Diagnosing Organization: Ford - Case Study Example

Diagnosing Organization Table of Contents Table of Contents 2      2 Introduction 3 Organization environment 3 Organizational relationships 4 Competitive Environment 4 Strategic challenges 5 Performance improvement system 5 An Issue Affecting Organizational Performance 6 Evaluation of the Issue 6 Analysis of the Organization’s Mission Statement 6 Advantages and Disadvantages of Organization Assessment Models 7 Open Systems Model 7 Advantages and Disadvantages of the Open Systems Model 7 Disadvantages 7 Human Performance Technology Model 7 Advantages 8 Disadvantages 8 Recommendations 8 References 10      Introduction Twenty first century has been dubbed as the age of competition. The advent of globalization has led organizations to breach geographic boundaries in an attempt to maximize their customer base. In this context, organizational performance assumes considerable importance as it defines the efficiency of an organization in delivering constant value to its stakeholders. Organizational performance is defined as the extent to which an organization achieves its business goals while creating competitive advantage for itself in the business market (Kirkman, Lowe, Young, p.7). A recent study with regards to organizational performance links effectiveness with that of organizational performance. The study also states that every organization is based on a specific function which is derived from its organizational goals. The authors define effectiveness in this context as “the level to which an organization achieves its goals” (Lusthaus, Inter-American Development Bank & International Development Research Center, 2002, p.109). The degree to which an organization shows its effectiveness in meeting its goals depends on the employees of an organization to a very large extent. The employees of an organization are considered to be its greatest assets. The ability of the organization to meet its organizational goals depends on the ability of the employees to provide efficient results to the organization. The effectiveness of the employees depends on the motivation level of the organization. A motivated employee is known to act more efficiently which is essential for organizations to achieve their goals. Organization environment Every organization operates in a suitable environment. The environment in which an organization operates has direct consequences on its efficiency in meeting its business goals. A few aspects of organizational environment are as follows- Organizations may operate in an open or a closed system. A closed system is one which constantly interacts with its external environment. Firms may also choose to operate in a closed environment wherein they behave as a complete self sufficient unit, having limited or no interactions with the outside environment (Kinicki, 2009, p.380). Organizational relationships Organizational relationships are defined as a network of various interdependent units which provide the necessary resources to the firm. Some of these entities are as follows- Vendors Buyers Suppliers Customers Government These five entities have a direct influence on the performance of the organization with regards to meeting its organizational goals stated in their mission and vision statements (Tilquist, 2002, p.1). Competitive Environment Competitive environment of an organization was analyzed by Michael Porter who opined that an organization is affected by five factors with regards to competitions in the business markets. These five factors are stated below- Bargaining Power of Buyers Bargaining Power of Suppliers Threat of new entrants Competition from existing firms Threat of substitutes The extent of influence of these five forces defines the competitive framework of any organization. Organizations thriving for excellence must ensure that a fair balance of the above stated five forces is maintained. This helps in achieving sustainable competitive advantage for the organization (Ahlstrom, Bruton, 2009 p.132). Strategic challenges Organizations face considerable challenges while operating in their business environments. These challenges come from the following areas- Multiple stakeholders Globalization Competition Government Regulations Technology Employee Management (Human Resource) Issues Organizational efficiency and performance depends on the manner with which an organization takes care of the above stated factors. Effective handling of these factors ensures that the organization has a strategic advantage. The effect of these factors have compounded with the advent of globalization where organizations are no longer barred by geographical boundaries. This has led to a situation where organizations are trying to reach out to every possible consumer market in the world. Performance improvement system Organizations are continuously thriving to achieve organizational performance. Organizational performance not only means achieving financial targets but enhancing or improving its business processes with an aim of increasing the productivity and efficiency of the organization. Certain techniques for improving organizational efficiency are given below- Six Sigma Techniques Total Quality Management Kaizen Enterprise Resource Planning The techniques described above tend to enhance the efficiency with which an organization performs its tasks. These techniques lead to maximizing the efficiency with regards to handling and managing the resources of the organization. The implementation of these techniques ensures the fulfillment of the long term goals of the organization through continuous improvements. These also lead to the creation of competitive advantages as many organizations are known to achieve economies of scale after implementing techniques like Kaizen and Six Sigma. This has led to creation of entry barriers for new entrants. An Issue Affecting Organizational Performance Organizational performance is affected by many factors. These factors may be