How company Vrtnarstvo d.o.o.

meet expectations of its

stakeholders

Course B713, TMA01

Student: Tutor:
Marko Benda Univ.- Lekt. Hanno Poeschl
M.B.A.
Zadobrovška c. 76 Wurzingergasse 1/1
SI - 1260 Ljubljana-Polje A-1180 Wien / Austria

Ljubljana, 19.12.2004
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TABLE OF CONTENTS

Question 1
1. Summary 3
2. Introduction 3
3. Description of company stakeholders 3
3.1 Internal stakeholders 4
3.1 External stakeholders 4
4. Analysis of the organizational structure and culture 6
4.1 Organizational structure 6
4.1.1 The mission 6
4.2 Organizational culture 8
4.2.1. Formal rules of the company 8
4.2.2. Informal rules of the company 8
5. Analysis of the appropriateness of the 9
structure and the culture for meeting the
expectations of the organization
5.1. Analysis of the structure 9
5.1.1. Differentiation of structure 11
5.1.2. Integration of structure 11
5.2 Analysis of the culture 11
5.2.1. Cultural differences 12
6. Conclusion 13
7. Recommendation 13

Question 2 14
References 15

Word count:
Question 1 1942
Question 2 302
______________________

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Total 2244

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Question 1

Summary

Each company developed its own culture which influence on the external
and internal behaviour to the company and employees. This behaviour
reflects to external environment and influence on company’s stakeholders
who can affect to the successfulness of the company. The company is
dependent of the external environment by providing the services and
product to its target market. Market – consumers on the other hand,
responds to the company by purchase and use goods and services
provided by the company. The satisfaction of users in long term provides
companies growth and development which in general means that
company meets expectations of its stakeholders.

Introduction

This task will be written in three parts. In this assignment I will focus on
analysis of the stakeholders, organizational structure and culture of
company Vrtnarstvo d.o.o. In first part I will describe stakeholders of the
organization, with their main interests and expectations. In second part
will be analysed the organizational structure and culture and in third part I
will analyse the appropriateness of the culture and structure with stress to
expectation of internal and external stakeholders1.

Description of company stakeholders

Each living company has external and internal environment. To those

environments stakeholders affect to efficiency of the company by affecting
with their demands, offer, providing labour and finances. If one of
stakeholder group is missing, there is no life cycle of the company and
this affect to expectation of stakeholders. Each stakeholder holds their
interests and has different expectations which are described below.

1
Write a report to your manager which analyses the extent to which
your organisation’s structure and culture help it to meet the
expectations of its stakeholders. ( Course File, Assignments OUBS 2004, p.5)

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1.1. Internal stakeholders

Company’s internal stakeholders are:
- Manager’s expectations are reputation, stock options for their good
stewardship, planning and control.
- Our 40 Employees as one of the most important stakeholders expect
to have regular salaries and respect. They also expect safety which
reflects in providing health insurance and pension safety. Our
employees are also owners and they expect profit of the company.
They control 56 % of shares. 

1.2. External stakeholders

External stakeholders of the company are:
- A customer buys our products and services. They are interested in
company’s quality and reputation, because with buying good
company products their reputation in business grows too. Their
interests are important because they need good and quality service
in long term so it’s important for them to do business with good and
well known company
- Consumers use our product and they expect that products are good
quality.
- Suppliers are also very important stakeholders because their
expectations of our ability to pay material they provide for our
production is regular and exact. Their satisfaction is a key to good
input prices and services we buy and use from them.
- Other Owners who holds 44% of shares are external stakeholders.
They are transit stakeholders because they can sell their shares and
put founds elsewhere. Their main interest is positive cash flow,
growth and value of the company. They also expect dividends.
- Investors lend us money so we can achieve better service for
suppliers and we can have investments as planned. Their
expectations are in returning capital with interests by general
agreement.
- Government expect that the company is growing, has as many
employees as possible, to bring away tax from operation, tax from
profit and other contributions company has to pay by law to country.


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External
Stakeholders

Government

Suppliers Lenders

STAKEHOLDERS Vrtnarstvo d.o.o.

INTERNAL STAKEHOLDERS

Employees M anagers

Employees as
shareholders

Consumers
Shareholders

Customers

Figure 1: Stakeholders of company Vrtnarstvo d.o.o.

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Typical stakeholders with financial interests2

Interested parties Reasons for interest

Suppliers Payment for service or material
Government Payment of taxes and
External contributions
stakeholders Customers Satisfaction
Lenders Principal and interest
Shareholders Dividends, growth, control
Manager Respect, stock options, rewards
Employees Salaries
Internal
Shareholders Profit
stakeholders

Analysis of the organizational structure and

culture

1.3. Organizational structure

Structure of the organization is based on the goals and sense of direction.

