Operational Practices of the UAE Based Businesses

Introduction

Contemporary business activities have become increasingly complex for entrepreneurs. This situation has compelled organizations to implement robust operational practices in an attempt to address the needs of employees, customers, suppliers, and competitors among other stakeholders. Various factors that should be considered in operational management include excellent delivery of services, good customer-supplier relationships, and employee motivation among others. The best functional practices in a business entail proper resource planning. There is also a need to channel such resources towards the stipulated goals. The involvement of employees and suppliers among other stakeholders in the delivery of quality services to customers entails quality performance based on the culture and mission of the business.

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The importance of the study is defined by the following objectives.

  1. To investigate the operational practices that are implemented by various businesses in the UAE
  2. To evaluate various cultural aspects of management that are used by these businesses
  3. To assess the effectiveness of lean tools that are used in operational activities of the business entities in the UAE

Two hypotheses will be developed from the literature review. Correlation analysis will also be used as a descriptive-analytical. This study seeks to explore the operational practices in the UAE. This study was based on a qualitative research design that emphasized on survey techniques to gather data. This design was chosen because it was relatively inexpensive. It also takes a little time to conduct. It was also easier to estimate the prevalence of an outcome of interest because the sample was taken from the whole population (Creswell, 2013).

Literature Review

Most businesses have been noted to accomplish their goals owing to proper organizational cultures that are geared towards improved performance (Heizer & Render, 2004). The operational practices that have been implemented to improve performance include the creation of a favorable environment. This situation encourages employees to engage in teamwork activities. According to Heizer and Render (2004), managers must also enforce a culture of good relations not only with the employees and with customers but also to the suppliers and distributors among other stakeholders (Kruger, 2001). Under this section, various topics have been discussed concerning the research question.

Leadership and Management

Businesses do not only require managers to perform management roles but also exercise exemplary leadership qualities. Therefore, they should practice transformational management practices were employees are also involved in critical decision-making. The aspect of participatory leadership ensures that the upcoming company managers are thoroughly trained through engagement and teamwork (Jung & Wang, 2006). Through this process, the managers uphold motivation amongst the employees; hence, the probability of achieving organizational goals is increased significantly. Employees also feel motivated when their innovative ideas contribute to the overall output (Jung, Su, Baeza, &Hong, 2008).

Through good leadership, managers create a culture of excellence among the employees. Therefore, leaders should refrain from issues such as bureaucracy, egocentrism, and arrogance among others that undermine the establishment of improved performance cultures.

Proper Customer Analysis

Managers who perform excellently in their various entities have been noted to adhere to firm and appropriate analytic procedures to study consumer behavior. This strategy is essential in anticipating what the customer needs. One of the factors that must be considered when performing such analysis is customer segmentation (Walters, David, &June, 2001).

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Operational business practices such as the delivery of services must be organized in a way that facilitates customer satisfaction. At the outset, the business must have a suitable geographical location. In this sense, it should be centrally placed to ease accessibility, whether through physical or online means. The age categories of the customers should also be must be analyzed to ensure the production of suitable products (Walters et al., 2001).

Embracing customization is embraced by highly performing business entities since such businesses are customer-driven. Many researchers have noted that certain behaviors of customers that are demanding ensure that the business provides services or develops products that are based on their customers’ requirements (Rafae, 1993). The behavior of customers can be easily studied by monitoring the frequency of purchase of a particular product, conducting interviews on customer satisfaction, and making changes to the expectations of the organization. Further performance of research on customer needs creates a pathway for improved sales in a business entity (Rafae, 1993).

Another aspect of customer analysis that a business must consider is loyalty. Maintaining good customer relationships is an idea that has been underpinned by many researchers. Customer loyalty determines their frequency in the enterprise. Companies that enjoy repeat customers provide superior services and a healthy environment that ensure increased experience (Rafae, 1993). According to Kumar and Denish (2004), customer loyalty is won through the provision of excellent services. Good rapport should be created amongst the employees and customers. They should also ensure timely service delivery. Other businesses also capture customers through the establishment of favorable product and service prices. The quality of services and products among others is also paramount to the accomplishment of organizational goals (Kumar and Denish, 2004). Customers should be educated on the current trends of services and goods that are safe and convenient. Employees of such business entities spent limitless time in encouraging customers to try new products; hence, most of them gain trust from the customers (Kumar and Denish, 2004).

