MANAGEMENT AND MARKETING IN THE POLISH SAWMILLING INDUSTRY
Author: Ratajczak, E (Ratajczak, Ewa); Pikul-Biniek, J (Pikul-Biniek, Joanna)
Year: 2009
Paper: 52
International Journal of Innovation
Brief Introduction:Drivers of changes in the present economic reality are globalisation, innovative technologies, competition, and new types of customer behaviour. As a result of these processes previous concepts of and methods for company management become insufficient. To gain competitive advantage in the market it is necessary to take more into consideration of such aspects as human resources development, knowledge transfer, and enhancement of customer loyalty. The aim of this article is to present results of research on the changes in the Polish sawmilling industry in the field of management, organisation, and marketing. Surveys and interviews with experts carried out in 2006 and 2008 were main research methods. Modern management systems and organisational structures encountered in Polish sawmilling companies stem to a great extent from specific features of this industry which encompass great dispersion of and dominance of microenterprises (around 9 thousand business entities, including over 90% with employment of up to 9 people). At the same time this industry is of great economic importance - it produces 9.7% of sold production of traditionally defined wood industry (including furniture) and employs 34 thousand people. After a deep crisis at the end of 1990s the economic situation of the industry improved in the period 2006 2008 - in 2007 the industry was characterised by one of the highest growth dynamics amongst the industries of the wood sector. From conducted research it follows that in the Polish sawmilling industry bigger companies, most often having a considerable share of foreign capital, are generally more open to innovative management concepts and techniques. In such companies management is made up of specialist in the field of economics and management more often than in small companies, whereas in smaller firms traditional techniques of company management are used the oftenest, whilst not in all cases this is so because of deliberate action of the management. Moreover, generally in microenterprises the owner himself manages the resources of the organisation, decides the goals of the enterprise and methods for their attainment. On the basis of research it may be stated that part of sawmilling companies regularly streamline their organisational structures (of over 100 surveyed sawmilling firms every third company streamlined its organisational structure in last 5 years), although this is not a common phenomenon. However in the surveyed companies a centralised decision-making structure is dominant which means that there is lack of characteristic of modern organisation "democratisation" of management and "flattening" of organisational structures. Until now full implementation of such modern concepts as: knowledge management, comprehensive quality management, innovation management, lean management, reengineering, benchmarking, time-based management, or coopetition, was not observed in the Polish sawmilling industry. However application of some actions specific to these ideas might be observed. In the context of knowledge management the research showed that not many sawmilling companies have continuous programmes of employee training which significantly limits development of these organisations. In the sphere of quality management every third sawmilling company has an organisational unit responsible for quality, which is a positive phenomenon. However still not all the producers see the necessity of having ISO certificates. With reference to changes in the innovation sphere it was observed that hardly ever sawmilling companies have in their organisation structure units responsible for innovations, R&D, and implementation of new technologies. In recent years new investment have been most often connected with machinery, whereas outlay on purchase of licences, patents or new technologies has been small. Moreover, the research shows that Polish sawmills more and more often change their production profile to further processed products of higher added value. Post-sale service has also been increasing or its scope has been broadened, which evidences modern approach to management in which the client and his loyalty is the most important. The stronger consumer orientation is reflected mainly by the fact that most sawmilling companies create and maintain a permanent network of consumers and have system of preferences for their regular customers. At the same time product promotion, most often over the Internet, is a key marketing technique. This way of communication is most advantageous to big sawmills or sawmills specialising in the production of unique goods. The following factors can be found amongst other factors which have a bearing on winning and keeping the clients: offer of high quality products, low price, unique design, supply on time, and possibility of complaint. However it is a disadvantage that regular marketing research is relatively seldom conducted in sawmilling companies. Some other forms of activity characteristic of modern management trends were observed in the sawmilling industry as well. The examples of such activities include: reduction of poduction area and standardisation (features of lean management), setting company's priorities and strategy by comparison with the best companies and adaptation of the model practice (benchmarking), commissioning or subcontracting of selected work packages within the framework of continuous cooperation (outsourcing). On the basis of research and declared intentions of management it may be assumed that in the future the variety and scale of modern management practices application in sawmilling companies will grow.