Supply Chain and Procurement Management

Comparison between the Behaviour of Leaders and Managers

Leadership is the inborn ability of a person to influence others by way of motivation to ensure they contribute towards making their organizations effective and successful. The behavior of leaders is usually described as brilliant and mercurial because they exhibit charismatic traits (Folkman 2009). This means that the personalities of leaders cannot be substituted by other aspects that determine the behavior of individuals. Managers are in charge of controlling and directing employees to ensure they work together to achieve the objectives of their organizations.

Leaders take risks that are perceived to be sometimes wild and irrational and that is why most of them are usually misunderstood by investors and employees. They are usually comfortable taking risks because they have high levels of imagination that make them think beyond what ordinary people do. The personality of most managers is usually described as rational because they focus on solving problems and ensuring that they combine the factors of production and maximize them to achieve profits for their shareholders and investors. In addition, their personalities are defined along with the virtues of persistence, intelligence, strong will and critical analysis. Leaders focus on leading people and ensuring that every person contributes to the success of their organizations by making use of their skills, experiences and abilities (Dukakis 2010). Managers manage work and ensure they coordinate all workers, responsibilities and resources to ensure all resources are maximized to generate profits. Achievements are the outcomes of good leaders who usually look at problems and devise new, creative approaches to managing them and ensure they do not affect the performance of workers and their impacts have minimal negative influences on productivity.

Managers focus on achieving positive results by creating strategies, establishing policies and ways that will create teamwork and contribute to the smooth operation of organizations. They work in coordination with other employees to ensure they collect their views, values and expectations and analyse their contributions to the success of their companies (Fuda 2013). Leaders are usually perceived to be lone-rangers and work in isolation without consulting other people for their views regarding different situations. In addition, they take and face risks without fear of making losses or compromising the performance of employees and organizations. They believe that risks are opportunities for growth and improvement; therefore, they work hard to ensure they utilize all opportunities for positive gains.

However, managers are risk-averse because most of them do not know how to manage challenges without affecting the performance of their organizations and employees (Chartered Institute of Purchasing and Supply 2014). Leaders play passive roles and facilitate decision-making by ensuring they create avenues where other employees can meet and discuss ways of moving their organizations towards improved performance and higher profits. However, managers take active roles and participate in key decision-making to ensure they discuss with other employees the performance of their organizations.

Leaders aim at transforming their organizations through consultative and participative approaches while managers do so through dictating and authorizing their subordinates. The power of leaders is exercised through charisma and influence while managers use their positions and formal authority to control their subordinates. Leaders appeal to the hearts of their followers and this motivates them to achieve their objectives easily. On the other hand, managers appeal to the heads of their subordinates, and thus they aim at ensuring they understand the expectations of their organizations and work to achieve them.

Sources of Power According to French and Raven

These authors identified five sources of power as legitimate, reward, coercive, expert and referent. They explain that legitimate power has the formal right to make demands and expect the subjects to comply with the policies set. Reward power is derived from the ability to compensate individuals that comply with policies while coercive authority is based on the ability to punish people that do not comply with the rules established to regulate their behavior (Ranadive 2012). Expert power is derived from an individual’s experience, education and skills that make him unique in society. Referent power is the ability to influence others based on how they like an individual.

Application of These Sources of Power in the Purchasing Department

This department has numerous tasks that require individuals with the ability to determine the directions that suit organizations. Managers can use their legitimate power to influence the decisions of the purchasing department by ensuring they dictate the choice of suppliers. In addition, they can use their expert power to advise this department on the best ways of selecting the choice of products or services that their organization wishes to specialize in offering them (Jamison 2013).

Customers can use their coercive power to influence the activities of this department. They influence the activities of this department by refusing to accept the staffing policies that an organization uses to select workers for their clients. The accounts and managerial departments may use reward power to influence the performance of the purchasing sector. They can evaluate the recent performance of their organizations and propose an additional allocation of funds to the purchasing department (Morse 2008). In addition, the quality assurance department can also determine and affect the success of the purchasing sector by proposing changes of suppliers or reduction of some inputs to ensure the quality of its services is improved.

How People Working for Suppliers Use These Sources of Power with Their Customers

The supply department determines the availability of goods and services in the market. This department may be influenced by managers who use their legitimate power to compel it to increase or decrease the supply of products and services to customers. This means that the supply department will have no choice but to follow what managers tell its staff to do. Failure to obey this regulation may lead to penalties imposed on all or those workers that are responsible for making the requested changes. Clients have the reward power and they can use it to determine the success or failure of the supply department (Joyner 2008).

