How Does SAN Implement Continuous Improvement and Carry the True Essence of Management - Case Study Example

Managing People and Organizations Part A A multinational organization like SAN is more focused to systems and practices. Employees are enticed to commit to change, and everyone becomes involved. The method is innovative, a concept of continual improvement, far different from the traditional way. Workers are formed in teams or clusters and function through teamwork and motivation. Each team is given independence, the members are allowed to function at their own utmost capacity, and are trained in the process, becoming multi-skilled, while each member is responsible to the team. As they mature in their job, they improve their skill and become more professional in their dealing with fellow employees and the organization. The philosophy behind work at SAN is that when individual workers are allowed to work at their own pace and given the responsibility as part of the team, they become well motivated and work for the team and the company for which they work. The motivation is that each works for improvement and advancement of the organization. A member becomes like a part owner of the business. The cluster to which a worker belongs competes with other clusters when it comes to skill, but they are all working for one organization. Cluster methods provide improvement not only as workers but as developed individuals. Each cluster works like an independent body but each member is multi-skilled that allows the cluster members to be flexible. The hierarchy of ordinary Western and American corporations is vertical with top echelon doing the commands and policies. In this case study, there are only four levels in the hierarchy, which means this multinational organization is trying to be modern and innovative, distinguishing itself from too much supervision and corporate politics. SAN is multi-cultural with Swedish and French cluster managers and respective teams working with precise teamwork; that’s why they are effective and very motivated. Official data from the Department of Trade and Industry in the United Kingdom, which forms part of the Workplace Employment Relations Survey 1998 reports that 65 per cent of workplaces have the majority of their employees working in teams. According to one estimate in 2000, 80 per cent of all Fortune 2000 companies had over half of their employees working in teams (Flores and Gray, 2000, cited in Thrift, 2001, p. 420, cited in Knights and Willmott, 2007, p. 118). “If the organization is to perform, it must be organized as a team” (Drucker, 1992, cited in Knights and Willmott, 2007, p. 118) For Katzenbach and Smith (1993), for example, the connection between teams and organizational success is performance. Teams, or what they call ‘real’ teams, should be understood as discrete units of performance and not, or not only, as examples of positive organizational values such as sharing, collaborating or listening to others. Katzenbach and Smith (1993, cited in Knights and Willmott, 2007, p. 123) propose that the importance and the impact of teams at work is dependent on how much they are not a simple new label attached by senior managers to old ways of working; they are not to be equated with well-intentioned teambuilding events proposed by management consultants and they are not the same as recipes presented in the popular management books making the best sellers list. Teams are identified as a distinctive form of organizational technology – i.e. a particular way of organizing work that is designed to achieve specific ends. As Katzenbach and Smith (1993) put it, there is a ‘wisdom’ related to teams at work. To create ‘real teams (i.e. teams that reach high performance) managers need to learn a proper discipline which requires application, time and commitment. Features of team discipline are: adequate level of complementary skills, truly meaningful purpose, specific goals and performance objectives, clear working approach, mutual accountability (Katzenbach and Smith, 1993, cited in Knights and Willmott, 2007, p. 123). Team formations, or team clustering as in the case of SAN in our case study, cannot be underestimated. Team formations are considered special features for improved organizational performance. Teams are identified as essential components of the implementation of the principles of total quality management (Oakland, 1996). They are building blocks of ‘excellent organizations’ (Peters and Waterman, 1982, cited in Knights and Willmott, 2007, p. 125), key elements of the ‘learning organization’ (Senge, 1990) and they are critical components of virtually all high-performance management systems that build profit by putting people first (Pfeffer, 1998, cited in Knights and Willmott, 2007, p. 125). Synonymous terms given to this kind of clustering are responsible teams, self-managing teams, or semi-autonomous teams which are building blocks of new ‘post-bureaucratic’ organizational forms, but which are comparatively flat and agile because they have few