Problem Identification and Analysis of KeyGrains Managing Director - Case Study Example

Case Study Report for KeyGrain’s Managing Director Prepared by (Name’s) Business Foundation Consultants Date Table of Contents Executive Summary KeyGrain, a firm that sells health products in the Australian market, has several problems that have been noted by the newly selected Managing Director, Alison Razor. This report explores the major issues facing the firm, as indicated by Alison and the recommended solutions as well as an explanation of how the company will implement the recommendations. One of the issues addressed in the report is that the firm sells one product brand only and focuses only on the Australian market. Since competition has been rising in the health, there is likelihood that the firm might not withstand the competition in the future. Further, the quality of production has been constantly found to be poor, yet the firm seems to lack a proper performance management system and training opportunities for the workers. Last, there seems to be a lack of proper communication between the top management and the workers within the organization, leading the workers and middle managers to be dissatisfied with the top management. As indicated in the recommendations, the firm can address the issue of overreliance on the Australian market and one product brand amidst the rising competition in the health industry through establishing new brands and establishing a proper and efficient strategic plan. The quality of output can be improved through establishing a proper performance management and reward systems. Last, developing proper communication channels will help to solve the issue of communication. 1.0 Problem Identification and Analysis KeyGrain is a firm that sells health products in the Australian market, and it is owned by an American organization. Recently, Alison Razor has been selected as the Managing Director (MD) of the firm after completing MBA program. Alison has noted several problems in the company, which are likely to halt the performance of the firm in the future if not effectively addressed. The following are some of the major problems facing the company: 1.1 Overreliance on one Market and Product Brand One of the major issues identified by Alison is reliance on the Australian market and one product brand only. As Alison explained, the firm focuses only on the Australian health market. As Alison noted, the competition in the Australian health market has been rising and is expected to continue rising in the future. At the same time, the firm sells only one health product, the healthy muesli bars. The problem lies on the fact that if competition continues to rise, the firm might not withstand it. In the extreme case, the firm might be compelled to close its operations. The main source of the problem is a lack of a proper strategic plan for the firm. For a business organization to succeed, as John and Harrison (2013) explained, it must have an efficient strategic plan that guides its operations. Among the main contents of an effective strategic plan are good vision and mission and proper and achievable goals and objectives of the firm. A vision entails what a firm aims to become or achieve in the future. Mission refers to what a firm aims to do to achieve a certain vision. Goals are the measurable outcomes that firm targets to achieve over a given period. Objectives are the steps that are taken to achieve a certain goal. All the four contents of a strategic plan influence the plans of a firm and motivate workers to work hard (Härtel & Fujimoto, 2014). KeyGrain seems not to have a proper strategic plan as the middle managers, and the workers are just contended with what that firm has been achieving and are not guided by proper plans. 1.2 Poor quality of Output Another problem facing KeyGrain is the poor quality of output. Leo Rams, the firm’s quality manager has been visiting the outlets of the firm in the past and as been unhappy with the quality of outputAs such, the poor quality of output at KeyGrain is likely to hamper its performance and success. The problem of poor quality of output in the company is likely caused by issues such as the lack of proper performance management and reward systems. After recruitment, Ross has been trying to implement a performance management system that is based on a problem-solving approach to replace the previous system that was based on appraisal system. The company does not seem to have an effective reward system as Alison felt that there was a need to establish it. . The quality of output is a major factor that has a direct influence on the performance and success of a firm (McFarlin & Sweeney, 2014). When the quality of output reduces, customers start looking for alternatives in other organizations. Without producing quality products in a competitive market, a firm is unlikely to withstand the competition. 1.3 Lack of Effective Communication Further, there is a lack of effective communication between the top management and other stakeholders within the organization. There is growing discontent within the organization that the management does not understand the staff. As well, the middle managers do not have an adequate understanding of the functions of the top managers as well as the importance of the decisions they make and management practices they engage. The middle managers, for instance, are skeptical of the approach taken by the human resource manager to enhance workplace diversification. Effective communication, as Beerel (2009) explained, helps in ensuring that the vision, goals, objectives, and mission of a firm conveyed well and understood by the workers and other internal stakeholders. Without proper communication, workers and managers are likely to misunderstand each other, as indicated in the case of KeyGrain. 