AEON Co.(M) Berhad is a public listed company, incorporated and located in Malaysia. It is listed on the Main Market of the Bursa Malaysia Securities Berhad (AEON CO.(M) BHD. 2017, p.2). It is a leading retailer in Malaysia with a total revenue of RM4.04 billion for the financial year ended 31 December 2016 (AEON CO.(M) BHD. 2017, p.13). The ‘AEON’ name today is well established among Malaysians as well as foreigners, especially due to its association with the international AEON Group of Companies. It has established itself as a leading chain of General Merchandise Stores and supermarkets. In every market, its activities are guided by its unchanging ‘Customer First’ philosophy. Its aim is to combine excellent products with unique personal services in order to surpass customers’ expectations (AEON Co.(M) BHD. n.d).
The head office of AEON Co.(M) Bhd located at 3rd Floor, AEON Taman Maluri Shopping Centre, Jalan Jejaka, Taman Maluri, Cheras, 55100 Kuala Lumpur (AEON Co.(M) BHD. n.d.). AEON stores, shopping centres mostly situated in suburban residential areas in whole Malaysia, catering to vast middle income residential families. For example, AEON malls or stores are located at Kuala Lumpur, Selangor, Johor, Perak, Melaka, Penang, Negeri Sembilan dan Kelantan in Malaysia (AEON Co.(M) BHD. n.d).
Jaya Jusco Stores Sdn. Bhd. was established in Malaysia in 1984 in response to the Malaysian Prime Minister Dato’ Seri Dr. Mahathir’s request to help modernizing the retail industry in Malaysia using the world’s most advanced management expertise. In 1983, Dr. Mahathir visited Tokyo and met the JUSCO Co., Ltd. President, Mr. Takuya Okada to discuss the proposition of bringing the JUSCO name to Malaysia. Then, he invited JUSCO to set up store in Malaysia and a joint venture company was established in September 1984. There were three parties involved: JUSCO Co., Ltd., Japan, Peremba, a leading government owned property company and Cold Storage, a premier supermarket chain store. JAYA JUSCO’s aim was to grow with the people of Malaysia through the transfer of expertise from Japan to Malaysia and human resource development, two factors which would contribute greatly to the progress of Malaysia. During March 2012, all the JUSCO stores and shopping centers in Malaysia are fully rebranded into AEON (AEON Co.(M) BHD. n.d).
At AEON, the mission as a corporate group is that every person has a home and is interconnected within community. The company vision is to create and sustain quality affordable homes that strengthen lives and communities (Alep, 2013).
Common Forms of Business.
AEON Co.(M) Bhd. is a public listed company, incorporated and located in Malaysia. It is listed on the Main Market of the Bursa Malaysia Securities Berhad, investors can purchase stock through Bursa Malaysia with the stock code “6599” or identify by stock name “AEON”. (AEON CO.(M) BHD. 2017, p.2)
AEON Co.(M) Bhd. is holding company during the financial year is AEON Co., Ltd., a company incorporated in Japan and holds 51.68% equity interest in the Company. AEON Co., Ltd. is part of the AEON Group of Companies in Japan which consists of AEON Co., Ltd. and over 300 consolidated subsidiaries and affiliated companies who are engaged mainly in the retail business as well as financial services, shopping centre development, other businesses and services. The AEON Group of Companies in Japan is an integrated Japanese retailer and is active not only in Japan but also throughout ASEAN and China. (AEON CO.(M) BHD. 2017, p.14)
It is principally engaged in the operations of a chain of departmental stores and supermarkets selling a broad range of merchandise from clothing, food, household products, other merchandise and property management services of malls. The Group’s only subsidiary is involved in furniture retailing with a presence of three outlets. This furniture retail arm is a joint venture with Index Living Mall Group, a leading furniture maker and retailer in Thailand. This Joint Venture Agreement entered into between AEON Co. and Index Living Mall Company Limited to jointly incorporate and register a private limited company in Malaysia in the name of “Aeon Index Living Sdn. Bhd.” (AEON Co.(M) BHD. n.d). Besides, AEON Fantasy (Malaysia) Sdn. Bhd. is jointly owned by both AEON Co. (M) Bhd. and AEON Fantasy Co., Ltd. (Vacancy, n.d.). AEON Co, (M) Bhd. owns 20% stakes of AEON Fantasy (Malaysia) Sdn. Bhd, 70% stakes of AEON Index Living Sdn. Bhd. and 20% stakes of AEON TopValu Malaysia Sdn. Bhd. (AEON CO.(M) BHD. 2017, p.14)
Ethics and social responsibility.
