Human Resources And Organisational Development - Essay Example

? Human resources and organisational development Table of contents Executive summary…………………………………………………………….p 3 Introduction…………………………………………………………………….p 4 Current organisational culture and desired organisational culture……………..p 4 Poor management practices…………………………………………………….p 5 Lack of external environment scanning and planning…………………………..p 6 Six Thinking hats approach……………………………………………………..p 7 Desired process changes………………………………………………………..p 8 The Kotter’s 8-step model of change…………………………………………...p10 Conclusion………………………………………………………………………p.11 Bibliography……………………………………………………………………..p 13 Executive summary Allworld Foods continued losing market share and incomes to competitors due to use of outdated strategies. The company did not change its organisational culture even after experiencing the initial declines in revenues in the grocery segment. Aggressive pricing and marketing efforts and disregard to external environmental forces led to decline in dividends and loss of the loyal customers. The company made no efforts in improving customer value. The company needs to change the current organisational culture, the management and leadership practices and human resource management principles. The company also needs to plan for changes in the management structure. Poor management and leadership practices have led to low employee motivation and decline in company dividends. The management did not plan for changes in the market thus new strategies could not be implemented to counter the increased competition in the market. Allworld Foods need to change the organisational culture and implement new strategies in order to attain competitive strengths in the market and position itself as an industry leader. Human resources and organisational development-Allworld case study Introduction Allworld Foods, an Australian company had a competitive strength in the market and endured aggressive competition from other companies such as Smith’s Pty and United Grocery Group Pty (UGG). The company undertook aggressive expansion strategy by establishing budget clothing stores in malls and purchasing chains of travel agents. The company also created the “Montague” in honor of the founder of the company. 80 percent of the income was from the grocery business. Later, Mercury Consolidated acquired Smith’s and installed new managers with the objective of out competing Allworld Foods. Mercury Consolidated had initially embarked on similar strategies in New Zealand, France and South Africa. Allworld depended on other business lines like clothing, Montagues and travel to buffer the revenues when grocery business was declining. Smith’s ne management implemented new product mix and streamlined operations. Smith’s ventured in new markets Generation Y and Generation X. Within two years, Allworld dividends declined and employees expressed a lot of grievances with the management. Shareholders raised concerns of the remuneration of the management. According to the CEO, Lily Chambers, new a cultural shift was needed and was only possible to start at the top. The paper will discuss the need of changes in the organisational culture and processes in order to survive in the changing external environment. The paper will also analyze the current culture of Allworld and the desired culture. Lastly, the paper will offer recommendations that should be implemented in order to attain competitive strength and market share in the industry. Current organisational culture and desired organisational culture There are numerous reasons that may lead to failure of organisational market share. The decline in the market share can be occasioned by changes in the external environment or internal inefficiencies. Reduction in the market share is an indicator of stiff competition or decline in the total market of the products due to obsolete technologies or products1. In the case of Allworld, the decline in the market share was caused by intense competition from Smith’s. Aggressive pricing strategies and marketing campaigns may not help a company maintain its market share unless it changes its organisational culture. Allworld Foods implemented the same traditional strategies of advertising and low pricing in order to counter the competition from Mercury Consolidated. Allworld Foods had enjoyed a long period of market share stability, hierarchical structure and bureaucratic culture that led to the slow decline in the market share2. Business organisations exist in order to create customer value and fulfill the changing customer needs. A company must align its vision, mission statement and objectives for the purpose of fulfilling customer needs and increasing market share. The design of the organisational structure relative to the external environment forces determines the ability of the company to respond to changes in the market3. According to Waddell, Cummings and Worley, organisations like Allworld Foods should implement cultural changes, redesign the organisational processes and utilize organisational learning in order to effectively respond to competition in the market4. Allworld Foods should determine the actual cause for the decline in market share, gather enough information of the magnitude of the problem and implement changes that will combat the problems5. Allworld should change the organisational culture. For instance, it should change the traditional assumption that customer decline would only be for a while and that its marketing and aggressive pricing strategies would make the company competitive in the market. This basic assumption and values have been passed to the subordinate employees thus changes are needed in order for the company to remain competitive in the market. Allworld should also adjust the norms and values since senior management condemned the Board for insisting on changes. The company should also change artifacts like the Montague since customers no longer identify the company with the founders. Allworld Foods has been expanding overtime without any changes to the organisational culture, the same culture that was created by the founder has been maintained for long though the external business environment has changed tremendously. Allworld founders did not create a flexible culture that can enable effective organisational learning and innovation, all the processes in the organisation are routine6. Poor management practices Management includes planning, organizing, directing and controlling the activities of the organisation towards the achievement of organisational goals and objectives. Management formulates and implements strategies that are geared at increasing the level of customer value and customer service experience. The management has a primary of duty of monitoring and scanning external environmental changes like competitor actions and social cultural changes. The management of Allworld needs changes. The Board has lamented that the current management has not been able to track the changes in the environment. Allworld has consistently lost the market share and loyal customers to the competitors. This is an indicator that the current management has failed in identifying the changing market trends and customer needs7. Lack of the external environment scanning and planning The management has also failed in the planning function since it has not set the sales