013202
Subject Lecturer: Gary
Bennett
Date Due: Friday, February 25, 2005
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p.1-8 |
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p.9-15 |
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p.16-20 |
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p.
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ORGANIZATIONAL
ANALYSIS / REPORT
GENERAL INTRODUCTION
“Richfine
Industries Limited” was registered as a trading company with the Hong Kong
Revenue Department. The company has been registered with another name “Kai Fat
Porcelain (H.K.) Limited”. The director also owned a factory with two different
names in Po On County, Shenzhen, China. (Please refer to the business card of
the candidate, App 1) The four companies actually share the same resources and
have direct business linkages. The major concern of these four companies is Porcelainware, e.g. tableware, dinner
sets, coffee mugs, espresso cups, souvenir plates…
INDUSTRY
Porcelain
manufacturing as well as trading is old business in China. The market is widely
extended but the actual number of buyers is limited. The industry itself is
quite passive, Sales can never persuade buyers to order unless they are
intending to do so. Therefore, all porcelain-related factories are facing the
same pool of client.
STRUCTURE
In
terms of external and regional
specialization, it is quite clear that
the Hong Kong Office responsible for the trading, selling and promoting the
products manufactured in the Shenzhen factory. Richfine also hold booths in
international trade fairs and exhibitions in order to extend the market; they
are not only selling their own goods but also deal with customerized designs.
Richfine
is defined as a small entrepreneur in Hong Kong. It has 5 staff only: 3 Marketing
Sales, 1 shipping clerk, 1 general assistant, and the boss who is staying in
the office for about 3 days a week. (Please refers to the App 2 for Job
descriptions)
In
short, the company has a simply structure, with the boss being the decision
maker, all staff carrying out what did the boss decided. All Marketing Sales
handle customers account on their own, whenever necessary they will communicate
with the shipping clerk, but seldom share information among the Marketing
Sales. Organizing trade fairs or exhibitions are supposed to be a team work,
but usually the director will assign a person to do all the booking and reservation
work.
There
is no manager nor Training department, nor Human Resources Department, the
director himself acts as the Manager, but when a new colleague joins the
company, the new comer is going to have “on-job learning” on his/her own, other
senior should have the self-consciousness to be a mentor.
To
conclude the structure of RICHFINE, it is
|
1.
highly specialized |
for everyone have clearly defined job
duties; |
|
2.
least departmentalized |
for there is no departments at all; |
|
3.
wide span of control |
for the director completely control over
all the staff though the actually number of staff is small, the percentage is
high (100%); |
|
4.
highly centralized |
for all decision making performed by the
director; |
|
5.
highly informalized |
for the staff should find ways to overcome
the problems they are having without further support, sometimes they should
perform works out of their professionalism |
EXTERNAL
ENVIRONMENT
The
external environment which RICHFINE in is stressful. Technological innovations had led to great changes; computerization
has been carrying out in almost all industries since the last few decades. However,
the director and managerial level in
RICHFINE are resisting to learn and to accept new technology. Computers are
only used for checking business emails and typing.
Computers
and internet also boost the pace of globalization
as communication is being more effective nowadays. On the other hand, it also brings
along keen competition when
competitors can assess the same customers. In fact, some of RICHFINE customers
had shifted their business to other factories.
At
the end of the year 2004, the high price
of oil also created stress as burning decal papers requires a super-heated environment
and thus the factory consumes large amount of fuel everyday.
However,
there is a great opportunity for import-export companies, as the importation quota in European countries
will be cancelled in 2005; all companies have chances to enter a larger
market.
To
conclude, RICHFINE is a simple, loose-structured small company characterized by
the high degree of centralization, and is now facing challenges created by the
rapid change of the world.
INTRODUCTION
TO THE RICHFINE MISSION & VISION
OVERALL
BUSINESS STRATEGIES
Business
Strategy is always related to the Entrepreneurship. For most of the Small and
Medium Entrepreneurs in Hong Kong, business
strategy is a vague concept for the decision makers. Entrepreneurship is weak as well. Mission has always been “MAKE
MONEY”, vision has been “MAKE MORE MONEY”. The company has no clearly stated long-term planning; most of the policies are set in time of urgency.
The problem is more serious when the entrepreneur is a traditional Chinese who
believes in dictatorship.
