Management of Beak and Johnston Company - Case Study Example

Contents Q1) 2 Q2) 3 Q3) 4 Q4) 5 Q5) 6 Conclusion/ recommendations 7 References: 8 Q1) Beak & Johnston based in Greenacre, Sydney- Australia primarily manufactures meat products and was established in the year1985. Then in 2002 it won a contract under which it would supply case-ready meat to Woolworths. The company could have implemented new machines or tools for servicing the new order but instead it ushered in significant changes in its management and operational styles. A completely new organizational culture was introduced along with simultaneous sweeping restructuring. The main goals of these new steps were to flatten the hierarchy and also to put more focus on team performance rather than on individuals. A very decisive step was that of removal of the middle management layer. This ensured that all the departments worked in proper synchronization with each other. Sometimes it might happen that to many management layers work against smooth interaction between the different layers and especially between the top management and the workers at the lower rungs. This creates confusion and hampers proper coordination between departments. Deletion of the middle management layer resulted in a leaner structure which was much more suitable swifter coordination. This ensured that information flowed without boundaries and moreover a new specialized team was also bestowed with the task of disseminating operational information unanimously to all teams. The leadership team which previously had eight members was curtailed to four members to initiate a leaner structure and to save the company from a victim of the proverbial ‘too many cooks’. This leadership team played an advisory or consulting role to the production teams. Moreover the earlier supervisors were transformed into coaches in terms of their functions. This denoted that they could not concentrate on supervisory functions anymore; rather they would have o play motivational and value building roles for the team members. Team building and maintaining coordination were their main task. Incase of teams, gradually several responsibilities spanning from meeting their targets, HR processes like hiring and general personnel management to even retrenchment of non performers, were handed over to them. As the different teams depend on each other for their own functional success, coordination and understanding increased between them. All these ensured much better response time form managers. Business communication sessions were held every four weeks which dealt with different relevant issues from health to financials of the organization. Focus on combined and cooperative productivity ensured that these leadership teams gained primary importance rather than single performers, which was again necessary to handle a large contract like the one with Woolworths. “Managing is not a series of mechanical tasks but a set of human interactions” (Teal, 1996, 4) This was evident when in house survey of the company showed that decision making has become more efficient and effectual along with improvement in overall moral and communication flow. Also production and response time became faster. Q2) When Beak & Johnston started in 1985 they followed the usual management organization style with different levels of management. But in 2002 with growth in their mind and after winning the Woolworths contract they changed their structure. Simultaneously the concept of autonomous teams was introduced in the organization. Suddenly individual performance was not the primary parameter of measuring success instead team achievement became the buzz word. But for workers who had by then become habituated to the older process which paid more importance to individuals, the transition might have posed different challenges. The workers who had been habituated with the previous culture could have found it difficult to set into the new system and team dynamics. It could have been the case that workers working very hard would have repented the fact that their individual brilliance was not being recognized; instead the whole team was gathering applause and rewards based on his or her hard work. Questions might have aroused in their minds regarding freeloaders or social loafers who are individuals who were not performing to at the level that was expected but were carrying on with the team. These kinds of situations have the potential of braking employee moral, especially of those who are good performers. These freeloaders or social loafers basically withheld performance but enjoy the rewards of a good team performance. ( Rudman 2003,197 ) Also earlier an individual would listen to his boss and take orders while after the structural change, the team had to listen to the coach who was the motivator and the coordinator. Again teamwork usually needs compromise from individuals, which not everyone might have been ready to offer. Also the fact that individuality in terms of creativity would have been suppressed in teams could have given rise to tensions. (Lutz 2003 ) Intangible motivators were being relied upon at first but chances of these acting as strong motivator could have been less for employees who have long become habituated with tangible benefits as motivators. Moreover employee turnover suddenly increased as the new policies and procedure were initiated. This might have happened as many employees could have felt increased stress from the new changed environment along with new expectations and parameters of measuring success. Employee stress levels increase from uncertainties while very fast change in the working environment and culture does not bode well for many of them. The effects of changes might have had affected some employees more than others and as a result they had left. It is important to balance out the changes and maintain a synchronized approach while ushering new changes. (Burke and Cooper 2008, 1993-1994) Q3) “On its Web site the Encyclopedia Britannica says that service industries are in the business of creating and delivering services. They do not create or manufacture any tangible products or goods. Manufacturing firms are engaged in mining, manufacturing and also in construction industry. The service sector comprises of firms which provide banking, retail, communication, software services, etc.” A services firm and its employees always interact with the customer and face them also, in context of selling their services or solving the customer’s problem. Therefore consistency in terms of service standard is extremely crucial for the firm’s success. Service sector firms are in the business of selling knowledge to clients and they also offer them solutions through this. There must be such a structure prevailing in the company which allows flexibility in terms of operations as the client’s requirements usually change from time to time. Smooth transmission of knowledge throughout the verticals and channels of the firm is necessary for delivering proper services. This would also ensure quick and swift response from the management in case of problems or complains. Moreover service delivery and its connotations are changing with every passing day with improvements in services management research and concerned areas. Therefore training and constant up gradation are an important part of this industry to keep it competitive. Service sector employees always present a smiling face to the customer and usually they do not like functioning under very rigid organization systems. Moreover they often have to take care of overlapping functions and jobs. Therefore a more transparent and flexible organization structure which is more on the flatter side is