The Case of Watsons and H&M Consulting - Essay Example

?The Case of ‘Watsons’ and ‘H&M Consulting’ Different organisations employ different methods of leadership and management, influenced by various factors prevailing in the workplace. These factors include the structure of the company, the culture that exists there, trade unions, the attitude of the leaders and how they motivate their employees. The two organisations in question here are ‘Watsons Engine Components’ and ‘H&M Consulting.’ Watsons Engine Components is a manufacturer and supplier of car engine parts to major automobile companies. It is a family-owned business that is run in a traditional and orthodox way, that too with the total employee strength of only 200. The company although doing well at present, faces grave situation in future because of its inflexible and non-inspirational ways. The increasing local competition and mounting pressure from the car manufacturers means the rigid ways of the company could drive Watsons towards their doom. On the other hand, ‘H&M Consulting’ is a large global management, engineering and development consultancy. It is a dynamic and fast-growing organisation, which since its inception in 1989, has grown into a 1300-employee entity, with presence in 120 countries. The company’s increase in size has been achieved through acquisitions of various operations worldwide. The company’s recent track record suggests that it is a competitive and focussed organisation determined to outperform its competitors by striving towards customer satisfaction through professional excellence. In this analysis, we shall try to find out the different management techniques employed by each company together with some other factors, and the effects it has had on their performance and competitiveness in the market. The Structure of the Organisations The first and the foremost factor that affects an organisation in its smooth functioning is the structure that exists there. The organizational structure is “an externally caused phenomenon, an outcome rather than an artefact.” (Mohr, 1982). Different types of structures of organisations have been identified to exist. Classically, there are two kinds of structure— Hierarchical Structure and Flat structure. Hierarchical form of structure is referred to that organization where every entity except one, is a subordinate to one entity. Flat Structure (Slack & Parent, 2005) is that organisation where there are very few or no levels of intervening management between staff and managers. Furthermore, new forms of structure have since evolved. They are Functional Structure, where employees within the functional divisions of an organization perform a particular set of tasks, leading to operational efficiencies in that group. However, it might result in lack of communication between the functional groups within the firm, making it slow and inflexible. The other one is Product Structure where all the organizational functions are brought together into a division which contains all the required resources and functions. However, Matrix Structure groups employees by both function and product. It is evident from the case of ‘Watsons’ that their structure is strictly hierarchical with very low flexibility. The Managing Director Gordon Watson takes little interest of the activities on shop floor, and is set to be followed by current Operations Director John Smith, a long-standing friend of Gordon’s. Under this structure hardly any coordination exists between different functions of business. New and innovative ideas from Ahmed Khan, the production manager, are difficult to implement because of immobility of staff on the shop floor between different machines. Also, some of the staff is under-worked while the others are overburdened. Ahmed Khan’s proposed changes in favour of new computerised production process and shop-floor activities to be organised into multi-skilled, self-managed teams are also lost in disrupted channels of communication. The Marketing Department that handle customer liaison hardly communicates with anyone from the Manufacturing Department because it is the firm’s procedure that all interdepartmental liaison should go through the directors. The situation in ‘H&M Consulting’ is way more favourable and healthy. H&M has a ‘Matrix Structure,’ with project teams comprising people who possess the relevant skills from different parts of the organisation and who work together autonomously on a specific project within a finite time limit. This has resulted in minimal hierarchy and central direction. Managers act as coaches and advisers to project teams. This has helped the company immensely in growing leaps and bounds in their objective of achieving customer satisfaction as they can put the best of resources available on a particular project. The same approach is adopted for other assignments other assignments once the project ends. Team and Team Working Teams are very important cogs in the wheels of success. A team is defined as “a small number of people with complementary skills who are committed to a common purpose, performance goals, and approach for which they hold themselves mutually accountable.” (Belbin, 2007). Dr. Meredith Belbin in 70’s proposed that people play different roles in a team. The key to success of teams lies more on behaviour of individuals within a team, not on factors such as intellect. She identified nine team roles: Plant, Co-ordinator, Resource Investigator, Shaper, Monitor Evaluator, Teamworker, Implementer, Completer Finisher and Specialist. The role of the team members and striking the right balance within the team are essential for the success of a team. The inflexibility of ‘Watsons’ in their operations is the major cause for the company to face in finishing more challenging orders in time. The total absence of team dynamics is the principal reason behind the company’s failure to withstand change and future competition. Although there do exist Implementer and Teamworker, there is a total lack of Plant and Co-ordinator within the team. Ahmed Khan acts as a Plant, hence his presence outside the team is never taken seriously. Also missing are Completer Finisher and Specialists that are critical in finishing and providing knowledge in a particular field. ‘H&M Consulting has the team dynamics well worked out. For all their projects, they employ individuals from different fields and departments to come together and form a team. As teams are easily formed and disbanded for every specific project, ‘H&M Consulting’ is able to bring in the best of consultants for engineering, environmental science, economics, project management, health and safety, risk management, IT and education. Their roles are clearly defined and the expectations from them are well laid out. Thus the teams can work out between themselves and select what role to be played by whom, therefore delegating work and giving autonomy to carry out the task. Leadership Leadership has been described as ‘the process of social influence in which one person can enlist the aid and support of others, in the accomplishment of a common task.’ Leadership have produced theories involving traits, situational interaction, function, behaviour, power, vision and values (Richards & Engle, 1986), charisma, and intelligence among others. Leadership qualities in the head of the organisation have a huge bearing on how the subordinates perform in an organisation. The leader’s primary responsibility is to inspire his/her subordinate to do more than what is considered adequate. Some of the types of leadership are ‘Autocratic’, one that assumes total control, and ‘Participative’ which divides power among different individuals. ‘Watsons’ leader is driven by the motto: “If it it ain’t broke, don’t fix it!” This is a very reactive form of leadership and it suggests that the remedial measures be taken only when a problem is fairly perceptible. A proactive form of leadership is need of the hour for withstanding modern day competition. This kind of laid-back attitude rubs off onto the staff as well, who are just concerned to get the job done and are least bothered in improvement and optimization. This attitude results in lack of initiative and motivation among staff that often resist change; highly unionised workforce often runs into conflict with the managers. The total control of managers over the staff and no incentives to them results in no participation of the staff in improvement of the work techniques. A more hands-on approach on behalf of managers and senior leaders is warranted to bring the change in the attitude of the workforce. Better skilled and more efficient employee is often poached by rival companies by offering better salaries and incentives. ‘H&M Consulting’ is a company which has been growing steadily since its inception in 1989. They have never faced the problem of turnover as the employee morale and satisfaction has always been high, thanks to the focussed leaders who are very democratic and who act as coaches than as dictators. H&M’s Chief Executive Officer Theo Wolf is a strong role model for his staff. He is deeply respected; many of his staff has even called him inspirational. He is very motivational and communicates his high expectations to his staff effectively. His aim has always been to empower his staff so that they try new approaches and develop innovative ways of managing each project. Employees’ voice is patiently heard and their concerns duly taken note of. The leadership style is much more proactive than that of ‘Watsons’ and thus takes care of the problem well before it goes out of control. Management Many a concept of effective management exists in organisational behaviour. The ‘McKinsey 7’s framework’ is the theory that looks at seven elements: Style, Systems, Staff, Structure, Strategy, Shared vision, Skills. These seven elements play a significant role in any organization and the Mckinsey 7’s framework (Witcher & Chau, 2010) gives an insight into the integration of these significant elements. Another concept is of ‘14 principles of management’ from Fayol (Cole, 2003) consisting 1. Division of Work 2. Authority 3. Discipline 4. Unity of Command 5. Unity of Direction 6. Subordination of Individual Interests to the General Interests 7. Remuneration 8. Centralization 9. Scalar Chain 10. Order 11. Equity 12. Stability of Tenure of Personnel 13. Initiative 14. Espirit De Corps. There exist serious trust issues between the management and the staff in ‘Watsons’. The 14 principles of management are vigorously violated at various levels. Beginning from division of work to authority, many employees are overworked and departments understaffed; the management assumes no responsibility while exerting authority. The HR Manager also does not take any responsibilities for employee retention and absenteeism. Equity is non-existent as managers look down upon the staff and consider themselves way superior than them, hence union problems. No initiative is taken by managers for innovation at large, barring a select few. Stability of tenure of personnel is also fairly low in ‘Watsons’; skilled staff is usually unwilling to work in the organization. The lack of initiative of the staff on shop floor is eminent. The 14 principles of Fayol are implemented well at ‘H&M Consulting,’ and this is evident in its more or less fluent functioning. The managers here lead by example; they lay emphasis on hands-on approach. How management acts is more important that what management says. It also helps when the management has a well-defined mission statement. It states that H&M Consulting’s mission: Providing customer satisfaction, through professional excellence, Giving commercial success, and employee fulfilment. This mission shows that the employees of the ‘H&M Consultings’ directly support business growth. Through a clear mission statement the management also communicates the goals and expectation to its employees for them to strive for. Motivation Motivation is very important to keep employee morale up, and it is vital for mental well being of the whole organisation. In this regard, Maslow’s theory of human motivation (Green, 2000) assumes greater importance. He talks about the hierarchy of needs, stating the fulfilment of physiological needs, safety needs, love and belonging, esteem, self-actualization and self-transcendence, with the hierarchy rising from physiological needs to self-transcendence. The absence of motivation in the employees of ‘Watsons’ is conspicuous. The needs of the employees are not taken care of by