volume goals and measures of controlling deviations from the planned goals. Allworld should ensure research and development activities are undertaken in order to identify the changing customer tastes and preferences. The management should also consider diversifying the product mix. For instance, Smith’s has expanded its product portfolio thus the customers are able to seek variety of goods from the same chain store. The management should implement other strategies of retaining customers other than aggressive pricing. Since low pricing strategies have not worked, this is an indicator that customers are not price sensitive but value the quality, level of customer service or variety of products. Planning entails forecasting changes and establishing goals, and preparing plans that aim at attaining the pre-determined goals and objectives. It is evident that the management of Allworld has not been planning for changes in the environment. From the above case, Mercury Consolidated initial objective was to dethrone Allworld as the premier grocery chain. Allworld should have gathered information on Mercury’s strategic goals and plan how to react to the threat. The current organisational culture has made the management to believe that Allworld will always be ahead of the competition. Also, the organisational belief from past experience is that customers will always come back. The management was not interested in learning about the changes in customer needs and buying behaviors. The management seems not concerned about the customer value strategy of the competitors and their competitive strengths. The management has not implemented any solid measures and strategies of retaining the customers by creating switching costs. Six Thinking hats approach The Six Thinking Hats approach is a creative decision making method that is mainly used when decisions must be undertaken within a limited time period. No specific competencies that are desired from the participants in order to make decisions. The technique approaches the problem from numerous perspectives by mixing creativity, skills, ambition and proper contingency planning. The technique considers diverse ideas and the benefits and constrains that may be experienced in implementing each idea. The White Hat is unbiased and neutral in thinking and involves statistical data collection. The decisions concentrate on the relevant facts and ideas are mainly based on the facts. Allworld management has not realized the changes in the industry and still relies on the past statistical data since they assume that customers will still come back according to their past experience. Allworld need to collect market statistical data on each of the competitors’ sales volumes and their competitive strengths and strategies. The Red Hat is emotional and intuitive and decisions are mainly based on personal emotions and views. Allworld management should realize that some goals may be unattainable due to changes in external market forces. The company should prepare both short term and long term goals in order to compete effectively in the grocery industry. The management should also consider the welfare of the employees and shareholders and stop disregarding their grievances. The desired cultural change should be communicated effectively to all employees. The management will think emotionally on how proposed changes will affect employee working relationships and job morale. The employees may be unhappy with performance measurement methods and new procedures in the organisation8. Black Hat thinking is pessimistic and judgmental and mainly concentrates on the disadvantages of the desired change. The management mainly concentrates on the dangers or the negative outcomes of the proposed decision. The management also considers the inadequacy of resources and poor contingency plans for the proposed changes. Allworld should change the vision statement and organisational culture. It should change management beliefs, assumptions and values. Poor change management and resistance may make the desired cultural changes unattainable. Poor performance techniques may lead to employee dissatisfaction and low job morale9. The Yellow Hat thinking is positive and optimistic. The management is able to suggest optimistic ideas for the future success of the organisations. This approach promotes employee motivation and evaluation of opportunities for competitive strength in the market. Short term goals should be implemented to guide the achievement of the overall organisational long term objectives. Green Hat Thinking is creative and looks at identifying new perspectives. The objectives of this approach are to identify non-habitual approaches to problems in the organisation. It is based on extended rules and elaborate thinking approaches. Allworld should a team to guide the process of organisational change. The CEO should tract the changes by preparing short term wins and reviewing the sales volume data periodically. The management will closely monitor the performance of each employee and devise correction actions to low performance. The Blue hat approach is based on managing, facilitating and coordinating decisions in the organisation. The managers using this approach emphasize on maximizing efficiency of internal processes in order to attain the set goals and objectives. The management should implement effective communication channels and methods of performance evaluation. A change of the vision statement is essential and the change team should ensure all the employees appreciate the importance of the changes. All barriers to change must be removed. Short term goals and wins should be introduced to guide the overall long term goal achievement. Desired process changes The CEO, Lily chambers should embark on research and development activities in order to understand the customer needs. The CEO should implement organisational cultural changes. According to the “general model of planned change”, Lily Chambers will undergo four crucial steps in implementing changes to the assumptions, values, management beliefs and norms in the organisation. The CEO will have to focus on the human resources, the leadership style, the communication channels, and the vision of Allworld and change environment. Effective communication channels are essential since all the stakeholders in the organisation will be able to understand the need for the cultural changes. A two way communication channel will aid the management in monitoring the cultural changes and resistance to the planned change. The CEO will have to assess and respond to the employee demands and grievances10. Human resources are the significant assets of any organisation. The financial success of Allworld will depend on the creativity and hard work of the human resources towards the achievement of the organisational goals and objectives. The expected change at Allworld will threaten the top management since most of them fear losing their power and jobs or responsibilities. The senior management is also afraid of losing the working relationships and respect from the subordinates. Effective communication will help the CEO in communicating the need of cultural changes in the organisation. For instance, the employees of Allworld are unhappy with the current management practices. The CEO should investigate the leading cause of employee grievances. Some of the causes of