EXECUTIVE SUMMARYOBJECTIVE:The objective of the report is to identify the four functions of management performed in FergusonAssociates, a private limited company providing Management Consultancy Services throughoutPakistan.OBSERVATIONS:Ferguson Associates has a flat divisional structure, with a director at the top of each divisionaldepartment. Each director is himself responsible for carrying out the four management functions,namely, planning, organising, leading and controlling, for his department.Ferguson Associates has a mission statement that spells out its emphasis on quality, integrity, andcustomer satisfaction, and all its corporate objectives are directed towards the attainment of thismission. It has a strategy of differentiation and a policy of positioning, which it implements throughleadership tools, human resources, and customer feedback. The decision making is decentralised, and isspread throughout the levels of the organisation, with the final decision being taken by thedepartmental director.As for organising, the company has a highly fluid and flat structure that gives it the advantage ofresponsiveness to the environment. The directors have a moderate span of control, and delegation andaccountability are embedded in the structure. However, the company has its weakness in the area ofretention of the employees due to lower levels of monetary compensation.The directors are responsible for leading their subordinates as well. They are quite effective in thisregard, too. They have a team management style, and are concerned both with performance and quality,and welfare of the subordinates. They provide intrinsic motivation to their employees throughchallenging goals and creative tasks, and follow the open-door policies for communication. They havea definite corporate culture with values that again reflect the mission statement.The directors monitor the performance of the subordinates on an ongoing basis and control themthrough close supervision. They make sure that they are providing quality services and satisfying thecustomers, and also take corrective actions when the need arises. They maintain strict financial controland the subordinates are not provided the information about the net annual profitability of thecompany.CONCLUSION:The responsibility for planning, organising, leading and controlling the department and thesubordinates is on the shoulders of the directors. With the exception of a few flaws, especially in thearea of organising the human resources, these directors are performing these functions well and havethus been able to keep the company on the track of profitability and success. COMPANY PROFILEFerguson Associates is a private limited company that provides Management Consultancy Services(MCS) throughout Pakistan.Originally, these services were provided by a partnership firm called A. F. Ferguson & Co. which wasestablished in 1890. However, in the 1960’s, a separate company was formed and this part of businesswas handed over to it. A. F. Ferguson & Co. continues to provide audit and tax services. Both A. F.Ferguson & Co. and Ferguson Associates put together, are known as The Ferguson Group.For a long time, Ferguson has been a member of Price Waterhouse, which has recently merged withCoopers & Lybrand to become Price Waterhouse Coopers, now the biggest firm of its kind in theworld.LIST OF SERVICES:The management consultancy services provided by Ferguson Associates include the following: Chain Management Business Process Reengineering Computer Package Implementation Information System Risk Management Computer Package Evaluation Special Investigation Share Registration Services Executive Recruitment Services Salary Surveys Financial Modelling Corporate Restructuring
Organisational Studies System Development Development of Sales ManualEXTERNAL ENVIRONMENT:The external environment affecting Ferguson Associates can be divided into:THE GENERAL ENVIRONMENT:The multinational Price Waterhouse Coopers requires its member Ferguson Associates to keep up withthe developments taking in the international and technological sectors. It encourages its localsubsidiary to incorporate the latest business trends and concepts while also being competent withrespect to the new tools and technological methods surfacing in the international arena. Besides sincemost of its clients are MNCs with head offices abroad, they demand world class services fromFerguson Associates.Similarly with the increasing demand of the consultants in the market, their expectations of monetarycompensations are also rising.However, the legal/political or the economic environment does not have much effect on this company.It is relatively immune to changes in these sectors of the environment.THE TASK ENVIRONMENT:The consumers of Ferguson Associates are multinational companies and large local organisationsseeking management consultancy services; its sole supplier is the labor market that includes graduatesfrom IBA, LUMS, ICAP, and foreign institutions. The major competitors are Taseer Hadi & Co., SidatHyder & Co., and Shah Rehman & Co. THE MISSION STATEMENTWe strive to provide a broad and co-ordinated range of excellent, timely, value-for-money services thathelp our clients make the best business decisions. We are committed to meeting the expectations of our clients by maintaining international standards and fully exploiting the advantages of technology.As custodians of a long-established institution of national importance, our partners and staff maintain the highest reputation for integrity and quality and we will continue to strive to increase the quality and the integrity of business processes, thereby contributing to the development of our society. THE CORPORATE OBJECTIVESFerguson Associates has a very flat hierarchy, consisting of just three layers. Thus, most