Watsons Engine Components vs. H&M Consulting - Case Study Example

Introduction to Organizations and Management A critical comparative analysis of two organizations i.e. Watson’s Engine Components vs. H&M Consulting in terms of style of operation and management Introduction Management plays critical role in success of any organization (Milgrom and Roberts, 1992). Various components constitute a single enterprise or an organization and the final objective is to achieve maximum product output per unit input with out compromising the quality and customer satisfaction. To manufacture any single product, team work is involved and lot of planning goes in this production process. Hence, in any good organization, there should be a clear road map that decides the specific roles of various people at different tiers so that good coordination would be possible facilitating maximum out put in unit time. In general, several principles of management play vital role in giving any organization a solid strength and proper direction and an element of sustainability. Effective management also facilitates good organizational design and structure, effective team work, ideal organizational culture and dynamic leadership. To understand this properly, practical studies of some organizations and comparison of their operation and management styles would be of immense help. Keeping this in consideration, a relative comparative analysis of two different firms i.e. Watson’s Engine Components vs. H&M Consulting has been made in terms of their style of operation and nature of management. The operation and management of both these firms is discussed with special emphasis to structure and design of organization, team work, leadership issues and organizational culture. Out of these two enterprises, Watson’s Engine Components is a old fashioned and family owned in nature and it has very poor management credentials and there have been no serious efforts to improve the situation keeping the present day market in consideration. Starting with its design and structure to leadership and tea building and the organizational culture are found to be very poor leading to its low efficiency and poor client base. The detailed analysis is presented which is as follows: Organizational design and structure For achieving ideal output in any firm, the implementation of optimum design of the organization is very important. Good organizational design would always facilitate better coherence and coordination among the employees and would also be instrumental in production of high quality end products. In the present case study, the organizational design of Watson’s Engine Components is hierarchial and it is not satisfactory as it lacks proper direction. In any organizational design, the founder or leader has to provide clear road map in which the organization has to concentrate for achieving its predetermined targets. Moreover, an effective organizational structure requires functional and divisional components (Hax and Majluf, 1981). In Watson’s Engine Components, Watson couldn’t give any futuristic model and it is completely family owned company with less diversification and specialization is also wanting as there is no proper division of works under different sections or departments. In this way, there is no proper communication and operation of authority of individual employees, span of control and accountability resulted in poor performance of Watson’s Engine Components. There is no coherence at among the employees and flexibility is also found to be lacking which makes Watson’s Engine Components less competitive in the present day market. For meeting the present needs of the market, the design has to be modified in any successful organization (Kikulis et al., 1995). But this has never happened in Watson’s Engine Components. The staff absenteeism and turn over rates of technical staff are quite quite high in Watson’s Engine Components resulting in poor organizational efficiency and this is to be addressed immediately. The Managing Director Gordon Watson himself is about to retire form his job and he has not motivational ideas about the transformation of present design to a new and flexible one. On the other hand, H&M Consulting has one of the best organizational design where the top management clearly understands the thinking of base level employees so that very effective communication takes place here. This automatically results in highest quality of the end products that results in excellent customer satisfaction. Its organizational structure is less hierarchial and works with effective central direction. The successful organizational design includes the efficient utilization of information technology in which H&M Consulting also excelled (Karl et al., 1995). Moreover, the organization design of H&M Consulting is superior in nature because it addresses the problems of the employees very quickly and allows the employees to speak out their problems. Overall, it could utilize its financial, human and material resources very efficiently to achieve its predetermined targets through sound organizational design. Hence, Watson’s Engine Components must try to adopt the model of H&M Consulting in terms of organizational design that facilitates diversification and risk minimization In terms of organizational structure, Watson’s Engine Components lags far behind the H&M Consulting. At Watson’s Engine Components, the various components of organization are highly disorganized and completely devoid of any forward and backward linkages where as the situation of H&M Consulting is quite different where lot of planning has been made for good organizational structure and review of the performance also is being made on regular intervals and hence employees are