Good managers always treat customer experience as an opportunity to gain loyalty as compared to their competitors. The managers ensure that products are of higher quality with a fresh aroma, especially in the food industry. The customers are also given a cordial reception and are served with respect and dignity. Such actions increase the satisfactory levels of a customer; hence, repeat business is established (Puccinelli et al., 2009).

Operational Strategies of a Business Entity

Enterprises that improvements in performance have proper management and operational strategies. However, the success of such strategies is usually determined by apt leadership practices. Operational strategies should entail cooperating designs and management styles that provide an atmosphere for improvement of products and processes whilst ensuring that output and quality are not compromised (Correa, Ellram, Scavarda, & Cooper, 2007).

Relationships and Supply

Powell (1995) posits that suppliers are important persons in a business entity. They determine the costs of finished products in the market. Also, they guide the quality of products and services that are delivered to customers. The activity of dealers is crucial for the determination of the competitive advantage of the business. Higher costs of production and/or service delivery arising from the point of supplies (Powell, 1995). Various business entities adhere to extravagant prices due to congested supply chains. At any given moment, managers should ensure that a minimal network or straight-chain supply is implemented in the distribution process. Intermediaries should also be minimized to ensure efficient transactions. Good relations with suppliers of raw materials must also be guaranteed all the time. This strategy results in the minimization of costs that can be incurred during the provision of services among others (Fisher, 1997).

Adequate maintenance of business-supplier relationships is done through constant communication. It can also be ensured through the provision of feedbacks concerning raw materials, product quality, and overall performance. The management should also be in the forefront to establish robust communication techniques with the suppliers. It should also involve suppliers in the development of various cost reduction means (Fisher, 1997).

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Organizational Culture and Performance

Ogbonna and Harris (2000) define organizational culture as a combination of behaviors, styles, and attitudes towards, suppliers, customers, stakeholders and any other persons who form part of the business. These people must have a common goal or values that bind them together (Ogbonna& Harris, 2000). Culture is viewed concerning factors such as hard work, good dealings, ethics, and professionalism among others. The culture of an organization directs its activities that must be prioritized. Such issues can include sales focus, customer orientation, cost determination, innovation, and motivation among others (Ogbonna& Harris, 2000). It determines the competitive advantage of the business through the determination of operational activities. It also cultivates a high performance in the organization through the combination of both internal and external environmental characteristics. Different personalities also influence the decision-making processes by the management (Ogbonna& Harris, 2000). Moreover, it affects the operational activities that directly or indirectly lead to a positive effect on the performance of the business.

Lean Practices in a Business

Most companies implement lean practices to reduce wastages and add value to the products that are needed by customers. Good managers must understand customer value. Therefore, they must ensure a continuous increase in products of higher value to customers (Doolen & Hacker, 2005). The primary goal of lean practices in an organization is to deliver perfect value to consumers using the available resources and minimizing wastage. Businesses ensure that value creation is met through efficient utilization of resources to provide a variety of high-quality products whilst ensuring quick delivery and cost minimization (Doolen & Hacker, 2005).

Methodology

This chapter presents the research design, description of the study area, population, sample, and sampling procedure. It also encompasses data collection instruments, validity and reliability, and data collection and analysis.

Research Design

The study was based on a qualitative research design that emphasizes on survey techniques to gather data. This design was chosen since it is relatively inexpensive and takes a little time to conduct. It is also easier to estimate the prevalence of an outcome of interest because the sample is usually taken from the whole population (Creswell, 2013).

Population

The UAE has a population of more than 1,000 employees in the service business sector. The population is composed of various linguistic, religious, and ethnic groups. Because of the varied factors that influence operational practices in an organization, the population provides an ideal setting that leads to improved performance.

Data Collection Instrument and Procedure

The questionnaire method was used as an instrument for the research.