of the goalssetting and planning activities are handled by the top management.The objectives of this company can be classified as:STRATEGIC GOALS:The strategic goals of the company, along with the strategic plans, are decided by the directors for aterm of about 10 years. However, they are reviewed every year in the meeting of the directors to makesure that they are in line with the changing environment. They are: To continue to be the leading organisation providing the Management Consultancy Services. To attract and retain the best professional staff. To project an outstanding corporate image. To exceed customer satisfaction through the strategy of “under promising and over delivering”.TACTICAL GOALS:These goals together with the plans to achieve them, again, are devised by the top management of thecompany on an annual basis. To ensure that these objectives are achieved, mainly through marketing, isthe job of the director of each division. For this year, these goals are: To increase the revenues by 15% as compared to last year. To ensure that each section – Information Technology, Human Resource, Public Sector, Corporate Affairs, and Share Registration – shows an increment by almost the same proportion, that is, 15%. To grow in terms of clientele and staff, in order to achieve the profitability targets.OPERATIONAL GOALS:The company assigns all its projects and assignments to teams. These teams consist of consultants fromthe particular division that the project pertains to, and has a project or team leader. These teams aredissolved after the completion of the project, which takes about 2 to 3 months each.The director of the particular division assigns the deadline for the submission of the report regardingthe project to the team leader, after negotiations with the client. Hence the proposal given to the client
is the main criterion for the short-term goals. The team leader is responsible for making sub teamswithin his team, for the subdivision of duties, for specifying individual, short-term goals regarding theassignment. He is also responsible for deciding on the methodology to meet the team’s targets.However, he has to get his plans approved by the director of his division.Most of the goals to be achieved in Ferguson Associates are specific, measurable, challenging, realistic,and bounded by a specified time horizon. However, these goals are not linked to monetary rewards.The model of planning followed is Management By Objectives (MBO) whereby all the employees areinvolved in the process of making objectives and setting goals, and then reviewing and assessingsubsequent performance against these targets. GRAND STRATEGYThe grand strategy followed by Ferguson Associates is that of continuous growth. They have an overallgrand strategy of a minimum of 12% growth as compared to the previous year. Keeping in line withthis strategy, the firm internationally went through a merger to become the biggest company of its kind.CORPORATE-LEVEL STRATEGY:In the BCG Matrix, Ferguson Associates can be classifies as a star, since the business is rapidlygrowing and it is enjoying the highest market share in Pakistan. However, the other company in thesame group of companies, A. F. Ferguson & Co., is a cash cow since the auditing and tax consultancybusiness has already reached the maturity stage. In spite of this fact, A. F. Ferguson is more profitablebecause it has a higher clientele. Hence, they are both pooling in their profits to help each other.While formulating the corporate-level strategy, Ferguson Associates establishes the key variables,measures performance in those key areas, compares it with other competitors and client ideals, andsubsequently formulates and implements the strategy. Hence, to be able to do so, they maintain a highlevel of awareness, and establish client loyalties.BUSINESS-LEVEL STRATEGY:Out of Porter’s competitive strategies, Ferguson Associates is aggressively following the differentiationone. It has the policy of positioning, based on attributes and benefits conferred by Ferguson Associates,and which can then be used as a focal point for management effort to maximise penetration of themarket and to maximise profitable usage of staff. This policy results in the differentiation of FergusonAssociates significantly from its competitors, the communication of a distinctive corporate image, anda basis for integrating and focusing all business development activities.It differentiates its services on the basis of their very high quality and through the policy of under-promising and over-delivering. It also makes sure that its consultants are providing key benefits to theclients, for example, helping him make better decisions, be more successful, and have more control;enhancing his effectiveness, working closely with him (the client) as a team; giving him added pride byproviding a high quality service, etc. Hence is able to not only fight the competition but also shun thethreats from any potential new entrants.Four out of the earlier-mentioned services provided by Ferguson Associates are in the growth stage,four in the maturity stage, and six in the declining stage. However, since the firm is able to adapt to thechanging environment quite rapidly, and through time-based competition, it is still in the growth stage.Hence, its differentiation is very appropriate for this stage.Ferguson Associates has a strategy of combining marketing aggressiveness with organisationalresponsiveness to match environmental turbulence.FUNCTIONAL-LEVEL STRATEGY:The various divisions of the company adopt strategies to support the business-level strategy, that is,most of them are providing high quality services in their respective areas to differentiate the firm as awhole.IMPLEMENTATION OF THE STRATEGY:The directors use leadership qualities and human resources as tools for putting strategy into action.They pose as role model for all the subordinates and lead the way in differentiating the firm fromothers in the business. Besides, since the firm has a high turnover rate, and is often involved inrecruitment, it is able to hire according to the changing environmental conditions and on the basis ofthe strategy they adopt.More specifically, they are using the following tools to implement their differentiation strategy: Feed back marketplace attitudes Correct any marketplace misperceptions Monitor competitor activity Build client databases for targeting, contact programs, and selectivity analysis