Ethics decision made by AEON Company (M) Berhad was moral right rule. Because AEON wants to make sure consumers have more information to their products and can make correct decisions. Their products are labeled with information that is easy to understand and simple to use. The labels include nutrition information on products displayed example at AEON Bakery and AEON Sushi (AEON Co.(M) BHD. 2017, p.29). All merchandisers of AEON are bound by the AEON’s Purchasing Code of Ethics. This code regulates the relationship between employees and suppliers, making sure all businesses are conducted ethically. Their services or supply agreements are terminated immediately for a period deemed fit by AEON (AEON Co.(M) BHD. 2017, p.29). This decision making by AEON is practical rule.
Social responsibility of AEON Co.(M) Berhad was divided to four part which are Environment, Community and Marketplace (AEON Co.(M) BHD. n.d). AEON believes that green environment is the basis for a better life and has developed some programs to preserve biodiversity, eliminate emissions of carbon dioxide. AEON also trying hard on create a higher environmental awareness and educate younger generations on the importance of protecting environment (AEON Co.(M) BHD. n.d). For example AEON work together with FRIM launches tree planting programme to create a green environment as well as provide a platform for local communities to learn and appreciate the environment (CCU, 2017). AEON organized ‘Forest Tree Diversity Planting’ to effort in restoring and re-greening the former tin mining area (The Star Online, 2014). AEON also encouraging people to join its “Say No To Plastic Bag” campaign, use reusable bags not plastic bags (Jayaraj, 2008).
In Community section, AEON try to promote healthy, safe, and interactive activities with communities in locations where their stores operate. The Company strives to be more aware of its responsibility to act as a responsible corporate citizen in all its efforts. AEON continues its activities aimed at providing opportunities that promote environmental conservation, promoting educational opportunities and social responsibility and healthy living among the community. It may take many forms including philanthropic initiatives, such contributions and voluntary donations (AEON Co.(M) BHD. n.d). Example AEON team deliver RM20, 000 worth of essential aids such as food and household necessities to 200 victims affected by the flood in Kelantan and help them to cope with the impacts of the flood (AEON Co.(M) BHD. n.d) . AEON organized a Mega Blood Donation campaign and collected 2,500 blood bags within three days. The volunteer blood donors among staff members and customers contributed their blood that was distributed to local hospitals (Menon, 2007).
Social responsibilities of AEON for marketplace are AEON organized Transformation of Kedai Runcit (TUKAR) that aims to modernize and improve traditional ‘pop and mom’ shop. With the guidance of an established retailer like AEON, the sales of TUKAR shops have increased and the entrepreneurs have gained more retail manage knowledge (AEON Co.(M) BHD. n.d). AEON works with government agencies to support small and medium enterprises (SMEs) on opportunities to gain marketing experience and promote local brands to the public. The entrepreneurs were given shelf space to sell their products in AEON stores (AEON Co.(M) BHD. n.d).
In a nutshell, AEON Co.(M) Berhad is actively embrace socially responsible behavior. AEON is having proactive approach with high social responsibilities.
Managers and managing.
Datuk Iskandar Bin Sarudin serves as Non-Executive Independent Chairman of the Board of AEON Co. (M) Bhd.(Staff, 2017). The board of director of Aeon also followed by Managing Director Shinobu Washizawa, Executive Directors Poh Ying Loo and Hiroyuki Kotera, Non-Independent Non-Executive Director Kenji Horii, Independent Non-Executive Directors Datuk Syed Ahmad Helmy bin Syed Ahmad, Dato’ Tunku Putra Badlishah Ibni Tunku Annuar, En Abdul Rahim bin Abdul Hamid and Charles Tseng (AEON CO.(M) BHD .n.d.).
