aims and Objectives The research sets out to explore the relevance of 360 degree feedback appraisal system in contrast to the traditional appraisal process currently functional in the library and technical services department of the University. What is 360 degree feedback and in what ways it could prove to be an efficient tool for continuous improvement, development? What is the current functional appraisal technique in the universities library/technical services department and the benefits of introducing 360 degree feedback as an appraisal tool? To analyse the functions/pitfalls of introducing 360 degree feedback within the library/technical services department of the University, with an emphasis on its use for the continuous improvement, development and motivation of the staff. 1.3 Specific Introduction â€Å"University staffs tend to report high levels of stress at the best of times, and academic staffs usually rate their experience of stress as higher than other staff groups in the higher education setting,† (Easton and Laar, 2010). The current funding cuts by the government and the global financial crisis demands a major change in the way various processes function across universities in United Kingdom (UK). The current study is an endeavour to address the numerous limitations in between the traditional appraisal system and the 360 degree tool. The researcher aims to expand the literature that previously exists on the 360 degree appraisal system and to analyse why the gap exists in between both the processes. The researchers primary focus is on the staff motivation and personal development as the key factors that need consideration within the University of Huddersfield. The researcher has given a thorough critical analysis of the 360 degree feedback appraisal system through the review of the academic literature and has focussed on identifying whether or not there are any benefits of using 360 degree feedback over the traditional appraisal systems. As stated by Mason, et.al, (2009), multi-rater feedback is by fa r the best tool for staff development and monitoring effective continuous development in any organisation. Borman, (1997); Javitch and Burke, (1995); Yammarino and Atwater, (1997) state that one of the elementary assumptions of the 360 degree feedback approach is about the employees specific workplace behaviour and when compared to an individuals perception, can act like a catalyst and prove extremely beneficial for enhancing the employees self awareness, self development, motivation and subsequent behavioural change (Church, 2000). Concurrently, Cardy, et.al., (2011), critic that although the evaluation from 360 degree feedback includes feedback from all directions managers, colleagues, customers and the responses from all the point of views propose immense probability for improvement, insight and learning, the feedback from these multiple source seldom agree. On the rating scale, colleagues may rate some characteristics higher while managers may rate those very characteristics lo wer and likewise. The whole prototype of 360 degree feedback interpretation and evaluations can draw a perplexing image of the feedback which will hardly be of any significance to the individual in improving their performance. The underlying rationale of this study has been to evaluate the pros and cons of the traditional appraisal system currently functional in the university, and to analyse by what extent the human resource department, can benefit by introducing 360 degree feedback as their employee appraisal mechanism, especially in relation to the motivation and development of staff. 1.4 Research Plan The below figure (Figure.1) gives a diagrammatic representation of the research plan. The researcher has used the mind mapping technique to construct the research plan (Buzan and Buzan, 2007), which gives a clear picture of how the research task is carried forward as per the time line set by the researcher. The research plan has helped the researcher to carefully pre-plan the actions that needed to be taken during the research. In the following chapters the researcher has critically analysed the 360 degree feedback tool. The literature review covers the latest developments in the 360 degree feedback mechanism along with a thorough comparison with the traditional appraisal system currently functional in the library and technical services department of the University of Huddersfield. The research methodology chapter gives a thorough account of the research design chosen by the researcher, the various techniques used for the research, discussions about the semi structured interviews and questionnaires, followed by the analysis of data, research findings and conclusion. Chapter 2 2 General Literature Review 12-21 2.1 Specific Literature Review 21-27 2.2 Summary of the Literature Review 27 2. General Literature Review â€Å"The way 360 degree feedback is done seems to be critical to successfeedback interventions depend for their effectiveness on the extent to which they augment task motivation and encourage learning, although there are moderating variables such as the nature of the task,† (Kluger and De Nisi, 1996; Tyson and Ward, 2004). 