Alpha Plantations and Major Crisis in 1999 - Term Paper Example

 Y Executive Summary 4 Company Background 4 Summary of the Case 5 Management Issues 6 Communication issues 7 Motivational issues 8 Leadership Style 8 Commitment 9 Recommendations 9 Communication Style 9 Understanding and Flexibility of Attitude 10 Monetary and Non-Monetary benefits 11 Staff Commitment and Loyalty 12 Contingency Leadership 12 Conclusion 13 References 15 Table of Contents YExecutive Summa Company Background 3 Summary of the Case 4 Management Issues 5 Communication issues 6 Motivational issues 6 Leadership Style 7 Commitment 7 Recommendations 8 Communication Style 8 Understanding and Flexibility of Attitude 8 Monetary and Non-Monetary benefits 10 Staff Commitment and Loyalty 10 Contingency Leadership 11  Directive leadership 11  Supportive Leadership 11  Participative approach 12  Achievement oriented leadership 12 Conclusion 12 References 13 Executive Summary 4 Company Background 4 Summary of the Case 5 Management Issues 6 Communication issues 7 Motivational issues 8 Leadership Style 8 Commitment 9 Recommendations 9 Communication Style 9 Understanding and Flexibility of Attitude 10 Monetary and Non-Monetary benefits 11 Staff Commitment and Loyalty 12 Contingency Leadership 12 Conclusion 13 References 15 Executive Summary This paper aims to analyze the case of Alpha plantations which faced a major crisis in the year 1999. This crisis led to a number of major changes in the company’s activities and overall operating environment. The employees and other workers at management level were also affected and replaced. The changes in the major operations area and management level staff raised new questions to the prevalent deteriorated conditions. This paper points out the problems that were faced by the company and provides recommendations to improve the performance of the business. Company Background The oil palm company Alpha Plantations Sdn Bhd in Malaysia has two major divisions namely Oil Palm Estate and Palm Oil Mills. This company is owned by a British Company and aims to supply oil to the parent company’s detergent manufacturing business. The company employs local workers to meet the workforce needs. The mill carries out its operations in a shift based environment with three shifts employing 25 works per shift. Supervisors are appointed to watch over the work of each shift. Among the most senior members of the company is Mr. Ang. He is working in the company since 1965 and has achieved the designation of the senior production supervisor through constant efforts and struggles. Mr. Ang is supposedly experienced in dealing with almost every situation surrounded in the company’s premises. He deals with the workers, solves their normal issues, is responsible for the undisrupted operations of the business, involved in the co-ordination of shift planning, responsible for the preparation of daily production reports, sets short term performance targets for the shifts and also helps in Human Resource Planning issues. He also acts as a ‘Gatekeeper’ which directs towards his important role as an assistant to the mill manager and every issue comes in to his supervision before it reaches the mill manager. Owing to the multitasking and untiring efforts of Mr. Ang, the mill manager is quite satisfied and contented with the firm, methodical and almost militarily efficient way of running the business. Summary of the Case The year 1999 acted as a devastating experience for Alpha mills. The basic reason behind the deteriorated financial performance was the cut off in the oil prices. The mill manager, Captain Chubb, could not find a better way to overcome the situation and restrain the regular losses. Captain Chubb was replaced by Mr. Ian Davison who was appointed as a new mill manager to Alpha mills. Mr. Davison analyzed the current operations and performance of the company soon after he was appointed for the mill manager position. He reached a number of conclusions by properly analyzing the situations and activities prevalent in the company. He observed that the current operations are leading to higher machine breakdown and changeover time. He proposed the use of technologically advanced machinery and equipments to curb this issue. His observation pointed towards the wastage and yield which may be improved. He proposed changing the employee structure by preparing the employees for multitasking and reducing the number of employees working currently. This way he foresees a reduction in the costs to the factory. Employees were not utilizing their true potential and encouragement and motivation to improve this situation was proposed by Mr. Davison. He also pointed at the disrupted communication patterns and company structures which hindered growth and success of the company. Mr. Davison proposed a technologically enriched company culture with stricter performance measurement strategies to resolve the identified issues. He also emphasized on centralizing the company structure by reorganization of shift into production teams being led by ‘facilitators’ to promote commitment among the team members. Mr. Davison did not impose the changes directly onto the workers but instead organized a picnic followed by a briefing session. Mr. Davison successfully communicated the changes that are required and clarified the crisis position from which the company was going through. The changes proposed by Mr. Davison were not fully accepted by Mr. Ang. Despite of the emphasis on teamwork and team-based problem solving techniques, Mr. Ang was found to interrupt the teams’ own efforts to resolve issues. He was also found to get irritated on minor issues and misbehave with the workers. Owing to the