Organisational Behaviour - Casual Togs - Case Study Example

Table of Contents Casual Togs: Organizational Behavior Report 12 1.Introduction 2 2.Problem Diagnosis 2 3.Causes of problems 4 4.Case for change initiative 5 5.Future suggestions 7 5.1.Management Practice 7 5.2.Structural Change 8 5.3.Adaptive Change 9 6.Recommendations 10 7.Conclusion 11 8.References 12 1. Introduction This report intends to explore the major problems facing Casual Togs, a 20 year old Midwestern city based firm that produces women’s apparel; this report will expose the root causes of the major problems faced by the firm as well as how to persuade the firm’s proprietor to change. Besides that, this report will offer the firm suggestions on how to prevent future problems in terms of management practice, structural change, as well as adaptive change, before summarizing a number of key recommendations for the future trajectory of the firm in general. This report aims to help Casual Togs respond to the increasing competition in the highly competitive fashion industry through structural as well as adaptive change that will lead to the streamlining of the firm’s operations as well as management and control. This report will be a crucial decision making and policy tool to the management of the firm since it will not only highlight the problems faced by the firm, but it will also highlight their respective causes while making crucial suggestions and recommendations that will prove worthwhile not only for the firm’s management effectiveness, but also for its operational efficacy as well as long term sustainability and profitability. Consequently, the firm’s management will be able to utilize this report’s findings in identifying critical areas of focus in its policy and operational decision making processes besides implementing key structural as well as adaptive changes that will transform its management, operation, as well as chain effectiveness respectively. 2. Problem Diagnosis Casual Togs is currently experiencing serious problems that are gradually hindering its growth, particularly in the face of intense fashion competition that is emanating both from larger firms and the avant-garde smaller firms that are currently re-defining the fashion industry. Tough price competition is a norm today, rather than the exception, and this further exacerbates Casual Togs predicament in the fashion industry, thus, its continued profitability as well as long term profitability is currently hanging precariously. The company is seriously constrained due to inadequate capital resources, a situation that has prompted leasing of facilities and equipment in all its branches in the seven southern states. The company is increasingly facing a serious problem of merchandise returns from customers who refuse acceptance of shipment due to a number of shortfalls in the firm. Production and delivery at the firm is largely uncoordinated and projection of sales volumes and styles for each of the five seasons is a daunting task since garments must be ordered and produced within the shortest time possible. The other major problem impacting Casual Togs is that the owner and principle stockholder Cy Geldmark is responsible for all final operating and policy decisions and department heads are not free to act as they see fit for the firm; management personnel are not consulted and decision sessions are informal and non-scheduled. The management of the firm lacks formal organization and practices since management has no formal hierarchy of command and management personnel often engage in emotional outbursts leading to chaotic decision-making sessions. The management personnel are highly divided due to various conflicting interests and as such no meaningful discussions can be held that can result to any meaningful results for the firm. Dissident voices among the management personnel impedes decision making thereby leading to erroneous decisions being made by Cy, and this further aggravates the situation of the firm. The firm is currently facing a decline in orders due to the loss of its old customers who cite poor quality and late deliveries as some of the reasons for quitting their loyalty to the firm and its products. Besides that, the firm is experiencing difficulties attracting and hiring the best human resources to occupy critical positions in its management hierarchy; for instance, the firm was forced to halt its distribution center construction mid-point because it could not find a suitable person to hold the supervisor position. Additionally, the company is suffering from high employee turnover, which leads to the loss of key human resource capabilities that could potentially be a source of competitive advantage; two of the firm’s new designers resigned. 