Bad Management Decisions in Oman Oil Marketing Company SAOG - Case Study Example

BUSINESS REPORT By Name Course Instructor Institution City/State Date Table of Contents Bad Management Decisions in Oman Oil Marketing Company SAOG 1.0 Introduction A single decision can hardly harm a company, especially if it has a large revenue base, huge market share, and a successful history. Workers are increasingly becoming more unsatisfied with their managers. Workers desire their managers to pay attention to their disquiets; to offer performance expectations and clarity of purpose; as well as to map the future roadmap. They anticipate their managers to show leadership, but rather scores of workers are finding themselves being managed by individuals with no vision and focus, involved in corporate politics, and talented in mismanaging resources. Managers have to improve their style of management and start to offer the needed strategic direction and support to keep their workers inspired as well as their work teams motivated. Bad management decisions are made because of overreliance on past experience, addiction to corporate politics, resources mismanagement, or lack clarity of purpose. Contemporary managers must master the proficiency of making decisions quickly, intuitively, and rationally, considering that the worth of such decisions are impacted by the manager's intrinsic favoritisms, incapability to change, and shortened times of responses. The article seeks to talk about bad management decisions in Oman Oil Marketing Company SAOG, and uses the Soft Systems Approach to solve the discussed problems so as to bring change. Fig 1: Problem Solving Flow Chart for Oman Oil 2.0 Analysis of the Business Problems 2.1 Entering the Problem Situation The core business of Oman Oil involves: distribution as well as marketing of lubricant and fuel products, direct sales of fuel to commercial and government sectors, sales of lubricants, aviation refueling, in addition to fuel storage and distribution. In favor of lasting objectives for the company, Oman Oil’s business units are offering considerable efficiencies to the company’s strategy while still abiding by the best practices in the world. Given that the company operates in a more competitive business setting, Oman Oil concentrates on strong performance by constantly improving its key strategic goals (Oman Oil Marketing Company SAOG, 2014). At Oman Oil, employment change has been a common thing in the occupations of many workers. The responsibility on the company management to make sure that workers adhere to the company rules and still remain satisfied has turned out to be challenging. Evidently, satisfaction is vital for employee retention and ensuring work unit efficiency. Motivation of employees is extremely hard to develop and plan considering that motivation is an outcome of the work-life balance, work climate, organisational culture and more significantly, the individual’s material benefits. Oman Oil’s initiative for motivation development has been for improving productivity, and employees’ efficiency and effectiveness. Motivation is time and again erroneously considered as urgency for power and money, and so it is imperative to understand how employees’ motivations are oriented (Parvin & Kabir, 2011, p.114). Employee reaction to work is always distinct since a job that could be motivating to one worker cannot be for a different person. So, workers’ needs associated with job are fulfilled when the job design makes it possible. 2.2 Job Dissatisfaction and Low Morale Oman Oil has failed to consider the criticality of job design as a factor in employee satisfaction. Therefore, innovative employees in the company have found it to more challenging to work because of lack of work variety and little autonomy. At Oman Oil, bad management decisions have led to poor communication, which consequently has resulted in job dissatisfaction. Most managers at the company isolate themselves from employees and some do not know how to associate with their employees professionally and individually. This result in bad communication, thus, leaving workers feeling separated from the company. Without a doubt, this is harmful to the company’s wellbeing since when employees feel abandoned, they perform poorly. Dissatisfaction makes workers uncertain about their position in the organisation, and so they work without a purpose for the company. Most workers at the company are uninformed of how their performance impacts their co-workers and the general performance of the company. With no communication, it becomes hard for workers to improve their effectiveness and efficiency bearing in mind that workers always desire their achievements to be recognised by their employers and to be appreciated. Bad management decisions also results in low morale, which leads to more conflicts amongst workers and reduced productivity. Low morale makes workers to do their work assignments with minimal effort, and can be aggravated by lack of motivation from the company’s leadership (Purcell, 2003, p.69). Workers at Oman Oil perceive unfair treatment of a number of co-workers, which has led to discrimination, and also managers have obstructed a balance between personal life and work duties. Even though, Oman oil has clearly defined their performance expectations, inconsistent follow ups with regard to workers’ productivity levels and job dissatisfaction have led to reduced revenues. Any new employee joining the company is always furnished with a performance plan that outlines the standards for their respective job, but lack of regular appraisals have made it hard for workers to know if the company is satisfied with their performance. In spite of setting performance standards, inability to follow up with reviews has made employees feel less appreciated. Constantly speculating whether they are meeting the anticipated productivity requirements has affected not just performance of the workers, but also the productivity of the company. 