Paper 1: Flashcards
What does SVT do? , summary + divisons
Skandvig Terra PLC (SVT) initially specialized in producing and delivering potable water in Norway.
SVT currently supplies potable water to over one million people in Norway and to millions of households in over 20 other countries. SVT builds and operates water treatment plants to purify the water and is responsible for maintaining the regional water supply networks in these countries.
SVT expanded into other business sectors, including desalination( possible primary sector) and household water treatment products, by acquiring other companies.
SVT is organised into four divisions based on product:
⮹ The Fresh Water Division, which supplies potable water
⮹ The Desalination Division, which constructs and operates desalination plants
⮹ The Engineering Division, which manufactures water treatment equipment and power turbines
⮹ The Consumer Products Division, which manufactures home water filters
Why do they have different divisons, who are the skateholders in the diviisons and what power/authority do they have. and what is thier leadership style:
Each division is headed by a director with operational and tactical authority, enabling quick decision making. For example, in response to climate change causing shortages of potable water in some countries, Yannick Pedersen, the director of the Fresh Water Division, was able to quickly find alternative sources of potable water.
Yannick has a situational leadership style that works well in a division that has to respond quickly to unexpected changes in the external environment. His leadership style contrasts with the style adopted by Ariadne Johansen, the director of the Engineering Division. Many employees view Ariadne’s leadership style as autocratic, a style that may have led to the Engineering Division being one of the industry leaders in productivity per employee (Economcs of scale) However, Yannick has clashed with Ariadne on several occasions, as he feels that machinery needed to update water treatment plants has been delayed due to Ariadne having different priorities.
The 4 divisons what do they do, important info
Fresh Water Division
This division sources, treats, stores and transports water from the environment (surface water deposits, rivers and subterranean aquifers) for distribution to populations. The water is collected and stored in large manufactured reservoirs. The division, which supplies potable water to nearly 200 million people around the world, has increased in size through both internal and external growth strategies (One of their strengths) . Its most recent acquisition (example of external grow) was Geng PLC, a major water supplier in the United Kingdom (UK).
Desalination Division
Desalination is a process that removes salts and other minerals from sea water to produce water that is suitable for human consumption or irrigation (water for on farmland. SVT’s Desalination Division manufactures and operates desalination plants around the world, providing two income streams. The division provides 15% of the world’s desalination capacity.
The market for desalination is growing rapidly, and some estimates suggest that the global water desalination market will double in the next 10 years (potienal growth questions). SVT currently operates desalination plants in 19 of the 120 countries that use such plants, including Australia, China, Greece, India, Japan, Portugal, Saudi Arabia, Spain and the United Arab Emirates.
The Desalination Division also manufactures much smaller desalination plants , which are installed on seagoing vessels. The large increase in the demand for cruise holidays in the last 20 years has boosted SVT’s sales of these plants by 300% since 2015.
Engineering Division
This division manufactures equipment and machinery for SVT’s water treatment plants, with factories in Norway, Germany and the UK.
To broaden its product range, SVT completed a takeover of a rival engineering company, H4 PLC, in 2015. H4 manufactures steam and gas turbines in four factories in the UK. These turbines produce electricity. Originally a family-owned business, H4’s board of directors had been reluctant to embrace change. Its factories operated five days per week, with a single shift that ran from 8.00 am to 5.00 pm each day. H4 employees were paid competitive salaries, similar to those offered by rival businesses, but the company never made use of any other financial or non-financial methods of motivation for its employees. (Potential Motivation questions)
Consumer Products Division
The Consumer Products Division manufactures and sells water filters for use at home. The filters take potable water and use carbon to remove calcium, chlorine, copper, cadmium and zinc. These filters, which do not remove bacteria or viruses in the water, are not suitable for use in countries that have problems with access to potable water.
Between 2005 and 2010, SVT’s Consumer Products Division made consistently increasing contributions to SVT’s overall profits. In the same time period, SVT’s share price rose by 65% and annual profits doubled, enabling the company to increase its dividends each year.
HR: what do they do, what issues did they experince, their solustion and the result of it.
As a result of moderation programme:
modernization programme:
The modernization programme of the former H4 factories was completed successfully in 2016. The objective—to operate these factories 24 hours a day, seven days a week, with three shifts per day—was met.
By reorgrmnaing operations they acheived economis of scale. Brcuase they waned all facotires to open 24/7 they did the modertnation programme
SVT offered a one-time incentive payment to employees who agreed to sign a new flexible-working contract, which would include accepting a new shift pattern every six months. Employees who did not want to sign this contract were offered generous payments to leave SVT. Approximately a quarter of the employees, with an average age of 61, turned down the flexible-working contract and left the company. (Potiental Ethical issues) (Labor turnover)
However as the result of modernization programme:
he modernization programme of the former H4 factories was completed successfully in 2016. The objective—to operate these factories 24 hours a day, seven days a week, with three shifts per day—was met. In the last six years, labour productivity has improved, unit costs have fallen, and labour turnover figures in these factories have been consistently below the national average.
Reorganization of the operations of H4’s UK factories has acheived them , differnet types
organization of the operations of H4’s UK factories, achieving economies of scale
Motivation tactics for employees
H4 employees were paid competitive salaries, similar to those offered by rival businesses, but the company never made use of any other financial or non-financial methods of motivation for its employees. (Potential Motivation questions)
Consumer product diviosn imporant infomration (such as finance) , how id they grow
Between 2005 and 2010, SVT’s Consumer Products Division made consistently increasing contributions to SVT’s overall profits. In the same time period, SVT’s share price rose by 65% and annual profits doubled, enabling the company to increase its dividends each year.
SVT increased its market share in the home water filter industry by both external and internal growth. From 2010, SVT began to take over many small water filter manufacturers in both Europe and the United States of America (USA). SVT aims to become the brand leader in this market in both Europe and the USA. In 2018 SVT’s board of directors approved a substantial five-year marketing budget. (Marketing Questions)
CSR, and what is their program and what does it conssit of with what purpose?
Skateholder responsible
Corporate social responsibility (CSR) – SVT’s Outreach Programme
SVT set up its Outreach Programme as part of the company’s commitment to helping people in less economically developed countries (LEDCs). The programme offers these countries free skilled labour provided by SVT employees. After 10 years of continuous employment, all employees are offered the opportunity for a three-month paid career break to take part in the programme. SVT pays the employees’ travel expenses and accommodation costs and continues to pay their salary. As part of the programme, employees have taught in schools, dug wells, repaired infrastructure and provided training to local people in many LEDCs around the world, including Angola, Sudan and Yemen. In the last 10 years, 6000 SVT employees have taken part in the programme. SVT works with charities and non-governmental organizations (NGOs) to identify projects that would make the best use of SVT employees.