Conduct specific research Revise recruitment criteria Revise appraisal and reward systems Hire outside professionals Hire opinion leaders Use psychometric tests Train with respect to technical, interpersonal, and tactical selling skills Enhance service delivery New product development Pricing policies Cooperation and coordination between service lines National and international networking Cost analysis and control Client criteria DECISION-MAKINGThe decision-making process in Ferguson Associates is decentralised. The model used is classical,whereby the directors take their time while making decisions and explore and evaluate all the possiblealternatives before choosing the rationally economic one.The director discusses about the acceptance of the proposal given by the client with his subordinates,then he asks them to draft the final proposal, and leaves the methodology to be adopted during thatproject up to the discretion of the team.While recruiting new employees, the director asks his consultants to interview the prospectiveapplicants and shortlist them. Then the director personally interviews the employees recommended bythe consultants, and then makes the final decision about the selection himself.The third important decision is about technology acquisition; her again, the director takes thesuggestions and recommendations of his employees before taking the final decision.Hence, the style of decision-making followed by the directors of Ferguson Associates, according to theVroom-Jago model, is CII. That is, the director asks for the suggestions and ideas of his consultants orsubordinates in a group, and then takes the final decision himself.However, the remaining decisions, that are mainly related to the assignments or projects under process,are taken by the team responsible for that particular project, with or without the approval of thedirector, depending upon the decision itself.The group participation format used while taking any type of decision is interactive, that is, themembers come together with a specific agenda and decision goals, and openly discuss the problemuntil they reach a consensus. And in order to increase the breadth and creativity of these decisions,which is important to abide by the differentiation strategy, brainstorming technique is used. That is, themembers are encourage to come up with even far-fetched ideas and present them in a non-criticalfashion, during the interactive group discussions. ANALYSIS OF THE ORGANISATION STRUCTUREDEPARTMENTALISATION:The organisational structure is quite a flat one, with only three layers of hierarchy. Besides, there is anaccountant and a receptionist who are responsible to carry out their functions for all the departments.The managing director is at the top of the chain of command and chairs the board meetings. He takescare of the organisation’s administration, and makes the decisions regarding major issues, like purchaseof new office space, etc., with the involvement of the directors. The director of each department isresponsible for the initial contact with the clients. He sees the nature of the job and the degree ofcomplexity, and accordingly formulates a team through a discussion with his consultants. The teamsare formed on the basis of availability, competence, experience, and expertise. They may be as small as3 members, to as large as 40. The consultants are the ones who are made the members of this team,with a team leader based on experience and technical ability relative to the particular assignment.Although the consultants all report to the director and are considered a single layer in the structure, andare even collectively called consultants, there are various levels among them. These, in descendingorder, are: Managing Consultant, Supervising Consultant, Consultant-I, Consultant-II, AssistantConsultant, and Consulting Assistant.The approach to departmentalisation is divisional since the consultants are not grouped based on theirareas of expertise. In fact, each division has consultants from various backgrounds, and are grouped on
the basis of a similar project outcome. Hence, the employees get a general management training andare able to develop diverse skills due to working with colleagues and team members from differingareas of expertise.FLUIDITY:The structure is highly fluid; there is an efficient manner in which the primary structure forms into atemporary workable flow, and then dissolves to allow for another team to be created. The ability to stayso flexible is one of the highlights of this firm. This feature of the structure gives the consultants theability and opportunity to work with different colleagues – providing them a change as well as therichness of ideas from different people. Every one gets a chance to act as a manager, as team leadersvary from one task to another, depending on its requirements.WORK SPECIALISATION:The work specialisation is high, with each director responsible for only a particular function, and eachconsultant for a particular aspect of the assignment, which is his expertise. In spite of this fact, there isno boredom or monotony as each assignment is different and calls for making the best