Managing Stress and Conflict in Hyde Aero products Ltd - Report Example

Topic: Managing Stress and Conflict in Organization Review Report: Hyde Aeroproducts Ltd Introduction The Company is part of a group of engineering companies based in and around Hyde Cheshire. It is not a manufacturing company but it is a major subcontractor, supplying components to a number of major aerospace manufacturers. Its major business comes from the defence sector of the market, especially for structural components for use in military aircraft. Apart from this it has minor business connected with the production of components for the Airbus wing production facility based in Broughton Chester. The following report presents a review of the organization on its effectiveness to recognize, understand and deal with organizational stress. 1. The effectiveness of the organization in recognizing workplace stress and providing any necessary support mechanisms is evaluated According to the research done by (Rogelberg, 2007), it is very important for the organization to recognize workplace stress and to provide the necessary support. However, in Hyde Aeroproducts Ltd., the biggest challenge is that there is no effort to recognize workplace stress. The organization has an attitude that is reflective of a macho stand, where people should be accountable for themselves and there is no need for the organization to provide a secondary support system. However, this is not an accurate way of handling the situation because if stress is caused due to a variable that is a part of the organizational activity, then it is necessary for the organization to step up, recognize it and also to take concrete action to ensure that it is prevented. At present, the organization acknowledges the ascpect of stress at workplace ‘on paper’ just because of the H&S regulations that dictate these, but there is no actual implementation of stress management. There is no proper framework to underline the indicators that can reveal the stress levels and furthermore, there is no grievance system where the employees can address any of the issues that they have. This lack of guidance or framework results in employee stress manifesting in many different aspects such as the quality of work and even attitude towards work, creating a unhealthy situation. 2.      Your own ability to provide any necessary support using relevant organizational mechanisms The team that I handle is small and hence, it is easier to function as a single cohesive unit. Hence, it is possible to understand the situations where members of the team are not able to perform optimally because of the dip in performance. According to the research done by Derek and Hudson in 1995, a robust team leader is one who is able to understand and sense the performance issues of the team members in a proactive basis. Indicators such as coming to the office late regularly, incorrectly completing paperwork, making simple mistakes and lack of concentration are the factors that are monitored for finding out if there is something amiss. Another useful fact is that the average age of the people in my department is mid 40s; therefore, any personal issues or problems faced by the employees often tend to follow the same trajectory. However, there may be issues like workplace conflicts that can worsen the situation. For example, in a particular instance, the inspection team had to deal with a very uncooperative floor worker because he had verbally attacked them because of a poor work rate. In such situations, the role that I play is to look at the situations objectively and see which side is correct or wrong. At times, there is a pressure situation created because of client demands. Clients insisted product delivery on short notice and often, the organization has to agree to their terms. In such situations, the pressure gets passed down to the employees to push the release. It is a given fact that stress at workplace is inevitable and there may be situations that demanded extra inputs from the employees (Jacobs and Gerson, 2000).. One major way to handle excess work pressure is by adequate delegation (Mackay et al, 2004). Here, I try to ensure less stress by being proactive in my approach. 3. The organisations effectiveness in recognising and addressing people problems is evaluated According to the research done by Quick, Quick & Nelson in 1998, Organizations not only need to manage the stress levels of the employees, but also need to take preventive steps to avoid situations that leads to excess stress in the work place (Quick, Quick & Nelson, 1998).. The Human Resources management team plays a key role along with the management to come up with appropriate steps to prevent and deal with stress. However, in Hyde Areoproducts Ltd, it was noticed that the company does not have any protocols related to Human Resources which focuses on employee satisfaction and welfare. With a very high focus on improving the profitability, it has ignored the aspect of stress among the employees. For any organization, assessing stress levels is critical (Rogelberg, 2007). This process has not been carried out in the organization. Organizational stress can be due to several different reasons and not just work pressure. It could be due to reasons such as conflicts among employees, lack of guidance or stagnancy. It was noticed that that the management approach is very transactional with a hesitation to approach or engage workers at a personal level. Instead, the only focus is to get the work done in exchange for the payment. It is possible to see the signs of stress in an organization with the help of different variables (Blaug et al, 2007). The rate of attrition shows and increase, the work environment becomes negative. It starts affecting the performance of the people because productivity and quality of work also shows a negative trend. However, as there is no mechanism in place for identifying the stress levels, these indicators tend to go unnoticed. In the organization, if an individual’s performance begins to have a negative affect due to any professional or personal reason the onus lies on the employee to get in touch with their manager.. If the person has informed the situation in advance, then the company offers unpaid leave to support the employee in case they are ‘valuable’ employee. Therefore, the overall focus on handling stress in the workplace is very less in Hyde Aeroproducts Ltd. 4. Your own ability to recognize and address people problems is evaluated My own ability within the organization to handle stress has a limited scope because of the lack of proper framework or support system. Hence, what I do is to observe how people interact with each other, how they carry on their tasks, if they make any recurring errors in their work or they participate in excessive overtime to catch up. This will give me an indication of if something is not right in my team or not. As my team is salaried, there is no overtime benefit for the employee hence; I closely monitor how they work. I also keep the lines of communication open so that they can come to me at anytime to ask me questions or clarify any issues. I also try my best to extend deadlines for those employees who need extra time. However, the biggest challenge that I face is there is no proper system to address such issues and the measures that I take are largely informal. 