employees’ discontentment at Allworld may include poor remuneration, poor performance evaluation techniques, lack of job security, and poor working conditions11. The management should ensure all employees are adequately compensated for their efforts by paying them fair wages. The management should appreciate and reward employees for their hard work and meeting of performance targets. The management should implement two way communication channels that allow employees to air their grievances on the working conditions. The management should undertake employee training and development. Training of employees on new skills will help them improve on the level of customer service and easily understand the customer needs and requirements12. The management should also involve the employees in the decision making, this will encourage innovation and creativity within the organisation thus new and improved processes will be implemented to counter the threats in the market. The CEO should also implement performance standards for all employees. This will enable employees to understand their job expectation and the desirable skills and attitudes that are necessary for effective performance of the job. The management should delegate responsibility and authority to the subordinates in order to ensure individual accountability of the various tasks within the organisation13. The management should also win the employee trust during the change process. The CEO should display integrity and fairness in implementing the cultural changes. The management should openly communicate the need for the cultural changes and help the subordinates in understanding and adjusting to the organisational cultural change. The CEO should also change the vision of the organisation. Initially, Allworld was destined to be the premier grocery outlet in Australia. Since the company has lost to the competitors in the market share and profitability, a vision change is essential in order to ensure alignment of organisational goals with the changes in the external environment. The vision of the organisation should be to increase the market share of Allworld and improve the incomes from the grocery business. The management should provide the subordinates with visual aids of the new vision and organisational structure in order for the cultural changes to take effect immediately. The CEO should also identify potential barriers to cultural change and create an enabling environment for the desired cultural changes. Hostility towards change and lack of knowledge on the impact of the new organisational change are some of the potential barriers that Allworld Foods may experience. The CEO should train the senior managers on the expected cultural changes and create a team to oversee the necessary cultural changes14. The Kotter’s 8-step model of change According to Kotter’s 8-step model of change, Allworld should implement new technologies, new processes and new strategies in order to attain a competitive edge in the constantly changing external business environment. The CEO should start by creating urgency for the organisational cultural change. The CEO should show all the subordinates the poor sales volumes and declining dividends. The CEO should also make the employees understand that their poor remuneration is due to the low profitability of the organisation. The CEO should provide information to the other senior managers on reports of environmental scanning and strategies that have been implemented by Smith’s. The CEO should identify the future threats of the current organisational culture and the opportunities that Allworld could exploit in order to stay competitive in the industry. The CEO should involve all the stakeholders including the customers, employees and shareholders in discussions relating to the anticipated organisational cultural changes and management restructuring15. After creating urgency for the changes, the CEO will need to form a coalition for change by establishing effective leadership principles in order to convince all the stakeholders that cultural changes are necessary. The CEO should identify the change agents within the organisation from employees who appreciate the importance of the cultural changes. The team should be selected from all the relevant departments. The CEO will also need to create the vision for the change like the desired sales volume within certain duration of time. The vision should be creative and possible to attain with the available organisational resources. The CEO and change team should devise the strategy that is essential in executing the vision of the organisation. The CEO should effectively communicate the vision to all the stakeholders. The communications should be undertaken periodically in order to ensure all the employees understand the implications of the new vision to their tasks. Communication can be done through artifacts in the organisation and message boards. The vision and mission statement should be displayed in all the major departments in the organisation and at the office receptions16. The CEO will then have to remove all the obstacles to the cultural changes. For instance, a review of performance evaluation methods, job descriptions and remuneration methods will assist in removing the hu8man obstacles to the cultural changes. The next step will involve creating short term wins. The short term wins are early indicators of the organisational cultural changes. The CEO should set time frames for the short term wins that could be like within a year. The early targets should be easy to achieve and may include low employee absenteeism. The management should then build on the short term win in order to ensure total organisational cultural changes. For instance, launch of a new product within a year may be one of the short term wins but the organisation must strive to launch more than ten new products within the next five years. The changes should then form the new culture of Allworld. The CEO should entrench the new cultural values in all aspects of the organisation. New product development and creativity should be the defining culture of Allworld17. Conclusion The management of Allworld has relied on traditional aggressive pricing and advertising strategies to stay competitive in the market. There is evidence of poor management practices and lack of planning. Allworld lacks a contingency plan that can enable the company to effectively respond to urgent changes in the market. The management should change the values, assumptions and beliefs of the organisational culture. Scanning of the environment will enable Allworld to understand the competitive strengths and strategies of all the competitors. Allworld should conduct research on the changing customer needs since customers are no longer attracted to the low pricing strategy. Bibliography: Bradford, D and Warner B. Reinventing Organisational Development: New Approaches to Change in Organisations. New York: Pfeiffer. 2005. Bratton, J and Jeffrey G. Human Resource Management: Theory and Practice. New Jersey: Lawrence Erlbaum Associates. 2000. Burnes, B. Change. England: Ashford Color Press. 2004. Campbell, A. “The power of missions: Aligning strategy and culture,” Strategy and Leadership 20 (5): 10-63. Dessler, G, Griffiths J, and Lloyd-Walker B. Human resource management. 2nd Ed. 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