Primary data was collected through online administration of questionnaires to randomly selected subjects (Sugiyono, 2008). Questionnaires are helpful in the collection of data, especially in cases where large samples are involved in the study. The questionnaire instrument was chosen because of the shorter time duration and lack of biasness. Reliance on primary data is essential in knowing more about the operational activities that promote business performance. The questions were structured in a simple format that comprised closed-end techniques based on a Likert scale (Sugiyono, 2008).

Data Presentation

The results of the study are presented under the following subheadings.

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  1. Demographic information of the respondents
  2. The business practice
  3. The performance of the businesses
  4. The culture of the businesses
  5. Lean practices in these organizations

Demographic Information of the Respondents

The characteristics of respondents that took part in the research are elaborated as follows. A total number of 45 respondents were included for the study from the vast business entities in the UAE.

Level of Management of the Respondents

The total samples that were included in the research were 45. 56-percent of the subjects emanated from the first-line management level, while the middle and top management levels comprised 30 and 14 percent respectively.

Business Practice

Contacts, Communication, and Planning

About 48 respondents agreed and 29 of them strongly agreed that they frequently keep in close contact with the suppliers of their businesses, while the remaining 13 percent were unaware of whether they kept contacts with the vast suppliers of their businesses. 48% and 40% percent of the respondents strongly agreed and agreed respectively that they keep a long-term relationship with their suppliers. About 51-percent of the subjects said that they provide feedback to their suppliers. However, 44-percent indicated that their senior managers communicate with their key suppliers. Only 15-percent of the respondents mentioned that their enterprises involve suppliers in planning for future services. 22-percent of them did not indicate anything on the involvement of suppliers in planning.

This result was also similar among the respondents who disagreed. 8-percent of the employees strongly agreed on the commitment of suppliers on annual cost reduction, while 33-percent were unaware of such. They also revealed that their customers provide performance feedback as indicated by 42 and 37 percent of respondents who strongly agreed and agreed respectively. The customers also share current and future information about the various demands in the market; hence, they are included in future planning processes as agreed by 56 percent of the respondents on information being shared and 28 percent on planning processes. Business interviews with customers, observations, and use of focus groups have ensured that the organization maintains high operational standards. About 36 and 27percent of the respondents agreed and strongly agreed respectively with the claim.

Table 1: Showing the summary of selected business practices and response by the respondents.

Strongly agree (5) Agree(4) Neither agree nor disagree (3) Disagree (2) Strongly disagree (1)
Contacts 13 22 6 1 1
Long term relationship 22 18 4 1 0
Involvement in Planning by both customers and suppliers 16 28 22 19 2
Feedback by customers 19 17 6 2 0

Diagnosis of the Problem

About 49 percent of the interviewees agreed with the non-value techniques that were used to identify the root causes of poor quality products while no respondent strongly disagreed. Most of the employees about 56 percent were aware of the practices that should be in place to guarantee value addition to the customers. Thus, about 49 percent of the respondents indicated the formal methods that were used to identify the problems of value.

Quality Assurance

Quality is a collective responsibility in the organization. Approximately 52 percent of the respondents confirmed that all the business entities and various departments were involved in the delivery of quality services and goods. The only 11percent disagreed with the above statement, while zero percent of the respondents strongly disagreed. However, 22 and 38 percent of them strongly agreed and agreed that statistical methods and techniques were used for quality assurance purposes in the enterprise.

Ergonomic Setting of the Business

Employees in the UAE business entities appreciate the work organization and space. 51-percent of the respondents agreed that they accessed information instantly. Resources that augment work efficiency were also readily available. Nonetheless, 11percent of the employees failed to air their views on the ergonomic settings of the business, while zero percent disagreed with the claim. The remaining 28-percent of the respondents strongly agreed that the ergonomic setting has made operations efficient.

As a result, both employees and customers spent less time in the accomplishment of tasks through waking as agreed by 42-percent of the respondents. The respondents of about 22% and 44% strongly agreed and agreed respectively that the layout of the business-suited production and distribution of products and services to the customers. Finally, yet importantly, most of the equipment is easily accessible and centrally placed for every employee as agreed by 55 percent of the respondents.

