EKEM Furniture Managing Organizational Problems

Introduction

This memo highlights problems on several factors like organizational culture, trust, job satisfaction, leadership, power, and politics faced by EKEM. It has come to the notice of the management that things are not okay at the plant in Brisbane. The quality of workmanship is obviously not keeping the earlier standards set by the company. Worker absenteeism, low levels of productivity and high labour turnover rates have become quite common.

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It will also give suggestions of the required organizational change based on which the management can act to save maintain operations in the Brisbane plant itself. It is to be noted by the management that organizational behaviour is an important area of study in management circles. The way employees conduct themselves in an organization will ultimately decide the fate of the organization. The memo will be broadly based on this area.

Change Model

Kotter’s 8-Step Change Model: Implementing change powerfully and successfully

In view of the problems faced by EKEM the best model of changing the organization would be to follow the 8 step change model by John Kotter as described in his book “Leading Change” published in 1995.

Step One: Create Urgency

Here potential threats are identified, opportunities are exploited, transparent discussions are carried out and stakeholders and customers are taken into confidence.

Step Two: Form a Powerful Coalition

Here the leader is identified, key people are motivated, team building is completed and strength and weaknesses of the team are identified.

Step Three: Create a Vision for Change

Here the central change values are determined, future goal of the organization is set and a strategy is created to achieve that goal. Make sure that the vision can be addressed to the people.

Step Four: Communicate the Vision

The employees should be conveyed of this vision and understanding of the employees’ concerns must be addressed.

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Step Five: Remove Obstacles

Obstacle of achieving the goal should be identified and proper leaders should be appointed. At the same time, one must evaluate the procedure of the entire change process of the organization and implement sources that are capable of executing the procedure.

Step Six: Create Short-term Wins

Short term and easy goals should be placed and celebrated so that it appear that the organization is moving in the right direction. Additionally, reward mechanisms should be employed.

Step Seven: Build on the Change

This is the time to gain momentum along with constant review and fresh ideas.

Step Eight: Anchor the Changes in Corporate Culture

This is the time to hire new employees to induce freshness and the management can slowly attain a complete change without much trouble.

Given the troubled condition of EKEM the same steps can be implemented with needed alterations with headings of the organization that are relevant to the steps.

Steps and Recommendations

Step One: Create Urgency

Organizational behaviour is a very important field of study and many organizations are putting great efforts at implementing theories and ideas that have developed over the years. “Organizational Behaviour is the study of individuals and their behaviour within the context of the organization in a workplace setting. It is an interdisciplinary field that includes sociology, psychology, communication and management” (Deans 2006).

The definition shows that it is a large area of study with many disciplines of human study being involved. The above-mentioned factors like organizational culture, trust, job satisfaction, leadership, power etc will influence the behaviour of the workers largely. Other factors that influence behaviour include the presence of formal and informal work groups, the level of communication within the organization, the level of leadership possessed by managers and supervisors, motivation levels and personal needs of employees. The management should note that there are four basic models, which determine the outcome of organizational behaviour in organizations (Models of Organizational Behaviour 2007).

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The four basic models are the autocratic, custodian, supportive and collegial models. Please understand the current model that is being followed and analyse whether the model needs to be changed for bettering performance.

Recommendations

The issue has to be settled between the management and workers based on the recommendations in this report. It is strongly suggested that the company take steps to switch over to a model that closely resembles a supportive and collegial model rather than the present autocratic model. If not, the prospect of shifting offshore will become a reality. Moreover, the same problem will eventually crop in any market that the company plans manufacturing operations. Sure, there would be problems relating to this change in the transition period. However, Change Management is an integral part of the corporate fraternity these days and that too with reasons.

In general sense it can mentioned that Change management includes assessment of changes, implement the change, plan and attainment. Thus, the main aspects of Change management indicate two major points. One is to trace the change intricately and two is to support the procedure of the change and channel it into proper course or utilize this change for the advantage of the corporation.