NIL improvement in Mr. Ang’s performance, his mid-year appraisal ratings were negatively affected. This negative rating was accompanied by negative feedback from Mr. Davison, the mill manager. Mr. Ang’s performance and working style was changed dramatically after this feedback and appraisal. He was unenthusiastic to work and meet his responsibilities towards Alpha mills. Mr. Ang was promoted to the position of a mill executive with a little increase in the pay. This new position snatches away any line authority of production teams from Mr. Ang. The disappointment led to the misbehavior of Mr. Ang with the mill manager which led to his termination. Management Issues The analysis of the case points towards a number of problems that exist. The company is facing human resource management and change management issues as per the learned theories and models. The factors that are affecting the performance of the company include both internal and external issues. This section provides information about the issues which should be reviewed and resolved to improve the performance of the company. Communication issues It is evident for the case of Alpha mills that communication mediums used and techniques adopted do not meet the requirements of the business activities. The confession of operators that they did not understand the terminologies is a clear communication weakness in their discussion. The use of harsh tone, shouting and unsympathetic words by Mr. Ang to his employees and Mr. Davison to Mr. Ang also prove the absence of effective communication patterns in the company. There was a lack of communication before Mr. Davison was appointed as the issues were mostly brought under Mr. Ang’s surveillance. After the appointment of the new mill manager, the communication gap still existed. Motivational issues The hygiene and motivational factors theory by Herzberg follows Maslow’s concept and concentrates on the human needs at work. His theory can be classified into 2 broader categories i.e. Hygiene needs and motivational needs. Hygiene needs are linked to the job security, compensation, policies, rules and so on. These factors, however, are not directly related to the motivation level of employees but help on strengthening trust and association between employees and the organization. The motivational factors include Recognition, achievement, advancement, growth and Responsibility (Podmoroff, 2005). Managers and supervisors tend to believe that employees quit jobs mainly for the reason of dissatisfaction over salaries (Kaye and Jordan-Evans, 1999). Mr. Davison also thought of salary as an important factor and raised it to keep Mr. Ang at peace when changing his job responsibilities. The reaction of Mr. Ang, however, clearly opposed this view. Mr. Davison should have considered other motivational issues to improve or change Mr. Ang’s attitude and work style. Leadership Style The leadership style which is being followed by the managers may be questioned. Mr. Ang and Mr. Davison both followed an authoritative style and did not allow the employees to take part in the decision making. They provided tasks, set goals and measured performance without understanding, viewing and thinking about the needs and interests of the employees. Mr. Ang, when forced to change his style, got irritated and finally ended up with termination. The employees might have been facing the same feelings towards their work. Commitment The staff is not committed to the plans and targets enforced by the managers. The staff is much concerned in maintaining their current working pace and not putting much efforts in gaining some advantage from the change proposed. The weakness in the change management is the lack of motivational factors, staff participation in decision making, performance appraisals or some other factor which encourages a change in their performance. Loyalty plays a vital role in such scenarios and Alpha mills does not provide any schemes or benefits which may earn staff loyalty and commitment to the company. Recommendations Communication Style It is necessary for the communicator to make up his speech in such a way that it does not sound cold or harsh. This is because the message would put down the listeners or the person to whom the message is referred to. And this would create other errors at the workplace. In our case, Mr. Davison’s harsh and strict tone changed the attitude of Mr. Ang towards the work and the workplace. Thus it is necessary for the communicator to bring warmth to his speech so that the person who is being referred to does obey the instructions carefully (Michael 1988 & Kelly 1979). Understanding and Flexibility of Attitude Emotional intelligence is the ability of someone to understand his own emotional state or the state of the other individuals. It helps to realize one what he himself wants in his surroundings and what others want. Emotional intelligence is an important aspect in determining interpersonal relationships in the workplace. It can be counted as a communicating factor too in the workplaces. In communication it is necessary for one to assess what the other individual is going through (Lenaghan, Buda & Eisner 2007). If Mr. Davison could use emotional intelligence and understood the phase from which Mr. Ang was going through, the response and the reaction of Mr. Davison would have been different. In work places this is quite necessary so as to develop an important interpersonal relationship. Emotional intelligence provides the individuals with the capability to realize what the emotional state of the other person is. This would help the employees in corresponding with each other during work. The employees and employers would not laden