Organisational Behaviour - Assignment Example

?Introduction Mergers and acquisitions often fail to materialize because of the inability of the two firms to actually reconcile their cultural differences. Different research studies have conclusively suggested that the mergers and acquisitions often fail to deliver the results because firms may not be able to find synergy between the two cultures and resultantly may not be easily able to make this transition strategically smooth. From the organizational development and behavior purposes, issues such as keeping motivation levels high, managing the perceptions of the employees, retaining the right kind of employees are some of the key issues which need to be managed properly in order to ensure that the employee to employee integration of organization can also smoothly take place. Such type of issues therefore can easily distract an organization from achieving desired results from the takeover. The given case study outlines different situations which emerged as a result of the acquisition made by Orton of the Costwise. The differences between the two cultures have apparently resulted into a clash between these two cultures. The result was the decline in the motivation as well as changing perceptions about the way Costwise employees started to perceive the Orton as a organization as a whole. This paper will therefore discuss the different employee motivations states, the overall perceptions held as well as exploring the main problems faced by the management. Besides, recommendations will also be presented as to how to overcome these problems while at the same time ensuring that the employee morale remains high. Employee Motivation Employee motivation is one of the key concepts in organizational behavior as it has a direct impact over the performance of an employee. Over the period of time, different motivational theories have been put forward to discuss as to how employees get motivated while at the same time discussing the ideas of what managers must do in order to make the employees relatively more motivated to achieve the desired objectives of the firm. Motivation is considered as the driving force which can actually drive a person to achieve a particular set of goals or accomplish something in life. Motivation within organization therefore is often viewed from the perspective of how the employees willingly contribute towards the achievement of organizational goals. Organizational behavior theories suggest that managers have to accomplish different organizational tasks through employees. As such motivating employees is one of the key tasks to be performed by the managers to ensure that the will to deliver the work and accomplish the organizational tasks remain high. In order to achieve any level of motivation, managers therefore have to offer certain explicit and intrinsic rewards to the employees to remain motivated. It is important to understand that motivation is not necessarily being related with the rewards of monetary nature but employees can be motivated through different other aspects of overall work too. Managers therefore must have to ensure that they understand the different motivational states of their employees to design and develop appropriate motivational strategies. (Rollinson, 2008.) Motivational States From the facts provided in the case study it could be assessed that the employees of both the organizations felt demotivated and were unable to cope with the change. The employees of the Costwise specially seem to be at odds with the proposed changes in the culture as well as change in the management of the firm. Firstly, the managers at Costwise were relatively independent in terms of setting up some of the tactical moves for the stores. Hiring, setting up prices as well as managing the overall competition at local level was in the hands of the managers. With the takeover, however, this was not the case as Orton was highly centralized in terms of controlling and setting up each and every aspect of doing the business. This move from the de-centralized culture to a highly centralized culture therefore has resulted into strong de-motivational issues for the store managers specially and resulted into higher employee turnover. The above may also be due to the fact that employees at Costwise may be were working in an organizational culture which was relatively open and allowed some kind of leverage and independence to the managers to participate in the overall process of managing and controlling at the local level. (Cesare and Sadri2003). This however, was not the case at Orton because of the way organization was managed over the period of time. Though Orton was a public limited company however, it remained as a tightly hold company run by one man since last many decades. Another very important concern of the ex-Costwise employees was the perception that the overall compensation for them was less than that of the employees of the Costwise. This therefore suggested that the ex-costwise employees were even considering their survival as threatening because of the low compensation. If we compare this situation with that of the Maslow’s theory of hierarchy, it may be surprising to know that the managers were not even taking care of the physical needs of the employees. This also suggested that the most of the employees were at the lowest motivational state where they even considered it relatively difficult to get themselves motivated because of low pay. Another important issue with respect to the employee motivation was the empowerment of the employees. It has been observed by Costwise employees that they have been overlooked and were not even informed of the major changes taking place across the organization. Lack of employee empowerment can often result into significant motivational issues. Empowering employees and involving them at the different stages of decision making process therefore can allow employees to feel part of the organization and become involved and feel valued by the organization. (Lloyd, 1996.) This however, can also be attributed to the overall culture of the Orton where decisions were central and almost ever organizational aspect was controlled from the center. This approach therefore might not have resulted into improved employee performance as well as motivation. It may also be due to this reason that company could not start to earn from its Costwise operations. Employee Perception From the given facts in the case study, it seems that the overall perception of the employees of Costwise may not be positive. The strong resentment that the employees of Costwise were second rate citizens within the company and that they were treated discriminately therefore the overall perceptions which emerged as a result of this were negative. It is also important to note that there is a very strong correlation between the employee performance and the level of motivation employees carry. Treating people fairly therefore is one of the key criteria for improving the morale of the employees and making them feel part of the organization. The current situation at the Orton however, does not seem to suggest the same as the friction between two groups of employees will not only result into strong demotivation for the Costwise employees but will also have an impact on their level of performance. It is therefore important to understand that overall employee perception may not be positively reinforcing the confidence of the ex-employees of the Costwise. The lack of trust and confidence on each other therefore may further disallow them to effectively form teams and work towards the achievement of organizational objectives. This also means that the lack of team coherence as well as understanding may result into lack of coordination between the employees and hence firm may face operational level difficulties in the stores. This may become more significant due to the fact that rebranding of the stores have already resulted into lost sales and a lack of coordination between employees may further deteriorate the condition. Main Problems A closer understanding of the facts presented in the case study would suggest that the organization may be going through following major problems: Lack of employee motivation This could be one of the key problems faced by the organization as