Besides the board of director, AEON be led by a group of senior management that followed by Managing Director, Executive Director of Corporate Management, Executive Director of Business Operation and General Manager including General Manager of Corporate Planning, Specialty Store Operation, General Merchandise Store Operation, General Affairs, Mall Leasing, Technology & Business Process Development (Supply Chain Management), Merchandising, Legal, Asset & Property Management and Finance & Accounting (AEON Co.(M) BHD. 2017, p.12).
A manager should have conceptual skills, human skills, and technical skills. To improve the managerial skills of manager, AEON conduct Management Trainee Program. This Program aimed at training new talents into the organization desired corporate culture and develop qualified individuals into future leaders. So that they have ability to make decision, lead and control employees. Through the training knowledge, techniques to perform organizational role, management, analytical and problem-solving skills, it has also taught them how to become a successful retailer and efficient manager (AEON CO.(M) BHD .n.d.).
During controlling, managers have the power to change the workplace such as organization’s people, technology and structure. AEON manager with human skill control the work process engineering, restructuring, empower decision in decentralization and work teams then a corrective action taken in order to make adjustment (Studymoose, 2016). AEON’s Top manager leads employee with using interpersonal roles. Aeon have a clear figurehead as a symbol of the organization’s mission that going to achieve. Employees have a good relationship with top manager, all feedbacks are collected during the meetings then the problems will be compiled and analyzed. To improve communication and liaison between top management and employees, AEON conduct periodical get-together, such as sports activities, festive gatherings and appreciation events (AEON CO.(M) BHD. 2017, p.37).
The manager as a planner and strategist.
A strategy and a plan are important to Aeon Co.(M) Bhd because it sets direction and the priorities for the company. The vision and mission statements are important to communicate the goals of the plan to employees and the public and it is developed before a plan. The vision of Aeon is every person has a home and is interconnected within community (LinkedIn Corporation, 2017). Its mission is to create quality affordable homes that strengthen lives and communities (LinkedIn Corporation, 2017). Aeon’s goal is to operate as an “international-scale retailing group” (LinkedIn Corporation, 2017).
During planning, managers need to analyze company SWOT strategies. Aeon’s strength is it has pricing power so customer will continue use its products and services (LinkedIn Corporation, 2017).Then, Aeon has less of space or capacity to store their goods which considered as weakness (LinkedIn Corporation, 2017). In opportunity aspect, they can diverse their portfolio of products and services through capture new market (LinkedIn Corporation, 2017). It plans to see where the synergies are and bring in other businesses such as wellness and healthcare into Malaysia (The Star Online, 2017). In threats aspect, Aeon have to compete with other hypermarket (LinkedIn Corporation, 2017).
As a standing plan which is used in programmed decision situations, the product and marketing organizations have joined forces to create a structure that can develop new value-based products based on a deeper understanding of customer needs. In conjunction with market growth, Aeon strengthens its merchandising function to respond to customer demand for high quality products. Firstly, it meets all price products according to price, such as low, medium or high prices (LinkedIn Corporation, 2017). Those located in big cities, their prices may fall between medium to high prices, based on local buying power and branding products (LinkedIn Corporation, 2017). While in small towns, their products can range from low to medium. Secondly, place for example distribution channel, the place where the product will be sold, which can be local, regional, nationwide, or international (LinkedIn Corporation, 2017). They now have supermarkets and hypermarkets all over the country and develop their growth gradually. Thirdly, it will do sales promotion such as giving products samples, coupons, freebies and rebates for its customers, sales employees, or other retailers (LinkedIn Corporation, 2017). To promote their supermarkets and stores to stock and display their products, it used sales promotion techniques including deal loaders and trade allowances (LinkedIn Corporation, 2017). The purpose is increasing consumer demand, stimulating market demand.
Moreover, as a single-use plan is only used for a time to solve a new problem. Aeon Co.(M) Bhd plans lower capital spending in year 2017 (The Sun Daily, 2017) .According to the Sun daily, it has allocated a capital expenditure (capex) of RM500 million for the financial year ending Dec 31, 2017 (FY17), compared with RM700 million in FY16, mainly for the opening of the Aeon Mall Kempas in Johor Baru by third quarter this year and the refurbishment of its Aeon Queensbay store in Penang (The Sun Daily, 2017) . Aeon executive director Poh Ying Loo said the group has restructured its development portfolio in a challenging business environment today, commenting on the lower capex in 2017 (The Sun Daily, 2017). Poh: “An investment into the capex is an investment into the future. For the last two years, we have built stores such as the Aeon Mall Shah Alam and Kota Baru. Going forward, we will refurbish their stores selectively to refresh company ages and provide a new customer experience.” (The Sun Daily, 2017) Thus, it shows that the leader or manager took action in their planning and attained their goal.
