Allworld Foods Case Study – Management Issues
Larboards, for both its’ employees and customers and once again, to become a market leader.
He four areas of major concern are the need for cultural change, improvement of organizational management and leadership and the implementation of more effective planning for change. Poor management practices have caused strained elation’s not only between the hierarchy within the firm but to subordinates also. Poor leadership has seen discontent staff with no sense of direction and a bleak Morning environment. Inadequate planning has caused a dramatic loss of customers and dividends, as no new strategies had been planned or thought of and there were no set goals in the organization.
The need for cultural change cannot be overstated as this is the core problem at Lowered Foods. This has resulted in a drag on productivity, progress and overall organizational performance.
Ere road to regaining the reputation and esteem they once possessed will be very Eng but well worth the effort. Firstly Larboards will have to plan new strategies that Nil fit with the external environment to bring back lost customers. After this has been achieved they will need to align organizational culture with these improved strategies.
This will be a means for gaining a competitive advantage and give them the confidence to excel well into the future and achieve their former position as industry leaders. Report Topic iris report will discuss organizational culture as the primary problem facing Lowered s and the importance and affect it has on the business’s current and future success. It will then go on to discuss how the issues of leading, planning and management structure are hindering the growth of Lowered Foods and based on these implications examine ways in which managers should integrate policies to aid in making their organization sustainable.
This report will also provide suitable recommendations that should be observed as this will help in improving the sustainability of an organization. Limitations Ere limitations in the compiling of this report were the word count limitations, scope and sources of research. It was difficult to keep within the number restrictions, whilst till trying to implement applicable reference material in sufficient depth found through research. 2. Sources of Data All information used in this report is from secondary sources and have been found through peer reviewed Journals, web sites, newspapers online databases and books. 2.
4 Organization of Report Ere report will discuss in detail how the culture developed in an organization can be key component to obstructing the success of the firm. Managerial leading, planning and change of organizational structure and culture will be discussed, as these are Issues that are crucial to the efficient operating of an organization.
Based on these issues the report will further go on to explain how the implementation of strategic goals, a culture – strategy fit and performance management can be used to aid in preventing loss of dividends and customers, retention and satisfaction of personnel, all of which will provide for a more sustainable organization. Recommendations for all identified major organizational problems will be respectfully outlined, stating each suggestion, its benefits and how it can aid in corporate sustainability. In conclusion, the main findings will be stated and a plan of execution of subsequent commendations will be discussed.
. 0 ORGANIZATIONAL CULTURE Organizational culture can influence the effectiveness of an organization and is particularly important when attempting to manage organization wide change. Manager (2000) states “practitioners are coming to realism that, despite the best- laid plans, organizational change must include not only changing structures and processes, but also changing the corporate culture as well. ” Lowered Foods recognizes that their current organizational culture needs to transform to support the organization’s future success and progress.
It has been affirmed that a well instructed and managed organization culture, closely associated to a successful business strategy, can denote the difference between triumph and failure in today’s demanding environment (Waddled, Cummings and Worker, 2007).
In order to address this there is a need to understand the dimensions of organizational culture that lead to successful implementation of the change necessary for Lowered Foods to become a more effective premiere grocery chain. Hatfield (2009) explains that an organization must plan where it wants to go before trying to make any changes in the organizational culture.
Lowered Foods needs to eave a clear picture of where the organization is currently and thus can plan where it Ants to be next. At present their position as market leader is under great threat due to a changing external environment, ideally Lowered Foods would like to continue to be the premiere grocery chain for years to come. It is evident that the organization’s culture needs to be updated to ensure that their held views, values, norms and basic assumptions can accompany those of their external surroundings.
Corporate culture is the result of long term social learning and reflects what has been effective in the sat (Scheme 1992). At Lowered Foods they believed that their old strategy of increased advertising and aggressive pricing would still achieve they same positive outcome as it has when previously used in the past. This is defective of the pattern of basic assumptions held within their organizational culture, as this strategy would have been passed down to succeeding generations of employees as an effective remedy. ‘lucre (1992) notes that as organizations develop over time, they tend to become less open to change, less responsive to external environmental changes and more inwardly focused and reactive. Lowered Foods have been changing and expanding but their organizational culture seems to have maintained the same shape it had Nee created by previous Coos and senior staff. Early experiences highlight the importance of the founding stages of an organization, and that founding leaders need to rapidly put in place effective capabilities, controls and routines, and create a culture that is open to learning and innovation (Pears, 2009).