use of thecreative and professional skills of the team members working on it.AUTHORITY AND RESPONSIBILITY:The consultants have to report to the team leader whenever they are part of a team and to theirrespective departmental director as well. They are monitored on an on-going basis by both of them,which serves as an effective control mechanism.The consultants have a lot of authority, responsibility and information relative to the assignments thatthey are working on. However, all the information and authority relative to the organisation as a whole,particularly the financial aspects, is confidential and even the consultants are not aware of it.ACCOUNTABILITY:There is a high degree of accountability with respect to performance on the assignments and service tothe customers. Apart from that, the consultants use their own discretion over the timings of their arrivaland departure. This laid-back style gives them the feeling of having a control over their lives and jobs,thus satisfying and motivating them as well. Hence, they make sure that they give the best in return totheir directors. This increases their performance, the quality of their work, and customer satisfaction.Even the directors have to report to the Chairman and other participants during the meeting of theboard of directors every month.DELEGATION AND CENTRALISATION:The tasks are delegated as well. In most of the assignments, the director works as a facilitator, andoverseer, and the team members do most of the work. This shows that the centralisation is low as well,as the team members are authorised to take most of the decisions regarding the assignments. And, evenwhile taking other organisational decisions like recruitment of new employees, the consultants areasked for their suggestions, which are properly considered.SPAN OF CONTROL:The span of control for the directors is 10 to 15 employees, with as low as 7 for one and as large as 25for another. The low span is not due to a tall structure, as the structure is very flat, but it is due to thefact that the organisation is a small one, and the turnover rate is high. The organisation structure, whichis organic and flexible, with all these characteristics, is suitable for a firm utilising service technology,that is characterised by intangible outputs and direct contact between the employees and the customers.COORDINATION:The coordination within departments is very high, partly due to the informal and laid-back environmentwith no communication gaps, and partly due to the use of teams. However, the coordination acrossdepartments is poor and there is a big communication gap. This is because no cross-functional teams orintegrators are used, as the departments are independent, and there is no flow of work between them.ORGANISATIONAL CHANGE:The most important change that takes place in the organisation structure is when one of the consultantsis promoted to the position of a director, and a new department is set up for him, either by starting anew service, or by dividing the task handled by one service, into two departments. However, noresistance or problems surface in these kinds of change.The other change that takes place is normally a change in the technology or the introduction of a newservice. In both these decisions, the employees are asked for their suggestions, and hence, they arecommitted to these changes and accept them readily. Besides, these changes are also accompanied bytraining of the employees to cope up with the change, and develop capabilities according to the clientneeds in the market.
The structure is so neatly and simply laid out that is allows for quick and new elements to be made apart of the organisation; hence, adaptability is one of its key features.RESOURCE ALLOCATION:As far as resource allocation is concerned, the director of each department has the authority to utilisethe organisational resources whenever needed for the functions of his department. These resources maybe capital, human or any other available. ORGANISING THE HUMAN RESOURCESThe Human Resource Management functions for each department are also handled by the directors.The consultants are recruited as the assignments come up and the need for more employees becomesevident. Hence there is no forecasting or human resource planning done. And even, when theemployees leave, the replacements are not hired until the need for doing so arises in the form of a highnumber of assignments.ATTRACTING:During the process of recruitment, the consultants conduct the screening interviews of to shortlist theprospective employees. Then the final hiring interviews are the responsibility of the director himself,who takes the final decision. During the interviews, questions relevant to the area of expertise of theinterviewee, and the assignment for which he is being hired, are asked to check his appropriability forthe assignment. After they are hired, the employees are put on a probation period for six months tomonitor their performance, during which the employee can leave or can be terminated without priornotice; however, this has never happened.DEVELOPING:The training of the employees is done through on-the-job instructions and through experience andexposure. Besides, both the directors and the consultants are also sent to various relevant seminars tokeep them abreast with the latest market trends and concepts.The performance appraisal is carried out on the first of July every year, when every director appraiseshis consultants on the basis of a performance appraisal form. Then, a counselling interview is heldbetween the director and the consultant in whom the director gives the consultant feedback on hisperformance throughout the year in a thorough and sensitive manner. These are conducted in aninformal environment with a two-way communication. However, the employee