Common Law - Klondike Mary vs Berts Bar Supply Company - Case Study Example

Running Head: Can Culture Be Managed' Can Culture Be Managed' The Personal Side of Business Can Culture Be Managed' The Personal Side of Business Because human resource management (HRM) requires emphasis on the human element in business, successful strategy must be directed at the employee base more than at upper management or business design. Leadership needs to know who their employees are and be aware of the different levels of management and how they get along with other employees. People will work harder for appreciation than they will for money. Recognition and communication are key elements in a successful company. Richard Ellsworth (2002) explores the corporate mentality and challenges the conventional wisdom that corporations should be dedicated to the creation of shareholder wealth. Further, it is the concern of Stahl and Mendenhall (2005) that strategic and financial goals are too often emphasised in business, whilst the psychological, cultural and human resource implications are not fully recognized. A company that recognises and includes its employees in the decision-making process will enjoy increasing success in the long run. It is the long-term goals that matter the most. Strategy of Managing Culture Organisational development (OD) is a planned organisation-wide approach to improving effectiveness, utilising humanistic values and beliefs about the potential to grow and a willingness to make changes. Work was once considered a mechanistic and rational process, but, over time, research has indicated that organisations are not as rational as the public has perceived them to be. OD is informed by a set of humanistic values and beliefs about the potential of people and organisations to develop and grow. Effectiveness is influenced by relationships, and understanding interdependencies within the work system is critical because change in one place will have an effect elsewhere (Opening Up OD, 2004). There are two ways to develop a business: in terms of structure and in terms of staff selection. Structure is the method used to set up the business from a mechanical and linear viewpoint. It offers a working outline from leadership to individual performance, as set forth in the Burke-Litwin model below (Using, 2006). However, a company that offers incentives for employees will find it much easier to capture the market share in the long run. In this respect, the McKinsey 7-S Framework appears to offer a more interconnected method of organisation (Famous Models 2006). Both of these systems have initiated criticism, but where people are involved, although a rigid framework might appear to bring about positive results, it leaves no room for compromise and is doomed to failure over time. Models of Performance Retrieved from http://www.roffeypark.com/articles/onearticler.php'article_id=169 It should be noted in the Burke-Litwin Model above that although the chart appears to be linear, the use of it in this case is more interactive and circular. The response from employees at AAH Pharmaceuticals in the UK to a questionnaire conducted by an outside company, Roffey Park, garnered an 86% response. The model allowed an analysis of organisational dynamics, and the findings were fed back to employees in a newsletter, completing the circle (Using, 2006). This is one indication of how the Burke-Litwin Model can be used, but unless its structure is flexible, it could bring about a less than satisfactory result. The Seven S Framework below appeared in The Art of Japanese Management by Richard Pascale and Anthony Athos in 1981, at a time when Japan was at the top of the global economic field. It became a basic tool for the McKinsey Consultancy and is called the McKinsey 7S Model. Whilst the Burke-Litwin Model studies activities, the 7S Model observes people. Chimaera Consulting offers their interpretation of the model (n.d.): Retrieved from http://www.chimaeraconsulting.com/7s_model.htm Strategy A set of actions that you start with and must maintain. Structure How people and tasks / work are organised. Systems All the processes and information flows that link the organisation together. Style How managers behave. Staff How you develop managers (current and future). Shared Values Longer-term vision that shapes the destiny of the organisation. Skills Dominant attributes or capabilities that exist in the organisation. (Famous, 1999) As noted by Salvatore Faletta, CEO of Leadersphere, (2005, p. 15) style, staff, shared values and skills are what are called the soft variables, and too often an organization will ignore these variables, concentrating on strategy, structure, and systems. Unless all the variables are linked, the 7S Model will not be successful in its efforts. With Japanese business practises considered the model for business at one time, the concept of lean manufacturing came about from Toyota's superior efficiency, reliability and flexibility (Beale, 2005). Beale stresses communication among staff and management to develop a lean environment, one that can be sustained beyond the potential threats of the future. Need for Change Change in a global economy is a necessary element for today's marketplace. A preferred method of incorporating change is by using a people-centred system. The concept is a practical one, and Beale (2005) states that effective organisational change is dependent on "changing the behaviour of the workforce and ensuring a people motivation for change" (1, par. 2). Unlike the traditional command-control management systems used in incorporating change, the lean manufacturing (LM) discussed by Beale "supports a culture of employee empowerment, participative decision-making and problem solving" (1.1), in other words, the "shared values" section of the McKinsey 7S Model. However, because the bottom line of lean manufacturing is cost reduction and improvement in productivity as defined by the end customer, critics of lean manufacturing feel that it concentrates too much on the tools and techniques and does not take into consideration the employee mindset. If the change fails to penetrate into everyday working practises, the expected benefits of lean manufacturing will not be realised (1.2). In any change programme, Beale notes, there will be people who resist, but a combination of communication and training