Problem Solution: InterClean, Inc - Essay Example

Running head: PROBLEM SOLUTION: INTERCLEAN, INC. Problem Solution: InterClean, Inc. Goes Here of Phoenix Problem Solution: InterClean, Inc. Inter clean has been functioning so far purely as a Company that supplies cleaning products, therefore the efforts and skills of its employees has been focused upon the area of increasing sales. However Inter clean has recently embarked on a new strategic initiative, wherein it intends to offer solutions and services that will streamline the cleaning of their clients by providing a package of services that would include full cleaning service contracts, product training for employees as well as regular monitoring and information sharing on new Government regulations that are mandated for institutional and industrial cleaning in the sanitation industry. As a part of this process, it has also acquired Enviro Tech, which is one of the Company’s major domestic competitors. Some of the salient issues that need to be addressed are as follows: (a) managing the merger with Enviro Tech successfully, paying attention to organizational issues (b) addressing the concerns of the old time employees of Inter clean and (c) the issue of training for employees. Situation Analysis Issue and Opportunity Identification The goal of this process of transition is to transform the Company’s purely sales based approach to a solutions based approach. As a part of this approach, the organizational framework of the Company has changed, with the acquisition of Enviro tech. People management plays a critical role in a successful merger and acquisition as in this case of acquisition of Enviro tech by Inter clean, with sensitive decisions to be made on issues such as organizational design and staffing, etc but these are often elements that are overlooked. (www.coolavernues.com). In the case of Inter Clean after the acquisitions process, the members of the executive team all have different agendas and there is a lack of coordination and integration in terms of goals, motivation and long term interests of the Company. Tom wants to pursue global expansion, Sally is interested in further mergers, Janet wants to retain the status quo in terms of HR policy and Garcia and the others want to take over an important role in Sales and Marketing. This has created a win/lose situation as part of a distributive negotiations process, as a result of which there is confusion in goals, especially among Inter clean employees. There is also a conflict between the employees of Inter Clean and Enviro tech. Janet does not want to let the old employees go, while the executive team wants to include employees of Enviro tech. This is causing difficulties and confusion among employees, since some of them anticipate being laid off and are bitter because they have not received the training they anticipated. One employee has already resigned. There is a need for the executive team to sit down together and work out a coordinated strategic and HR policy so that goals can be coordinated in the interests of the Company and employees can be motivated. For example, the technically more advanced Enviro tech employees can be put in charge of training employees of Inter Clean, while Tom’s global strategy and Sally’s merger strategy must be coordinated with the strategic goals of the Company. The status quo cannot be preserved, therefore Janet will have to amend her position or may have to resign, so that the Company can progress in developing an integrated work force that can be effectively trained. Additionally, there is also the ethical issue involved with the question of discharging some employees, as is inevitable with a merger. This is likely to be resisted because the employees anticipate training rather than being fired. As a result, there may be a need to develop some solutions such as early retirement, or the proverbial golden handshake in discharging employees. Stakeholder Perspectives/Ethical Dilemmas There are three primary groups of stakeholders in the new Company formed by Inter Clean with the merger of Enviro tech. The first is David Spencer, the CEO, who is interested in taking the Company forward by the most effective combination of steps to make it grow, which includes taking risks. The other major group of stakeholders comprises Janet Durham and Tom Jennings, who together with the older employees of Inter Clean represent the old guard, which is interested in ensuring that their interests are protected. They favor a policy of training for Inter Clean employees and further expansion of the Company into a global concern rather than restructuring. The last group of stake holders is the entrants from the Enviro tech Company, who are more interested in gaining a strong foothold in the new company. Sally Lindley wants to pursue a strategy of mergers with other Companies while Hsu and the others want to take charge of the marketing department. They represent the interests of the newer employees, who want to enjoy a more active role in the Company’s future activities. Apart from this, there are minor players such as Sam Waters, who is only interested in ensuring that issues of compliance are taken care of, because he wants to protect his job. However, his input is essential because it includes environmental regulations and other aspects and other technical specifications which will be essential for the sales people to know. Problem Statement Inter Clean views itself as an organization that will provide a package of cleaning solutions in the future rather than remaining merely as a sales organization. As a part of this process, it needs to develop a strong team of trained sales persons who will be able to demonstrate Inter Clean’s high quality products with high quality service. The Company has recently merged with Enviro Tech in order to avail of the technical expertise of that Company. End-State Vision