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Foodco Holding Company – Total Quality Management

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The Asian nations provide a very stable and readily available market for any industrial company willing to take upon the challenge. Due to the highly beneficial business conditions, Asia has become one of the most intensive business environments in the world. In particular, the oil-rich countries of the Arabian Peninsula are distinguished by their favorable economic circumstances, and many corporations registered in the developed North frequently turn their attention to this region, seeking to increase their investments there. The United Arab Emirates (UAE) is one of those Asian nations that may exhibit some of the high-profile business environments that may attract numerous multinational corporations (the MNCs). Both its national economic resources and the prestige accorded to the UAE economy globally may allow this nation to develop into the leader of the 21st century global economy. As the UAE are increasingly dependent on external food supplies (Vogt et al, 2010, p.220), it is worth examining the case of the Foodco Holding Company, which performs the function of a leading food supplying company in this nation.

The Foodco Holding Company is widely considered to be one of the major global food supplies providers. Its well-developed transportation network enables the company to occupy a prominent place at the global foodstuff markets.  Some of the reasons for the Foodco’s products popularity include their adaption to the local consumers’ needs and the willingness to abide by the norms established by national regulatory institutions. The results of several surveys carried out in the UAE demonstrated that Foodco may be one of the leading sellers of foodstuff products in the nation. Due to the lengthy history of dealing with the UAE customers, the Foodco managed to develop a competitive edge in the local market, contributing to the development of the UAE food industry. Given the importance of the food industry for the prosperity and economic development of the UAE, the Foodco’s management strategies are worth researching, as they may prove conducive to rapid and successful development of the similar consumer-oriented companies both in the UAE and beyond.

Company’s background information

The Foodco Holding Company is one of the main UAE-based corporations the business activities whereof include the foodstuffs’ production and their supply to the national market.  The company launched its full operations in 2006 in the state of Dubai, being represented by its National Foodstuff Company (Foodco LLC). As of today, the Foodco Holding includes two wholly owned subsidiary companies, i.e. Oasis National Foodstuff Company LLC and FOODCO LLC (Alacra Store, 2012). The former specializes in foodstuff packing and related operations, while the latter is generally in charge of the group’s wholesale foodstuff distribution activities. 

The Foodco Holding Company is the group’s parent company, which accords to it a number of advantages stipulated by its strategic location, guaranteed financial assets, well-developed infrastructure, and an innovative business management approach.  Since its inception, the company has become one of the industry’s leaders, which found its reflection in both the growth of the new subsidiaries and the overall market expansion of the group. Naturally, such business successes did not come about as the result of some miracle but were predicated on the diligent work of its management team that proved its professionalism at both strategic and operating levels of the company’s management. Thus, it is necessary to review some of the Foodco’s key management principles that would have a more prominent impact on this pilot company’s rapid growth and development.

The company mission

The Foodco Company’s official website defines the company’s mission as follows: “To provide all Foodco Holding subsidiary companies with the backing required to achieve their core objectives, ensuring they are appropriately resourced and well managed” (Foodco Holding, 2012). Such definition may be taken as emphasizing the parental and financier role of the company as the bearer of the organizing function within the group’s general framework.

The company vision

Similarly, the official statement of the company’s vision specifically promotes the need “to support all the companies under the umbrella of Foodco Holding through the best corporate governance practice” (Foodco Holding, 2012). Such definitions may be used to refer to the need to conduct an organizational coordination that accords the key role to the Foodco Holding.

Operational management

The development of the necessary business management proficiency demands the familiarization of the management and operational strategy personnel with the quality management strategies. Of these, the Total Quality Management (TQM) would appear to be one of the approaches finely tuned to developing the business management capacities needed in order to prosper in the modern global economy.  In recent years, several management research studies over the years proved the connection between the TQM implementation and the growth and success in the competitive market environment.

While several definitions of TQM have been laid down by various scholars, the one offered by Rawlins (2008) seems to be most helpful here. In his interpretation, the TQM is regarded as a continuous process of the quality improvements aiming to circumvent each and every possibility of the production/distribution/transportation errors (Rawlins, 2008, p.5). The TQM has been consistently used by the number of the world’s important corporations, including the Foodco Holding Company.  While the TQM principles are used in diverse contexts by different individuals when referring to the social contexts of employee-manager relationship in corporate environment, it may have the universal meaning when applied to any corporation using the TQM concept. Therefore in order to develop a more positive industrial relations’ atmosphere, the top management personnel may frequently strive to implement this concept in their organizations.  In practice, the TQM encompasses a range of the management’s activities dealing with the stimulation of the employees’ participation in the organization’s affairs in order to make effective use of their skills and proficiencies, as well as to promote the production of the goods and services necessary for accommodating the customers’ needs and desires.

