Management of Juicy Red Tomato - Case Study Example

JRT- case study Juicy Red Tomato (JRT) Company has been growing at a rate of 5% per year for the last 15 years but in the past 3 years cost has beenincreased by 2.5-4%. Now due to increase in cost, JRT is facing a difficult situation to maintain its profits. JRT’s growth rate is almost stagnant and this situation creates the problem. Now the Management of JRT wants to explore the root cause of the present problem because of increase in costs that puts additional pressure on its profits. Now in this situation, Management of JRT has only one option left and it is to increase quantum of operation, through expansion of business and also to increase its growth rate so that at least the margins could be maintained despite cost increase. Now to sort out the present problem in JRT, management has identified some problems through appointing a consultant. The problems which has been identified so far is the key management personnel and long term employees leaving the organization, citing the reason that they had “No future” with the JRT. Now JRT has formed two –way approach to this problem i.e., first it has to invest in retaining key managerial personnel and key front line production employees and the second is to improve communication between production and operations through use of modern technology. The present consultant has been appointed to investigate the present effectiveness and efficiency of the organizational structure as well as selection and maintenance of managerial personnel. For this job consultant has to analyze internal as well as external situations and causes of the problem and to suggest the solution. As we have gone to the whole case situation, initially we come to the conclusion that the present structure of JRT is older one and almost unchanged for the last 15 years. Managerial persons, mostly rise through the ranks, are not new. So the whole management team of JRT is almost older one and all are enjoying the status quo. |Except for the last 3 years when costs have increased due to some unexpected changes in weather, pests and labor cost, older management is feeling stressed in coping with the new situation/challenges and most of them are leaving without citing the actual reasons. Now the silver lining for JRT is that it is ready to expand business and it has further scope of increase its growth rate. In my opinion, JRT has to start with restructuring its organizational structure. The most effective organizations structure are those structures which could attract develop and retain high caliber staff, implement flexible and adaptable organizational structures and process to support organization’s strategies and continue to develop advanced business systems which optimize organizations efficiency and effectiveness. In JRT, reorganization is intended to respond to changes in the enterprise environment, changes in business conditions, and willingness/compulsion to have expansion of the business, JRT has to take care of its present product line or marketing methods, business cycles competitive influences, new production techniques, labor union policy, government regulatory and fiscal policy etc. To provide autonomy and creativity to its managers, JRT must develop managers by allowing them to manage decentralized semi-independent units or provide them adequate financial control with a high degree of decentralization. By providing this new structure to managers, JRT must encourage creativity among its managers with autonomy and accountability, which ultimately address their indicated problem of “No future”. Organizational structure of JRT is facing excessive spans of management, excessive costs, slow decision making etc. so JRT has to reorganize its structure with more decentralize forms. This decentralize structure facilitate more effective communication between different departments and levels of employees. To make more effective and efficient organizational structure, JRT management has to emphasize on better relationship between managers and line staff by involving them in decision-making and later on acting on them. Manager’s role should be to assist and counsel not to show their authority. Line managers should be encouraged or require consulting with staff. In the process of change, JRT has to take care of the important fact that each and every staff has to be informed on the matters about organizational condition, future planning action and the decision taken by the management to avoid any confusion. Here communication through all possible media should be encouraged. Different channels of communication should be developed through using various technologies and JRT must also take care of its financial implications. Generally, if staff has not been informed or informed only about the decisions, productivity as well as loyalty towards organization suffers immediately. If people/employees do not understand their new job responsibilities, descriptions, specific goals for specific positions, authority and relationships, they may not perform effectively and efficiently and the organizational structure will collapse (Koontz & Weihrich, 2004). Management of JRT must provide all members, training or organize a workshop so that each one must understand the structure and their roles and responsibilities. Apart from formal communication and organizational structure, some informal structures must arise and JRT has to recognize and take full advantage of these informal organizations to promote sense of belonging, self-respect and satisfaction, status etc. These informal structures promote more and more Informal communication and open lots of channels and affect morale of employees. The effectiveness of the organization is also influenced by organizational culture (Taylor, 1991, pp.34-47). Thomas Peters and Robert Waterman (1982), emphasizes on a coherent culture having decentralize decision making, broadly defined decentralize authority, people selected on the basis of performance, participative leadership, communication flow is top-down, bottom-up, horizontal and diagonal features enhance the effective and efficiency of any organization. So JRT has to adopt organizational structure based on above features to improve its effectiveness and efficiency. Now due to exit of key personnel and with the proposal of expansion plan, JRT has to recruit and select personnel at all levels and to retain them. It has to retain the existing managers and employees also. Now selection of new employees and managers has to be based on proper requirement analysis. Promoting people within the organization may be one of the ways to fulfill the requirement but solely depending on the process blocks/restricts new/innovative ideas/views and updated knowledge and skills as well as the attitude. So selection and recruitment of new persons should start with proper analysis of the assigning position requirements. Job design should be such that job has to be appropriate, challenging, and position has to be matching with the various skills and characteristics of individual. Once the right person has been recruited to the organization, it is important to retain them. Frequent turnovers of employees and managers increase cost for the company as well as its credibility in the market. So at every level, JRT has to adopt various methods and provide better remunerations, satisfaction and motivation to all its employees to retain them. The first and foremost thing that the staff of JRT must feel rewarded, recognized and appreciated. The next thing employees’ want at workplaces is the proper utilization of his/her talent and skills. A motivated employee wants to contribute outside of his specific job. So providing the required environment to motivated employee to contribute according to his talent and skills provides them more satisfaction and fulfillment. Recognition of employees always plays a major role in retaining with in the organization. Senior management has to meet line managers/employees regularly and encourage them. It helps employees feel welcomed, acknowledged and loyal. Best employees always prefer the organization, where they get frequent opportunities to learn and grow in career, knowledge and skill. So every employee must be provided tools, time and training to retain them. Most of the JRT employees and manager who had left the organization cited the cause for leaving is “No Future” because JRT is a stagnate organization for long. If it has to change and to survive in the new conditions and impact of challenges, JRT has to adopt all the above-mentioned suggestions, which have been enumerated after analyzing the present condition of the organization. Adopting all the above advices of human resource consultant JRT must overcome its problems and survive successfully in the market. ***************************************************************** References: 1. Peters, Thomas J. & Waterman, Robert H. Jr., (1982), In Search of excellence, New York; Harper & Row. 2. Koontz, Harold and Weihrich, Heinz (2004), Essentials of Management: An International Perspective, 6th Edition, The McGraw Hill Companies. 3. Taylor, Cox, Jr., (1991) The Multicultural Organization, Academy of Management Executive, May, pp.34-47. Read More