Enterprise Rent-A-Car’s Expansion in Greece

Topic: Vehicles Words: 2843 Pages: 11

Introduction

Enterprise Rent-A-Car (ERAC) is a worldwide car-sharing and renting services provider with American roots. Its expansion strategy regularly includes brand assimilation and taking the position of a ‘local’ company that covers vital locations (University of Salford, 2022). By prioritizing excellence in customer service, employee development, and fleet growth, ERAC has a long history of outstanding performance. Despite the company’s numerous successes, it is essential for ERAC to plan its next step thoroughly and carefully in order to avoid unnecessary expenditures or even a potential failure to launch. Changing the alignment of different departments and systems within its new franchisee through gradual shifts appears to be the most optimal strategy. This paper will analyze ERAC’s expansion plan, its key objectives, schedule, necessary resources, and other factors for consideration.

Planning and Control

Mission and Objectives

The primary mission that the company needs to complete is the transformation of Autokinito through aligning the franchisee’s activities with ERAC’s traditional approach to the firm’s management. Objectives include updating the organizational culture, Autokinito’s leadership style, its fleet, and the IT system the firm uses presently, and must be achieved within a span of one year. After the transformation, the criteria for success of Autokinito are the following: a 10 percent annual growth of its fleet, standardization of its 49 branches, and at least 20% increase in online reservations. Stakeholders will be able to perceive these changes via online tracking tool provided by the firm. The impact of the project is supposed to bring Autokinito’s activities to a necessary level of excellence and quality that is widely accepted by ERAC in numerous other locations across the globe, although the transformation is a lengthy intervention. Employees and leaders of this new branch may perceive benefits after the initial phase of conversion, and the final impact will be visible within the year of the planned intervention.

Stakeholder Management Plan

Changes, such as the proposed transformation, require close cooperation between the leading managers from both teams. Since each stakeholder possesses a different risk in this endeavor, various aspects of the project must be discussed with each specific group and department (Edwards et al., 2019). The involved sides include workers, managers, and directors of Autokinito, as well as the project leader from ERAC. Since Autokinito’s employees might be hesistant to adapt, ERAC’s representative must work with the franchisee’s leaders to determine the future path ahead. Before the initialization phase, leaders will be required to hold meetings with their employees to explain the changes ahead. In order to satisfy everyone’s demands, people must be provided with the outline for the completion date, costs, purpose, and benefits of the objectives via a shared document containing all the features regarding this project. The presentation of the proposal is required to communicate it to the stakeholders, and will be delivered before the beginning of the first steps. Since there are performance issues identified in several of Autokinito’s branches, the development of a personalized approach to problem-solving will be explained to stakeholders with the hopes of ensuring their direct participation.

Project Activity Plan

As seen in (Figure 1: Work Breakdown Structure (WBS) and Figure 2: Organizational Breakdown Structure (OBS)), there are four target groups of work-related activities that must be transformed and three general branches of the organization that must be incorporated into ERAC’s workflow. Conditions for the satisfaction of said plan require the company to transition toward acceptance of the new work culture, performance measurements, and developmental goals set by ERAC for Autokinito. These items must be presented as a set of procedures with a seamless connection with each other. Activities for this project must clearly relate to weak and misaligned spots in Autokinito’s current practice.

Resource Allocation and Utilization Plan

Table 1: Responsibility Assignment Matrix (RACI Chart)

Step	Project Initiation	Project Manager	Autokinito Leaders	HR Department	IT Department
1	Leadership Transformation	A	R/A	C	–
2	Employee Development	A	C	R/A	I
3	Fleet Expansion	A/I	C	I	I
4	IT Upgrades	C	I	I	R/A

A combination of WBS and OBS allows the company to generate a sufficiently extensive responsibility chart that can be referred to at different stages of the project. Each department must possess a clear idea of its role in this transformation, as their participation or knowledge of the industry’s situation can provide vital highlights for reducing time and resource waste. The appointed project manager will be requested to initialize numerous tasks across the board and supervise many departments involved in the process. Human resources will be a priority for Autokinito under ERAC, which will require them to keep staff directed toward necessary training, new hires to maintain a growing fleet and online bookings and ensure that leaders’ vision aligns with the firm’s mission. In turn, managers will be required to possess knowledge of the regional car rental market and have a flexible leadership style that will benefit the transformation objectives.

Figure 4: Product Breakdown Structure (PBS)

It is inevitable for ERAC to input a significant number of resources into the project, as the current state of Autokinito’s activities does not include regular ERAC costs. All parts of the final product that are depicted in (Figure 4: Product Breakdown Structure) are going to be expanded significantly. The franchisee has no goal in pursuing expanding its car fleet, only 15% of its bookings come from online sources, and employee career development is not a priority for its leaders (University of Salford, 2022). With the initial investment, ERAC can temporarily alleviate the rising costs of operations, although it is expected that the franchisee will be able to stabilize its post-transformation performance and turn to profit at the required level. Allocating funds toward the expanded field of operations provides Autokinito with a foundation that must be exploited for future gains.

