Lulu Hypermarkets In Dubai Commerce Essay

smasher Hypermarkets In Dubai Commerce Essayapricot Hypermarkets belongs to EMKE Group which is a leading consortium in Dubai. at that place atomic number 18 78 hypermarkets of the group that ar operating within the GCC Gulf Cooperation Council Countries (Bahrain, The Kingdom of Saudi Arabia, Kuwait, Oman, Qatar, and the UAE). The hypermarket competition in Oman is composed of beauty Hypermarkets with the French party Carrefour Hypermarkets, the Kuwait- travelling bagd Sultan Center Hypermarkets, Oman-based Safeer Hypermarkets, the Dubai-based KM Trading Hypermarkets, and the new entrant from Dubai Al Maya Hypermarkets (opened in April 2009).Lulu is operating trustworthyly four (three in Muscat, unmatched in Sohar) hypermarket retail come forwardlets (in the metropolitan areas) and eight supermarket retail outlets (in small towns and upcountry areas) in Oman and bequeath be opening its fifth hypermarket in Salalah the third largest city in Oman after Muscat and Sohar. Th e Companys central warehouse for Oman is located in the capital city Muscat.The Problem SituationLulu Hypermarkets has been facing tough charge competition from the Dubai-based KM Trading Hypermarkets and the new entrant Al Maya Hypermarkets. With the current globular economic crisis and fluctuating oil prices Oman too is facing the need to modify finances and the same applies to consumers in Oman. The result is consumers confuse become more careful and frugal in spending and sometimes end up harsh their volume of purchases and are more motivated here in Oman by discounted prices and Sale since the middle of year 2008.A major proportion of the caudex of Lulu Hypermarkets is do up of imported food market items and consumer electronic items, fashion goods, clothes, stationery, toys, and furniture) from Australia, India, China, the EC, Malaysia, the Kingdom of Saudi Arabia, and Thailand. This merchandise goes into creaseing via Lulus vertically integrated supply chain.The stor es staff in Lulu hypermarkets and supermarkets report to their floor supervisors and separately of the supervisors (there are 3 floor supervisors one for separately floor in each of the hypermarkets and 1 floor supervisor (only grease floor) in each of the supermarkets) directly report to the purchasing supervisor in each hypermarket and supermarket. The purchasing supervisors directly report to the Purchasing Manager (see Figure 1 below for a simplified Lulus validation structure of its purchasing department).Figure 1 Organisation Structure of Lulus Purchasing Department, OmanThe purchasing manager receives orders from the purchasing supervisors who base their order requisitions from the selective informational output generated from the EPOSs at each hypermarket/supermarket outlet. Thereafter the purchasing manager orders stocks from abroad and liaises with overseas suppliers with and with the Tendering Contract Specialist. As is parkland here in the GCC countries, Lulu too has a very conservative top management that includes its Board of Directors.However, currently Lulu is actively engaged in replacing the old IT architecture and revamping its focal point Information frames (MISs), including a Inventory Management System, soon (around end of September 2010) to take wages of online ordering formations with the introduction of its own web-portal.Customer remembering is a key factor for roaringly operating any rail line at all times (Hurley, 2004). This is all the more critical now addicted the global economic crisis which most of the countries worldwide, including Oman, are going through.Of late (since mid 2008) there have been frequent shortages of stocks (spray dried milk and opposite staple grocery items leading international brands) and as a result Lulus nodes (both the Omanis and expatriates) are unhappy over the non-availability of items/brands of their choice that were retailed by Lulu.In certain lines of grocery items there were lavishness stocking and on a nonher(prenominal)s there were shortages. And in order to overcome the shortages orders were made to be transported by air which significantly increased the freight cost of imported goods.On the other extreme, some grocery items (low bulk) that are supplied to small institutional buyers (e.g. coffee shops in Muscat) could not be sourced from the exporters in time for delivery as several(prenominal) orders had to wait to be bunched to make up the bulk to obtain low cost freight from the shipping companies. These mistakes have been caused by weak or disadvantageously decision making resulting from brusque information and communication flows between the store outlets (sales) and purchasing department (purchases). For example, the Inventory Status Analysis Report and Customer gross sales History have been found to be not that accurate during a specially commissioned operational audit in February 2009.Furthermore, Lulus warehousing space in (Muscat) Oman is limited. Although the EMKE Group is capable of building a new warehouse in Muscat, the mountainous terrain makes it difficult to construct warehouse