Prospective Strategy for Copyfix Inc - Report Example

Prospective strategy for Copyfix Inc Introduction Copyfix Inc is an organisation in need of change and reform. Whist it has not been operating badly, it could move into decline if additional innovation and a new way of thinking are not introduced. This organisation is clearly lacking a dynamic structure and needs to follow a Business Process Re-engineering strategy for the following reasons. Communication In the supporting documents, it is stated that there are rumours circulating amongst the employees regarding its effectiveness, and this is further mirrored in the employee meetings where accusations of mismanagement are rife. This suggests that the management of the organisation do not communicate any strategy, ideas or plans with their employees, and in return, feedback is not obtained that could result in major improvements in other areas (Mullins 1999). A lack of communication will also result in management becoming distant from the shop floor, and this is where all the work is carried out. The lack of communication has manifested itself in the management area and the production area. For instance: A look at the organisation chart revealed that the departments were fragmented and isolated from the shop floor. This resulted in the decision making excluding those who knew the processes. This isolation also resulted in inter-departmental conflicts, as each department was not aware of the other's roles and responsibilities, which had led to a series of problems. There are no clear lines of communication between managers with each of them reporting to one individual, and so there really is not much scope for discussion. Strategy This organisation is lacking in strategy as decisions are not thought out and rather spontaneous. For instance, a proposal was put forward that 50% of profits go towards shareholders. This figure does seem too high, and there is no mention of any discussion about this issue or where this proposal came from. The main emphasis seems to be on making the shareholders and not on improving products they manufacture. A long term strategy that is focussed is therefore required to help with managing the cash flow problem, as profits have to be diverted to the organisation in the first instance. The lack of a strategy has also resulted in massive quality problems at this organisation, and as a manufacturing organisation, the importance of quality cannot be emphasised (Hall 1987). The organisation is due to pay penalties for environmental standards, as their equipment and production line did not meet the required standards. Whilst this is tied in with strategy, as in value and quality are not built into the process, it is also a communication problem as it has not been addressed and remained undetected. Failure to build in quality will result in financial wastage (Slack et al 1997) which the new executive board are keen to avoid. The previous board also stated that they were old and had been with the organisation for a while and this may have clouded their judgement and affected the organisation. This is a call for new management styles and leadership, and the organisation really needs to look at major changes. The chair of the executive board was rotated on a regular basis and this resulted in an approach to the strategy that was inconsistent as the chair was never stayed in post long enough to see any changes or projects carried through to completion, which impacted on feedback, as the organisation has no way of finding out how well their systems are. The short-term costs also do not build loyalty, trust and are a disincentive to team working (Bartol and Martin 1998). Sales and Marketing This organisation is not maximising its marketing and sales, which is what gets their product sold. The graphs indicate that revenue is evening out, which means it is time to innovate, by either improving the product or introducing a new product (Slack et al 1998). However, this ties in with quality and it is evident that the lack of quality assurance and controls is hampering the effective use of the production equipment (Slack et al 1998). The strategy does not concentrate on branding and building up the corporate image of the organisation, which could also explain the gradual decline in profitability. There is no presence of an after sales team which is one of the best and effective ways of obtaining customer feedback (Bartol and Martin 1998). The product is for the customer and it makes sense to gain the customer's opinion and view of the product, so as to ensure a programme of continual improvement. The after sales are profitable for the company, and indeed most organisations make most of their profit from selling warranties and providing customer service support. This organisation has also built up a large inventory which needs to be reduced using Just-In-Time technology (Slack et al 1998). The organisation also needs to take advantage of sales to bulk buyers to reduce this inventory and for quality purposes. Thought has been given to tenders however the customer will end up being neglected especially as the organisation is not running to full capacity. Tenders have the disadvantage of delaying payment until the next payment period, and unless this organisation has a similar financial system, this could cause problems for the balance books. Research and Development The R&D department needs to be involved in the planning and designing stage, and should also be playing a big part on the production floor. One of the complaints levelled against this department was the fact that they did very little development, and if they did, it was too late. This is typical of an organisation with little communication and teamwork. Production and Operations The variation of output of the production lines is asymptomatic of an underlying quality problem. If the machines are the same, there really should be no