Information Concerning Instructions

53-percent of the respondents agreed that there is the existence of instructions for various functions of the organization, which serve as a guide to the completion of the tasks that are assigned to them. However, 7 percent of the employees were not aware of the information on instructions. The research revealed that employees in the various business enterprises in the UAE follow instructions strictly with a view of delivering quality services and products as agreed by the 53-percent respondent. Respondents of about 38-percent agreed that charts and data that are displayed on notice boards ensure progressive performance. This situation has encouraged most of the employees to amplify their efforts towards the accomplishment of both individual and organizational goals.

Customers and employees also indicated that signposts guide then effectively within the vast facility as presented by 49-percent of respondents. Training on the improvement of employee skills is carried out by the various business entities in UAE as indicated by 60-percent of the respondents.

Customer Demands

The study revealed that about 35 percent of the respondents strongly agreed with the fact that the speed of the functional activities in the organization was directly linked to the demands of the customers and completion status of various processes. Nearly 31percent agreed with the idea, while 22 percent of the respondents did not provide any information. Approximately 57-percent of the employees agreed that tracking the completion status of the processes was used for a smooth flow in all the entities. Effective management of the business’s inventory was accomplished using the pull system as indicated by 58 percent of respondents who agreed while 24 percent strongly agreed.

Employees and the Business

24 percent of the respondents strongly agreed that the employment and staffing of employees are based on information, time, and delivery criteria for different types of services while 48 percent agreed. The management ensured staffing depending on the workload of the organization. 48 percent agreed with the idea, and 24 percent agreed strongly. Respondents of about 51 percent agreed with the fact that the organization’s management welcomed any ideas of employees that were deemed beneficial to the premise.

60 percent of the respondents agreed that front line employees are involved in problem-solving situations in all the business entities in the UAE.

Business performance

The various factors that were considered when analyzing business performance include sale and market share, the cost versus expenditure, customer satisfaction, increased productivity and quality, and reduction of inventories among others (Venkatraman & Ramanujam, 1986). 47 percent of the respondents among the various entities indicated that sales and market shares have increased while only 2 percent strongly disagreed. About 38 percent of the respondents did not know whether there was a reduced expenditure among the various business entities while averagely about 48 percent of the respondents agreed that there is increased customer satisfaction. Event tough 21 respondents indicated an increase in productivity among the employees, 55 percent of them from the various entities were unaware whether inventories have been reduced.

Lastly, about 53 percent of the respondents on average agreed on improved quality, improved response to demands of customers, and reduced response time respectively from all the entities.

Culture of the Organization

About 47 percent of the respondents from the various enterprises in the UAE agreed that the organization’s culture has greatly improved due to the introduction of lean thinking. Only 42 percent of the respondents agreed that their managers understand lean practices. They are also implementable in the various organizations as revealed by 47 percent of the respondents who said that their managers have a positive approach and are committed to lean practices. Although the lean approach is used in the operational activities, 35 percent of the respondents did not provide information on the investments that were put in place for its implementation.

35-percent of the respondents also failed to clarify their stands of the application or did not indicate whether they have a positive approach towards the lean practices in the organization. Nonetheless, 47 percent of the respondents acknowledged the fact that most employees understand the concept since they are provided with training opportunities as indicated by 42-percent.

Lean Operational Tool Ranking

Various lean practices that are used by the management of the UAE were ranked based on average. The results are presented in the table below.

Table 2: Showing ranking of the various lean tools used by the various enterprises in the UAE

Tool N Rank
Cellular layout 83 1
Visual feedback system 79 2
Kaizen 78 3
Error proofing 75 4
Just in time 71 5
Route cause analysis 71 5
Quality circle 68 7
kanban 64 8
Value stream mapping 64 8
Plan Do Check Act 63 10
Overall equipment analysis 62 11
Jidoka 60 12
Preventive maintenance 58 13
Bottleneck analysis 54 14
Quartile analysis 53 15

Discussion

The study evaluated the operational practices of the various business entities in the UAE. This section discusses the main findings of the study under the following sub-headings.