Business
strategy is absented in the factory because of the absence of management in the
factory. However, there still a 3M motto echoing in the Hong Kong office: “MAKE MORE MONEY”.
In achieving
the 3M goal, the director tried to increase Sales performance by introducing a commission
system which is linked to the sales record. Secondly, he has been holding booth
constantly for over 10 years in the famous Tendence and Ambiente Fair in
Frankfurt.
HRM
& HRD OBJECTIVES & PLANS
There
is no specific department or unit
responsible for the Human Resources, nor Human Resources Management in RICHFINE.
But it is still possible to draft the principles behind by studying the
experience of employing the existing staff.
In
the Hong Kong Office
Cost minimization is the most important objective in determining a successful
candidate. When there is personal particulars and resumes in, shipping and
accounting clerk would helps checking and sorting their resumes according to
the expected salaries with the least carries the highest priority.
Employment
is usually not planned and organized,
it only occurs when a staff leaves the
company. The new comer should entitle a degree but whatever he/she had
studied in the university is not important. The focus is “On-job learning”rather than knowledge.
In
the Shenzhen Factory
Employment for the operation level also
depends on the cost, all managers in the
factory have the authority to employ and to dismiss. On the other hand, employment for the managerial level depends
on the relationship. Similar to all other traditional Chinese factories,
director of RICHFINE likes to place his relatives or someone with family ties
in strategic positions.
However,
the average education level of the managers is high school standard, some of
them are illiterate. They are in lack of managerial knowledge, and do not have
to make strategic decisions.
From
the above description, it is obvious that RICHFINE is a company with only one
important goal: MONEY. In achieving
this goal, the director would make all decision himself; staff is an executor
of what had been decided. Human Resource
is not important in terms of literacy and creativity, but important in terms of
least cost and tight family ties.
ANALYZE
THE HRD PLANS & OBJECTIVES
As
RICHFINE does not have a Human Resources Department, the director performs the
Human Resources Manager himself; this is going to analyze his attitude and
plans in performing Human Resources Management work.
In
the Shenzhen Factory
The
director of RICHFINE is a traditional Chinese man as stated before, He likes
employing relatives in the factory. The
managerial level in the factory is formed by the Lee family or his relatives
and friends. This is because the Chinese traditional culture believes that
people should share all he owns with who he knows.
Thus,
it is not surprising to see that the factory manager is illiterate, the technical
manager does not know how to use a Macintosh, the production manager never
works in the factory but wandering around. Managers are supposed to be smart
enough to make necessary decisions, leading his/her people to overcome
different problems, help creating team spirit in order to motivate the workers.
Therefore it is no good for a company to have managers doing nothing.
A case study
The
worse became worst when the General Manager tried to rape a female worker, the
worker was given a sum of money and then fired, but the manager still holding
his title and making sexual harassments to the others. He has no worry of being
fired just because he is a relative of the boss.
After
the “rape” case, one day when that General Manager went to the Burning Unit to
investigate a strike, he argued angrily with six workers and then fought with
them.
It
seemed to be an unusual case, however, it was linked with the previous “rape”
case. One of the fighting workers is the father of the victim, he had been an
angry father after that; at the same time, all factory workers were told to
reduce their salaries and to lengthen working hours. Emotional stresses from
the above two matters resulted in this event.
From
the above case, one can easily conclude that RICHFINE is experiencing serious
problem from the poor personal quality
of managerial level in the factory.
For
the operating level, employment is directly linked with the cost. Lowest salary
expectation ranks the highest priority. Any of the managers has the authority
to employ workers in the factory, therefore, the “strategy” and “objective” of employment is too weak or completely
absent.
Work
needs certain level of skills, when the managers hire the “cheapest workers” who are skill-less, the experienced workers are
supposed to teach them.
When
the proportion of new-comers remains low, the factory can still runs well. However,
it is difficult to have further
expansion as the existing number of skillful and experienced workers is too
little to teach a large number of new workers.
Further
to this, some of the valuable workers do not want to work at such stressful
environment. They demanded for a higher
wage, longer reset hours, and the most important is that they do not want to
work under the managers. What they demand is reasonable as they need to
work six full days and their wages had never been raised for over 2 years even
when the company a considerable amount of money. Associating with the CEPA, labour forces in mainland China
experiencing a slow but steady rise of income, if RICHFINE insists not to
change its employment terms, it will loss the existing skillful workforce
gradually.