is not shown hisappraisal form, which contains the rating of employees on the accuracy of their work, punctuality,initiative, responsibility, neatness of work, organisation, career development, training of colleagues,communication, relationships with clients, colleagues, etc.MAINTAINING:The salary structure is a conventional one. The starting salary for each post is fixed, and increments areall merit-based, following from the performance appraisal. As compared to competitors, Fergusonclaims to be paying its consultants highly. However, as compared to the entire market or industry, thecompensation offered by Ferguson is quite low, which is the reason for the high turnover rate.The managers are also given cars, and medical allowance is reimbursable up to a certain level, differentfor each position. The facility of the provident fund is also available, in which 10% of the salary ofeach employee is pooled in by Ferguson itself, and the other portion is the 10% of the salary of theemployee kept back for this purpose.The employees are rarely terminated; however, those who leave, have an exit interview to determinethe reasons behind this decision. These reasons normally are the opportunities for better prospects. LEADERSHIP STYLEThe Chairman of the firm is at the top of the hierarchy, but he is not directly involved in its operations.He is only responsible for taking major administrative decisions regarding the company, while themajor role of leading the subordinates is played by the departmental heads for their respectivedepartments. These leaders focus on three primary areas: Managing business with an enterprise perspective – while exercising mutual respect and cultural sensitivity. Encouraging the creation of innovative, integrated and commercial solutions to the clients’ complex problems. Ensuring that the structure leverages the company’s unique breadth and depth to get the best from all the departments and human resources.The leadership style used in all the departments of Ferguson Associates is democratic, due to the highdegree of delegation and participation. The management style is team management, and boasts of a 9,9scale on the leadership grid, because the directors are highly concerned with both the task activities and
the welfare of the subordinates. Hence, they generate commitment among the consultants, who fulfilthe expectations of their directors as regards the assignments, and do not exploit the authority given tothem in terms of flexible scheduling.The leader-member relations are good, the leader position power is strong, but the task structure is low.This corresponds to the Situation III according to Fielder’s contingency theory that is moderatelyfavorable. Hence, the relationship-orientation is very suitable and appropriate in this situation.Again, judging it according to Hersey and Blanchard’s situational theory, the task readiness of theconsultants is High, or R4, and hence, the combination of participating and delegating used by thedepartmental heads is effective.Now, coming to the Path-goal theory, the personal characteristics or the abilities of the subordinates areexcellent and highly suitable for their tasks. However, the work environment is moderate; this isbecause, the tasks are creative and ambiguous, and the formalisation is low. In this case, thecombination of achievement-oriented, supportive and participative styles shown by the directors leadsto high performance and satisfaction. The directors are achievement-oriented because they set highgoals regarding the assignment and customer satisfaction for their teams of consultants to meet, showconfidence in the consultants, and assist them in achieving their goals. They are supportive as they useteams and treat subordinates as equals, and have a highly open communication system. They areparticipative since they encourage the involvement of the employees in decision-making and make useof group discussions. However, the reward used by the leaders are non-monetary. They do not givehigh monetary incentives, rather they focus on giving challenge to satisfy esteem needs, and praise andrecognition as a reward for the employees. This is the drawback of their leadership, since these rewardsmay not be the right ones for all the subordinates. MOTIVATIONThe major motivating aspects of jobs in Ferguson Associates are that they provide rich learningexperience and mental stimulation through challenging, varied and creative tasks. Not only that, thepersonal marketability of the consultants of this firm is quite high and this leads to better prospects forthem.However, as mentioned earlier, the monetary compensation and incentives are relatively lower. Tocompensate for this, the directors use intrinsic motivation tactics for them. They give them positivefeedback whenever they perform well, praise them highly for a job well done in front of the wholestaff, and highlight the outstanding aspects of performance to motivate them as well as the others. Andeven if the director has to give negative feedback, he calls the particular employee, discusses what wentwrong, and suggests how corrective actions can be taken. These consideration activities lead not onlyto motivation, but to satisfaction and commitment as well.In case of conflicts in the teams, the team members are encouraged to solve them themselves with thehelp of the team leader. However, if this fails, then the director gets involved, calls a meeting, finds outwhat is wrong, discusses corrective actions, and if needed, warns those causing the conflict.In order to motivate the employees by satisfying their various needs, they are given full security of thejob since people are extremely rarely fired, and they are even given extension after retirement. Thework environment is flexible, and informal, with low degree of