buildings in the short sink.In consequence, poor bloodline management is a serious issue which is threatening Lulus efforts in customer retention and loyalty and the profitability of its business in Oman.An attempt has been made in this paper to analyse the above issue in Lulu, Oman by applying Checklands (1981 Checkland Scholes, 1990) Soft Systems methodological analysis (SSM).MetaphorsProblem situations such as the above can be gear upively tackled by the application of critical systems opinion (capital of Mississippi, 2003). Critical systems persuasion sexual climax employs a wide range of system of rulesal metaphors (images) which can help in arrest the organisations as hygienic as to explore and analyse the difficult occupation situations which managers need to tackle (Flood Jackson, 1991).Metaphors can be viewed as co gnitive lenses through which plenty make sense their situations for obtaining a conk out sense of the same (Kendall Kendall, 1993).The most common archetypal metaphors that can be used to guide systems thinking are (Jackson, 1993 Morgan, 1997)Organisations as machinesOrganisations as organismsOrganisations as brainsOrganisations as culturesOrganisations as political systemsOrganisations as psychic prisonsOrganisations as flux and transformationOrganisations as instruments of dominationMetaphoric manifestation of the organisation helps to understand how its stakeholders make sense of their organisation and their worldviews and also encourages its managers to think creatively about their organisations as well (ibid). This is because metaphors provide a useful government agency to make creative assumptions in organisational analysis for describing and exploring the occupation situation effectively (Morgan, 1980 1997).To guide the critical systems thinking, in relation to the ab ove problem situation, the organisms metaphor has been chosen at the dominant metaphor and the machines metaphor as the dependent metaphor. The organisms metaphor represents open view and the machine metaphor represents closed view (Flood Jackson, 1991).According to Jackson (1993) an organisation when viewed as a machine is seen as a tool created for achieving the parts of the owners of the organisation. Managers are assumed to be rational in their decision-making (ibid). Control in the organisation is enforced through strict rules and procedures within a rigid organisational hierarchy of authority (ibid).An organisation when viewed like an organism appears as a Gordian system composed of sub-systems that coexist together (ibid). The main aim of the organisation is survival from which the derivatory objectives are set for each of the organisations sub-systems to accomplish (ibid). If there are functional failures and then the sub-systems should be examined as whether they conti nue to meet the organisations objectives and needs and also the organisation should be cross-checked as to whether it is properly aligned with and well-adjusted to its environment (ibid). To this end the managerial sub-system must be entrusted with this important task (ibid).Accordingly with regard to the Lulus problem situation above, the organism metaphor is considered as the dominant metaphor as the enumerationing management and costs involve external environmental participants (for e.g. suppliers and customers) and the machine metaphor as the dependent metaphor since it produced negative effects through poor information and communication flows in relation to purchases and sales as well as wrong decision making in relation to ordering supplies.Hard Systems idea and Soft Systems ThinkingProblem situations in organisations can be tackled by managers by using a intemperate systems thinking approach or semisoft thinking approach.Hard systems thinking approach is useful when syst ems exist and the objectives of the system/s can be easily defined (Checkland, 1981 1988). Hard systems thinking approach is based upon rational and scientific methods where a single(a) optimal solution is found (Checkland, 1981). However, the hard systems thinking approach is not useful to speak messy, unpredictable, and ill-structured problem situations wherein the military personnel participants constitute an important variable in the complex problem situation (Checkland, 1981 1989).Soft systems thinking approach does not pick up systems to exist and views the piece activity systems (HAS), which indicates the tender activity to accomplish a certain goals, quite distinct from other systems in the organisation (Checkland, 1981).The strong emphasis placed upon systemness sets hard systems thinking approach distinctly separate and antithetical from soft systems thinking approach (Checkland Holwell, 1998).The System of Systems Methodologies (SoSM)For exploring the complex pro blem situation of Lulu Checklands (1981 Checkland Scholes, 1990) Soft Systems Methodology has been chosen from Jackson and Keys (1984) the System of Systems Methodologies (see Table 1 below).The reason behind choosing SSM was that Lulus problem context involved unique participants separated by locations and the unique disposition