Organisational Behavior of BTSA Ltd - Case Study Example

Analysis of Business Environment: BTSA Ltd Executive Summary The report focuses on various organisational behavior concepts such as Power and politics, conflict and negotiation, organisational structure, and organisational culture and its impact on a business environment of a company. In this report, the organisational behavior of BTSA Ltd is discussed in detail with emphasis on the various factors that helped in shaping the structure and culture of the company. The constant flux within the company and its impact on the culture and structure of BTSA provided some interesting findings. Further, the influence of power and politics and conflict and negotiations are also stressed upon in this paper. Table of Contents 1 Analysis of Business Environment: BTSA Ltd 1 Executive Summary 2 Table of Contents 3 Introduction 4 About BTSA Ltd 5 Power and politics 6 Conflict and negotiation 8 Organisational structure 9 Organisational culture 10 Reference 13 Introduction In this era of globalised economy and competitive environment, it is being witnessed that companies need to forsake their secure set-up to create a sustainable business for the future. The case is similar for BTSA Ltd, which is a Canada-based company that was later acquired by MultiTech Global, a US-based major company. The small firm therefore is undergoing various organisational changes and therefore provides an ideal company to be studied for understanding the concept of organisational behavior. Therefore, this case study would focus on the various organisational behavior concepts and how it impacts an organisation, which in this case is BTSA Ltd. Some of the major organisational behavior concepts to be examined in this paper include: Power and politics, conflict and negotiation, organisational structure, and organisational culture. About BTSA Ltd BTSA was established in 1859 when its founder came to North America and settled New England to manufacture fire hose. Later the company was bought over by the Groupe Protective in 1972. However, the company kept modernising itself and invested around US$ 3 million in 1992 to establish a new manufacturing outlet. Thereafter, Groupe Protective was acquired by Emerald Inc. in December 1995, which in turn was purchased by MultiTech Global in February 2000. Therefore, the company has been facing many transformational changes over the years. However, all these changes were very minor in character as compared to the acquisition by MultiTech, which was a US$ 60 billion company at the time of the sale of BTSA, at that time a US$ 40 million company. Therefore, the greatest challenge that the company faced is to integrate with the matrix-based organisational structure of MultiTech. Over the last few years, BTSA has been facing many organisational changes including the following: Change in structure: Moving to a matrix-based organisation Technology: Implementation of ERP and MRP systems which many complain provides lesser flexibility and more formal way of working, thereby curbing the private space. TQM initiatives: Initiation of Six Sigma practice which has made several reporting structure and process driven work flow. Cultural flux: Incorporation of US organisational culture, with added stress on employing graduates and professionals. Power and politics It has been seen that politics and power are the two major ingredients in the everyday office activities in every organisation. Everybody gets impacted or has to deal with the issue of politics and power in their companies. In the highly division-based and compartmentalized environment of an office, various differences are created around the employees. Some such common divisions include rift between employee and managers, friction between subordinates and superiors, followers and leaders, gender differences, disparity between the visions of headquarter and the branch office or between the administration division and the production unit. In the everyday activity of a company, there are many instances of politics and power play which eventually impact the overall working of the company, due to the conflict of interests of various groups (Buchanan and Badham 2008). This entire concept of politics and power within an organisation is shaped through the characteristic of an organisation itself. Power cannot be gathered or hold on it, it can be subtle and complex and depends on the relationship between the various stakeholders within an organisation (Clegg et al. 2006: 217–27). In case of BTSA, it has been seen that the previous power position was being held by the Canada-based General Manager. However, with the acquisition, a massive change management regarding the structure of the company took place with a Plant Director replacing the General Manager from his power position. The new plant director implemented various changes within the organisation and improved the efficiency of the company through the introduction of various initiatives like Kaizen, Lean Maufacturing and Kanban. He also decided to implement a new ERP and MRP system. The director also focused on reducing the inventory as well in order to cut prices. This was an important decision as the vision of MultiTech Global regarding this decision was in direct clash with the demand in the market. Analysis has revealed that in case of BTSA, the stock quantity may decide about the quarterly financial results. In this case, the director had decided to decrease the inventory by around 33 per cent in a year’s time. This resulted in increase of EBIT by 20 per cent. The director was able to look through the inefficient manner of working and implement lean manufacturing into the system. However, despite the fact that the director was able to bring in so many changes into the system, he lacked leadership qualities and was more of a manager rather than a leader, which did not accord him a power position in the company. Further, his approach to micro-manage everything led to his interfering into the work of the floor supervisors and operational team. This resulted into dissatisfaction among the team and heightened politics within the organisation. This finally led to the resignation of the director. Conflict and negotiation Conflict within an organisation may be understated and might not come to the fore always. For instance, there might be groups that have differences in opinion or vision, but still work together without any conflict. However, a conflict situation takes place when these same groups openly disagree and take their differences out in the public. There are majorly two kinds of conflicts, perceived and behavioural. In perceived conflict, the groups can pinpoint the differences in opinions and there is an environment of fear, tension, mistrust, hostility and anger. While behavioural conflict arises in situation of cynicism and subtle resistance to the conditions of open hostility or even manoeuvring. Although, many argue that personal characteristics also contribute towards conflict situations in an organisation (Rivkin & Siggelkow 2003). In order to control the conflict situation, it is necessary to adopt a good negotiation process, which would help in achieving the organisational goals in a better manner by aligning everyone with the company