Principles of Management of Land Rover - Case Study Example

Principles of Management The Parent Organization It was at the Amsterdam motor show, that the Land Rover had made its debut on April 30, 1948. ‘Created by Maurice Wilkes as a practical workhorse vehicle, the original Land Rover evolved through several series before being renamed as the Defender in 1990.  It also provided the basis for Land Rovers unique position as a manufacturer solely of 4x4 vehicles, now represented by a five-strong vehicle line-up – the Range Rover, Range Rover Sport, Discovery 3, Freelander 2 and the Defender’(Gaydon Warwickshire). Land rover right now has almost 78% of its model range exported internationally. This organization provided almost 9500 job opportunities with in the organization and another 40 thousand in the supply chain in those days. Land Rover has always been very innovative in its strategic management policies specially in promoting the productivity and creativity. In the year 2008 Land Rover introduced a new designing facility that would draw on advanced audio visual technologies with the projection power of eight cinemas to significantly speed up product development cycles (Gaydon Warwickshire). Some $4million had been invested in a state-of-the-art Virtual Reality Centre which will allow engineers and designers to see in life-size three-dimension, models of vehicles and components. It had reduced the need for physical prototypes, saving both time and money in the process. The Land Rover Company was bought by Tata Motors just more than a year ago. Shortly after the $1.7 billion take over, mainly due to the economic conditions of Europe and the world at large, the company even had to close down at least three luxury car production units in England, leaving at least 14500 people jobless. Unfortunately for Tata, the purchase was soon followed by a collapse in the global economy. Sales of luxury sedans and S.U.V.’s – core to the Jaguar Land Rover portfolio – have been hit especially hard. According to Reuters, during a 10-month period ending in March, Jaguar Land Rover sales fell to 167,000 vehicles, compared to 246,000 in the same period the previous year (Mehul Srivasthava). Tata Motors declined to speak about the JLR operations. Debasis Ray, a spokesperson for Tata Motors, said the company doesnt comment on credit ratings, but pointed out that Tata had been paying down debt on the Jaguar/Land Rover purchase aggressively, listing a $1.16 billion payment from a rights issue and $840 million through a debenture issue. It also negotiated an agreement to extend the end date on the remaining $850 million to the end of 2010. Stock Up More Than 150% This Year (Mehul Srivasthava). However if the European economic experts foresightedness is good enough and the economical situation bounces back then Land Rover will soon find a relief. Environment At the moment the moment there is a total restructuring that takes place in the automobile industry at large. It was a part of this restructuring that Ford had put Jaguar and Land Rover up for bid. The Indian automobile manufacturers had grabbed it as an opportunity to expand. It is difficult to see what the outcome will be. But it is clear that the auto industry is going through a once-in-a-generation rethinking of the principles that form the foundation of its business (Espinoza J). Ever after Ford had bought Jaguar and Land Rover, the Land rover has been nothing but a money pit for Ford, consuming almost $10 billion, where as Land Rover had its highs and lows, with lows on most occasions. Though it was not an encouraging scenario, once when the Jaguar and Land Rover was put for bid many of the prominent automakers had been sniffing around. Along with Fiat, Renault and Peugeot, the BMW who had once owned the Land Rover, also had been among the probables to bid for the company. However, the Indian company has gone for a mammoth buying which may prove, in the future, to be an uncertain leap to the world market. At the same time, it is important to notice Tata definitely seems to have the wherewithal to deal with situation and it never looks like novice in the automobile industry. Nevertheless, to stay successful, Land Rover’s antique manufacturing system will have to be rationalized. Plus it will have to find some way to modernize its vehicles without compromising the brand heritage that makes them so appealing to their upscale buyers. Investor’s concerns With the confirmation Land Rover made, in the year 2008, to extend the industry leading CO2 offset initiative to the companys fast growing Middle East market. The program that balance emissions from the first 72,000 km of customer use on vehicles sold in the Gulf and Levant region and the CO2 generated by Land Rover’s manufacturing operations in the UK. The extension to the Middle East followed an announcement made at the Paris Motor Show that France will implement the program a year later, bringing the number of participating markets to eight, with more to follow. Also unveiled at the show was the new