Morgan Motor Company - Assignment Example

Morgan Motor Company Introduction Morgan Motor Company case brief shows that it still lives in pre-scientific management days. Corporations in the 21st century have made innovations even in the scientific management concept of 20th century. It is strange that Morgan Motor Company is able to survive against the heavy odds and stiff competition. Nowadays corporations as living organisms have the responsibilities towards society and employees by making a better livelihood for them. In the process, even family owned companies have to fall in line. Following the age old traditions in the name of keeping up with old tradition only amounts to self deceiving and escapism and exposes inefficiency. The profile of the Production manager shows that he is not trained in the techniques of production. Mere knowledge will be of no use unless one knows how to do things in sequence at a fast enough rate of speed so that out put is maximised and prices are made competitive. This is one example of how company is run as far labour recruitment is concerned. Hence the company to move forward from its century old stagnation, must implement Human Resource Development policies and train the existing labour force including supervisors and managerial level to work at optimum efficiency levels on par with current management practices and recruit new hands following scientific management methods. Besides, stocking pattern of raw materials is not in accordance with norms of working capital management. There should be forecast of raw materials and components required so that stock are maintained at optimum levels to ensure against locking of capital in non and slow moving items which can result in non availability of funds for the much needed components for lack which production might have been held up and labour force in all other divisions will also be idling as a result. The company seems to believe in long waiting list of customers as a status symbol of its products in demand and also ensure future production. It simply believes that if the order book is full and customers are made to wait indefinitely under some false notions, the company's future is guaranteed and product's prestige is enhanced. . The only USP of the car is that its components are hand made and there are enthusiastic car lovers around to take care of the company's future. These are false notions and in modern management thinking, overflowing order book is an index of company's inefficiency and poor management. It is not the case that overflowing order book is seasonal and hence expansion for the purpose is inadvisable. The company's ability to produce cars is not more than 500 per year but the demand is much more going by the overflowing order book. It can be still higher if only deliveries are prompt which potential company has failed to realise. It is also difficult to digest that the company has not installed computer for use in its day to day management. These days, lack of computer is a serious handicap for any business or for that matter any one as the computer can give up-to-the-minute if not second update on stocks position, bills payable and receivable positions which are crucial for working capital management and accounting information such as Balance Sheet and Profit and Loss Account will show if the company is running profitably or at loss and how much it has earned or lost. so as to make future planning practicable instead of planning in darkness. Besides CADD is completely absent in the company's dictionary. There is no R & D arrangement to keep innovating and stay ahead in the market. The company's obsession with old traditions and hand made cars should not stand in the way of innovations since they need not be at the cost of old traditions and hand made cars concept. Like old wine in a new bottle, the hand made car can still be made with innovative concepts and achieve cost cutting and fuel efficiency. The ancient form of ayurveda system of medicine is now taught under modern conditions. Stethoscopes, imaging technologies are now used in ayurveda to diagnose diseases though the medicine will be the natural one and not the synthetic one used in modern medicines. Hence it is not difficult find equations to be applied to hand made car making also if the ecology preservation is the only aim behind the company's obsession with hand made cars. The company's website is evident of the its determination to continue in business but no amount of advertising will help unless it switches over to modern concepts of management. This calls for change management techniques and organisational structure. . Organisational change is a painful process but inevitable to ensure company's longevity. The Morgan company must realise there are several stages in change and likely pitfalls are in every stage. The pitfalls during the change process identified by Kotter are shown in the table 1 below. Table 1 The following precautions must be taken during the change management process. Awareness must be created about the urgency of the need to change. The change initiatives unless made effectively will result in lukewarm outcomes. Kotter (2007) cautions because many mangers think change are an event and not a process. Change comes in stages and builds on one another which process takes years and in the process managers tends to skip stages in their anxiety to speed up the process. Highly capable managers also are apt to make critical mistakes by announcing achievements prematurely which will arrest the momentum, and result in reversal of gains and total failure of change effort. The management will be generally faced with worried employees who might think their promotion possibilities will be affected. The management will be left with more managers than leaders. At this juncture management of the organisation will need more leaders because change, by definition, needs new system. Morgan Motor company must therefore aim at minimising risk due to change efforts by keeping the existing system operational. Since in this case total change is required, it is the CEO of the company will be the key person for initiating the change. The pity is that top management of Morgan is not the least concerned to change from the existing system. Therefore the management expert from outside will have to don the role of CEO and impress upon the employees including the CEO about the unpleasant facts of continuing to be lagging behind in all respects. The Guiding team must be powerful Often, change process starts with few people, even or two. If it is achieved, the change team grows in stature and number and assumes leadership role. But if minimum size is not achieved early enough, no worthwhile change will happen. As the major change can not be made possible without the support of head of the organisation, Morgan Company should ensure that there is one head and not many heads and that one head should be motivated enough to lead the change. The outside agency appointed for the purpose should therefore coordinate with the selected head of the organisation in all its change efforts. Lacking a vision The head of Morgan Company and his team should formulate a vision of the future to be easily communicated and understood by customers, stake holders and employees. The vision must be sensible so that change efforts do not end up with a list of incompatible projects. In order for the various initiatives at various departments such as reengineering programme at the accounts department, 360-degree performance appraisal at the HRD, quality programmes etc to be aimed, there must be a clear vision statement. If one sees the failed programmes at the start itself, there will be numerous plans and programmes but without a vision. Not communicating