3. Causes of problems The main problems affecting Casual Togs can be traced back to composite factors both within and without the firm; firstly, the firm is primarily staffed with relatives and friends, irrespective of their individual qualifications and merits. The firm has also been unresponsive to industry trends by maintaining status quo and remaining traditional in style and approaches, which greatly hinders growth and development as well as quality of output. Rapid expansion of the company in the last five years has also resulted to further deterioration of quality and operations since the expansion is not supported by available resources as all the facilities and key equipment in the new locations have been leased. The highly complex and intricate selling seasons that characterize the fashion industry leave no margins for error, thereby producing unusual production and forecasting problems particularly regarding the quantity and styles of each season. Some management personnel attribute the persistent problem of returns to inaccuracies in the forecasting by style lines, which eventually leads to errors in production scheduling, while others blamed the returns on the lack of coordination between the firm’s production shipping lines and production methods. Endless consultations between Cy and the rest of the management personnel regarding crucial operating and policy decisions coupled by the numerous style modifications as well as quantity level changes in each season’s fashion does lead to further delays in production thereby consequently causing lateness in deliveries. Little or lack of confidence in the top leadership of the firm greatly impedes leadership efficacy and cooperation of management personnel thereby leading to dissidence to management decisions. Machiavellian chain practices and authoritative leadership impedes communication and management effectiveness in the firm, thereby negatively impacting chain effectiveness at almost all levels. Imprecise role definitions on the organizational structure create confusion regarding the center of command with Cy’s sister and vice president in charge of administration Judy overstepping her mandate by traversing all departments indiscriminately. Lack of formal organization within the firm further contributes to the heightened confusion and divisions among the management personnel, who often collide over crucial operation and policy matters within the firm. Lack of HR management best practices in the firm starting from the selection and hiring process, to training and development of key resources, to rewards and remuneration among other crucial things negatively affect both the motivation and commitment of the employees leading to high turn-over and declining quality of output; according to Doorewaard & Benschop (2003 p.272), effective HRM plays a crucial role in stimulating the human resource to develop crucial capabilities that facilitate the change process. Lack of employee engagement, largely due to the pervasive indifference to employee input and contributions to management decisions largely impedes creativity of the human resources coupled by the mismatch between skills and tasks in the firm greatly contributes to the low quality output. Rapid systemic changes within the firm’s production and supply chains can also be attributed to the further deterioration of the firm’s performance as indicated by the increased returns from customers. 4. Case for change initiative Organizations often operate in environments that are rapidly changing, complex, and this compels them to respond to the rapid changes in their industry contexts through tough change measures (Ashmos, Duchon, & McDaniel 2000 p.578). To convince Cy to change, a change agent would firstly identify the problems facing the firm, which need to be addressed to enhance efficacy of operations and organizational performance. For instance, the firm is increasingly facing the persistent problem of returns from customers, increased production delays, communication breakdowns, deteriorating quality of output, high employee turn-over, shortage of key human resources, among other challenges. Secondly, the change agent would want to review the firm’s macro reality, that is, its current state amid the increasing competition among other contingencies in fashion industry, thereby building a strong case for the need for change; Bowles (2006 p.440) highlights that the discrepancy between the present and the desired future state of the organization is a huge motivation for change. Reviewing the firm’s present position and circumstances in the fashion industry would highlight its strengths, weaknesses, opportunities, as well as threats thereby highlighting priority areas of management focus and the dire need for change. A comprehensive report of the overriding factors both within and without the firm would be so compelling for change since they would help project the future trajectory of the firm if it continues in its present direction. Thirdly, a change agent would need to establish the primary objectives and/or goals of the change initiative to convince Cy to initiate appropriate change in operations and policy decisions; change goals and/or objectives will clearly outline what the change initiative will achieve in the end. The primary goals will provide adequate validation for the proposed change plans since they will provide a concrete and justifiable reason for sponsorship as well as commitment to the change initiative in the first place. Additionally, to further bolster the case for organizational change to win Cy’s support, the change agent would need to identify other people of influence such as management personnel who exert considerable control over the firm’s management decisions, operations as well as policy in general. The support of such people of influence within the firm will be a great boost to the case for organizational change since Cy would be easily convinced to agree to the proposal seeing that it has the backing of influential persons in the organization. Besides that, the change agent would need to assess the potential financial costs as well as benefits to both the clients and the agency in order to build a strong case for the change initiative, to convince Cy that it was necessary. Similarly, for full support for the change program, the change agent would need to review not only the professional, but also the personal risks involved by implementation of the change program; Cy would be much easily convinced to implement change if the perceived benefits were greater than the professional and professional risks and costs involved. An equally important strategy of convincing Cy that change was not only desirable but also necessary is by evaluating the potential success of a macro change process; the feasibility of successful implementation of a macro change process would greatly convince Cy to change. 