In
the Hong Kong Office
In
the Hong Kong Office, none of the employees has relationship with the director;
however, the problem in the Hong Kong Office is lack of cohesion. Everyone is dealing with his/her own accounts
but never share information with the others, sometimes the common resource is
occupied by one staff. Lacking sense of
belonging and feeling of loneliness have been long-lasting problems in the
Hong Kong Office, and affected the efficiency and effectiveness of the Sales in
the Marketing Team.
As the
director always emphasized on doing work independently, he never encourages the team to communicate with the others. Therefore,
the Sales always do the duplicated things, it leads to a waste of time and resources.
On
the other hand, as RICHFINE has no clearly stated business strategy, nor
strategic plan, staff feel valueless for what they had done. Lacking of sense
of belonging results in a high turnover
rate; staff keeps changing throughout the year. The average period the
staff stayed in the company is one year.
There
have been times when all Marketing Sales working for less than 6 months. The
most experienced one worked since 6 months ago, the newer joined 5 months ago. The
three of them can actually be defined as NEW, so there is no senior staff to
train them.
Among
these three Sales, the 6-month man is unwilling to share his experience, and
even he is willing to do so, he does not have much to share. For the newer two,
they felt excited the first day they joined, but then were confused and de-motivated by the “chaotic environment” in the
company.
All
staff has no mood to work hard, the director had discovered this, and had announced a reward scheme. Marketing
Sales can enjoy the regular salary plus a commission; however at the same time cancelled the Year-round bonus. The
commission is actually discouraging the
Marketing Team because of the limited percentage of commission. While they
are making HKD2,000,000 sales for the company, they can only share 0.25%.
Besides,
the commission will be absolutely much lower than the Year-round Bonus. Given
the fact that the industry is quite passive in terms of developing client base,
staff can foresee that no matter how much effort they pay in, the maximum they
can do is around HKD4-5,000,000. The commission they can earn is less than 0.5
of their original bonus.
This
is, in fact a decrease in income, which is contradicting
to the good view produced by the cancellation of importing quota in
European countries. Therefore, staff feels that working hard can earn money for
the company but actually earn lesser money for themselves, thus resulting a “no work no loss, more work more loss”
culture among the office. None have recognized the importance of training because
they are not staying long, training on this specific field does not help their
future career.
All
in all, the major cause for this de-motivating environment is the extremely tight control of cost and the
attitude towards money of the director, thus results in structureless business plan and unorganized
Human Resource Management.
GOALS
AND OBJECTIVES OF HR PLAN AND ACTIVITY
In
order to deal with all the problems faced by RICHFINE (Please see App 3 for a
summary of the problems), a series of activities is designed to maintain and
enhance their productivity. Below is the HR objectives and the relevant
activities.
|
Objectives
|
Activities
|
|
The
Director l
change the perception of
being a dictator in the company; |
l
decentralize decision
making and empower the staff to let employee know how things working; |
|
l
enhance the managerial
skills and interpersonal skills; |
l
have courses in General
Management and interpersonal skills, join courses under Small and Medium Entrepreneurs
Fund and enjoy financial aids from the government; (App 4 for the content of
relevant training) l
when he still has
insufficient knowledge and skills, seek advice from a consultant; l
or employ an expertise to
help him during the period of learning; |
|
l
reduce the emphasis on cost
and employ someone who is beneficial to the company; |
l
rethink and rebuild the
overall business strategy, list out all the possibilities that can enhance
job performance; l
employ people with critical
thinking and good logic to improve the job performance; l
impose Assessment tests to
address strengths of prospective candidates. |
|
The
Managers l
rebuild / modify personal
quality; |
l
set more rules to regulate
their behavior, and state clearly the “dos and donts” in the employment
contract; l
punish the hateful
behaviour sharply without concerning the personal relation ties between the
director and the manager; |
|
l
reduce illiterate
proportion among managers; |
l
encourage them to have
continuous education, set up educational fund to provide subsidiaries to
learners, and make advantage of the government aid like Continuous Education
Fund; (App 4 for the content of relevant training) |
|
l
maintain / gain a better
managerial level |
l
stop employing relatives
without interviews, interviews should be held to ensure they are the right
person for the job; l
decentralize part of the administrative
power to them when they had been examined and qualified under certain