The business practice of Abu Dhabi Food Authority

Contacts, Communication, and Planning

Most of the respondents preferred frequent contacts with suppliers and consumers who form part of the business entities in the UAE. The higher percentage depicted a well-established communication framework in the organization. These findings are similar to other studies that have reported that frequent contacts with suppliers lead to timely delivery of raw materials or finished products to the consumers; hence, repeat business is ensured. Its contacts also facilitate communication in a way that ensures a briefing of consumers on new services or products that exist in the market.

Businesses can benefit from communication since consumers and other stakeholders learn new marketing trends. Contacts and communication ensure timely planning for quality goods. The two practices ensure that the consumers keep in touch with the new goods that are released to the market. Communication also helps in the determination of affordable prices to consumers. Nagaraja (2004) opined that buying behavior is significantly influenced by the experience of consumers.

Production of a quality product can be influenced through engagement with suppliers and consumers through constant communication. This situation helps the management to know more about the likes and dislikes of the consumers. Shivkumar (2004) showed that the consumer was mainly influenced by communication with employers and staff irrespective of various income groups. Consumers were also affected by the dealers’ recommendations on goods through frequent communication and contacts (Shivkumar, 2004). Therefore, there is a need for management of these businesses to embrace a culture that cultivates communication with both suppliers and consumers who even provide vital information concerning the preference of the product in the market.

Quality

Customers judge the quality of a service or a product based on the appropriateness of delivery. The managers should ensure the conformity of the products with what the many consumers need (Heizer& Render, 2004). All business entities in the UAE must work together to ensure that quality assurance is conducted. Various methods that include statistical techniques should be implemented to achieve the desired qualities of products. The products are also competitive in features such as color texture and variety (Heizer& Render, 2004).

The business deems quality assurance as a major activity being carried out as mentioned by all the respondents. Businesses gain competitive advantages through thorough conduction of quality assurance to its services as well as products (Heizer& Render, 2004). Banumathy and Hemameena (2006), while studying consumer brand preference concerning soft drinks, found that after globalization most of the consumers like the international brands such as Pepsi and Coco-cola (Kalaivani& SANTHI, 2014). Quality was an important factor that draws the consumer towards branded products. These studies are similar to the current one conducted in the various business entities in the UAE since all of them mentioned quality as a factor that leads to improved production.

Ergonomic Setting of the Business

The ergonomic setting of a business entity ensures a free flow of goods, equipment, as well as information, which in turn leads to less time wastage. Most of the respondents agreed that they were able to access information and other resources easily for effective production and performance. They also strongly supported the efficient operations of the business due to ergonomic settings thus adequate time is used to complete a given task.

The equipment can be accessed easily. The layout helps in efficient service delivery. There is a similarity between this study and the one conducted by Ramasamy in 2005. Although the one for Ramasamy and the rest was based on consumer buying behavior, a common factor was information being delivered to consumers and employees. Media and online communication are some of the ways through which a consumer and employees become aware of information on products and processes (Ramasamy& Yeung, 2009).

Information Concerning the Instructions

Issuing information concerning the direction of the usage of a product is essential to consumers. Instruction about a procedure or direction about product development is always given to ensure that the product is of higher quality. Some management also displays charts and data about the performance of the company so that value addition to the previously existing data is done to ensure that new varieties of products with higher qualities are produced.

Most respondents from the study indicated that there is immense use of displayed charts that give information on the progress of the various businesses, how they perform, and the requirements that are needed for improvement in production. There are also signposts to guide customers and employees to various sections of the company. This plan is set with the aim of ensuring proper time management.

Customer demands

Customer demands can be best achieved through proper customer analysis. Embracing customers’ demands include consideration of several factors such as quick delivery, customization, anticipating what they need as well as knowing their tastes and preferences (Rafae, 1993).

The research indicated that the speed of service delivery was key in fulfilling customers’ demands. Implementations of a pull system where sales of products are driven by customer demands were also mentioned. Meeting the demands of customers enables a business entity to gain loyalty from customers thus ensures repeat business. Planning of the operations of a business should also be done for the demand of customers as mentioned by the respondents in the study (Rafae, 1993). Therefore, it is essential to study customer behaviors thoroughly by monitoring their purchase trends and preferences to determine their needs (Rafae, 1993).

