Organisational Development and Change - the Dryburgh Footwear Company - Case Study Example

Organisational Development and Change Name: Institution: Date: Introduction The global market is continuously changing. As such, the organisations face a changing market context, in terms of the external macro environmental factors. Although organisations lack control over these macro environment factors, they have the potential and ability to create internal changes and operational adjustments that are poised at aligning such organisational operations with external market changes (Kotler & Kotler, 2014). This essay offers an evaluation of the Dryburgh Footwear Company employee turnover and absenteeism challenge and how the organization can effect changes in the long run period. The essay is classified into two main sections. Section one offers a summary context of the organization, while section 2 reviews how a change process could be effectively and efficiently administered in the venture. Section 1: Organisational Context Analysis The Dryburgh Footwear Company is a subsidiary Company of the Imperil Enterprises, a large and expanding multinational British Company. The Dryburgh venture was established as an Australian footwear market domestic venture, which aimed at serving the Australian market since 1971. At its inception, the organization enjoyed relatively cheap production system and a large market share. This was mainly due to the high tariffs charged by the Australian government on any imports as a way of protecting the domestic market (Deery, 1995). However, after the relaxation of these regulations, the organization faced a growing market competition since 1986, which led to its business rationalize and the closure of the North Melbourne manufacturing facility. With a growing market competition, the organization increased its focus on reducing the cost of production. Thus, the first stage towards the attainment of this objective was the reduction of employee wages, as a means of reducing the recurrent expenditure rates in the market. Further, the management used division of labour to increase employee productivity. In this context, its operations were classified into cutting, machining, cementing, cleaning and finishing, and warehousing respectively. In this regard, each employee was entrusted with a specific division, as a means of promoting specialization and eventually increased productivity. In terms of the organisational administrative structure, it had a relatively bureaucratic structure. The structure included employees, the supervisors, departmental heads, the branch manager, executive manager, and the board respectively. Although there existed an employees union, it was limited in its interactions with the employees. Thus, the only avenue that the employees could raise their concerns and issues was through the supervisors. This led to the evidenced high employee turnover and absenteeism. This means that the rate of employee satisfaction and loyalty on the venture remains low, with the likelihood of shifting to alternative employment opportunities in the market. This led to the contributions of practices such as continues shifting of employees from one production category to the other as a means of bridging the gap created by exited and absent employees. This had a further impact on employee productivity and specialization needs attainment. Based on the above organizational context analysis, it is apparent that there exists an employee management challenge, leading to a high turnover and absenteeism rates. The subsequent essay section offers a change management process to mitigate the challenge in the long run period. Section 2: Change process Management Problem Recognitions and Diagnosis The Dryburgh Footwear Company is facing a HR management challenge. This challenge could be evidenced by the high employee turnover ratio. As illustrated by the HR manager analysis, the turnover is almost at 100% annually, meaning that very few of the organisational employees serve for over a year without exiting. As a result, this means that the organization has to continuously recruit and train new employees to its overall production process. The challenges of such a HR system could be illustrated through the arguments developed by Singh (2008) and Droege and Hoobler (2003) respectively. On one hand, Singh (2008) stated that a high employee turnover rate increases the complexity of HR management. In this case, the authors asserted that such high turnover rates increased the hiring and training costs in an organization, reducing its profitability margins in the long run period. This is a major challenge to the Dryburgh Footwear Company, which is already facing a declining market base and profitability margins loss with rising industry competition. Moreover, Droege and Hoobler (2003) stated that a high employee turnover rate educes the ability by a venture to create a strategic corporate culture. The development of a corporate culture is a critical component in the modern business enterprises of creating a sustainable intangible competitive edge in the market over the competition. However, this is only achieved through a prolonged working process where the employees interact and work with each other over long period of time, creating and exchanging core values that define such an organisational corporate culture. As Hancock et al (2013) noted, organisations with a high employee turnover rate have a weak or no corporate culture at all. Based on the above critical evaluation of the Dryburgh Footwear Company it is evident that the present of poor HR management systems result to a high employee turnover and absenteiseem rate. As a result, this has increased the organisational recruitment and training costs, as well as denying it the merit of developing a string intangible corporate culture competitive edge. Method of Approach as a Consultant The above noted challenge is both an operational and a corporate level challenge. These two levels of business environments and systems require different approaches. On one hand, the operational level is the lowest level at which the business policies are executed and implemented (Quinn, 2013). As a consultant, it is apparent that the implementation of the existing policies has failed. One such implementation failure is the workers union