always experiencing highest level of satisfaction. This reduces the absenteeism and turn over rates of employees. Moreover, the employees are made very integral part of the organization and they strive well for better performance of their firm and they equally care for customer satisfaction and environmental and safety while involved in manufacturing process. The effective organizational structure always helps in providing quality decision making by the top management (Legerer et al., 2009). Due to lack of such a mechanism, Watson’s Engine Components couldn’t provide any effective decision making process that caters the present day market demands. However, H&M Consulting has a matrix structure with highest functionality and hence facilitated effective decision making and could meet the demands of the customers in timely manner and is ready to diversify its business to new areas also. The chain of command, span of control and unity of control are found to be very effective in the organizational structure of H&M Consulting which are very poor in case of Watson’s Engine Components. Hence, Watson’s Engine Components should strive for a better organizational structure that leads to ideal span of control, chain of command, flexible working environment, autonomy and team building. Teams and team working Team work is very important factor for success of any organization as it facilitates management of financial, human and material resources (Salas et al., 2009). Good team work is essential for achieving the target of quality production as it helps in effective communication between various tiers of the organization and it was proved that team work leads to higher reliability in organizations (Baker et al., 2006; Knox and Simpson, 2004). Moreover, it also creates an environment of motivation and result oriented approach and healthy competition. In those organizations where team work fails, the results in terms of quantity and quality of output would be poor. This is reflected in the present case study where Watson’s Engine Components couldn’t compete well with the present market players due to poor team work. In fact, the employees of its team from higher to lower levels are found to be highly demotivated and are searching for alternative employment avenues. For example, the Managing Director, Watson himself is in the verge of retirement and he has not put any efforts for creating an effective secondary leadership. Similarly, Production Manager Ahmed Khan got frustrated to work in this firm as his suggestions like utilization of information technology couldn’t be implemented and hence he is in a mood to make a switch over from this firm to a new firm. This has created an environment where motivation and strategic human resource management are completely absent. As a result, it led to the over burdening of some of its key employees resulting in poor output efficiency. The scenario is completely different in case of H&M Consulting where organizational team building is excellent with very good forward and backward linkages. The employees are given enough freedom to express their views for improvement of ways and means of production and they are encouraged to come with new innovative ideas for quality products. Unlike Watson’s Engine Components, H&M Consulting diversified its products from education to engineering and located through out the world and hence it requires very efficient organizational functioning for which effective team building is essential. The linkages are poorly managed in Watson’s Engine Components and the employees are specialized only in some specific nature of duties and are not suitable for any other department as they lack expertise and enough training. This made Watson’s Engine Components a less flexible company in utilizing its employees for production of the end products. Even its poor ability to meet the demands of present orders is due to its poor team work and low working efficiency of workers. However, the situation is quite impressive in H&M Consulting where the communication among team members is very good and the employees are trained well in all the different specializations and they are ready to take up any job assigned based on the needs of the company. Its managers act as advisors and help in smooth functioning of the organization. Most importantly, the team members work in different locations in different natures of work and hence have lot of flexibility in adjusting to the new environment. The biggest challenge before Watson’s Engine Components is in the form of increased cost of raw material and low duration for production and reduced selling price due to reduction of margins by the car manufacturing companies, hence to make a sustainable production at the time of these new challenges, new techniques with innovative nature are required for which team building is a crucial requirement. Approach to leadership and management For the objective of getting proper direction for meeting the predetermined targets, effective leadership is quite essential (Yukl, 2005). In fact, for any organization, the dynamic leadership is must for deciding the reasonable targets and effectively communicating the ways to achieve the same to all its employees and also to solve the problems of the different departments from time to time. Moreover, a dynamic leader is very essential to inculcate a good organizational culture (Ann and Carr, 2010). In case of H&M Consulting, dynamic leadership is being provided by its Chief Executive Officer Mr. Theo Wolf who is highly motivational and inspirational in nature. He always strive for providing avenues for employee empowerment so that they produce more innovative and environmental friendly products. As mentioned earlier, in Watson’s Engine Components, the