1 Skill development guide formal report

Skill development guide: writing a formal report

No skill is as important to managers as report writing. As a manager of the future, you need to be prepared to write progress reports, proposals, accident reports and evaluation reports – to name but a few! You would be likely to use a formal report format if:  Your subject matter is important to your organization  Your findings are extensive  The analysis is complex  The report is to be used over a long period of time.

Remember that a formal report should reflect and maintain the organization's professional image – especially if it is to be seen by people outside the organization.

Because of the importance of formal report writing for managers, lecturers in business schools often set assignments that require you to write a report of this nature. In this skill module we shall be concerned only with suggestions for the writers of formal management reports. We shall not try to present a comprehensive treatment of informal reports, including information reports, recommendation reports, justification reports, and proposals – for more information on these, please refer to the suggested further reading at the end of this section.

The guidelines given in this document are general. In all ‘formal report’ assignments it is important that you apply OB knowledge to the question or case/problem in hand in order to produce critically informed analysis, and that you seek guidance from your lecturer on each of the following criteria:  Length of report  Use of headings  Documentation format.

What exactly is a formal report?

The main differences between formal and informal reports are in tone, structure, and length. The planning of every report begins with a statement of purpose explaining the goal, significance, and limitations of the project. Reports include primary information from your own observation and experience and secondary information gained through library research. Formal reports require careful citation of information

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taken from secondary sources in the form of footnotes, endnotes, and a list of references in a bibliography. The overall presentation of the report may be deductive or inductive and its individual parts may be arranged chronologically, geographically, spatially, or topically. In their discussion of strategies or plans for the organization of formal reports, Guffey and Nagle (2007) define the deductive plan as one that ‘present big ideas first’. This means beginning with findings, proposals, or recommendations. For example, if you were studying four possible reward systems to improve employee motivation, you would begin by recommending the system you judge to be most appropriate to the organization's human resource strategy and follow with discussion of the alternatives. It is suggested that the deductive strategy is used when the reader is knowledgeable and supportive.

In contrast, the inductive strategy or plan presents data and discussion first, followed by conclusion and recommendations. Guffey and Nagle (2007) believe that this sequence is often most effective because ‘formal reports generally seek to educate the reader’ (p. 279). Using the study of four possible reward systems to improve employee motivation mentioned above as an example, an inductive plan would begin with information regarding all proposed programmes, followed by analysis of the information and conclusions, and finally a recommendation drawn from that analysis. The format of the report Final presentation of the formal report includes three major sections:  Prefatory parts – such as the letter of transmittal, the title page, table of

contents, and an executive summary  The body – includes an introduction, background information, discussion of

findings, summary, conclusions, and recommendations  Supplementary parts – such as the works cited, a bibliography, and the

appendix. Prefatory parts Letter of transmittal First impressions are important; the letter or memo authorizing the report should therefore be given serious consideration. The letter should:  Deliver the report (‘Here is the report requested by …’)  Present an overview of the report  Offer to meet to discuss the contents

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3 Skill development guide formal report

Title page The title page is the first page of report. It should include:  Title of report  Author's name and company  Name of addressee or recipient  Date  Report number (if necessary).

Table of contents Rather predictably, this shows the contents and arrangement of the report. It should always include a list of appendices, and sometimes also a list of illustrations. Executive summary This is an abridged version of whole report, written in non-technical terms; it should be very short and very informative; normally it describes salient features of report, draws a main conclusion and makes a recommendation. It is always written last, after the rest of report has been written. The body Introduction The job of the introduction is to prepare the reader for what is to come; it should indicate the purpose and scope of the report and provide background information so that the reader can read the discussion intelligently. It should also motivate the reader, making them understand why the problem was researched and why the study represents a contribution to existing knowledge. Guffey and Nagle (2007) suggest that the introduction contain seven items:  Explanation of how the report originated and why it was authorized  Description of the problem that prompted the report and the specific research

questions to be answered  Purpose of the report  Scope (boundaries) and limitations or restrictions of the research  Sources and methods of collecting information  Summary of findings (if the report is written deductively)  Preview of the major sections of the report to follow, thus providing coherence

and transition for the reader.