3.0 Discussion of the Business Problems at Oman Oil 3.1 Expressing the problem situation There are numerous causes for job dissatisfaction, which has been attributed by bad management decisions, and they include: low payment, limited career growth and lack of interest. Most workers are being underpaid, and this has been the most challenging within the workplace since it is driven either through perspective or interpretation that is exceedingly individually concentrated. So when a person believes he/she is paid poorly, then he/she perceives himself/herself to be underpaid, even when their salary is consistent with the position they hold. Through the internet, most workers research how other workers holding the same position are paid and end up releasing that they are being poorly paid, which results in dissatisfaction. Furthermore, workers feel dissatisfied with their current job, when they see their co-workers are living a high standard life than them Dissatisfaction attributed by lower salary can make the worker leave the organization, and this will have a negative effect to the company (Parvin & Kabir, 2011, p.115). Lack of opportunity for career growth at Oman Oil has created dissatisfaction amongst workers, since every worker desire to grow his/her career and get promoted. The management has failed to understand the significance of career growth, and so failure to give the employees the chance to grow has made them become dissatisfied and disappointed with their current job. This creates the likelihood that the worker will possibly leave the company for another company that has better opportunities for career growth. Another factor that has attributed to dissatisfaction is when workers are offered a position that they do not desire. Many people take jobs that they are not interested in just for money, but this ultimately creates a problem of dissatisfaction, and results in lower productivity. However this is not the case at Oman Oil, rather most workers are posted to positions that was not included in the interview process; for instance, an employee interviewed for IT position is posted in accounting department to do clerical work. All this are brought about by bad management, and since workers need managers who can lead and motivate them, lack of such in the organization can result in frustration. Effective management cannot be achieved by managers who care about their interests and who have no vision for themselves and for the organization. Bad management practices reduce workers confidence, results in stress that causes serious health-related issues. Certainly, dissatisfied and ill-treated employees do not care about their job performance; rather they care more about money. A manager who is unskilled will always blame the workers for his confusion, instigating anger and bitterness. An angry, irritated worker is less likely to concentrate on his job, and may leave the company for a less paying job in another organization. 3.2 Poor Communication Oman Oil is more concentrated on revenues as well as production, instead of focusing on their own workers and customers. In the company, workers are hardly applauded for their job performance, and when performance appraisals are conducted, the results are never made available for the workers. This as a result, makes the employees feel unmotivated, intimidated and uncomfortable, while managers feel motivated and ask for more from the already dissatisfied workers. In the company, ideas presented by junior staffs are often ignored by top managers, and this in turn makes the workers feel worthless and neglected. Therefore, it becomes challenging for employees to envision a good future while still working for Oman Oil. Mostly, workers who fail to support the company’s practices and objectives are not compensated for their hard work. The company managers prefer under-compensating their workers arguing that such workers can labor for peanuts. Simultaneously, other workers are compensated heavily by these managers because they have agreed to be their slaves. This inequality in compensation results in dissatisfaction since hard working employees are compensated poorly for their effort while lazy workers and sycophants of top managers are paid heavily for doing nothing. This proves why retaining talented workers is more challenging. Poor communication is a noticeable challenge at Oman Oil; bearing in mind that communication between managers and employees is important for improved job performance, satisfaction, and productivity. Although communication is acknowledged as a key factor to success in the working environment, companies like Oman Oil are still struggling with poor communication. 