Problem Solution Provided by TeraTech - Essay Example

Running head: PROBLEM SOLUTION: TERATECH Problem Solution: TeraTech Goes Here of Phoenix Problem Solution: TeraTech TeraTech isin the process of developing and launching a new product – analytical CRM which is relatively a new concept. This paper, discuses the various problems that the company might face during the process of its new product development as well as provides an in depth analysis of the various alternatives involved, their pros and cons, and the viability of each alternatives along with the far reaching impact on the organizational long term goals.. Describe the Situation Issue and Opportunity Identification The events / issues discussed in the Table are framed in accordance with the three key issues discussed in the TeraTech case, namely, communication, and change management and employee development concepts. TeraTech uses the electronic media for communicating key issues such as staffing – hiring as well as retrenchment of staff. Such strategic issues needs to be communicated in person, through face to face discussions involving all the key stakeholders involved, so as to facilitate better decision making. TeraTech is planning the launch of a new product which requires specialized skill set for its product development and support, which the current staff lacks. Hence the issue needs to be solved through choosing proper alternatives so as to facilitate overall growth and development of the organization. The training and development of the staff is a viable option, in this scenario as it contributes towards the sustainability of the organization. Stakeholder Perspectives/Ethical Dilemmas TeraTech is faced with ethical dilemmas regarding issues like maintaining the existing staff levels as well as providing training to them in order to better equip them to work on the proposed new product – analytical CRM. The CEO of the company is keen on conserving the financial resources so as to maintain the profit levels of the company. The CMO, as suggested by the CEO is reluctant to increase the staff levels due to the lack of availability of funds, while the VP HR is faced with acute shortage of employees and requests hiring of additional staff, as the existing staff is already overburdened with work with some of them doing overtime. To ease the pressure on the existing staff, it is necessary to hire additional staff to share the responsibility. The CTO too is faced with a problem where the existing staff doesn’t have the adequate skill set required of them for working on the proposed product. For the testing and support of the new technology to be implemented during its development, she needs staff with adequate skill levels which could either be done by hiring new staff with the necessary knowhow or training the existing staff, both of which would require heavy financial investments. Frame the “Right” Problem Newness of the product concept and lack of trust in its merit. On resolving the above stated problem, TeraTech holds immense possibilities of becoming a dominant player by implanting new technology, developing in – house methods of combating the radical changes in technological aspect as well as the current trends in the pharmaceutical industry, as well as consumer behavior. Describe the “End-State” Vision On resolving the current issues, such as lack of technological knowhow on the part of the existing staff, the organization’s communication model and the lack of availability of funds, TeraTech has immense potential of becoming a dominant player in the pharmaceutical industry in providing the analytical CRM products. Considering the wide scope of the CRM industry, its advantages could be later on extended to encompass several other sectors such as hospitality industry, IT sector as well as to individual consumers. Identify the Alternatives and Benchmarking Validation Issue: 1. Communication: Media selection by TeraTech for communicating strategic information such as staffing – hiring / termination of employees which affects the managerial decision making process where decisions might be based on inaccurate information, leading to higher dissatisfaction and resentment among the employees rendering them unproductive in the process. 2. Change Management: TeraTech intends to make major organizational changes in terms of the existing number of employees for sustaining its revenue inflow as well as change in their existing product design to suit the customer requirements but it is experiencing staffing problems and lack of skill set required of its employees to develop the new product. 3. TeraTech’s management is faced with the key strategic issues concerning the new product development that requires its employees to possess specific skill set; however, on account of non availability of adequate funds, hiring new employees is not a viable option and the existing employees do not possess the necessary skills/ knowhow for developing and supporting an analytical product Opportunity: 1. To develop a better and more effective communication model in accordance with the complexity of the managerial problem/situation 2. To survive in today’s marketplace, a business must constantly examine and revive its performance, business strategy, processes and systems to understand the significance of such changes and its probable implications on the project as well as on the business as a whole. 