Recommendations for Joe Wills to Improve Business Performance - Fasco Motors - Case Study Example

Culture Management Contents Contents 2 Introduction 3 Discussion 4 Application of cultural dimension framework 4 Recommendations for Joe Wills to improve business performance 8 Conclusion 12 References 14 Introduction The case is about effective culture management at Fasco Motors which is associated with manufacturing horsepower motors, gear motors and blowers. It is a subsidiary of Invensys and was incorporated in New York in the year 1911. The company has been able to expand its business operations by 2001 across Asia and North America comprising of 13 manufacturing factories with 5000 employees. Fasco Motors consisted of employees belonging to different culture and its major aim was o enhance its overall capabilities at a global scale. This company has even been able to set up their operations in Thailand. The management team for this set up majorly composed of Thais. However there were certain key personnel in this team who belonged to different culture. For instance Jim Doyle who was the President at Fasco Motors was a Canadian, Allen Moot the general manager was an Australian, and Ivan Ramsey the general manager at parent company Invensys was an Ireland citizen, Edward Fyvie being the President of the parent company was an Australian and Joe Willis who was the financial auditor of the company was citizen of United States. The management team at Fasco Motors comprised of individuals belonging to diverse culture. This to some extent resulted into problems which disrupted the entire workplace environment. The fraudulent case which was identified in the organization was due to improper management of culture and failure with respect to team building. Thai culture was totally different as they were not used to hearing a no and always aimed at building strong relationships. To some extent the fear in minds of employees of being discarded from their jobs was due to lack of relationship building within the team. This case highlights the importance of culture management in an organization and even encompasses certain techniques which can be incorporated so as to improve business performance. Discussion Application of cultural dimension framework The management team comprised of members belonging to different culture which denotes their values and beliefs. Problems that had been identified in the case was two-fold as on one end there was fraudulent case with involvement of general manager Allen Moot and joint venture partner Sanga Devakula, and on the other end there was differences in cultural aspects between new management team and employees. It can be stated that culture was a prime factor that led to overall chaos in the organization. The major issues that had been identified in the organization was Fasco paying more in comparison to market value in framing joint venture with Thai businessman Devakula, the company paid 47% more than market value in order to purchase land and the biggest issue was the company was selling out its motors to business of Devakula at a much lower rate than adjusting financials in order to show profit on its sale. Devakula was making large profit margins from this deal and was even giving a fraction of profit earned to the general manager at Fasco Allen Moot as stated by the audit team of the company. This clearly reflects the culture of two people who were actively involved in the fraud which was causing harm to the organization (Konrad, Prasad and Pringl, 2006). Like other members of the organization they were not dedicated towards their company especially Allen Moot who considered individual interests to be more important than common interests or goals. His career had started off with a small company located in Indonesia and later on he became associated with Thai operations of Fasco Motors. He was inclined towards gaining popularity amongst the Thai business people and for that he was ready to compromise on his ethics and values. On the other hand Sanga Devakula who was actively involved in the fraud was an influential businessman with strong connections in political grounds. Though he was considered to be a part of the Fasco Motors but he always considered his own business to be topmost priority. The new management team that was framed by the parent company Invensys executives comprised of Ivan Ramsey as general manager, Edward Fyvie as regional vice president and Joe Willis as an individual who would be involved for designing team rebuilding efforts. The work culture of the organization had become such that employees were being forced to participate in such fiscal fraud (Marilyn and Scott, 2014). However Ramsey, Fyvie and Willis decided on firing those individuals who were directly involved and not those who were being forced to obey orders. Their attempt to transform work culture failed in the first place as they were subjected to various legal problems that was initiated by Allen Moot and Sanga Devakula who possess strong political connections. The overall scenario of the case denotes that cultural diversity was prominent at Fasco Motors and this was not properly being managed. All the members of the management team had their own set of views and beliefs and this in turn was affecting the performance of employees. This can be further classified using Deal and Kennedy’s model of cultural dimension. The cultural framework states that there are six basic elements which forms a corporate culture they are history of an organization, beliefs and values set forth by the management, ceremonies and rituals, heroic figures which are established due to certain tasks performed by managers or leaders, stories being told by the management which signifies company values that are later transformed into actions by employees and the cultural network which forms a platform for informal communication and learning (Schyns and Meindl, 2005). As per these elements stated by the model it can be said that Fasco Motors lacked a proper corporate culture in terms of heroic figures, cultural network and company stories. The management did not take any such initiative to design informal training programs for employees or to communicate with them on a regular basis. Employees working at Fasco Motors were more familiar with following orders then to contribute their innovative ideas or opinions (Halverson, 2008). There were four cultural types that were identified by Deal and Kennedy on basis of degree of risk and speed. The risk factor was associated with the activities being performed by a company and speed is related to the learning capability of an organization in relation to success of their strategies or actions. Figure 1: Deal and Kennedys