Engineering Products: Key Changes

Introduction

Engineering products, a major engineering firm in Britain, experienced major changes in the 1980s, making specialization in three major business areas i.e. automotive components, defence and industrial services (Newell & Scarbrough 2002). The changes took place as the engineering firm became more of a customer-based organization. The changes were also instigated by the need to make variations in various products and expansion of operations in different countries (Newell & Scarbrough 2002).

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Recent changes in Engineering Products have seen significant pressure from the firm’s customers in the automotive division become a driving force in determining the operations at the international level (Dicken 1992).This is attributed to the fact that the customers have sought to standardise the methods of production used by Engineering Products as well as the firm’s working processes that target “best practice” across different sites (Newell & Scarbrough 2002). This means that the products (cars) sold by Engineering products vary in minor instances depending on the countries in which they are sold (Sayles, & Chandler 1993). Nevertheless, the products purchased need to be of completely similar specification in a particular country where they are sold. As a result, Engineering Products works on a focus of ensuring that its component manufacturers standardise their operations internationally (Newell & Scarbrough 2002).

This paper evaluates various issues of Engineering Products such as culture, motivation, structure of organization, how the organization exercises power and control and how the various aspects of change in the organization’s structures and management affect its products. The paper will also identify the main issues that relate to Engineering Products in terms of how theories of management apply to the firm. The use of quotations in the paper demonstrates the relevance of the arguments as well as the opinions and recommendations expressed in the paper. Also highlighted is the issue of hierarchy since Engineering Products has decentralised its operations across its subsidiaries (Newell & Scarbrough 2002).

Major changes in Engineering Products

The significant changes realised at Engineering Products included the need to standardise the cars produced in various countries albeit with minor variations (Lynch 1983). The impetus for the changes was driven by customer demands; hence, the management at the headquarters of Engineering Products’ automotive division were faced with the task of ensuring that the previously disparate plants became integrated and served customers in their own country in a most decentralised way (Newell & Scarbrough 2002). This led to creation of appropriate management structures in different countries to facilitate effective communication at various levels of operation (Newell & Scarbrough 2002).

Theories and issues in management related to Engineering Products

Motivation theory

According to Maslow, human needs are hierarchical but depend on each other in augmenting motivation to perform various activities (Doyle 2003). At the highest level are psychological needs such as food. Next are physiological needs such as safety and shelter and social deprivation needs such as need for affiliation and belonging (Doyle 2003). Nevertheless, growth needs such as a forward-looking and incentive motivators such as work place issues affect work behaviour most (Doyle 2003).

At Engineering Products, motivational needs among staffs are catered for by ensuring that various ideas expressed by different members of the operation teams are discussed and implemented. The firm has several structures to serve this function. For instance, the automotive division operates various “manufacturing councils” which involve periodical meetings in which the group’s manufacturing directors bring together ideas that can be integrated in the manufacturing plants (Newell & Scarbrough 2002).

These ideas are mainly focused on ensuring that workers are motivated to facilitate maximum productivity (Newell & Scarbrough 2002). To facilitate this motivational experience, Engineering Products set up an “International College of Engineering” in Germany at which engineers converge to stimulate and develop new ideas that are focused not only on enhancing their productivity but also ensuring that what is produced is customer oriented (Newell & Scarbrough 2002).

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Another advanced step that Engineering Products has taken in ensuring that its employees are motivated is the training of an international cadre of managers who are posted on assignments in different countries other than their countries of origin (Hirst & Thompson 1996; Hofstede 1984). This ensures that employees get motivated by learning the experiences in other countries in which the firm operates. Engineering Products also uses internal consultants to help motivate employees to produce the best are posted on assignments in different countries other than their countries of origin Hirst & Thompson 1996; Hofstede 1984). This ensures that employees get motivated by learning the experiences in other countries in which the firm operates. Engineering Products also uses internal consultants to help motivate employees to produce the best out of their potential in ensuring that products match customer specifications (Newell & Scarbrough 2002).

Organization culture

At the Headquarters of Engineering Products, there is a dictum that “Decisions are made at the centre about outsourcing to supply to different customers” (Newell & Scarbrough 2002). In this respect, the different levels of management in the organization structure are required to decide from their factories which customers have to be supplied and this is obviously in the local market that a particular subsidiary is operating. The firm’s organization structure ensures that decisions about critical areas such as outsourcing are well discussed to ensure better coordination of activities in the manufacturing process (Clegg, Kornberge & Pitsis 2005).

The HR at Engineering Products has had a central role in ensuring that the firm moves characteristically towards international integration. This is portrayed by the fact that the company has created structures that facilitate regular contact between managers from different parts of different divisions. Engineering Products has a program in which certain tasks can be performed at different levels both locally and internationally (Clegg, Kornberge & Pitsis 2005). At the headquarters of the company, the management uses a strategic form of leadership rather than an administrative type in order to facilitate integration of ideas at various levels of operation. As argued by Davies (1991), strategic leadership is a good form of leadership given that it is focused on everyone’s participation towards a target rather than pointing at some groups to realize the result.