1.4 Low level of Innovativeness KeyGrain has workers who are not very innovative. Alison found that Rob Lowe, the previous Chief Executive Manager, was working with Australians only. After Alison took over leadership as the MD, she hired a new human resource manager, Ross Keilor. Ross started recruiting people from other ethnic groups and increased the percentage of women recruited, which was not welcomed by the middle managers. This implies the previous leader did not support the establishment of workplace diversity that enhances innovativeness. Workplace diversity, as Jain and Sharma (2013) explain, is achieved through recruiting and giving equal opportunities to individuals with different personal attributes, such as gender, age, ethnicity, race, religion, ability, and sexual orientation. One of the advantages of workplace diversity is that a firm consists of internal stakeholders with different abilities and perspectives. As O'Meara (2013) explained, enhancing workplace diversity increases the chances of a firm to recruit innovative individuals. On the other hand, discriminating against persons based on their traits reduces chances of hiring or promoting talented individuals with the ability to steer a business to succeed. One of the significant impacts of workplace diversity is that it enhances innovativeness of the workers and managers (O'Meara (2013). Lack of workplace diversity at KeyGrain explains the reason the middle managers and workers in the organization have not been very innovative, as Alison noted. 1.5 Lack of Training Opportunities Another issue is that the firm does not offer training opportunities to workers. The workers in the company have been expressing that they lack adequate knowledge of the products they make and are unable to answer questions raised by the customers. The quality manager, Leo Rams, has been directing the workers to be reading about the products during their own time and when possible, at the workplace. The source of the problem is the lack of properly established programs for training the workers about the products they handle. As Armstrong (2012) explained, offering to train the workers, which helps in improving their knowledge and skills and ultimately, the quality and level of output? As such, lack of training opportunities for workers at KeyGrain is one of the causes of poor quality of services offered to customers. 2.0 Statement of Major Problems Out of the numerous problems facing KeyGrain, there are three major issues that need to be addressed urgently. The issue of overreliance on the Australian market and one product brand should be addressed so as to establish plans to counter the rising completion in the health industry. Second, the issue of poor quality in the firm should be addressed quickly since it has a direct impact on the performance of the company as it is on the verge of losing customers. Third, communication problem within the company is likely to halt the relationship between the managers and the workers, which has a direct adverse impact on the quality and level of the output of the workers. The issue of lack of innovativeness is important, but it is already being addressed through recruitment of diverse workforce by the new human resource manager. Solving the three problems will also involve solving the other problems identified. 3.0 Evaluation of Alternative Solutions to the Major problems a) The issue of overreliance on one product and market The problem of overreliance on the Australian market and one product brand can be solved by developing a strategic plan containing clear vision, objectives, mission and goals of KeyGrain. The contents of the strategic plan mentioned above should be focused on future expansion and growth of the firm. The main advantages approach is that the firm will have a strategic direction and employees will be guided by the plan to meet the ultimate goals and objectives of the firm. The weakness of the approach is that it cannot be effectively implemented in a firm where there is a lack of proper communication between managers and workers. Second, the firm should expand product range (Armstrong, 2012). The approach will help to reduce the risk of organizational failure associated with relying on one brand and will increase product choices for the consumers. The weakness of the approach is that it requires a firm to make significant investments in the new products in development, production and marketing processes (Armstrong, 2012). b) The problem of poor quality of output The problem of poor quality can be addressed through developing a performance management system based on problem-solving approach. The main advantage of the strategy is that it will enhance the ability of workers to solve problems without the assistance of managers, and the workers will feel motivated to provide quality work. Also, all products will be checked before being supplied to the customers to ensure that they meet the desired quality. The weakness of the approach is that not all workers can solve problems on their own and thus, it might not work properly on them (du Plessis, 2010). Also, the problem of poor quality can be addressed through establishing an effective reward system. The advantage of the strategy is that workers improve the quality of output out of inner motivation. The weakness of the approach is that some workers who might view the reward system as being unfair might feel unsatisfied and end up leaving the company (du Plessis, 2010). c) The problem of lack of effective communication The problem of lack of proper communication can be solved through establishing effective channels for direct communication between the workers and managers any time, such as communicating through emails and telephones. The advantage of the approach is that it allows workers to communicate their grievances and concerns with the management and thus, they feel as if they are being listened to. The weakness of the approach is that the top managers can hardly deal with all workers directly using the available channels. Second, the top management should plan to meet the workers in meetings frequently or at work places and discuss emerging issues directly. The strength of the approach is that workers will feel more valued and will be more satisfied than when dealing with the management through other communication channels. The weakness of the approach is that the managers might not have ample time to meet all workers (Armstrong, 2012). 