Determinants of Success, Profitability, and Long-Term Sustainability of Businesses

Discuss About The Increasing Employee Participation Voluntary.

With the continued development of a global economy that is more integrated and inclusive (especially in the period of post Globalization), commercial and industrial scenarios in the global framework have been experiencing considerable dynamics. They have also been experiencing modifications so as to cater to the needs of customers globally. Newer industries and cognitions have also been cropping up with more demands for supply-side players getting involved in such industries. The continuous entry of new supply-side players in these industries has been contributing positively to the increase in the competition among the firms.  This in tum encourages the firms in these industries to develop their operational framework and implement different methods and strategies in order to keep an edge over their competitor. In the same way, they capture a larger share of clientele which in tum, helps in ensuring profitability and long-term sustainability of the companies. Having introduced the topic of study in such a manner, this activity will also distinguish the determinants of success, profitability, and long-term sustainability of the business organizations through several theories of discussion. The same theories will then be used to determine how the training of workers leads to customer satisfaction.

The primary determinant of success, profitability, and long-term sustainability of business organizations is the level of customer satisfaction for the services or commodities provided. Such, in tum, is an extremely crucial indicator for measuring the wellbeing of the company because the prospects of the companies depend hugely on their goodwill. The circumstance discussed herein mostly holds for beverage and food industries. There are several supplier side players in the food and beverages industry which, therefore, explains why there is an increased number of options for the customers to choose from. There are different ways through which companies in these industries bring in modifications in their operational framework to increase the satisfaction of the customers.  In such a case, one of the primary ways (and of which shall form the basis of this discussion) is the provision of appropriate training to their employees.

There are several literary pieces of evidence regarding the need for employee training in the contemporary commercial organizations. The same pieces of evidence are on the aspects of customer satisfaction as one of the primary determinants of profitability and sustainability of the business organizations. However, not much work has been done regarding the linkage factors. Simply put, not much emphasis is provided on the effects of training of employees to realize customer satisfaction (especially in the food and beverage industry). Such is why this activity’s literature review section will try to conduct an extensive literature review. Also, the activity will provide the objective of studying the above-mentioned linkage. In this case, the perspective of discussion will focus on the global food and beverage industry while exploring the theoretical and empirical aspects.

Theories and Empirical Evidence of Employee Training and Customer Satisfaction

This section of the report tires to study the literary evidence present in the contemporary period regarding the two above-discussed variables – the employee training and the aspects of customer satisfaction.z However, special emphasis is put on food and beverage industry within the global framework. The review incorporates extensive theoretical as well as an empirical exploration of each of these variables individually. 

Cascio (2018), (in his elaborate work on the management of human resources) describes the different employee related operational activities.  Such is the same operational activities that companies undertake. Cascio (2018) also discusses the requirements for the same. According to the author, (over the years), the need of managing the resources of the companies efficiently has been felt.  This has become extremely crucial specifically for the purpose of creating scopes of profitability and future prospects for the companies (in the contemporary competitive global business framework) (Hassan et al., 2014).  Management of resources, as per the assertions of the author, primarily includes development and management of an efficient human resource base in the companies themselves.  Such is because the productivity and efficiency of the human resources form one of an integral part of the operational framework of the companies on which the profitability, as well as the future prospects of the same, depends considerably.

The argument put forward by Cascio (2018) regarding the need for management of human resources is supported by several other literary pieces of evidence. For instance, Jehanzeb and Bashir (2013), argue that the level of global competitions for industrial and service sectors requires companies to manage and develop their human resources. Such should be done in a way that enables such companies to contribute to making a competitive edge. In such a way, companies are able to compete evenly for customers and also enhance satisfaction. One of the primary strategies which the commercial organizations can implement in this aspect is training programs for their employees. Such would ensure that workers improve their service delivery skills which in tum, would benefit the employees, clients, and employers. According to Elnaga & Imran (2013), as businesses become more integrated (and their scope expanding with time), the needs for continuous development of the skills of the employees becomes an absolute necessity both for the betterment of the employees. In this aspect, Seeney & Martindale (2012), provide their own definition of “employee training.’ According to them, employee training involves the provision of programs (both voluntary and involuntary), which are often implemented by the companies. Such programs are for the purpose of developing the existing skills of the employees or to incorporate new skills. In this case, workers are able to understand their roles better (while at work). The involuntary training programs make it mandatory for the employees to attend while the voluntary ones give them the chance to choose to attend or not to attend the same. Singh and Mohanty (2012), puts forward the bilateral benefits of training of employees in the contemporary business organizations. According to them, better trained and updated employees lead to the development of a skilled, efficient and highly productive workforce. Such workers are able to understand their jobs better and bring out more than what is expected of them.  The workers, thus, have an increased overall productivity and cost efficiency which makes them earn the trust of their clientele.  On the other hand, the development of skills of the employees also helps them in individual levels. They are thus, able to take up higher job roles and contribute positively to the development of their long-term career.