standard, so to encourage them to behave and work better than before. |
|
The
Workforce l
improve knowledge in order
to raise their interests towards the industry; |
l
more field visit to
different unit of the factory instead of concentrate on paper work; |
|
l
provide concrete environment
to work in; |
l
raise the transparency in
administrative work and decision making, hold weekly meeting for open
discussion instead of briefing what should be done, so that staff can have a
clear idea; |
|
l
increase sense of
belonging; |
l
allow staff participation
in making decision to raise sense of belonging; l
encourage team work and
project work instead of working alone, share resources and information to
create team spirit, so that they can feel “inside” the company; |
|
l
increase sense of
achievement; |
l
raise the commission
percentage as rewards link up with performance, they have more incentives to
work hard; |
|
l
increase productivity of
the factory workers. |
l
make agreement to a certain
rise of salary and benefit; l
promise to punish the
hateful behaviour for the managers and other workers in order provide a “safe”
working environment. |
LINKS
BETWEEN HKD OBJECTIVES & THE ORGANIZATION STRATEGY
It
is supposed that commission will boost the Sales performance and booths or
fairs will help extend the market.
However,
it is not sales performance was not improved because of the actual decreased
income. To help regaining motivations,
the actual income should not be less than before. Even though there is no
Year-round bonus, the company can raise the commission percentage to a level
that there would be potential to earn more than before if people work hard. In
that way, commission is encouraging. Besides, commission is a quantified
measure for achievement.
The
second related to the strategy is encouraging project work or team work. Although
there are only 3 sales, they can be
powerful if cooperated well. For example, organizing an exhibition can be
more cost-effective if information is shared, and all sales engaged in a
particular but co-related part.
Besides,
Marketing Sales have insufficient knowledge
about the industry, so it is impossible that they can persuade customer to try
their product. So it is necessary for them to have more field visit to the
factory. But the company should retain their royalty so that they are willing
and happy to learn about the industry.
The
director had overlooked the importance
of the factory part, ignored his
role and did not recognize the
unhappy emotion of the sales. Therefore, the HRD plan has to deal with
these.
To a
certain circumstances, the problems are caused by the improper practices and
conservative thinking of the director. In order to have a completely and smooth
change in HRD plan, he should have some changes first. Work performance is not
influenced by the commission only, but also the emotional feelings, working
under a dictator and keeps not knowing everything constantly create negative
feelings, which would affect the willingness towards work. Therefore, it is
necessary for him to change his perception and allow staff participation in
decision making.
It
is known that the director himself may not have much managerial skills; therefore,
seeking advices from a professional strategic consultant is an alternative for
short time solution. At the same time, he should equip himself with relevant
knowledge for long term development.
The
factory part which should not be neglected is the support unit of the office. Management
is also important because when workers refuse to work, there is nothing to be
produced. In order to provide a pleasant working condition for them, a
reasonable rise of salary is needed. Besides, proper punishment and reward
should be introduced so that they can earn their livings safely. (Linda 2004) This
can also regulate the manager to behaviour well.
Apart
from the behaviour, the managers are suffered from illiteracy that they have no
concept of management, and have no real power to manage. This is not health for
the factory, as manager are supposed to share part of the workload for the boss
and help maintain a good condition in the workplace. Thus they have to be
trained. After they can be proved to have a certain standard, they can share
the work and raise the efficiency and effectiveness.
On
the other hand, the director should establish official procedures in
employment; he should examine the personalities, skills, knowledge and
potentialities of candidates in interviews, for example impose an Assessment
tests to address the strengths of prospective candidates. But not based on the
relationships and social ties. (Carla, 2004)
ORGANIZATIONAL
FACTORS THAT MIGHT INFLUENCE
It
is not easy to implement the plan in a conservative company.
Individual
resistance & resolution
Personal perception and bias is the major problem, most of the staff in both
the factory and the office. They do not believe the conservative boss would
like to change, or keep the changes for long. Sometimes, the changes is too
frequent seems that in the morning they are ready to change in the evening they
should be ready to have another change.