accountability, and hence the socialneeds are fulfilled. Besides, an annual dinner is also held without failure in which not only theemployees, but the clients are also invited along with their families.The employees are also ensured of internal fairness, and procedural and distributive justice, by beingpaid fairly and equitably, solely on the basis of inputs of the employees.The employees are given recognition, responsibility and opportunities for personal growth to increasethe level of satisfaction. Besides, healthy working conditions, good interpersonal relationships andflexible policies contribute to decreasing the levels of dissatisfaction among the employees, present dueto low compensations and benefits.The jobs are highly enriched, have high degrees of skill variety, task significance, and autonomy, andthe supervisors regularly provide feedback to the employees. This leads to the critical psychologicalstates of experienced meaningfulness of the work, experienced responsibility for the work, andknowledge of the actual results of the work activities among employees, thus increasing theirmotivation, satisfaction and performance. COMMUNICATIONThere are no barriers to communication within departments in Ferguson Associates. The director ofeach department is personally involved with all his employees and has an open-door policy. Theemployees can go up to him and discuss their problems or suggestions with him any time. If a team ison a fieldwork, the team leader communicates with the director on the telephone twice a week, or if
need be more. The employees have no interpersonal barriers and are constantly involved in healthy,informal communication and social relationships. Besides, inter-team communication also takes placewhen the employees come to Ferguson once every week for administrative work (the employeesworking on an assignment spend the rest of the week at the client’s office).However, the interdepartmental communication is lacking, probably due to intense competition amongdepartments. The interaction among the directors takes place once every month during the meeting ofthe board.Most of the upward, downward, and horizontal communication is informal and verbal, to avoid anymisperceptions and hurdles that may be faced during information sharing. Besides, it also ensuresimmediate action, and immediate feedback, and consumes less time. Only the increment letters that aredistributed once every year, or the circulars announcing holidays are written. Besides, a monthlynewsletter published by Price Waterhouse Coopers is also distributed among all the employees to keepthem up to date with the latest information on the products and policies of PWC.For external communication, that is, with the clients, again, all methods of interactive coordination areutilised. The communication takes place either face-to-face, or via telephone.The leaders also follow the policy of MBWA (Management By Wandering Around), to receive first-hand information about the employees. There is a common hall to all the consultants of eachdepartment, which not only facilitates this practice, but also prevents any barriers of communicationamong employees. The team communication structures are decentralised, and team members freelycommunicate with each other and arrive at decisions together.Since the information is shared with the employees, and they have a full-time access to the director, thegrapevine is not strong and rumors are rare. However, sometimes, rumors about the activities of theclients do arise among the team working with that client. CORPORATE CULTUREThe directors of Ferguson Associates keep emphasising the culture of the organisation, which hasformal and documented values that are communicated to all the employees. To ensure alignment withthese values, the directors act as role models, and closely administer and review their consultants.CORE VALUES:The values of Ferguson Associates can be divided into:THE BUSINESS ETHICS:The company follows two important business principles and adheres to them very strictly. These are: Independence of Judgement and Advice – the services and consultancy provided by the company to its clients is free of personal or organisational biases and prejudice. Confidentiality – the most important principle for the organisation is that it ensures that the information provided by its clients is kept completely confidential.THE FOUNDATION ATTRIBUTES:These are the values that the company follows in order to remain competitive, and to satisfy itscustomers. They are essential for the very existence of this organisation. They are: Professionalism – to maintain consistently high standards, to attend to details, to always give full attention. Value for Money – to competitively price the services, to ensure that clients get more value in return for the money paid as consultancy fees. Clear Communication – to clearly state the things by translating technical points into language that is understood. Quality & Excellence – to remain committed to excellence, to hire top-notch people, to provide them with excellent training. Easy Access & Approach – to be available when needed, to be responsive when called. Positive Relationships – to establish strong personal relationships, by working closely with the client. Local Presence – to understand the national culture, and to reflect it in the dealings with the clients. Excellent Reputation – to provide quality that is sought by world class companies. Well-known – to establish a well-known and instantly recognisable name for the company. Broad Range of Services – to have a number of services.LEVERAGE ATTRIBUTES:These are the values that the company strongly adheres to, in order to have a strong competitiveadvantage; they separate the company by labelling it as outstanding against the merely competent.