The Company aims to establish itself as an entity that is able to provide turn key cleaning solutions which would provide a streamlined package of cleaning services, including training of employees, regular monitoring and information sharing on the basis of full cleaning service contracts. Ii aims to achieve this goal through the development of skills among its employees, utilizing the technical expertise of Enviro tech, while also addressing organizational issues that may arise in the wake of Interclean’s take over of Enviro tech. Ethical issues involved in this venture include the question of streamlining the employee base by laying off old employees who do not have technical skills and the question of hiring new employees, despite the availability of a large pool of employees who can be trained. Interclean can however accomplish its goals by developing a comprehensive training program, where the employees of Enviro tech can work in teams, side by side with Inter Clean employees to train them and combine complementary skills of the two sets of employees. Alternative Solutions One of the major issues that has been identified in this scenario is the lack of clarity in strategic goals, with different members of the executive team pursuing their own agendas. The memos sent by team members reveals that former employees of Enviro tech have their own agenda to gain a higher profile role in the new Company, while employees of Inter Clean want to maintain the status quo. There is an opportunity for the entire team to sit down together in a meeting and develop common strategic goals that they can all agree on, in order to derive the future strategic vision of the Company and the path that it will follow. An alternative solution is for the CEO to take an active role in ensuring that a common set of strategic goals are set out for the new Company and members of the executive team are asked to present their ideas, so that this strategic direction can be modified as necessary. Another issue that has been identified is the divergence in motivation and interests of the older set of Interclean employees vis a vis the newer employees of Enviro tech. There is an opportunity that exists for these two groups of employees to work together. An alternative solution is that two member teams be developed, one from Interclean and one from Enviro tech, so that their differing skills set could complement each other and add to team effectiveness in the development of solutions. Lastly, one more important issue that has been identified is the ethical dilemma that is posed by the need to develop a new pool of employees, thereby placing the needs of the older group in jeopardy. There is an opportunity to develop effective financial packages to discharge these employees. An alternative solution would be to provide these employees the opportunity to attend exhaustive training sessions to acquire the new skills that are required. Analysis of Alternative Solutions The primary goal is the development of a qualified and well trained pool of best employees who can effectively take the Company forward. This has the highest weightage in terms of importance. The second most important goal is to develop common strategic goals for the entire Company in order that all members are aligned in one direction. This issue is next important in weightage. Another important goal is to ensure that the skills of employees are aligned in such a manner that they complement each other. The last goal is to ensure that the problem of weeding out employees is done in an ethical manner. Alternatives to pursue the first goal is to identify the best employees by assessing their past performance and the areas where they have not been able to fare so well. This measure is already being implemented by the new merged Company and is not being well received by employees, who are suspicious that they may be laid off for poor performance. An alternative solution is to allow employees from Inter Clean and Enviro tech to work in teams of two, with the skills of one complementing the other. As a part of this effort, Enviro Tech employees can also provide some training to Interclean employees. This provides a cost effective solution whereby a team of two employees each will work more effectively than individuals. In aligning the strategic direction of the Company, a meeting of the executive team is the first alternative. However, this may not be so effective because members such as Janet Durham will continue to insist on their own view point since they are old and established employees of the Company. Similarly, Sally and her team will also likely continue to insist on their own view point. Therefore, it appears that the necessary goal can be more effectively achieved of David Spencer takes a hand in the issue and frames out a set of strategic goals. In such an instance the duty of the executive team will be only to modify those goals while they will have to agree to broadly adhere to the strategic direction stated by the goals. This may help to bring more resilience to the efforts of the executive team to reach a consensus on important matters of strategy. In terms of ethical issues, one of the alternatives is to tackle the question of mandatory layoffs by enforcing early, mandatory retirement for some of the older employees or providing them with a good financial package to voluntarily resign. This offers a good option to deal with the older employees who are already near retirement. However for other employees, it may be better to consider providing them training by requiring them to enroll in the training program. This will help to supplement their skills, so that they will feel valued by their Company and work harder to achieve the desired goals and sales targets. Otherwise, the hiring of new employees may make older employees feel bitter. Risk Assessment and Mitigation Techniques In the event Inter