ISD Model for Employee Training

In this context the training and skill development of the employees particularly for the companies venturing in global food and beverage, the same impacts are vivid.  According to Odunlami & Matthex (2014), the global food and beverage industry has been consistently growing thereby leading to changes in demands of the customers worldwide. The industry has experienced modernizations in the aspects of innovations and application of new cost-effective. The percentage for the same is about 55%. Such numbers represent enterprises globally incorporating innovations in their productions and sales.  With the globalization of these sectors and continually increasing usage of internet, e-trading is also becoming one of the primary components of changes in this sector.  Together, an explanation towards the rapid dynamics and expansion of the concerned industry in the global framework is obtained.

According to Turi, Goncalves, and Mocan (2014), one of the primary hurdles in the expansion and future profitability of the food and beverage sector is the presence of insufficient labor force and the absence of highly skilled workers. According to the authors, the demand for a skilled employee is considerably high in this industry. Such is accompanied with the increasing implementation of innovative technologies. As per their arguments, the primary skills, which the employees in the food and beverage sector lack primarily include; the foreign language skills higher professionalism organizations and also the learning of the usage of innovative technologies for higher and better production.

There exist several theoretical models regarding the procedures of employee training in the commercial organizations, the primary ones being discussed as follows:

1. a) Instructional System Design Model

Kraiger (2014), (in his works) highlights the ISD Model as one of the primary models used for the purpose of designing employee training that in turn increases their overall performances. The model deals with the determination of the aspects of training, namely-  who, when, v. here   why, what and how. The steps incorporated in the model are as follows:

• Analyze the need for the training for their employees
• Plan the goals they want to achieve and select the strategies for imparting training accordingly

• Develop the training tools and materials accordingly
• Execute the training programs accordingly
• Evaluate whether the goals set had been reached by the training programs by evaluating the performance of the employee’s sentences
• Transitional Model of Employee Training

Another extensive and more inclusive model for employee training that can be implemented across the world is the transitional model. According to Liu et al. (2012), the missions of companies to ensure absolute success is to ensure that employers are skilled enough to ensure productivity. Schedules of employee training should encompass several procedures shown in the model below. The illustrated model is very clear. From the same, we can perceive that the missions, visions, and values of companies determine the manner in which employees operate to ensure productivity (through customer satisfaction). Such organizational values also determine the objectives for training employees alongside the implementation and evaluation of training programs. Since a company will always need to increase the number of clients to ensure profitability, keeping the customers satisfied is thus, the sole objective of such a firm.

Transitional Model for Employee Training

The term “customer satisfaction” has been defined in different perspectives by various scholars. From a commercial point of view, Saeidi et al (2015) define customer satisfaction as the measurement of ways in which the utility of goods and services meet or surpasses the needs and wants of customers. As mentioned before, continued development of a global economy and a global industrial framework, there are considerable dynamics to customer satisfaction experienced. Companies are modifying their operations to ensure that they cater to the needs of customers globally. Also, new industries and cognitions have also been cropping up with more demands for supply-side players getting involved in such industries. Such a case encourages the firms in these industries to develop their operational framework and implement different methods and strategies. In these way, companies are able to keep an edge over their competitor.

There are several reasons that have been outlaid as factors of significance regarding customer satisfaction. Such factors include:

Increase in the customer satisfaction from consumption of goods or services of any company leads to the creation of a higher goodwill of the company. Much of such goodwill is spread by the word of mouth of a happy and satisfied customer (Tu, Wang & Chang, 2012). On the contrary, lack of customer satisfaction leads to the creation of a negative customer feedback, which in turn affects the long-term profitability and sustainability of the company. Considerably, because in general, the number of options in the hands of customers is much high in almost the entire industries, companies have to be careful (Tu, Wang & Chang, 2012).

According to Khan (2012), customer satisfaction is considered important in the contemporary period as given the huge number of supply-side providers in each of the industries. Given this scenario, it becomes easier for the contemporary commercial companies to retain their existing customers than acquiring newer clientele thereby making customer satisfaction a key unit of concern in a contemporary commercial scenario.