360 degree feedback is an appraisal system used in strategic Human Resource management (HRM) as an intervention and an evaluation technique for personal development of the employees (Cardy, et.al, 2011; Fleenor, 2008; Tyson and Ward, 2004). It has also been referred as the ‘‘vital sign of the modern organization (Fortunato and Smith, 2008; Church and Waclawski, 1998). In this process the employees receive confidential, anonymous response from colleagues, managers, customers, family members etc (Figure 2). About three to five people fill out an anonymous online feedback form that asks questions covering a broad range of workplace competencies. The feedback forms include questions that are measured on a rating scale and also ask raters to provide written comments. The person receiving feedback also fills out a self-rating survey that includes the same survey questions that others receive in their forms. Various authors have outlined that 360 degree feedback is quite effective as it is a non bias process which makes performance management a more objective and fair process (CIPD, 2009), in contrast to the traditional appraisal processes where in a lot depends upon how the appraiser perceives the individual, which can be bias and less transparent. The 360 degree feedback has been used in many organisations for the development of staff members, and the gap in the two appraisal systems is due to the bias nature of the traditional appraisal mechanisms over the transparency of the 360 degree f eedback process. While traditional measures of appraisal systems date back to decades, current literature highlights the multiple developments in the field of appraisal techniques (Dalton, 1996). One among the later developments in the field is the 360 degree feedback appraisal mechanism. This research has explored the relevance of 360 degree feedback appraisal system in contrast to the traditional appraisal process currently functional in the University. Specifically, the author has examined how employee motivation and personal development are affected by 360 degree feedback. The aim throughout the research has been on comparing the traditional appraisal system functional in the University of Huddersfield (UOH) with the 360 degree feedback methodology by exploring how it could contribute in the personal development and motivation of the staff members within the University of Huddersfield. Meyer, (1991); and Folger and Cropanzano, (1998), disagree that evaluations of traditional appraisals are often positively inflated as usually the appraisers are not trained to give negative feedback, and if this is the manner in which the appraisals are conducted then the effectiveness of the performance management process will significantly be undermined (Guangrong, 2010; McCarthy and Garavan, 2001). Therefore one could state that if the tool if used accurately it can provide a non bias and more transparent appraisal system, which may decrease the possibilities of employee dissatisfaction in contrast to the traditional appraisal mechanism, and can emerge as an excellent motivational factor for the employees. As a matter of fact ‘360 degree feedback can significantly enhance the performance management process (Staff360, 2011; CIPD, 2009). However Fleenor, (2008) and Vinson, M.N. (1996) disregards the facts about the effectiveness of 360 degree feedback as people may use their role as a feedback provider as an opportunity to criticize others behaviour at work. According to Chartered Institute of Personnel and Development, (2009) if the 360 degree tool is perceived to be in any way threatening, it can seriously damage both commitment and performance. â€Å"It is important that people receive regular honest feedback on their performance. They should understand how their role contributes to overall organisational aims and objectives and how they are performing against agreed criteria. 360 degree feedback can enhance this process by widening the scope for information from the line manager relationship to embrace a wider range of opinion. However, it is important that this is carried out sensitively and fairly,† (Staff360, 2011). Lepsinger and Lucia, (2009); Fleenor, (2008); Tyson and Ward, (2004) comprehend that there are direct evidences of employees performance improvements from 360 degree feedback appraisal mechanism. Various authors research prove that 360 degree feedback also results in improved customer satisfaction, improved management skills and these improvements motivate the employees to work on their identified strengths and use them for advancement in their carrier (Edwards and Ewens, 1996; Hazucha et al. 1993). Hence, the current study is an attempt to deal with the several limitations, and develop the literature that previously exists on the 360 degree appraisal system and to analyse why does the gap exist in between the traditional appraisal system and the 360 degree tool. â€Å"The University of Huddersfield has charitable status as an exempt charity under Schedule 2 to the Charities Act 1993 (amended by the Charities Act 2006). It is therefore subject to charity legislation but is not required to register with the Charity Commission and is not regulated by it. As an exempt charity, the University does not have a registered