It is perceptible that Ninth an accumulation of experience organizations may become more successful but could also become less adaptable and less open to new ideas, which seems to be the ease with Lowered Foods as they are finding it difficult to adapt to the changing environment and don’t have any new ideas as to how to get their sales back up and reclaim their prestige reputation apart from old methods that are not as effective as they used to previously be.
Leaders need to be externally focused, having a clear understanding of the environment they are operating in and its associated Challenges and opportunities, so that effective strategic leadership can be exercised pears, 2009). Lowered Foods needs to gain a better understanding of how their external surroundings are affecting operations and that as the environment changes and develops so must the organization. Culture is a powerful component of an organization’s success, laying the tracks for strategy to roll out on.
Trice (2009) states “Aligning organizational culture with strategy is a powerful means for gaining competitive advantage and industry or sector leadership”.
Larboards seems to have no culture – strategy fit, the current strategies they already have in place seem to work away from the organizational culture. Organizational culture is a critical foundation which shapes the way that the Nor of the organization gets done (established through goals, plans, measures, rewards) and the infrastructure (systems, process and structures) gets utilized Caber and Panache, 1999).
Cultural change appears to be the primary problem at Larboards, hindering the organization from further success but there are also other underlying issues, such as planning, leadership and management, which must be considered if Lowered Foods wishes to regain its position as the market leader. MANAGEMENT Ere key to any stressful entity is the management structure to that entity management structure is sound and co-operating well together and has the best interests of the entity at heart, the entity will flourish and become very successful.
If the management structure is not working, this will upset the natural flow of the entity Inch would result is lack of efficiency and ultimately lack of profit mastication. In this case Lowered Foods management structure is not working.
There were calls for a shake up of senior management by the board members. The primary problem in this case is a cultural but to fix this firstly the management structure must be fixed.
As (Whitely 1995, 168) states management consists of training in statistical assortment techniques, to check the quality of production and customer service at every stage and set goals for improvement. This is something lacking at Lowered s because as loss of customers would indicate no checks have been happening and management have not been setting goals to achieve desired outcomes as they Nullity be where they are today struggling to maintain some sort of balance. Management of Lowered Foods needs to be able to facilitate change on culture and change within the company, starting from the top, all the way down. Patron and McAllen 2000) tells us that the structure and management of a company depended n the environment in which the company found itself in, also taking into account the internal and external factors that could affect the company.
It is very important for management to be aware of the environment in which they are in and to be able to find the best methods of survival. In the case of Lowered Foods they have not been Nary of their environment, by increasing advertising and upping their prices they thought that this would relegate the threat.
However because not enough planning and research had gone into it, it had the opposite effect and Lowered Foods lost a lot of customers and a lot of market share. Management had not been in touch with the aver-changing environment and management have to be continually reviewing processes and making sure they are up to date with the market, as it is constantly Changing. Management at Lowered Foods Just expect for everything to sort itself out and somehow they will still be the market leaders, without having to plan or to consider anything else going on around them.
They use the same strategy when they face competition, increase advertising and aggressive pricing. Lack of planning by management is a big liability to a company. (Burners 2004, 208) tells us that long term landing is extremely essential in an ever changing technological and economic environment. It is very important to have back up plans in case your original plans let Ho down or Just don’t work. Ere bottom line is that management is a very important factor of a companies’ ability to perform and to be able to compete with in an industry.
The CEO, Lily Chambers knows that a change is needed and it has to start from the top.
Management is responsible for managing people, for steering the company in the right direction and ROR over-seeing everything that happens Witt in the company. So management NAS to be working well together and in tune with how everything around them is going. Lowered Foods need to change their management structure and do it quickly otherwise they could suffer a lot of damage, which could not be recoverable. 5.
0 PLANNING Another factor involved in Larboards case, causing controversy is the issue of Planning. In Larboards cultural environment, they lack planning/research by under estimating their competitors.
Larboards should have obtained information about this Mercury group as the case study mentions, they were not without experience as they eave embarked similar and successful strategies in this Industry (Gravid ; The 2007). From Mercury’s point of view as the new competition to Larboards foods main objective was to dethrone Larboards as Australia’s premiere grocery chain. Lily Chambers, CEO of Lowered Foods being appointed three years ago, the team Senior management) and Lily lacked the essence of planning and research to re- ensure Lowered Foods to be back on top.