These values are: Fully Shared Knowledge – to have great knowledge, and a broad, deep business perspective, to share the secrets of success with the clients. Proactive Recommendations – to anticipate the needs of the customer rather than being just reactive. Co-ordinated Services – to bring all resources to bear on the problems of the business. Respect for the Corporate Culture – to accept, respect, appreciate, and adhere to the corporate culture.THE SLOGAN:The slogan is another important feature of the corporate culture of Ferguson. It communicates theemphasis on quality and creativity to both its employees and clients. The slogan is: “Join us. Together we can change the world.” CORE MANAGEMENT CONTROL SYSTEMFINANCIAL CONTROL SYSTEM:The most important control system that is used in Ferguson Associates is the financial forecast thatprojects the company revenues on an annual basis during the meeting of the board of directors. The topmanagement then uses financial analyses of selected ratios to reveal subsequent business performance,and internal audits to evaluate the operations. The directors thus identify areas out of control and takecorrective measures.Ferguson Associates also uses separate financial controls for each department. This includes thefinancial forecast carried out by each director for his particular department and the subsequentmonitoring and corrective actions. These are based on the cash budgets also made by the directors toestimate the flow of cash into their departments on a monthly basis. The approach used is the activity-based costing and the directors estimate the costs by anticipating and identifying the various activitiesneeded to produce the services and then determining the cost of those activities. These forecasts andbudgets are strictly adhered to, and hence, provide an effective tool of controlling the resources andoperations of the organisation.All the financial information is kept confidential from the consultants, and they are not involved in thebudget and forecast control systems. However, they are aware of the fees charged for the assignmentsthey work on, since it is finalised after thorough discussions with them.TIME SHEETS:Each consultant is required to maintain a time sheet for keeping the record of the time spent at theclient’s office. It is reviewed weekly and the fee is charged accordingly. The directors normally believethe information provided by the consultants with respect to these time sheets. However, it is double-checked since the director keeps a constant contact with his consultants that ensures him of the timespent by them at the clients. QUALITY CONTROLThe directors of Ferguson Associates use systematic processes through which they regulateorganisational activities to make them consistent with expectations established in plans, targets, andstandards of performance. The control of quality is ensured through close supervision at the higherlevel. Since the control system is flexible and timely, it is accepted by the employees, and hence, isquite effective.STEPS IN THE CONTROL PROCESS:To exert effective control, the top level has integrated quality control with the mission statement andstrategic planning ideas. The standards of performance are established through the operational goals forthe employees on a project or assignment basis. These depend upon the final proposal approved by theclient and the director after discussions with the consultants themselves. Then the directors, throughobservation and supervision, determine the actual performance of the employees. This is followed byan explicit comparison between the standards of performance established and the actual performanceobserved. If the actual performance falls below the desired one, the directors hold discussions with theconsultants to find out the root cause, and also to agree upon the corrective actions to be taken.ORGANISATIONAL CONTROL FOCUS:The type of organisational control is concurrent and the directors monitor ongoing employee activitiesto ensure their consistency with established standards. The main focus is on human resources, and thedirectors ensure that they get the right training and fully understand the strict ethical values of the
organisation. The director is personally involved in these activities in order to produce the correctresults, with regard to each assignment. This is because the director personally signs every assignmenttaken up by his department and hence, is responsible for every single word of it. This is why eachdirector makes sure that the employees are strictly adhering to the firm’s policy of “under-promisingand over-delivering”. This stringent control has also lead to the firm’s image as certifying only what is“100% right”. Due to this Ferguson is enjoying an excellent reputation and a positive corporate imagesince this approach is the right one for most service organisations.CONTROL APPROACH TO QUALITY:The quality control approach used by Ferguson is the decentralised control approach, which includesthe use of social values, traditions, common beliefs, and trust to generate compliance withorganisational goals.CORPORATE CULTURE:Ferguson Associates has a strong cultural with its values embedded in its mission statement andcorporate objectives as well as in the day-to-day operations. The consistency of the values with theorganisational goals makes the corporate culture a powerful control device.PEER GROUP:The teams that work on projects are cohesive due to the informal nature