employees of the Costwise seem to be largely dissatisfied with the way they have been treated. Lack of employee motivation will not only result into the lackluster employee performance but can increase the employee turnover also. Higher employee turnover therefore invariably can have an impact on the organizational performance. The fact that organization has not been able to fulfill the market expectations in terms of profitability is therefore a clear and vivid example of how the lack of employee motivation can actually result into low performance. This problem may have been caused by the way organization is managed as the culture of Orton does not seem to be open and fair enough to allow the new employees to become part of the organization. Discretionary and unfair treatment, centeralized organizational structure as well as lack of synergy between the two cultures may be some of the reasons causing this problem. It is however important to understand that such understanding of the employees may be improved if the Orton is able to improve the work related environment and further empower the employees to contribute towards achievement of organizational goals. Lack of Synergy One of the most important reasons as to why the organizations expand is based upon achieving synergy while at the same time ensuring that organization expands at the relatively quicker pace. A closer analysis of the facts presented in the case study suggests that the Orton has grown mostly through organic growth where it financed most of its growth through profits. Through this route, Orton has actually focused upon increasing the number of stores locations while at the same time ignoring acquiring other firms to expand into other geographical areas. By acquiring Costwise, Orton basically attempted to enter a large supermarket niche where it wanted to have access to the large superstores in terms of size to maximize the revenue per square foot. It was because of this reason that Orton gradually sold small compact stores to the competitors in order to focus exclusively on the larger stores to cater to the wider customer needs. However, despite such intentions, it seems Orton has failed to achieve the desired results due to the lack of creation of synergy between the two organizations. The lack of synergy therefore has not only created operational level issues for the firm but also caused the employee dissatisfaction. Before acquiring the firm, Orton probably failed to clearly establish as to whether their own organizational culture will fit into the culture of Costwise or not. This lack of cultural integration between the two therefore may have contributed towards non creation of synergy between the two organizations. (Welch, 2011,) Organizational Structure One of the key reasons as to why the employees of Costwise were wary of the new change was the overall organizational structure of Orton. The structure was highly centralized with most of the decisions made by just one person. Though the firm was a public limited company however, the lack of diversity on the Board as well as strong control over the management of the firm has resulted into the development of a culture which was closely held. Though Orton was a family run business however, lack of allowing fresh talent to come into the organization may result into complacency. Lack of shared decision making may also be one of the direct results of such an organizational structure. Such approach therefore can clearly outline that the organization may not be running on sophisticated management principles but rather was managed as a family business. (Chick, 2011) The reasons behind this problem may be the traditional nature of the organization and how it has evolved over the period of time from a family run business to a public limited company. The tendency to keep the control under one command may be one of earliest management styles and techniques to be followed and implemented. This sort of management style and techniques therefore may not be suitable for an environment which is changing and employees may have more choices in terms of finding appropriate employers who can fit into their working style and nature. Recommendations In order to overcome above situation, following steps may be taken: 1. Redesigning of compensation system may allow the firm to basically motivate the employees and make them feel part of the organization. Compensation system should be performance based rather than rewarding the loyalty with the firm. By designing a new system of compensation, firm can actually also allow the employees of Costwise to get motivated and feel themselves part of the organization. 2. Empowering employees is another important strategic move which organization can take in order to allow more employee participation and allowing them to become part of the overall decision making process within the organization. Empowering the employees also serves as one of the key motivating factors behind having satisfied and productive employees. Empowering should allow the employees to participate more in the decision making process while at the same time allowing them to take more responsibility and become more responsible for their work.( Brooks, 2006.) 3. Effective change management system must also be implemented in order to ensure that the employees of the Costwise specially feel more empowered. This change management process should be directed at the employees of Costwise to make them realize that a transition to a new system and ways of doing things must be adapted. In order to accomplish this, Orton therefore must undertake different programs including improving the communication with the employees so that they can understand the overall strategic purpose of takeover and how this can affect their overall long term stay with their new organization. Conclusion The overall situation described in the case study suggests that takeover has resulted into strong dissatisfaction for the employees. The lack of motivation therefore might have resulted into employee performance issue which could not allow the firm to actually profit from the takeover. It is also important to understand that the overall culture of the organization was highly centralized with most of the decision making taking place at the center. This has however, not been the case with the Costwise where managers were often involved in the decision making at the store level. This change in the way decisions were made therefore has also resulted into the strong motivation issues for the organization. In order to overcome such situation, it is important that Orton must redesign its compensation system to better accommodate the employees. There is an strong resentment within ex-Costwise employees that they are being paid less thus creating dissatisfaction as well as the lack of productivity. New compensation system should be based upon the notion of performance and as such employees must be rewarded based upon their performance and contribution towards the improvement of Orton’s profitability. Empowering the employees is also another important strategic move which can be undertaken to ensure that the employees perform to the best of their capabilities. This could be achieved by allowing more participation from the employees and making them part of the overall decision making process undertaken at the Orton. This could allow the employees to become more responsible and accountable for their work and decision. References Brooks, I, 2006. Organisational behaviour: individuals, groups and organisation. 3rd ed. New York: Financial Times Prentice Hall. Cesare, J and Sadri, G, 2003, Do all carrots look the same? Examining the impact of culture on employee motivation, Management Research News, (26/1),.29 – 40 Chick, G, 2011, Employee engagement for control freaks. Human Resource Management International Digest, (19/6), 3 - 6 Lloyd, G, C., 1996. "Fostering an environment of employee contribution to increase commitment and motivation. Empowerment in Organizations, (4/1), 25-28. Rollinson, D, 2008. Organisational Behaviour and Analysis: An Integrated Approach. 4th ed. New York: FT Prentice Hall. Welch, M, 2011, The evolution of the employee engagement concept: communication implications, Corporate Communications: An International Journal, (16/14), 328 – 346 Read More