Management Leaders are the basic framework of an organization. These people enable the organization to run smoothly and efficiently. They are the people, other than the top management section, who ensure the make or break factor of an organization. As the corporate scenario is vulnerable to changes, overnight it becomes that much important for the leaders to keep updated all the while. Changes, general or specified, should be monitored closely and analyzed according from the perception of company and solution should be chalked out accordingly. It is the leaders’ job to manoeuvre the system in accordance to the change so that the organization is not affected under any circumstances.

As a result is obvious that it is essential for the leadership to address Change management principles for the proper usage and management of resources and obtaining the complete or maximum utility out of the process. Change can be advantageous or fatal for an organization. The job of the leadership is to channel the mode of operations towards an advantage scenario. Thus, Change management principals are important and the company should be up to the task.

However, it should be stated that the human resource department of any organization is of prime importance in the modern era of marketing and management. Keeping this in mind it could be stated that the management section of human resource department holds the success of any organization. It is true that machineries are as important for most industries but still the human elements hold the penultimate key of success. The management principals implemented by organizations in view of human resource management are wide and numerous in accordance to the nature of the business.

Step Two: Create a coalition

Trust

The situation that exists in the company indicates a low level of trust between management and workers. The level of trust between workers themselves appears to be high due to their unwillingness to divulge facts like names and incidents. Trust between workers themselves and between workers and the management are very important and the management should see to it that it is built. This is also the case between supervisors and middle and top management. Of the lot, the supervisors seem to be the most isolated. They appear not to have the trust of the top management and the workers below. The supervisors themselves reciprocate the feeling.

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Recommendations

More open communication and socialisation is one way to develop trust. This will be a slow process, but should be taken up seriously. Supervisors and managers unwilling to cooperate should be transferred or terminated after a warning.

This case is especially true for supervisors. This is the first level of official communication between the top management and the workers. This step will also help in gaining the trust of the employee. They will feel that the management is serious about change. A people oriented leadership style with a small of mix of autocracy would be ideal in managing workers. A senior worker who has the trust of other workers may be even being promoted to the post of supervisor.

Step Three: Create a Vision for Change

Organizational change

When these recommendations are being implemented, a lot of change which will bring about resistance from employee but resistance will be more from supervisors and the middle level management (departmental heads). Workers may welcome the change if they feel that the management is serious about improving conditions. The Kurt Lewin’s change model is a tried, tested and accepted model of managing organizational change.

This model involves three stages namely, unfreezing, changing and re-freezing (in that order). The first step involves all employees being made aware of the problems exist presently and the need to solve them. The need for change should be stressed. The next step will be the actual change and will involve experimentation. These two changes may need the help of a change agent and this consultant is willing to play the part. The final step after the necessary changes have occurred is to re-freeze the organization in its present form. By this time new skills and attitudes would have developed which should be rewarded and acknowledged by the management.

Step Four: Communicate the Vision

Leadership

This is one of the most important aspects that determine organizational behaviour. This area is too detailed to be covered comprehensively in this report. Hence only a brief overview will be given. This is also one of the areas, which this company is lagging. It can be seen that the most serious lack of leadership is in the departmental heads, especially the manufacturing department. There are also different types of leadership styles that can be followed. The major styles are autocratic, charismatic, laissez-faire, democratic, people oriented, servant, transactional and transformational leadership. (Understanding Leadership Styles: Leadership Styles 2008). The style followed in EKEM is obviously autocratic.

Recommendations

The best style that could be adopted here is the democratic or people oriented style or a combination of both. A certain amount of autocracy may also be needed since the employees at this level may not do their job properly without proper supervision. Thus, in this context, it can be concluded with that healthy relations between the management and the employees only can bring prosperity to the company. Thus, the leadership system or the Leadership of multidisciplinary or interdisciplinary team of professionals is not simply about trade unions and industrial relations between managements and employees.

