The mega and task environments are external influencers to an organisation and need to be recognised, analysed and managed for the business to experience sustained success and competitive advantage in the market. These external stimuli include factors such as technological, economic and legal-political elements and customers, competitors, suppliers and employees (Bartol et al, 2003).. Organisations must look outside of their behaviour product markets only and include political and social factors, labour training and employment norms and legislation as well as culture and values when making sound business decisions (North, 1990).
The elements made up in the mega and task environments are explored in this discussion as they relate to SecurityMail, an organisation specialising in the direct marketing industry. Tony Revell, the Sales & Business Solutions Manager at SecurityMail, was interviewed to gain an understanding of the external factors influencing business sales operations at SecurityMail. This discussion aims to analyse the mega and task environmental elements that effect the organisation and whether all the elements are identified as being important.
SecurityMail was founded in 1980 in response to a demand for a secure mailing house and is the third largest mail house in Australia. SecurityMail has grown into a sophisticated information systems management business with an annual turnover of $120 million. They employ 700 people at operations in Sydney, Melbourne and Brisbane and their core business activity is defined as data and document management (SecurityMail National Employee Handbook, 2002).
SecurityMail has created a niche in the market by providing a personalised service, tailored to meet the individual needs of their customers.
They recognise that many clients have specific requirements that may be unique to them or their industry. SecurityMail also recognises that in order to be able to meet the requirements of their client base they must also seek and foster a responsive and co-operative approach from their suppliers (SecurityMail Company Profile, 2001).
Tony Revell, the General Manager, Victoria – Sales & Business Solutions is well placed to observe and comment on SecurityMail’s relationship with its external environment. Tony joined SecurityMail in April 2001 having come from within the mail processing and fulfilment industry. He has over 24 years management and sales experience in the direct mailing and chemical and scientific industries and also has an MBA and a Bachelor of Business majoring in Economics and Marketing. At Security Mail Tony Revell manages the Sales and Business Development activities and also the Project Management arm of the operations in Victoria (refer to Appendix 1.1 for SecurityMail’s Organisational Chart). He is in constant contact with the external environment and is required to manage the effects and influences of both the mega and task environments and talked in depth about the effects these environments have on SecurityMail’s operations.
3 Mega and Task Environments
3.1 Mega Environment
The term ‘mega environment’ refers to the external environment that reflects conditions and trends in the society that an organisation operates within. There
are five major elements to the mega environment; technological, economic, legal-political, sociocultural and international. These elements are often external to the span of control of the organisation and as such are often unable to be influenced directly (Bartol et al, 2003).
3.1.1 Technological Element
SecurityMail’s emphasis is on harnessing technology to get information moved intelligently, reliably, quickly and securely. It is therefore paramount that management stay abreast of changes in technology. They do this through memberships on industry groups, journals, suppliers and through information extracted from the market by the sales team and by attendance at overseas trade shows. Continual re-investment of capital into technology and equipment has been essential for the organisation to remain competitive. This re-investment has ensured that SecurityMail’s products and services are meeting or exceeding the demands of their clients. Many of these new technologies are at the forefront in the market in which it operates. SecurityMail has invested in new equipment harnessing the latest in technology to process client work faster and more efficient than ever before.
3.1.2 Economic Element
Tony Revell concluded during his discussions that the economic element does have an important impact on the operations of SecurityMail. The importance extended to national issues such as inflation and interest rates. This effect was felt recently on market forces impacting the financial services segment. Declining share prices of some of their major clients impacted the client’s marketing dollar and as such SecurityMail experienced reduced marketing campaign work, a factor of which they could not exert control over.
3.1.3 Legal-political Element
The organisation functions under the required legislation governing the operation of companies within Australia. This does not have a huge impact on the operations of the organisation but does still play a factor in its business decisions and application of corporate governance. The new privacy legislation that became effective in December 2001 impacts the ways in which SecurityMail
can store, transfer and use the data it collects from its clients. The impact felt was relative to new processes of operation it had to adopt to comply with the legislation but has now just become part of the way the company does business. Positive legal and political impacts have been felt through the deregulation of the financial, telecommunications and utilities markets. Changes impacting SecurityMail’s clients through political and legal changes has created additional growth opportunities for SecurityMail.