vision fully Most of the times organisations draw up very good vision for the change but fail to communicate widely to all the employees and other stake holders. With just one or two meetings as if for the sake of formality, vision for change is announced and left at that. This should be avoided by Morgan Motor Company by often holding meeting with the stake holders and spread the message by all possible means. Not removing obstacles to the new vision Although employees will be ever willing to cooperate, some obstacles will appear to be on their way to perform. These are mostly imaginary fears and therefore the management must convince those with such inhibitions and make them understand there really no obstacles exist. In few cases, the impediments will be real such as narrow organisational structure. If job categorisation is limited, the job holder will not feel like performing more than what his job describes literally. Not systematically planning for, and creating, Short-Term Wins. Since the transformation is time consuming process, people involved will often turn out to be skeptical of the outcome during the interim period. Hence change efforts to be planned systematically to allow for short term gains within 12 to 24 months to satisfy the skeptical individuals. Not anchoring changes in the organisation's culture. Management must take care to see change efforts are embedded into the organisation so that they become the social norms and shared values. Two factors are particularly important in institutionalizing change in corporate culture. The first is a conscious attempt to show people how the new approaches, behaviours, and attitudes have helped improve performance. When people are left on their own to make the connections, they sometimes create very inaccurate links. For example, because results improved while charismatic Harry was boss, the troops link his mostly idiosyncratic style with those results instead of seeing how their own improved customer service and productivity were instrumental. Helping people see the right connections requires communication. Indeed, one company was relentless, and it paid off enormously. Time was spent at every major management meeting to discuss why performance was increasing. The company newspaper ran article after article showing how changes had boosted earnings. The second factor is taking sufficient time to make sure that the next generation of top management really does personify the new approach. If the requirements for promotion don't change, renewal rarely lasts. One bad succession decision at the top of an organization can undermine a decade of hard work. Poor succession decisions are possible when boards of directors are not an integral part of the renewal effort. In at least three instances I have seen, the champion for change was the retiring executive, and although his successor was not a resistor, he was not a change champion. Because the boards did not understand the transformations in any detail, they could not see that their choices were not good fits. The retiring executive in one case tried unsuccessfully to talk his board into a less seasoned candidate who better personified the transformation. In the other two cases, the CEOs did not resist the boards' choices, because they felt the transformation could not be undone by their successors. They were wrong. Within two years, signs of renewal began to disappear at both companies. There are still more mistakes that people make, but these eight are the big ones. I realize that in a short article everything is made to sound a bit too simplistic. In reality, even successful change efforts are messy and full of surprises. But just as a relatively simple vision is needed to guide people through a major change, so a vision of the change process can reduce the error rate. And fewer errors can spell the difference between success and failure. (Kotter 2007) The change that is very badly required at the Morgan Motor Company needs to be managed adroitly because an unwilling management is first enrolled for the change and then regardless of willingness or unwillingness, certain change management reactions should be anticipated and well taken care of.. And that is the reason why, the above likely situations during the change management should be considered. First of all, the first principles of management should be observed in the restructuring of the organisational structure at Morgan Motor Company. There is total lack of unity of command and proper demarcation of responsibilities. Before any thing to take place, a convinced management for the total transformation of the company should be in place. Any amount of talk of change efforts either in the structure or the way to do business will not be use unless the management takes the best foot forward. The organisational structure should be so planned that each people concerned are interconnected and not remaining detached. "The sets of entities in an organization's environment that play a role in the organization's health and performance, or which are affected by the organization, are called stakeholders. Stakeholders have interests in what the organization does, and may or may not have the power to influence the organization to protect their interests. Stakeholders are varied and their interests may coincide on some issues and not others. Therefore you find stakeholders both cooperating with each other in alliances, and competing with each other" (Borgatti 1996). See the two figures below. Figure 1: Unconnected organisation of stake holders Figure 2: well connected organisation of stakeholders. Borgatti (1996) states different structures are recommended for each kind of activity involved. The activities can be Technology (Task), Unit production (small batch) and Mass Production (large batch) and continuous production. "The structures are determined according to degree and type of horizontal differentiation, vertical differentiation, mechanism of coordination and control, formalization and centralization of power" ( Bogatti) But theorists of today say there is no one single way to organize consistent with the activity. The contingency theory they adopt expects organizational structure should align with the size, technology and environment. Size deals with production or purchase or investment capacity, labour strength, revenue and customers, and capital employed. While differentiation increases with size, but at a diminishing rate, where there is administrative overhead, size declines thus achieving economies of scale. Morgan Motor Company falls under the category of mass production coming in large batches. The items are cars, razor blades, aluminum cans, which involve large percentage of automation and assembly lines. Hence the Morgan's organizational structure should be recast so that there is unity of command and delegation of authority to prevent the organization from drifting as a ship without a captain and a motivated (delegated) crew. Success depends on the how well stake holders including employees are motivated. According to Abraham H.Maslow (1908-1970) who developed theory of motivation, there are three assumptions. They are human needs are insatiable, their behaviour depends on purpose and need and the degree of importance in the hierarchy of needs. (Hartman) In sum for the revitalization of Morgan Motor Company, there should be an ideal organisational structure, all pervasive motivation at all levels for proper foundation to implement change efforts. References Borgatti P Stephen "Organisational Theory: Determinants of Structure" Hartman W.Stephen, "Management Theory" New York Institute of Technology Kotter P.John 2007 Leading Change Why Transformation Efforts Fail Harvard Business Review January 2007 Read More