Immediate Problems Facing Australian Cladding Company - Case Study Example

THE AUSTRALIAN CLADDING COMPANY CASE STUDY THE AUSTRALIAN CLADDING COMPANY Insert name Insert grade course Insert instructor’s name October 18, 2011. Introduction The Australian Cladding Company (ACC) was initiated in 1998 by an engineer by the name Jim Hackett. Hackett formed a novel light weight, low cost house cladding product that found ready market in Australia. The company grew considerably and attracted even international markets. Even though the company’s headquarter was located in Sydney, the company had ready markets for t products in other states as well as international markets. This company thrived under very good economic environment and grew rapidly such that the HRM did not manage to keep the pace with the growth. There were some initiatives that favored the development of the company such as the First Home Owner Grant Scheme that made sure that the construction industry remained afloat. Due to the increase in demand, the company raised its staff from the initial 20 crew to around 150 production staff and an extra 25 staff working in support roles such as logistics, finance and accounting, sales and others. This rapid growth had its aftermaths in the HR practice and activities and that was the starting point of the problems that the company is facing now. Immediate problems facing Australian Cladding Company There problems facing this company started when the company grew rapidly while its HR activities lagged behind. From the case study, the first problems that the company faced is the drop of profits between the year 2007 and 2008 as a result of increased costs; cost management figures showed increased scrap and wastage rates as well as labor costs. The company has also been suffering from efficiency problems with the production staff – sometimes, the staffs were hanging around not doing anything, yet at other times, people were stressed and working flat out. Despite a long history of long staff tenure, the company has been experiencing problems of staff retention. This involves the skilled staff on the floor together with key engineering people as well as several IT specialists, who have left the company due to lack of professional development. The case study also shows that the number of work place accidents has been on the rise. According to the case study, one of the machine operators, Sandra, reported that a number of workers have not been taking enough safety precautions while operating machineries. Another issue that has been indicated in the case study is that of female workers lamenting that their male colleagues have been using seductive language in the workplace and if the company does not take action, there will several cases of sexual harassment (case study) By mid 2008, the company was suffering from poor performance and staffing problems. According to one of the consultant that had been hired, Terry, the problems were being caused by rapid expansion of the company while the HR activities were left lagging behind. The Hr was not able to plan properly for the expansion of the company and so the staffing was done in a haphazard manner without considering the roles to be played by workers. It is clear that recruitment was done hurriedly and people were given jobs that did not fit them. For instance, at around 2003, most of the employees were male and by 2008, there were several females employees, who found it difficult to cope in a male dominated working environment. No wonder most of them were feeling as if they were being sexually harassed. The skilled workforce was resigning because they were discontented for lack of professional development. Moreover, senior positions in the company had been taken by the old employees and the new employees could not see a career path for themselves in the organization (case study). Another problem that the company is facing is the issue of international credit crisis. There are several issues that have emanated from globalization at international level, among them being several instances of economic downturn due to technological developments and global warming. By 2009, ACC was hit by the fall-out from the international economic crisis. As a result of the crisis, most of the state projects in Australia came into a halt, reducing the market for the ACC and thus affecting the profits of the company. Thus, as the cost of production has been going up, the profits have been declining leading to more stress and layoffs in the company (case study). The underlying problems facing Australian Cladding Company As the company continues to grow, there will be several underlying problems that the company will have to face, most of the related to the working environment. ACC staff will be facing a number of stressors at work. These stressors may include role overload, role conflict, role ambiguity, as well as new responsibility challenge emanating from recent organizational restructuring – a common feature of organizational life in the 21st century. Taking the workers of ACC as a team, the company might face conflict and status incongruence. The company is learning to apply the new technology since it is young and is also in the midst of changing the management style as the staff increases. Also, the company I part of a culture, where competitiveness has become as even greater stressor in the 21st century (Cohen et al.1987). There are eight sources of stressors that will be affecting ACC as it is being restructured: Ergonomic factors: there are poor physical conditions that will worsen stress at ACC. For instance, the design of the control room as the cladding company is a significant variable in terms of stress to the workers and more