Freelander 2 TD4_e, equipped with intelligent stop-start technology and Land Rovers most fuel efficient vehicle to that date. Offsetting CO2 and the development of sustainable technologies are just two strands of Land Rovers integrated approach to tackling climate change. Land Rover was jointly investing £700m in sustainable technologies. The answer to such situation right now is the development and marketing of a hybrid Range Rover sport. It should not be very distinct from the traditional qualities of the Land Rover’s Range rovers. But it should practically be very different from the traditions and completely in tune with the new generation concept SUVs. Designing, manufacturing and marketing such a product to today’s highly competitive automobile market would be the key factors to come through and regain the past glory of the Land Rover. Strategy Uncertainty Reducing strategy A co-operative strategy to develop a certainty in the market which would guarantee to stabilize the revenue of the company is the core factor of the approach implemented. Many executives believe that such an uncertainty reducing strategy is the key to the profitable running of the institute. At Land Rover one is determined to ensure sustainability which is integral to the business. Despite a tough economic climate it is important that Land Rover carries on showing strong leadership in this area to secure a sustainable future for our business. While the team of the firm workers to reduce their impacts through the development of new technologies and continue to be proud of their CO2 offset projects they run with Climate Care that positively and profoundly affect both infrastructure and behavior in many countries around the world. In 2009 the company will bring more of their markets into the program. Uncertainty reducing strategy is used where the long term uncertainty exists in the market or where there is an emerging economy. The concept will include a Creative management of technology, innovative and market competitive models with utmost pricing tactics. The efforts of most automobile manufacturers are concentrated on the development of the appropriate models, at the moment. The land rover will concentrate on power, Tradition and fuel efficiency. As the first step of implementing the strategy a SWOT evaluation would be conducted in the organization to dig out the strengths from which the new project can capitalize and the weaknesses which the new project management should deal with and eliminate. Went around the room and solicited ideas from participants. Areas of strength for the unit included: leadership abilities, decision-making abilities, innovation, productivity, quality, service, efficiency, technological processes, and so forth. Recorded all suggestions on a flip chart. Posted all flip charts pages on a wall. Consolidated duplicate points by asking the group which items can be combined under the same subject. Resisted the temptation to over-consolidate—lumping lots of ideas under one subject. Took many hours to clarify the group of all the questions and concern they had. The main strengths were clarified and were concentrated upon. Structure The company has a hierarchical structure and a line staff structure. ‘Organizing, the process of structuring human and physical resources in order to accomplish organizational objectives, involves dividing tasks into jobs, specifying the appropriate department for each job, determining the optimum number of jobs in each department, and delegating authority within and among departments The framework of jobs and departments that make up any organization must be directed toward achieving the organization’s objectives’ (Raymond J, and Timothy M.S 91). This organization is structured under Chief Executive who leads from front. Then, Research and development wing, personals, manufacturing Finance and sale. The new segment of this structure will be working along side the research and development wing. Undoubtedly, integrated to all the wings from the point of research and development. The manufacturing unit will be chanalized to the different projects it is producing. The new Hybrid Range Rover will have its own team of developers with specific criteria. In fact the structure of an organization is the pattern of relationship between roles in an organization and its different parts. The purpose of this structure must be to allocate work and responsibilities in order to direct activities and achieve the organizations goal. Structure enables managers to plan, direct, organize and control the activities of the organization (Mullins21). The incision of the new division in to the existing structure will have significant impacts to the over all structure of the company. It will call for further downsizing of the other divisions to have more precision and productivity. The new division will be designed to exploit the skills along with experience to the maximum. This approach will allow the manager to get the employs directly into the project strategy f utmost satisfaction to the