Dell’s initial mistake was moving away from being customer-service orientated, to focusing on generating more profit by cutting costs. They did not consider the impact this move would have on their customers and their market share. It produced negative results.
The Internal Environment was affected in the following ways:
Insufficient skills or training in the call centre, resulted in slower turn-around time to resolve or react to customer queries. The uncertain internal environment created frustrations amongst the staff, which in turn converted to frustrations amongst the customers i.e. long hold times, too many transfers, etc. This caused efficiency levels to drop.
The External Environment was affected in the following ways:
Dell, which should have been at the forefront of computer technology, started lagging behind. The company was not responding quickly enough to threats imposed by computer viruses. This frustrated Dell’s customers and therefore affected the company’s markets and its ability to compete in those markets. As a result, this created significant opportunities and threats for competitors. The unstable state of the economy could have also been a factor in Dell deciding to cut costs. But, instead of bringing in more income it backfired negatively. Call centre staff being employed on the basis of the Employment Equity Act could have limited Dell in not being able to employ staff with the necessary technical or customer service skills the company required.
Dell’s planning process would entail the following:
Dell’s first step in the planning process would have been to identify any changes that necessitate planning. These changes can occur either outside or inside the company. Dell would need to establish goals that would give direction to all major plans. This would start with the vision, which would translate into a mission statement, which would translate into long-term goals for the company. The third step was for Dell’s management to agree on the planning assumptions or premises. This would be their assumption about the internal and external environment in which their plans would operate. Dell would then have needed to develop various courses of action i.e. identify and examine the most promising alternatives. Dell’s next step would have entailed the company evaluating the chosen options by comparing the various factors in light of the premises and goals. Dell would have selected the course of action they wanted to pursue. This would mean formulating supporting plans in line with the chosen course of action. Dell’s final step would be to convert the plans into budgets. Doing this would ensure Dell had sufficient resources to carry out the plans to achieve the company’s goals.
The following are barriers Dell could have encountered in its planning activities:
Ignoring the constantly changing external environment. This posed a challenge particularly for Dell, which was not keeping up with rapidly evolving technology and the problems that was brought about by this. Assuming that conditions in the environment would remain constant could also be a mistake. Lack of understanding of the company’s strategic plan. Dell’s plan could not have been clearly explained by management, which could have resulted in staff not understanding the company’s long-term goals. Poor understanding of the principles of goal formulation. Top-level management may have set goals for the company without having a clear understanding of challenges experienced at lower levels. On the other hand, lower level management may have been allowed to set the goals, which may have not aligned itself with the company’s long-term goals. Resistance to change. Employees may not have wanted to accept the proposed changes or align themselves with the company’s new goals and vision. Planning being time-consuming and expensive. Implementing the company’s new vision and goals may have been very costly...
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