In fact, it is a definition, which portrays the projection and maintenance of understanding, togetherness, and essential values and ethics as accepted by both the management and the workers of the companies. Thus, it is a managerial frame of reference, which does not easily bring itself together with companies or social positions, which are distinctively more politically influenced. Instead of all drawbacks in Leadership ideologies of management, it has numerous facilities. Thus, the companies for finding solutions of their management-employee problems could always follow this approach.

Step Five: Remove Obstacles

Power and politics

Power is always an influential factor in organizational behaviour. Unless some power is exercised over employees, proper work will not take place and may give way to total confusion and even anarchy. This is the case in most organizations unless the workers are self-motivated and ambitious to a very high level. Leadership power can be exercised in the company in many ways. According to theorists and management experts, they are coercive power, reward power, legitimate power, expert power and referent power. It can be seen that the style used here is mostly coercive power. Legitimate power and reward power is also used to a certain extent.

Improper use or lack of power can lead to organizational politics. It can also be that “the process of mobilizing power is the process of politics.” (Clegg, Kornberger & Pitsis 2005 p. 161) Power in the hands of the workers can lead to politicization in the organization. So also is the case with management who can form their own politics within. This can be good or bad depending on the leaders who control the power. This situation will result in many types of political games played by the workers.

According to Mintzberg, these games include insurgency, counter insurgency, sponsorship, alliance building, line vs. staff games, whistle blowing games etc. It can be seen that the workers and management are playing insurgency and counter-insurgency games respectfully. Otherwise, the level of politics in your organization is quite low, maybe due to the levels of individualism that is growing within. Proper steps should be taken to see that politics (which is unavoidable to a certain extent) does not cause further damage.

Recommendations

The only way out in this context for the organization is Efficiency of the Leadership. Efficiency of the Leadership of multidisciplinary or interdisciplinary team of professionals lies in not only making the employees to work, but to make them work willingly, sincerely and consciously, by employing new knowledge, new methods, new designs, new machines and novel techniques of production and by allaying mistrust and antagonism.

The Leadership purpose takes account of a several activities, and the most important among them is making a decision what staffing requirements one have and whether to use autonomous contractors or take into service employees to meet these needs, appointing and training the most excellent employees, making sure that they are better performers. This also means handling performance related problems, and ensuring that the human resources and administrational practices do the accepted thing to various set of laws.

Step Six: Create Short-term Wins

Job satisfaction

Unless a worker is satisfied with his job, there are chances that they will do poor quality work and eventually leave the organization. If this situation is rampant, labour turnover will be very high. Job satisfaction can be defined as “simply how people feel about their jobs and different aspects of their jobs” (Spector 1997). Job satisfaction is not just related to doing a job one likes and the salary and benefits derived from the job.

As per the Job Satisfaction Survey scale, people have different attitudes when it comes to assessing job satisfaction. The scale mentioned above lists several factors, which decide the level of job satisfaction. They are pay, promotion, supervision, benefits, contingent needs, operating procedures, co-workers, nature of work and communication. With EKEM Furniture, the following factors are in its favour in this regard. They are pay, promotion, benefits and nature of work. However, with regard to other factors, the company is lagging behind and hence the level of low job satisfaction among the workers. This is justified by the level of high labour turnover and falling levels of quality and productivity.

Recommendations

It will not take much effort on the part of the management to correct these and hence should be done at the earliest. Job descriptions should be clear and not left unambiguous. Job satisfaction depends on many factors other than liking for the job and adequate compensation. Implementing the recommendations of this report will increase it to satisfactory levels. A job satisfaction survey should be carried out immediately and should be periodically carried out once changes have begun to be implemented.

Step Seven: Build on the Change & Step Eight: Anchor the Changes in Corporate Culture

Like organizational behaviour itself, its sibling field of study namely organizational culture is also a very complex thing. Culture whether in organizations or the society evolves over a period time. The study of culture is also a multi-disciplinary area involving related fields like sociology, psychology and anthropology. EKEM Furniture has a history of 32 years and definitely, some sort of culture would have evolved over this period.

A common definition of this term is “the way we do things around here” (Don, Slocum & Woodman 1995 p. 464-67). This simple definition quite rightly explains the concept with the many individual elements that create the culture being left to individual circumstances.

