Managing Organisational Design and Change - Research Paper Example

1.0 Introduction It can be noted that organisations operate in a dynamic environment that is constantly changing during the contemporary period. On the other hand, customers also have growing interest in quality and affordable products. Thus, in order for any business to survive in the long run, the organisation concerned should strive to keep pace with the changes in the environment and strike a fine balance between the quality concerns of the product and the performance issues of the human resources who are the key drivers of the production process in the organisation. In today’s organisations, change is inevitable and is often necessitated by various internal and external factors and this initiative often affects the operations of the company in different ways. As such, this report seeks to identify the main quality and performance issues affecting Commercial Technology Limited (Comm Tech) and suggest possible solutions that can be implemented. The report will include an immediate action list and a longer term plan for improvement of the organisation. This report will also attempt to suggest and establish the best way the organisation can effectively utilize the strategic changes that can be implemented to ensure better performance in the manufacturing of Office System 2010 (OS 2010). There is also need to identify the agendas of the stakeholders for the initiative to be successful. Attention in this case will be on the need to sustain organisational change which requires aspects like organisational learning whereby the workers can be re-orientated through provision of basic training and development which would be closely monitored upon implementation in order to improve their performance so as to guarantee quality of the products offered. 1.1 Description of the organisation’s current strategic quality and operational performance Technology Limited (Comm Tech) is an organisation which produces electronic office and business equipment. Comm Tech is number three in the UK in terms of market share, number ten in Europe but still has to establish significant sales in the wider world market. The company has of late invested heavily over the years in the areas of research and development and in proto-type design which has seen designs of several successful products. The current business strategy for the company is primarily focused on developing a range of high quality products that would underpin penetration of the wider world markets and business growth. Concern is on growing business as quickly as possible in this particular case. Comm. Tech has sought to utilise the competitive advantage strategy but as going to be described in detail, it can be noted that this strategy is posing some serious challenges to its operational performance. Porter (1985) has suggested that many businesses are strategically viable such that their competitors may not be able to exceed their performance and he termed this state of affairs competitive advantage. Such stable status can be achieved only when they apply certain strategies that can hardly be imitated by the rival competitors. Porter (1985) has argued that a firm needs to have sustainable competitive advantages. Kotler and Armstrong (2004) concur with this notion when they suggest that competitive advantage is an advantage gained over other competitors by offering consumers greater value either by lowering prices or providing more benefits that justifies higher prices. There are mainly two sources of competitive advantage namely; cost advantage and differentiation as illustrated in the diagram below. Through Porter’s generic strategies, a ‘Cost Leadership’ strategy is where a firm seeks to be a low-cost producer in the industry whereas ‘Differentiation’ is when a firm seeks to be unique in the industry through offering products that are highly valued by the customers. Fig 1. Porter’s Generic strategy model Competitive Advantage Source: In this particular case, the Factory Manager, Michael Hartley said the biggest problem bedevilling the organisation is that the members of the organisation do not work together. For instance, the Purchasing department made decisions to change from good to untried suppliers in a bid to save some money. However, the main problem encountered as a result of this stance taken by the Purchasing department is that material supplied is of low quality and it negatively impacts on operational performance of the organisation. At the moment, it seems that the organisation has diverted from its focus on quality but the end product that will go into the market straight. In as far as the aspect of product quality is concerned, there are two dimensions that are involved-level and consistency (Kotler & Armstrong, 2004). In developing the product, the marketer must first choose a quality level that will support the product’s position in the target market. On the other hand, consistency is concerned with freedom from defect where a product is always viewed as satisfactory by the consumers. Focus in this case of Comm Tech is on quality level. There are various challenges facing each department along the production line and this has a bearing on the operational performance of the organisation. For instance, the Head of the production department pointed that they have been having a bad time making the printed circuit boards of the new OS 2010 machines. The designers placed the components very close to each other and these are often damaged beyond repair and about 30 % of all the boards coming off the machine have some problem with them. As a result of the defects of the boards, most of the time is spent inspecting and reworking the boards. On the other hand, the other challenge is that authorities from the top have given the instructions to run the machine 20 % faster which has compounded the problem given that the machine breaks down quite often. The strategy to fast track the production process against the background of poor quality boards has negatively impacted on the performance of the organisation. Instead of mitigating the severe impacts of the backlog already existing, this strategy is even worsening the situation. Another aspect of quality on the