Ngai Tahu Holdings: Analysis and Recommendations for Improving Organisational Performance - Case Study Example

Ngai Tahu: Analysis and Recommendations for Improving Organisational Performance Introduction This essay is based on Ngai Tahu Holdings, a special type of company that is owned by the Ngai Tahu Charitable Trust. Ngai Tahu Holdings is charged with the responsibility of advancing the interests of the community by achieving commercial success. In this essay, an analysis of Ngai Tahu in terms of how its mission, vision and strategy underpin its overall purpose is presented. An analysis of how the organisation is designed in terms of the major contingency factors and what it is able to achieve is also presented. The evaluation is based on how the design of the organisation takes into consideration the five key contingency factors of business life cycle, strategy, human resource, the environment and technology. Lastly, recommendations on what should be done in order to improve the overall performance of the organisation are made. Analysis of Ngai Tahu The purpose of Ngai Tahu as a corporation is embedded in its mission, vision and overall strategy. The mission of Ngai Tahu is to foster the interests of the community by successfully pursuing commercial interests through the activities of the various companies that operate under the umbrella of the holding company. By virtue of the fact that the company is owned by the Ngai Tahu Charitable Trust, which represents the interests of the larger community, the vision of Ngai Tahu Holdings Company is to ensure that it maximises the value of its shareholders and, by doing so, improve their overall welfare (Ngai Tahu Holdings, 2016). Furthermore, the company is guided by specific values (Ngai Tahu Holdings, 2016). The importance of these values is seen in the desire of the management team of the company to ensure that all the subsidiary organisations of the holding company are guided by these values in their operations. One of the main values of the company, which is expected to be observed across all its subsidiaries, is related to the family. All the subsidiary companies are expected to operate in such a manner that meaningful relationships are created, fostered and maintained (Ngai Tahu Holdings, 2016). The need to build and maintain important relationships means that all the companies operate as one large family that is guided with a unity of purpose and direction. The second important value which is used to guide the manner in which the subsidiaries of Ngai Tahu carry out their operations is related to people. The company observes the need to respect all the people who are involved in its operations. The company also lays much emphasis on expertise. The necessity of expertise is what makes it necessary for the company to get people who are well equipped to carry out specific operational activities of the company. In addition to this, the operations of all the subsidiaries of the company are based on the values of stewardship and integrity. Under stewardship, the company seeks to protect the people, the environment, and the culture of the people and other aspects of the society in which it operates (Ngai Tahu Holdings, 2016). On the other hand, the value of integrity is underscored by the need for the employees of all the subsidiary companies of Ngai Tahu to behave ethically and with integrity (Ngai Tahu Holdings, 2016). There is a significant relationship between the vision, mission and strategy of the company and how they are designed. This relationship is terms of the contingency factors. In theory, the essence of contingency thinking in organisational design is that the design of any organisation should be based on the need to take into consideration all the existing conditions and ensure that all the resources are utilised in the most efficient manner (Beckford, 2012, p. 156). Further, according to Schermerhorn, et al. (2014, p. 272), the extent to which the design of an organisation is based on contingency can be determined by evaluating how the design satisfies the needs of all the main contingency factors, which include the business environment, strategy, technology, life cycle and human resources. In relation to the environment, organisations need to be designed in such a manner that their designs are based on the opportunities and problems which exist in the external environment (Schermerhorn, et. al., 2014, p. 272). One of the main things to consider is the environment in which the individual companies that make up Ngai Tahu Holdings operate. It can be seen that Ngai Tahu Holdings is composed of the following divisions: Ngai Tahu Capital, Ngai Tahu Farming, Ngai Tahu Property, Ngai Tahu Seafood and Ngai Tahu Tourism (Ngai Tahu Holdings, 2016). Therefore, the company uses a divisional form of structure under which the different subsidiaries of the company are organised in the form of divisions based on the industries in which they operate. What is important to note is that using a divisional structure is the most appropriate approach for the company. The appropriateness of the divisional structure for the company is as a result of several reasons. However, one of the most important reasons is that this division suits the company because of the level of stability and predictability in the industries in which the company operates. In general, companies that operate in relatively stable and predictable environments tend to use functional and more vertical forms of structures because the structures help them to focus on efficiency (Schermerhorn, et. al., 