Entering HVAC Market - Assignment Example

This document is a report that proposes a corporate wide programme to prepare the company for entering the HVAC market. It is divided intofour sections namely Managerial Goals and Plans, Innovation Management, Training Requirements and Strategic Leadership. It uses various theories of management to put forward various requirements and provides suggestions for the management on various approaches. INTRODUCTION: This report is based on core managerial techniques and outlines the steps required to be taken by the firm to enter the HVAC market. Keeping in mind the recent merger with the firm providing technological expertise in wireless communications the report outlines Goals and Plans needed to be devised by the firm, ways in which it can innovate in order to capture the new market the firm is venturing into, needs as ways to train employees and emphasizes the importance of strategic leadership. This report should be helpful to prepare the firm for a change and reorganizing it needs in order to survive the HVAC market. It provides the way to create a four level managerial goal, strategic management techniques and approaches to devise strategies to achieve the set goals. It outlines ways to innovate and brings forth the innovation process. It brings into account organizational behaviors and motivation factors which are beneficial to the company. It also provides an effective model for the sequence of changes. It brings forth the importance of training programs and being classified as a learning organization. It shows how training personals could be beneficial for the firm. And in the final section it states various leadership strategies and its importance for effective working of the organization. Managerial Planning and Goals In view of the recent merger of the firm providing security system and our venture into the area of Eco-Friendly HVAC Systems a change in the organizational behaviour is in order. To make our company goal directed and structured activities such as Planning, Organising, Controlling and Leading must be rationalized. Our operations are now just not restricted to providing IT network equipment like LAN's and Firewalls. The merger has brought in the expertise in wireless technologies and thus broadened the horizon. Thus the foremost essential part of the strategic itinerary is to setup the goal and device a plan to achieve the set goal. A bottom up strategy for devising a mission statement is advisable. Firstly specific, measurable targets should be set up for each individual and departments forming the operational goals. Tactical goals should be conveyed to the middle management aiding the functions of major divisions of the firms. The senior management should be aware about short term and long term goals about the position of the firm in the market in future. Finally a Mission Statement has to be devised to be presented to the external players depicting the overall intent of the firm. In order to achieve these goals a particular strategy or a long term course of action needs to be in place. A few success indicators and corresponding strategic enablers must be considered in this context. Market Penetration Agility, Market Share Momentum, Rate of Return Factor and Shareholder Value Growth must be measured in terms of our technology standards meeting the market requirements, differentiation and compelling competitive advantage, strength relative to other economic value players (customers, competitors, suppliers, and channel members) and Proactive CRM, support, operational excellence, derivative products respectively. The Management By Objectives (MBO) approach is the one most likely to provide beneficial results. The following figure explains the working of the MBO approach. The Management By Objective approach:: Managerial Planning and Goal Setting. -Daft and Marcic 2008 Three approaches might be considered while developing a strategy to enter the new market of Eco-Friendly HVAC Systems production: The Position approach, Resources approach or the Opportunistic approach. Each approach has its pros and cons. In the Position approach our firm might decide to create its own place in the market which would ideally be the market leader's position and defend it. It has a continued duration of advantage with profitability being the major strategic goal. The risk involved in this approach is that it would be considerably complicated to alter position as market situations change. The company has to nurture and control its resources across the markets if the Resources approach is adopted. This approach too provides a sustained duration of advantage with long term dominance being its prioritized performance goal. The risk in adopting this approach is that the firm might lag behind in creating new resources during changing market conditions. In the third, Opportunistic approach the company has to demonstrate flexibility and has to pursue transitory opportunities but at the same time has to stick to the simplistic basics. Duration of advantage is unpredictable but growth in the market is the main concern here. There are also risks like managers being hesitant on promising opportunities involved. The Position and Resources approaches are well suited for well structured, slowly or moderately changing markets whereas the Opportunistic approach is applied in cases of rapidly changing, unambiguous markets. As the market for HVAC systems is still considerably unexplored and given our status the Opportunistic