They
are not afraid of change, but as they are not
staying long, there is no good for them for changes. Although they can
adapt to frequent change, they still not like daily changes.
As a
result, changes should be carried out steadily. The company should schedule a pace of changes, and inform
the staff about the schedule.
For
the managers, they may feel de-powered
at the beginning because they need to be punished when behaving wrong, and
their established resources would be allocated. Besides, they may have weak self-esteem as the plan put
emphasis on their illiteracy. (App 5 for Reassign Workload According to
Employee Talents)
Those
who are close relative of the director may blame
him for being selfish: does not want to share his wealth with them, which
is opposite to the traditional belief. It shows disbelieve to them as well.
Therefore,
the company should explain the rationale
for every change, and tell them about the difficulties they are facing, so
that the managers understand the changes are not aimed at exposing their
weaknesses.
Organizational
resistance & resolution
Structural and group inertia is the major obstacle. The whole company has addicted to
the old habit. Besides, the personality of traditional Chinese refuse changes.
The
plan involves completely change from top to down, from personal behaviour to
organizational culture, it would be difficult
to handle such a large scale of change. But if the uncomfort is not
handled, the company will gradually loss the valuable workforce.
There
is also group norm in the Hong Kong
Office. One staff may love to change, but the high turnover rate discourages
the majority to think that change is unnecessary and have no good impact on their
future career.
In
order to deal with the problems, the company should hold open discussion to accept different opinion towards the
changes; both the employer and employee sides can reach an agreement about
the changes. Before any changes occur, the company should think carefully of the priority of different measures.
EVALUATION
An evaluation
should be carried out one year after implementation. Reminded that the overall
business strategy is to improve sales performance and extend market space, it
is assumed that the former will have direct impact on the latter, so
improvement in the latter would implies the improvement in the former.
Success
indicators will be used in the evaluation; they can be either quantitative or
qualitative indictor.
The
Quantitative Indicator
For
the factory part, shortening of average
production time, fewer false steps, fewer terminations imply the better
effectiveness of the workforce.
Whether
the number of harassment case was
reduced can be an indicator of successfully modify the managers behaviour,
as well as improving the working environment.
For
the office part, assessment quiz can
tell how much they know about the industry. Besides, how fast and how accurate the Sales answering customers in fairs or
exhibitions can be an indicator.
For
the director and managers, the result
from courses and programs they joined can be used as an indicator of how
much they have learned.
Report on team work cooperation can tell how well they utilize the resources. Besides, the
company can retrieves Sales Records
to see if the Sales performance has been improved. Moreover, the turnover rate in employment record
speaks for itself whether the working environment has improved.
The level
of dictatorship can be measured by the number
of open discussions held in decision making, whether the number of ideas accepted and objected acceptable, and whether
he provides rationale for the objected
ideas.
The
Qualitative Indicator
The feeling and atmosphere, e.g. joyful,
stressful, relaxing, tense… in the office can be a
qualitative indicator. Besides, how much did the staff smile and laugh can indicate if it is a comfortable and energetic working environment.
There
can be positive and negative feedback collected from the evaluation, what is
important is to resolve the bad one and keep the good one. All in all, it is foreseeable
that difficulties will keep appearing during the change process, managers
should be strengthened enough to keep the modifications and changes
consistently. Otherwise, all the undesirability will come back again!
Appendix 1 – Business card
of RICHFINE staff – (pictures off the
record)
Appendix 2 – Job description of RICHFINE
staff
A
summarized table for the job function they are performing.
|
Job
Title / Job Position |
Job
description / Responsibilities |
|
Director |
l
designing for the new
items; l
deciding where to hold
booths and exhibitions; l
designing how to decorate
the booths and exhibitions; l
deciding who should be
employed; l
making all decision
regarding the manufacturing processes; |
|
Marketing
Sales |
l
holding international trade
fairs, exhibitions; l
handling correspondences,
telephone and fax enquiries; l
communicating with the
factory for orders, samples; l
help developing the client
base; l
maintaining customer
relationship; l
coordinating the shipping
schedule and production schedule; l
individuals report to the
director directly; |
|
Shipping
Clerk |
l
handling shipping
schedules; l
performing accounting job; l
performing job function as
a bookkeeper; l
keeping records and filing
of the sales orders; l
reporting to the director
directly; |
|
General
Assistant |
l
cleaning, outdoor works. |
Appendix 3 – Summary table of the HR
challenges in RICHFINE
|
The
Director n
lack of leadership skills,
especially interpersonal skills; n
too much emphasis on cost; |
|
The
Managers n
poor personal quality, e.g.