charity number. In 2010, the Higher Education Funding Council for England took over as the ‘Principal Regulator for the institutions it funds and now has a general duty to promote compliance with charity legislation. This does not affect the Universitys status as an exempt charity,† (hud.ac.uk, 2011). The UK governments educational funding slice and the recession hit economy demands a drastic alteration in the way various processes function across the Universities in UK. However, since the 360 degree feedback is a tool primarily developed and used mainly in the private sector organisations, there is a challenge in its implementation in a public sector or a third sector organisation and as in this case, the University of Huddersfield which is a registered for charity organisation. Brutus et al., (1998) support that the reactions to performance measurements may vary between public and private sector organizations—public sector managers underestimate their achievements compared with private sector managers, for example. Hence, based on these findings one could ascertain that there is a greater need for motivation and development of employees in the public/third sector organisations, and the 360 degree performance appraisal system is an HRs ideal response to combat such issues. As suggested and supported by Lepsinger and Lucia, (2009); Borman, W.C. (1997); Javitch, M.J. and Burke, W.W., (1995); Yammarino, F.J. and Atwater, L.E. (1997), one of the elementary assumptions of the 360 degree feedback approach is about the employees specific workplace behaviour and when compared to an individuals perceptions, can act like a catalyst and prove extremely beneficial for enhancing the employees self awareness, self development, motivation and subsequent behavioural change (Church, 1995, 2000). The researcher has explored the 360 degree appraisals methodology that has become popular in human resource circles over the last few years, wherein the employees performance is assessed by their colleagues, managers and others and has analysed its benefits over the traditional appraisal processes. Brown, (2006) criticizes that while the 360 degree process seems like an interesting idea; it involves more meetings and many forms to be filled out in comparison to the traditional appraisal systems. However Maylett, (2009) and Wiley, (1993) supports that 360 degree feedback can prove to be a good instrument for the staff development as this process gives an individual in-depth performance feedback and hence based on the findings the employee can work on their personal development, by getting trained in the area where there weakness lies and the time lost in filling the extra forms are worth the effort. Arguments from different authors suggest that the feedback systems have always been in to existence in the organisations in some form or the other, but of-late has been developed and given a name ‘360 degree feedback and according to Garavan, et al., (1997) 360 degree feedback process is like an ‘old wine in new a bottle. It is also known as multi-rater feedback and is an appraisal process in which the individual is assessed by themselves, colleagues, managers, stakeholders, customers, etc. The 360 degree instrument can be used to achieve various goals and one aspect of it is the need of continuous measurement of improvement efforts, development of staff and their motivation. Ward, (1997) defined 360 degree feedback as ‘the systematic collection and feedback of performance data on an individual or group derived from a number of the stakeholders in their performance. †Because of their shorter expected tenure, women are less likely to be as motivated by the deferred rewards of career ladders. As a consequence, she argues that employers with large shares of women have historically used shorter-term rewards and undertaken more routine and extensive monitoring,† (Brown and Heywood, 2005; Goldin, 1986). Various authors criticize that traditional appraisal techniques are not that effective in case of female employees and there are many incidences of gender bias in appraisals. Renowned authors, Brown and Heywood, (2005) support that ‘a major and recurrent criticism of the traditional appraisal process is its openness to subjective and discriminatory outcome. The primary goal of this research has been to expand beyond the current literature by analysing the data and results to create suggested policies for the University of Huddersfield, to implement pertaining to the improvement of staff morale and productivity. Furthermore, on reviewing the growing body of literature and the research on 360 degree feedback, the researcher was able to identify the usefulness of having 360 degree feedback over the traditional appraisal processes in the University of Huddersfield; the study has also given ample scope to the researcher in developing more insightful questions. The author has identif ied the various factors on which the success of 360 degree feedback mechanism depends; the literature supports that more effectively the 360 degree instrument is implemented the better are the results. Newbold, (2008) highlights that that if the tool is implemented accurately, with the proper training and the correct