variation if the organisation is focussing on quality. This also suggests the production line equipment is under-utilised (Hall 1987). At this stage investment is not a good idea, as the organisation needs to find out where the problems are in the system and the organisation as a whole before spending more money on more machinery. Any investment should be diverted to enforcing quality so as to reduce rework, absenteeism so as to reduce overtime wages and staff motivation. The high staff turnover rate is unsustainable in the long term. More should be done to train and develop staff for after-care sales service and to work in quality control. Goals The organisation must concentrate on reassessing and re-aligning its business and corporate strategy. This can be started by conducting an environmental and industry analysis, as this will place the organisation amongst its competitors and this will also determine how they should set their market share, sales and equity. This strategy has got to be based on quality so as to build value into the organisation and this has to be adopted and championed by the senior management and communicated to all employees (Mullins 1999). The other goal should be on business process re-engineering as all the process will have to be assessed, and some changed whilst some will be made redundant. This will also foster communication across board. All these goals will bring about change in the organisation, as well as continuity, as quality is not a one-off strategy, it is continuous. Strategies The organisation needs to follow a growth strategy which will involve growth in terms of earnings and sales. The growth strategy CopyFix should focus on is the concentration strategy which focuses on the growth of a single product or service, or a small number of closely related products or services (Bartol and Martin 1998). This ties in with quality management as the organisation should be looking at producing the product they have effectively and maximising the sales from this product before introducing a new one. This strategy will also require the input of all in the organisation as it involves market development and product development. This strategy will also force the organisation to concentrate on its processes and its product, which will require the input of all the employees. This strategy should be implemented in conjunction with a cost leadership strategy which emphasises organisational efficiency so that the overall costs of providing products and services are lower than those of competitors (Bartol and Martin 1998). This will involve minimising costs in all areas of the business which means redundancies at senior management level as well, so as to develop efficient production methods by taking control of overhead and administrative costs. Low costs can lead to lower prices which offer a competitive advantage, and can lead to above-average profits as a result of the higher profit margins or large sales volumes. The cost leadership strategy cannot be effective without the expense of the required quality, and the constant innovation of new or existing products. This strategy should be implemented through a change management programme, and the principal players for implementation will be technology, human resources, reward systems, decision process and structure (Bartol and Martin 1998). The technology will focus on the knowledge on the shop floor, the tools, equipment and work techniques and for a cost leadership strategy, the technology in the organisation must match the cost strategy. Employees are the key to success in this organisation and management has to ensure all have the necessary skills to operate in this area and provisions should be made for training, as a skilled workforce usually has a greater ability to find ways to reduce costs or produce new products or services. This is also supported by reward systems as employees need to feel they have achieved something at work and rose up to any challenges. The decision process involves the resolution of problems in the organisation, and this could be implemented by introducing a staff representative and regular meetings between all departmental managers at all stages of the production processes, so that any potential issues are dealt with before the product goes on the market and returns as rework. The final step would involve the structure of the organisation. It needs to become less hierarchical as it this is hindering interaction and coordination within the organisation. If these are not present, then the organisation will fail to meet its goals. The strategies can only be successful if the structure supports the strategic direction. Conclusion CopyFix is an organisation that is maturing before it has realised its full potential. Its progress and success was being hampered by the presence of an ageing management team, resistant to change and not dynamic enough to take the organisation through a competitive time. Whilst the decision to bow out was commendable, the new management team need to undertake a thorough assessment of the organisation they have inherited, as there are a number of issues to be resolved and this includes the reputation and corporate identity of the organisation. The new management team have got to recognise the importance of introducing quality as standard in the organisation for management and production, as this will ensure the organisation maintains a steady growth, and that it can react in the current competitive environment. References Bartol, K M & Martin, D C. (1998) Management. 3rd Edition. Irwin McGraw-Hill, New York. Hall, R. (1987) Attaining Manufacturing Excellence, Dow Jones/Irwin Mullins, L J. (1999) Management and Organisational Behaviour. Financial Times-Pitman Publishing, London. Slack, N., Chambers, S., Harland, C., Harrison, A. and Johnston, R. (1998) Operations Management. Financial Times-Pitman Publishing, London. Read More