5. The organisation within its broader environment, using PESTLE and SWOT analyses, is evaluated When an organization frames any particular strategy, it is necessary to evaluate it with the help of various analysis techniques to get a comprehensive picture of how the strategy may function in light of the various variables that are involved in the strategy. Some of the major analysis techniques that are used by management teams and researches are PESTLE and SWOT. PESTLE Analysis PESTLE stands for the analysis of the Political, Economic, Social, Technological, Legal and Environmental factors that needs due consideration during the implementation of any particular strategy of an organization (Gelliespie, 2007). PESTLE is a method of analyzing the various external variables that an organization would have to account for during the implementation of a strategy or its whole mission. External variables would mean factors such as public policies or economic environment that are critical for the organization. By implementing this analysis, an accurate profile of the organization can also be created (Gelliespie, 2007). Political The company faced serious recession recently mainly on account of budgetary constraints adapted by the government and the new policies of the government with certain foreign countries. Search for better technology, drastic reduction of finance for ongoing projects, withdrawing of certain aircrafts from military use are some of the measures adapted by the government. As a result of this, order substantially reduced, the policy of advance purchase was stopped by customers and supply time drastically reduced. These factors shattered the work schedule of the company resulting sometimes overtime works and some other times layoffs resulting employee’s dissatisfaction. Economic factors With its lean business due to factors mentioned above the company finds it difficult to compete with other suppliers who are supported by military customers in financial difficulties, as a part of healthy competition. There are other factors such as increased costs, taxation, material and energy costs etc adversely affecting the company. Capital investment for new projects is an inevitable part of the company’s business. Young and energetic skilled workers must be regularly added to the work force. Financial stringency of the company forced to stop the practice of inducting new apprentices. Technology In aircraft industry each component is made by man effort. Identical components are not made by automation. Automation in making components is not cost effective due to the individual nature of production and with a limited number of components being required only once in a build. There is every possibility in future of making unmanned war planes using composite materials and aircraft made of metal will have a limited future and the company foresees the possibility of no longer producing components in the presents form.      Environmental factors The main environmental issues that may arise will be connected to some accidents that may occur during handling of chemicals. To prevent this all protective measures have been taken under the strict supervision of a superintendent who is responsible to train the operators for the safe handling of the respective equipments against contamination and also for disposal of all toxic and hazardous waste. In the case of modernisation of engines and fuels by the customer company to avoid pollution, they will communicate to us the necessary re-modification of our equipments to suit to their newly developed system which we may be able to accomplish.                                                                             Legal factors On account of the special nature of the business of our company connected to our customers viz. military and aircraft companies we have to adhere to strict confidentiality measures against leakage of technology and other safety matters. Any violation of this will lead to very serious consequences including prosecution of the directors of the company, cancellation of license to manufacture and exorbitant fine to the tune of £5-Million SWOT Analysis SWOT Analysis basically means the analysis of Strength, Weaknesses, Opportunities and Threats (Hill and Westbrook, 1997). It is always useful to do a SWOT analysis about the strategy of the organization to identify these variables at an early stage. With the adoption of any particular management approach - be it a big organizational change or a small change in process, it is necessary to look at the SWOT variables so that there is better awareness of what the various advantages and risk factors may be. It is also particularly useful because the various subsequent steps that would come into play in both planning and implementation can be understood. Often, SWOT can be used to determine if a particular objective or strategy is achievable or not by looking at the analysis. If the weaknesses and threats are much larger than strengths or opportunities, then the strategy would need reconsideration. STRENGTHS Capabilities The company which was setup as a subcontract supplier of aerospace components has a very long and vast experience in technological knowledge and skills in the field. Competitive advantages The location of our company is very near to the customer which enables us to be close contact with them, which helps to incorporate any change or modification in the components as and when it is required by the customer. USP (Unique Selling Points) The Company can operate on a “turnkey” capability in all works such as assembly system, supplying machine tools, fabrication tooling and jigs/fixtures using in-house sources. Human Resources, Assets  The company consists of about 60 workers and some casual workers who are well versed in