the managers who maintain total control over them. The employees take no initiative for improvement of work on shop floor, even though they have a fairly good idea of the changes required; this is so because innovation is not expected of them and there are no incentives either. Even the lack of feeling of fraternity among the employees is highlighted through high percentage of absence (9%). Employees are not adequately respected by the managers; and morality and creativity is not even though of. Therefore the employees’ needs of esteem and self-actualisation, placed at the top by Maslow, are never fulfilled and employee morale remains generally low. The lack of motivation would also soon rub off onto Ahmed Khan who would, in all probability, leave the company as a frustrated person or for better pay offer. ‘H&M Consulting’ has never faced problems of motivation till date because its CEO Theo Wolf a role model to get inspired and emulate him. He is liked and revered by his staff. He motivates his staff through his highly-effective communication skills. His aim has always been to empower his staff so that they could try new approaches and develop innovative ways of managing the project on which they work. He takes a very good care of the needs of his employees and respects their opinions and suggestions. The core values of ‘H&M Consulting’, encapsulated in PRIDE, are also important tools in ensuring a motivated workforce. The letter R stands for respect where it respects the local customs and cultures of the countries it works in and encourages all staff to respect each other regardless of background or origin and encourages diversity in its workforce, benefiting from its employees’ range of skills. For example, the specialist expertise of pharmaceuticals staff in India and Ireland is used to help on similar projects in the Middle East. Culture Organizational culture prevailing in a workplace is another major driving force for a company to be successful. Various types of cultures exist in a workplace and it is important for managers to promote the right kind of culture which is most relevant within a department or the whole organisation. It is imperative that whatever culture that suits the organisation has a strong presence as strong cultures help firms operate like well-oiled machines, cruising along with outstanding execution, with perhaps minor modification of existing procedures. The four culture typology theory suggests that there exist four kinds of culture based on high and low levels of Sociability and Solidarity. (Langton & Robbins, 2006). They are Networked culture (high sociability, low solidarity), Mercenary Culture (low sociability, high solidarity), Fragmented Culture (low sociability, low solidarity) and Communal Culture (high sociability, high solidarity). In every organisation, there exists a mix of these cultures. The problem that plagues ‘Watsons’ is the absence of a strong presence of any of the four types of cultures. All traits of these cultures can be found in the organisation, but a significant and dominating aspect of each of those is missing. Thus the culture of ‘Watsons’ is very weak. The person with prime responsibility of maintaining a healthy culture within the organisation, the Human Resource Manager James Bacon passes the buck onto other managers for low retention and high absenteeism. His approach of taking a complaint from a female employee about nude pinups on shop floor was also shocking. ‘H&M Consulting’ has a vibrant and cheerful work environment. The PRIDE guideline of values has set up a very healthy workplace and it demonstrates the culture of the business. ‘H&M Consulting’ relies on its employees to fulfil its business objectives. Its culture encourages employees to be responsible for their own development. This results in growth of the people and the organisation. As part of its culture, ‘H&M Consulting’ also seeks to be a corporately responsible company; part of this includes supporting sustainable business practice, such as reducing its carbon footprint. Conclusion It is clear from analysing the various factors of structure, culture, etc. of the two organisations that which organisation is overall healthier and prepared to meet new challenges, and which company is on its way down. Although the two companies in question work in different sectors, one in manufacturing and one in consulting, and their markets also being different, it is quite clear which one is more competitive and robust. The inflexible structure of ‘Watsons’ compared with that of H&M’s matrix has been the bane of its existence. The absence of team and team players has also hurt ‘Watsons’ badly. The complete lack of interest and responsibility on the part of leaders at ‘Watsons’ has not helped matters either whereas CEO Theo Wolf ‘H&M Consulting’ has set up an example. The laid-back attitude of management and lack of application of core management values has created confusion in the workplace, affecting productivity for ‘Watsons.’ Meanwhile the management through its mission statement and well-defined goals has helped in sending a clear message to its employees and customers alike. Unmotivated employees and weak culture has seriously dented the chances of ‘Watsons’ to remain competitive, while ‘H&M’ has steered clear of those problems. So much so that in spite of frequent acquisitions of other businesses worldwide, the employee morale and culture has not diminished, even across continents. Thus the prevailing factors at ‘H&M Consulting’ hold the company in good stead and it shall continue to rise from being among the top 20 big companies in the UK to work for to even greater heights. The mismanagement and traditional, and inflexible ways of ‘Watsons’ has been pulling the firm down slowly, even though it might appear to be doing well at present. The company is just starting to experience major trouble, which shall compound if no remedial measures are initiated immediately. If, however, the serious overhaul of the system is not affected, the company shall meet its eventual death very soon. References Belbin, 2007. Belbin Team Role Theory. 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Understanding sport organizations: the application of organization theory. IL: Human Kinetics. Read More