vision. Negotiations help in managing people in a better manner by communicating with them and influencing their decisions (Van Boven & Thompson 2003). In case of BTSA it was seen that in order to undertake various organisational changes, the company faced high employee attrition. This was due to the fact that the company was undergoing a flux situation and the employees were in conflict with the company policies. The worst impacted were the research and development (R&D) division, which saw around 80 per cent of its engineers leaving the company. Due to major re-haul in the company culture and technological changes, the employees were in conflict with their expectations and the company’s vision. This resulted in the resignation of so many employees. Further, the new plant director’s decision to introduce various changes within the organisation also created a chaos situation. The top leaders also failed to communicate the vision of the merged entity to BTSA’s employees which resulted in creating pessimism among the employees. Organisational structure One of the main challenges of organisation design is dividing the given of a company or firm in a manageable coordinate and yet specialised jobs so that the actions reaps positive results (Rivkin and Siggelkow, 2003). The solutions for addressing the challenge is using matrix organisational structure along which is characterized by team that is cross functional. One of the primary advantage of the organisational structures is the utility for integrating or coordinating, and using the technical specialists in managing projects. It also helps in creating flexibility in cross-functional teams for expediting projects or any client specifications (McCollum and Sherman, 1991). There are four primary reasons for taking up a Matrix organisation (Sy & Cote, 2004): For allowing companies to focus on multiple goals as aimed or set For facilitating information management For establishing economies of scale for the company For speeding up the response towards environmental demands. In the new MultiTech Global scneario, BTSA Ltd.’s structure saw an evolution from being an autonomous business which was led by General Manager towards a Matrix organisational structure. Firm’s managers currently report into various corporate VPs or Directors in comparison to the former local General Manager who was based out of Canada. Some of the BTSA Ltd. manager’s opined that changes like these can be detrimental and also required huge time investment. Issues and problems were brought up on BTSA Ltd.’s ability to acclimatize themselves and continue innovating that contained many corporate structures. It also said that these matrix structures can lead to initial drifting of BTSA Ltd. management team. Opinions were also brought on the matrix structure, which was considered to be “rigid” that only cultivated silos. With organisations adapting to customer demands, business environment, and employees’ responsibilities should also be customized accordingly (Ghoshal and Bartlett, 1990). The employees who are not accustomed to change, may create more confusion and flux (Sy and D'Annunzio, 2005). Organisational culture Organisational culture is also referred to a collection of norms and values that can be shared with people or group in a firm in such a way that they can cross function or communicate with each other or stakeholders who are stationed out of the organisation. These values are ideas and beliefs that focus on the type or standards that a member in an organisation should use to achieve. The values help develop organisational norms, or guidelines and expectations of the employees (Hill and Jones, 2001). Organisational cultures are identified under three heads: artifacts, values, and basic assumptions. Artefacts is referred to visible symbols or signs of culture that may include personal enactment, stories, ceremonies or rites, symbols, rituals. Values provide details around peoples underlying beliefs of should be there and what should not; Assumptions that can be referred to deep beliefs that guide behavior and provides details around how members should perceive and think about certain topics. Culture of an organisation consists of the aspects that it provides or feels. Culture of an organisation can be referred to or compared to a personality of an individual. It considered being a unique constellation of beliefs, work styles, values, or relationships that help distinguish an organisation to another (Harrison and Stokes, 1992). Quality culture and its importance can be realised through the change envisaged in an organisation (Abraham et al., 1999).Change in perform can be a resulted of cultural changes being done. Culture of an organisation cannot be readily available and implanted. On the other hand, it can be guided or influenced by the policies, procedures which can be implemented and often times reinforced. One way of changing the culture is to change the method through which a daily task is being monitored. (Pennington, 2003).TQM can be considered to be a stepping stone for changing the culture. TQM practices require unique mindset (culture) who emphasise on customer satisfaction, getting it right first time and shared leadership. BTSA Ltd. people were very responsive to the Plant Director’s appointment and were ready for any changes. The Plant Director also deserves the credit for influencing the changes while involving the BTSA Ltd.’s managers in all the stages. Employees in the Plant volunteered towards improvement initiatives Union employee grievances was not on a rise in the past year Senior management or staff members were inclined towards the changes as it benefited them in longer run. Synergies between the staff members also increased; BTSA Ltd. is active in Canada from the year 1914. In times when BTSA Ltd. family short-listed the site for building the second plant, it helped the company as it had long history of socially taking care of small rural community. In the past years, new Plant Director also contributed re-establishing these traditional social activities for instance Christmas party, employee golf tournament and summer BBQ. Activities like these were under fire during the MultiTech Global’s aggressive cost cutting plan which caused public wide corporate scandal with their Ex-CEO in the year 2001. These activities can be termed as organisation culture artefacts which should be maintained for insuring better socialization and also decreasing the overall turnover of the company. Organisational culture can be termed as artefacts, values, perspectives, assumptions that are shared by members within an organisation or firm (Knapp, 2006). Reference Abraham, M., Crawford, J., Fisher, T. 1999, “Key factors predicting effectiveness of cultural change and improved productivity in implementing total quality management,” International Journal of Quality & Reliability Management, Vol. 16, No. 2, pp.112-132. Buchanan, D. and Badham, R. 2008, “Power, Politics, and Organizational Change: Winning the Turf Game”, (2nd edn), London: Sage. Clegg, S.R., Courpasson, D. and Phillips, N. 2006, “Power and Organizations,” London: Sage. Ghoshal S. and Bartlett C.A. 1995, “Changing the Role of Top Management,” Harvard Business Review, pp.86-96. 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