3.3 Mismanagement of Resources Bad management decisions results in profits decrease in two ways: first, by failing to properly supervise the employees and secondly by failure to balance budget of the company. When workers experience bad management, they exhaust their working time to search for other employment, and so they fail to concentrate on achieving the organizational goals (Amabile & Kramer, 2011). This as a result, makes the company to continue paying employees for a low output. As a marketing company, Oman Oil’s sales are obviously impacted by bad management decisions, bearing in mind that the gross margins are impacted directly when the company fails to meet the quotas. Additionally, if outflows are extremely high or the management is mismanaging the company’s resources, the gross profits will be extremely low. Bad management decisions are unhealthy for any company, considering that it made companies such as Betamax, SwissAir, Woolworth’s, Tucker Automobiles, Enron, and DeLorean Motor Company to fail. Bad decisions also lead to high employees’ turnover; the training and recruitment costs become expensive, which as a result impacts the ability of the business to remain functional. Bad decisions have a direct effect on company’s resources, especially if the company funds are misappropriated or the financial plan is overstretched, and so cannot be sustained by the earned profits. With no adequate business reserves, the company can be unable to absorb regular losses, and may ultimately fail. 4.0 Developing the problem solving Model To overcome job dissatisfaction and increase satisfaction amongst employees, Oman Oil should espouse job enrichment, a job design technique. Basically, job enrichment central focus is to offer workers more control over their work. Bearing in mind that dissatisfaction and stress at the workplace is attributed by lack of control, and this results in lower performance. If possible, Oman Oil should allow employees to undertake tasks, which are normally performed by their supervisors. In so doing, they will have more influence over the development, execution, and appraisals of the jobs they perform. Through job enrichment, employees will be completing their activities with more responsibility, freedom, as well as responsibility. They will as well get more feedback from their seniors, and this may help them to evaluate and correct their individual performance. Some of the strategies that Oman Oil can utilize to enrich jobs in its workplace includes: rotating jobs. In job rotation, employees should be given the chance to utilize various skills, and carry out various types of work. Oman oil’s employees should be moved through various jobs, which enable them to view various business units of the organization, acquire various experiences and learn diverse skills. Undoubtedly, this will be exceedingly encouraging, particularly for employees in repetitive jobs or jobs that revolve only around one or two skills. Another strategy that will reduce dissatisfaction at Oman oil is combining tasks so as to offer a work assignment that is more complex and challenging. This can suggestively boost ‘task identity’ and facilitate employees to utilize various skills, which as a result, can make the job appear more important and meaningful. For instance, the company can change an assembly line process, wherein an employee performs one task, into a process wherein the whole unit is assembled by one worker. This model can be utilized anywhere the company has groups or people characteristically performing just one function of a complete process.so the company should consider broadening its workers roles so as to offer them the responsibility of a larger function of that process or for the whole process. 4.1 Feasible and Desirable Changes Even though it is performed at the group level, creating an independent working team can to a large extent improve job satisfaction and performance at Oman Oil. This can be achieved by setting up a goal for the group/team, and allowing member of the team to freely determine work schedules, assignments, parameters of evaluations, and so forth. The management can allow the teams to choose their team members; and in so doing, the supervisory positions will considerably reduce, and employees will gain management as well as leadership skills. Oman Oil should implement participative management so as to allow members of the team to take part in making decisions and joining in strategic planning. This will be an excellent method of showing team member and other employees that their input in the company is crucial. Participative management is a best tool for a company whose managers are dictating everything, and when employees see that their ideas and suggestions are considered and valued, they will become motivated. Employee-directed feedback should be increased to enable employees understand how poorly, or well they are performing their tasks. Therefore, the when the employees are given more control for monitoring and evaluating their own performance, their jobs will become more enriched. Instead of having a