Danger Signal of Wang Laboratories - Book Report/Review Example

• Business Assignment: Section 5

Chapter 4

• The danger signal in the acquisition between the two companies is the failure to recognize the differences in distribution channels, brand image and customer relations between the two brands. The two companies had differences in terms of scale as well, which meant that they catered to different consumer segments and used different distribution channels to market their products. The larger company’s management hoped to use their larger scale distribution channels on their acquired company, which led to a mismatch between approaches and difficulties with the distributors and consumers. In addition, the acquisition took place when consumer trends were changing and other companies were introducing new and more competitive products (Finkelstein, 2003, p.111).
• The root leadership cause that is at the foundation of the danger signal is the failure to understand organizational behavior, how the two companies differed in their organizational behaviors. The behaviors of the two companies were different in their dealings with consumers, targets markets and consumer segments. This contributed significantly to the losses experienced by the acquiring company because they were incompatible based on their micro, meso and macro levels. The most important of these levels is the micro level, which comprises the individuals within an organization.
• The one who will be responsible for creating and executing the plan is the human resource manager in the acquired company. Since the acquisition failed because of a usurping of the operations of the smaller company by the larger company, the human resources manager should be able to pinpoint the changes in the different departments, how it could have negatively influenced the smaller company’s performance. This is especially the case for the marketing and logistics departments, which were potentially the most affected by the merger.
• The plan for dealing with the danger signal identified in the case is to ensure that human resource is reintegrated into the acquisition process. The major issue in the acquisition process is the lack of inclusivity in the acquisition process where one of the companies swallows the larger company without regard for the differences in policies and business practices for the acquired organization. To deal with the following process, the following are the step comprising the plan to deal with the problem:
• The larger company should include the human resources, marketing and logistics departments in the acquisition process to ensure the organizational behavior of the smaller companies is maintained. This will reduce the potential for strategic incompatibilities between the two companies where one company must inevitable incur losses because of the abrupt and non-inclusive shift.
• The HR department should develop strategies for employee retention during the mergers, especially in terms of specific skills and knowledge acquired through company experience. Increase in employee turnover during acquisitions is a very likely occurrence, which might lead to loss of organizational knowledge and a disturbance to long-established organizational cultures. The HR department should ensure that this does not happen abruptly through the institution of HR policies meant to retain the integrity of the acquired organization.
• There should be preservation of core business competencies during the acquisition process, such as logistical and marketing competencies. Abrupt shifts in business practices can negatively impact the relationships between internal and external stakeholders (RSRK p.291)
• The HR manager will see to the completion of plan implementation. The HR manager will coordinate with the marketing and logistics departments, including the top management of the two companies to ensure that the plan is implemented successfully
• Success will be measured by improvements in financial performance of the acquired company because it experienced a dip in performance after the acquisition. In addition, operational efficiency should also be a measure of success
• Celebrations will occur when the two companies are able to meld their cultures to acquire a unified culture where there are suitable working relationships and synergies.
• Strategic development to reduce turnover will take place over one week of strategy evaluation and formulation. This strategic development process will include measures to maintain the organizational characteristics of the two organizations in terms of organizational processes and behavior.

