Organisation and management issues of Alcan - Essay Example

Write a briefing essay on the Alican Case study. Organisation and management essay Write an introduction about what the case study is about The case study is about Alcan. The Lynemouth Smelter Complex, a part of the British Alcan, 1998, is made up of three main units: the Alcan port and the storage area, located at Blyth, from where the two most important products used for smelting are imported, 'bauxite' from South America, which is brought to Ireland, where it is transformed into 'alumina', and 'calcined petroleum coke' brought in from the United States of America. The alumina which is produced at the processing plant is then carried on to Blyth, in specially designed wagons, to the Lynemouth Smelter Complex, and also to Lochaber and to Kinlochleven. The second unit at the Lynemouth Smelter Complex is the 390 megawatt power station, which uses about one million tones of coal every year. The third unit is the actual aluminium smelter with an annual output of approximately 200,000 tonnes. The anode blocks, churned out at the rate of one every three minutes, that are produced at Lynemouth are in fact made with carbon that has reached temperatures of above 250 degrees C in a mixer, which by itself weighs about three and a quarter tonnes. The blocks are thereafter transported to a gas furnace, where they are heated again, to temperatures of 1,150 degrees C, and then the anode is baked into a solid block of carbon, with an excellent electrical conductivity. Thereafter, aluminium rods are attached to the carbon blocks, at the rodding unit. It must be noted that aluminium can be made into more than three hundred different alloys, according to the needs of the customer. (British Alcan, Lynernouth Smelter 1998) Aluminium is the third most common element that is found on the earth's crust, but the extraction of the element is an extremely complex industrial process, and this is exactly what happens at the British Alcan, and the purity of the aluminium produced depends on a large number of factors, and in general, what is produced is about 99.7% purity, and at times, even more. (Fact Sheet 2, Primary Aluminium Production) Recently, that is, in 1995, Alcan has been involved in a controversy, and this paper is a case study of what happened. As mentioned earlier, aluminium is a long term, and also a capital-intensive business, and as far as Lynemouth is concerned, it had begun its operations in the year 1972, and one of the major costs of operation was the power that it had to use for the process of smelting, twenty fours hours a day, all year round. In the year 1990, the plant had about 780 employees, the majority of whom were male, and who had been with the plant since its inception. Work organization was traditional, and the work turnover was low. (Newell; Scarbrough, 2002) There was in addition, a perception that the organization desired to impose changes, by using parts of already existing agreements, instead of involving the Unions. While the employees also reported that the management was not alt all communicative with them, the Union had to take up the cause, and it was requested that the management cooperate with trade unions to establish a better relationship with the employees, because the productivity of the plant was declining as a result of dissatisfaction. Gradually, there was overcapacity with the opening of new plants, and the price of aluminium started to fall, and employment also started to decline from 56,000 to 46,000. In 1991, one of the two pot lines of the plant had to be closed down, and there was a redundancy of fifty percent of the entire workforce. With only one line of operation, Lynemouth was faced with great difficulties, and the management found that they would have to somehow raise efficiency levels immediately, so that production would be improved. Soon team working was brought in, with the cooperation of the trade unions, and in 1994, direct supervision was abolished, and in its place, team leaders were appointed to supervise operations, but the problem was that he could not take care of indiscipline. (Newell; Scarbrough, 2002) At this time, the employees of the company had become reasonably sure that there was indeed a huge gap between the management and the workers, and also that the team leaders representative of the management had no right to enforce discipline. In work organization as well, although there was an added flexibility, there were also very clear cut limits, and the workers had to depend on technical staff to monitor the production; only a specialist would be able to handle all the operations. When it was decided in the year 1996 that Line 1 was to be reopened, the problem was additional investment, and recruitment, and the problem was that teams had now become a part of the plant, and group leaders were feeling threatened by them, because of the fact that teams had started to perform many of the tasks that were to be performed by the group leaders. They also stated that maintenance would only respond to production. Others complained that the senior management looked after teamwork, while middle management simply looked on. Some managers stated that the air of complacency was not right, and that it would contribute to less productivity, and that teamwork would be affected. (Newell; Scarbrough, 2002) In short, the climate in the plant was quite mistrustful. There were certain options before the management; one was that the influence of the Trade Union would be reduced, secondly, that there would be a more cooperative relationship with the trade unions, and thirdly, that the communications system would be changed and