of the organisation and thesmall number of employees in each department. This cohesiveness leads to peer control that pressurisesthe team members to adhere to the team norms and departmental goals.SELF-CONTROL:The self-discipline and self-control of the employees makes them keep performing their tasks up tostandard. This stems not only due to the fact that they are aware of the close supervision of thedirectors, but also due to the intrinsic motivation, satisfaction, and commitment generated among theemployees by the highly challenging, nonroutine and unique nature of their jobs, procedural anddistributive justice, and laid-back culture. It is also due to the sense of responsibility and pridedeveloped among the employees due to high degree of empowerment in their activities and decision-making.EMPLOYEE SELECTION AND SOCIALISATION:The directors carefully select individuals who are not only competent for the job, but will also be ableto fit in with the company’s culture. They are passed through a rigorous selection procedure, since theyare interviewed and screened first by the consultants and later by the directors themselves. Thisselection process, particularly the involvement of the consultants, leads to the selection of individualswho buy into the company’s goals, values, and quality traditions, and hence develop internal standardsof performance that allow for self-control.TOTAL QUALITY MANAGEMENT:Ferguson Associates has no formal focus on total quality management. It is only done through makingthe customers the first priority, through focusing on teamwork, and through the empowerment of theemployees. Besides, continuous improvement techniques are also used by making sure that the qualitydelivered on each assignment is better than the one delivered on the previous one. SUGGESTIONS FOR IMPROVEMENT The consultants should be involved in the operational goal-setting and planning process to generate greater understanding and acceptance among them. The budgets should be prepared for the whole organisation rather than preparing them individually for each department to ensure better coordination across divisions. The employees should be paid more competitively to enable the company to attract and retain the best workforce. The company should also offer long-term rewards to employees to retain them for longer periods of time. otherwise, the company can require the employees to sign long-term employment contracts with the firms after they are hired. The ratings on the performance appraisal forms should be shown to the employees to further ensure them about the absolute and objective fairness. The employees should also be asked to rate and appraise their directors in order to point out aspects where the directors could improve. The company should develop formal training programs for the consultants to keep them up-to-date with the latest trends, concepts, and technological advancements. The social gatherings involving the employees of all the departments should be held more frequently to further improve the quality of collaboration and coordination among them.
The directors should follow an open-book policy and share all the information regarding the company and its profitability to generate even higher satisfaction and commitment. CONCLUSIONOn a concluding note, the SWOT analysis of Ferguson Associates is presented below:STRENGTHS:The major strength of Ferguson Associates is the excellent reputation it enjoys that stems from the factthat it is a long-established firm that has been providing quality services throughout Pakistan for morethan three decades. It is the biggest firm of its kind in Pakistan, and is also associated with the top mostaccounting firm, Price Waterhouse Coopers. These factors have lead to a huge clientele for Fergusoncomprising of MNCs and large Pakistani firms. These strengths have also given this firm a majorcompetitive advantage.WEAKNESSES:The main weakness of Ferguson Associates is its inability to retain its employees for long periods oftime. Besides, the coordination and communication across departments is also poor due to thecompetitive element present among them. Not only that, but the company has the highest fee rates inthe industry that is responsible for the loss of assignments of firms that fail to appreciate quality.Another weakness that leads to the loss of assignments offered by the large Pakistani organisations isthe company’s strict adherence to ethical standards, due to which it does not accept the projects of thecorrupt government organisations.OPPORTUNITIES:Most of the companies in Pakistan still lack computerisation and are following old systems andmethods of doing business. Ferguson Associates excels in Computer Package Implementation andBusiness Process Reengineering that have enhanced their client base to include the organisations thatare now moving towards computerisation and restructuring.THREATS:The only major threat faced by Ferguson Associates is from the growing number of competitors. Thesecompetitors are now emerging in the industry and are being successful due to the fact that they provideManagement Consultancy Services at a much lower rate, and hence, the companies that fail toappreciate quality are attracted towards them.Hence, Ferguson Associates should build upon its strengths and the opportunities provided by theexternal environment while also working at the elimination of its weakness to fight off competition andmaintain its success run for a long time to come.