Chapter 5

• The paper deals with the case of Wang Laboratories. The danger signal detected is in the leadership practices of the leader in his management of his human resources and dealing with the competition. Blinded by his battle with IBM over the magnetic core patent rights, the leader ignored the trends towards personal computing and thereby lost an incredible opportunity to usurp the market share in personal computing. The leader was too concerned with competing with IBM, who had sales volumes of $47 billion, in comparison, the organization’s $3 billion sales volume. This competitive rivalry led to the breakdown of communication between the leader and his employees (Finkelstein, 2003, p.148-149).
• The root leadership cause that is the foundation of the danger signal is the lack of intrapersonal and interpersonal communication in the leader’s leadership practices. The leader’s leadership problems are the result of his inability to engage in meaning intrapersonal and interpersonal communications. It could have negatively influenced innovation and the incorporation of multiple perspectives in the company’s business practices, thereby reducing competitiveness. The employees at the company might not have had the autonomy that is a significant factor in engendering an innovative culture within a company.
• The internal communications manager will be responsible for creating and executing the plan to deal with the identified leadership problem at the organization. If the company did not use an internal communications manager to handle communications, it is necessary to create such a position and determine the roles and responsibilities that come with the position. Another potential position in human resources that might be able to carry out the stated plan is the administrative assistant.
• The following are the steps proposed for dealing with the problem identified:
  • The organization should provide a feedback mechanism between top management and lower-level employees that will provide a two-way communication platform. Such a platform will increase employee engagement with the company and produce better innovation
  • Two-way communications should include communication of the company’s strategic objectives, goals and mission to ensure that they have a unified understanding of future company directions
  • The company should change its organizational culture to one that enables information sharing between departments and between top management and employees
  • To ensure that the communications and culture change strategies are successful, the company’s leadership should embody the practices outlined in the plan in order to lead by example. Through behavior modification to reflect openness and positive response to feedback, the company’s leadership can lead by example, thereby improving the potential outcomes in the implementation of the plan
  • The company should consider hiring a dedicated internal communications manager to manage the two-way communications approach suggested in the plan (INF p.7)
• Top management will hold the internal communications manager in account for implementing the proposed plan. The internal communications manager will provide period evaluations on the success of the implementation.
• The following are the measurement criteria for the developed plan:
• The first measure is the ability of the plan to aid in meeting the organizational strategic objectives and goals. This is measurable by the level of employee engagement with the firm and specifically their engagement with top management
• The establishment of two-way communication is another measure. Employees can report their comfort levels when engaging with top management, which will provide evidence of the effectiveness of two-way communication
• The effectiveness, usage, and access to communication channels made available by the plan should provide additional information of employee engagement in the company.
• The internal communications manager should look out for the institution of a new initiative in the company and use this as a unique opportunity to gather new data and analyze it to find out the success of the implementation process
• During the implementation process, celebrations will occur after the accomplishment of major milestones. During the celebrations, exceptional contributions to the implementation process will be recognized through motivational prices and other gifts that ensure the employees feel appreciated
• The expected completion time for the solution is estimated as a full financial year divided into quarterly milestone periods where the internal communications manager will evaluate the improvements in internal communications between top management and employees and among employees.

Chapter 6

• The danger signal identified in the sports manufacturer is the shift from strategic focus on girls and women’s fashion accessories to providing running shoes for men. The company did not have the core competencies to provide the new consumer segments with the products and services required to gain competitive advantage in comparison to competitors who had more experience with the men’s consumer segment. The company’s focus on a universal response to a different market segment could have caused the identified danger signal because of the diversion of core competencies to other consumer segments rather than remaining with the consumer segment where the company had the core competencies to compete (Finkelstein, 2003, p.194).
• The root leadership cause of the identified danger signal is strategic misleading. The management attempted to apply general principles to different consumer segments in their strategy. This led to failures in attaining competitive advantage because there were more established companies catering to the targeted consumer segment.
• The top management will be responsible for creating and executing the plan to direct their core competencies to their established consumer segment. The plan will involve backtracking to the previous strategic focus on girls and women’s fashion accessories.
• The following are the steps that designed to solve the identified problem:
• The company should focus on its existing consumer segment and backtrack from the new consumer segment. The company will expend too many resources trying to win the new consumer segment, which is a risky strategy because it does not have the core competencies to acquire a significant market share and win over the competition. This will involve the sale of assets acquired for providing goods for the new consumer segment. The sale should be timely to reduce the reduction in value caused by the depreciation costs of the fixed assets (3SMJ, consolidation chapter)
• The person responsible for ensuring that the strategy is implemented is the leader of the company. The strategy implementation process requires someone with the management power to sell off the assets and arrange for a strategic reorientation towards the previous consumer segment. Difficult decisions might need to be taken such as dealing with excess human resources. Such difficult decisions will require the leadership skills of the company’s leader.
• Success will be measured by the minimization of costs associated with the strategic reorientation. Although the company might lose short-term revenues because of investments already made in the new venture, the minimization of long-term revenue loss will be a reliable measure of the implementation of the proposed solution.
• Celebrations will occur when the company is able to regain its strategic focus through backtracking from the new business venture.
• The expected completion time is one financial year. As the company closes the financial year, the balance sheets will show the success of the backtracking process in minimizing losses.