aerospace manufacturing and supplying systems and committed to maintain quality and standards. Experience, knowledge, data Starting from a single company our company has developed now to 25 separate companies. Technical knowledge and skill has been maintaining at the highest level by recruiting excellent ex-aerospace managers and skilled workers in addition to the existing ones in the company. Financial reserves, likely returns Being a part of a big private business group valued at £100M, the company has flexibility in decision making depending upon its performance level and size to set aside giving returns to shareholders and go for funding major projects regardless of the impact on yearly profit. Price, value, quality Generally military projects are on cost plus basis and development cost to stick on quality standard required by the customer is not in question. Once the quality standard has been established there is sufficient human expertise and skill to ensure the same in the production. Accreditations, qualifications, certifications Equipped with licences and accreditations from a variety of customers and government institutions and efficient work force meet their bids successfully the company goes on making profit. Management cover Majority of middle level managers are having previous experience as shop floor workers and BAE systems workers and they have very good liaison with managers of customer firms. WEAKNESSES Gaps in capabilities In recession periods vacancies arising due to quitting of skilled workers cannot be filled in time which will compel the firm to refuse some works and in certain cases ongoing works could not be completed even during extended periods. Lack of competitive strength The company needs a competitive attitude as customers prefer to maintain competition among sub-contractors. Reputation, presence and reach The effort to reduce price level at the cost of employee’s satisfaction has given a bad reputation which detracts suitable personnel from the company. Vulnerabilities Being a sub-contractor company it has no product of its own and has to rely upon others to meet the orders from customers. Maintaining an integral supply chain The materials used for the commodities are set by the customer, and are to be procured from the suppliers approved by the customer, the quality and standards of which will be under the scrutiny the customer. Unpredictable future The customer keeps the suppliers in darkness about future developments. New technology may render metal aircraft obsolete, which points to a bleak future. Morale, commitment, leadership There is a Tough –Guy, Macho culture among management, in which most often employees are put into strenuous and hard work. This attitude of the management towards the workforce fails to inject a feeling that the organisation is their own. Accreditations The company’s expertise only in aerospace commercial or military aircraft and in metal aircrafts but not in non-metal aircraft, carbon composite/Kevlar manufacture and hence could earn accreditations only in that field. Processes and systems Modern technology goes for light weight, non-metal aircrafts whereas the company only concentrates in metal aircraft manufacturing. This is stress factor in concerning the future of the company. OPPORTUNITIES Competitor’s vulnerabilities We have been in the business for a long time and the continuous availability of skilled workforce is an advantage for us. Technology development and innovation Lack of own technology necessitate the company to rely heavily on the customer for new and advanced technologies in this field. Geographical, export, import The company has to depend only on domestic demands as customer favours short supply line. Information and research There is not a research and development policy in the company and the same is sought for only as per the request of the customer. Therefore, this expansion can be a good opportunity. Partnerships, agencies, distribution The company is a part of Northwest Aerospace Alliance, consortium of companies from the NW, which bid on contracts to supply as a single entity. Volumes, production, economies Unique within the aircraft all aerospace contracts are quoted as being “projects” using specific components and each component is unique in nature. THREATS Political effects The curtail of defence budget due to recession lead to the scrapping of nimrod aircraft, harrier fleet, cutting back on typhoon, the withdrawal of some tornados from service and the reduction of orders of helicopters from UK suppliers. Legislative effects In connection with use of extremely hazardous chemicals and health related emissions new legislative injections and subsequent labour laws have evolved which in turn has increased the cost of production in the company. Competitor intentions - various Some competitors have shifted to low cost market abroad enabling to compete on price alone. But in that case they are unable to do rectification work due to the distance factor. Market demand Recessions have made the market dull and the customer’s orders also reduced which affects the company. New technologies, services, ideas New technologies have evolved which imposes the use of composites in aircraft design, which in turn render the present operational system obsolete. Vital contracts and partners Being part of an alliance of similar companies who are aero space based is an advantage enabling them to bid collectively on large contacts. Sustaining internal capabilities The existing workforce is getting aged which necessitates the need of recruiting young engineers. But this is very difficult to have new recruitment with technically skilled workers as the company had a bad reputation in employee’s satisfaction and worker manager relationship. Insurmountable weaknesses The autocratic methodology of the management which is task oriented and resulting in employee’s discontent, makes it difficult to enrich the capability of workforce by new induction which in turn will escalate the crisis of skill losses in the company. Loss of key staff The inter relationship among employees –skilled workers and white collars in the company has become antagonistic leading to quitting of inevitable skilled workers equipped with training of more than one year ,thereby causing stress in the company’s performance. 