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Background The introductory paragraph is usually followed by a review of relevant literature, often given the heading ‘background’. The literature review serves the following purposes in the presentation of the report:  Placing the research in a historical context to show familiarity with relevant

developments  Distinguishing what has been done from what needs to be done  Showing how your research builds on prior knowledge by presenting and

evaluating what is already known about your research topic  Offering a point of reference for interpreting your own findings. Your report

will show how your study expands, revises, or improves knowledge in an area. The goal of the literature review is to demonstrate ‘the logical continuity between previous and present work’ (APA, 1994, p. 11). Discussion of the findings This section is a narrative, providing all the details, evidence and data needed by the reader to understand what you are trying to do, what you have actually done, what you have found out and what you think should be done next. Formal reports often use visual aids to emphasize, summarize, or clarify information. Some general guidelines apply to the use of visuals – they must:  Have meaningful titles and headings  Be identified and discussed in the text  Be located close to their reference in the text  Be vertical on the page  Include a credit to the source must be credited if appropriate

Graphics software packages can create professional-looking visuals. Summary / conclusions After your discussion of the findings, you should offer a summary of the major conclusions or milestones reached. Conclusions are only opinions, so can never advocate action – that is the preserve of the next section. Recommendations If the discussion and conclusions suggest that specific action needs to be taken, the recommendations state categorically what must be done.

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Supplementary parts References This section should include a list of reference documents which were used to conduct the project and which you consider will be useful to the reader. It should contain sufficient information for the reader to correctly identify and order the documents. In-text citations should be referenced following the APA method. This is outlined in detail in the ‘Writing a critical essay’ part of the Skills Development Guide, but as a brief guide, follow the format shown in the reference below.

Bratton and Gold (2007) identify, ‘five major HRM models that seek to demonstrate analytically the qualitative differences between traditional personnel management and HRM’ (p. 21).

At the end of the report, all works you have referred to in this manner should be included on a page entitled ‘References’, following the relevant format (see ‘Writing a critical essay’). Bibliography It is recommended to include a bibliography that lists all sources consulted in the research, whether or not you actually cited them. Appendices An appendix is a section at the back of the report that contains supporting data (such as charts, tables, photographs, specifications, and test results) that rightly belong as part of the main discussion but, if included with it, would disrupt and clutter the major narrative. If you find it necessary to include an Appendix you should make clear reference to it within the relevant section of the main discussion so readers know when it would be appropriate and enlightening for them to refer to it.

Suggested further reading

Guffey, M. E. and Nagle, B. (2007). Essentials of Business Communications (Fifth Edition). Scarborough, ON: Nelson. Hart, C. (1998). Doing a Literature Review. London: Sage.

Work and Organisational Behaviour: Skill Development Guide © Carolyn Forshaw, 2010

SMU108

This case was written by Professor Shantanu Bhattacharya and Lipika Bhattacharya at the Singapore Management University. The case was prepared solely to provide material for class discussion. The authors do not intend to illustrate either effective or ineffective handling of a managerial situation. The authors may have disguised certain names and other identifying information to protect confidentiality. Copyright © 2021, Singapore Management University Version: 2021-12-12

NIO: BATTLING TESLA WITH BATTERY AS A SERVICE

“Buying is a profound pleasure” were the wise words of Simone de Beauvoir, the noted existentialist

author, on the salutary effects of material acquisitions on the human psyche.1 While they were

spoken more than half a century ago, the impact of acquisitions on consumer utility remained relevant,

but with a caveat. A research report had found that while consumers had the same adrenaline rush

from material acquisitions, the methods of acquisition had changed.2 Over the last two decades,

consumers had been reducing their purchase of physical goods as a percentage of their total

household expenditure, and instead, spending more on services and experiences. They preferred to

access physical goods on a needs basis, in a shorter timeframe. There was a similar trend in the B2B

sector as well; businesses had been lowering the share of illiquid assets like property, plants, and

equipment as a fraction of their assets, and outsourcing more activities. 3 Was this change in

consumer preferences permanent or transient? Could firms offer their products using alternative

means (for instance, as a service) to take advantage of this change? NIO’s CEO and founder, William

Li, was likely betting that the change in consumer preferences was indeed permanent.

On August 9, 2021, NIO shares rebounded 3.1% to reclaim the 50-day and 200-day moving average

indicators after a 16% fall in stock price the previous month. 4 NIO was one of the strongest

competitors of Tesla in the electric vehicle (EV) market in China. While 100% of the firm’s sales

came from China, it had plans to expand globally in the near future.5 Many investors and stock

analysts in the market were closely watching NIO to see if it could mirror the path Tesla had taken

to become a strong global competitor. While Tesla was the clear leader across all markets in the EV

sector, the competition was intense, and NIO had launched battery-as-a-service (BaaS) as its unique

selling point to attract consumers and compete against rivals. In a press release, William Li had stated,

“We believe products and technology must change along with the way people use them and their

entire ownership experience. We want consumers to feel optimistic about owning a car.”6

