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An acute concern for hygiene and good health led to the establishment of Ecostore. It began in New Zealand, with the sincere effort of doing everything organic by Malcolm Rands and his wife Melanie in 1993 (Ecostore.com.au. 2016). They aimed to produce healthier products with less or no chemical elements which are used on the human body on daily basis. Eco-sustainability is the main focus of Ecostore and through this way, they have grown as one of world’s leading organic skin care product despite beginning in a relatively smaller eco village in New Zealand. Nonetheless, Ecostore commenced a movement of promoting sustainable products for skin care, cleaning and drying, body care and baby care (Ecostore.com.au. 2016).
Very quickly, Ecostore has spread across European and American continents apart from the Australian continent. By the end of the 1980s, consumers all over the world became fed up with the excessive presence of chemical and toxic elements in daily health care. This dissatisfaction widened the path of evolving sustainable products and green chemistry. Ecostore is the outcome of this evolution. Each product of Ecostore is organic and free of chemical components and this is how Ecostore became popular among consumers first in Australia and New Zealand and then all over the world. It started with selling products by receiving orders via emails based on product catalog and now Ecostore products are available in more than 900 supermarkets all over the world (Ecostore.com.au. 2016). They use less raw ingredients to achieve the best results in a product and most importantly they use organic and biodegradable packaging for dispatching their products to the markets. This paper aims to conduct a management analysis of Ecostore to understand the current business status of the company.
Organizational behavior in a company depends on some significant factors. Organizational behavior signifies the internal environment, their beliefs, their work ethics, employee relation and the signature work culture of a business organization. For Ecostore, their signature style of working is dealing solely in plant based or non-chemical products (Adler and Gundersen, 2007). The internal environment of the company promotes a very deep inclination to sustainable products. Moving on to different types of organization behavior, Ecostore is very much concerned about their interpersonal behavior and group behavior. Interaction among the employees in an organization is inevitable; thus, Ecostore emphasizes on having a cordial socialized attitude of all the employees to facilitate organizational activities (Bowditch et al. 2007).
Talking of group behavior, teamwork is the key method in Ecostore to come up with innovative ideas of products and then dispatching them to the consumers. As Ecostore’s sole focus is sustainable products, inevitably they give high priority to ethical aspects of business. In spite of being an optional choice in New Zealand, they fully disclose the product details on packaging. Moreover, the company employs organizational behavior to boost company management as some of its essential aspects such as leadership, motivation communication, and change management (Need, 2006). The founder of Ecostore, Malcolm Rand focused primarily on the well-being of humans when Ecostore was just a start-up. Then, it was only his leadership that motivated Ecostore, now considering the strength and expansion of the company, good communication, and coordination among the number of leaders has been carefully adapted to maintain company’s mission and vision that are to protect human health from chemical junks and cater chemical free health care products all over the world (Adler and Gundersen, 2007).
Human resource management or HRM is the strategic approach to managing and navigate the employees or manpower in a business organization to leverage profitability and productivity. Being a multinational company, Ecostore must have an efficient HRM which is aware of all the good practices. HRM practices are intrinsically related to organizational innovation. Every business must evolve out of what it formally was; otherwise, it is very hard to sustain the business (Armstrong and Taylor, 2014). Additionally, consumers also require modification and innovation in the product range they use. The need of organizational innovation lies at this point. Organization innovation has some similarity with change management. But it is not the same as the former is an eventual process over the time and the latter is a deliberate incorporation to improve a company’s business. Ecostore needed organization innovation as their business quickly expanded throughout the international spheres (Daley, 2006). Ecostore is an Australian continent based company and when it expanded to other continents such as Asia, America, and Europe different business approaches are very necessary to satisfy the different tastes of customers. However, the specific HRM practices of Ecostore consist of three different exercises in general and are modified in international business if needed:
Ecostore took up international business slowly but their business growth on international business has been very steady. However, in the capitalist continent like America, they struggled to attract consumers as the local government has not been that assistive during their business expansion. But over the time, the popularity of organic products hit the American continent from Asia and this Australian company very soon founded a strong base for international business in these continents (Buckley and Casson, 2010).
The approach of Malcolm Rands was very personal and philanthropic. The obstacles faced by Ecostore are mainly clashes between their own business policies and the local government policies. Business and government are said to be dependent on each other. Government inevitably imposes multiple taxes and customs on a foreign business setup. Sometimes, this makes companies like Ecostore very hard to keep up their business ethics as this compels them to focus on the profitability (Stock and Watson, 2005). Apart from the local government policies, an international business also faces the laws and policies of a state when it comes to import and export. Ecostore does not have manufacturing companies in all the countries and in those cases they have to depend on local distributing companies to sell in the markets (Drucker, 2011). This is another complication of international business. Furthermore, Ecostore at the initial level of setting up their international business was challenged with lack of promotion. In the early 1990s, e-commerce was not evolved and in different continents, Ecostore had to depend hugely on promotion. Promotion increases production cost and sometimes they did not have an option left but to raise product price as compromising with product quality was not an option for them (Drucker, 2011). This so far concludes the role of international business in the business expansion of Ecostore.