3. To evaluate and design developmental policies in accordance with the organization’s vision and long term goals by focusing on enhancing the skills, knowledge, learning objectives and innovative capability of its employees, that will help TeraTech in the attainment of the organizational objectives and fuel its overall growth in the process. Alternative Solution: 1. Training the existing staff 2. Hiring temporary employees 3. Develop and Implement better marketing strategies 4. Outsourcing part of the job 5. Developing proper and effective communication models to facilitate smooth and effective decision making among the staff as well as the key stake holders 6. Creating an aggressive communication plan to keep the parties concerned well informed 7. Conducting pilot tests to gauge the success or failure of the proposed technology implemented for new product development 8. Equip the Human Resource Department with better knowhow to deal with situations involving termination of services of employees. Evaluate the Alternatives Training the existing staff and identifying the key strengths of the existing product and highlighting and marketing it as its USP are identified as the key alternatives to the problems / issues mentioned above. The training of existing staff would help the management in addressing several issues including, stimulating the sales growth and improving the product functionality by implementing new technology. Identifying the key strengths of the existing product and highlighting and marketing it as the unique selling proposition would help in increasing the sales growth of the given product and help the management in addressing and resolving the issue of lack of availability of adequate funds for the new product development. Identify and Assess Risks The other probable alternatives involved in addressing the problem statement mentioned above includes, changes in business policies, as well as organizational structure and implementation of new project technology. The risks involved in implementing / utilizing these alternatives for resolving the management issues include, delays in project due to the newness of the technology and additional time required by the project team to adjust and adapt to the new technology as well as time taken to test the prototype developed on the basis of the new technology. The teams working on the project could get confused owing to the frequent changes in the business policies on the part of the management. Also the system functions may not be used if not supported by correct procedures. Besides the changes in the organizational structure would lead to loss of focus on the part of the employees who might fear the loss of their jobs thereby leading to feelings of insecurity and low self esteem. Also such changes would cause imbalance in the working environment, which in turn hamper the productivity of the employees. The delays would severely affect the sales growth as well as the marketing strategies developed for the new product. The project teams involved in the new product development would feel overburdened on account of frequent changes and lose credibility in the management’s decision; as a result the employees might lose their will on account of lack of motivation. Although these risks narrow down the organization’s choices available at their disposal, proper decision making to resolve the impending issues on the part of the management could limit its consequences to a considerable extent. These issues were identified on the basis of the communication issues in the readings, chapter 15, Organizational Communication in the Internet Age, by Robert Kreitner and Angelo Kinicki, Change Management: The People Side of Change by Jeff Hiatt and Timothy J Creasy, and Employee Development: The Nebulous Harmony of HRD by Rosemary Harrison. Make the Decision The alternative solutions that would best suit TeraTech and assist it in resolving the various issues identified in the above processes, include training the existing staff. The advantages of training the staff include, improved employee value by enhancing their knowledge on the new technology, which would in turn help them increase the overall productivity of the organization. The proposed training would also help in saving a extra time and financial resources on the part of the management, which would otherwise have been utilized for hiring of additional staff, with the adequate / required knowhow. The training acquired by the selected staff could be further passed on to the fellow employees thereby eliminating the need to train the staff on a frequent basis. The disadvantages on the other hand include utilization of time of the current staff who might feel overburdened as a result affecting their on the job performance in the process. Also, the expenses of hiring the services of a qualified trainer are quite high, which could eat away a major chunk of the organizational resources. In spite of the above stated disadvantages, training of the existing staff is chosen as the best possible alternative for TeraTech, considering its immense potentials to transform the business goals into reality. Although the concept of analytical CRM is relatively new, the advantages that it has to offer are widespread, and have the capabilities of spreading to various other sectors other than the pharmaceutical industry. Thus in the near future the company could use the trained staff in developing in-house models for other sectors of the industry as well as customized products for individual customers. This way TeraTech could avail the dual benefit of having the trained staff and the facility to further utilize their skills for the future Research and Development activities of the organization. Develop and Implement the Solution The solution chosen for TeraTech to solve the problem, is training its existing staff to make them competitive and well equipped