These stakeholders buy goods or services produced by an organization and if they increase their demand this means that a company will be forced to supply more. In addition, they set high standards and ensure organizations supply goods and services of high quality. This means that they can use their coercive power to force organizations to supply goods and services that meet their standards (Kellerman 2010). Lastly, people working for suppliers can use expert power to determine the future consumption trends of customers and advise their bosses on what to do to maximize the expected demand. In addition, they can also use their referent power to determine what suppliers should do to ensure they are better placed in positions where they can compete effectively with other suppliers. This will give them time to plan and know what to do to ensure they attract and retain large markets.

What is a Project? Differences between Purchasing in a Project Environment and Purchasing Normal Goods and Services

A project is a plan that has interrelated tasks that are supposed to be executed within a specified period. There are many differences between purchasing in a project environment and purchasing normal goods and services. First, purchasing in a project involves the acquisition of essential skills, tools or machines that will be used to facilitate the production of goods or services (Pristorites 2013). Therefore, their qualities will determine the value of a service or product produced. This means that purchasing in a project environment requires proper consideration of the quality of inputs acquired by an organization.

The quality assurance department is involved in this process to ensure an organization purchases inputs that will add value to the products or services of an organization. However, purchasing normal goods and services does not require total and keen consideration about the quality of inputs that an individual requires. Most inputs must meet the general quality standards for them to be available on the market for human consumption. In addition, this purchasing is supposed to meet short-term goals and this means that there is no value added to the input. Secondly, purchasing in a project environment does not necessarily mean that the goods or services bought are used for production purposes (Harvard Business Review Press 2014). In fact, most of them are usually used to facilitate the production process and are not in themselves part of the products or services produced. For instance, an organization may decide to open a new branch and this means that it must buy construction materials, stationery, furniture and hire workers. Therefore, their costs are recovered once the new branch starts to operate and generate profits. This means that the cost of acquiring inputs incurred in the purchase of goods or services in a project environment is recovered over a long period.

On the other hand, purchasing normal goods and services does not incur losses and there are no expectations of profits (Frame 2013). Most of these are consumer goods and services and thus there is no expectation that the money used to acquire them will be recovered. Therefore, these are aids that help people to live comfortable lives and do their activities without worrying about their health, wealth and security. Thirdly, purchasing in a project environment is considered an investment because the value of the inputs acquired cannot be destroyed (Goleman 2011). The value of input like land appreciates over time and this means that investors will recover their money and make profits when they sell their land on high value at later dates. However, the value of inputs like vehicles, machines, furniture and buildings depreciate with time and others become obsolete. Therefore, they will not fetch good prices when they are sold later.

However, investors usually harvest a lot of profits generated by the combined efforts of these inputs, employees, raw materials, services and products. Therefore, they recover the money they used in the initial processes of establishing their investments by the time the value of their assets depreciated. On the other hand, purchasing normal goods and services does not involve the generation of profits or securing money for future use. This purchasing is used to satisfy urgent basic needs and thus their lifespan is very short and the nature of their use means that their values are destroyed. Therefore, they do not secure the financial future of purchasers.

How a Project Management Approach to Procurement Activities Can Deliver Benefit to ENOC

organizations rely on their project management departments to ensure their plans are implemented to benefit them. ENOC specializes in supplying indirect commodities like labor supply, transport, IT solutions and consultancies. A project management approach to procurement activities can deliver benefits to ENOC in the following ways (Kerzner 2013). First, project management will help this department to identify an undesirable or unacceptable situation that complicates the processes involved in procurement. The department will present issues it thinks are impediments to its success and this will ensure there is coordination with the project management sector to evaluate the effectiveness of the highlighted issue. For instance, the procurement department may realize that consumers have changed their tastes and prefer using public transport vehicles to private ones. This means that there will be less demand for private vehicles and this will have a negative impact on the sales of this company (Project Management Institute 2007).

Therefore, this department will conduct research on how to increase the sale of private vehicles, even though consumer trends show a decline in the popularity of these models. Therefore, it will start offering private vehicles at cheap prices or increase the benefits that customers will get when they buy them. However, it will be important for the department to embrace a project management approach in managing this issue to ensure the problem identified is real and affects the ENOC Group. This approach will enable this department to identify the weaknesses of the use of private vehicles that make them less popular. Therefore, it will ensure it buys vehicles that are cheap and economical in fuel consumption. This measure will ensure the procurement department identifies car models that will have high stock turnover despite the change in consumers’ preferences.

