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PREPARING FOR THE EXAMINATION
enter the market and offer a rival service. With this in mind CTC will need to
consider the customers as an important stakeholder group whose values must also
be addressed. Failure to do this might lead to a signifi cant loss of market share.
Although the relationship with CTC is now ‘at arms length’ it is likely that the
government will want CTC to capitalise on the opportunities offered by overseas
expansion and to generate signifi cant tax revenue for the good of C. The share-
holders are more likely to want CTC to demonstrate signifi cant, profi table, growth
and a reward in terms of both dividend and share price increases. This may lead to
a confl ict of stakeholder objectives that must be managed by the directors.
The customers will still want to receive a level of service at, in their perception,
a cost effective price. This will also lead to a confl ict with the interests of share-
holders, who will necessarily seek a growth in profi tability. Increasing prices may
be one of the ways to achieve higher profi ts.
Now that CTC has become privatised it will be subject to the full range of regu-
lation that commercial organisations have to deal with in addition to any industry
specifi c regulation that the government has created in the light of the privatisation.
This may mean that CTC is required to provide some unprofi table services, or be
prohibited from providing some profi table ones.
The objectives that CTC sets from now on must address the areas of profi tabil-
ity and reward for the shareholders, customer satisfaction, the competitive position
of CTC with respect to any new entrants to the market, overseas expansion and
compliance with the new regulatory regime.
C6(a) The initiatives identifi ed using Herzberg’s motivation-hygiene (dual factor) theory
as a framework.
The fi rst initiative involves a revision of the system that measures managerial
accountability (now on net profi t rather than increasing turnover). The second
involves a restructure and reallocation of duties giving SBUs greater control over
their own performance.
This thinking can be explained within the context of Frederick Herzberg’s
motivation-hygiene, or dual factor, theory. Herzberg’s contention was that the
opposite of job satisfaction is the absence of job satisfaction and not job dissat-
isfaction. By extension, the opposite of job dissatisfaction is an absence of dis-
satisfaction. Herzberg’s research indicated that satisfaction and dissatisfaction are
infl uenced and created by different variables. His theory has been very infl uential
across a wide range of jobs, organisations and countries.
His initial study in the 1950s of 203 Pittsburgh accountants and engineers
focussed on when they felt either exceptionally good or exceptionally bad about
their job. This ultimately led to a two-factor theory of motivation:
●
Motivators (or satisfi ers) are factors that if present within a job encourage indi-
viduals to greater effort and performance through higher levels of job satisfac-
tion (but not dissatisfaction). These factors relate to what people are allowed to
do and the quality of human experience at work. These are the variables that
motivate people. Examples include job role, organisational recognition, personal
growth and a sense of achievement, advancement and responsibility. These fac-
tors are said to relate to job content.
●
Hygiene factors (or dissatisfi ers) are factors including status, pay, interpersonal
relations, supervision, organisational policy and administration, job security and
working conditions. These factors relate to job context.
SOLUTIONS TO C STYLE REVISION QUESTIONS E1