In planning process, managers are involved in determining the organization’s mission and goals. Then, they analyze current situation and develop strategies. Finally, they implement strategy by allocating resources and responsibilities to achieve strategies.
A daily operation, the Board has delegated authority and power to several levels of Management including Managing Director and Executive Directors. The Managing Director and the Executive Director each command their own respective functions to ensure the smooth operation of the Company. They are responsible for implementing of board policies approved by the Board and are required to report and discuss at Board meetings all material issues currently affecting the Group and its instructions, projects and regulatory development (AEON Co.(M) BHD.2017, p.44).There are three committees under board of directors which are Nomination Committee, Remuneration Committee besides Audit and Risk Management Committee (AEON Co.(M) BHD.2017, p.44).
Determine the design of organizational structure is based on organizational environmental, strategy, technology and human resource. Change some things in their workplace can classify these changes as organizational change that is transformation of the organization’s people, structure, and technology (Study Moose, 2016).Firstly, structural changes includes any alteration in power relationships, coordination mechanisms, degree of centralization, similar organization structure variables or job design (Study Moose, 2016). AEON Co.(M) Bhd. controls the work process of engineering, restructuring, and empowering decisions in decentralization, wider spans of control, reducing specialization, and working teams (Study Moose, 2016).These structural components provide employees the authority and means to carry out process improvements. It helps cross-functional work teams can work together to encourage problem solving.
The main practices for AEON Co.(M) Bhd. is align the objectives of change effort with organizational strategy. This is because of organization’s strategic plan authenticate the products and services and the core business, and it helps organization support processes that help deliver these products and services (Study Moose, 2016). Moreover, it identifies the organization’s special competencies and help organizational enhance the core and process of key support organizations (Study Moose, 2016). For example, the goal change efforts do not support organizational strategy so the change effort will not produce significant value to the organization (Study Moose, 2016). Therefore, by coordinating the goals of change with their business strategy, the change effort will have a greater chance of succeeding because the change effort will receive greater executive commitment than if the goals are not aligned. To achieve this, AEON clearly defined the structure, procedures, and its principles, policies and management system.
Technology is the combination of skills, knowledge, tools, equipment and machines used in the organization. Most of the managers in AEON Co.(M) Bhd. deal with changing technology are continuous improvement initiatives on their products and services, which are directed to develop flexible processes to support better quality operations as well as their employees committed to continuous improvements are constantly looking to improve things (Study Moose, 2016). So, it provides training to employees who need new technology and methods. Furthermore, it provided proper employee education and training is needed, which requires problem solving, decision making, negotiation, statistical analysis, and team-building, and they can analyze and act on data (Study Moose, 2016).
The responsibilities of Aeon’s human resource officer manager are ensuring recruitment activities are within the estimates and timeline (AEON Co.(M) BHD. n.d). Moreover, planning and implementing recruitment exercise basically for Headquarters and liaising with Head of Departments, to discuss and advise about current and future worker needs (AEON Co.(M) BHD. n.d). So, it can help Aeon monitor its progress in achieving its goals and objectives in the strategic plan.
In conclusion, ethics and social responsibility of AEON Company (M) Bhd. was divided to four part and AEON also practices through actions. Furthermore, we have identified there are four organization change management principles, which are very important to organization change. We also analyze the company’s practices and operations in managing organizational changes. As a result, organizations need to adopt principles and practices of change management based on their business needs. To promote success, the organization should address the three identified critical processes that achieve executive commitment, realize the vision of the future organization and convey that vision to the organization.
In additional, a select group of people who have the necessary skills and personal characteristics should lead the process of upgrading the software process. There are needs many techniques for managing resistance to change included education and communication, participation, facilitation and support, and negotiation. Lastly, the human resource variables are the important part. It included training and development, high job security, and encouraging individuals to have ideas.