Management of H&M Consulting and Watsons - Essay Example

?Contents Introduction 2 Analysis 4 Organisation design and structure 4 Teams and team-working 5 Approach to leadership and management 6 Organisational culture 7 Type of culture 8 Conclusion 10 Bibliography 11 Introduction The report covers the cases of two companies that follow different operating styles. The first company is Watsons, a company engaged in the manufacture of car engines. The second is H&M Consulting, a consulting firm in the business of management, engineering and development consultancy. Watsons is a family-owned business that employs a largely semi-skilled workforce. The structure is strictly hierarchical and there is a long history of conflict with the unionised workforce that comprises the majority. There seems to be an issue of trust between management and workers. The changing business environment is putting pressure on the company to achieve more with less. The company has a number of issues in its ability to manage existing and new business requirements due to internal capability limitations – poor inter-department communication and coordination, lack of flexibility among teams and poor internal control mechanisms. The leadership is, in the meanwhile, focusing on personal plans. Watson represents a company that has omitted the task of creating a vision or strategy for itself. The owner believes in responding to situations after they arise, an attitude that runs through the organisation and stifles the capability of talented resources. This is demonstrated in the absence of unified focus at all levels in the company and that of ‘clarity to business units’ to provide direction (Johnson, 2008, p. 304). The H&M Consulting Group employs a highly-skilled specialised workforce that can cater to business requirements of a diverse client group. The company is following a strategic path of inorganic growth through acquisitions and recruitment. The company follows a networked structure that utilises specific talent in teams to manage projects. Sophisticated information technology is utilised for effective coordination between and within project teams and to ensure resource availability to achieve project requirements. The workforce is self-directed. H&M has laid down well-defined mission and value statements and the workforce is focused on ensuring commercial success while taking care that core principles are met. The leadership is in constant contact with relevant issues with respect to corporate responsibility and seeks to find ways to ensure that it contributes to these larger goals. H&M represents a global organisation that draws strength from a strongly networked employee base. It represents a structure that is transnational as defined by Bartlett and Ghoshal as possessing ‘strong geographic movement… global product responsibility necessary to achieve global efficiency… worldwide functional management… vital to worldwide learning’. Translated into management tasks, this includes ‘legitimising diverse… capabilities, developing… flexible coordination, building shared vision’ (Hoecklin, 1995, p. 42-43). Analysis The case is analysed on the parameters of organisation design, team work, leadership and management style and culture. Organisation design and structure The key to competing in a changing environment lies in the capacity to differentiate one’s offerings from the other players in the market. Differentiation may be based on niche service offerings that cover specific market needs or a diverse offering that covers varied ones. Watson operates in the automobile components sector and has not opted for a strategy based on differentiation. H&M operates in a number of sectors that require specialised knowledge and skill thereby creating a niche for itself in a wide setting. The method to implement a strategy based on differentiation is through a careful assessment of the value chain within as well as among competitors and designing the organisation structure. Organisation structure that is based on the view of the value chain allows for the separation and coordination of similar activities. This method allows the firm to be ‘divided into discrete activities’ (Porter, 1998, p. 58-61). A unified focus on organisational goals is enabled by structure. ‘Organizations that wish to be successful in achieving objectives must consider the alignment of organizational and member goals’ (Triplett, 2007, p. 3). The grouping of similarly occupied resources helps determine the number of resources that are committed to a specific strategic variable and forms the basis for ‘inclusiveness’ and the avoidance of political strongholds that affect performance (Baligh, 2006, p. 68-70). Organisational strategy can be implemented in the presence of a structure to support it. Strategy implementation calls for the creation of a design that combines ‘structure, control systems and culture’ (Hill and Jones, 2009, p. 380) to direct the efforts of the workforce. Daft, Murphy and Willmott (2010, p. 74) point to the creation of value with internal ‘flexibility, readiness and a positive external evaluation’. The ability of the organisation to acquire resources and grow is determined by its relationship with the environment. Watson’s has not devised a clear purpose and remains unaware that it is a small-sized local entity competing in an increasingly global environment. The absence of a strategic focus is brought out by the reactive principle of the owner, ‘If it ain’t broke, don’t fix it!’ This percolates down the organisation and results in the creation of inefficient silos that operate without awareness of organisational needs. The company employs 200 members and is organised along the lines of traditional hierarchies with a top-down approach. The firm accepts orders without considering existing capability limitations or introducing structural flexibility to manage the new requirements. The business head is focused on post-retirement planning while the second in command is looking to take the lead. The subordinate position to John Smith is a talented resource who finds it difficult to move ahead with the current structure as well as to continue functioning on an ‘as is’ basis. Internal ideas on how to improve performance remain untapped. The unionised workforce and management work in an environment of mutual distrust. Talent is scarce with competitors keen to attract resources at Watson while the company continues to function in an apathetic manner. Another feature of the hierarchical structure is the absence of an upward communication mechanism. The ideas of a manager that will enable the company to compete in a global arena are not given cognisance. The mission and value statements of H&M Consulting clarify that the final goal is reaching and exceeding customer expectations through excellence. These statements are shared across the global organisation spanning 120 countries. The company deploys a specialised workforce across diverse projects related to health, education and infrastructure across the globe. The presence of a strongly networked resource base with relevant skills allows for effective skill utilisation on the basis of business needs. The workforce is empowered by the flat organisation structure and high decentralisation required to carry out a wide scope of work. The organisation is clear about the aim of helping its clients to find more sustainable solutions and the flexibility of its structure aids in reaching organisational goals. Teams and team-working Cummings and Worley (2008, p. 263) believe that team work paves the way for problem solving and motivation to commit to larger goals. Cushman and King (2001, p. 129-131) describe an organisational effort to move towards a team-based structure defined by skills rather than fixed job definitions. Union negotiations were conducted to redesign the shift system, increase the hours worked with more flexible job descriptions. This approach has resulted in increased trust and shared goals between workers and managers. There is reduced supervision as teams become increasingly self-managed. Team building efforts are also useful to curb ‘apathy and general lack of member interest; loss of productivity… lack of innovation and initiation… timeliness and effectiveness’. As a part of good team management, team leaders should establish expectations… and ground rules’ under which to operate (Cummings and Worley, 2008, p. 79). Merkel and Al-Falaij (2004, p. 135-136) define empowerment as the organisational capacity to draw on the abilities of the team and enable them to work without supervision. Team members support each other without limiting growth and learning. Empowerment fosters achievement of organisational goals. Holbeche (2009, p. 134) identifies alignment between organisation, team and individual as the key to achieving corporate goals. Team work is enabled by the creation of team development plans, performance measurement and reward systems that recognise and reinforce teamwork. At Watson, quality and speed are affected due to the inflexible team structure with staff rarely moving between processes, absence of multi-skilled resources to carry out varied tasks and poor inter-departmental communication. High levels of absenteeism and lack of expectation that staff should be skilled and transferable to move between jobs affects productivity. The fixed positioning of staff members in teams regardless of work stage leads to the co-existence of under-employment and over-burdening. Decision making is centralised, ideas remain within individuals and rules are loosely applied or not defined as brought out by the complaint of a female staff member. The teams are closely monitored and are not empowered. High absenteeism is a sign of low commitment and ownership of responsibility by the workforce. The teams display an absence of commitment to goals and functioning as independent units with loose rules applied. The leadership has failed to align rewards with team effort. At H&M, specialised teams work together for projects and are disbanded and re-deployed on project completion. Teams function independent of supervision within defined timelines. Team structures are flexible and devised to suit project requirements. Self-management leads to high innovativeness and initiative. The managers coach and advise the teams on helping clients towards sustainable goals. Teams are empowered with their understanding of larger corporate purpose and the means to achieve it. Specialised skills are well utilised to ensure high business effectiveness. Approach to leadership and management Northouse (2010, p. 73) refers to leadership styles that seek to direct and support others. Directive behaviours tend to follow top-down communication mechanisms and lays directives on goals and tasks. The supporting approach is a low directive-high support style that that enables the employee to be effective on task accomplishment and routine decisions. The leader remains available for problem solving and social support. Watson displays a directive style with centralized decision making and communication. H&M displays the supportive approach with team members enabled to function independently on assignments across the globe while the management provides coaching and mentoring and the leadership provides holistic guidelines and business focus. Cameron and Green (2004, p. 19-22) refer to McGregor’s Theory X as a management approach that assumes an absence of inherent motivation to achieve and requiring close supervision. The authors also discuss Rokeach’s belief system theory that highlights individual beliefs and attitudes and their connection to goal achievement. Watson displays a Theory X management approach with its top-down communication and absence of workforce involvement mechanisms. H&M displays a belief in individual motivation to achieve goals and focuses on providing an enabling framework. Organisational culture Strategic goal setting must be supported by a suitable corporate culture to enable effective strategic implementation. While strategy is an attempt to define the company’s business and competitive environment, culture determines the capability to achieve. No one culture can be considered suitable, rather organisations must understand the cultural framework and attempt to progressively adopt a culture that is most suited to success. Ahlstrom and Bruton (2009, p. 154) explain that hierarchical structures show dependence for approval from higher levels of management and thereby stifle individual creativity. The authors highlight that culture as the foundational basis for corporate strategy since it affects the conduct and understanding of communication. Type of culture Handy identified four culture types including ‘Power’ and ‘task’ cultures. Power cultures are largely found in small individual-run organisations. Attitudes are determined by the owner/ leader and communication is informal and mainly routed through the power centre. Task cultures are designed to complete projects or tasks and include matrix structures that allow for flexibility and effective skill utilisation (Lynch, 2007, p. 282-283). Watsons displays a power culture with the owner’s attitude percolating down the structure, informal acknowledgement of important decisions regarding who leads the company after the current leader and the absence of will to bring about change despite the signs of there being a pressing need for it. Managers are responsible for decision and all inter-departmental communication is routed through the directors. This leads to poor communication and reduced speed and low responsiveness to customer requirements. A talented manager is frustrated because his idea that aims at providing focused service to the customer remains ignored by the management and lacks support from the culture that allows departments to route vital communication through the directors. The company depends on information technology to ensure availability of skills and resources for ready deployment. The manager sees the need for the use of computer technology to increase the efficiency of production and creation of an integrated system tailored to specific customer needs. He also has ideas and experience of team deployment that he has experienced in similar companies. Neither his ideas nor experience are given credence. This culture hinders the capacity of the manufacturing department to understand the needs of the customer and for the marketing department to realise the capacity of the manufacturing department. Since the directors expect direction to come from the business head, the existing mechanism fails to support the communication requirements. H&M displays a task culture that focuses on enabling clients towards sustainability. The teams display the flexibility to be reorganised for different projects across the globe. The cultural focus is on ready skill availability and utilisation towards the achievement of organisational objectives. Information technology is utilised to achieve efficiency and provides an effective mechanism to track talent availability. H&M has designed and communicated a business culture that cuts across national cultures and draws attention to the employee capability to fulfil its objectives while taking responsibility for personal development. The organisation supports personal growth while attending to its role as a responsible corporate entity. Conclusion The capability of an organisation to face up to the pressures of competition is dependent on its internal ability to structure itself around a clear goal. Organisational culture determines its capability to achieve the goal. Culture is in turn determined by the express behaviours and actions that the company undertakes. A company may seek to change the way it does business by reviewing its strategy and identifying the cultural forces that can hinder achievement or it may choose to draw up a business culture that emanates from existing assumptions and practices. All of this requires the business leadership to engage in examination of personal attitudes and to connect with the workforce to understand ground reality. Watson is beleaguered by the presence of a leadership that is involved in personal growth and gain and absence of cognisance of the changing nature of competition from local to global. The organisation does not possess a mechanism to allow for credence to ideas and solutions provided by the workforce and managerial staff. Instead, the company is attuned to directives flowing down from the owner/ business head. In the absence of a larger goal for energies to be focused on, the company has its energies directed in narrow tasks and is blind to overall business needs. The organisation structure has not been viewed from the angle of business relevance and assumptions on team management and organisational culture remain unchecked. The company is trundling along without awareness of its business reality. Any attempt to bring about change will be possible only if the leadership shows willingness to alter the current assumptions and change work and communication styles. In the absence of this effort, Watson will soon find itself outdated and less relevant in its competitive scenario. H&M on the other hand is blessed with an inspiring leader and self managed team profile. The organisation structure is aligned to meet diverse global business requirements and the possibility of cultural mismatch is managed by providing all the members with an overriding mission statement that percolates to form a business value and cultural norm. The organisation is in constant contact with the external environment and quick to provide niche services in emerging business requirements. It is also in touch with changing expectations of corporate houses and ensures the flow of communication of these responsibilities across the workforce. The diverse workforce is expected to direct its energies towards the goal of achieving customer satisfaction through excellence while giving due attention to the company’s stand on corporate responsibility and stated environmental practices. The organisation is receptive to ideas that emanate from its members and sees itself as employee-run. H&M displays the ability to remain alert to its business environment and proactively move to garner the benefits or change its practices to stay relevant. Bibliography 1. Ahlstrom, David and Bruton, Garry D. (2009). International Management: Strategy and Culture in the Emerging World. OH. Cengage. 2. Baligh, Helmy H. (2006). 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