Cost Estimation

Figure 5: Cost Breakdown Structure (CBS)

It will be essential to review the necessary expenditures for Autokinito’s transformation. The development of the local workforce is critical for ERAC’s expansion strategy and will consume a portion of the finances provided for the realization of this plan. If the number of employees in vehicles in Autokinito is similar to ERAC, the company is expected to have approximately 400 workers who will require additional training (University of Salford, 2022). With a turnover of 35%, this number may make the related objective challenging to achieve without overspending. With an approximately $300 training cost per employee, $120,000 will be allocated in this stage, as seen in (Figure 5: Cost Breakdown Structure (CBS)) (EIB, 2020). Another $196,000 will be spent on leadership training and new hires for managerial positions in each of Autokinito’s 49 branches, with approximately $3,000 per manager and $1,000 per site (Orechwa, 2019). The costs of training will be divided into employee retention-related courses and Enterprise system usage lessons and kept under a strict scrutiny through lesson outcomes reports after each session.

While ERAC provides a $560,000 investment for the project establishment that is directed toward human resources management, the necessary IT system upgrades might require additional funds from the company. To ensure that the latest and safest technological solution is employed, ERAC has to extend its current digital framework for all Autokinito’s branches, for approximately additional $147,000 funds allocated to this chapter, with an approximately $3,000 per branch (Nagar, 2022). Each branch is expected to report the necessary purchases and training expenses after their occurrence within one day to the company’s finances department. This number exceeds the expected limit of spending and makes it essential to either attract sponsors or call upon ERAC’s additional funding.

Schedule

Table 2: Project Schedule

Project Schedule

Figure 6: Network Diagram of Activities, Dependencies and Critical Path

The proposed workflow for this project includes a year-long intervention into Autokinito’s current activities. Changes to personnel, sites and vehicle readiness must occur within the first four months, after which employees’ adaptation to the new environment must be gradually converted into the firm’s revenue growth and expansion. Each of Autokinito’s 49 branches must be brought to the expected level of performance through the clear connection between people, their tasks, and their customers. The level of proficiency among workers is expected to improve over the course of the initial six months of operations, as their adaptation will be converted into a higher quality of service.

Risk Management Assessment

Table 3: Risk Management

Risk	Impact	Likelihood of Occurrence	Degree of Impact	Action on Trigger	Responsibility	Response Plan
Rejection of the organizational culture	Lacking training and improper leadership style	H	H	Learning courses attendance and surveys on the perceived managerial style	Autokinito’s managers	Further funding of leadership and employee training
Leadership mismanagement	Underqualified leaders	M	M	Project leaders’ assessment	Project Manager	Replacements of top leading positions, training of the existing managers
High turnover rates	HR department miscommunications	H	L	HR statistical analysis	Autokinito’s HR department	Increased financial and growth incentives for employees
Vehicle fleet stagnation	Insufficient revenue growth	M	M	Quarterly fiscal reports	Autokinito’s finances department	Optimization of the revenue stream
IT framework failure	Insufficient knowledge of IT among employees	L	M	Online booking accessibility and usage rate	ERAC IT specialists	Expansion or replacement of the IT team

The proposed plan has the potential to cause confusion among Autokinito’s employees and leaders. As seen in (Table 3: Risk Management), there are flaws that can halt the execution of this project, yet there are paths to alleviate their impact. Defining the exact limitations for each objective may lead to freezes in progress across the strategy. Although it is crucial to communicate the expected borders for each step, a degree of flexibility is required in order to avoid common pitfalls that may lead to time and resource gaps (Edwards et al., 2019). Personnel will be expected to perform to the best of their abilities, yet the probability of being fired cannot be removed entirely, as this project can be deemed risky. Therefore, intuitive activities must not be discouraged entirely but limited to specific groups who will bear responsibility for the incidents occurring during a particular phase.

People Management

Conflicts

A transition planned by ERAC has several weak spots related to conflict management. The plan involves major realignments to the familiar work environment of the franchisee, which can be met with discontent from the locals. People in Autokinito are used to operate the existing vehicle park and will resist changes related to this expansion (University of Salford, 2022). Moreover, the organizational culture of Autokinito differs from ERAC significantly, as employees are less integrated into the company due to annual winter layoffs that create high turnover rates. Another potential point of conflict is the introduction of graduates to the rest of Autokinito’s staff.