approach for strategic planning is most advised. Strategic management involves three major processes as pointed out by Johnson and Scholes (1999). Strategic Management:: Exploring corporate strategy, London: Prentice Hall. Johnson, G. and Scholes, K. (1999) Strategic Analysis involves the study of the external players such as competitors, behaviour and needs of the customers. The firm also needs to understand its assets and potentials in order to serve the customer better and thus gaining an advantage over its competitions by doing so. The technological expertise in the field of wireless communications which our firm has acquired as a result of the acquisition along with our core competences should be mixed with well researched market situations and various alternative lines of actions should be prepared to gain an upper hand in the new market. Based on the current market conditions and trends risk analysis should conducted on each of those alternatives and prioritization needs to be in place. Strategic implementation is to put a chosen alternative on course. The firm needs to mull over the four tools of transforming strategy into action: Leadership, Structural design, Human Resources, Information and control systems. Innovation Management There are a number of factors which drive a firm towards innovation. Technological advances, changing business environment, intensified competition and changing customers and their needs are a few to name. At present our firm needs to innovate to capture the HVAC system market. The merger has given the firm a head start by enhancing our domain expertise in wireless communication. The innovation process:: "The Entrepreneur's Toolkit" -Harvard Business School Essentials, 2005 Our firm should follow the traits of a learning organisation i.e. it should learn from various sources and rapidly convert those learning's into actions in order to gain the competitive edge in the market. Also, Entrepreneurship is essential for the organization to innovate. Mc Clelland (1987) points out three sections in an entrepreneurial role: Pro-activity, Achievement orientation and commitment to others. The entrepreneur should be pro-active and must take the initiative and make his assertiveness felt. He should have the ability to identify and act on opportunities, be efficiency oriented, plan systematically and constantly monitor progress. The commitment to others provides a trustworthy image of the firm in the market. Thus honoring work contracts and maintaining business relationships are essential to the growth of the company. Motivation of people is also essential in innovation. Motivation concerns the forces either within or external to a person that stimulate fervour and persistence to follow a particular line of action. It is a challenge for managers as it arises from within a person and also differs for each of them. Organizational behaviour needs to be studied carefully in order to motivate people of the organization. Maslow's Hierarchy of Needs Frederick Herzberg in his two factor theory proposes that the work characteristics associated with dissatisfaction vary to a great extent from those pertaining to satisfaction. He states achievement, recognition, work itself, responsibility, advancement and personal growth as motivation factors. He also puts forward a few hygiene or maintenance factors which in itself do not motivate but damage to those would crumble the platform for motivators. Status, security, relationship with subordinates, relationship with peers, personal life, salary, relationship with superiors, company policy and administration, work conditions and supervision are the proposed hygiene factors. Douglas McGregor brought forth two main management approaches: Theory X and Theory Y. In Theory X he states that manager is inclined to believe that everything must end in blaming someone. Managers also cannot trust any employee, and they reveal this to their support staff via their communications constantly. According to the Theory Y management believes that their employees may be ambitious, self-motivated, and anxious to accept greater responsibility, exercise self-control, self-direction, autonomy and empowerment. Both these theories provide extreme ends. For the benefit of our organization a middle path should be followed. Change Management is also crucial for the development of the firm. A planned change can be brought about in two ways. An Incremental change based on efforts to enhance basic working structure and organizational process or a Transformational change involving restructuring of the total organization. The shift to a technology driven agency necessitates a profound change within the organization. Internal forces like venturing into a new market of production HVAC systems, new goals and needs require us to rethink our processes and bring about change. Resistance to change may come forth due to a number of factors like self-interest, lack of understanding or trust, uncertainty and different assessments and goals. These must be dealt with proper measures to enforce change. But before going about changes the driving forces and restraining forces needs to be identified and a force-field analysis must be carried out. Bringing about change should be carefully planned and carried out in a sequential manner. Model of Change Sequence of Events:: Managing Change Environmental forces such as global competition, customers and various other competitors along with internal forces in the likes of plans, goals, needs and