resources, a 360-degree appraisal could prove to be a powerful and positive addition to any performance-management system. The 360 degree feedback has been used in many organisations for the development of staff members, and the gap in the two appraisal systems is due to the bias nature of the traditional appraisal mechanisms over the transparency of the 360 degree feedback process. Various authors have outlined that 360 degree feedback is quite effective as it is a non bias process which makes performance management a more objective and fair process (CIPD, 2009), in contrast to the traditional appraisal processes where in a lot depends upon how the appraiser perceives the individual, which can be bias and less transparent. Maylett, (2009); Meyer, (1991); Folger and Cropanzano, (1998), argue that evaluations of traditional appraisals are often positively inflated as usually the appraisers are not trained to give negative feedback, and if this is the manner in which the appraisals are conducted then the effectiveness of the performance management process will significantly be undermined (McCarthy and Garavan, 2001). Therefore one could state that if the tool if used accurately it can provide a non-bias and more transparent appraisal system, which may decrease the possibilities of employee dissatisfaction in contrast with the traditional appraisal mechanism, and can emerge as an excellent motivational factor for the employees. However Vinson, (1996) disregards the facts about the effectiveness of 360 degree feedback as people may use their role as a feedback provider as an opportunity to criticize others behaviour at work. â€Å"Multirater feedback has several significant advantages over single-rater assessment. Rather than relying on the perceptions of one individual, multirater feedback takes into account multiple perspectives. Those working with the employee, along with the supervisor, are generally able to provide a more comprehensive picture of an employees behaviour or performance. This is especially critical when the supervisor does not have the opportunity to observe all areas of an employees performance,† (Maylett, 2009). Maylett, (2009); DeNisi and Kluger, (2000) support that ‘360-degree feedback for decision making affects the actual ratings given to the individual being appraised and these systems should be primarily, if not exclusively for developmental purposes (Figure 3). Furthermore, the conditions in which 360 degree feedback work in an organisation largely depends upon the perception of 360 degree feedbacks potential to enhance human resource management system of the organisation. As suggested by Lepsinger and Lucia, (2009) factors like culture (that supports openness and honest feedback) and systems (that minimise irrational responses and have built in ways to identify people whose ratings are untrustworthy) assess if the organisation is ready to implement the 360 degree feedback process, and the researcher has explored the possibilities of its implication in the University of Huddersfield, based on these grounds. 2.1 Specific Literature Review This section of the dissertation takes a specific critical standpoint on whether 360 ° feedback as strategic Human Resource tool have a profound strategic justification in the University of Huddersfield (UOH) which is a registered for charity organisation (hud.ac.uk, 2011) . The researcher has given a critical account of the 360-degree feedback tool, as an option for performance development appraisals and for motivating the staff in performing better, in the registered for charity organisations. Currently, the 360 degree tool is not very common in the third sector, registered for charity organisations and the investigation could be a scope for a research elsewhere. According to Berk, (2009); and Fortunato and Smith, (2008) 360 degree feedback is an appraisal tool used by approximately 90% of the Fortune 1000 organisations (Fortunato and Smith, 2008; Bracken et al., 2001; Tornow and Tornow, 2001; Edwards and Ewen, 1996, 2001). Cardy, Leonard and Newman, (2011) believe that the incre ased popularity of the 360 degree feedback is unquestionable and that organisations have spent innumerable amount of funds in implementing the feedback system. However, Cardy et.al, (2011) argue that many Fortune 1000 companies have implemented the 360 degree feedback without having considered the purpose, which is not very advisable, as 360 degree feedback is at its best for staff development, motivation, and for administrative use such as in determining performance related salary. The utility of 360 degree feedback, mainly upward feedback, may be constricted when appraisers provide erroneous ratings (Bernardin and Tyler, 2001; Bracken and Timmreck, 2001). Kuvas, (2006) highlighted that the relationship between the performance appraisal and work is interrelated to the employees inherent motivation at work. For an employee to perform in an organisation, job satisfaction and motivation to execute an activity for itself, in order to experience the pleasure and satisfaction inherent in the activity (Kuvas, 2006; Deci et al., 1989; Vallerand, 1997). Cardy et.al. (2011) highlight that when feedback received from too many sources are used