operational, financial or may be related to aspects of human resource management. In the context of the present study, the aspect of organizational communication has been selected. The choice of topic of study assumes importance in the sense that organizations have a large number of operational departments and employees apart from numerous suppliers. Co-ordination with regards to information sharing assumes considerable importance with regards to organizational performance. Evaluation of the Issue Downs and Adrian (2004) conducted a study on the importance of organizational communication. They stated that the success of an organization depends on the ability of the firm to manage its communication process. Organizational communication is important in large organizations as information tends to pass through a large number of intermediaries which often results in distortion of the original message. This leads to spread of rumors which affects the efficiency of the organization. Communication also takes place between various suppliers and the firm (Downs & Adrian, 2004, p.3). Effective management of communication leads to proper inventory management as real time information sharing enables organizations to keep a track of the inventory levels. This helps in reducing inventory costs as well as to handle issues of stock outs. Analysis of the Organization’s Mission Statement The organization selected for the study is US carmaker Ford. The mission statement of the organization is given based on a thought of “one team, one plan, one goal”. “The team consists of customers, employees, suppliers, social community and investors of the organization” (Ford, 2010). The mission statement shown above clearly shows employees as an indispensible part in achieving strategic goals. In order to ensure maximum utilization of human resource, the company must ensure that they are motivated to perform their job. Organizational communication is quite vital for the success of the company’s mission statement, as it aims to bring all its stakeholders on a common platform. Information sharing and management is quite vital for the success of this statement as any distortion in the transfer of information may lead to disastrous consequences for the organization. Advantages and Disadvantages of Organization Assessment Models Open Systems Model The open system model advocates constant sharing of information by an organization with its external environment. The system states that organizations must seek continuous feedbacks from various external sources in an attempt to use information sharing as a strategic competitive management tool (Authenticity Consulting, n.d., p.141-142). Advantages and Disadvantages of the Open Systems Model The application of an open systems model offers certain unique advantages to the organization. The application of this model leads to greater effectiveness in communications, proper leadership, better planning and design of various products and services (Authenticity Consulting, n.d., p.141-142). Disadvantages The major disadvantage of this model is that in case of improper management of organizational communication, this model may lead to drastic consequences. Human Performance Technology Model Figure 1: The HPT Model (Source: Stolvitch, Pershing, Keeps, 2006, p.926) The HPT model is used for analyzing organizational performance. The model uses a cause analysis as well as selection of intervention, development and design to evaluate the effectiveness of the organization in meeting its organizational goals. Advantages The main advantage of this model is that it uses a cause and effect analysis of the organizational performance. Disadvantages The major disadvantage of this model is that, it ignores the aspect of organizational communication while analyzing organizational performance. Recommendations In context of the present study, it can be concluded that the open systems model is the best strategy for Ford to evaluate its organizational performance. This is because the mission statement of the organization states that the goal of the organization is to bring together its different stakeholders on a single common platform. In order to achieve this, Ford must ensure that there is proper exchange of communication. Communication management is the most essential impediment to achieve the organizational goal of Ford. The use of open systems approach would help in establishing and managing various aspects of organizational communication. This is because the model emphasizes organizations to improve their communication with the external world. This complements the organizational mission and goals of Ford, which is to bring various stakeholders of the firm on a single common platform. References Ahlstrom, D & Bruton, G.D. (2009). International Management: Strategy and Culture in the Emerging World. Cengage Learning. Authenticity Consulting. (No Date). What is an open System. Retrieved October 22, 2010 from http://managementhelp.org/misc/orgs-open-systems.pdf Downs, C.W & Adrian, A.D. (2004). Assessing organizational communication: strategic communication audits. Guilford Press. Ford. (2010). About Ford. Retrieved October 22, 2010 from http://www.ford.com/about-ford/company-information/one-ford Kinicki. (2009). Organizational Behavior 3E. Tata McGraw-Hill. Kirkman, B.L, Lowe, K.B & Young, D.P. (1999). High-performance work organizations: definitions, practices, and an annotated bibliography. Center for Creative Leadership. Lusthaus, Inter-American Devlloment Bank & International Devllopment Research Center. (2002). Organizational assessment: a framework for improving performance. IDRC. Stolvitch, H.D, Pershing, J.A & Keeps, E.J (2006). Handbook of human performance technology: principles, practices, and potential. John Wiley and Sons. Tilquist, J. (2002). Strategic Connectivity in Extended Enterprise Networks. Retrieved October 22, 2010 from http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.87.852&rep=rep1&type=pdf Read More