work on their peers and subordinates if they see distortion in their emotional state. According to Goleman (1998) Emotional Intelligence is “the capacity for recognizing our own feelings and those of others, for motivating ourselves, and for managing emotions well in ourselves and in our relationships” (p. 137). (Abascal et al 2009). Mayer and Cobb (2000) define 4 elements of Emotional Intelligence including Emotional identification, perception and expression, Emotional facilitation of thought, Emotional understanding and Emotional management. Emotional intelligence is useful in many areas of life; however, the workplace rests one of the major areas which attain greater benefits by this concept. Businesses are not merely dealing with the materials but are also in relationships with people; for instance, the customer-employee, employee-employer, employee-employee and so on. The trust and relationships of an individual with the workplace interactions explain his/her level of emotional intelligence and expertise in dealing with others’ emotions. Lam and Kirby (2002) reveal that emotional intelligence plays a more prominent role in improving the work performance than general intelligence (i.e. IQ). Research also indicates that emotional and social competitiveness is 4 times more helpful in achieving professional success and reputation (Feist and Barron, 1996). Similarly, Snarey and Vaillant (1985) found a weak relationship between professional success and IQ but emphasized more on the ability to tackle with emotional responses, anxiety, frustration and complex relationships. Moreover EI helps individuals in attaining a higher level understanding of people’s attitudes and helps in maintaining relationships. Monetary and Non-Monetary benefits Herman (1999) concludes that salary and monetary benefits are more likely to attract individuals towards the organization than encouraging them to leave. Thomas (2000) and O’Malley (2000) illuminate that the employees’ concept of an ideal organization in detail. Both studies provide a number of factors that result in a motivated, committed and satisfied workforce. These factors include friendly and safe working environment, performance appraisals, individual values, monetary and non-monetary rewards, records of achievements and other incentives. Silverthorne (2005) describe three major factors that contribute to employee motivation in Russia. These include “promotion and growth, feeling in on things, and interesting work (p 110)”. Staff Commitment and Loyalty An increased participation of the employees in the decisions of the company can make somewhat obvious to the employees that the company cares for them. This care and warmth by the company is necessary for employee motivation. It will integrate them in the organization and the feeling of being a part of it makes them comfortable in putting their best efforts for the good of the company. Alpha mills may allow pension schemes, health insurances, performance based rewards and so on to promote a committed workforce. Contingency Leadership The contingency approach of leadership is associated with the path-goal theory more closely than others (Dubrin, 2001 pp. 32-34). The path-goal theory follows the same idea as defined in the expectancy theory of motivation. The main idea is the relationship or connection between the leaders behaviours on employee participation and performance in achieving the tasks assigned to them. The path-goal theory is more inclined towards the rewards in order to attain higher motivation of employees and higher performance efficiency. Path-goal theory emphasizes on servant leaders, who are less dominating and more helpful. The leaders working under the contingency perspective of leadership are more like coaches, facilitators and guides to the employee team. The path-goal theory of leadership is the basis of contingency leadership perspective (Yukl, 2001). This theory defines four distinct leadership styles as follows: Directive leadership which points towards the task-oriented leadership. The leader explains the task clearly, provides a framework to follow and describes the standards against which the performance would be measured. This style of leadership use rewards and payments as a tool of motivation. Supportive Leadership may also be termed as people-oriented leadership. The leader following this style is supportive in actions, words and behaviours. A supportive leader is respectful, honest and pleasant with the employees. Having a friendly attitude, a supportive leader provides a less wearisome environment to the workers. Leaders use social support and gentle manners to motivate the staff. Participative approach is more motivating for the staff as they feel more incorporated in the working environment. The leader takes their suggestions and arguments under consideration while making decisions. Hence, it provides decision making and idea sharing power to the subordinated to some extent. Achievement oriented leadership refers to the style when leader sets challenging goals and motivates staff by showing his concern and believe in their abilities to achieve those targets. Conclusion Alpha Mills is facing a crisis position which is not handled effectively by the new mill manager. The reason may be his incompetence in the nature of business being carried out by Alpha mills. The lack of coordination between the senior staff like Mr. Ang and the new mill manager is another reason for the deteriorated position and performance of the company. The authoritative and rather inflexible attitudes of the leaders in Alpha mills are also a considerable factor when analyzing the situation. 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