The Organizational Development Practices - Research Paper Example

The Organizational Development Practices The business world has become a complex game in which companies have to adapt to the changes in order to survive. The most critical factor that differentiates successful business entities from those who fail is the quality and capacity of its human capital asset which can be quantified in the form of an intangible asset called goodwill (Garrison & Noreen, 2003). Due to the importance of managing the human resources of a corporation in an effective manner the concepts and principles of organization management provide a framework that can be followed to run a business operation smoothly. The purpose of this paper to analyze the organizational development (OD) practices that can be implemented in Company A in order to turn the corporation around and help the company to begin earning profits again. Company Profile Company A is a conglomerate multinational corporation in the retail industry that has been operating in the marketplace for over 50 years. The company prides itself in being a store that offers quality merchandise at reasonable prices that provide value to the customer base. The company has grown a lot during the last decade and has achieved international penetration in many locations including Hong Kong, London, and Paris among other prestigious locations. By choosing spots of high consumer traffic the firm’s sales have been very good during the last couple of years. The firm employees over 20,000 direct workers worldwide. The company’s rapid expansion created a series of new issues and problems that must be attended in order to ensure the company continues to run a profitable operation for many years to come. The mission of the company is to provide its customer a great shopping experience in which there able to select from a large variety of consumer goods at a price point that will attract interest from the customers while at the same time allowing the company to meet its sales quotas and revenue expectation and reaching their annual projected goals. Company A operates under a bureaucratic system due to a centralized decision making philosophy. The corporate headquarter of the company located in Los Angeles California is responsible of all strategic decisions the company implements. It also controls the internal functionality of the firm subsidiaries which results in the creation of a business entity that is slow to react to market changes. The corporate offices also have control over the internal human resources practices of all the independent firms. The firm gets too involved in every minor issues that could be handled internally by the division manager, a move that slows down the decision making process of the enterprise. Company A is operating in a global marketplace which implies the firm needs to adapt its business practices in order to align their long term goals with the expectations of its growing customer base. In the business world companies are able to become more effective at meeting the needs of its clientele when the employees believe in the mission, vision, and purpose of the firm. In order to ensure the employees follow the corporate vision they have to be satisfied with the treatment they receive from the company. The only way for an employee to become motivated to provide the best customer service possible is if the employee receives the same type of treatment from the managerial and executive staff. One of the most influential factors that determine the way people working within an organization behave depends on the corporate culture the firm has developed over the years. The concept of corporate culture can be defined as the system of shared actions, values, and beliefs that develops within an organization and guides the behavior of its members (Schermerhorn & Hunt & Osborn, 2003). The corporate culture of a firm is developed through years of accumulated actions and behavior. This means that if Company A has a corporate culture that is not aligned with the new medium and long term goals of the firm the company has to implement radical changes that can occur by following business concepts associated with change management techniques. The company currently needs a development plan to improve the value and capabilities of its human resources. The company currently is struggling in the marketplace as its sales numbers in the last trimester were the lowest they have been during the last four years. The generally perception is that the company’s customer service has deteriorated and as a consequence the firm’s customer attrition rate has diminished. The number of employees working per store has not gone down, instead the payroll and amount of employees has been on the rise during the last three years. Despite the company having more employees than ever, Company A has human capital issues that must be attended in order to turn the operation around and once again become a profitable corporation with a good long term outlook. The value of a company rises when a firm is effective at developing its staff to increase the skills and capabilities of its human capital. Company A is in dying need of a new human resource strategic planning. Human resource strategic planning is the process of providing capable and motivated people to carry out the organization’s mission and strategy (Schermerhorn, et. al., 2003). The situation Company A is facing requires proactive and reactive measures that can help spark or instill radical change throughout the organization. The firm already has a very large staff of employees distributed among its 750 stores across 23 nations. The company has to get back to its roots and realize the customer is top priority. In order for the customers to receive the service they expect from the company the firm must prepare the staff through training mechanisms. An alternative training solution that could be utilized is online training courses. The corporation can hire a professional consulting firm to prepare short training courses on the things the employees can do to improve their human behavior so that the customers receive better treatment and a better overall level of service. The most practical way to implement the online training strategy is for each employee to choose its own schedule outside working hours. The employees