4.0 Recommendations To properly solve the issue of overreliance on one market and product, it is vital for KeyGrain to establish new brands (healthy cereals, beverages, and snacks) and at the same time, develop a strategic plan. As Gooderham and Grøogaard (2013) explained, a strategic plan guides a firm to be focused on attaining certain goals and ultimately, expand its presence in the targeted market. Product differentiation helps in enhancing the presence of a firm in the targeted market. As such, combining the two approaches will enable the firm to develop and maintain a competitive edge in the Australian market and beyond. The problem of poor quality of output should be addressed through establishing effective reward and performance management systems. Performance management system involves working together with the workers and other internal stakeholders to ensure that the desired quality and level of output is produced to achieve the goals and objectives set by a firm (McFarlin & Sweeney, 2014). As McFarlin and Sweeney, (2014) explains, a performance management system that is based on problem-solving approach is supportive to workers as they solve the emerging problems to enhance quality and level of performance rather than ignoring and waiting for the management to solve or to judge the quality of output such as in the case of the appraisal system. As such, a performance management system that is based on problem-solving motivates the workers and helps to improve the quality of output (McFarlin & Sweeney, 2014). A reward system involves establishing ways of offering rewards, such as bonuses, time-off, and gifts, in recognition of good performance (Härtel & Fujimoto, 2014). Offering rewards to the workers motivates them to work harder and improve the quality of output. The issue of lack of effective communication can be solved by establishing effective channels of communication, such as phones and emails and, through making frequent face-to-face meetings with the workers directly. Combining the two approaches will ensure that the workers have open channels of expressing their concerns and problems to the management anytime. As McFarlin & Sweeney (2014), establishing effective channels of communication between the management and the workers helps to improve understanding and relationship between the parties involves. 5.0 Implementation Action Steps WHO WHAT WHEN/WHERE HOW Cost MD, the Human Resources Manager, the Quality Manager and the Financial Manager Develop a strategic plan and establish new brands (healthy cereals, beverages and snacks) Between 2 months and 2 years from December 27, 2015. Melbourne office and outlets. Develop a strategic plan through writing it down and communicating it to the workers in meetings and written documents. Researching on, developing and marketing new products brands 1. Cost of making consultations for a strategic plan and printing it. 2. Cost of researching, developing, producing and marketing new product brands. 3. Cost of meetings with middle managers and workers The Human Resources Manager and the Quality Manager Establishing effective performance management and reward systems Between 27th December, 2015 and April 1st, 2016. Melbourne office and outlets. Establishing and defining the rewards that should be given in recognition of quality improvement and guiding middle managers to teach workers on how to adopt a performance-based system based on problem-solving approach 1. Cost of creating and printing reading materials on how performance management should be undertaken 2. Cost of meetings with the middle managers and workers 3. Cost of rewards MD, the Human Resources Manager, the Quality Manager and the Financial Manager Installing communication devices and other channels and making frequent face-to-face meetings with internal stakeholders 27th December, 2015. Outlets Installing devices and channels that facilitate effective communication with workers and middle managers, such as phones and emails. Making meetings or meeting the middle managers and workers to discuss face-to-face the emerging issues. 1. Cost of meetings 2. Cost of installing communication devices and channels 3. Cost of printing information in case of written communication is adopted References Armstrong, M. (2012). Armstrong's Handbook of Human Resource Management Practice. London; Kogan Page Publishers. Beerel, A. C. (2009). Leadership and change management. Los Angeles: SAGE. du Plessis, A. (2010). International human resource management: An overview of its effect on managers in global organizations. Interdisciplinary Journal Of Contemporary Research In Business, 2(4), 178-192. Gooderham, P. N., & Grøogaard, B. (2013). International Management: Theory and Practice. Berlin: Edward Elgar Publishing. Härtel, C, H. J., & Fujimoto, Y.. (2014). Human Resource Management. 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