Clean lays off employees, it could cause rancor and ill will and older employees may even leak out company secrets or spread ill will in public. Moreover, hiring new employees will involve costs in advertisement, recruitment and training. Therefore, it may be a more viable option to consider retaining some of the older employees in order to maximize their skills. Combining members into teams could also help to mitigate risks by allowing complementary skills of Enviro tech and Inter clean employees to work together. It allows existing employees to benefit from training, so that they can work together to provide effective solutions. This also helps to address the ethical issues involved in laying off employees. From a strategic point of view, if the executive team is allowed to sit and hash out issues for themselves, there is the risk of these executives getting into a heavy conflict with each other, such that matters will reach a stand off and become unresolvable. On the other hand, if the CEO lays out a general strategic plan based on the input from all executives which will take into account HR issues, compliance issues, technical issues and financial matters, it may help to achieve consensus faster among members of the executive team. Optimal Solution The best solution appears to be for the CEO Spencer to outline the Company strategy in achieving its goals, by setting out the plan for development of a plan to set up employees in teams on the basis of their complementary skills and training to be provided for them. This offers one of the best solutions in terms of the risks ad well as advantages of each of various options that have been discussed above. In order to avoid the kinds of conflicts, dissent and dissatisfaction that appears to be dogging the organization, it is necessary that a central authority is established, since the goals among executive team members are so different. Moreover, employee needs will also be addressed through this solution and it will help the organization to avoid extra costs involved in firing employees by providing them financial packages and then hiring new employees at higher costs. There is already a wealth of human capital that is available within both organizations – Inter Clean and Enviro tech and these can be effectively combined to produce an optimal result at a lower cost. The best employees need to be identified on the basis of their past performances as well as their skill levels in various areas. It must also be determined how quickly employees are likely to be able to imbibe the new skills. Then an effective training program can be devised with determination of the time frame in order to assess cost effectiveness. Implementation Plan In implementing this plan, David Spender will have to first ask every member of the executive team to submit recommendations on areas of concern and the strategy that they feel is likely to achieve the best results and why. Based upon this, Spencer can come up with a broad strategy and then use these guide points as the basis for discussion at an executive meeting, where members will be allowed to debate and discuss the merits of each point of the program. Then the members will have to sit down and work out an exhaustive appraisal of each employee’s performance on the basis of their skill sets as wlel as their past sales performances. This must also be applied in the case of Enviro tech employees. Employees who are too old or who have very limited amounts of the required skills for operating in the new environment will have to be identified. The executives must then discuss viable financial plans which could satisfy these employees and still remain cost effective. In the event that members like Janet Durham have problems, they will need to adjust because Spender has laid out the general plan. Similarly, if Spender has stated that the current strategy of the Company is restructuring rather than mergers and alliances, the Enviro tech members will have to adhere to it, although they will certainly be allowed to express their opinions. After an exhaustive employee survey and appraisal, a decision can then be made about how many new employees need to be hired, keeping this at a minimal level. The balance of the employees then have to be paired in teams. A training program must be devised and the length of the program determined. What is to be taught is also to be assessed, and schedules have to be set out wherein team members can work together to educate each other about their complementary skills. A deadline and target date for completion of the training program and initiation of the solutions based effect must also be determined. Evaluation of Results The major procedures may therefore be summed up as follows: (a) devising a general strategic plan for the Company, outlining the goals as restructuring – person responsible, David Spencer. Any revisions or amendments to the plan will involve the efforts of all members of the executive team. Compliance based issues will require the input of Sam, while marketing goals can be defined with input from Tom, Eric, Ving and Terry. The responsibility for identifying former sales performances of employees will be Sally’s and Janet’s because they will have to produce the respective figures. The person responsible for carrying out skills inventory of employees will be Carol, while Janet, Sally and Carol in association with David would devise the team lists by combining a member from each of the two Companies. The sales targets and marketing objectives they must attain will be the responsibility of the marketing executives. setting out a time frame and developing the finer points of the training program would require input from all the executives. Conclusion On the basis of the above, it may be noted that the major problem areas that have been identified are in terms of strategy and HR issues. Since there has been an