customer. The use of these principles will facilitate the development of new structural forms that are more resonant with the times and thus designed to respond to conditions of rapid change and uncertainty. Leadership Leadership style is the manner and approach of providing direction, implementing plans and motivating people (Lewin 271). Phil Popham who is the managing director of the Land Rover seems to have a very distinctive way of leadership. He uses a style of authority, that, the leaders tell their employees what they want to be done and how they want it to be accomplished, without getting the advice of their followers. But some of the appropriate conditions to use it is when you have all the information to solve the problem, you are short on time, and your employees are well motivated. Some people tend to think of this style as a vehicle for yelling, using demeaning language, and leading by threats and abusing their power. This is not the authoritarian style, rather it is an abusive, unprofessional style called bossing people around. It has no place in a leaders repertoire. The authoritarian style should normally only be used on rare occasions. If you have the time and want to gain more commitment and motivation from your employees, then you should use the participative style. The participative style of leadership would be used for new division. ‘This style involves the leader including one or more employees in the decision making process (determining what to do and how to do it). However, the leader maintains the final decision making authority. Using this style is not a sign of weakness; rather it is a sign of strength that your employees will respect. This is normally used when you have part of the information, and your employees have other parts. Note that a leader is not expected to know everything -- this is why you employ knowledgeable and skillful employees. Using this style is of mutual benefit -- it allows them to become part of the team and allows you to make better decisions (Lewin 286). This way of leadership will perfectly find harmony with the authoritarian style of the chief executive. Moreover, this way of management will help to utilize the employees’ ability to the 100%, while drawing their utmost dedication and loyalty. Work Culture and Human Resource The shared values and practices of a company’s employers is often assessed for the development and well being of the unit. ‘Company culture is important because it can make or break your company. Companies with an adaptive culture that is aligned to their business goals routinely outperform their competitors. Some studies report the difference at 200% or more. To achieve results like this for your organization, you have to figure out what your culture is, decide what it should be, and move everyone toward the desired culture’ (John Reh). The culture of land rover at this moment doesn’t seem to be very positive. The transparency the employees must have in order to make the organization looks to be constrained by many factors including job insecurity. Before the new division would look to change the company culture, it will have to decide what the company culture to look like in the future. Different companies in different industries will have different cultures. Look at what kind of a culture will work best for Land Rover and more specifically the new hybrid Range Rover in its desired future state. Review the division’s mission, vision and values and make sure the new culture that is being designed supports them. The most important step on this would be to establish and maintain a Human Resource management effort which would help to retain the employee commitment and fully empowered employees. HR team will also concentrate on improving the integrity of work place and trustworthy relationships not forgetting the importance of performance-based compensation and reward programs to build a customer focused team. The main aim of the HR will, in the new culture remain as emphasis on recruiting and retaining outstanding employees, high degree of adaptability, high accountability standards and Demonstrated support for innovation. This will positively effect on the current organizational aspect of the company. Work Cited Gaydon W. Cave drawings show the way for Jaguar and Land Rover. 12 December 2007. Espinoza J. Jaguar Land Rover Steers Clear of Bail out Auto industry 8/11/2009 http://www.forbes.com/2009/08/11/jaguar-land-rover-markets-equities-auto.html Raymond J. Aldag and Timothy M. Stearns, Management (Cincinnati: Southwestern, 1987). Kurczewski N Tata Introduces Limping Luxuary Brands to India Wheels: New York Times. http://wheels.blogs.nytimes.com/2009/07/04/tata-introduces-limping-luxury-brands-to- Lewin, K. "Patterns of aggressive behavior in experimentally created social climates." Journal of Social Psychology,1993 10, 271 Mehul Srivasthava Tata still reeling from the Jaguar Land Rover buy. Business week. August 11, 2009 Mullins L.J Management and Organizational Behavior 3rd ED. Pitman Publishing London. 1993. Read More