As per the arguments put forward by Wu, Huang & Chou (2014), customer satisfaction is even more crucial in the food and beverage industry across the world. The authors put forward several assertions in the support of the same} which can be explained as:

The food and beverage industry is the industry producing and supplying raw as well as processed foods and alcoholic and non-alcoholic beverages, constitutes a crucial part of the daily commodity bundles of the customers. A significant share of the daily expense of the global population goes in buying these commodities thereby creating considerable scopes of revenue generation for the companies venturing into the supply side of these industries.

Defining Customer Satisfaction

The initial fixed cost of production in this industry is lesser compared to many other industries. Also, the global exposure of the food and beverage companies across the odd is higher than many other sectors making the level of competition among the firms in this particular sector to be considerably high. On the other hand, the demand for foods and beverages for each individual is not unlimited and with the increase in income the pattern of consumption of the individuals keeps on changing. Such factors (together) make it even more competitive for the companies venturing into this sector. In tum, customer satisfaction is made more important for the companies because a lot of the profitability, sustainability as well as a global share of clientele depend on how satisfied the customers are with their products.

Brownell (2012), in. this context puts forward the notion of healthy eating and organic production in the food and beverage industry. According to the author, in the recent periods with the negative effects of junk foods and beverages on the global health and obesity conditions coming up more and more customers are opting to shift towards organic and healthy eating. This shift in the consumption pattern also makes it important for the food and beverage companies to take into account the aspect of customer satisfaction in their production and operational framework.

Given that the topic emphasizes on the food and beverage industry, one of the widely used models (in the aspect of measurement of customer satisfaction) is the SERVQUAL Model of measurement of service quality and customer satisfaction. According to Ryu, Lee & Kim (2012), the SERVQUAL method involves multidimensional analysis of measuring the service quality of different companies and industries with the help of the aspects including the perceptions and expectations of the customers availing the products. The model is based on five dimensions of measurements as shown below.

The five primary dimensions of the SERVQUAL Model have been explained elaborately in the works of Bhat (2012). In the same studies, he argues that:

1. Reliability: – entails the ability of a company to perform the services they ought to deliver in a manner that is appropriate and without any error.
2. Responsiveness: – Refers to the presence of a prompt and willing customer service department in companies
3. Assurance: – Refers to the skills and knowledge of employees within a company alongside the ability to induce trust among the customers
4. Tangibles: – indicates towards the conditions of the facilities, tangible services, communication materials and others with the company, which can have positive implications for the consumers
5. Empathy refers to the presence of the framework where each of the customers has the provision of individual care and attention from the companies

SQ =P-E

Where;

P – Refers to the perception of the given service quality

E – Refers to the expectations of the individuals regarding tile service quality of the same.

The relationship between employee training and customer satisfaction in food and beverage service

Taking help of the SERVQUAL Model of service quality and customer satisfaction assessment, Beukes, Prinsloo & Pelser (2013), tries to assert the importance of implementation of training for the employees (in relation to increasing customer satisfaction in the food and beverage industry). According to the author, there are gaps in the model which, if not addressed properly, can lead to decrease in the level of customer satisfaction. One such gap is the difference between the expectations of the customers and the actual specifications of customer needs (with regards to service quality). The same is known as “the delivery gap”. Another gap is the communication gap. This gap refers to the difference between the intentions of the service delivery and information provided to the customers. According to Beukes, Prinsloo & Pelser (2013), to bridge such gaps and develop a robust as well as an empathetic customer service framework, it is important that companies implement a proper training framework for their employees. Such training frameworks need to be designed such that the employees can understand the objectives of the companies as well as demands and complaints of the customers. Training is one crucial way through which the above-mentioned gaps can be bridged.

Conclusion

The above review of the existing literature highlights the different traits present in the aspects of both pieces of training of the employees. It also reflects on customer satisfaction with the help of the existing theoretical and conceptual frameworks. In such a manner, it, therefore, draws the relationships between the two concerned variables. Given the presence of immense global competition and dynamics among the supply – side players (in almost all types of industries especially the international food and beverage industry), it becomes evident from the review that there lies extreme importance in the operational framework of the companies. The same frameworks should be used to incorporate and evaluate customer satisfaction and feedbacks. There also exists the need for employee training and development for the companies to achieve greater customer satisfaction. Customer satisfaction, in turn, is expected to have considerable positive implications on the profitability and sustainability of the companies, in the extremely competitive global environment.

References

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