6. The impact of economics and politics on the organisation is analysed. As seen in the PESTLE analysis, the political and economic factors have a critical role when it comes to how the organization would achieve its mission or implement a strategy. Here is an over view of how an indivudual political and economic factor had an impact on the organization. Among the many government policies that have been enforced in order to reduce any wastage of resources, one was the policy that certain aircrafts would be withdrawn from the air force of the country. This naturally resulted in that cancellation of orders because of the removal of use of Harrier squadrons. When orders are cancelled, the entire logistics and planning of the organization undergoes a change. This resulted in making many employees redundant because of lack of work. As most of the administrative and office staff was on contract, they could not be laid off or their salaries could not be cut off. Hence, it directly affected the shop floor workers. Many of these workers were laid off and some of them who remained had to take in a pay cut. Hence, it is clear that the political environment has a big influence on the company strategy. Similarly, the economic conditions have a huge influence on the way in which the organization has to adopt different strategies. The economic recession is one situation where the organization had to reconsider its different policies. As mentioned in the PESTLE analysis, the economic situation demands that the commodity purchase happens within the same group, even if its price is higher than compares to suppliers that are outside. This greatly affects the cost of operations and a considerable amount of money has to be invested for this purpose.. Again, as there are many constraints related to the avenues where the costs can be cut, this burden is also transferred to the employees either in the form of pay offs or pay cuts. 7. The legal environment within which the organisation operates is analysed As with the political and economic environment, the legal environment also has a critical role to play when it comes to strategic management. It is mandatory for any organization to ensure that it complies with the legal policies within the particular industry (Clarke, 2004). The company ensures it follows all the rules and regulations within the sphere of its operations. As an organization that is a part of the manufacturing sector, it has to follow many different laws such as HSE employment laws, tax laws, CAA laws, rules regarding disposal of wastes, regulations on environmental pollution, militarily equipment laws and so on. One such rule is the adherence to the legal formalities because of the close association with the military and aircraft companies who are their clients. This often results in secrecy protection of government and classified information. It is very critical to keep this information top secret as these issues may be even related to the national security. With regard to certain products, it is necessary to give this information to employees who are on the lower level such as the shop floor workers. It can create stress among the employees because they become over cautions and under constant pressure to ensure that the information is not leaked. More than the employees, the management faces a higher level of stress because it is worried whether the information will leak out and creates legal complications for the organization. 8.      The organisations culture and ethics and how these manifest in terms of management style and team structure Every organization has its own culture and ethical stand which are reflected in terms of the management style and team structure. At Hyde Aeroproducts Ltd, the stance adopted is one that of a power culture which was described by Charles Handy (Handy, 1985). In such a culture, the power is concentrated in the hands senior management without looking at factors such as employee satisfaction, quality of work or even morality. Instead, the focus is on profitability (Dewe and Driscoll, 2002). In this organization also, a power culture is followed, where in the stress to improve profitability is largely to receive an increased bonus. This culture of the power being confined in the hands of a selected few has pervaded the organization. Hence, the management is not hesitant to take steps that would increase the profitability without thinking about the employees. They have to battle a situation of layoffs, pay cuts and stress. Additionally, annual appraisal is only a formality and workers are given a standard 2% increment which leads to a large level of dissatisfaction. This can lead to a high rate of turnover because employees may look for greener pastures. A high rate of turnover is not an indication of a healthy organization and can reduce the quality of the workforce (Kenny and Cooper, 2003). It is also true that there is no proper system for addressing the problems of the workers. If there are any major issues, then the employees are often shown the door. To create a healthy workforce, it is mandatory to reward skilled workers with good pay and protection plans so that they can contribute effectively without any disappointment or stress. The first and foremost step that needs to be taken is to develop a culture that is gives importance and value to the employees. The organization also should share its profit with the employees so that they are better motivated to perform to the best of their abilities. In addition, the management has not yet recognized the need of stress management. Conclusion The research has shown that Hyde Aeroproducts Ltd does not have any mechanism to either prevent stress at workplace or manage stress effectively. The employee dissatisfaction is high and the quality of the workforce has reduced. Hence, the important factor is to bring out a change in culture where employees are valued and respected so that they can perform effectively and build a great organization.                                                                                                                                            References Blaug, R., Kenyon, A., Lekhi, R., 2007. Stress at Work, London :The work foundation Clarke, T., 2004. Theories of Corporate Governance: The Philosophical Foundations of Corporate Governance. New York: Routledge Derek, R., & Hudson, C., 1995. The role of Emotion Control and Emotional Rumination in Stress Management Training. International Journal of Stress Management, 2(3), pp.119-132. Dewe, P and O’Driscoll, M., 2002. Stress management interventions: what do managers actually do?, Personnel Review, 31(2), pp.143 - 165 Gelliespie, A. 2007., Foundations of Economics. London: Oxford University press Handy, C., 1985. Understanding Organizations. 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