recommended for the services industry. Though the firm would adhere t preset guidelines and industry standards yet it must have an element of flexibility which would ensure that the employees have a certain amount of freedom to discover and learn new processes which are again extremely important for their survival in the industry. They should have easy access to training and up gradation and quick access to problem solving resources. Moreover certain intangibles like cultural ethos, atmosphere, working environment also form crucial parts of a service sector firm and the industry as a whole. (Baschab and Piot 2004, 200-202) Therefore in case of a service industry firm, the new changes which were ushered in Beak & Johnston would in fact be useful and pertinent. The new changes in the organizational model have made it hierarchically lighter and more focused on team performance and also more flexible in terms of approaching the higher management for quick response. Also the coaches have taken a mentoring role and are motivating the employees on a constant basis. These are all suitable for proper and smooth functioning of a ser vice sector industry and firm. Therefore the changes would be equally beneficial for the service industry also. Q4) Political behavior in the workplace has always got a negative connotation attached to it. Whenever people get together and form groups there is bound to be political manifestation both between the employees themselves who belong to the same group and also between the different groups. Inter and intra group politics is detrimental for the smooth functioning and positive work culture of any organization. This leads to increased amount of stress in the employees and an atmosphere of doubt and skepticism is created. Usually it has been found that six groups participate in inter organizational politics. They are; the CEO or the boss, the employees who actually manufacture different products, the mid level managers who act as a coordinating link between the top brass and the employees, the supervisors, R and D and planning personnel and the staff engaged in administration support. The last or the sixth one is not a person but the overall principles and beliefs of a particular organization. When so many exclusive groups participate in the team dynamics they bring in their won set of perceptions and beliefs and political connotations. (Gadot and Vigoda 2003, 131-134) The amount of politics in an organization also depends upon the structure. For example, in a large organization a vertical and horizontal spread is followed with numerous layers of management and each function having a head at the top. As there are more layers in this kind of organization, chances of communication being disfigured while in its way down from the top are also more. Also these various layers of management give rise to complexities in the coordination process between the various levels and their employees. As a consequence of this politicking opportunities and incidents also increase in number. But in a flat organization which has comparatively much less number of layers of management, communication flow and inter and intra group coordination is much better thus dismantling prospects of politics between them. This does not mean that in flat organization there is no politics but the chances of the same surely do come down due to the inherent transparency of the structure. (Singh 2007, 147-150) In Beak & Johnston since the new change was ushered in terms of formation teams and cut in the hierarchical level a flatter structure has come to the fro. This has resulted in focused delivery of communication and better coordination between the employees and management. Also it has been seen that supervisors play a crucial role in politics inside an organization (Gadot and Vigoda 2003, 169-170). But since under the new structure in Beak & Johnston the supervisors have been replaced by coaches who play a motivational and guiding role, politicking opportunities have come down. The more open, transparent and well coordinated a organization is, less are the chances of politics in it as a fair environment exits in these kind of organizations and everyone is well conversant with the actual happenings in it. Q5) Beak & Johnston which was founded in 1985 had revenue of A$ 25 million in 1999. The company got the Woolworths contract in 2002 and its revenue rose to A$ 110 million in 2005. By the year 2005 Woolworths’ contract constituted 80% of the total business of Beak & Johnston. This is a remarkably high dependence on one singular customer for any company in any industry. If something untoward was to happen to the Woolworths arrangement and the contract was cancelled then all the structural changes or organizational restructuring Beak & Johnston went through to service the contract, would seem insignificant. In this kind of a scenario the firm might have to look for newer businesses of different kinds. This newer businesses may need a completely different functional structure and organizational process to support them. Basically as Beak & Johnston are primarily focused on the Woolworths part of the business and taking all decisions in that context, this might back fire under changed circumstances such as above. Spreading business risk is essential for any organization so that it doesn’t become over dependent on a single customer and therefore a single revenue source. Also Beak & Johnston almost overnight changed its prevailing policies and restructured it organization which gave very little time to its existing employees to adapt to the changed circumstances. As a result employee turnover rate went up. Ideally any organization going through such sweeping structural and philosophical changes should allow more time to the employees to adapt to the changing environment and changed expectations from them. Conclusion/ recommendations Beak & Johnston in its pursuit of growth and servicing the Woolworths contract has introduced sweeping changes across the organization. But these changes have been initiated very fast and have had certain negative effect on the some employees who have left the organization due to not being able to cope up with the new changed scenario. So in future if the organization goes for a major overhaul like this it would be prudent on its part to make it a gradual process so that all the existing employees are able to sink in and the changes permeate to all levels smoothly. Also the fact that presently the company is over dependent on a single source of business which forms 80% of its business, is not a good sign Therefore it is advisable for the company to spread its business risk as this is one of the most pertinent and significant points for success for any firm in any industry. References: Teal, Thomas. 1996. The Human Side Of Management. Harvard Business Review November December 1996: 4 Rudman, Richard. 2003. Performance planning and review: making employee appraisals work. Allen & Unwin. Lutz A, Robert. 2003. Guts: 8 laws of business from one of the most innovative business leaders of our time. John Wiley and Sons. Burke and Cooper 2008. Building more effective organizations: HR management and performance in practice. Cambridge University Press. Gadot and Vigoda 2003. Developments in organizational politics: how political dynamics affect employee performance in modern work site. Edward Elgar Publishing. Singh 2007. Information System Management. APH Publishing. Gadot and Vigoda 2003. Developments in organizational politics: how political dynamics affect employee performance in modern work site. Edward Elgar Publishing. Baschab and Piot 2004. The professional services firm bible. John Wiley and Sons Read More