problems of the company should first be identified. Needed changes in technology, products, structure and culture must be defined and problems and opportunities need to be evaluated. Change must be initiated by facilitating research work, creativity, idea generation and formation of venture teams. Finally the change has to be implemented by using tools to transform plans into action. Such tools involve Leadership which plays an important role in persuading, motivating and putting shape to values and culture, Structural Design which involves creation of teams, organizational charts, and centralization/decentralization along with task design, Human Resources which recruit or select employees, manage transfers and promotion for effective utilization of employees and finally Information and Control System which apply rules and procedures and control budget allocations. Training Requirements To achieve success the firm must be categorized as a learning organization. Going by Peter Senge's definition in The Fifth discipline,1990 a learning organization is an "organizations where people continually expand their capacity to create the results they truly desire, where new and expansive patterns of thinking are nurtured, where collective aspiration is set free, and where people are continually learning how to learn together." He postulates the traits of a learning organization. Existence of a shared vision which is agreed on by all involved in the firm is essential. People should dispose of their old thought process and the regular routines used for resolve problems or doing their jobs. The entire organizational processes, behavior, functions, and interactions with the environment should be integrated with the system of interrelationships. Communication amongst each other (across vertical and horizontal boundaries) should be made transparent so that people express their views without the fear of condemnation or penalty. People must rarefy their personal and fragmented departmental interests to work as a cohesive unit in order to accomplish the organization's shared vision. Elements of a learning organization:: The nature of management The five disciplines pointed out by Peter Senge are Systems Thinking, Personal Mastery, Mental Models, Shared Vision and Team Learning. Systems' thinking is a framework that could be used to understand structures, patterns and relations that shape organizational behavior. It provides the greater picture. It brings out ways to change and acknowledges internal processes in shaping work. Personal Mastery is a discipline in which an individual continually clarifies what is imperative which helps him to grasp the reality. Commitment along with proficiency is essential and is expected out of each individual. It is important that each employee generates a sense of purpose, power, self worth and personal vision. Mental Models are deeply held internal images of the working of the real world by each individual. A deep understanding of how these images affect individual action is required in order to shape them properly. Shared Vision is the ability to create a collective picture of the future that is being sought. It reflects the intention to be involved in the larger scheme of things that is embodied in the organization's services. Scenario planning should be used as a tool to build the shared vision. Team Learning is a group discipline which aids alignment of the thoughts of various members which is required to achieve desired outcomes. Skilled discussion and open dialogue are essentials of team learning. Skilled discussions involve conversations based on assemblage of techniques which assist individuals to develop an aptitude towards problem solving and dialogues are used express free thought, creativity and ideas. Knowledge Management is central to the growth and existence of the firm. As defined by Rowley it is "the state of being able to identify value, create and evolve all knowledge assets, such as personal knowledge, data, etc". It is the process of methodically acquiring knowledge and spreading it through out the entire organisation and promoting a culture of learning. This helps members of an organization to deal with a situation effectively in the present and also foresee the difficulties and opportunities which they might encounter in the future. Knowledge Management:: Emerging Perspectives- Gene Bellinger. (2004). Human Knowledge can be divided into two categories: Explicit and Tacit. Explicit knowledge refers to the knowledge that has been expressed in an abstract form and can be understood and manipulated by logical reasoning. Tacit knowledge is implicit and mostly intuitive. Predominantly it is acquired by working on practical situations and grows with more exposure. Thus knowledge transmission may take place in three forms: Tacit-tacit knowledge, Explicit-explicit knowledge and Explicit-tacit knowledge. Tacit-tacit knowledge is the sharing of hands on knowledge between people. This kind of learning is set in a practical backdrop. Explicit-explicit learning takes place when knowledge is passed on in a pre-defined abstract form. Here codified knowledge is exchanged and is amalgamated. Explicit-tacit knowledge exchanges takes place when the training on pen and paper is brought into action and is applied to daily activities like solving problems or to enact routine situations. Thus in our firm each department needs to setup its own training module and specialized personals must be allocated to each of these modules. Each division