However from their state of mind and their Organizational culture, being use to the way things were run before as , “Larboards Nas unfazed they have been in this position before and confident they had always mom out on top” (Gerard’ et al 2007).
Even though they have had many close encounters in the past, their processes and planning then has changed from the current times today. Furthermore the company embarked used a Weather the storm’ strategy of increased advertising and aggressive prices. Knowing that they will lose customers, they knew from experience they had always come back (Gravid et al 2007).
From this, the senior board at Larboards has no idea of the current economic times, and the changes to what customer’s needs and wants are. Or help understand how the CEO Lily Chambers and the senior management board dress these issues of planning in the organizations, the ‘General model of planned change’ (Waddled et. Al 2007) can come into place (see appendix 2 for the model).
This model describes the four basic activities that organizational members Jointly carry out in organization development. These are; entering and contracting, to diagnosing, to planning and implementing change, to evaluating and institutionalizing change Waddled et. L 2007). Entering, contracting and diagnosing are the first steps of this model, used to help managers, in this case Lily the CEO and other senior management gather initial Information to understand the problems or opportunities facing the organization. In relation to the case, problems of an old culture in the organization everyone is used old, plain ways the organization was run before. Larboards has to identify what customer’s need and also their own strengths gain some vision as how to go up against their main competitors with a competitive advantage.
This may include a team building exercise were everyone in the organization brainstorm to what Larboards problems are and gain a clear perspective on the organizational issue Earner ; Wright On the opportunities side Larboards has a growing chain of market expansion that can help attract customers and also re direct their vision. Following up on this they need to diagnose how the organization is functioning (Barney ; Wright 2001), and to discover the sources of problems and the areas for improvement. In reference to the case study, their major problem, is a shift for an organizational change, hence strategic planning.
Larboards, through Lily’s leadership should re-develop their vision and re-evaluate the cultural environment to understand employee’s feedbacks and encores for the organization (Brown ; Harvey 2006). The next stage in the model for planned change, is Planning and implementing change. From the information gathered by the organization (Larboards), using feedback from the senior management Lily should lead the team at Larboards by creating a new vision statement for what the members want the organization to look like or become.
Through this Larboards should plan how to re-direct their sales and point out their targeted publics to go head to head with Mercury by establishing a mission statement based on their beliefs, values, and competitive strengths and desired public images (Waddled et. Al 2007). Instead of using old tactics such as Weather the storm’ to help gain organizational strength, the management team should plan their strategy through research in the food market and also identify what their competitors are doing so they know what they are up against.
In addition through Larboards beliefs, an energies commitment to change process would increase the motivation of the organizational members and give them a challenge to undertake (Bartok et. Al 2008).
Lastly the third initial stage of the model, Evaluating and institutionalizing change ells with the design and effectiveness of the intervention and management of the successful change program, Larboards has adapted to.
Through this feedback to organizational members, such as the senior management to Lily and the board committee provides information about whether changes should be continued, modified or suspended (Waddled et. Al 2007). Dealing with institutionalizing change, involves reinforcing the firm (Larboards) through feedback, rewards and training. Once Larboards is happy with the way things are starting to come their way, the reward would be the firm is back to where it stands, premiere market leader.
Also through developed of training employees, more opportunities will arise through promotions and also retaining skilled employees (Brown & Harvey 2006). 5. 0 LEADERSHIP Ere leaders of an organization are responsible for ensuring that employees get the support that they need to develop their skills thus enhancing organizational efficiency. Leadership roles include establishing appropriate structure, systems and process to enable people to produce the high level of creativity, energy and effort to generate efficient service to the organization (Britton and Gold, 2000).
However in the ease of Lowered Foods, though there was structure as proposed by those in senior management, they nave chosen to use the tried and tested strategy, instead to changing their strategy to be in tune with their external environment. Leaders in an organization have a critical role to play in organizational design, in terms of addressing organizational development (ODD) issues with unique insights on how to identify areas of inefficiency and in developing, reviewing and refining structure, policies and practices.
They also play a critical role in encouraging departments and divisions to more effectively implement the new methods, systems, ND directions of work on an ongoing basis. Effective leaders play a vital role in embroiling individual commitment (Bradford and Burke, 2005); this however is not the case in Larboards Foods as staff are becoming more unhappy which could be due to lack of encouragement or also because areas of inefficiency have gone undetected by those in senior management.