that take the online course are going to receive a bonus allowance of $1500. The duration of the course in hours is 100 hours. The effective rate of revenue bonus for the employee is the equivalence of $15.00 per hour. Monetary rewards are a great way to motivate employees to change their behavioral patterns. In this particular application the employees are receiving the dual benefit of improving their professional capabilities while at the same time increasing their revenue. In order to comply with labor laws and union contracts the company can not mandate that the employees to take these courses outside the working hours. The $1500 incentive should enable the company to convince the majority of the employees to take the course. Along with the online telecommuting seminar the company must have several other educational initiatives to improve the capabilities of the employees. The company can hire guess speakers including renounce industrialist and successful businesspersons to provide motivational speeches. The short seminars would be given during working hours. The duration of each seminar is two hours and they would be given twice per month for a lifespan of six months. The events are going to be given to groups of a maximum of 200 employees. The executive staff should select among the staff the employees that have shown leadership skills because they would benefit the most from the educational experience. Another important aspect of the organization development plan is analyzing the implication any new development strategies may have in the corporate culture of the company. Corporate culture refers to an organization’s values, beliefs, and behaviors; these values and belief system becomes part of the every day operation when executives articulate and publish the values of their firm which provides patterns for how employees should behave (100ventures, 2009). The organization has to consider the organization culture in any attempts to implement changes that will affect the staff of the firm. The changes and strategies to be applied have to align with the overall mentality and organizational culture framework. One of the best ways to implement a plan for organizational change is for the top executive staff of the organization to get deeply involved in the process. When such an action occurs the employees of the firm are more receptive to accept the proposed changes because they are more willing to follow the message and plan of attack of the primary organizational leaders. Leadership is an important aspect that is necessary to achieve organizational change. There are multiple leadership strategies than can be utilized to alter the behavior of the employees to motivating them to accept the new corporate regime. An example of leadership style that can be extremely effective at inspiring the employees to follow the lead of the role model or leadership figure is transformational leadership. Transformational leadership occurs when leaders are able to broaden and elevate follower’s interest and stir followers to look beyond their own interests for the good of others (Schermerhorn, et al., 2003). When the management team utilizes a leadership style such as transformational leadership they are able to captivate the crowds and impose a positive influence and mentality among all the company’s stakeholders. The major stakeholder groups include the lenders, shareholders, employees, the community, partners, governmental institutions, the environment, and the customers (Kotler, 2002). The transformational leader is able to send a message that allows the person to get their support and convince them that the future strategic plans are in the best interest of the organization as a whole. Organizational Development Diagnostic Strategy The company has a staff of 20,000 employees of unique individuals with many different ideas. In a recent survey performed by the human resources staff which utilized primary research in order to investigate the problem, the HR department leaned that 60% of the employees admit there are internal issues that are causing friction and hurting the firm’s ability to serve the customers. A way to retrieved more information from the employees of the firm about the specific events or issues that are hurting the productivity of the company is by installing multiple feedback mechanisms. A way to implement a feedback mechanism for the employees to place suggestion boxes across the factories in which the employees can fill out a short survey of five to six questions that can be complete in less than three minutes in an anonymous basis. The corporation also needs to receive feedback from its customer. A way to provide an incentive to receive feedback is to offer customer a 10% discount on their next purchase for them to fill out a survey that can filled in less than 5 minutes. Another primary research technique that can utilized by Company A to retrieved valuable information is to form a focus group of mid-level managers of the staff to discusses the problems of the company and to hopefully come up with multiple alternative solutions to be studied further through a series of viability studies. To truly diagnose the problems of a large multinational firm such as Company A there needs to be a process that eliminates bias. Along with the internal evaluation the executive staff has to perform to determine the internal and external weakness of the company a third party must be hired to perform an independent study of the human resources practices of the organization along with multiple recommendations for a plan of attack. The benefits of hiring an external firm in the diagnostic process is that such a specialized consulting firm has the capability of creating a full report with recommendation in relatively short period of time (1-3 months). Company A has to become more flexible in order to change the current path the company is on. The lack of flexibility and poor vision placed the company in an undesirable business dilemma. The problems the firm is facing have solutions, but the company has to act and create an efficient and effective implantation plan with the inclusion of a realistic timeline for completion of the organizational change project. The results of the organizational diagnostic applications revealed many internal weaknesses in the firm. The employees lack