2014, p. 272). Furthermore, it has been stated that the divisional type of organisational design helps companies to use resources more efficiently and is suitable for organisations which are large in their scale of operation (Samson & Daft, 2012, p. 376). In relation to strategy, it can be seen that the structure of Ngai Tahu is supportive of the process of implementing the strategy of the company and helps in the accomplishment of the key operating objectives of the company. The ownership structure of Ngai Tahu and the fact that one of its key stakeholder groups is the local people means that the company prioritises the needs of the community above everything else. For the company to achieve its operating objectives and continually grow, it pursues a strategy which is based on stability and the expectation that the different divisions of the company will continue to experience steady growth over the years (Ngai Tahu Holdings, 2015). The third contingency factor that is important in shaping the design of organisations is the extent to which organisations use technology to enhance their operations. Ideally, the design of an organisation should support key technologies and create an environment in which the organisation can use different types of technologies to gain a competitive advantage (Schermerhorn, et. al., 2014, p. 272). In this case, since Ngai Tahu Holdings has several companies under it and these companies operate in entirely different industries, the extent to which the design of the organisation takes into consideration the need to use core technologies for its own benefit varies widely. However, it should be noted that the level of control that the overall management of the company has over all its subsidiaries and the level of responsibility that the senior managers of the subsidiaries enjoy is one of the factors that make it possible for the subsidiary companies to use key technologies to their advantage. For example, the farming business of the holding company manages to develop leading farming practices by collaborating with universities because of the design of the company. The managers of the business enjoy a level of autonomy that allows them to use such core technologies to enhance the outcomes of the business. An organisation’s design should also accommodate the changes that inevitably occur as a business moves through its life cycle (Schermerhorn, et. al., 2014, p. 274). As business organisations move through the birth, youth, midlife and maturity stages, they experience specific challenges (Schermerhorn, et. al., 2014, p. 274). For the organisations to succeed, the design should provide the right framework for the management to address the different needs and challenges that business organisations face in the course of their life cycles. Ngai Tahu is designed in such a manner that the management team can evaluate the value of any individual business unit over the course of time and decide on the specific needs of the business. It is this level of interaction between organisational design and the life cycles of the different business units of Ngai Tahu that makes it possible for the management of the company to wind up the operations of units which they deem to have reached their maturity stage (Ngai Tahu Holdings, 2015). The last important contingency factor is related to the extent to which an organisation provides its employees with an environment that supports the employees and enables them to perform well in their work. It can be seen that as a whole, Ngai Tahu highly values its employees. One of the values of the company is to ensure that the company looks after its people well and builds a family environment among staff (Ngai Tahu Holdings, 2016). It is because of the commitment to improving the performance and level of satisfaction of its employees that the company hires individuals who are well suited for specific jobs and offers the employees personal and professional development opportunities (Ngai Tahu, 2015). 5 Key Recommendations to Improve Organisational Performance The following are the five recommendations that can be implemented to improve the overall organisational performance of Ngai Tahu Holdings. From the financial results of the year 2015, the performance of the company in terms of growth in the value of the equity of shareholders, total assets and profitability has been increasing steadily over the last few years (Ngai Tahu Holdings, 2015). Therefore, there is need for the company to improve its overall performance in order to ensure that its performance, as measured in terms of the metrics of profitability, value of equity and assets, continues to increase in the near future. 1. Ngai Tahu should improve the level of participation of all employees in all its key decision-making processes. The company uses a divisional form of organisational structure for practical reasons. Under this design, the senior management team of the organisation retains a high level of control over the decisions that are made by the different divisions. In this case, the senior management still controls the decisions that are made by the management teams of the several businesses of the holding company. However, there is evidence that organisations are increasingly finding it necessary to increase the level of involvement of all their employees in decision-making as a way of increasing employee productivity and satisfaction (Griffin & Moorehead, 2011, p. 135). In this case, as much as Ngai Tahu has been operating using the value of the need to respect everyone, there is a need to ensure that employees as well as middle level managers are deeply engaged and involved in the decision-making processes taking place in their businesses. 