Norton Lilly International - Case Study Example

Norton Lilly International Case Study Company overview Norton Lilly International is a privately owned shipping agency involved in providing shipping services to the services to different clients in the world. Previously, the company pursed growth through formation mergers and acquisitions and by 2005, the company was the largest shipping agency in South America. However, the growth in the company was not without consequences given that such growth had not been well entrenched in the company's culture as asserted by (Burton and Gamble 369). Consequently, operational efficiency did not match the agency's growth path leading to losses in 2006. Following the loss in 2006, the agency hired James Burton to double as the Chief Operations Officer and Chief Finance Officer given his professional qualifications as a Certified Public Accountant who had been consulted by various organisation that sort to achieve growth (Burton and Gamble 368). The agency's mission is to restore operational efficiency thereby helping to increase its profitability. The company sort to achieve this mission by pursuing growth which would see it double its size (Burton and Gamble 368). In addition, the agency had an objective of ensuring smooth transition as it was at the verge of being passed over to the next generation of in the family (Burton and Gamble 368). Basically, the company wanted to have a turnaround strategy which would ensure both operational efficiency and profitability. Crafting of the strategy In first stage of the endeavour to bring about efficiency at the agency required development of a strategy. The strategy was based on ensuring the company achieves sustainable competitive advantage and could be based on five different perspectives that include; Dominant Industry Economic Features, Five Forces Analysis, Competitive Analysis, SWOT and PESTEL and Financial. Generic strategies may also form the basis for crafting a business strategy. A business can rely on a combination of perspectives or all of them. Based on the dominant industry perspective economic features, Burton first role in developing the strategy was to assess the business to identify the areas that could help the company get a strong foundation for execution (Burton and Gamble 370). Under this approach, core business areas are assessed and addressed given that they support other parts of the company. This is also in congruent with the competitive advantage approach which calls for one to assess the strengths and maximize on them to ensure achieve the mission set out. The crafting of the strategy execution was also based on PESTEL analysis which postulates that a strategy must assess the social perceptions of the people involved (Goodstein and Burke 5). Consequently, Burton understood that he was bringing change among a group of people who were equally competent and therefore he had to introduce ideas hat could be easily accepted and therefore he chose an incremental approach. The other components of PESTEL require the political, environmental, technological, economic and legal macro-environment within which a business is conducted given that they may affect its growth. In the strategy crafting, Burton noted that he could only achieve change through a gradual process as this would give the executive the confidence that such change will be bring tangible benefits to the company. Moreover, Burton believed that gradual and logical business growth would help the company identify new ways of doing things. Executive Strategy After crafting a growth strategy, it has to be implemented to bring about sustainable positive change to the company. In such efforts, the company follows a series of activities which begins with organizational building, strategic leadership and resource allocation. The execution also involves addressing the organizational culture, evaluating and recognizing achievements and management of the operating systems of the company (Grudy 10). The first weakness addressed in the executive strategy was to deal with centralization. Previously, the agency’s decision making was largely centralized and to bring change; Burton formed an executive committee whose role was to ensure decentralization of decision making (Burton and Gamble 370). This is tied to the mission of passing the agency over to the next generation as it would ensure that there is no gap when the top management who make decisions for the company exit. In the case of Norton Lilly, Burton did not focus on changing the strategy but rather, he concentrated in ensuring that the agency's top management understood the value of a good strategy. This is part of bringing about strategic leadership that is able to create value to customers and investors. As a strategy to manage information, the company implemented process mapping to ensure that everyone in the organization understands its functioning (Burton and Gamble 369). Changing the organizational culture is a critical part of strategy execution process given that employees need to adapt to a new way of doing things. At Norton Lilly, Burton had to change the perception of employees who had a mind set of ''we have always done it this way'' (Burton and Gamble 373). In changing the organizational culture, Burton wanted the employees to critically assess the operations and propose better ways of doing things rather than following laid out procedures. This strategy also helps to change procedures and policies which come with a new process. Execution of a business strategy also called for review of the policies and procedures and implementation of the best practices. Among the changes made in the company policies and procedures were the launch of process mapping in the Linear department. In this department the problem that was identified was that end to end service delivery was inefficient given that the billing, cargo release and freight collection were not well coordinated and did not observe best practices leading to penalties. However, the execution of the strategy enforced best standards that needed to be followed where departments were required to expedite their operations. Process mapping was fruitful given that by the end of 2007, the executive and the employees could clearly identify weak points and address them. In the execution process, resources were first allocated to address the most critical areas of business operations (Grudy 10). This is justifiable given that the company resources including human and financial resources are usually constrained and therefore they are usually directed in areas that will bring about significant change to the agency. In addition, strategy execution calls for continuous assessment of progress. Consequently, Norton Lilly evaluated its progress based on performance and financial returns (Burton and Gamble 373). In the process of transforming the organization through strategic management, it is critical to ensure that there is evaluation and control. This helps to understand how the strategy fits with the agency in bringing the change needed (Goodstein and Burke 10). It also helps in assessing the change by the strategy and address any short falls. It is also critical to evaluate whether the performance in the organization has been enhanced by such a strategy which can be achieved through evaluating employee motivation and customer satisfaction. Summed together, these activities allow a company to enjoy sustainable growth and profitability. Work cited Burton, James and Gamble, John. ''Norton Lilly International Implementing Transformational change in the shipping industry.'' Norton Lilly International Case 24 Goodstein, L and Burke, W. ''Creating Successful organizational change' Organizational Dynamics No 4 Vol 19 (2001) Grudy, Thomas. ' Strategic Choice' Management Quarterly Part 8 (July 2000). p 2-10 Read More