sophisticated ergonomic designs are necessary. The employees will frequently be complaining about ergonomic factors at work. Hazards in the workplace: it is clear that the work at ACC poses a lot of risks to the workers. This is evident from one scenario where Sandra, one of the machine operators, reported to the Managing Director (Jim) that several workers were undertaking enough safety precautions while operating machineries. Consequently, the numbers of workplace accidents have been on the rise. When faced with abnormal situations, workers are subjected to physical danger. However, the type of stress that is induced by uncertainty as to whether an event presenting physical danger might occur can often be significantly reduced by making the workers feel adequately trained and equipped to cope with emergency (Matheson, 2003). Conflict in the workplace: workers in ACC are prone to suffer from occupational burnout due to role conflict as well as other physiological characteristics in the working environment. As the company becomes larger, these conflicts may increase and thus result to organizational stressors stemming from role ambiguity and conflict in the managerial levels (Brosnahan, 1999). Job strain: job strain is the high psychological demand and low decision latitude on the job. This will be very common factor in Australian Cladding Company if the current situation is not dealt with. Organizational team politics: there is a connection linking occupational stress and organizational politics. In ACC, negative stress may result from such factors as uncontrolled team politics, lack of effective consultation, and exclusion from the decision making process as well as restrictions on behavior. There is some evidence to suggest that workers experience more stress in all bureaucratically structured arrangements as compared to less rigidly structured arrangements. The democratic involvement of workers in the management and decision making process of ACC will become a foremost challenge and source of tension and conflict in the 21st century (Guest and Conway 2000). Work overload: work overload can be seen as being either quantitative (having too much to do) or qualitative (the work being too difficult). With time, work overload will be a managerial issue in ACC due to increased levels of layoffs. For instance, quantitative overload is always associated with cigarette smoking, and also such stress-related symptoms as lowered self esteem, low work motivation, and escapist drinking. Work under-load: ACC may have been suffering from work under-load since some of the professionals have been leaving the job due to lack of professional developments. Work under-load together with a repetitive, routine, boring, or under-stimulating work environment, such as a spaced assembly line may even lead to ill health. Boredom and lack of interest in the job may reduce an operator’s ability to respond to an abnormal situation. The company might as well suffer from techno-stress – stress emanating from the introduction of information technology. Techno-stress may be related to monotony, work overload or under-load as well as other ergonomic conditions (Perry, and Debra 1997). Irregular hours: as the company expands, the workers might be forced to work at irregular hours. Irregular hours constitute a common occupational stressor, affecting neuro-physiological rhythms, like mental efficiency and low work motivation, which may lead to stress related disease. Team burnout: the ACC workforce can be termed as a team while the executive directors can be referred to as team leaders. Burnout may be defined as an internal psychological experience involving a changed world view with negative feelings and attitudes, and a consistent sense of fatigue or exhaustion physically, psychologically and emotionally. The individual seems to lose trust and above all a zest for life. In interpersonal relations, the team member subject to burnout orientation increasingly feels a sense of depersonalization thus registering a negative shift in responding to other team members (Meier 1984). Such a pattern of feeling tends to harm the team member’s health as well as disrupting the team. There are several causes of team burnout and are evident in ACC. They include: Lack of clear direction, focused goals and vision for team. Lack of positive conditions and challenges. Lack of balance between power and responsibility. Technological change resulting in downsizing, de-skilling, and loss of power or role conflict. Career development crises. Lack of perceived success and meaning performance. Lack of perceived success due to unclear goals and planning. Since team burnout does not happen overnight, ACC workforce may find themselves gradually having persistent negative perceptions both at work and outside (Ulrich, 1997). HR activities and HR approaches needed to be implemented to ensure ongoing strategic competitive advantages Implement strategic human resource management (SHRM) For the company to overcome its current problems and be able to achieve its long-term goals, the organization should implement strategic human resource management (SHRM) and strategic team leadership approaches in the HR activities. Human Resource Management (HRM) is the function within as organization that focuses on recruitment of, management of, and providing direction for the people who work in the organization. It is the organizational function that deals with issues related to people such as compensation, hiring, performance management, organization development, safety, wellness, benefits, employee motivation, communication, administration and training (Becker, Huselid, and Ulrich, 2001). Human Resource Management is also a strategic and comprehensive