Cultural Framework (Source: Diamond, 2012) As per figure 1 it can be stated that employees at Fasco Motors belonged to the tough guy-macho category in which they were taking high risks and feedback on their performance was immediate. In this approach team work was not favoured and more of individualistic approach was incorporated. All the team members were inclined towards becoming stars and in due course even joined hands with people who were doing fraud in the system (Daft and Marcic, 2010). Some of the employees in Fasco Motors preferred gaining commission and being in good books of general manager than to follow company’s values and beliefs. Team work was not present in this organization and the cultural matrix also denotes that tough guy cultural aspect is related to excellence achieved by an individual rather the entire team. This not a suitable culture for all those employees who require time to adjust and develop as it was being observed in Fasco Motors. In this organization employees were having a fear of losing their jobs as some of them were unwillingly involved in the fraud case (Ting-Toomey, 2012). This fear to survive in the system was eventually lowering down the level of performance of employees. There is another cultural model which signifies the various dimensions of culture related to an individual or an organization. The dimensions are individualistic versus collectivistic, masculine versus feminine, uncertainty avoidance, power distance, time perspective and indulgence versus restraint. Amongst all the dimensions the two most important factors which hold importance in context of Fasco Motors are individualistic versus collectivistic approach and power distance (Harrison and Carroll, 2006). In this organization individuals who hold managerial positions such as Allen Moot considered themselves to be supreme authority. This initiated the factor of power distance in the company which was relatively high. Distance between the management and team members were large and this was the reason behind employees having fear to communicate with the team leaders. It eventually resulted into lack of team effort behind any task and declining performance of Fasco Motors at Thailand. The power factor was distributed unequally throughout the system (Harrison and Stokes, 2002). This greatly affected the business and provided advantage to outsiders such as Devakula to improve upon his own business by utilizing the resources of Fasco Motors. On the other hand another cultural dimension which can highlight the scenario of the case is individualistic versus collectivistic approach. In this organization individualistic approach was more prominent as management team members were majorly focused on their individual goals and interests rather than on team goals (Pirayeh, Mahdavi and Nematpour, 2011). The common interests were neglected at Fasco Motors and the result of which was monetary fraudulent cases. This cultural dimension was so strong that even production manager, sales supervisor human resource director were actively involved in the entire process. Collectivism factor was low in the organization and hence the level of trust and confidence was lacking amongst the employees (Gray and Densten, 2007). The needs of an individual were given highest priority in the organization in comparison to the needs of the group which created unfavourable situation in the organization as stated in the case. Recommendations for Joe Wills to improve business performance Joe Wills as a financial auditor was able to bring forth the fiscal fraud that was taking place at Fasco Motors and due to which he was even subjected to various legal formalities. The involvement of top management in the fraud made the situation worse. However the major difficulty that was evolving in the organization was due to lack of team work. This is an area that needs to be improved by the new management team so that employees are able to enhance their skills and capabilities. Business performance is directly related to the level of performance of employees. In an organization such as that of Fasco Motors where the business is expanded across various regions with leaders belonging to diverse culture it is essential that management works in collaboration with employees (Lussier, 2012). This collaboration can be achieved by giving importance to common goals and interests rather than individual interests. Joe Wills belongs to US culture where work is given the top most priority. He was in charge of restructuring the workplace environment so that employee turnover rate can be controlled and such fraudulent cases do not evolve in the nearby future (Srinath, 2009). The steps that were been taken by Wills and his team were aligned with increasing the level of communication across the workplace. This initiative was formulated so as to remove the barriers prevailing in the organization between management and employees (Boxall and Purcell, 2003). In the present scenario it was important that experts from the industry were involved in the process of team rebuilding. Since many employees and individuals holding managerial positions in the company were removed from the system it created unrest amongst the others. Employees possessed low trust regarding their job and this proved to be a major challenge for Joe Wills. The first step that can be taken by Joe Wills in order to develop a strong team is to incorporate a participative approach throughout the system. This would help in involving all the organizational members in developing strategies as well as taking effective decisions (Daenzer, 2009). Participative approach would help in eliminating all those drawbacks that were associated with authoritative style being previously followed in the organization. This procedure can be implemented by setting up a committee in the organization which would deal with all the problems or issues being faced by employees at workplace. The workers committee would comprise of members elected by the employees so that they serve as a platform for communicating directly with the management (Hayes, 2010). At times it becomes impossible for the management to deal with employees individually so in that context this committee would be beneficial to convey grievances of employees to top level. This step would even facilitate faster decision making so as to resolve problems faced by the workforce. Joe Wills need to blend US culture with that of Thai business ethics. Both the business ethics and values are contradictory as on one hand US culture is work oriented with no time for building relationships and on other hand Thai culture relates to forming healthy long term relationships (Senge, 2010). In Thai culture business is not