hierarchical layers (Peters, 1988, cited in Knights and Willmott, 2007, p. 126). One thing remarkable in this method is that teams tend to enhance organizational flexibility and learning as they can explore and react quickly to any problem or new challenge. Motivation is also greatly enhanced as teams are ‘empowered’ by bestowing upon the members responsibility and autonomy in performing organizational tasks, in contrast to traditional organizations with their tight rules of command, short span of control and coordination (Jenkins, 1994, p. 852, cited in Knights and Willmott, p. 126). Team working is also known as the lean factory. Womack et al (1990, p. 90, cited in Knights and Willmott, p. 126) narrated in their book the five-year research on the status of the organization of work in the automobile industry around the world. They called it the ‘lean design’ because it defies traditional criteria of organization of production and management thinking. Its aim is to avoid waste, slack and redundancies. It is also known as ‘just-in-time’, a principle that refers to a short process. Here every point in the chain, from the suppliers to the producers and distributors, only delivers on demand, so that capital is not tied up in stock and product refinements that require new parts can be speedily introduced. The system is fast and efficient, with few errors, and this is what lean design aspires to achieve. The principle is similar to the Toyota production system. The Japanese way of manufacturing cars at Toyota has been an effective way, ahead of the European and American concepts of production. Toyota has been doing this for the past several decades. The Toyota concept introduced the kaizen and kanban method of production. Kaizen means continual improvement, while the kanban system would signal employees when to order or replenish parts or products. This was a layout arrangement of plant machinery that allowed workers to operate a number of machines and allowed them to work in teams to provide layout (Lynch, 2008, p. 773). Toyota management practiced independence to its employees and managers. It allowed the workforce to be independent but with less guidance from supervisors who acted not as bosses but mentors. Toyota is able to integrate the process design and business functions effectively. Some other aspects of the Toyota management: 1. Supervisors are chosen from among the employees whose role is as facilitator and mentor and not as boss. 2. The chief engineer or leader has broad expertise over a particular department. 3. Employees are better trained inside the company, and don’t get much training or expertise from outside source. Part B It has always been a common belief that when people are motivated, they accomplish goals. Workers become productive when they feel they are a part of a team, or part-owner of the organization; they feel this sense of belongingness and so they strive for the organization’s improvement. Money is not an aim or an objective, and work becomes a part of life, not distasteful. Managers in organizations who believe this principle push information and responsibility downward, explaining to workers the reasons why things should be done, assuming they have an interest in doing them and a willingness to do them. They treat employees like they make a difference to the company because they will really make a difference to that company. Organizations have been trying ways to help employees adjust their family life with work. As organizations care for employees’ welfare, businesses benefits include increased productivity, improved recruitment and retention, lower rates of absenteeism, reduced overheads, an improved customer experience, a more motivated, satisfied and equitable workforce (McIntosh, 2003: 185). Studies have found that successful managers have stronger power motives than less successful managers. The human need theory asserts that people have urges relative to the three needs which are the need for achievement, the need for affiliation, and the need for power (Firth, 2002: 86). The role of team leaders is to coach, that of the facilitator, not someone to play as superman (Armstrong, 1998, p. 8). An organization has to encourage goal-setting of employees in the workplace. Locke (2001) as well as Michael (2005) and Montana and Charnov (2008) argue that goals may vary and often come into conflict with the goals of the organization they are employed. The organization has to seek ways to balance workers’ expectations and the organization’s goals. High performance in a job leads to high satisfaction. People always connect work with life’s fulfillment, and connect their satisfaction at work with their feelings and satisfaction of life, and happiness with their family. Satisfaction in the workplace means happiness at home and fulfillment in life. Work and life balance suggests a balance for life and what people do. There has to be a blending equality that includes work, family, pleasure, fulfillment, and satisfaction. Motivation theories are linked to the needs