Our organization targets are achieving the target in long-term profit focus.
The consumer orientation, competitor orientation and inter-functional co-
ordination are by Jaworski and Kohli important three approaches3.

1.3.1. The mission

The mission of the organization is important in sense of direction.

Organization must know their way and need to have a vision what and
why will be look like in 2, 5 and 10 years.

We are trying to bring nature in peoples homes. We produce plants that

are capable to survive in our environment with know how and expertise
we have. We aim at customer trust and tradition. 

2
The context of management, Session 1-3, Tony Stapelton, p.1-23
3
The market – led organization, Jaworsky and Kohli, 1990

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M ission and values

Why? Broad purpose

Aims or goals
What?

Objectives

How?

Targets Specific and

immediate
purposes

The pyramid of purposes4

Our commercial organization is traditional company with 40 employees. It

was established 35 years ago with the structure which didn’t change much
in all those years. The roles didn’t change also and are clearly defined.
The structure is classical pyramid-vertical shaped. Organization structure
is functional. 

General
Manager

Financial
department
Retail Wholesale
manager Production
manager
manager

Production
planting, S ervice
watering Horticultural
packing arrangment of
transport gardens,
maintaince...

Figure 2: Functional structure

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The context of management, Sheila Cameron 2003, Session 4-11

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1.4. Organizational culture

Company’s culture looks from outside as very normal company behaviour.

When going deep in the company culture you can recognize that
employees use many different symbols for communication. They have
very stabile way of working day. This can be show in practice while they
go by different groups on day break, how they do their work by habit, and
how difficult they accept news and improvements. They are all locals and
they don’t accept “foreigners” which is reflected in company customers
and consumers. The company doesn’t have strong corporate culture,
because employees work as individuals instead as team workers as they
suppose to. They aren’t proud that they are employees of company they
owe too. The symbols like logo of the company are not important to them.
The culture in our company is our personality. We have a role culture
because our culture is impersonal.

Figure 3: Role culture5

4.2.1. Formal rules of the company

There are formal rules which define how people should behave, how they
are dressed in different uniforms defined by department manager. There
are differences but in general workers are all dressed in green and yellow
colour.

4.2.2. Informal rules of the company

Customers felt very comfortable if they are addressed in its dialect. People
use this dialect often.

5
The context of management, Handy's four cultures, Figure 5, p.5-16

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Analysis of the appropriateness of the structure

and the culture for meeting the expectations of
the organization

1.5. Analysis of the structure

First we have to ask ourselves Who we are; we are a company created

in closed system without competition. The structure of the company
was made without any normal capital oriented models.
The structure of the company is not sufficient. That’s why we have
many recurring structural problems which are:

Structural problems and solutions

Problem Solution
We have a lot of paperwork We have to make company IT
Morale is low because workers are We need to motivate people with
working too much as to level of better working conditions and new
salaries bonus politics
We have a lack of coordination We need to set up real
responsibility for managers and
penalties
We have a lack of communication We need to start with daily
between managers and other meetings with reports and working
working staff plans
Workers are lost on the field and We need to set up system for to
are dependent of management hand over working tasks
We are loosing information’s which We need to set up computer traced
are important for production system for information dispatch

Because of quoted structural problems with other important working

procedures we do not meet the expectations of the organizational
stakeholders. The structure should be more process oriented and company
should be able to recognize those problems and use mentioned solutions.
Our most important stakeholders - customers don’t like to use service
from people who are frustrated and unsatisfied.

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competition

Unhappy
stakeholders Vrtnarstvo d.o.o.
- employees
-customers
-owners

Figure 4: Consequence of structural problems6

competition

Happ y stakeholders
- employees
-customers
-owners

Vrtnarstvo
d.o.o.

Figure 5: Result of satisfied stakeholders7

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When the company have to much of structural problems began to lose the best employees, customers. If the
management doesent recognize the problem, the company will go down to the bancrupcy.
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Strong company is making market and dependence to Stakeholders and competition

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5.1.1. Differentiation of structure

As mentioned before, we have an impersonal model in organization. We

have to achieve differentiation with control in departments. We can create
a mixture of span of control with degree of job definition8. With span of
control we can achieve faster circulation of information in sublevels of
company. With exact job definition we can clearly define responsibilities of
individual workers so that they will not be able to displace responsibility to
other workers.