NIO had launched BaaS in 2020 to offer battery charging and swapping services to EV owners for a

small monthly subscription fee. BaaS users could buy a NIO car without the battery, resulting in

savings of more than US$10,834 (CNY 70,000)7 on all NIO models.8 This brought the EV to a

similar price bracket as fuel-run cars, making it attractive to a wider range of consumers. It also

improved NIO’s price competitiveness against larger EV manufacturers like Tesla in the cutthroat

market.9 Moreover, it allowed the firm to enjoy the subsidies that had been extended by the Chinese

authorities in April 2020 to EVs priced below US$46,400 (CNY 300,000) if they supported battery

swapping. 10 The Chinese government had offered these subsidies with the stated intention of

accelerating the move from fossil fuel vehicles to EVs.

EVs were an important element of the strategy in the transportation sector to act on climate change

and contribute towards a circular economy. They offered a more environment friendly and

sustainable way of life to consumers, and NIO and Tesla were leading the way in producing next

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generation EVs. There was also an increasing push from environmental agencies to allow used

batteries from EVs to be reused for other projects (like home solar) to extend their shelf life, and only

discarding them once their full usage capabilities had been extracted.11 Hence, the BaaS service was

seen as an effective solution to combat the environmental impact of batteries. Individual car owners

did not own and dispose the batteries; instead, the vehicle manufacturer would retain the batteries for

reuse and disposal. Managing the usage of batteries at an organisational level ensured that batteries

could be reused in a more environment friendly manner. BaaS was also useful to the consumers living

in smaller houses/apartments where they did not have the infrastructure to charge their cars.12

However, setting up the infrastructure to support BaaS (i.e. charging and swapping stations at various

locations) was an expensive affair.13 Moreover, these stations could be used for charging only NIO

cars and not other EVs. Besides, the technology for batteries had improved to the extent that they

could last longer in terms of miles travelled based on a single charge, reducing the need for frequent

recharge/swaps at charging/swapping stations. Given the scenario, was NIO’s BaaS venture a

sustainable business model? Could it provide the company with a strong competitive advantage?

Climate Change, Electric Vehicles and the Circular Economy

EVs had seen growth primarily because of the climate change agenda, which had been a topic of

international discussions for the last two decades. A global panel on climate change had forecasted a

temperature rise of 2.5 to 10 degrees Fahrenheit over the next century due to global carbon emissions

with transport accounting for around one-fifth of the total emissions.14 Road transport accounted for

three-quarters of those emissions, i.e., 15% of the total carbon dioxide (CO2) emissions globally.15

EVs were perceived as a reliable solution towards reducing road transport emissions, as they did not

directly use fossil fuels and other carbon emitting sources of energy.16

While EVs had been around for decades, it was only in the early 2000s that governments and

automakers started promoting them as a key technology to curb oil use and fight climate change.17

Subsequently, demand for EVs started to grow, and in 2010, the first modern, all electric, five-door

family hatchback EV (Nissan Leaf) was launched by Nissan for the mass market.18

Over the next decade, many start-ups that specialised in manufacturing EVs emerged, and Tesla soon

became the market leader for the growing EV market. Many large auto manufacturers also entered

the EV market and launched new all-electric models in several consumer categories.19

EV sales increased from 17,000 in 2010 to 2.1 million by 2019, with China accounting for 47% of

the global sales.20 The global EV market was expected to grow to 125 million vehicles by 2030

(refer to Exhibit 1 for Global EV Growth).21 Many traditional auto manufacturers had started to

focus purely on EV models and halt traditional car manufacturing for the future. For example,

General Motors had set targets to stop selling new gasoline-powered cars and light trucks by 2035;

Volvo had decided to pivot to a hybrid and all-electric line-up by 2030.22 23

However, while EVs were expected to reduce the climate impact and pollution problems of transport,

many of the materials used in the batteries were toxic and rare.24 In fact, by 2025, 250,000 metric

tons of EV lithium-ion batteries were expected to reach end-of-life for vehicles.25 However, despite

being non-usable for vehicles, these batteries could still retain 70–80% capacity and could potentially

be used for other purposes.26 Finding a second life for disposed batteries was essential for making

EVs sustainable.27 Reusing batteries from EVs could slow down the resource cycle by extending

their life through recycling.28 Extending the battery life cycle was therefore a crucial aspect in

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improving EVs contribution to overall sustainable development and circular economy. Notably,

capturing the value left in a product after use was the cornerstone of a circular economy.