to deal with the issues concerning new product development which requires specialized skill set. This is chosen as the best alternative as it has long lasting effects on the organizations. It is chosen over the other alternatives due to the sheer credibility of the plan as well as its widespread effects on the attainment of prospective organizational goals. The solution requires identifying key areas of research required to be studied prior to its implementation such as; selecting and identifying the key areas which require training. Preparing the budget in order to ascertain the overall cost involved in such training, choosing the appropriate training method such as in-house training, organizing seminars, conducting post job classes, etc., selecting / choosing the appropriate number of employees to be trained, and lastly testing and implementing the new techniques acquired through training in order to gauge the efficiency post training of the employees. These steps, beginning from selection of key areas for training to the final testing and implementation of the techniques would take approximately 17 weeks at the end of which the staff would be well equipped to finally launch the new analytical product. Any further changes in the technology would need upgradation and not full length training hence the future costs to the organization could be cut down to a considerable extent. Evaluate the Results The training and development of the existing employees would stimulate the sales growth of the company and would guarantee overall growth and development of the organization as a whole. Several companies invest in enhancing the skills of their employees in order to utilize such skills for the attainment of their future goals. There is little doubt about the fact that training employees is an investment rather than expenditure for the companies. The American Society for Training and Development (ASTD), a professional association of 70,000 corporate - learning specialists around the world, suggests that money invested in training of employees often come back to the organizations in the form of enhanced shareholder value. According to the statistics of a study conducted by ASTD, entitled “Profiting from Learning: Do Firms’ Investments in Education and Training Pay Off?”, on 575 U.S. Companies between 1996 and 1998, shows that an overall expenditure of more than $680 per employee per year by a company, as compared to the spending of an average company, resulted in an increased TSR (Total Stakeholder Return) by 6% in the following year. A review, conducted by the Office of Training and Further Education (OTFE 1997), of studies conducted in the United States, Europe and Great Britain, clearly asserts human resource management (HRM) practices are, without doubt, the most powerful forecaster of an organisation’s productivity and profitability (David Essex, 2008). In fact, research on British businesses, conducted by the Centre for Economic Performance (CEP) at the London School of Economics 1997 (CEP 1997), showed HRM policies have eight times more impact on company productivity and profitability than business strategy does (OTFE, 1997). Conclusion In conclusion on the basis of the studies and research conducted for verifying the viability of the proposed alternatives and its overall impact on the growth and development on the organization as a whole, it could be very well estimated that TeraTech can successfully achieve its short term (implementing new product development technique) as well as long term goals (being a dominant player in the analytical CRM industry). References Journal: OTFE (Office of Training and Further Education) 1997, Return on Training Investment, OTFE, Melbourne. CEP (Centre for Economic Performance) 1997, Annual Review, London School of Economics, London, pp.5-7. Bartel, A., 2000, Columbia University. NCVER (National Centre for Vocational Education Research), 2001, Does training pay, NCVER, South Australia. Text Harrison R, (2003). Employee Development: The Nebulous Harmony of HRD, Orient Longman Publishers. Hiatt J, Creasy T J. (2003). Change Management: The People Side of Change, Prosci. Kinicki A, Kreitner R, (2004) Organizational Communication in the Internet Age, New York, McGraw – Hill. Online resources Essex D, Study Says Employee Training Increases a Company’s ROI, June 20, 2008. Available from: < http://www.iceandsnowtechnologies.com/articles/TrainingBenefits.pdf> Table 1 Issues and Opportunities Identification Concept Application of Concept in Scenario or Simulation Reference to Specific Course Concept (Include citation) Personal Experience at your Organization TeraTech has a lack of stakeholder alignment that will hinder their ability to implement new products and services/solutions. To develop value added channels of communication aligning key stakeholders under a common vision. This is an opportunity to increase organizational comprehension and employee involvement that results in the garnering of trust and loyalty among stakeholders. Barriers to effective communication: “There are four key barriers to effective communication: (1) process barriers, (2) personal barriers, (3) physical barriers, and (4) semantic barriers.” (Kinicki & Kreitner, 2003) Parenthetical citations must include page or paragraph number 1. Media selection by TeraTech, of communication of important information such as staffing – hiring/ termination of employees which affects the managerial decision making process where decisions might be based on inaccurate information, leading to higher dissatisfaction and resentment among the employees rendering them unproductive. To develop a better and more effective communication model in accordance with the complexity of the managerial problem/situation. Media selection – A Contingency Perspective “Media selection is a key component of communication effectiveness. Effective communication occurs when the richness of the medium is matched with the complexity of the problem/situation” (Kinicki and Kreitner, 2003) The credit card company, ABC International, for which I worked in the past, was faced with a similar problem where most of the communication was done through electronic media. Major strategic decisions were conveyed by the senior management via emails thereby limiting the scope of a two way dialogue whereby the employees could solve the issues through proper face to face communication with those in the top managerial positions. 