Chapter 7

• The danger signal that reveals a problem with the company’s approaches to business model is a reluctance of top management to change its strategy because it was successful in the past. Past successes for the jeans manufacturer led to a misguided adherence to its strategy, thereby creating room for loss of market share because of innovations from other companies engaged in the production of jeans (Finkelstein, 2013, p.221).
• The root leadership cause of the identified danger signal is failure to manage change. Change is a necessary part of the organization. The jeans manufacturer failed to recognize changes in trends in the marketplace and stuck to its traditional strategy because it had produced results in the past. This was an insufficient approach to business strategy because of the dynamism of the external business environment. Innovations from other companies dislodged it from the top position in the market, creating a reduction in organizational performance.
• The person who will be responsible for the creation and execution of the plan is the change manager. If the company does not have such a position, it should consider creating one to ensure that the organization is able to respond to changes in the external environment through instituting internal environmental changes to meet the changing trends among consumers.
• The following are the steps the company should follow to deal with the identified problem:
• The company should conduct a stakeholder analysis of its consumer base and shareholders. This will provide information on how well the internal business processes are influencing stakeholder perception of the company. The company should consider the needs of stakeholders and refrain from adhering from traditional product lines and approaches that are not suited to the changes in consumer preferences and the external business environment.
• The company should address the potential for resistance to change in its internal business environment. The resistance to change problem is the genesis of the problem identified previously. This might be because of the organizational characteristics that create an environment where there is not culture of change. The change manager should address this in conjunction with top management to ensure that employees and the company leadership are open to changes internal and external business environments.
• Finally, the company should create a change management team to institute the desired internal changes based on the findings of the stakeholder analysis. The change management team, under the leadership of the change manager, will ensure a coordinated and successful implementation of the change processes required (INF, p.ix)
• The person accountable for the implementation process is the change manager, who will work with the change management team to bring about the desired organizational changes.
• Success will be measured by the recovery of the market share lost due to the problem identified. A market research will be conducted to evaluate whether the change management process is having an impact on the stakeholder perceptions.
• The celebrations will occur during performance evaluations to incentivize the employees to embrace the changes taking place in the organization.
• The stakeholder analysis should take two weeks of intensive analysis. The change management team will be created within the first week of the change management process. Addressing employee resistance to change will be a continuous process.

Chapter 8

• The baseball team cited in the text fails to absorb information on the need to change their practices to reflect the changes in the external business environment. The organization failed to heed to the information that black players are just as talented as their white counterparts in the baseball league are. Failure to respond to incoming input from people with knowledge about the trends in the league led to bad management decisions that cost the organization (Finkelstein, 2013, p.254).
• The root leadership cause for the danger signal is lack of incorporation of knowledge into organizational practice. Leaders should be able to acquire information and use it to inform decision-making processes. Failure to do so means that the company operates on limited information, thereby limiting its ability to remain competitive in its operating environment. Information is especially important in the knowledge economy, where organizational knowledge is an important asset for maintaining competitiveness.
• The person responsible for creating and executing the plan is the team’s manager. The team manager makes crucial decisions, such as determining recruitment strategies. He or she should be able to respond and incorporate the information acquired from recruitment specialists into decision-making.
• The plan suggested to deal with the problem is the diversification of the team to ensure that the organization benefits from the different capacities possessed by different racial groups. Diversification of the team members, or human resource in business organizational settings, has benefits in increasing productivity. Without organizational diversity, the organization misses the diverse skills and knowledge possessed by diverse groups with varying cultural backgrounds (MML, p.57)
• The person accountable for the diversification of the team is the team manager because the identified problem falls within his sphere of responsibility.
• Success will be measured by the team diversity. In addition, performance and improved public perception of the team should provide more indicators for the success of the diversification strategy.
• Celebrations will occur after the team wins major tournaments. These celebrations will cement team relationships and remove racial tensions that might be apparent after the diversification process.
• The diversification of the team should occur within the training season before a new tournament occurs. This should give the team enough time to acclimatize to the new members from diverse communities and therefore build the rapport that is necessary in ensuring improved performance.