of the inventory system which is significant both in the problem context as well as for Lulu to satisfy its customers needs.Table 1 The System of Systems Methodologies (Jackson Keys, 1984).PARTICIPANTSSoft Systems Methodology SSMChecklands (1981 Checkland Scholes, 1990) Soft Systems Methodology is a useful methodology for applying systems thinking to complex problem situations in organisations to analyse both qualitative and denary information for the same, since Lulus problem situation involves complex human, political, and fond elements.SSM ProcessThe SSM is a 7 coiffure mathematical operation of enquiry wherein the logical connections of the SSM do by help the real(a) problem solving activity to move more flexibly between one stage and the other in the SSM (Flood Jackson, 1991).Although the SSM is a 7 stage process the stages need not necessarily to be used in a strict sequential order (Checkland Scholes, 1990). Figure 2 below illustrates the 7 stage SSM process.Figure 2 7 phase angle Model of SSM(Source Adapted from Checkland Scholes, 1990) coiffure 1- The Problem SituationIn this first stage of the SSM the participants of the HAS start investigating the ill-structured problem situation without any assumptions which eventually lead to a common understanding of the messy-problem which requires immediate attention (Jackson, 2003).Lulus messy problem situation represents the shared need of the participants of the organisational (Lulu) human activity system (HAS) to collect the available information together as a team in order to explore.The HAS in Lulus problem situation is represent in the form of a Review-Group com posed of the Director and Assistant Director Purchasing Warehousing -, Purchasing Manager, Purchasing Supervisors (Muscat only), one floor staff from each of the Lulu Hypermarkets, two general stores staff members from Lulu hypermarkets and supermarkets, and the Tendering Contract Specialist.Accordingly, the information was gathered and sorted through data collection on physical and social structures and processes (departmental, for e.g. Accounts Finance) by studying the inventory records, large samples of daily till rolls, minutes of the purchasing department meetings, interacting with customers, etc. In addition to this 3 workshops were conducted, at Lulus bespeak Office (its first Hypermarket at Darsait a metro in Muscat) with the above participants where open discussions were encouraged. pegleg 2- Problem Situation Expressed through mystifying range of a functionsRich picture/s is/are used to represent the available information which was gathered from stage 1 of the SSM process to depict the developed situation involving the human activity (Paucar-Caceres Rodriguez-Ulloa, 2007).In other words, the rich picture helps to visualise the generalised characteristics of the problem situation better. The following key characteristics emerged from the workshop with the participants of the Review-GroupPoor Inventory ManagementStock-out situationsLimited inventory storage spaceMay lose customers to competitorsPoor information and communication flows between the store outlets and purchasing departmentInadequacy of the living inventory management system.The rich picture shown in Figure 3 (on the beside page) illustrates the review groups impressions and viewpoints on Lulus problem situation.Figure 3 Rich Picture for LuluThe above rich picture in Figure 3 illustrates the concerns of the Lulu staffs and the members of the Purchasing Department in the problem situation. Dotted line indicates the lack/ lack of good communication and information flows.Stage 3- R oot DefinitionsAfter examining the rich picture in detail, a systematic description of the viewpoints or the worldviews from different angles are made. Root definitions help capture the core purpose of the activity systems to explore effectively into the problem situation and improve it (Checkland Scholes, 1990). Root definitions in effect are verbal descriptions about the systems which are being examined (Hicks, 1991). The root definitions help to describe the transformation processes and the situational-changes in the real world (Paucar-Caceres Rodriguez-Ulloa, 2007).Accordingly a single root definition was derived from the above rich picture and has been reproduced belowAn inventory management system owned by the Company with the objective of improving the inventory control through timely and efficient procuring and purchasing of goods by utilising the available resources effectively in order to sell profitably. This inventory management system will be used to manage the purcha se routines effectively through better communication and exchange of information among all the staffs for satisfying customers by providing improved customer services.The abbreviation CATWOE is consisting of the six key elements Customer, Actor, Transformation, Worldview, Owner, and Environment, are used for formulating the root definitions.The CATWOE elements for the above root definition areCustomers Lulu and its customersActors The built-in staffs of LuluTransformation alter inventory control and