quality control department for conducting performance appraisals waste the company resources to point out mistakes and not offer solutions, the company should give all teams the responsibility for their own quality control. In this case, employees will get instant feedback, and as a result, they will learn to resolve difficulties, make decisions, as well as take initiative. Open and ongoing communication between workers and managers can assist Oman Oil keep its strategic goals clear, remain projects focused and be able to handle conflicts whenever they arise. When issues as well as expectations are talked about often by employees and managers in both informal and formal environments, then every worker will get clear understanding of work relationship status. To improve communication, top management at the company must hold staff meetings often, so as to offer the managers and employees an opportunity to jointly talk over the issues associated with current business operations. Oman Oil’s managers must draft a meeting agenda, with workers’ input, and distribute it in time. This will create the chance for all possible topics as well as issues to be talked over and to offer workers adequate time to analyze the agenda and get ready for the meeting. In case, employees complain about an agenda item, the management should postpone the meeting until the conflicting parties solve the issues. Besides that, the company should carry out one-on-one meetings with the employees since some issues can well be solved through a one-on-one setting between the employee and the manager. This entails issues associated with conflict resolution, grievances, discipline, as well as employee benefits and compensation. Furthermore, one-on-one meetings techniques between workers and managers offer all the parties the chance to confidentially discuss individual objectives, goals as well as topics not appropriate for group discussion. No matter what Oman oil does, they should know that enhancing the employees’ productivity is crucial for the company’s bottom line. So the company should espouse management information systems such as enterprise resource planning (ERP) systems and management information system so as to boost the company’s productivity and help employees perform more in less time. 5.0 Taking Action Implementing any change in the company will be challenging and will obviously be met with fierce resistance. In order to implement the recommended changes: Oman Oil management will need to follow a three-stage process. First stage will involve communicating the goal behind the desire for change so as to help the workers understand why it is imperative for the recommended changes to take place as well as the intended benefits. There must be sufficient chance for individuals to voice their worries and give views, ideas, and opinions. Failure to communicate the need for change will obviously damage the process of change, and may result in resistance from either workers or managers. In the second stage, the company will have to execute the recommended changes in phases so as to allow collaboration. Basically, collaboration is important if situations allow, so enabling workers to feel the benefits of change prior to its full implementation is helpful in reducing resistance. Finally, the company will have to assess, review, and report on change so as to measure its effects and assess its success. 6.0 Conclusion In summary, as argued in this report, bad management decisions have negative effect on workers as well as the overall operations of the company. Unskilled managers present at Oman Oil are presenting scores of challenges to employees making them dissatisfied and less motivated. Additionally, second-rated supervisors have shown inability to increase revenues, balance budgets, or skilfully carry out other important tasks. Recommendations presented to improve employee satisfaction and performance at Oman Oil include job rotation, combining tasks, creating working teams that are independent, implementing participative management, in addition to increasing employee-directed feedback. Communication is imperative and is the backbone of any company productivity, and so it can be improved at Oman Oil through increasing staff meetings, carrying gout one-on-one meetings, and making use of information technology. Offering hard working staffs the tools they require to competently finish their jobs can help improve the company productivity. 7.0 References Amabile, T. & Kramer, S., 2011. Do Happier People Work Harder? [Online] Available at: HYPERLINK "http://www.nytimes.com/2011/09/04/opinion/sunday/do-happier-people-work-harder.html?_r=0" http://www.nytimes.com/2011/09/04/opinion/sunday/do-happier-people-work-harder.html?_r=0 [Accessed 22 January 2015]. Oman Oil Marketing Company SAOG, 2014. Overview. [Online] Available at: HYPERLINK "http://www.oomco.com/overview.php" http://www.oomco.com/overview.php [Accessed 22 January 2015]. Parvin, M.M. & Kabir, M.M.N., 2011. Factors affecting employee job satisfaction of pharmaceutical sector. Australian Journal of Business and Management Research, vol. 1, no. 9, pp.113-23. Purcell, J., 2003. Understanding the People and Performance Link: Unlocking the Black Box. London: CIPD Publishing. Read More