5. Future suggestions The management of Casual Togs should consider a number of suggestions outlined below in terms of management practice, structural change, as well as adaptive change to prevent future problems at the firm. 5.1. Management Practice Management should seek to unite all management personnel through a formal organizational structure that clearly defines tasks and the direction of flow of authority to avoid confusion, management personnel collisions, as well as unnecessary delays in the channels due to lengthy consultations and unclear or muzzled communication. Effective management should ensure that the human resources of the firm are selected and hired according to standard procedures without bias or favoritism of any sort to ensure recruitment of highly qualified and talented personnel. Management should also ensure adequate employee engagement at the firm since it promotes the motivation and commitment of the human resources, thereby unleashing their creative potential, which could potentially be a great source of competitive advantage for the firm. Employee output as well as the contribution of management personnel can lead to enhanced decision making at the firm and should not be neglected, especially because a multi-dimensional perspective of issues is always richer than a single dimensional perspective of the top management. Formal organization and structuring of the management practice within the firm will be a great boost to management effectiveness since it clearly stipulates tasks and responsibilities thereby promoting harmony within operations as well as management decision making respectively. Management should be keen to industry changes and trends to remain competitive in the highly complex and fast-changing fashion industry and the input of various management personnel at the firm should be regarded seriously to enhance management decisions. 5.2. Structural Change Unlike smaller businesses that typically do not need any organizational structures since their owners are directly responsible for the execution of all the business functions, large businesses must have both formal and informal policies as well as procedures of governance to facilitate management of operations and employees respectively. Structural change is crucial for the effectiveness of operations at the firm; alterations in the direction of flow of authority, capital, information, as well as responsibility in the organization are crucial not only for the sake of operational efficacy, but also for long term organizational profitability and sustainability. Casual Tog’s management structure is highly unclear and unorganized due to overlapping mandates amongst management personnel that creates confusion in the flow of information, authority, capital as well as responsibility in the firm. The prevalent collisions amongst management personnel are a perennial source of confusion and dissident in the firm, thereby greatly impeding management effectiveness since there seems to be no collective agreement on what should be done and by whom. An effective organizational structure provides the fundamental framework that employees have to follow in their pursuit of organizational goals and/or objectives; the effective organizational structure enables delegation of responsibility as well as organizational change throughout the organization. Structural change within the firm can result to numerous benefits including streamlined operations, enhanced decision making, as well as improved employee performance; similarly, structural change will enable the firm to successfully operate its multiple locations while focusing on enhancement of customer service, sales revenues, and profits from business operations. Effective organizational structure ensures that business functions are completed effectively and efficiently since it promotes the flow of information from frontline operations to managers that make daily business decisions. Similarly, an effective organizational structure helps in the establishment of a concrete management culture and maintenance of a management core while helping the organization to focus its resources and energies on a specified set of business goals as well as objectives accordingly. 