improved, so that there would be better employee involvement. Since this was the favoured option, teams were given more responsibilities than before. However, the moot question was whether this in fact served to incite better staff satisfaction, and better effectiveness of work organization, and an increased productivity. By 1997, although senior managers, and employees felt that change had indeed been achieved, technical staff and middle managers started to resent the changes, because of the fact that they were not involved in any decision making processes within the organization. (Newell; Scarbrough, 2002) 2) Discuss what specific issues in the case study that can be analysed. There are certain specific issues in the Alcan Case that can be analyzed, like change, teamwork, and the managerial structure of the organization. Today, Alcan is entirely different in several aspects, from the Alcan of a mere four years ago. The company has grown operating earnings of 18% annual compound rate, and has also managed to invest $8.8 billion to develop and to maintain the growth of the organization, mainly through acquisitions and taking advantage of internal opportunities, like for example, the expansion of the Alouete Center in Quebec. (Engen, 2005) These were some of the numerous strategic investments that Alcan had embarked on in the recent past, and it is because of this that Alcan has been able to effectively strengthen its global presence, and also maintain its stability and sustainability. Today, it can be stated that the main strengths of the company lie in the unique combination of its strong and committed workforce, and also because of its strong network of operations. (Innovative aluminium and packaging Solutions Worldwide) In addition, its excellent customer base, in combination with the management's decision to embark on and to maintain a sustainable and an innovative strategic alliance with its numerous customer and suppliers, making the organization one of the most dynamic and multilingual and multicultural organizations in the global world of today, with more than 70,000 employees in about fifty five countries all over the world. (Innovative aluminium and packaging Solutions Worldwide) What is valued most at Alcan is integrity, accountability, trust, and most importantly, teamwork, which, the management believes, will form a firm stronghold with which the company would be able to guide its customers, its stakeholders, and its suppliers. Today, unlike yesterday, Alcan is indeed willing to be openly accountable and responsible for combining decision making powers with the numerous responsibilities that go with it, to all the various levels of the organization. Today, as far as an Alcan employee is concerned, accountability effectively means that he would ensure that all the commitments of the organization and of him to the organization are honoured, and that he would be willing and able to accept the entire responsibility for all his actions and his behaviour, with ease. The approach that the management believes would stand it in good stead over the next few years is that of cooperative teamwork. (Everything you need to know about Alcan Composites) This approach would be utilized for all problem solving and project implementations, and there would also be additional interaction between members of the team, and also between other groups, which in turn would result in effective communication between all the employees of the organization. Trust has also become one of the most important tenets that the company insists upon today, and this trust refers to the trust and belief that others will keep up their promises, and that the team would uphold its commitments to others willingly. This would mean that there would be a transparency of communication, both within and without the organization, and the management would be able to make sure that the full potential of its employees may be reached. (Everything you need to know about Alcan Composites) It must be stated that Alcan is one organization that has long since realized that it must follow certain basic values; since the demand for their product means that the company must invest in communities, it also means that these same communities become partners in achieving the company's many goals. In short, the organization Alcan has today adopted a lifecycle management approach so that it would be able to effectively capitalize on the benefits that are generally associated with the properties of the aluminium that they produce. (Linda. 2000) 3) Using the issues above in question 2, what theories can be used to help analyse the case study and provide examples using the following issues of Motivation, Restructure of the organisation, management style and leadership. 4) Discuss why these theories can be applied and how they help us understand and analyse the case study. Motivation refers to the fact that one has certain needs, and this causes certain behavior patterns to arise in order to satisfy the needs, and this can thereafter change which needs are primary, and which, secondary. Maslow's theory stresses on the hierarchy of needs: self actualization, esteem, belongingness, safety, and psychological. (Theories of Motivation) Taylor, on the other hand, created the theory of 'scientific management', and made the following observations about man: man wants to maximize his economic gain, everyone responds as an individual, and not as a group, and people can be treated like machines, that is, in a standardized manner. These principles can be applied to the case of Alcan, where team work was abandoned because of the production's and the middle management's feelings of