There are four basic models in organizational culture and they are baseball team culture, club, academic and fortress cultures. On investigation, the culture that exists within EKEM Furniture does not seem to fall solidly into any of the usual categories.

However, indications are that the culture may move to a fortress one in the future. There is a palpable feeling of the employees being very tense. They are also suspicious of any one related to top management and see this consultant in the same way. Another aspect that should be mentioned here is the level of socializing or lack of it. Workers tend to stay to themselves or within small informal groups. The cliché that man is a social animal does not seem to apply here. The following matrix developed by Edgar H Schein showing the relation between socialization and individualization will make the point clear.

Individualisation.

High individualism and high socialisation will result in creative individualism, which is very good for organizations manufacturing creative products. For those who are making routine products, high socialisation and low individualism is fine and this will result in the required conformity. Low individualism and low socialisation will result in isolation for the workers. It appears that this is the situation is EKEM at present. If this trend remains, the situation will move to the final quadrant namely high individualism and low socialisation, which may lead to rebellious workers. It has been mentioned by the management that there have been isolated instances of intentional defacing of property and products and this is an indication of things to come.

Recommendations

It would be appropriate to bring in the club model organizational culture. Steps should be made to bring in more socialisation which coupled with high individualism can result in creative individualism (Clark 2008). A club culture will have high levels of socialising with varying levels of individuality. Therefore, the result would be high conformity and creative individualism. Both of these will be beneficial to the company.

Therefore, the focus should be on creating high socialisation. Workers with low individualism will be conformists while those with high individualism will be creative. Since the products are design based, creativity among workers should be welcomed and encouraged. Ways to achieve this are suggested as the top management and workers should have a series of informal meetings for the next two or three months.

This would be just a social gathering. Families of workers may also be called occasionally. There will be resistance and mistrust at the beginning. But things will get better as time goes on. The level of socialising will begin to increase. This will also be a period to observe the workers who are positive or negative to the change. The negative ones may not even attend such meetings. They can be marked for removal or transfer from the plant.

Conclusion

A preliminary report on the state of affairs in EKEM Furniture has been given here. It can be seen that many things are wrong within the organization. The problems have been listed out and steps to correct them have been provided. Efforts by me to try to effect changes were not met with success. The departmental managers and even supervisors demand that a report should be written to them directly in addition to the CEO.

Moreover, the level of trust shown to me was not very high. The only way forward is to have the cooperation of the top management. One immediate step that will gain the belief and trust of the workers is to remove the departmental managers with immediate effect. They have been instrumental in making the matters so bad. This step will also make the workers believe that the company is serious about the change.

People with some vision and leadership should be put in place instead. With patience, understanding and firmness the affairs of the company can be turned around with a period of one year. The full cooperation of me in this effort is assured. If properly implemented, there would be no need to offshore manufacturing operations. The company can regain the prominent position of making low priced quality furniture in the Australian market.

List of Reference

CLARK, Donald. (2008). Social Systems, Culture, and Individualization : Organizational Behaviour. [online]. Baclubindia : Interactive Platform for Management Professionals. Web.

CLEGG, Stewart., KORNBERGER, Martin., and PITSIS, Tyrone. (2005). Chapter5: Managing Power and Politics in Organizations. Managing and Organizations. Sage. P. 161. Web.

Define or definition. (2008). OrganizationalStructure. Web.

DON, Hellreigel., SLOCUM, John., and WOODMAN, Richard. (1995). Organizational Culture. P. 464-467. Web.

LAMB DEANS, Debra. (2006). Organizational Behaviour: Introduction. Cornell University: ILR School. Web.

Models of Organizational Behaviour. (2007). Organizational Behaviour. Web.

SPECTOR, Paul E. (1997). What is Job Satisfaction? Job Satisfaction. Sage. P. 6. Web.

Understanding Leadership Styles: Leadership Styles. (2008). Mind Tools.. Web.

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