5.3. Adaptive Change In the face of the complex and fast changing business environments in the contemporary global business environments, organizations must be highly adaptive to the changing industry conditions in order to remain profitable while surviving the strict competition respectively; organizational culture, the way of doing things, must be adequately aligned to the contextual changes (Silvester, Anderson & Patterson 1999, p.2). In that respect, adaptive change is crucial since it enables the firm to readjust and reposition themselves according to the industry changes and trends not only for profitability, but also for survival in the long term. Adaptive change requires more than just the sharpening of processes and skills within the firm since it questions the very basis of belief systems and ways of thinking that are deeply entrenched within the firm and calls for a total reorientation of perspectives (Eriksen 2008, p.622). Casual Togs would benefit greatly from adaptive changes since it has been insisting on doing things in traditional ways even in the face of rapid changes in the fashion industry, which inevitably render old thinking obsolete. Adaptive change is never smooth and comfortable for anyone due to the heightened anxiety it creates due to the perceived uncertainty the change brings with, thus, the firm must prepare adequately to manage the adaptive change process to promote its success. A vast majority of the firm’s personnel will be very happy with the traditional ways of doing things and may have the least incentive of altering the status quo, thus, may out rightly resist any proposed change initiative. Nonetheless, effective change management is crucial to help in alleviating anxieties of the adaptive change process to promote not only acceptance of change but also participation of the entire human resource and management personnel in the change process. 6. Recommendations Casual Togs needs to implement a number of organizational changes that would result to the firm’s reorientation and re-positioning within the fashion industry; persistent trouble of increased customer returns can be solved by addressing a number of key strategic issues at the firm including delivery delays, quality problems, inaccurate forecasting is style lines, as well as communication breakdowns, among others. Employee engagement is crucial for the firm given that the human resource is the single most effective source of competitive advantage for the firm; furthermore, given that production at the firm is strongly based on the careful, personal effort of individual workers, the firm should ensure its employees are adequately engaged. Employee engagement and participation in the decision making process is a great boost of motivation and commitment, which greatly increases workforce effectiveness while reducing turn-over tendencies among the workforce accordingly. Allowing the workforce, particularly the management personnel the freedom to make decisions instills confidence and trust, which further encourages creativity and the conceptualization of fresh fashion ideas that could be potentially revolutionary. Institutionalization of effective HR management practices such as formalized selection and hiring, development, as well as promotion of human resources among other aspects also greatly influences workforce effectiveness thereby promoting quality of output and organizational performance accordingly. For instance, this will allow the firm to select and hire its workforce based on qualifications and to match its tasks with crucial talents within the workforce besides providing equal opportunities for promotion at the firm. Formal organization of management with formal structures of power and specific roles and jurisdictions enhances management efficacy since it not only promotes harmony and order in decision making, but it also leads to effective communication and execution of management decisions thereby promoting operations. Formal structures prevent collisions and divisions within the management hierarchy, thereby promoting harmonious relations among the management personnel, which further enhances consultations, communication, and the entire decision making process. Just-In-Time (JIT) production is a brilliant production strategy that reduces in-process inventory among other production costs while focusing on continuous improvement of returns on investment, quality of output, as well as operation efficiency. Effective change management strategies would also be effective for the successful introduction and implementation of scheduled process changes in the future particularly given that organizational change often encounters resistance from members of the organization, if not managed properly. 7. Conclusion Overall, Casual Togs is experiencing increased returns from customers due to a number of reasons including delayed deliveries, poor quality, inaccuracies in the forecasting by style lines, which eventually leads to errors in production scheduling, as well as the lack of coordination between the firm’s production shipping lines and production methods. The firm needs to consider following the recommendations cited in this report to reform its management practice while initiating both structural and adaptive change in order to remain profitable while overcoming competition in the highly complex and dynamic fashion industry. 8. References Doorewaard, H., & Benschop, Y. (2003). HRM and organizational change: An emotional endeavor. Journal of Organizational Change Management, 16(3), 272. Silvester, J., Anderson, N. R., & Patterson, F. (1999). Organizational culture change: An inter-group attributional analysis.Journal of Occupational and Organizational Psychology, 72, 1-23.  Bowles, T. V. (2006). The adaptive change model: An advance on the transtheoretical model of change. The Journal of Psychology, 140(5), 439-57.  Eriksen, M. (2008). Leading adaptive organizational change: Self-reflexivity and self-transformation. Journal of Organizational Change Management, 21(5), 622-640. Ashmos, D. P., Duchon, D., & McDaniel, Reuben R. (2000). Organizational responses to complexity: The effect on organizational performance. Journal of Organizational Change Management, 13(6), 577-595. Read More