Leadership is of critical value as Human Resource Management (HARM) incorporates planning, controlling and evaluating activities concerned with staff selection, training and development, conditions of employment and other human resource issues Nothing the organization (Desert, Griffith and Lloyd-Walker, 2004). Lack of planning and evaluation of strategy is manifested in the case of Lowered Foods as it decided to remain with the tried and tested method instead of researching the market and implementing newer strategies to suit the needs of the current market.
Furthermore, the fundamental function of HARM is concerned with recruiting, motivating and developing competent employees.
Hence selection procedures are designed to supply the organization with employees with knowledge, abilities, and skills pertinent to their role within the organization. HARM activities then motivate the Norfolk by providing employees with satisfactory pay, benefits and working conditions (None, 2005). HARM professionals develop individuals to ensure that they possess the knowledge and skills necessary to be effective employees (Desert, Griffith and Lloyd-Walker, 2004).
In the case of Lowered Foods, the staff may be feeling unhappy due to lack of motivation as well as feeling that they were not being rewarded adequately. As per the equity theory (see appendix 3) of J.
Stacey Adams, people are motivated by their beliefs about the reward structure as being fair or unfair, relative to their inputs and in comparison to the inputs of others. Organizational development is a planned effort, managed by the leaders of the organization, being the senior management; throughout the organization, to increase organizational effectiveness and health through planned interventions in organizational processes.
The senior management in Lowered Foods should plan, together with the board and implement a new strategy to improve the situation of the company instead of playing the ‘blame game’ (Cummings and Worker, pa, 2008). According to McGreevy (Pl 1 1, 2004), a HRS strategic plan can also be labeled as a high level ODD project”. It integrates company cultures and vision with HRS policies, procedures, systems, and structures and provides the high-level framework for how HRS is supposed to outing within the organization.
The HRS strategic plan should reflect the company’s long term goals and objectives of company management by describing how the HRS functions support the company’s strategic plan. Larboards currently lacks vision as it was not emphasized by the senior management or the board. It is crucial that a proper vision be established and followed whilst planning heir strategy in order to have a clear direction of where the company is heading tow reds. Developing people is central to organizational development and thus organizational effectiveness.
Therefore it can be said that the leaders of an organization have a critical role to play in identifying an organization’s competitive advantage and ensuring its success. 7.
0 RECOMMENDATIONS Recommendation I Explanation of Benefits I Long term and Short term syllabification’s I It is recommended for organizations to set long and short term goals for individuals, units and the whole organization as part of the overall organizational plan. The plan and the goals needed to successfully achieve the desired outcomes must be communicated effectively to every individual in the organization.
Once the periodic organizational plan has been produced, it can be translated into what each department or unit must achieve in order to fulfill its obligations. These departmental goals can then be converted into individual goals if desired. This can be sustainable for the organization as the tailoring of required goals to the individual helps to increase retention by increasing employees focus and determination to achieve the given tasks. It also ensures individual and department actions are aligned with the organizational plan.
This will aid the organization working as a whole and therefore increase communication between sectors of the company which should highlight and pass on information about organizational problems and recommendations to solve them I Horizontal Management Structure I A change from the current vertical to horizontal structure Mould be of advantage to Larboards as there would be better communication between the senior levels of management and the lower level employees. The employees Mould be able to better discuss their dissatisfactions and unhappiness with the noir management.
More feedback from employees would enable the senior management to make changes to improve employee satisfactions. Management must be able to communicate their goals to the rest of the organization and be able to monitor them. They need to make sure that individuals are meeting the required goals that are set to them and that the organization is going upwards. This is also benefit the organization because it will increase communication between different parts of the company which would help them pass on information to each other about problems in the organization and how they can resolve them.
I Performance Management (PM) I PM identifies organizational goals, results needed to achieve those goals, measures of effectiveness or efficiency (outcomes) toward the goals, and means (drivers) to achieve the goals. This chain of measurements is examined to ensure alignment Witt overall results to the organization (Manager, 2006). * PM focuses on results, rather than behaviors and activities. An employee may appear extremely busy, but not be contributing at all toward the goals of the organization. An effective performance improvement process must follow a systems-based approach while looking at outcomes and drivers. Produces meaningful measurements – They help ensure equitable and fair treatment to employees based on performance.
I Shape culture to support strategy I Aligning organizational culture with strategy is a powerful means for gaining competitive advantage and industry or sector leadership. Organizations that seek leadership and sustainability make the choice for culture by design, not default.