Secondly, a project management approach to issues affecting the procurement department in ENOC Group will help this sector to clarify and test the importance of a new project in the company. In addition, it will enable this department to examine ways of implementing the new project without inconveniencing other departments or the company (Heagney 2011). For instance, if this department decides to invest in fuel efficiency and cheap private vehicles it must ensure that their qualities do not compromise the standards set by ENOC Group. In addition, if it decided to use cheap staffing or transportation solutions it has to ensure that the quality of services offered does not compromise the expectations of ENOC Group clients.

The approach will enable this department to explore various alternatives of implementing the project and know which one is the best. Moreover, this approach will define the scope and outline actions to be taken to ensure the project does not become a white elephant in the company. It is necessary to explain that a project management approach should be used in the procurement department to ensure there is no ambiguity of projects and this will limit the chances of initiating and implementing projects that create conflicts with the roles of other departments (Feist 2013). Lastly, this approach will help the procurement department to evaluate the performance and achievements of its new projects. Repeated assessment of the effectiveness of projects will help the procurement department to know how to improve them to ensure they are cost-effective and generate reasonable profits for ENOC Group.

John Kotter’s Eight Step Change Model

Change is a process where an organization decided to introduce new policies, practices, systems, people or departments to ensure it maximizes the abilities of its resources for gainful reasons. This includes the introduction of production, marketing and distribution practices that will ensure there are minimal costs involved in their activities. Change is inevitable in organizations because it enables them to remain relevant in terms of producing goods that meet consumers’ needs, compensating employees reasonably and using legal production, marketing and advertising strategies to promote the popularity of their brands (Kotter 2012). John Kotter identified the following eight states of change that must be given appropriate attention to ensure organizations achieve their goals.

First, he explained that the first step towards introducing change in organizations is to act with urgency. Change necessitates organizations to move with speed and address weaknesses or issues that expose them to inefficiencies. Therefore, Kotter proposes that organizations should move with speed and ensure they address issues that need to be changed to ensure a company produces goods or services that meet the required standards (Cummings 2014). However, those companies that take too long to initiate changes hardly achieve their objectives because of a lack of competitive advantages. The procurement department of ENOC Group should be keen on checking its practices to identify ways of improving the quality of its services to meet market demands.

In addition, he noted that change does not come spontaneously in organizations. Therefore, there is the need for managers and other key stakeholders to develop a guiding coalition that will steer their organizations to make the required changes. This means that the procurement department of ENOC Group should implement its changes in issues like order quality and quantity through the combined efforts of various stakeholders in this organization.

Developing a change vision is another step outlined by Kotter to ensure organizations achieve their objectives. Change vision includes all aspects that will ensure all employees and stakeholders understand the need to introduce changes in their organization. This stage will ensure the employees of ENOC Group’s procurement department understand what this organization plans to do and this will help them to pledge their support to ensure the anticipated changes are introduced and implemented without resistance.

Moreover, he proposed that communicating a vision-buy-in is another important stage of implementing change in organizations. Kotter considered this the most important part because it determines the level of understanding and acceptance of new aspects by employees. ENOC Group focuses on offering service-oriented consultancies that experience regular changes; therefore, its employees must accept, understand and support changes to ensure this organization achieves its objectives and clients are advised appropriately regarding the changes.

His fifth stage involves empowering broad-based action that will ensure all departments and stakeholders are accommodated by the changes introduced into an organization. Kotter argued that there is the need for all stakeholders to support changes in organizations through various ways including offering their experiences, skills and knowledge on how to implement them. This makes it easy for organizations to implement changes and track their effectiveness in improving their performance. ENOC Group has various departments that should be consulted and involved when introducing and implementing changes.

Moreover, he explained that the generation of short-term wins is another important stage in the introduction of changes in organizations (Anderson 2010). He argued that managers should ensure that changes have short and long-term benefits that can be seen by employees and other stakeholders. ENOC Group should focus on short-term gains like changes in customers’ attitudes towards its new changes and how this affects its performance. Kotter considered short-term benefits to be very important because they create the impression that the change introduced will achieve all its objectives and this will win the support of all stakeholders.

Kotter explained that not all changes are usually embraced positively by all stakeholders in organizations. He argued that change initiators must expect resistance from some managers and employees; however, they should never give up and think that their contributions to change their organizations are irrelevant. Kotter explained that resilience and focus are important in ensuring that change initiators do not give up on what they start. ENOC Group has experienced managers that should work hard to initiate changes and ensure they are embraced by all workers. They should not give up easily, even when other employees resist their moves.

Lastly, he explained that managers and other stakeholders should make change stick in their organizations. Kotter explains that the introduction of future changes will not face a lot of resistance if managers introduce and maintain a tradition of making changes to stick in their organizations. ENOC Group needs to develop a tradition of initiating changes because it specializes in offering services that change depending on consumers’ demands and trends.


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