needs to carefully devise their training programs. Explicit-explicit knowledge must be exchanged along with tacit-tacit learning. This must then give way to Explicit-tacit knowledge to implement job profiles suited to each individual. Systems Engineering, Installation and Customer Services should be core in-house training where as few individuals from R&D and production may be sent to specialized training centers to gain additional expertise in each area. Strategic Leadership As defined by Briner et al (1997) "Leadership is the process by which a person influences others to accomplish an objective and directs the organisation in a way that makes it more cohesive and coherent". It is considered as a strategic tools used to implement strategic plans and convert them into action. It may be stated that there is a fine difference between being a manager and being a leader. Bennis and Nanus (1985) stated that "Managers are the people who do things right and leaders are people who do the right things". The leader plays a key role in the development of an organization. It is his role to have a vision and come up with strong ideas. He must engage in long term, strategic planning. He should communicate well with internal as well as external agents. He must play a major role in shaping the culture of an organization and must lead by example. Monitoring and controlling performance should also be his area of expertise. Jim Collins, 2001 defines the five level leadership hierarchies. At the lowest level the leader is expected to be a highly capable individual, i.e. a productive contributor with talent, understanding, ability and good work culture at an individual level. At the second level he must be a contributing team member who value adds to the achievement of targets and gels in with other group members. At the third level he must be a Competent Manager devising plans and organizing people for the competent and effectual pursuit of objectives. At the fourth level he should ensure Effective Execution by building extensive commitment to a comprehensible and convincing vision and motivating people in order to generate high performance outputs. Finally, the Level 5 Leader builds on durable platform by means of a mixture of personal compassion and professional resolve. Individuals should be chosen as leaders based on the above guidelines and if properly chosen would prove to be beneficial to a great extent for our firm. Hersey and Blanchard's Situational Leadership theory states that different approaches must be employed by leaders in varying situations. The leader must analyse the competencies and commitment of each employee in his task area and handle him accordingly. Employees may be divided into four classes D1, D2, D3, and D4. D1 refers to employees with low competence and high commitment. D2 refers to employees with some competence and low commitment. D3 refers to employees with high competence and variable commitment. And D4 refers to employees with high competence and high commitment. According to this theory Leaders should apply different styles in the likes of S1, S2, S3, and S4 for each employee depending on which class he belongs to. S1 refers to "directing" which needs to be applied to the employees belonging to the D1 class. Leaders chalk out the roles and errands of the 'follower', and oversee them intimately. Decisions are taken by the leader and passed on, thus communication is predominantly one-way. S2 refers to "coaching" which needs to be applied to the employees belonging to the D2 class. Here too leaders define functions and chores of the 'follower', but accepts ideas and propositions to a certain extent. Decisions still are the leader's privilege, but communication is becomes two-way up to a particular degree. S3 refers to "supporting" which needs to be applied to the employees belonging to the D3 class. Leaders make day-by-day decisions, such as task allotment and processes, to the follower. The leader assists and participates in decision making, but control is with the follower. S4 refers to "delegating" which needs to be applied to the employees belonging to the D4 class. Leaders though still involved in decisions and problem-solving, but predominant control lies with the follower. It is the follower's prerogative to decide when and how the leader will be involved. Situational leadership:: Hersey and Blanchard The three elements of leadership situations are Task structure, Positional power of the Leader and the Group. Task structure is concerned with the extent to which errands to be executed by the group are defined. It involves defining particular procedures and having understandable, explicit goals. Leader refers to the degree of positional power, i.e. the level of recognized authority the leader has over his subordinates. Group traits allow the leader to decide what approach will be suitable for controlling a particular group. Highly committed and organized groups require nominal guidance in contrast to a group of highly empowered individuals. References: 1. Daft and Marcic (2008) 2. Rafinejad, 2007 3. Eisenhardt and Sull, 2001 4. Exploring corporate strategy, Johnson, G. and Scholes, K. (1999) 5. Sheth and Ram, 1987 (adapted) 6. Goffin and Mitchell, 2005 7. Mc Clelland (1987) 8. P.M. Senge, The Fifth Discipline, 1990 9. Knowledge Management - Emerging Perspectives. Gene Bellinger. (2004). 10. Rowley,1999 11. Briner et al (1997) 12. Bennis and Nanus (1985) 13. Paul Burns (2001) 14. Jim Collins, 2001 15. Hersey and Blanchard Read More