5.1.2. Integration of structure

When we will set the responsibilities of workers we will need to integrate

and ensure co-ordination. The way the information are shared, will be
very important for successfulness of those changes. If the information and
communication will lag behind, the changes will be without sense.

The process of creation responsibilities by setting targets and goals of any

individual employee in the company will build relationship between
workers and will integrate the routine which is today not present in
making decision process.

1.6. Analysis of the culture

As mentioned above at point 4.2 we have Role culture model, described

by Handy9. We have a very high bureaucracy. Communications are too
formalized and not followed, there is a lack of team work and we have too
many individual persons instead of team workers in middle management.

We need to start with new culture with low risk and quick feedback. Deal
and Kennedy’s model named this culture “Work hard / Play hard culture”10
The company has to work fast, recognizing news on the market and use
it’s knowledge and know-how. It supposes to get quick feedback with low
risk instead of slow feedback and low risk which is in the company present
now.
This company culture should remind all employees that they should be
proud to work in a company like we are and other stakeholders should see

8
The context of management, Sheila Cameron 2003, 4-25, 4-27
9
The context of management, Handy's four cultures, Figure 5, p.5-16
10
Deal and Kennedy, 1982, p. 108: »Fun and action are the rule here, and employees take few risks, all with
quick feedback; to succeed, the culture encourages them to maintain a high level of relatively low-risk activity.«

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that the company we are can be trusted and that their satisfaction is not
one time but always on.

5.2.1. Cultural differences

We have two different departments working on separate sites. One is

production who works on company ground the others are service and are
mostly outside the company. The service department prided them selves.
They are working late because they are working far out from the
company. There are mainly man and therefore expresses their
masculinity.

In company department are mainly women and they felt that they are in
background. They also have lower salaries, mainly because of travel
expenses they don’t have.

But they all felt that they are pushed away, because old management
didn’t accept their contribution to company and they simply send them
away with words: “Mind your own business”.

We have to motivate people to start working together as one team with

different tasks. This could be done with regular meetings and control to
sub levels.

production
workers

Company

service
workers

Figure 6: Difference between departments in company

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2. Conclusion

The pyramid model of the company structure led to this kind of cultural
differences in the company. The management should become more
familiar with other people work, listen to them and tried to involve them in
working process, including some decision making process. All employees
should become more important not just as workers in the organization,
but as a member of the company.

3. Recommendation

The analysis show, that company has a strong and rough culture and
structure based on the social system which was developed in times when
country was still under communist system. This system was with its
monopoly very advantageous for companies on that market. With changes
in market economy companies had to change quickly. Some of them, like
ours are still under big influence of those past times. Workers cannot
switch, because it’s all what they know to do.
Management has to put more importance to employees work, so that they
feel contributing in company’s achievement. There has to be levelled up
all departments no matter what the work description is. The solution lies
in new fresh and educated individuals who will be able to put news and
changes in behaviour of the company. The structure and the culture must
be changed according to normal market demands. In past market people
were looking for goods, now goods are looking for customers.

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Question 2

The company I’m general manager in is a company in which the course

ideas could be implemented immediately. The company is working at the
moment on entrepreneurship basis. It suppose to work as small or
medium company. View to stakeholders of the company is the problem
and is very wide. It’s good idea to start reorganizing company from the
beginning.
The material I have read is very useful, because I can daily – parallel to
reading/learning use the ideas in practise. I have already started to work
with new ideas token from the course books 1-6. I’m also thinking more
long-term and in the culture as well to the structure of the company I’m
trying to make changes. The structure of the company will become more
clear and “new” with describing it and starting with changes I described in
task.
First changes will be changing the way company communicates with
environment. Our trade mark will be refreshed and will be newly
positioned.
I have already ordered that visual look of the company which will become
more visible and all workers in different departments must look alike –
clothes etc. We have also started to solve structural problems with
solutions described on page 9. With this we will try to solve some
structural problems and tried to identify and find solutions; how to
become more friendly company to the external environment. The basic
concept of defining stakeholders in our company stared with thinking
which actually our primary market group is. With this knowledge we found
out, that we are too local oriented and that the products we are offering in
whole market is old and without new ideas.
We established team which discuses about daily work and tried to find
new solutions to problem on time, not later, when the solution become
behaviour.

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REFERENCES :

The context of management, Tony Stapelton (2003) Session 1-3

The context of management, Sheila Cameron (2003) Session 4-6
Perspectives on the context of management, Tony Stapelton, (2003)
Marketing management, Philip Kotler (1991)

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