It has been repeatedly mentioned that Ecostore produces only organic health care products. The use of organic raw materials makes the production system more manual than mechanical. This gap of technology has been a real drawback for Ecostore. Shifting to a complete mechanical production process was much delayed in Ecostore (Gassmann, 2006). The role of technology requires huge employee training and hike in cost. Additionally, a whole new department was included in the organization. This has been a major change for the internal environment of Ecostore. As stated earlier, resources of organic raw materials are mostly nurtured manually and then transforming them into usable products through technology became a concern for Ecostore management. However, through the following points, the impact of technology on the business of Ecostore so far is being presented for better understanding:
Innovation is considered as a mechanism in entrepreneurship. Ecostore is a great exemplification of the true definition of entrepreneurship. They took the risk of coming to newer business frontiers on a global scale as the kind of products they produce that completely depends on their suitability (Bessant and Tidd, 2007). This is the point innovation is needed in any business- to make the product range globally acceptable without losing the essential characteristics. Ecostore always aimed to provide healthier products and to achieve this they have rejected to add any kind of chemicals in their products when the competitors of Ecostore were already far ahead with attractive promotion, packaging, fragrance, and price (Zhao, 2005).
Ecostore innovated consumer’s conventional idea about daily body care products. They spread the awareness how much poisonous the chemicals are for the human body especially the kids. Their official promotional video on YouTube uses the simplest animation to how they started their fight against the ‘nasty chemicals’ first in their eco-village and then gradually all over the world (ecostoreNZ, 2013). So basically their innovation lies in their simple approach to the customers and their products. Talking about entrepreneurship, initially, Malcolm Rands started Ecostore as a small startup company in New Zealand. Over the time, he expanded it all over the world. The risks he had to face during this expansion process are mainly getting used to with different national economies (Olson et al. 2005). Ecostore seems to follow some essential innovation traits in their business:
All the essential characteristics of entrepreneurship are not compatible with Ecostore. For example, there is much scope of being heterogeneous in their business. All of their products are strictly related to daily external health care. The management coordinates with the employees very empathically so that the employees feel recognized and motivated (Zhao, 2005). That is why in all branches of Ecostore, they conduct general meetings to have an uninhibited interaction from both sides. The versatility and business skills of Malcolm Rands are undoubtedly commendable otherwise; Ecostore would not have reached this global scale.
In May 2016 Random and Melanie Rands sold out Ecostore as they wanted to concentrate more philanthropic works (The New Zealand Herald, (2016). This change management is surely going to affect the business of Ecostore all over the world. The consumers may not feel the impact much but as the company has so far run on completely on the principles and ethics of Rands couple, the employees have to cope up with the new management. On the other hand, the new management has to also understand their existing employees without damaging the productivity and profitability of the company. This paper will recommend some strategies to the new management for the better future.
iii) The change should be uniform in all branches of Ecostore. Notably, Rands has maintained the ethical uniformity throughout. In this respect, the new management can start taking feedback from the customers regarding their performances. It is not necessary but it will give a way to interact with the employees on a regular basis and in this way the new management will learn much-unwritten business information of Ecostore. For example, in this way they can learn how has been the work environment during Rands’s time. The financial history of Ecostore shows that they remained mostly unperturbed during the inflation period because at that time the old management concentrated more on retaining their faithful customers rather than creating new customers. Moreover, the code of conduct inside the company is more informal even with the managerial level. Rands kept it in this way as he wanted to add more humane elements in his products.
Thus, it can be concluded the new management has both advantages and challenges at the same to take Ecostore to a higher dimension. Rands always treated Ecostore from a philanthropic point of view, as he wanted to provide better health care more than anything else. In this competitive age, it is very difficult to stand by one’s principle. But he did it. However, this business stance has slowed down the process of customer creation. Nevertheless, Ecostore has a strong customer base and the new management has to raise the standard set by Malcolm and Melanie Rands.
This paper accounted a detailed analysis of the management of Ecostore and justified explanation. The first section describes a thorough background study of the company Ecostore. Next, the discussion moved on the role of organizational behavior. This section implied that Ecostore has never been hardcore profit-centric. The HRM practices the company exercises are all compatible with the mission of the company that is providing chemical free health care products. The international business strategy of Ecostore was slow but effective whereas the technological management strategy was static compared to Ecostore’s competitors. Innovation entrepreneurship of this company analyzed and it can be seen that Rands’s philanthropic nature left marks in every aspect of the business. Overall, it can be concluded that focus on quality rather than profitability did not hamper the business of Ecostore much.
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