Client legislative requirements can impact the operations of SecurityMail such as legal mailings advising customers of a bank rate change. This form of communication is legislated and equates to penalties being imposed to the financial institution if mail is not received by customers by a pre-determined date. The legal environment experienced by its clients is therefore transferred to SecurityMail.
The organisation recognises that it must keep abreast of legal and political changes in the external environment to ensure it complies with relevant legislation and reacts to identified business opportunities. It also must keep abreast of the legal and political factors experienced by its clients to ensure customer satisfaction and loyalty and the avoidance of penalties.
3.1.4 Sociocultural Element
The sociocultural element focuses on the attitudes, norms, values, beliefs and behaviours of the demographic region in which an organisation operates (Bartol et al, 2003). As SecurityMail only operates within Australia the impact is not seen as having a major influence on SecurityMail’s operations. When questioned further Tony Revell elaborated on regional sociocultural elements impacting the organisation:
* The adoption of flexible work practices to accommodate demands in society for family friendly employers.
* Recognition of language barriers and systems for overcoming these for the unskilled manufacturing labour force.
* Challenges in the future with the introduction of new technology. Additional training resources will be required by the organisation to skill up its blue-collar workers.
* New technology will also require labour with higher skills sets which will be harder to draw upon in the local area.
* Occupational Health & Safety issues with an ageing mostly female blue-collar workforce.
3.1.5 International Element
This element was not seen as having a major impact on SecurityMail. The only international dealings relate to information seeking regarding new technologies and equipment. There is no move at this stage for SecurityMail to enter the international arena.
3.2 Task Environment
The second external environment segment impacting on organisations is the task environment. The task environment encompasses the elements an organisation must deal with when interfacing during the course of conducting its business. Elements included in this segment are customers and clients, competitors, suppliers, employees and government bodies. As organisations confront these elements during the course of its operations the organisation is more likely to have an impact on these elements rather than those in the mega environment (Bartol et al, 2003).
3.2.1 Customers and Clients
SecurityMail has a diverse client base interacting with blue-chip companies in the financial services, telecommunications, utilities and advertising sectors. Since SecurityMail’s inception it has been their aim to provide a customer oriented service that meets the changing needs of their clients and to create a total solution that is integrated, flexible and cost effective. They have created a niche in the market by providing a personalised service, tailored to meet the individual needs of their customers.
SecurityMail works closely with their clients to ensure that requirements are understood and met and that service level agreements are both reflective of the needs of the client but also the resourcing and capacity levels at SecurityMail.
Regular work in progress and client meetings are held to discuss the progress of campaigns and redevelopment work and also to address quickly any issues that require resolution. The organisation also conducts regular customer satisfaction surveys and has implemented a corrective action system to ensure any client complaints and non-conformances are communicated to senior management and are acted upon in a timely manner to achieve the best outcome for both the client and SecurityMail.
Each client in excess of $50,000 has a dedicated Account Manager to service their needs and add value to their operations thereby cementing further the relationship with SecurityMail.
SecurityMail manages many customer relationship programs for their clients and therefore has the opportunity to observe and adopt best practice in terms of customer relationship management principles practiced by blue-chip Australian companies.
The relationship between SecurityMail and its clients is seen as having the utmost importance to the sustained success of the organisation.
There are many players in the mail processing industry but only five organisations who compete in SecurityMail’s market space and competition is fierce for new work. The market is not boyant with most work available being already won by various mail houses. New opportunities are obtained via official tender processes when contracts expire, outsourcing (of which there are not many companies who have not outsourced their direct mail needs), and company acquisitions. Competitive advantage in most cases comes down to price and service. Customer retention is a quality and customer satisfaction issue. There is little technological differentiation in the industry with no new major players surfacing for several years due to the high capital required because of the costs of technology and equipment.