better communication flowsWorld view Pro mess of improved customer servicesOwners The Managing Director and ShareholdersEnvironment Market competition and the organisational sub-systems.Stage 4- Building Conceptual ModelsThe root definitions serve as the basis for building the conceptual models for the problem situation.The conceptual model (see Figure 4 on the next page) from the above root definition indicates the followingThe purchasing department of Lulu must establish an effective feedback system to improve decision making in purchasing as well as in inventory control.Effective management of information and communication flows.Motivate the staffs to participate positively in the inventory management.This feedback system should also inform Lulu about its customers needs.Figure 4 Conceptual ModelThe conceptual model in Figure 4 depicts the activities that are required to carry out the transformation processes from the above root definition. The conceptual model indicates that for timely imports to be made a number of key activities have to be carried out like inputting the customer history, maintaining an active cooperation with the overseas suppliers etc for improving the inventory management system and thus ensure that Lulus business operations run efficiently and effectively with least disturbances.Stage 5- Comparing Conceptual Models with the Real WorldThis stage is to promote constructive debate (open discussion among the Review-Group participants) based on the conceptual model. This is carried out by comparing the conceptual model with the real world and identifying the differences therein to determine any changes for implementing them successfully in such a way that the reality matches closely to the conceptual model derived from the application of systems thinking approach (Jackson, 2003).Stage 6- Systematically Desirable and Culturally Feasible ChangesThe debate in the form of open discussion is continued in this stage as well. The main aim of this debate is to identify systematically desired changes relevance and culturally feasible people oriented -. The purpose here is to determine changes that need to be made for improving the problem situation rather than the conceptual models (Checkland Scholes, 1990).The Review-Group identify the following systemically desirable and culturally feasible changes for interventionIntroduction of an up to date Inventory Management System (new application software) which is capable of keep ing the stock levels under control such that adequate (optimal) quantity levels and lines of stocks are available at all times.Ensure that the staffs are motivated to work in a cooperative way, especially, the staffs that are involved in Lulus purchasing function.It would be necessary to incorporate customer sales history for having control over slow despicable items (that still have customers who buy them solely not frequently).Although Lulu maintains an excellent rapport with all its overseas suppliers, the group felt that more active cooperation from the suppliers should be elicited.Timely imports through enhanced purchasing procedures.With improved purchasing procedures and optimal re-order sizes better discount deals from the suppliers should be actively negotiated and obtained. This could give a competitive advantage for Lulu over its rivals in Oman through competitive pricing.Increasing the capacity of storage space for holding stocks would involve capital budgeting procedur es by the Top Management.Stage 7- Taking Actions to Improve the Problem SituationThis stage involves taking systematically desirable and culturally feasible actions for improving the problem situation. The taking of systematically desirable and culturally feasible actions can help further to improve the problem situation (Jackson, 2003).Accordingly, the information gathered from the 3 workshops with the Review-Group participants was helpful for Lulu in creating recommendations that require intervention in the real world for improving the problem situation, through the possible implementation of the systemically desirable and culturally feasible changes identified in Stage 6 above.ConclusionThis paper attempted to apply the Soft Thinking approach to complex problem solving in the case of Lulu Hypermarkets, Oman through the application of Checklands (1981 Checkland Scholes, 1990) Soft Systems Methodology. Lulus operations in Oman is driven by the need to totally import all of its sto cks from overseas (which is inevitable in Oman as the industrialization is being developed only since 1995 after the implementation of privatisation by the Omani Government) and the objective of Lulu to keep all its customers satisfied with availability of goods as and when the customer requires.