In its essence, the TQM is a managerial action process with its underlying functional dimensions and objectives towards achieving the roles of enhancing the company’s performance. Therefore its main objective would be the development of the necessary employees’ excellence by stimulating the growth of proper skills and proficiencies among the Foodco Holding employees so that the company’s customer satisfaction may increase greatly. As to the basic employees’ performance and the general organization of the company’s operational activities, the TQM-based management strategy purports to establish a reliable and well-organized communications network, as well as the supporting services and operations structure (Rawlins, 2008).  The TQM offers a number of benefits to the operations management strategy, as it emphasizes the role of business practices conducive of the company’s performance improvement, encourages frequent evaluation of business results, as well as long-term strategic planning.  Thus, the development of a customer-oriented, transparent and open relationship between the customers, employees and the management is the basic TQM task recommended for the improvement of the present corporate environment. The clear-sighted perspective on the TQM would enable the development of the business environment that would be conducive to sustainable economic growth and development.

Furthermore, the TQM philosophy of management is centered on the customers, which encourage members of a TQM-oriented organization to efficiently facilitate the improvement of their company’s performance through the active involvement of the employees. The specific concepts of process control, product quality, and quality improvement are all integrated into the TQM approach.

The factors conducive to the success of the TQM management strategies are based on the improvements in products quality provided that such improvements may encompass the wide array of the stages comprising the chain of production in question. With respect to this paper’s immediate subject, it should be noted that most companies apply the techniques that are clearly derived from the TQM concept. This is due to the fact that a TQM strategic plan should incorporate the vision and values found in a company’s principles and transform these into long-term goals. The successfully implemented TQM strategies contribute to the attainment of specific outcomes which an organization wants to obtain.

Challenges faced by the company

Economists cite a variety of reasons for the growth of challenges in operations and production activities of an organization or company. However, some of the principal factors influencing operations, productivity and development of a company are illustrated below;

Capital/labor ratio This variable may be considered a measure of the correlation between investment being made in plant, machinery, and tools, on the one hand, and the labor hours’ productivity, on the other.

Resources scarcity –The lack of certain resources such as energy, water and the raw materials required by the company would create productivity problems.

Workforce changes-Changes in the workforce composition affect productivity to a larger extent, because of the labor turnover.

Innovations and technology - This is the major cause for increases in productivity.

Regulatory effects- These impose substantial constraints on some firms, which leads to respective productivity changes.

Bargaining power The bargaining power of organized labor would lead to excess of output increases which would have a detrimental effect on productivity.

Managerial factors- Managerial factors are the means by which an organization benefits from the unique planning and managerial skills of its management.

Quality of work life This is a term designating the organizational culture, pointing at the extent to which it motivates and satisfies employees.

Below are the main constraints which are affected by the factors imposed above:

Marketing and sales - Foodco Holding Company possesses a strong brand image which is well known nationally. Further, Foodco Holding Company stresses the values of technology, performance, quality, exclusiveness, etc. The Foodco Holding Company proceeds from the need to communicate these values through its end products. In addition to communicating these values, Foodco Holding Company utilizes a variety of methods in order to promote the products sold under the Foodco LLC trademark. Thus, the company faces continuous challenges. Unfortunately, the challenge faced by the company from the development perspective of maintaining a balanced operations strategy role in identifying and budgeting the marketing operations and controlling them has been amplified by its lack of qualified and competent marketing personnel.

Procurement - This term refers to the purchasing of raw materials and other supplies. As it has been mentioned above, there are two major foodstuff clusters where the raw materials purchases of Foodco Holding Company are concerned, so that this is a continuous challenge for the company. Moreover, all of the production subsidiaries of the holding company are interdependent for the purposes of the purchase of raw materials and other supplies.

Technological development – The Foodco Holding Company faces constant challenges with regard to continuous technological development and innovation while bringing new products into the market. With the major challenge for the technology side of the company, there is no reliable updating of the new data, the crashing of monitoring systems, and the control over general security mechanisms in the company, including those of traffic control, so that it is not clear who can access vital company information and who lacks such access. Therefore the lack of technological advancement has lowered the company’s capacity for maintaining its informational resources.

Human resources- Foodco Holding Company has developed some specialized scrutinizing processes through which only the best available workforce in the labor market are assumed to be picked. The human resource challenge has showed that the company may be internally underdeveloped, with challenges in marketing, operational and the general and strategic management, so that the Foodco Holding Company may lack qualified and capable personnel to take upon these goals.

Infrastructure - Foodco Holding Company is renowned for its world class infrastructure which it has to maintain and further develop. Due to their products’ sensitivity, the Foodco management needs to develop better processing and transporting facilities in order to expand their customer base.

Quality standards

The international consumption standards regulate the development of the foodstuff industry in the United Arab Emirates, as without the standardization techniques the local production would be jeopardized. The Foodco Holding Company has its own standardization measures which are utilized in developing and realizing the potential of its products sold under the company’s trademark (Grant & Hall, 2012, p.348). Therefore, in the structure of the quality assurance of the corporation, the standardization monitors are present which check the development quality of its products and the way by which the resources are distributed to the local markets. Standardization techniques have enhanced the Foodco’s attainment of national significance and the development of its UAE-based subsidiaries. Furthermore, the implementation of the TQM management principle in the organization has led to the development of a strong management-employee company relationship and its expansion throughout the company’s profiling system. The management has been providing the best quality assurance in terms of measuring the corporation’s ability to expand into the international economic arena.

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