There are a few strategies that may assist with overcoming these problems. First of all, the change in the organizational culture must ensure that the pursuit of career development is valued among employees. Project audits can help the managerial personnel predict and detect any deficiencies and seek ways to promote friendliness and efficient communications (Larson & Gray, 2021). Existing and potential workers, especially fresh graduates, will be taught the benefits of career-oriented employment, with numerous options for such a path provided to them. By establishing a close relationship with the potential customer base, ERAC and Autokinito can successfully attract the desired kind of employees to their business for positions that can solidify the new work culture.

Keeping the leaders updated on the ongoing events and their schedule can help the firm to undertake necessary actions for conflict minimization ahead of their occurrence. Moreover, the implementation of a project-status-reporting strategy can deliver measurable data and help people perceive acceptable levels of failure or overextension (Wysocki, 2019). Keeping track of the progress is a positive notion yet intervening in the work environment ahead of incidents can significantly boost retention rates. Nonetheless, it will remain necessary to consult with the project leader and ERAC specialists who possess the knowledge of expected barriers to communication between the franchisee’s employees and the global firm network.

Management Style

Flexibility will be the key to the success of the planned operation. The lifecycle model of management requires Autokinito to undergo several phases that will replace previously accepted norms in a seamless fashion (Lauer, 2020). Since ERAC is expected to be met with a team that might be resistant to changes, the initial approach to managing the workforce will require the authoritative leadership style to push through the initial barrier. From a position of power, managers can judge the ongoing events realistically and follow ERAC’s company policies to the best of their capabilities (Lauer, 2020). Authoritative leaders can help align the direction of the company sharply, as the project requires. However, after this development, they will be asked to change their approach to ensure the professional growth of employees.

After the initial goals are met, the setup for the development of local professionals can begin. For such a strategy, a transformational style of management is the most beneficial method. This approach can foster creativity and improve customer relations through less bureaucracy and more empathetic connections between different hierarchical levels (Lauer, 2020). In order to enable people to pursue their desired career paths, a trusting and non-threatening CEO must be appointed. The individuality of each employee must be accounted for, especially among younger generations who will be hired through skill development programs (Lauer, 2020). Communications are expected to turn toward a feedback-oriented path with a high degree of acceptance toward valid criticism. Responsible decision-making skills are to be encouraged, prioritized, and supported by easily accessible training courses.

ERAC’s award-winning approach to graduate involvement in the company’s business will also be integrated through cooperation with local educational facilities. However, ERAC must recognize that the organizational culture of Autokinito did not involve such a change in employee demographics. Managing people’s discontent regarding their job positions that may be threatened by more proficient workers must be done through performance assessment and support for the existing workforce. Opportunities to grow must be provided to every stakeholder who seeks to pursue the new path of self-improvement and autonomous learning, as workers’ commitment to the organization will be expected to improve (Rusu, 2021). A transformational style is a perfect option for such a change, as leaders will encourage others to follow their path, which is why the top management will be trained first.

Conclusion

In conclusion, ERAC can ensure the growth of its new franchisee through major changes to its leadership style, lagging IT systems, and the projected expansion of its scale of operations. To achieve the best possible outcome, a gradual shift in Autokinito’s organizational culture is essential, as several of its branches are stagnating, and the fleet is not growing to accommodate the increasing market demands. Training highly qualified employees who will be presented with a viable career path is a priority for ERAC, which is something that Autokinito did not prioritize before the acquisition. The current state of Autokinito’s IT systems also indicates the need for drastic measures, and ERAC has the solution ready. Integrating the entire firm into Enterprise’s operations is a challenging yet surmountable task that will require significant changes to the local work environment. At the same time, this shift must not estrange the local population from being employed by ERAC. Therefore, the transformation will start with people and then gradually proceed to incorporate the technical difficulties that Autokinito possesses. Support for the project by all stakeholders and possible sponsors is a reliable failsafe mechanism against the existing risk factors that can undermine the proposed plan.

References

EIB. (2020). Employer-provided training in Europe: Determinants and obstacles. European Investment Bank. Web.

Edwards, P. J., Serra, P. V., & Edwards, M. (2019). Managing project risks. John Wiley & Sons.

Larson, E. W., & Gray, C. F. (2021). Project management: The managerial process (8^th ed.). McGraw-Hill Education.

Lauer, T. (2020). Change management: Fundamentals and success factors. Springer Nature.

Nagar, T. (2022). Car rental website development cost and features (2022). Dev Technosys. Web.

Orechwa, W. (2019). How much does leadership training cost? LinkedIn. Web.

Rusu, D. (2021). Strategies, organizational commitment and leadership styles in SMEs. Business Excellence and Management, 11(4), 31–49. Web.

University of Salford. (2022). Set up a franchise in Greece – ‘Autokinito Rent-A-Car’.

Wysocki, R. K. (2019). Effective project management: Traditional, agile, extreme, hybrid (8^th ed.). John Wiley & Sons.