2. Ngai Tahu needs to maintain its level of participation in corporate social responsibility (CSR) activities. From the financial report of the company for the 2015 financial year, it is evident that the company has concentrated on giving back to the society for a long time (Ngai Tahu, 2015). Since the local community is the most important stakeholder of the company, the need to distribute the company’s earnings to causes that help to improve the lives of the locals defines the CSR approach of the company (Wolf, 2014, p. 210). In theory, it is stated that CSR encompasses the practice in which organisations are concerned with the social, environmental and economic needs of their societies as well as all their other stakeholders (Wolf, 2014, p. 210). In this case, it is necessary for Ngai Tahu to maintain its level of CSR activities for the sake of achieving its overall vision of improving the lives of its key stakeholders. 3. The company should focus on the need to get the feedback of clients and integrate the feedback into its operations. Ideally, integrating feedback from clients into the operations of the business will help it to identify areas that require improvement and improve in the identified areas. Essentially, getting feedback from clients is one of the defining aspects of the view of organisations as open systems which use resources from the environment to create value for the environment and, in doing so, rely on feedback from consumers to continuously improve their functioning (de Waal, 2012, p. 34). 4. The company should increasingly embrace innovation and learning. It has been pointed out that the overall design of the company is based on the premise that the industries in which it operates are relatively stable and that the company should focus on efficiency. In theory, it has been shown that organisations which focus on long-term orientation tend to perform relatively well over the course of time (de Waal, 2012, p. 34). In this case, much as it is important for the company to focus on efficiency and long-term growth, it is important that it incorporates elements of innovation, continuous learning and improvement in its operations. This will help it to focus on long-term growth and performance in a manner that helps it to be in a position to take advantage of any opportunities that may arise or effectively address any challenge that it may meet over time. 5. The company needs to maintain the level of expertise and quality that is seen in its current management team. Currently, the company focuses on getting individuals who are skilled enough to handle the specific management responsibilities that they are charged with. Furthermore, the organisation provides professional improvement programmes for its management staff as a way of equipping them with the specific skills that the need in order to perform when carrying out their managerial duties. What is important is that even though the organisation seeks to provide an environment that is appropriate for its managers, it is necessary for the organisation to ensure that it maintains its quality of management personnel. In theory it has been shown that maintaining a high level of managerial skill is one of the defining characteristics of highly successful organisations (de Waal, 2012, p. 35). Within the context of Ngai Tahu, maintaining a high level of managerial skill will help it to maintain its current performance in general. Conclusion It has been shown that the design of Ngai Tahu is based on the need to help the organisation address the challenges that it faces in its environment and take advantage of opportunities to achieve high performance. It has been argued that the design of the company is appropriate for the company in that it matches its environmental needs, helps its employees to perform at their best and allows the organisation to embrace new technologies and innovation in its operations. It has also been shown that the design of the organisation helps its management team to address the issues that arise as the constituent companies go through the typical business cycles and that the design helps the company to pursue its overall strategy. However, there are areas that Ngai Tahu needs to improve in order to maintain its current high performance and even improve it in the future. The essence of the recommendations is that they are based on addressing specific issues that arise out of the five main contingency factors of the environment, human resource, strategy, technology and business life cycle. References Beckford, J. (2012). Quality: A critical introduction. London: Routledge. de Waal, A. A. (2012). ‘Characteristics of high performance organisations.’ Business Management and Strategy, 3(1), 28-45. Griffin, R.W., & Moorhead, G. (2011). Organisational behaviour. Sydney: Cengage. Ngai Tahu Holdings. (2015). 2015 Annual report. Retrieved from, http://ngaitahu.iwi.nz/investment/ngai-tahu-annual-reports/2015-annual-report/ Ngai Tahu Holdings (2016). Ngai Tahu Holdings Group profile. Retrieved from, http://www.ngaitahuholdings.co.nz/group-profile/group-structure// Samson, D., & Daft, R.L. (2012). Management. Mason: Cengage. Schermerhorn, J.R., Davidson, P., Poole, D., Simon, A., Woods, P., & Chau, S.L. (2014). Management (5th Asia-Pacific Edition ed.). Milton, Australia: John Wiley & Sons. Wolf, R. (2014). Empowering organisations through corporate social responsibility. New York: IGI Global. Read More