Employees and the business

Employee welfare is a business entity is critical in ensuring the performance and smooth running of various operational activities. Staffing system should be critically examined so that over or understaffing are managed. The respondents from the research indicated that staffing is done according to the workload, information on time and delivery means as well as the type of services (Sartain & Schumann, 2008). Improvement of performance is also ensured through employee involvement in decision-making as well as giving innovative ideas as mentioned by some respondents.

Business performance

Enhanced business performance goes hand in hand with the culture that exists in the organization. Other factors that are considered when analyzing business performance include sale and market share, the cost versus expenditure, customer satisfaction, increased productivity and quality, and reduction of inventories among others (Venkatraman & Ramanujam, 1986). These factors were analyzed by the researcher during the study and it was found that the majority of the respondents agreed with the mentioned aspects of business performances from the various business entities in the UAE.

Culture of the organization

Culture and its characteristics like operational activities directly influence the outcome that is anticipated in an organization. Higher performing businesses base their activities on effective leadership that in cooperating with respect and dignity to employees (Leung, Bhagat, Buchan, Erez, & Gibson, 2005).

Culture through leadership fosters an improvement due to the change and implementation of lean practices. The inclusion of lean practices as part of the culture was greatly recommended by the respondents in the research. The change must be felt in the hierarchy of management through effective communication, motivation, initiative as well as responsibility and risk-taking (Leung et al., 2005).

Belief and purpose of an organization are reflected in its corporate culture. The culture must be in tandem with the stipulated strategy to facilitate the realization of its potential. Therefore, it boosts the overall performance. Businesses should always be formed based on cultures that are vibrant and robust. Besides, the management must initiate change with care. The effects of change can adversely influence the business in the end (Leung et al., 2005).

Lean Practices

The process of lean practice should be implemented in a business operation. Such activities include designing a process through the transformation of batch and/or “push” to “pull” by ensuring that cost reduction is done through effective utilization of space, minimization of inventories, reducing waiting time, and human efforts. Implementing plan turnaround techniques should be ensured by lead-time, quick delivery, less variability, and higher quality for profit (Emiliani, 2004).

Lastly, a practice of P-D-C-A in both risk and human resource management should be implemented. From the research conducted, the respondents indicated they use of pull system in ensuring that inventories are cleared in the process of operations (Emiliani, 2004).

A highly skilled manager ensures that the staff is responsive to the needs of customers, ensures continuous improvement of quality, ensures that both lead time and inventories are minimized as soon as possible as well as prevents wastages among others (Emiliani, 2004). The business entities use various lean tools for effective operational activities. Such included; value stream mapping, overall equipment analysis, quartile analyses, cellular layout, kanban, quality circles, kaizen, visual feedback error proofing, jidoka, just in time, plan do check act, route cause analyses, bottlenecks analyses, and preventive maintenance.

Recommendation

The various recommendations made from the research conducted include;

  • Successful operational activities need strategic planning of how various operational activities are run by the business.
  • Business enterprises in the UAE ought to undergo a series of changes to ensure efficient operations regardless of their current market position.
  • A clear functioning culture that fully embraces lean practice must be put in place. This situation is ensured by physical investment.
  • The management system that guarantees a system that embraces effective planning that captures quality improvement, customer experience, market share, and competitions among others must be embraced.
  • More research should be conducted on customer behaviors thoroughly by monitoring their purchase trends and preferences to determine their needs

Conclusions

The report has elaborated on the operational activities of the various UAE businesses. It has also revealed how these activities have influenced the overall performance of these businesses. Another area that is considered in the research is the organizational culture, which included the management system and practice, employee involvement among others. The research also examined the outcome of these organizations in terms of competition and performance. The design approach implemented was qualitative (survey) whereby data was collected using a questionnaire instrument distributed to managers of these entities online. These managers were categorized as top management, middle management, and first-line management. The area of research and analysis of the study was at the UAE business entities that encompassed service, manufacturing, banking among others. The report implied that effective operational activities brought about the achievability of goals and objectives. The managers must thus embrace innovation. They should also consider the implementation of well-laid lean practices that ensure that customers’ expectations are met whilst utilizing the available resources effectively.

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