for the estimation of an employees performance the diverse sources of feedback seldom agree in their evaluation, although a broader understanding can be attained. Analysis and criticism of traditional appraisal system in contrast with 360 degree feedback The primary principle of appraisals is to put forward an opinion or feedback on how the employee performs in their current job role and to discuss further what could be done to facilitate the employee to perform the expected job, if they are not performing as per the objectives. Prowse and Prowse, (2009); and Randell, (1994) argue that appraisals are the systematic evaluation of an individuals performance linked to the organisations culture and behaviour. The various departments in the University of Huddersfield (UOH) use different appraisal mechanisms. The computing and library services, technical services and other administration departments of the University use a competencies framework for the staff appraisals. The appraisals are conducted half yearly (every 6 months) to follow up on the employees personal development plan. There are three documents that are usually taken in a one on one appraisal, the filled employee preparation form, the filled up competencies framework and the competency framework Role Profiling document which provides a brief idea of which level each role is at (Figure. 4). After the discussion the appraising line manager fills up the appraisal record which both the appraiser and the ‘appraisee sign and get a copy. This process is followed up every 6 months (Please refer to appendix 1 for appraisal documents). The purpose of the process is to facilitate the employees to develop in a systematic way so that university as an organisation functions in the best possible way utilising the optimum talent identified. Various authors support that the appraisal system also offers an opportunity to put across and discuss the employees achievements over the past year with th eir managers to confer their performance in general and make plans for the year ahead. The performance appraisals are potentially a solution for the organisations to get the most out of their employees (Prowse and Prowse, 2009; Armstrong and Baron, 2005). The scheme currently functional in the university is highly participative, with a huge emphasis on appraisal ‘self and making sure that the staffs have a key responsibility in determining their own improvement and personal development (UOH, 2011). â€Å"In order for an appraisal system to be absolutely flawless and effective a number of elements have to be in place, as in the understanding and agreement on performance goals, a process for collecting ongoing performance data and a framework of productive periodic review and formal appraisal discussions,† (Lepsinger and Lucia, 2009). Although the current appraisals seemed to have worked fine till date, the literature provides evidence of the flaws in the traditional appraisal processes. Lepsinger and Lucia, (2009); and Lee, (2006) highlight that disagreement on set performance criterion, the line managers inability as an appraiser to process the bulk of information received and the employees need, while being appraised to defend their self image, are the key factors which act as a barrier in the smooth functioning of the traditional appraisals. It could be argued that the two parties involved in a traditional appraisal usually do not agree with the performance criteria set and it is highly likely that a difference of opinion may crop up between the appraisers and appraisee on what it takes to perform the job effectively. Prowse and Prowse, (2009); and Lee, (2006) argue that that the appraisal practice cannot be executed successfully unless the appraiser has the right interpersonal skills to provide the feedback t o the appraisee. If the appraiser and appraisee do not come to a conclusion on what can mutually be agreed as a requirement for excellent performance, then it is quite evident that both may end up with diverse conclusions about the staffs effectiveness in meeting the set performance criteria. Furthermore, rather than reassessing the actions necessary for a thriving performance at work, if the traditional appraisal attempts to achieve a specific target or result, it hardly does anything to seize the gap in perception or help the appraisee in comprehending what amendments are vital for their advancement and development in performing the job (Lepsinger and Lucia, 2009). â€Å"Traditional performance appraisal systems are flawed in their design, implementation and use. Supervisors seldom are effective in using such systems because the assumptions that guide how we use performance appraisals are unsubstantiated,† (Lee, 2006). Lepsinger and Lucia, (2009); and Lee, (2006) solicit to discontinue the use of the traditional performance appraisal methods and state that the traditional appraisal processes that rely upon ratings should be discontinued and advanced performance management mechanisms should be adopted which are designed to produce ample quantitative and qualitative information. The line managers inability as an appraiser to process the mass information received is another major issue in the traditional appraisal