acquisition of Enviro tech by Inter Clean, this gives rise to issues of HR issues of mandatory lay offs that are created by such mergers. An effective training program may be developed rather than investing heavily in hiring of several new employees. The employees can be made to work in teams in order that their skills can complement each other. When David Spender sets out a general strategy, this will help to avoid rancor among members of the executive mean, each intent on achieving their own agenda and can produce some cooperation among them in achieving common objectives. References “HR Issues in mergers and Acquisitions” [online] Retrieved October 4, 2007 from: http://www.coolavenues.com/know/hr/mercy_1.php “The Negotiations Process” [online] retrieved October 4, 2007 from: www.lapiana.org/sr/tips/negotiations.html Table 1 Issue and Opportunity Identification Issue Opportunity Reference to Specific Course Concept (Include citation) Concept Interclean has not carefully laid out its HR goals. It has set out its goals as that of training the existing employee base into solutions cleaning. Yet at the same time, it has acquired Enviro tech and plans to integrate those employees also into the main Company, thereby creating a conflict in employee goals and causing Inter clean employees to give up their options. Hence, Interclean employees are looking for training, while Enviro tech’s employees visualize a much more important role for themselves in the new organization. This distributive approach create a win-lose situation and can lead to conflict, as compared to the win-win situations created by integrative negotiations (Kinicki & Kreitner, 2003, p. 504). Inter Clean has the opportunity to integrate the expertise of the Enviro tech employees by using them to train the Interclean Employees. “A distributive negotiation usually involves a single issue—a ‘fixed-pie’—in which one person gains at the expense of the other. For example, haggling over the price of a rug in a bazaar is a distributive negotiation,” (Kinicki & Kreitner, 2003, p. 71). Distributive negotiations The question of creating motivation among employees is not an integrative negotiation in this case. Rather than looking for joint gain, Durham of Interclean has her own goal of retaining as many of the old, untrained employees as possible, although a merger requires that some employees are laid off. As opposed to this, Sally Lindley of Enviro Tech is motivated by the prospect of developing joint ventures with other firms to leverage her future power, rather than looking for joint gain. Therefore motivation and interests are not congruent. There is an opportunity for Durham and Lindley to cooperate in an integrative negotiation, to plan the HR policy and strategic goals in such a manner as to ensure joint gains and congruent interests Integrative negotiations are referred to as win/win situations, where all sides are looking for a solution that maximizes the joint gain and allows everyone to walk away feeling they won something. (www.lapiana.org) Integrative negotiations Strategic goals are in a state of conflict. While the CEO has instructed that restructuring has to take place, not all members of the executive team have the same goals. Durham’s goals are to favor the existing employee base at Interclean, Lindley is looking for other strategic alliances while Tom is interested in global expansion without first paying close attention to the restructuring process. Borden Hsu and Garcia fancy taking over the sales and marketing of the new entity. There is an opportunity for the entire executive body to sit down together, rather than sending each other Memos, in order to clearly discuss an integrated strategic policy for the organization for the long term rather than looking to fulfilling their own agendas. Distributive negotiation (Kinicki and Kreitner, 2003) Distributive negotiation There is an ethical issue involved in laying off former employees who are not well versed in technology. There is an opportunity to develop special packages such as early retirement or golden handshakes to allow the employees to leave without rancour. Ethical issues Table 2 Stakeholder Perspectives Stakeholder Perspectives Stakeholder Groups The Interests, Rights, and Values of Each Group David Spencer, CEO The Primary stakeholder, who has inherited the Company from his father Janet Durham, Tom Jennings Those primarily representing the interests of Interclean’s former employees and strategic goals Sally Lindley, Ving Hsu and Terry Garcia Those forming a part of the merged Company, who want a better decision making role in the new merged Company Table 3 Analysis of Alternative Solutions [Click twice on table to change, see instructions on next page. The alternatives and their ratings as well as the goals and their weightings shown below are for illustrative purposes, you should enter your own. Delete this paragraph when done.] Table 4 Risk Assessment and Mitigation Techniques Risk Assessment and Mitigation Techniques Alternative Solution Risks and Probability Consequence and Severity Mitigation Techniques Identifying employees with poor sales targets for lay off and hiring of new employees Rancour among employees who have been laid off and may spread ill will about the Company Losing the goodwill of employees who could have provided service for the Company Higher costs in hiring of new employees Moderately severe Moderately severe Severe, because it will entail advertisement and hiring costs and retraining Allowing some good financial package for voluntary resignation or retirement Training the employees to benefit from their knowledge of the Company and its employees Providing training to older employees and hiring only those absolutely necessary Table 5 Optimal Solution Implementation Plan Deliverable Timeline Who is Responsible Table 6 Evaluation of Results End-State Goals Metrics Target Read More