performed unless there is appropriate relationship established between the two parties. This culture needs to be maintained in Fasco Motors as majority of the members belong to Thailand. The mix relationship building and work oriented culture should be the next step of Joe Wills towards improving business performance (Kneer, 2013). In order to implement this step there is a need to introduce formal as well as informal training programs in the system. Informal training programs would signify attending those individuals who are finding it difficult to cope with the set performance standards (Syed, Mustafa and Özbilgin, 2010). The company firstly needs to develop certain performance standards which would be monitored on a regular basis to determine which of the employees are outperforming in the system and which amongst them needs special attention. On the contrary formal training module should encompass industry experts which would guide the organizational members on which steps should be taken for future business improvement (Liverore, 2010). These experts can be from the parent company and should be a part of the organization from many years in order to possess sufficient knowledge about the entire system of operations. Formal training should be introduced not only for the present executives but also for those who are joining the organization so that they are able to gain knowledge about their job roles and responsibilities (Cox, 2001). This would help in maintaining work culture in the organization with a focus towards continuous improvement. Performance appraisal system is a concept which is introduced by every other organization to improve workforce performance and to keep employees motivated (Reiss, 2012). This in turn would prove to be an efficient tool as employees would be focused towards goal achievement and developing skills which would create a positive impact on the organization. The overall performance of a business can only be enhanced if the employees remain determined and motivated (Connerley, 2005). However in order to promote Thai culture in the organization the new management team needs to set up team dinner and team lunch on basis of specific interval so that team members interact with each other informally and healthy relationships are established. It can be stated that these social gatherings are not only important from business point of view but helps in preventing workplace conflict and strengthens the level of trust in the organization (Leopold, Harris and Watson, 2005). Relationship building can even be enhanced through organizing activities which would enable members from different department to interact with one another. This would help in maintaining work oriented US culture as well as respecting the relationship oriented Thai culture. Apart from all these steps Joe Wills can improve business performance by avoiding any such ventures that would exploit their own resources. The company needs to identify their competencies and accordingly develop strategies so that it is able to survive in the industry for long term (Hiatt and Creasey, 2003). Business performance can also be improved through restructuring process and analyzing areas of operations where Fasco Motors is lacking. Customers are the ones who can actually judge the performance of the company in comparison to other players in the industry (Werner and DeSimone, 2011). Strategic decision making can only be successful when all the team members take active participation in the process. In order to improve business performance it is essential that the entire brand image is modified while upholding the success stories of the company (Edewor, 2007). Joe Wills in order to improve upon the team performance should focus on eliminating the cultural dimension of power distance. Two-way communication flow would enhance the overall performance as management can make quick decisions in relation to problems identified by employees. The new management team can even involve professionals from the parent company to work in Fasco Motors for few months and send some of their employees to the parent company to analyze the workplace environment (Muna, 2011). This form of cross functional approach can prove to be effective as employees can gain insights in terms of work culture, business ethics, operating procedures, etc. Whereas professionals working with Fasco Motors can provide feedback on which areas need development or restructuring. This would enable the management to handle diverse culture and set strategies for future growth. Teamwork would be the basic foundation for all these activities in order to improve team and business performance. Conclusion The case has outlined various aspects related to workplace culture management. Various issues that have been identified in the case were majorly due to differences in business ethics and values amongst team members. The management at Fasco Motors comprised of individuals belonging to diverse culture. To some extent this proved to be a reason behind deteriorating performance of the business. The top management focused on individual interests rather than giving importance to group needs. This happened to be the major cause behind the fraudulent case in the company. Culture played a key role in disrupting the business ethics of Fasco Motors. The new management team that was framed by the parent company possessed all the expertise to restructure the organizational practices but was not being able to do so due to cultural constraints in the organization. However the company could revive from the present situation if it aims at involving all the team members in decision making and strategy formulation process. Joe Wills and his team were facing the same problem as stated in the case. They were not able to communicate well with the employees. This cultural constraint can be effectively removed if Joe Wills combines work oriented culture with that of relationship building. Team work is a vital component in every organization and this can be made a practice through initiatives by top management. Fasco Motors never favoured team work and due to this all the individuals were striving to become stars. This disrupted the entire workplace environment as group interests were not given importance. Authoritative approach prevented workers from participating in the decision making process and this mechanism was to be eliminated by Joe Wills. The new management team should develop strategies on forming a bridge between employees and management that could resolve issues quicker and facilitate better decision making. References Boxall, P. and Purcell, J., 2003. Strategy and Human Resource Management. 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