neglect. (Motivation in Theory, Taylor, Scientific Management) Vroom's Theory was based on the idea that employee effort would in fact lead to better performance, and that performance, in turn, would lead to better results, in terms of productivity. This means that if the reward is positive, his motivation would be increased, and vice versa. (Lindner, 1998) The 'Five Stages of Strategic Restructuring' can be applied to the case of Alcan, wherein the first stage is that of internal assessment, second, inter-organizational assessment, third, a discussion on the various forms of partnership within the organization, fourth, a negotiation and a communication process, and finally, the implementation of the changes that have been achieved. (Five Stages of Strategic Restructuring) The management and leadership style in Alcan is one that today encourages autonomy and innovations. Since it is an undeniable fact that a company would desire to maximize value for all its shareholders, it would inevitably mean that the quality of the employees must be high, and in order to maintain this fact, the company would attempt to combine a crystal clear approach with a practical and realistic leadership style. All the employees at the company would be valued equally, and they would also be allowed to take a major role in the decision making processes of the organization, and as far as Alcan is concerned, this approach put it back on the right tracks again, after the many controversies that it had to face. This is termed the 'self-directed team approach' of the management, and this means that the decision making is decentralized. Employees can therefore innovate and bring up completely new and original ideas, and these are well appreciated by the management at Alcan. (A Stimulating work environment) 5) Discuss the implications of these theories. 6) The overall structure of the organisation and a conclusion. Examine the on going teamwork of the organisation The theories mentioned above have had widespread implications on the management and the general running of an organization, and it is indeed quite often that the Alcan case is studied for the manner in which it was on the verge of downing its shutters, to the time when it decided to change its entire approach, and thereby include all its employees into the day to day workings of the organization, its decision making processes, and so on. The management and motivation theories of many great people can be applied to this particular case. According to Douglas Mc Gregor's Theory, for example, a simple but effective way with which to manage people: either an 'authoritarian style' or a 'participative management' style, most people must be forced to work, with the threat of punishment, or on the other hand, for most people, work is almost as simple as play, and they will not need punishment as motivation. The capacity and ability to use imagination, creativity and ingenuity in an individual when it comes to handling the organization's problems and decision making processes is largely limited, and it is only when the management makes serious attempts to apply and use this creative energy that the organization would be able to enjoy profits. (Douglas Mc Gregor, theory XY) Today, Alcan offers exciting work opportunities, where the emphasis is primarily on team work, leadership, autonomy, freedom of expression, and on innovation. The management and their team are expected to set clear cut performance objectives and plans for their teams, and thereafter work together towards achieving them. (An Exciting Workplace) REFERENCES "An Exciting Workplace" Retrieved from http://www.alcan.com/web/publishing.nsf/content/career+-+an+exciting+workplace Accessed 18 January, 2005 "A Stimulating work environment" Retrieved from http://www.alcan.com/web/publishing.nsf/Content/career+-+leadership+style Accessed 17 January, 2005 "Douglas Mc Gregor, theory XY" Retrieved from http://www.businessballs.com/mcgregor.htm Accessed 18 January, 2005 Engen, Travis. (28 April, 2005) "103'rd Annual General Meeting of Shareholders Montreal, Canada" Retrieved from http://www.alcan.com/web/publishing.nsf/Content/103rd+Annual+General+Meeting+of+Shareholders,+Montreal,+Canada+(Travis+Engen) Accessed 17 January, 2005 "Everything you need to know about Alcan Composites" Retrieved from http://www.alusuisse-comp.com/about_alcan.html Accessed 17 January, 2005 "Fact Sheet 2, Primary Aluminum Production" Retrieved from http://www.alfed.org.uk/templates/alfed/content.aspPageId=99 Accessed 17 January, 2005 "Five Stages of Strategic Restructuring" Retrieved from http://www.lapiana.org/defined/stages.html Accessed 18 January, 2005 "Innovative aluminium and packaging Solutions Worldwide" Retrieved from http://www.alcan.com/web/publishing.nsf/content/About+Alcan+Home Accessed 17 January, 2005 Linda. R. (2000) "Globalisation: Policies, Strategies and Partnership v. 2 Edited Papers" Commonwealth Secretariat. Lindner, James R. (June, 1998) "Understanding employee motivation" Journal of Extension. Vol: 36; No: 3. Retrieved from http://www.joe.org/joe/1998june/rb3.html Accessed 18 January, 2005 "Motivation in Theory, Taylor, Scientific Management" Retrieved from http://www.tutor2u.net/business/people/motivation_theory_taylor.asp Accessed 18 January, 2005 Newell. H; Scarbrough. H. (2002) "The Case Study: Alcan" taken from HRM in context: A Case study approach. HoundMills. Palgrave. "Theories of Motivation" Retrieved from http://www.analytictech.com/mb021/motivation.htm Accessed 18 January, 2005 Tomlinson, Richard. "British Alcan, Lynernouth Smelter 1998" Retrieved from http://www.lococarriage.org.uk/alcan_lynemouth.htm Accessed 17 January, 2005 Read More