(Part A 3,021 words without Contents References)Part BThe present day business environment is dominated by rapid and continuous global changes, which businesses and other organisations as well as their managers cannot afford to ignore these changes today and continue (Turban et al, 2005). Further organisations have become and are becoming more complex callable to the changes in the business environment in economic activity, population, and technology as a result of which organisations need to build their ability to adapt to these changes in order to meet the challenges imposed by the changes (Sterman, 1994).Todays managers require effective strategies to facilitate their organisations to adapt to the changing business environment and allow their organisations to continue their operational existence successfully into the future (Hitt, 1996).Fifth DisciplineIn order to face the changes in the business environment an organisation need to be a cultivation organisation (Senge, 1990). A reading organisation is one which is expanding its capacity continually for the purpose of obtaining a sustainable continued operational existence into future (ibid). In other words a learning organisation is one where it continually renews itself to stay in step with the changing times in the present as well as into the future.A learning organisation is distinctly unique from the other forms of traditional organisations in terms of the following five cracks (ibid)Building shared visionMental modelsPersonal bidTeam learningSystems thinking.The Five Disciplines of Learning OrganisationBuilding Shared VisionShared vision according to Senge (1990) is the common mutual image /view which pe ople in an organisation have in regard to the activities of the organisation they are in and the organisation itself. The main purpose of the shared vision discipline is to ensure that the individuals goals and objectives are aligned with the organisational goals and objectives in order to promote a mutual shared understanding of the organisation to which they belong. The discipline of shared vision is aimed at bringing about voluntary and wilful commitment from the people in an organisation.Mental ModelsMental models are the embodiment of profoundly seated generalisations and assumptions, images and pictures as to the worldview held by individual from his or her own perspectives (ibid). In other words, the mental models allow an individual carry out introspection for deeper exploration within him or her for the mutual benefit of the individual and the organisation.Personal MasteryThis discipline involves the continual clarification and strengthening ones personal vision to facilit ate voiceless focus of human energies by learning to be patient and developing the ability to see the real world in an objective way (ibid). This is commonly the highest of human aspirations which we all strongly endeavour to achieve.Team LearningThe team learning discipline is about individuals thinking in a unified way where US is more important than I. The core of the team learning discipline is about mutual dialogue that permits s thinking together (ibid). Team learning is indispensable for the learning organisation where teams are the dominant resource for learning in order to remain adaptable to changes in the organisational environment.Systems ThinkingSystems thinking is a modern approach to decision making that is composed of valid knowledge that help in the understanding of the problem patterns more clearly to formulate better improved solutions (ibid).Systems thinking is the key discipline of the learning organisation. Thats why Senge (1990) calls it as the Fifth Discipl ine in his book. Senge states that the systems thinking discipline integrates the previous four disciplines of the learning organisation. In his view the systems thinking discipline facilitates managers to obtain a better understanding of their organisational systems in order to plan and carry out action that are more appropriate to the problem situations in question.Systems thinking implies and indicates to the modern approach to thinking about systems that systems are important (Forrester, 1994). Systems thinking can help managers to handle complex problems more effectively by allowing them to view their organisational systems holistically (Checkland, 1981). In other words, the systems thinking approach helps managers to reconceptualise complex issues as well as find viable solutions to them (Senge Sterman, 1992).Using the conventional approach, assuming linearity, managers used to break a problem into their separate constituent parts to formulate a solution by analysing each of these parts and form conclusions in a scientific way (Kofman Senge, 1993). However, the modern problem situations which managers face in todays complex world do not leave to the conventional linear approach and hence would require systems thinking that forces to look into the circularity of the variables that make up the problem situations (ibid).Further systems view manifest systems thinking approach by helping and banding people to make their mental models that can foster group learning and obtain a shared understanding of the purpose (Turban et al, 2005).Given the current globalised world it is imperative to understand the importance of systems thinking in making decisions to address the challenges imposed by the changes in the global business environment (ibid).According to Senge (1990) systems thinking