company’s strategy is that the final assembly is facing problems mainly related to casing since the two pieces of cases provided rarely fit and have to be forced resulting in a lot of extra stress on the cases leading them to crack. It can also be noted that production time that can be utilised is only five hours from an eight hour shift. By any standard, this has a negative bearing on the organisation’s performance. Whilst efforts are being made to correct all the defects, it can be noted that inspecting and reworking the boards is a tedious task to the members involved. The workers are working under immense pressure and they are putting in a lot of extra hours to help sort out this mess. The operational performance of the employees is negatively impacted given that most of their time is lost while trying to cover up for the backlog which entails that there is no growth in terms of current development and production of new machines for the market. On the other hand, the efforts of the employees are negatively impacted given that they are exposed to stringent conditions and they are not motivated very much since they are not treated as valuable assets to the organisation who can contribute in the decision making process. 2.0 An analysis and identification of the main issues of strategic and operational concern There are various issues of strategic and operational concern in this case and this part of the report will critically analyse these factors and their impacts on the operations of the organisation as a whole. 2.1 Change as a strategy Change can be described as a transition or movement from the current situation to the desired future state (Amos et al 2008). There are various factors such as internal or external forces that influence change hence, the need for a business person to conceptualise change as the gap between the current reality and the desired situation for the betterment of the organisation as a whole. Change is not an overnight event as it requires proper planning and implementation (Amos et al 2008). There is need for the responsible leaders to influence the behaviour of the employees to accept any proposed change within the organisation given that the change initiative may not be readily accepted by the members of the organisation. This will be detrimental to the growth and development of the organisation given that the workers are the major drivers of the organisation which is the reason why the leaders have to effectively influence them to share the same vision for the organisation. However, changes at Comm Tech are abrupt and they are mainly influenced by the organisation’s need to save some money by switching from tried and tested suppliers to the other suppliers by virtue of the lower priced components offered which are used in the production of OS 2010 machines. It seems all is not well with regards to this strategy as the organisation is battling to clear the backlog which is piling by each passing day. In as far as change in an organisation is concerned, there are two approaches that can be adopted namely; the planned and emergent approach. The planned approach posits to the effect that change is properly planned and a change-management programme is in place while the emergent approach on the other hand is primarily concerned with dealing with emerging situations within an organisation (Amos et al 2008). Technological changes can emerge within the framework of the operations of the organisation and appropriate action should be taken to cater for these changes (Werner 2007). This is the case with Comm Tech but the organisation has no contingency measures in place to address the emerging scenario hampering production which is an issue of concern in the operations of the organisation. 2.2 Stakeholder analysis Stakeholder analysis is another main issue of strategic and operational concern to Comm Tech. In most cases, organisations are primarily concerned with fulfilling their set goals and objectives in their day to day operations as these determine their level of success or failure. The needs and wants of the stakeholders vary depending on the ever changing environment in which the organisations operate. In brief, stakeholders are comprised of workers, customers, management, suppliers as well as all the other people who are affected by the operations of Comm Tech. The agenda of the stakeholders can be analysed through assessing the shifting tastes and needs of the consumers in particular, the level of satisfaction of the employees as well as the capabilities of the suppliers to meet the demands of their buyers. All these factors greatly contribute towards the strategic operations of the organisation as a whole and they do not need to be compromised as this will negatively impact on the organisation as a whole. On a positive note, the OS 2010 has received rave reviews for its innovative design, functionality and price from trade shows and in the technical press and this has triggered rising demand for this product due to the business’s existing reputation for quality and an affordable product. However, this has led to a huge backlog of unsatisfied orders given that the firm cannot cope with the demand of this magnitude. This draws us back to the aspect of stakeholder analysis. The top management of the organisation failed to predict the response of the stakeholders particularly the customers as a result of the policies they implemented. For instance, management at Comm Tech failed to establish the capability of the new suppliers who were comparatively cheap in terms of the components they supplied and this has affected the operations of the organisation as a whole since a lot of productive time is wasted on correcting the defects of the boards in particular that are supplied by the new dealers. As it stands, the organisation is in a predicament of suffering revenue losses as there is a decline in business given that most of the precious time is lost while trying to correct the defective products supplied. This is problematic given that the full implementation of the envisaged change to the operations of the organisation has been dogged by unprecedented challenges which can result in poor performance by the employees which leads to decline in business. Comm. Tech has not put effective measures in place that attempt to create a fine balance between the needs and capabilities of all the stakeholders involved which has negatively impacted on its operational performance. In as far as the operations of the company are concerned, concerted efforts to satisfy the needs of all the stakeholders involved should be made given that any compromise deal will have negative repercussions on the company as is the case being faced by Comm Tech. The strategy implemented has not yielded early benefits as has been anticipated as a result of setbacks that can be attributed to the approach taken by the organisation towards the stakeholders. 