approach to managing people and he workplace culture and environment. Effective HRM enables employees to contribute effectively and productively to the overall company direction and the achievement of the organization’s goals and objectives. Strategic human resource management (strategic HRM or SHRM) on the other hand refers to an approach to the management of human resources that offers a strategic framework to support long-term business goals and outcomes (Redman, and Wilkinson, 2001). The approach is concerned with longer-term people issues and macro-concerns about structure, quality, culture, values, commitment and matching resources to future need. A strategic approach to HRM refers to a managerial process requiring human resource (HR) policies and practices to be linked with the strategic objectives of the organization (Ivancevich and Matteson 1990). Develop strategic team leadership (STL) Strategic team leadership (STL) can be referred to as an innovative process of managing stress, uncertainty and change for developing organizational excellence. Strategic team leadership is a process of reality construction employing two basic characteristics: one, the strategic team leader does not merely react to the environment but, actually enact the environment. Second, the strategic team leader uses as open-systems approach in developing a strategy in recreating the environment. The essence of an open-systems approach is to understand the importance of interdependence of organization and its environmental stressors. The strategic team leadership framework opens the way to a reinterpretation of internal and external organizational stressors and their associated uncertainties. Traditional approaches to leadership have tended to focus on the problems of linking tasks and the people who are to perform those tasks by identifying the behavioral styles appropriate for different situations (Holbeche, 2001). The strategic team leadership framework encourages leaders and participants to redefine reality such as stressors. ACC requires using both SHRM and STL to align its goals and objectives with the mission of the organization (Wood, 1995). Develop strategic vision and values The Australian Cladding Company is at the verge of collapsing if something is not done and done urgently. The organization is required to change its culture and its HR activities so as to improve the performance and mitigate the current problems that it is facing. Developing strategic vision and values is one of the HR approaches that ACC can use to overcome its current problems and ensure long-term competitive advantages are achieved (Lazarus, & Folkman, 1984). ACC can use strategic value analysis (SVA) as a grand coping strategy for managing stress, uncertainty and change. SVA is a proactive process that can assist clarify the linkage between its core values and stressors it faces with the ultimate objective of achieving better performance, improved quality of work-life, and a customer-driven viable, flexible and competitively effective organization (Schuler, and Jackson, 2000). For the organization to develop strategic vision and values, it is needed to undergo eight phases of transformation: ACC is needed to identify core values in its mission statement. Identify internal stressors, such as layoffs, workplace and accidents, and unique organizational characteristics. Identify stressors from the external environment, such as competition, international economic crisis and many more. Examine long-term objectives and their relation to stressors as well as the organization’s core values. Examine annual objectives and their relation to stressors and core values. Develop suitable strategic team leadership strategies to manage stressors, incorporating new values. Implement selected coping strategies. Evaluate the effectiveness of selected team leadership strategies and introduce changes reflecting feedback and new learning I understanding your organization mission, philosophy, and its core values in proactively managing changes and stressors (Sisson, 2001). The first phase in an organizational SVA begins with a commonly shared organizational philosophy and mission. An organization’s mission is the primary, distinctive purpose that sets it apart from other organizations of its type and identifies the size of its operation in product, service and market terms. It embodies the business philosophy of strategic decision-makers and implies the form’s ultimate aims. It projects a sense of worth and intent that can be identified and assimilated by outside stakeholders; that is, customers, suppliers, competitors, local committees, as well as the general public. The organization’s mission will also assert the firm’s commitment to responsible action in symbioses with the preservation and protection of the essential claims on insider stakeholders’ survival, growth and profitability. The values will on the other hand serve as the foundation on which the organization’s mission is structured, which in turn, influences the determination of long-term and short term objectives, (a plan to change value structure) and an implementation plan comprising of functional procedures and strategies (Behling, & Darrow, 1984). Develop empowering team communication (ETC) strategies ETC strategies refers to an inward look by the team or workforce at its own performance, behavior and culture for the purpose of dropping out dysfunctional behaviors (such as quarrels, sexual harassment) and strengthening functional ones. Since team development skills enhance synergy and positive working relationships with each other, ETC becomes an effective proactive strategy to make use of constructive stress and tackle dysfunctional stress positively. ETC is