has three core elements that provide the basis for systems view of the organisations. These are (ibid, p.373)Practices What you do,Principles Guiding ideas and insights,Essenc es The state of being those with high levels of mastery in the discipline.Leaders and managers can bring about the desired behaviour from their people in the organisation by focusing on the four levels of the behavioural perspectives of their people (ibid). These are (ibid)Events observable behaviours and actionsPatterns of behaviour repetitive behaviours and actionsSystemic structures the interrelationships between the patterns of behaviour andPurpose story forming mental models that keep that hold the systemic structures. outlineThe cornerstone of Senges learning organisation is systems thinking discipline and systems thinking helps the individuals to learn in their organisations with a holistic view of their organisation as a system. This is because systems thinking is a unifying discipline which integrates all the other disciplines (the disciplines of shared vision, mental models, personal mastery, and team learning) of the learning organisation to meet the challenges of cha nging and turbulent business environment in order to sustain the organisations continued existence.Systems in the learning organisation are composed of interrelated mental models (composed of each of the individuals perceptions) from its people. For a successful learning organisation to take place individuals must share their mental models without inhibition in order to obtain a coordinated understanding of the actual system holistically through a shared vision. It should be noted here that the concept of shared vision help individuals to learn more willingly and actively in a cooperative way. However, to do so managers should be free willing and equally actively extend their cooperation as well. Also managers should come out of their traditional mindsets to allow new systems thinking to get in (Senge, 1990).Fifth Discipline Lulu Hypermarkets (Muscat, Oman)Application of the Soft Systems Methodology, the soft systems thinking approach to Lulus complex problem situation, in Part A o f this paper is good example of applying Senges Fifth Discipline Systems Thinking.Global Economic CrisisThe current global economic crisis has impact Oman also. As a result the private sector as well as the public sector is facing challenges due to the global economic crisis. nonpareil of the major effect of the current global economic crisis is businesses in Oman, including Lulu Hypermarkets, are cutting back on their investments as well as their current pending capital projects.A key challenge faced by Lulu is the reduced spending pattern that has become noticeable since August 2008 in Oman (as is indicated by the drastic fall in the resale-value of the beach-side prestigious properties of the Wave project in Muscat).Lulu wrongly estimated that its sales would remain either unaffected or marginally affected by the impact of the global economic crisis. This is because about 78% of Lulus sales revenue comes from selling food and grocery items.But the inventory management problem situation coupled with reduced customer spending on food and grocery items threatened not only Lulus sales but also made it vulnerable to tough price competition from its rival hypermarkets.Together these indicate the unpreparedness of Lulu to changes in the external environment such as the one caused by the current global economic crisis.Systems ThinkingSystems thinking is the vital element for learning organisations that aim to continually have organisation alteration (Senge, 1990). And the use of systems thinking discipline implies that the organisation and its managers in question are willing to adapt to changes and meet the challenges posed by those changes to overcome them successfully.Systems thinking presupposes (although not necessarily) the use of shared vision, mental models, personal mastery, and team learning disciplines. The above SSM study for Lulu from Part A can be used to illustrate these disciplines in order to obtain a better understanding of the reduced spendin g arising from the impact of the global economic crisis.Shared VisionThe formation of the Review-Group for applying the SSM process brought together the participants from Lulus different locations in Oman, though many of them were sharing similar job responsibilities, in a face-to-face and peer-to-peer contact with one another as a group as well as workshop participants, allowed direct personal and open interactions with the members of the top management (the Purchasing Director and the Purchasing Manager). During the entire period of each of the workshop debates within the SSM process the open interactions helped one another to share their ideas and opinions regarding the problem situation, more so due to the close law of proximity of the factors that revealed the inventory management problem.In doing so the Review-Group members and the members of the top management and thus Lulu were on the same track to address the problem situation.Mental ModelsThe do work of