2.3 Diversity in decision making More and more organisations are striving to entrench diversity in their decision making structures given that employees who are treated as valuable assets and have something meaningful to contribute to the organisation are often productive compared to employees who are just treated as mere workers. There are diverse employees in an organisation and their views should be taken into consideration so as to create a sense of belong to the organisation among them. This is perceived as a competitive advantage and a strategic necessity for a business to survive (Schultz et al, 2005). In order to be able to compete, strong bonds of collective unit must be developed within an organisation and this is another main issue of strategic and operational concern to Comm Tech. In this particular case of Comm Tech, the issue of not involving the members in the production department to give in their input in the building of prototypes has impacted on the strategic and operational concern of the organisation. These were only built by highly skilled technicians without the input of the production department which could have helped in minimising some of the problems being encountered now. This issue is of concern to the organisation since there is need to encourage genuine participation of all the members of the organisation right from the start so as to create an environment that is characterised by mutual understanding. It can be noted that the members in the organisation who participate in important meetings and workshops discussing strategies for the organisation related to change will demonstrate greater enthusiasm for their work since they will have a sense of belonging to the organisation. The top management at Comm Tech should communicate relevant, timely and accurate information to the members of the organisation in a bid to create an environment of shared trust and commitment. As noted already, the changes implemented by the top management at Comm Tech were only imposed on the other employees and this has raised serious criticism by the board members with regards to the quality concerns of the organisation. For the betterment of the organisation, the other members regardless of their positions should always believe in the integrity of top management and should always perceive their actions as being meant for the good of the organisation and its members not to be simply told of what they should do in their operations. Building trust among the members of the organisation is always seen as a long lasting remedy which can ensure the survival of the company that is implementing some strategic changes to its operations. Making diversity as a strategic measure requires the leaders to develop suitable competencies that will enable them to develop an innovative culture which requires everybody to collectively and actively contribute to the development of the business by bringing relevant knowledge, experience and perspectives to it (Mayikana, 2002, p. 12 as cited in Schultz et al, 2005). The model of diversity suggests that; everyone is given the opportunity to develop their skills and reach full potential, people are empowered with knowledge and they are given the opportunity to utilise their knowledge and skills. However, this is not the case with Comm Tech the reason why it is encountering the problems it is currently facing such as backlog in the production of the OS 2010. The diversity model is illustrated in Fig 2 below. Fig 2 Diversity model 2.4 Total quality management The other issue of strategic and operational concern for Comm Tech is the aspect of total quality management (TQM). To a certain extent, this goes hand in hand with the diversity model discussed above. TQM is an approach in which all the company’s people are involved in constantly improving the quality of products, services and business processes (Kotler & Armstrong, 2004). When applied in the context of creating customer satisfaction, TQM is a requirement for success. Customer driven quality has become a way of doing business and is the reason why Comm Tech has to put effective measures in place in order to ensure that there is compliance with the needs of the customers in order to remain viable. 3.0 Proposals for short term improvements Reverting to the old suppliers is a good remedy for Comm Tech in the short term period. As the Factory Manager, Michael Hartley pointed, “One thing though, we never had this problem with the old supplier. Just because purchasing can save a quid here and there, they have switched to an untried maker.” A lot of precious time for meaningful production in business is lost while trying to correct the defects of the components supplied by these untried suppliers and this has seriously impacted on the quality concerns of the organisation. Due to the pilling backlog of unsatisfied orders of the OS 2010, it can be noted that the organisation is not generating the anticipated revenue but is actually making losses considering that production has slumped. Whilst other long lasting solutions will be sought, it is imperative for the organisation to stick to reliable suppliers for the sake of the organisation’s viability. This will ensure that within a period of about four months, the organisation will be better positioned to quick start its operations again and can be better positioned to clear the backlog while meeting the growing demands of the customers since there will be no production time lost while correcting the defective, cheap material supplied by the untried suppliers. 