Pro and cons of the company’s operations
Lowes Cos Ich is a home-improvement retail stores, which deals with building materials and supplies them through various stores in the US. The company provides a whole line of merchandise for home maintenance, decorating, remodeling and repair. The company is now shutting some of the home-improvement stores with the aim of improving profitability. However, this will affect many employees working in the company. Lowes expects to open other stores in North America from the start of 2012. The management needs to make tough decisions in order to improve their profitability as well as strengthen their financial situation. The company has a plan of restructuring its store and distributes their products in three regional areas to speed up the delivery of products into the market. This will increase profitability and productivity but shutting down some stores will threaten employees, contribute to lower quality of work and loss of customers.
There are diverse disadvantages of the Lowes Company’s operations from the management view. First, shutting down some of its stores will threaten employees. In fact, many employees will feel threatened as a result of closing some of the Lowes stores. Once the employees see the management is planning to close the stores, they may leave the company in search for another job somewhere else even before the stores are closed. Moreover, this will cause employees to lose trust in the company, and it will cause general uneasiness, which may contribute to lower morale as well as less productivity in the company. Hence, the company will not make profits but rather loses thus lose their reputation.
Secondly, loss of customers due to shut down of some stores will be a threat to the company. Once the company closes some stores, they will start losing their customers. Some customers will feel disconnected because they will know that the stores will no longer perform their functions. Moreover, even if Lowes Company will open other stores, getting new customers will take time. Therefore, this will lower the profit level thus the company may be forced to operate at losses. From the prior assumptions of the company, they expect to open about thirty stores every year. This will not contribute to economic recovery in the long-term but rather in the short-run and eventually making the company to operate at higher cost thus decreased productivity.
Thirdly, problems of security issues arise once the company shuts down some of the stores and reopens others in different places. It is fundamental to protect the information of customers in an organization. Grutter (79) argues that every organization must handle or deal with the security issues of employees. This is vital because it is one way of creating a better and conducive work environment whereby employees will compete thus contributing to high productivities. Moreover, employees prefer secured environmental working conditions. Although this is more demanding, however, securing the company’s data when it is someone’s hands is vital. Thus, closing down some store and later opening more other stores would be a difficult task and this would contribute to loss of the company’s data.
Lastly, the company will produce lower quality of work. Sometimes opening new stores will reduce competence because of low level of skilled labor. Many companies perform better because of training their workers about opening new stores will force the managers to incur many expenses in training new employees for the job. This is the reason many organization retain their employees but once the company closes some of the stores, they will lose their employees. Therefore, getting new employees will enable the company to spend a considerable amount of resources in training new workers. This will contribute to lower quality of work for the first time when the new stores are opened.
On the other hand, there are few advantages revealed depending on the company’s operation from the management view. First, the unveiling plan of restructuring the Lowes stores and merchandising the company into three regional areas due to the aim of delivering new products to the market is vital. This is because it will contribute to increased competitiveness and creating more market for new products. Moreover, the company may increase their productivity although it is difficult for the Lowes Company to attract talented employees. They may increase their productivity because of many stores located in different localities. Increased productivity will contribute to high profitability, but this will be noticed in the long run.
Secondly, increased profitability as well as strengthening of the financial position of the company. Grutter (92) points out that, the goal of the company is to make more profits thus will have more resources for expanding and investing for experienced employees. Therefore, the decision of opening more stores will contribute to increased profitability because of increase productivity. Additionally, it will strengthen the financial position of the company because of higher profits. This will enable the company to meet other costs such as transport costs, operational costs and many other costs.
In conclusion, the management operation in Lowes Company will face diverse disadvantages. The company will lose their employees and customers. This will contribute to low profits within the organization. Moreover, the security issues may arise thus the company may lose vital data. Consequently, this will contribute to lower quality of work. Additionally, there will be increased profitability sue to opening of more stores. The company will increase their productivity thus contributing to increased competitiveness due to new products in the market.
Grutter, Anton. Introduction to Operations Management: A Strategic Approach. Cape Town:
Pearson Education, 2010. Print.