could motivate a majority of the workforce, leaving those resisting to either adapt or leave (3.3). Creating a model based on cooperation between all facets of an organisation along with the concept of organisational development, are two important considerations in implementing change in the long term. A weakness in many organisations, especially those based in the United States, is lack of foresight and refusal to look beyond the present to what the future might bring in the marketplace. Establishing a solid employee pool, keeping everyone up to date on electronic advances, offering employee incentives and including employees in decision-making will do much to establish a stable working environment. A positive attitude expressed by employees will invariably create market long-term success. One problem with any effort to implement change is the failure of staff to follow through on mandates which are determined by upper management, and, according to Dawson and Jones of PriceWaterhouseCooper (2005): Contrary to conventional wisdom, people resist change only when it makes them feel out of control--when change is foisted on them without their consent". (par. 11). This traditional approach to change management relies on the premise that the organisation will adapt to the changes imposed on them, and once the changes are made, the company will resume its business course without looking ahead to what changes might be necessary in the future. Change projects based on technology and processes instead of staff issues are doomed to failure. "Organisations don't adapt to change; their people do," is the focus of Dawson & Jones' argument (par. 5). They note that people are willing to change if they understand and accept the reasons, and have a say in how their jobs become restructured. There are questions to be answered such as why aren't people managing risk properly, what incentives are needed, what education is needed, and what skills must be developed' Employee Resistance According to Anderson and Anderson (2002), the bottom line about resistance is straightforward: Resistance is always present in complex change efforts. Resistance is a good and natural response, not a bad thing. Working with resistance competently will always lead to increased results. You should never try to "overcome" resistance; instead, you should learn to nurture it, use it and benefit from it. (Introduction: par. 2) The command and control style of management almost always leads to employee resistance. When management teams make all the decisions without making employees part of the team, rumour escalates among employees and resistance occurs before the decision to make changes is even presented. The Andersons suggest that employees should be included on change project teams and the team could even be supplemented by an advisory team of employees. In this way, communication among management and employees will bring about change with little or no resistance. It is further noted by the Andersons that resistance to change occurs in all levels of an organisation, from the CEO to the line workers. Unfortunately, the change is apt to be debated among senior executives for quite some time, and when the change is finally announced, it is as if the whole company has always been in alignment, which is not the case. Management does not understand why there is resistance when this occurs. Once again, it is a matter of lack of employee involvement. The employees need the opportunity to discuss and challenge the change issues just as the senior executives have done, and to offer input into the proposal. How Important is Change in Business' Change is a requirement in today's global environment, whether implementing a new software program or refocusing an overall marketing strategy. This is a time of e-commerce, where change is an ever-evolving occurrence, and meeting the needs of employees and customers is more important than ever. Not only must marketing methods meet demand, employees must be educated in electronic advances. Leadership must be aware of staff at a personal level, and in the global marketplace, companies around the world must be willing to work together, sharing more than competing. Establishing a positive brand on the Internet is imperative for business success. Case Studies: Pilkington and Lloyds According to Starkey and McKinlay (n.d.), leading glass manufacturer Pilkington Brothers ran into difficulties in the early 1980s and had to re-evaluate their business practises. Management had to be readjusted and changes in working practises were also needed because the company had lost its technological edge. It was a clear example of barriers to come in the 21st century. The company addressed the problem by reducing manpower, cutting costs and controlling capital expenditures. According to Starkey and McKinlay, two new companies were offering competition with lower prices at that time. Unfortunately, Pilkington chose not to lower their prices and their situation deteriorated further. The next step was a price war but when prices stabilised, Pilkington could not support the lower prices and competition benefitted. It was determined that the company's reputation for high centralisation was damaging them and the following suggestions were made (416): Decentralising collective bargaining Restructuring of jobs, working practises and rewards Team-based commitment to business objectives a) Optimum flexibility and mobility of employees b) Single pay structure for all employees below middle management c) Flexible working-time arrangements and a 12% pay raise As determined by Starkey and McKinlay, these suggestions led to implementation of innovative working practises through decentralisation, particularly wage bargaining, and personnel directors in various divisions were allowed to negotiate according to their own market needs rather than the needs of the Pilkington Group in general. Development of business expertise, reorganisation of Group and board responsibilities, dismantling Group central committee structure with decisions devolved to operational level, new working practises less dependent on the centre, working practises disseminated throughout the group and handled at local levels, and agreement based on needs of particular sectors responded to at local levels were all implemented. For Pilkington, their overall goal of a leaner