The mail processing industry is highly competitive and new initiatives do not remain secret for too long. Industry gossip is rife. Information on competitors is sourced predominately from personal contacts but also from the market,
industry journals and publications, published materials such as annual reports, stock market reports and market research. SecurityMail is aware of the activities of their competitors and conducts various benchmarking, pricing, efficiency and customer satisfaction exercises to obtain a competitive advantage.
SecurityMail is always looking to strengthen its portfolio of offerings through strategic relations with key suppliers and partners. Partnerships with suppliers exist across all aspects of the service offerings of SecurityMail. Suppliers provide service and maintenance agreements on all equipment and also provide letterhead and envelopes and printed marketing material and receive outsourced work that SecurityMail is not able to process in-house. It is imperative that these relationships are nurtured as the service provided by their suppliers impacts on the ability of the organisation to meet service level agreements with their clients. The performance of all suppliers is monitored and preferred supplier agreements are set up to ensure that the organisation receives the most cost effective, efficient and reliable service possible from their suppliers. Clients are encouraged to allow SecurityMail to source items for them such as letterhead which it does through their preferred suppliers. This ensures that SecurityMail not only makes margin on the purchase but also allows SecurityMail to control the process.
3.2.4 Labour supply and the importance of managing diversity
The attraction and retention of skilled personnel is of high importance to SecurityMail. One of the organisation’s aims is to become an employer of choice. Career development and mentoring programs, competitive remuneration, training and development opportunities and employee benefit packages have been developed to both attract and retain staff. The mail processing industry is highly specialised and as such it is difficult to source experienced staff. The aim is to retain experienced staff and develop the skills of less experienced staff. As the organisation adopts new technologies more highly skilled staff will be required. Sourcing initiatives will need to be developed to attract potential staff from outside the local area due to a lack of the skill base available in the community within which SecurityMail operates.
SecurityMail enjoys harmonious relations with the AMWU (Automaotive, Food, Metals, Engineering, Printing and Kindred Industries Union). This relationship is of high importance to the success of the organisation and will continue to be developed and fostered to promote opportunities for labour force flexibility such as weekend shift work and twelve hour shifts.
3.2.5 Government Agencies
SecurityMail interacts with various government agencies such as employer organisations, WorkCover and the Australian Tax Office. Interactions with these bodies are seen as being a necessary activity in the operations of SecurityMail but is not seen as being a concern in the sales process.
4 The Importance of the Mega and Task Environments
Tony Revell recognises the important part each external factor has to play in the operations of SecurityMail. The only factors not viewed as being important to the sales process were government agencies and the international element. Interactions with government agencies were viewed as being a Finance function and not related to the sales process. The organization still views the element as being important but it does not impact upon Tony Revell and his team. The international element is not relevant to SecurityMail as the company only operates within Australia. Mr Revell conceded however that if operations moved off-shore then this element would become an important consideration for SecurityMail.
The ability to grow and prosper in the external environment is recognised as not being the documenting of a list of policies or institutional structures but rather an ability to incorporate external stimuli into coherent internal systems (West, 2001). SecurityMail has adopted this practice and incorporates the threats and opportunities of all of the relevant factors of the external environment into their operations.
Since SecurityMail’s inception it has been their aim to provide a customer oriented service that meets the changing needs of their clients. They have to continually respond to the increasingly complex demands of the markets in which they operate. The increasing trend during recent years to out-source non-core activities together with technological advancements has seen those demands become more time critical and sophisticated in their application.
All aspects of the external environment need to be monitored for any business to experience sustained success and competitive advantage in the market. This is recognised by SecurityMail and the success of this approach has resulted in them enjoying continued growth and expansion. Monitoring the external environment has also enabled them to keep abreast of changes and opportunities within their industry and to continue to expand and improve upon their product and service base.