3.1 Proposals for medium term improvements Implementing change is a process and it requires the leadership to effectively influence the employees to have a positive behaviour towards the change initiative. Thus, the tenet of managing change is found through leadership which is defined as the ability to influence a group of people towards the achievement of organisational goals (Robins, Odendaal & Roodt, 2001). The leaders of the organisation ought to take a leading role in spearheading change such that the subordinates will also be inspired to follow suit especially within a period of about six months after the inception of the change initiative. It can also be noted that human resources development (HRD) plays a vital role in change management. There is need to develop the skills of the employees through constant training, mentoring as well as coaching so that they will be able to keep pace with the technological changes taking place within the organisation. During the contemporary period, it can be noted that the market is dynamic hence the need to ensure that the employees have the requisite skills that can be utilised in the organisation so that it will remain viable. 3.1.2 Need to refine organisational culture: Culture excellence approach versus best practice approach Schermehorn, Hunt and Osborn (1997, p. 267 as cited in Rosouw 2003), describe organisational culture as a system of shared actions, values and beliefs that develop within an organisation and guide its members’ behaviour. To enhance, the organisation’s cohesion, it is imperative to create a culture that promotes innovative ways of identifying a problem and finding a solution to that problem (Locke & Kirkpatrick, 1995). The culture excellence approach gives precedence to the shared values within an organisation as a way of promoting better performance among the employees against the ever changing environment. Innovative and supportive culture enhances better performance and cohesion among the members of the organisation while controlling structures are likely to hamper effective performance by the same (Brand,1998). There is need for the management at Comm Tech to integrate the individual values, perceptions as well as their capabilities in the workplace for optimum performance. On the other hand, the best practice approach is specifically concerned with performance that is aimed at producing best results out of the operations of the organisation (Robbins, 2001). The aim of this approach is to maximise profits and it can be seen that this is the culture used at Comm Tech. However, the main weakness of this approach to culture is that it emphasises on the organisation’s profitability at the expense of the welfare of the members of the organisation. Indeed, every organisation ought to have a competitive advantage over the other rivals in order to remain viable but this approach puts too much pressure on the individuals. However, as far as change is concerned, the culture excellence approach is more ideal for Comm Tech given that it has the potential to shape attitudes, reinforce beliefs, direct behaviour, and establish performance expectations among all the members of the organisation. This entails that they will share the same vision of the organisation within the medium term period of up to six months after the inception of the change strategy. 3.2 Proposals for long term improvement In the long run, there is need for Comm Tech to redefine its organisational structure. Basically, organisational structure defines how job tasks are formally divided, grouped and coordinated (Robbins, Odendaal & Roodt, 2001). Whilst there are different types of organisational structures, a flat structure with decentralised features is likely to be more effective and ideal in the case of Comm Tech. In an organisation with a decentralized structure, action can be taken more quickly to solve problems and more people would provide input in the decision making process which makes the employees to feel less alienated and distanced from those who make decisions which affect their daily operations at workplace. In the case of Comm Tech, the structure of the organisation is vertical and the channel of communication is from the top management to the bottom level where there is less cohesion and proper feedback from both ends. The problems bedevilling this organisation are internally based and an internal solution is the only viable measure that can be implemented. As it stands at the moment, there is no collaboration between the organisation’s departments which is surprising given that the efforts of all departments within a particular organisation should be coordinated towards the attainment of the set organisational goals. 4.0 Performance management Performance measures to help manage change can be applied to the individuals, team and the organisation and this process is often owned and driven by the line managers. The universal challenge in the organisation is mainly concerned with implementing strategy or change and this is when performance management comes in handy to ensure the success of any strategy to be implemented in the organisation. Basically, “performance management is the means of getting better results from organisations, teams and individuals by understanding and managing performance within an agreed framework of planned goals.” (Armstrong, 1994, p. 23) This process is mainly concerned with directing the energy of the people in the organisation towards achieving strategic goals. This process sets up the expectations of particular action and it is the duty of the manager to follow up and monitor progress if a particular task has been assigned to an individual or a team. Performance measures in this case can be used on teams and the organisation as whole given that it is collective effort that determines the attainment of the organisational goals. In this case, teams can be found in departments or around functional areas within the organisation. Basically, “a team is a group of people that has been formed to work together in common, cooperative action towards the achievement of an outcome and for the benefit of the group rather than the individual.” (Schiltz et al 2005, p. 96). The goal of the team is synergy whereby the sum of the