theories by social scientists and scholars. According to Abraham Maslow (1943), our needs are arranged like a pyramid or ladder. At the bottom of the pyramid are the physiological needs such as food, water, oxygen and sex. As one set is met, the person moves up the ladder to the next. The next in the ladder are the safety needs such as security, stability, dependency, protection, freedom from fear, anxiety and chaos. Then we have the need for structure, order, law, and limits, and the need for strength in the protector. If the physiological and the safety needs are already met, “then there will emerge the love and affection and belongingness needs” (Maslow, 1943, p. 233). Self-esteem needs include how we value ourselves, and our love and respect for ourselves and for others. Then we have the desires to know and to understand (Maslow, 1943, p. 236). This refers to man’s quest for acquiring knowledge and systematizing the universe, or what Maslow calls expressions of self-actualization. Self-actualizing people focus on problems outside of themselves, have a clear sense of what is true and what is sham, and are spontaneous and creative, and are not bound too strictly by social conventions (Firth, 2002, p. 85). It is interesting to reflect on how far organizations play on and exploit this relatively low level human need. Management in the organization has to look how it has met the needs of its employees before they can go on and be effective in their job. In our case study, the employees of SAN were satisfied of the salary they received from the organization. They also act as finance decision-makers because financial decisions are decentralized, meaning, the respective team managers have the responsibility and power to decide the costs of the work they were doing. The members also feel they are being well taken care of by the organization who also desires the motivation of its employees. SAN wanted continual improvement and change in the organization. They carry the true essence of a manager in the present age of globalization. Edward de Bono and Robert Heller (2008) says: “The true change manager starts with redefining the purposes of the organization in the light of fully analysed external change. Next come the internal changes required if those purposes are to be met. Then you tackle the people, starting at the top. Will they or won’t they whole-heartedly accept the new purposes and internal reforms?” If you are not afraid of change, and you feel change is part of business, you have to incorporate this in the daily activities of the organization. Looking at quality management in the historical perspective of organizations, we tend to compare the management styles of the West and the Japanese style. The Japanese style looked for improvement in their products and services through their employees. They regard people as part of the organization; thus Japanese employees are always motivated. The American system only improved when they applied total quality management, a Japanese original concept. When SAN applied this continual improvement, their business benefits exceeded expectations. The SAN concept is for quality product and meeting the needs and wants of customers. When customers feel that they are being valued, they answer with loyalty. This is one aspect of relationship marketing (RM), which has been used to attain customer loyalty by way of satisfaction. Moreover, customer retention is significant in business. A returning customer is less costly to serve, but this returning customer purchases more, pays higher prices, and can spread the good news by word of mouth (Skogland & Siguaw, 2004, p. 221). The concept of relationship marketing is built on behavioral perspective of relationships. This involves trust and satisfaction, the conceptualization and economic evaluation of customer retention, and most work on internal relationships. The operational strategy in the SAN workplace focuses on motivating employees and meeting the needs and wants of customers. For this, they have attained continuous improvement, something much needed in the competitive world of business. References Armstrong, M., 1998. Managing people: a practical guide for line managers. London: Kogan Page Limited. Edward de Bono & Robert Heller’s Thinking Managers, 2009. Quality Management. Available at: http://www.thinkingmanagers.com/ (Retrieved 30 January 2010). Firth, D., 2002. Life and work express. United Kingdom: Capstone Publishing. Knights, D. & Willmott, H., 2007. Introducing organizational behaviour & management. London: Thomson Learning. Locke, E. A., 2001. “Motivation by goal setting.” Handbook of Organizational Behavior, 2, 43-54. Lynch, R., 2008. Global Automotive Vehicle - Strategy in a Mature Market and Toyota: What is its Strategy for World Leadership. In: Strategic Management, 5th edition (Financial Times/ Prentice Hall), pp. 767-775. Maslow, A. H., 1943. A theory of human motivation. In G. Goble, The third force: the psychology of Abraham Maslow. 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