Abstract
Submitted in partial fulfilment of the requirements for the degree of Master of Business Administration at Milpark Business School.
The objective of this study was to examine the role that customer loyalty and employee enthusiasm can play as a strategic objective to increase sales at MB Silicon Systems. In order to address these two factors from a strategic perspective, elements from various concepts have been used to gain a new understanding of customer loyalty, employee enthusiasm and strategy. The final goal of the study was to use the knowledge gained throughout the report to propose a management framework which can be implemented to give MB Silicon Systems a competitive advantage in its competitive industry.
The literature review suggested that a strategy of customer loyalty and employee enthusiasm will result in above average financial performance. Customer loyalty and employee enthusiasm cannot be separated from each other and they are linked by leadership, the vision and core values of the organisation. It is not possible to achieve customer loyalty and employee enthusiasm without the proper formulation and execution of a strategy. Such a strategy needs to utilize core management tools like the Balanced Scorecard which will bridge the vision of the organisation with goal setting mechanisms of motivation. The Balanced Scorecard will ensure that strategic objectives of the organisation will be mapped into the Balanced Scorecard while employees will be rewarded according to achieved targets of these objectives.
Surveys which were conducted with customers and employees have shown that MB Silicon Systems performs below international standards with respect to customer loyalty and that the organisation is failing with its existing strategy. The surveys have also shown that employees are demotivated. This state of demotivation results in a lack of teamwork and mistrust between employees. The lack of teamwork and mistrust is only the symptoms of organisational problems which need to be resolved by organisational redesign, implementation of management principles and healthy corporate governance. The low base of loyal customers and the demotivated state of employees is resulting in below average financial performance.
A management framework was recommended that will transform a strategy of customer loyalty and employee enthusiasm by using proven management tools. Implementation of the framework will ensure a competitive advantage to MB Silicon Systems which will result in above average financial performance.