leadership is not encouraging and lacks motivation. As a result, the employees don’t have clarity about the future direction of the organization and several problems like unionization couldn’t be tackled. Hence, Watson’s Engine Components should have a new and dynamic leader who can inspire its employees and communicate well with them and who can create an organizational culture with highest profressional ethics. Organizational culture Organizational culture must be very positive and work and target oriented. It should be created in such a manner that the employees at different tiers must feel that they are integral part of the organization and they should strive high for achieving the maximum output and they should derive satisfaction in producing quality products (Schein, 1996). It mainly includes the deeply rooted beliefs, values and standards that will shape the normal behavior of any group positively contributing to the higher employee productivity and organizational efficiency. The organizational culture must also aim at maintaining the professional ethics while being involve din the process of manufacturing of the products. In some of the cases, the minimum standards to be maintained for ecological safety also must be ensured which is possible with the good ethics. In the present case study, H&M Consulting maintained good organizational culture with sound ethics by producing the environmentally safe products and also helped in reducing the pollutants and green house gases. It has developed very effective organizational culture which will help in group enterprise, collective support, good team spirit, autonomy and dynamic leadership (Mars, 2009). It is basically an employee owned company and hence they have direct role in decision making and product specification resulting in higher customer satisfaction. It inculcated a positive culture in the form of PRIDE i.e. Progress, Respect, Integrity, Drive and Excellence. It helped in enhancing the living standards of the local communities and respects their customs and traditions and technically excels in its products and follows ethical values at highest level. Due to this organizational culture, they will have more job satisfaction and gets self motivated which in turn contributes to higher organizational efficiency. In contrast, the organizational culture in Watson’s Engine Components is not encouraging for optimum resource management. There is no team work existing and more alarmingly the trust between the management and workers is severely lacking and unions create havoc frequently leading to disruption to the services. The employees have no role in decision making about the product specification and development. Conclusion Management structure decides the efficacy of any organization. In ideal organizations, several departments work in coordination to transform the inputs to outputs and they aim at higher quantity of end products with satisfactory quality and hence the organizational design and structure are very crucial. In addition, the team work with higher levels of motivation is essential for production of quality goods on sustainable basis. Only those organizations which can apply the basic management principles can succeed in the present competition and they will be able to diversify their product range with the advancement of time. H&M Consulting is best example for this which has provided very conducive environment for its employees and rather it made employees as one of the components of management decisions so that they wholeheartedly contributed for the welfare of the organization. The organizational design and structure of this firm are quite effective and result oriented. In addition, an effective organizational structure aids in inculcating good value system in any organization (Hinings et al., 1996). The excellent team work along with coherence, organizational culture and dynamic leadership made H&M Consulting one of the best enterprises in the world and it could diversify its products and also it could expand to several geographical regions of the world in spite of the tough global competition. At the same time, Watson’s Engine Components remained stagnant in its management strategy with poor organizational design and structure resulting in its low output. It couldn’t make its employees well utilized and organized and they are specialized only in one or two techniques which made the firm less competitive in the market. At the same time, the company couldn’t inculcate good organizational culture resulting in lack of attachment of the employees with the firm. In terms of team work and leadership, Watson’s Engine Components performed poorly resulting in its negative growth rate over a period of time. It should chalk out a management strategy with new organizational structure and design that will facilitate effective team work and motivational leadership along with organizational culture. It should try to follow the model of H&M Consulting in inculcating organizational culture in the form of PRIDE i.e. Progress, Respect, Integrity, Drive and Excellence. Intensive training to the team leaders would certainly help Watson’s Engine Components to build up the team work and collective spirit as organizational culture (Tannenbaum et al., 1998). Hence, for the successful organizational performance, the principles of management must be well understood and implemented practically. References Ann, C. and Carr, A.N., 2010. Critical reflections on the good, the bad and the ugly of organisation leadership: the case of Wal-Mart. Culture and Organization. 16 (2) : 109-125. Baker, D.P., Day, R. and Salas, E., 2006. Teamwork as an Essential Component of High-Reliability Organizations. 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