Power and Control

In order to satisfy the diverse needs of customers, Engineering Products has moved from the traditional system of appointing senior managers from the country of operation to a more advanced system in which appointments are made based on merit (Newell & Scarbrough 2002). For instance, the company can now appoint nationals of certain countries to head operations in other countries, not necessarily of their origin. This has meant that senior positions are very competitive and meant only for ambitious individuals who have the capacity to inject new ideas into the company.

While ensuring competitiveness in appointments, Engineering Products also encourages mobility of staff in their operations. Hence, according to the company, “senior managers are now required to be more willing to spend more time overseas”- something that may not be appealing to everyone (Newell & Scarbrough 2002). While this creates opportunities for progression, it simultaneously imposes obligations on managers to become more geographically mobile. Along this line, Clark and Fujimoto (1991) argue that mobility of senior staff may be a good factor in terms of ensuring transfer of knowledge but may affect junior staffs who have to adjust continually to new ideas.

Structure of organization and organizational change

In spite of the fact that the operations of Engineering Products are carried out in a multiplicity of countries, the company’s organization structure has been arranged in such a manner that it encourages working together to produce standardised products in line with customers’ needs. There several structures to ensure that the products produced by Engineering Products are of high quality. These include “manufacturing councils” and other organizations such as the International College of Engineering whose members convene regularly to ensure that the items produced meet customer specifications. The result of this move is that plant managers at different levels have a significant input in the formation of policies and structural guidelines that are instrumental in operations at the international level.

According to Martinez & Weston (1994), non-managerial employees also have a significant input in the formulation of policies. Perhaps this has been the driving force behind Engineering Products’ move to ensure that its junior employees have a role to play in policy integration. According to Newell and Scarborough (2002), non-managerial employees in Engineering Products are a vital component in the process of international integration. This is shown by the fact that the company’s management routinely compares the performance of its employees in different stations to ensure that it sets high levels of competition against its rivals.

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Management style

The management style at Engineering Products has enabled the firm to integrate the ideas of employees at all levels, thus increasing the extent to which they are subjected to the existing environments. According to Hirst and Thompson (1996), prior to the standardization of items produced by Engineering Products, the firm used to have policies attached to each individual subsidiary. This however meant that significant variation occurred among the products. In addition to the variations in products, most working processes were developed internally as per the specifications of individual subsidiaries (Hirst & Thompson 1996). This system of management has greatly changed with the increased customer demand for uniform products at any given point of purchase.

Despite the unified manufacturing operations in different countries, some variations in the style of management could be a reason for the differences in productivity among Engineering Products subsidiaries. For instance, some unusually high productivity of the company’ affiliate in Spain prompted investigation into the working conditions in the plant (Malone 2000). It was found out that there were better operations, which enabled employees at the firm to multi-task without necessarily having to do additional work, thereby enhancing productivity (Malone 2000). The style of management in Spain was praised by the management of the firm and was ultimately adopted in all subsidiaries. This shows that in spite of harmonising operations of multinational corporations, there is still need to let the subsidiaries operate with some form of independence so that new ideas can be obtained from different circles.

Conclusion

Engineering Products has invested in many changes, most of which are directed by customer’s demands for uniform products in various countries. These changes include decentralising operations at various production stations while ensuring that the products are congruent albeit with minor variations as per local consumer specifications. In spite of the uniformity in features of products produced by the company, it is evident that there is still a need for independence among various subsidiaries in order to diversify opinions and ideas to build a strong conglomerate.

References

Clark, K B & Fujimoto, T 1991, Product development performance: Strategy, organization, and management in the world auto industry, Harvard Business Press, Cambridge

Clegg, S; Kornberger, M & Pitsis, T 2005, Managing and organizations: an introduction to theory and practice, SAGE, London

Davies, AHT 1991, Strategic leadership: Making corporate plans work, Woodhead-Faulkner, London

Dicken, P 1992, Global shift: The internationalisation of economic activity. Paul Chapman, London

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Doyle, C E 2003, Work and organizational psychology: An introduction with attitude, Psychology Press, New York

Hirst, P & Thompson, P 1996, Globalisation in question, Polity, Cambridge

Hofstede, G 1984, Culture’s consequences: International differences in work-related values. Sage, Beverley Hills, CA

Lynch, T D 1983, Organization theory and management, CRC Press, New York

Malone T 2000, The future of work: How the new order of business will shape your organization, your management style, and your life, Harvard Business Press, Cambridge

Martinez, M & Weston, S, 1994, ‘New management practices in a multinational corporation: the restructuring of worker representation and rights’, Industrial Relations Journal, 25(2): 110-21

Newell, H & Scarbrough H 2002, HRM in context: A case study approach, Palgrave, Houndmills

Sayles, L R & Chandler M K 1993, Managing large systems: organizations for the future, Transaction Publishers, New York

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