However, EV consumers were mostly individuals and taxi companies that had little incentive to

recycle the batteries. Besides, conducting such recycling activities for end consumers was a headache

for manufacturing companies and entailed cumbersome tracking and collaborations with multiple

collection, servicing and recycling agencies. In 2020, it was estimated that only 5% of EV batteries

were recycled globally.29 Governments had taken note of this problem, and regulated manufacturing

companies to ensure the sustainability of their products.30

Many EV companies had come up with different strategies to tackle the battery problem. Nissan, for

example, was reusing old batteries from its Leaf cars in automated guided vehicles used to deliver

parts to workers in its factories.31 Volkswagen had a similar approach; it opened a recycling plant in

Salzgitter, Germany, to recycle up to 3,600 battery systems per year. 32 A research study

had concluded that lithium-ion batteries could have a profitable second life as backup storage for

grid-scale solar photovoltaic installations, where they could operate for a decade or more in a less-

demanding role.33

Nissan and Renault had also started reusing batteries to serve the household energy storage market,

with solar panels in the UK as their core customer segment.34 Many third-party entrepreneurs had

established second life battery businesses; for example, energy control solution company Relectrify

in Australia had introduced battery management systems to squeeze more value out of used batteries

and facilitate the transition of batteries into a second life in residential solar storage.35

However, while technology solutions for battery reuse were advancing, economic and regulatory

aspects did not yet provide sufficient infrastructure, framework and incentives for efficient battery

cycles (refer to Exhibit 2 for further details on the Circular EV Value Chain).36 As of 2021, the

global capacity of recycling EV batteries stood at 180,000 metric tonnes while in comparison, just

the number of EV’s introduced on the road in 2019 could generate 500,000 metric tonnes of battery

waste. Thus, it was evident that battery waste posed a significant climate risk, which could dampen

the circular economy benefits of EVs in the long run.37

The EV market in China

China was the world’s largest EV market by demand and sales volume in 2020, constituting 41% of

all EVs sold worldwide.38 The country had tried to promote EVs to consumers in small and large

cities, with the aim of reaching its carbon emission peak before 2030 and achieving carbon neutrality

by 2060.39 EV sales in China were mostly concentrated in large cities with over five million residents,

like Shanghai and Beijing.40

The Chinese government had tried to promote EVs since 2009 by offering subsidies, tax waivers,

and charging points to encourage manufacturers and consumers. It had also implemented other

measures like licensing policies to limit the number of petrol cars on roads using a car plate lottery

system, with winning rates as low as 1% or below, thereby forcing consumers to switch to EVs.41

However, consumers (especially in smaller cities) were still not keen, primarily because of EV’s

higher costs compared to traditional vehicles.42 The price of a standard five seater fuel based top-

tier car was about US$ 34,150 (Nissan Altima)43; whereas the price of an EV was more than double

that amount (Tesla Model X for example was around US$ 89,900)44.

Demand for cars in China was on the rise and analysts had predicted that over 70% of new car sales

(including EVs) globally would come from China by 2030.45 Chinese buyers were big fans of SUVs,

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especially of models from global luxury brands like Mercedes, BMW, and Audi. Tesla was the

undisputed market leader of the EV market in China, focusing on mass market and luxury cars, and

accounted for about 51% of the EV sales in early 2020.46 NIO accounted for 16% of market sales in

the same period and focused on luxury cars. The bestseller in the market, however, was Hongguang

Mini EV (a micro car built by a local manufacturer), which sold about 270,000 units in 2020.47

The EV market in China had mainly flourished because of government subsidies that enabled local

original export manufacturers (OEMs) to sell EVs at affordable prices. However, EV sales had

plunged after the Chinese government cut subsidies by up to 50% in June 2020. The overall sales of

new energy vehicles (including EVs) in China had dropped by 7% year-on-year after these subsidy

cuts, marking the first fall in this market after more than two years.48

However, despite the pullback of subsidies, the China EV market had managed to regain its surge by

early 2021. Analysts predicted that the country would continue to maintain its leading market

position for the next decade.49 EV sales in the country were driven by government policy and

increased consumer demand, as EV prices continued to decline while its quality continued to improve.

Analysts believed that Chinese producers would start to target international buyers in the coming

years, given that they already had a head start on manufacturing at scale over the West and that

government subsidies to the industry were starting to decline.50

NIO

NIO was founded by Chinese entrepreneur William Li in Shanghai, in November 2014. Hailing from

a low-income family in a rural province in eastern China, Li had humble beginnings.51 He grew up

in the mountains with his grandparents and herded cattle as a child. After graduating with a computer

science degree from Peking University, Li took on several part-time jobs to support himself, before

venturing out as an entrepreneur. In 2000, he launched auto information websi