adequate training to deal with the expectations of the customers. In many of the foreign locations of the firm the company’s centralized marketing campaigns are ineffective because the firm is not taking into consideration the cultural differences in consumer buying behavior. The firm has major motivational problems due to the fact the company has a bureaucratic corporate structure that does not encourage creativity and does not reward properly the employees that deserve recognition for their efforts. The executive staff of the company is a bit inflexible which created a business atmosphere in which the floor employees do not have the trust in its supervisors to speak freely about business issues and problems that are occurring internally. It is imperative that Company A find a way to open up the lines of communication with its employee staff. Intervention and implementation strategy The executive staff of the company is the most important group of individuals whose actions will determine the future of the company. Company A has to perform a full evaluation of its internal and external practices. Along with the feedback mechanisms, external consultant, customer feedback mechanism, educational initiatives, and internal audit of the human resources practices the company has find a way to analyze all this information in effective way to be able to implement changes that will help the organization run smooth manner, while at the same time improving the productivity and financial performance of the firm. A good solution once all the multiple initiatives mentioned earlier are in place is for the company to invest in a brand new information system that is able to analyze quickly the raw data the company inputs into the system. Without a good information system the firm will not be able to interpret adequately the vast amounts of information that is being collected through the various development diagnostic strategies the company is going to be utilizing. The new information system is the optimal solution that can enable the company to turn its organization around. The company’s executive staff has to determine if the current staff in the information system department has the capabilities to create the system in a short period of time. The timeline for completion of the information system is three to six months. It would be cheaper to create the new system in house. In order to ensure the department has the qualified candidates it needs for a project of such importance the company should increase the payroll budget of this department in order to enable the manager of the department to hire 10-15 new transitory employees to be hired for a span of six months. If any of the employees prove to be valuable assets then the company would have the option of giving the selected employees a permanent position with the company. The company also has to improve its relations with other important stakeholder that are part of the production cycle or supply chain of the firm. A way to improve the efficiency of the corporation is to establish long term relationships with the suppliers in order to obtain greater benefits such as discounts once economies of scale are achieved by the cumulative effect of continuing a purchase pattern with small group of suppliers. Streamlining the supplier side of the supply chain can has tremendous benefits that can be passed on to the customer such as lower prices and better warranty offering on the products sold at Company A establishments. Another strategy that can improve the customer relationships is to increase the product and the service offerings of the company. Bring in a new mix of products can create excitement and captivate the enthusiasm of the customer towards buying consumer goods at Company A. The development plan the company has planned out to improve the capabilities, skills, and interpersonal abilities of the staff is the best approach the company can take towards being able to effectively implement radical change at the firm. The company can not continue to operate under its current strategic approach because the firm operates in a very competitive industry and the latest financial trimester reports revealed that the company was losing market share and its operating performance was poor. The new strategic plan will be able to transform the company into a business entity that is better able to handle the new challenges of the business environment of the 21st century which has forced all players to become more adept at adapting to change in order to stay competitive. We are currently living in an economic era knows as the broadband age. In this new business panorama information is the key variable that is needed to achieve business success. Companies have to recognize that in order to satisfy the need its customer and retain its customer base it’s essential to know what the customer wants and expects. The human resources of the company also have to have the proper training to be able to provide superb customer service. In a business environment in which the customer have lots of purchasing alternatives one of the best ways to attract customer and retain them in the long haul is to provide them with the type of service and personal touch that the customer appreciates. The global economy has become a complex environment in which multinational corporation have to invest a lot in research and development for new products and market research in order to learn about the new purchasing patterns and behaviors of the clientele. Company A has been a successful player in the retail industry for many years. There is no one single solution to solve the problems Company A is facing. In this paper we have provided a serious of solutions and recommendations that if implemented simultaneously can help Company A get back on the winning track and ensure the company will succeed in the short, medium, and long term. References 1000ventures.com (2001). Corporate Culture. Retrieved May 14, 2009 from http://www.1000ventures.com/business_guide/crosscuttings/culture_corporate.html Garrison, R., Noreen, E. (2003). Managerial Accounting (2003). Boston: McGraw Hill Companies. Kotler, P. (2002). Marketing Management (11th ed.). New Jersey: Prentice Hall. Schermerhorn, J., Hunt, J., Osborn, R. (2003). Organizational Behavior (8th ed.). New York: John Wiley & Sons. Read More