2. TeraTech intends to make major organizational changes in terms of the existing number of employees for sustaining its revenue inflow as well as change in their existing product design to suit the customer requirements but it is experiencing staffing problems and lack of skill set required of its employees to develop the new product. To survive in today’s marketplace, a business must constantly examine and revive its performance, business strategy, processes and systems to understand the significance of such changes and its probable implications on the project as well as on the business as a whole. “The most common barrier to success is lack of change management which includes factors such as: 1. Lack of willingness on the part of the managers to assign needed resources to the project. 2. Negative communication on the part of managers about the change. 3. Lack of funding for the change” (Hiatt, Creasy, 2003) The management at ABC International were caught in a strategic dilemma wherein they were divided on the views of launching a new product which was in accordance to the demands of the market and focusing on the promotion of existing products to increase their profitability. The top management’s reluctance towards change was mainly on account of lack of funds for the proposed change. 3. TeraTech’s management is faced with the key strategic issues concerning the new product development that requires its employees to possess specific skill set; however, on account of non availability of adequate funds, hiring new employees is not a viable option and the existing employees do not possess the necessary skills/ knowhow for developing and supporting an analytical product. To evaluate and design developmental policies in accordance with the organization’s vision and long term goals by focusing on enhancing the skills, knowledge, learning objectives and innovative capability of its employees, that will help TeraTech in the attainment of the organizational objectives and fuel its overall growth in the process. “Developing people as a part of an overall human resource strategy means the skillful provision and organizing of learning experiences, primarily but not exclusively in the workplace, in order that business goals and organizational growth can be achieved” (Harrison, 2003) The sales team at ABC International was faced with a core business problem of promoting its new product, credit cards for kids. This being a relatively new concept, the team faced problems for the proper product positioning as well as its appeal to the target audience in accordance with the industry demand. This required training the new staff as to the functionality of the proposed product so as to make it possible for the development team to facilitate efficiency in its promotion. Table 2 Stakeholder Perspectives and Ethical Dilemmas Stakeholder Perspectives and Ethical Dilemmas Stakeholder Groups with Competing Values List: Group X versus Group Y The Interests, Rights, and Values of Each Group Course Concept 1. Christine DeFalco (Chief Marketing Officer) – Chris Riggs (VP of Human Resources) Competing Values: Maintaining Staff levels The Chief Marketing Officer and the VP of Human Resources have conflicting views on the hiring of staff members in TeraTech, where the CMO is against hiring of additional staff due to shortage of funds while the VP of Human Resources is in dire need of additional staff as his existing staff is already overburdened with work to support their sales team. Christine DeFalco, being the Chief Marketing Officer of TeraTech, is entrusted with the responsibilities of maintaining/ sustaining the existing number of employees in order to avoid over utilization of financial resources on hiring of additional staff, which considering the current market status of the company, is of crucial importance for the future growth and development. 2. Wendy Martin (Chief Technology Development Officer) – Christine DeFalco (Chief Marketing Officer) Competing Values: Skills Assessment The Chief Technology Development officer of the company is faced with the problem of inadequate skill set of the existing staff whereas the new product development requires the staff to possess special skills. The Chief Marketing officer on the other hand is reluctant to add new staff as the company is in critical need of funds and cannot afford to spend on hiring of additional staff until the financial targets of the company is achieved. Wendy Martin, the Chief Technology Development Officer at TeraTech, is concerned with the skill set required by her team to support and develop the analytical product which her existing team lacks. Christine DeFalco, on the other hand, is required by her immediate superiors to bring down the current costs to the company which is essential to sustain its position in the fiercely competitive market. Table 3 