processes. The though process behind an effective appraisal is very complex. Experts break down the intricate process for collecting and processing information used in the appraisal process (Lepsinger and Lucia, 2009). Merits of introducing 360 degree feedback as an appraisal tool in the University of Huddersfield â€Å"Critiques of appraisal have continued as appraisals have increased in use and scope across sectors and occupations. The dominant critique is the management framework using appraisal as an â€Å"orthodox† technique that seeks to remedy the weakness and propose of appraisals as a system to develop performance,† (Bach, 2005). As discussed previously The University of Huddersfield uses competencies framework for the staff appraisals. The competencies framework is a description of the relevant behaviours needed to be competent in the job roles and support the organisation in remaining an exceptional University. The competencies appraisal framework boasts to benefit the employees by providing precision of performance expectations, uniformity and fairness throughout the appraisal, allowing superior identification of individual development requirements and giving a clearer picture of required skills to progress in the career path. In turn the university benefits by a lucid method of continuous development and performance management, enabling the identification and prioritisation of improvement needs to facilitate the improved stipulation of the learning and development courses or other areas of development (Source: HR, 2011). â€Å"360 degree feedback can make a positive contribution to the appraisal system. It can help to gain agreement on expectations, by using a broader range of information, and by facilitating open discussion,† (Lepsinger and Lucia, 2009). There are numerous benefits of introducing 360 degree feedback in the University of Huddersfield. As per the discussions with the human resource staff and the appraising managers it can be argued that the current appraisal system functional in the university is not flawless. The bias nature of the one on one performance appraisals is prone to disputes among the appraising manager and the employees, and although the university has a procedure in place to resolve such conflicts it could still benefit by introducing 360 degree feedback along with the traditional appraisal mechanism to rule out any such possibilities of conflicts. 2.2 Summary of the Literature Review To sum it could be concluded that the 360 degree feedback has a proven record as an excellent tool for staff development and motivation. The researcher has observed that the tool has become increasingly accepted in the organisations worldwide ever since the masses have discovered its value. Since the academic literature supports the research question proposed by the researchers. Chapter 3 3 Introduction to the Research Methodology 29 3.1 Research Design 29-33 3.2 Research Strategy 33-35 3.3 Review of Research Data Collection Methods 35-36 3.3.1 Semi-Structured Interviews Qualitative Data 36 3.3.2. Questionnaires Quantitative Data 37-39 3.4 Pilot Test 39 3.4.1 Questionnaire Pilot Test 1 40 3.4.2 Questionnaire Pilot Test 2 40-41 3.5 Alternate Research Methods considered but 41-42 3.6 Ethical Considerations 42-43 3.7 Methods of Data Analysis 43-44 3.8 Summary of the methodology 44 3. An Introduction of the Research Methodology In this section of the research paper the researcher has explained the various types of research methods and techniques available, and used by the researcher, followed by a justification of why these methods have been considered appropriate for this dissertation and why the other methods have not been considered. The process of data collection and data analysis has also been described in this chapter. 3.1 Research Design The researcher throws light on the research design and gives a general idea of how the researcher has gone about addressing the research question and description of its approach with rationality, followed by an account of the objectives derived from this research, gives an account of the sources which has been used in this research to collect data, and a description of the ethical considerations (Creswell, et.al. 2011; Saunders, Lewis and Thornhill, 2009). To quote Saunders, et.al, (2009): â€Å"Combining both quantitative and qualitative analysis ‘the researcher may possibly use the quantitative data and ‘qualitize it that is converting it into narrative that can be analysed qualitatively. Alternately, the researcher may ‘quantitise the qualitative data, converting it into numerical codes so that it could be analysed statistically,† (Saunders et.al, 2009). The author has carried out the research by conducting semi-structured interviews followed by a brief experimental introduction of 360 degree feedback process, and the analysis of the results were done by the careful examination of combination of the mixed methods. Various authors justify that there are diverse rationales for research; however practitioner researchers are faced with queries that demand versatile responses (Creswell, 2003) Hence, a mixed methods approach that uses qualitative and quantitative research can be considered as appropriate for several p