individual efforts in the team is greater than the sum of individual efforts. In the case of Comm Tech, the ideal types of teams that can be formed are cross functional teams. These cut across the different functions for example, product development teams are used regularly by team based and conventional organisations. In the cross functional teams, various departments such as product, design, engineering and logistics get involved at an early stage of planning and they work together for the duration of the project. As noted in the case of Comm Tech, the major problems facing the organisation is lack of cohesion among the members of the organisation which can be attributed to the absence of teams in the organisation. There is lack of collaboration among different groups of people within this organisation and it can be authoritatively said that performance measures should be implemented to measure the overall improvement of the teams in a bid to establish their impact on the change strategy. There are various factors that influence individual performance and some of these include the following: commitment to the organisation, personality, attitude, skills, ability, knowledge, knowledge and energy level (Schultz et al 2005). In order to improve performance, the manager must be aware that any of the above factors could be an obstacle to effective performance among the members of the team. Even a well designed and implemented performance management system can fail if one of these factors prevents the employees from performing. This is where performance management is essential so as to be able to diagnose the performance problems that may be encountered during the implementation of the change strategy. Performance management will be mainly concerned with establishing if the efforts of the individuals are being coordinated towards the same direction of achieving the set organisational goals. Performance management can also be implemented on the organisation as a whole so as to ascertain its ability to meet its set goals and objectives. This is mainly concerned with checking if the operations of the organisation are in compliance with the set goals and objectives otherwise the change strategy may be a failure. The day to day management of the goals for the organisation is very important in this case as it can help to establish if there is any improvement in the operations of the organisation after the implementation of the change strategy. Basically, implementing change in the organisation is mainly concerned with improving its performance towards the attainment of the set goals and objectives. Therefore, it is the role of the management to ensure that the individual as well as team efforts are being pulled in the same direction. Performance management can help the organisation to establish the checks and balances of the change strategy whereby it can be in a position to make necessary amendments should the need arise. Basically, performance management is a cycle as illustrated in fig 3 below. Fig 4.0 Performance management cycle 5.0 Conclusion Over and above, it can be concluded that in order for any business to survive in the long term period in the ever changing environment, the organisation concerned should strive to keep pace with these changes strike a fine balance between the quality concerns of the product and the performance issues of the human resources who are the key drivers of the production process in the organisation. It has been noted that in today’s organisations, change is inevitable and is often necessitated by various internal and external factors and this initiative often affects the operations of the company in different ways. As such, this report sought to identify the main quality and performance issues affecting Commercial Technology Limited (Comm Tech). Basically, the change strategy initiated by Comm Tech is mainly an effort of the top management brass and some of the problems facing the organisation can be attributed to this position. The report noted that lack of cohesion among the members of the organisation is an issue of serious concern as it has negatively impacted on the overall performance of the whole organisation. It has been suggested than Comm Tech should revert to its old suppliers so as to avert the impending disaster of lack of production due to poor quality materials supplied to the organisation. There is also need for the organisation to refine its culture in the medium term so as to give all the members of the organisation the autonomy to make decisions given that these affect their day to day operations in the organisation. It is also important for the organisation to redefine its structure in order to accommodate the views of all members in the decision making process. It can also be concluded that the decision making process should not be a preserve for the top management only given that implementing change is not a one day event. It requires concerted efforts of all members of the organisation so that they can share the same vision and goals of the company. References Armstrong, M 1994, Human Resources Management Practice, 7th Edition, Kogan Page Limited, NY. Amos TL et al 2008, Human Resources Management, JUTA, CT. Brand, A 1998, Knowledge management and innovation at 3M, Journal of knowledge management, Vol. 2 No.1 Competitive advantage ND, University of Cambridge- Institute of Manufacturing, Viewed on 17 March, 2011, . Kleynhans, R et al 2007, Human Resource Management: fresh perspectives, Prentice Hall, CT. Kotler, P & Armstrong G 2004, Principles of Marketing, Pearson Education International, NJ. Locke, EA & Kirkpatrick, SA 1995, Promoting creativity in organizations, Thousand Oaks: Sage Publications, London. Porter ME 1985, Competitive Advantage; Creating and Sustaining Superior Performance, The Free Press, New York. Robins SP Odendaal A & Roodt G 2001, Organisational Behaviour, Pearson Education, CT. Rossouw, D 2003, Strategic management, NAE, CT. Schultz H et al 2003, Organisational behaviour, Van Schaik Publishers, CT. University of Cambridge (ND), Institute of Manufacturing, Viewed 17 March, 2011, Werner A Et al 2007, Organisational behaviour: A contemporary perspective, 2nd Edition, Van Schaik Publishers, Pretoria. Read More