lack of responsibility; n
illiteracy; n
false use of their
authority; |
|
The
Workforce n
unwilling to work u
no rewards; u
no sense of belonging; u
sense of loneliness,
negative competition; u
sexual harassments; n
insufficient knowledge
about the industry; n
no sense of achievement; n
confusing environment
(never know what to do until the last minute the boss announce) |
Appendix 4 – The content of the initial
training course (Abstracted from Kathryn, 2004)
|
Content The initial
training should give managers a road map to follow when they determine that
an employee is languishing. The training course should include the following:
J
When to begin counseling. Managers should begin counseling when
they first detect a problem with performance and should document every major
discussion in case it is needed for future disciplinary action. Frequent,
specific feedback is the key to keeping underperforming employees on track.
“Often the greatest hurdle is the inability of the line manager to accept
there is a performance problem,” says Bob Manuel, partner at Charter
Solutions, a training consultancy in Lancaster, England. “Taking the first
step to counsel poor performers is often the most difficult step for a newly
appointed manager.” J
How to find the root cause. Why is an employee failing? Is it a lack
of skills, poor work ethic or bad attitude? Or is there some non-work-related
root cause, such as illness, substance abuse or loss of a loved one? If so,
inform managers of programs available to deal with these problems (i.e., your
company’s employee assistance program), so they can advise employees. If
there aren’t extenuating circumstances, focus on the ways in which the
employee is failing—make professional observations, not personal ones—and
create an improvement plan. J
How to give constructive criticism. Forty-three percent of employees feel they
don’t get enough guidance to improve their performance, according to the
WorkUSA 2004 survey by Watson Wyatt Worldwide. “Giving performance feedback
is the No. 1 dreaded task of managers. The best manner to overcome this is
through modeling and practice,” says Jespersen. A good training course will
allow managers to role-play. J
When to terminate. If attempts to rehabilitate performance
fail, poor performers must be fired. Teach managers how to document the steps
they take to minimize the risk of termination litigation and when to
recognize that termination is the only option. “Make sure you document well,”
advises Gruber. Follow
up of the training J
Within two
weeks of the training, remind the person of the core learning. At 60 days,
ask the participant what he has learned, how he has applied the knowledge and
what has worked. |
Appendix 5 - Reassign Workload According to
Employee Talents (Abstracted from Carla, 2004)
|
How To Implement Changes HR will face
challenges in trying to move companies away from “fixing weaknesses” to
nurturing strengths. Even with top management buy in, old practices can
remain entrenched without extensive coaching. Here are some practical ways HR
can encourage even front-line managers to move toward a strengths-based
approach: J
Spend less
time focusing on employee weaknesses. J
Don’t let
employee talent atrophy—support and strengthen areas of high skill. J
Stop
criticizing so frequently; instead, praise what employees are doing well. J
Encourage and
assist all employees to identify their strengths. J
Set small,
achievable goals in areas of weakness. J
Look for
employees’ off-hours passions and ways to use them in business. J
Ask
employees what they need to do a better job. J
Train
managers how to leverage employee strengths. J
Focus
appraisals and development plans on what employees do well. J
Don’t keep
your employees’ strengths a secret. J
Train
employees in their areas of strength. |
Robbins,
S.P. 2003, Organisataional Behaviour, 10th edition, Prentice Hall,
New Jersey
Linda
Wasmer Andrews. ‘Hard-Core Offenders’, HR Magazine, December 2004, Vol, 49, No.
12
Kathryn
Tyler. ‘One Bad Apple’, HR Magazine, December 2004, Vol, 49, No. 12
Carla
Joinson. ‘Making A Good Match’, Employment Management Today, Spring 2004, Vol.
9, No. 2
Carla
Joinson. ‘Metrics That Matter’, Employment Management Today, Fall 2003, Vol. 8,
No. 4
Dave
Whittington, Tammy Dewar. ‘A strategic approach to organisational learning’, Industrial
and Commercial Training, 2004, Vol. 36
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