also a powerful leadership strategy and can help ACC leaders develop strong suitable culture in congruence with organizational mission (Lazarus, 1996). Develop dynamic information technology management (DITM) The dynamic information technology management strategy (DITM) is one of the grand strategies for effectively dealing with uncertainty in the 21st century, which a director or a team leader can proactively and dynamically manage its impacts for the benefit of both the organization and its employees. The essence of dynamic thinking is to enable one to comprehend that technological leadership affects and is affected by all other leadership strategies – not only pertaining to the internal stressors but also external stressors. A proactively and dynamically managed information technological system can be a major strategy in coping with job stress and change, leading to enhanced quality, productivity, competitive edge or advantage, and overall excellence (Condrey, 1998). For the dynamic information technology management to function as a proactive and flexible systems strategy, it ought to be integrated with ACC’s both internal and external environments, and hence it will serve as an empowering strategic team leadership tool. ACC managers should not only adapt to the environment, but they should influence the environment so as to build an organic relationship between the organization and the environment. This will solve the innovation and IT problems that ACC has been facing (Holbeche, 2001). For ACC to be able to deal with current and future stressors, it has to plan a technology management strategy dynamically by aligning information technology with business strategy, which, if not managed well, might lead to distress and burnout. ACC is also required to develop, monitor and evaluate its technological position. This is because technological position is critical to organizational competitiveness in a rapidly changing global context. Finally, implementing technology management strategy requires recognizing its social impacts. This is because conflicts might arise between technology investment and quality of work-life, thus raising the levels of uncertainty or techno-stress. Thus, suitable advance consultation, provision of needed new information retaining, work redesign and ergonomic considerations are required to become part of a dynamically balanced technology-managed strategy (PA Consulting Group 2002). Develop empowering organizational culture Empowering organizational culture (EOC) is one of the HR approaches that ACC require to implement so as to manage stress and develop excellence in the organization. It is a long-term strategy that requires top management support and needs to be nurtured by strategic tem leaders over a period of time. Organizational culture is the value system shared by various members of the organization. Culture is the outcome of shared meanings concerning various organizational objectives and is sustained over time by both formal and informal institutional arrangements and organizational practices. The success of executives of ACC as strategic leaders is directly connected to the type and quality of strategies they practice for developing an imaginative organizational culture that enhances a sense of meaning for employees. As a strategic manager, Jim Hackett is needed to strategically identify and reinforce those values that help to use uncertainty resulting from rapid global change toward constructive organizational energy (Armstrong, and Baron, 2002). Develop empowering social support strategies (ESS) ACC has been suffering from the problem of people being reluctant to work and feeling the urge to leave the company due to lack of motivation and feeling that they are not loved. There was also the problem of sexual harassment reported by female employees. Social Support is a powerful team leadership tool for effective management of stress and enhancement of excellence. Social Support refers to the provision of resources and information belonging to one or more of the following classes: (a) information leading the employee feel that s/he is cared for and loved. (b) Information leading the employee feel that s/he is esteemed and valued; and (c) information leading the employees feel that s/he belongs to a network of communication and mutual obligation (Gratton, 1999). Learn the art of managing strategic empowering change Finally, the managing director (Jim Hackett) can be a great team leader of ACC if he can be able to adapt and lead to rapid, novel and radical change. This is because the pace and magnitude of change, intensified by the information revolution, will result in increasing stressors on the organization. The 21st century will witness a period of change in society that many are forecasting as a major revolutionary transformation in our entire cultural fabric. This magnitude of change influences our values, the role and activities of our institutions and even our concept of ourselves. Thus, ACC leadership is needed to identify forces for change and analyze the current environment of the organization with respect to major forces of change by examining their mission and their chances of survival and growth. These forces of change are required to be related to current and expected stressors in light of the organization’s mission, objectives and organizational values (Perry and Debra. 1997). References: Armstrong, M. and Baron, A. (2002), Strategic HRM: The Key to Improved Business Performance, CIPD: London Becker, B., Huselid, M. and Ulrich, D. (2001), The HR Scorecard: Linking People, Strategy and Performance, Harvard Business School Press: Harvard Behling, O & Darrow, A.L (1984). 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