Analysis of Alternative Solutions [Click Twice on Table to Change, see instructions on next page] Table 4 Risk Assessment and Mitigation Risk Assessment and Mitigation Alternative Risks and Probability Consequence and Severity Mitigation Techniques and Strategies Changes in the Business Policies Policy changes could delay the project Teams working on the project could get confused regarding the new policies System functions may not be used if not supported by correct procedures. Delays would severely affect the sales growth as well as the marketing strategies developed for the new product The teams would feel overburdened on account of frequent changes and lose credibility in the management’s decision thereby affecting the productivity Communicating the probable changes well in advance (as early as possible) Create an aggressive communication plan to keep the parties concerned engaged and well informed Conduct a pilot test/ prototype to ensure better performance. Making changes in the Organizational Structure Changes in the organizational structure might lead to loss of jobs on the part of the employees working on the project Employees may fear loss of job which in turn hamper their functionality It would further lead to an imbalance in the working environment Change in the organizational structure would cause concern among the employees about their status in the organization. It would lead to loss of self esteem The employees might lose their will to excel on account of lack of motivation. Document the concerns of the organization and look for probable solutions to mitigate such concerns Equip the Human Resource team with better knowhow to deal with such situations Facilitate a two way dialogue with the representatives of all the groups involved and encourage free exchange of ideas. Implementing new project technology Implementing of new technology might result in lower productivity as the employees would need time to adjust to the new technology The implementation of new technology might require sub conversion of efforts on the part of the project team The organization might have to deal with poor system performance in the initial phases as the project team takes time in adapting to the new technology and gain expertise in its optimization and configuration. Production might be affected due to the implementation of new technology as the project team would require time to adjust to it Might cause loss of revenue and increase outflow of financial resources leading to reduced profitability Difficulty in learning and adjusting to the new technology would lead to longer delivery times, causing substantial delays in the delivery of the products. Provide training to the project team as early as possible prior to the implementation of new technology The management should make necessary arrangements to provide a proper test environment for the new technology to be implemented. Ensure proper and adequate in-depth analysis of the functions, features and capabilities of the new technology. Table 5 Pros and Cons of Alternative Solutions Alternative Pros Cons Train the existing staff Encourages employees to learn and implement new techniques to increase productivity Saves the management from putting in extra time and resources in hiring new employees The trained staff can pass on their knowhow / skills to their fellow employees thereby reducing the need to train the staff on a frequent basis. Utilizes much of the time of the employees who might feel overburdened as a result their on the job performance might be severely affected Expense of hiring the services of a high quality trainer / instructor is quite high The employees might face difficulty in staying away from their work desks in order to attend the seminars / training classes thereby defeating the very purpose of such training. Outsource part of the job Facilitates re-allocation of staff to enable concentrated focus on various key aspects such as content development and program management Increased effectiveness and flexibility in meeting business requirements Enables freeing up of resources which could otherwise be utilized for evaluation of overall operational and quality improvement in training program. Might result in limiting the technical flexibility of the organization Loss of control over the process outsourced as well as lack of prior outsourcing experience The organization might be subjected to resistance from the staff who may perceive outsourcing a form of downsizing. Table 6 Optimal Solution Implementation Plan Action Item Deliverable Timeline Who is Responsible Select / identify the areas for training 1 – 7 days CEO (in consultation with the other key stakeholders) Prepare budget for the training 7 – 14 days CFO Choose the appropriate training method 2nd - 3rd week CEO Select the appropriate employees for training 3rd – 4th week CMO , VP HR Train the chosen employee 4th – 15th week (12 weeks training) CTO Test and implement the new techniques 15th – 17th week (3 weeks) CTO Table 7 Evaluation of Results End-State Goals Metrics Target 1. Facilitate better and effective communication of strategic organizational decision through development of efficient communication models in accordance with the complexity of the company’s managerial problem / situation Flawless communication between TeraTech’s stakeholders Communication model implanted to allow for uninterrupted exchange of ideas among TeraTech’s stakeholders 2. Effective implementation of new technological development in TeraTech’s business model through adequate training Well informed and professionally trained staff 100 % of employees who underwent training, equipped Read More