role (Yao & Zhong, 2013). Although the union exists as a legal entity to represent the works in the company, it has filed to implement and execute its mandate to the fullest at the operational level. On the other hand, the corporate level includes the decision making and strategies formulation stages in the organization. In this case, as a consultant, it is apparent that the organization lacks a proper HR development and growth program (Noe, Wilk, Mullen & Wanek, 2014). In this case, although the management has policies of employing employees, there lacks similar support training policies to empower and develop the employees as a means of supporting the employees’ satisfaction and retention strategies respectively (Felipe, 2012). Therefore, based on the above analysis, the proposed change process will incorporate n evaluation of improving the HR operational and corporate level strategies for long term posterity. Methods of changes to implement Based on the above analysis, this essay recommends three strategic changes approaches that should be implemented to eradicate the current employee turnover and absenteiseeim challenge. On one hand, the management should start off the change process through the development of an employee based union. First, the current union should be disbanded and a new one proposed for formation within a year. In this case, the employees should elect direct representatives to the union, as well as formulate a new union constitution. The formation of such a new and more inclusive union will empower the employees through an alternative grievance raising opportunity. Further, a key component of the proposed new union constitution would be a willingly and voluntary union membership (Kruppe, Rogowski & Schömann, 2013). As such, rather than directly including employees, the union should be responsible for marketing to the employees. This would ensure that the union is directly answerable to the employees and not the management, as it is currently alluded in the corporation. A second approach to change is the implementation of an employee job specialization program. In this case, the current challenge is a random reassignment of duties among the employees, which reduces their ability to enjoy the current reward bonus on productivity (Patel & Conklin, 2012). This proposal argues that the management should start of the process by categorizing the different production stages such as cutting, machining and warehousing as distinct departments. As such, when training and placing the employees, they should be placed in the specific divisions, and movement should be eventually limited. Creating Change Readiness Cummings and Worley (2014) stated that in order for a change process to gain effectiveness and success, it must be supported by all the stakeholders. According to the Lewin’s change model, this role fall under the first stage, the unfreezing of the existing systems. This includes changing the currently acceptable systems to create a desire and employee willingness to accept and embrace change. As Leonard and McGuire (2007) noted, such a change process is only acceptable if the stakeholders are satisfied that the change process is to their best interest. One of the fundamental challenges to stakeholders is the fear of the unknown. Thus, if the change drivers are able to eliminate this fear, this is increased awareness and support for a change process. In the proposed change process, awareness will be created through a number of approaches. One of the approaches will be through third party experts training. In this case, the HR will use a model of successful employee unions’ leaders to offer public lectures on the role of the employee unions. This will serve as a role of illustrating the challenges of the current union and how changing its operations would benefit the employees in the long run period (Epstein & Rejc, 2014). Moreover, public lectures on the employees on the roles of specialization and job division, creating an awareness and environment through which the employees would support such a system upon its introduction. Evaluating the Change Process Success Prior to declaring a change process s a success, it must be evaluated against parameters. In this case, a per the Lewin’s change model, the evaluation process falls under the second change stage of change. In this case, the model stated that a change process should be monitored on its progress (Gupta, 2004). This is because a change process could result to both wanted and unwanted and unintended outcomes. Evaluating these outcomes ensures that the negative and unwanted outcomes are monitored and eliminated. In the proposed change process, evaluation will be through the number and the impacts of the employee union and specialization. This will be evaluated after every three months on the number of registered members and overall productivity. Moreover, after every year, the number of overall absenteiseem and turnover will be measured to establish if the changes have enhanced a decline. Conclusion In summary, the essay offers an analysis of the Dryburgh Footwear Company current HR challenge. The analysis illustrated that the venture faces a HR policy and management challenge. As such, the essay recommends the development of a new union charter as well as job division and specialization practices. It proposes the use of public lectures from successful union leaders and employee personnel to create awareness and support. Finally, the success of the proposed changes will be evaluated annually through the number of reduced turnover ratio from the current almost 100% turnover ratio. References Kotler, P., & Kotler, M. (2014). Winning hlobal markets: How businesses invest and prosper in the world's high-growth cities New Jersey: Wiley & Sons Singh, L. K. (2008). Fundamental of tourism and travel. Delhi: Isha Books. Droege, S. 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San Francisco: Berrett-Koehler Publishers. Gupta, V. (2004). Transformative Organizations: A Global Perspective. London: Sage Publications Inc. Deery, S.J. 1995, 'Absenteeism and employee turnover: Dryburgh Footware Company', in Organisational change strategies: Case studies of human resource and industrial relations issues, ed.M. Patrickson, V. Bamber,& G.J. Bamber, Longman, Melbourne, Chapter 21, pp. 240-250. Read More