organisation with fewer levels and maximum flexibility and mobility of employees has been reached and they are showing great improvement, with 250 jobs reduced to a total of 60 new job descriptions, and with 7 to 8% of the workforce participating in the job-analysis teams or job-evaluation panels (420). The bottom line is cooperation within the whole company structure and inclusion of employees in the decision-making pool. It should be noted that the approach to success in an organisation must be realised through attention to all facets of the organisation from leadership to line workers, and it is up to human resource management to see the whole picture. If human resources are managed ineffectively, according to Biz/ed (HRM: Background, 2006, par. 3): Teams may not function appropriately Individuals may be placed in positions that do not maximise or utilise their skills The culture of the business is not shared Communication and decision making can be affected and mistakes occur. In the long run, all of these affect the relationship between the business and its customers. With the shift in the economy toward service-based industries and since human resources account for a large part of an organisation's costs, it is people that invariably drive a business. The vision of the human resources department throughout the organisation is one of its most important concerns, and the way in which they approach necessary changes can lead to success or failure in the marketplace (HRM, 2006). Conclusion The conclusion reached in this paper is the need to concentrate on long-term results rather than trying to fix problems that were neglected or unforeseen, to the detriment of the workforce. It also cannot be stressed enough that a full circle of connectivity must be established throughout an organisation. Starkey, Tempest & McKinlay (2004) show in their recently updated collection of articles how organisations learn in groups, showing the link between leadership and learning, and describing the key to management innovation and dynamics of strategic leadership. Can culture be managed' The research indicates that it can as long as the leadership in an organisation has the foresight to plan ahead for changes in a growing marketplace. All members of the organisation should join together to meet the demands of technology as well as fast-moving Internet advances. This is, as noted by Beale (2005) a "people-centred" society, and with immediate communication available globally, attention to the personal aspects of business must be realised by management. References Anderson, D. and Anderson, L.A. 2002. 'Getting Smart About Employee Resistance to Change: Part One'. Results from Change e-newsletter, April, 2002. Retrieved July 27, 2006, from http://www.beingfirst.com/changeresources/articles/200204/ Beale, J.R. 2005. 'A People-Centred Conceptual Model for a Sustainable Lean Manufacturing Environment'. CUIMRC Working Paper Series, Cardiff University, April 2005. Retrieved July 26, 2006, from http://www.cuimrc.cf.ac.uk/sites/www.cuimrc.cf.ac.uk/download.php'id=5. CIPD. 2002; updated March 2006. "Total reward factsheet," retrieved July 28, 2006, from http://www.cipd.co.uk/subjects/pay/general/totrewdqf.htm'IsSrchRes=1 Dawson, M.J. and Jones, M.L. 2005. 'Herding Cats: Human Change Management', PriceWaterhouseCooper. Retrieved July 26, 2006, from http://www.pwc.com/extweb/pwcpublications.nsf/docid/2ff7d96b5313a034852570b50042102a Ellsworth, R. R. 2002. Leading With Purpose: The New Corporate Realities. Stanford University Press, Stanford, CA. Faletta, S.V. 2005. Organizational Diagnostic Models: A Review & Synthesis. Leadersphere. Retrieved July 25, 2006, from http://www.leadersphere.com/img/Orgmodels.pdf Famous Models: 7S Framework. n.d. Chimaera Consulting Ltd. Retrieved July 24, 2006, from http://www.chimaeraconsulting.com/7s_model.htm Fingar, P., Kumar, H. & Sharma, T. 1999. 21st Century Markets: From Places to Spaces. First Monday, Vol. 4, No. 12, December, 1999. Retrieved July 28, 2006, from http://www.firstmonday.org/issues/issue4_12/fingar/index.html Human Resource Management (HRM). 2006. Biz/ed.com. Retrieved July 28, 2006, from http://www.bized.ac.uk/educators/16-19/business/hrm/lesson/hrm1.htm Opening Up OD. 2004. Roffey Park newsletter, Issue 57, Autumn 2004. Retrieved July 24, 2006, from http://www.roffeypark.com/articles/onearticledp.php'article_id=139 Starkey, K. and McKinlay, A. (1998). Case Study 10: Pilkington, pp. 315-321. Starkey, K. Tempest, S. & McKinlay, A. 2004. How Organizations Learn, 2nd edn. International Thomson Business Press, London. Using an Employee Opinion Survey to target organisational development: research with AAH Pharmaceuticals Ltd. 2006. Roffey Park newsletter, Issue 16, January 2006. Retrieved July 24, 2006, from http://www.roffeypark.com/articles/onearticler.php'article_id=169 Why Change' Centralisation too high New competition affecting market share Command-control method of management not working Global economy requires innovative methods to capture marketplace It is time for a culture of employee empowerment Employee resistance needs to be overcome Need for increasing technological edge Need for more flexibility Without implementing change: Teams may not function appropriately Individuals may be placed in positions that do not maximise or utilise their skills The culture of the business is not shared Communication and decision making can be affected and mistakes occur Employee resistance escalates Business losses are incurred Loss of market share Bankruptcy How to Change Decentralising collective bargaining Restructuring of jobs, working practises and rewards Team-based commitment to business objectives a) Optimum flexibility and mobility of employees b) Single pay structure for all employees below middle management c) Flexible working-time arrangements and a 12% pay raise Changes implemented Innovative working practises Understanding of need for decentralisation by workforce Increase in responsibility for line managers and shop stewards Personnel managers as advisers rather than industrial-relations function Fewer but bigger jobs with greater responsibility and accountability Leaner organisation with fewer levels and maximum flexibility and mobility of employees Increased self-supervision Fundamental understanding of economic problems communicated to workforce Read More