XYZ Company: Organizational Assessment and Strategic Change Management

Abstract

Sustainable change management is one of the most challenging yet very important tasks that the management must always deal with appropriately within an organization. XYZ Company has been successful in the past, and this is attributed to adequate leadership of the owners of this company. Its ability to expand to China demonstrates that this firm had a bright future. However, the policy that top leadership should be a preserve for the family members could cost this firm this bright future. The family members who come to power have no capacity to offer proper leadership that is core to success in the current competitive market.

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The current leadership of this firm lacks the capacity to inculcate creativity and innovation among employees. This means that this firm is unable to provide more innovative products needed in the market. If this does not change, then XYZ may be forced out of the market very soon.

Introduction

The current business environment is getting increasingly competitive as it gets affected in various ways, and from different angles. According to Kotler and Keller (2012), business environment has become so competitive that only the best-managed firms can be able to sustain the pressure. These scholars say that given this level of competition, a business unit must be able to understand changes that take place in the external environment and how they relate to the operations of their business units. Change is one factor that no business unit can afford to ignore. Changes are brought about by different factors in the external environment and they affect business operations in various ways. Technology is one of the leading agents of change. Technological changes affect business environment in various ways.

It affects the entire department within an organization. The production department is always under constant pressure to adopt technological changes in order to improve quality and reduce time taken to produce various products. The finance department is under pressure to change payment methods to incorporate online payments. The marketing unit is under pressure to use modern advertising means such as the social media. Human resource management is also under pressure to use modern technologies in recruiting and managing employees within an organization.

Sustainable organizational change is very difficult to realize if specific areas of risk are not addressed sufficiently. XYZ started out as an ambitious firm, especially when it opened stores in China. The ability to experience a 50% increase in the number of employees within three years is a testimony that this firm has a great potential. However, the future of this firm is very grim given the fact that it has been unable to thrive in areas of creativity and innovativeness.

Creativity and innovation is the only way through which a firm can gain a competitive edge over other firms in the market. This is because all competitors are exposed to similar environmental factors. The only factors that can make one firm gain a competitive edge over other firms is its internal environmental factors. These internal factors are dictated by creativeness of the management and its employees in addressing various operational issues. This research will focus on analysis of XYZ Company, and the best way it can manage sustainable organizational change in order to remain competitive in the market.

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Organizational culture and subcultures

Organizational culture and subculture define the nature of employees an organization would have and the kind of approach they will take in addressing various issues within the organization. As Booker (2006) observes, successful organizations have flourished because of strong organizational cultures that are focused on innovation and sustainable change management. One such firm that has thrived due to strong organizational culture is Apple Inc. This American electronics giant developed a strong organizational culture during the era of Steve Jobs that made it one of the top brands in the world in the year 2010.

This culture defined the approach in which employees are supposed to take when addressing various operational issues. This culture defined the relationship of the management unit and other employees. It also defined how each employee should behave while in official duty within this organization. This has benefited this firm a great deal. Having a clearly defined organizational culture helps management in predetermining the course of action that an employee of the firm may take when faced with various issues. It is important to be able to predict a possible course of action of various employees as this would help in defining the individuals who should hold various positions in the firm, and how to assign duties based on their importance to the firm.

At XYZ Company, it is obvious that a strong organizational culture is missing. One culture that has been observed keenly in this company over the years is the need to have family members hold executive positions such as the chief executive of the firm, chief financial officer, vice president operations and vice president, human resource. This is not only an undesirable organizational culture, but also one that is retrogressive in the current competitive business environment. This culture is outdated and cannot help this firm sustain the current competition in the market. According to McNally and Speak (2011), firms need to understand that it is important to develop strategies that are sensitive to the organization.

XYZ lack proper approach in managing employees. This explains why there is high attrition among the newly employed engineers in this firm. Good remuneration is one of the most certain ways through which a firm can retain its employees. However, most of the successful firms in the world have not used this approach to retain their employees. One of the best ways that a firm can use to retain its workforce is to develop an organizational culture that constantly challenges its employees in a positive manner. As Kapferer (2012) explains in his theory of science of behavior change, human being prefers working in an environment where their current potential is challenged.

They like it when they are made to feel that inasmuch as they have done great and achieved a lot, there are still a lot more to be achieved. This makes them feel that they have some unsettled business that they have to undertake the following day. The positive challenge of their current capacity would always make them want to stay within the organization for more days. This urge is even greater when it comes to young employees that XYZ Company has been hiring.

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These youthful employees do not like a boring working environment where they are subjected to one thing repeatedly. They want a working environment with new challenges, and a management that allows them to try out their new skills without any restriction. This culture lacks in this company, and for this reason, it has been unable to retain its employees.

Creativity and innovation is always sustained through organizational culture. According to Simerson (2011), such firms as Microsoft and Samsung have retained their creativity and innovativeness because of their organizational culture. A culture that encourages employees to try new ways of undertaking their normal activities is the only way through which a firm can remain competitive in the market. When this culture encourages employees to try out new approaches of undertaking various activities, then the employees will feel some form of commitment to try new approaches of operations. Creativity in undertaking various activities does not come in a day, and neither is it a preserve for the management.

It is not imported from some different planet into an organization. It is the result of constant trials and making errors in a bid to create a new approach of tackling issues within an organization. It involves every member of the organization; especially employees assigned various operational tasks in different departments within an organization. This means that they must be allowed to work in an organizational culture that highly cherishes creativity and innovation. Through this approach XYZ Company can managed sustained organizational change that will make it competitive in the market.

Existing leadership

The existing leadership structure of this firm holds that only family members of this company that can hold the top executive positions. This arrangement is justified given that this is a privately held firm. It is important to take note of the fact that this leadership structure has helped this firm reach its current position. An analysis of the past operations of this firm shows that it has been successful in the last thirty-two years that it has been in existence.

The initial top managers were the brothers who are the founders of this firm. They steered this firm to its current position because they had the vision in mind, and they knew what their business needed in order to achieve their desired dream. Given the fact that they had the dream in their heart, it is not surprising that they were able to achieve a lot in the last thirty-two years they spent at the helm of this firm. It has now reached a moment where they have to relinquish their top positions to a younger generation, probable because of their age. Given the policy that demands that top executive positions be left for the family members of this company, the next generation of the two brothers has come into the leadership of this firm.

It is very clear that this is where all the problems that this firm experiences emanate from because of lack of proper leadership. The executive positions in this firm have been left for individuals who not only lack the vision of where the firm should be in future, but also lack the capacity to manage the employees of this firm. In order to achieve the past success that enabled this firm to reach its current position, it is clear that the management was effective and able to understand and respond to environmental dynamics. The problems that this firm faces currently are caused by the incompetence of the top managers of this firm. These top managers are holding their current executive position not because of their qualifications, but due to their family ties with the owners of this company.

The existing leadership structure in XYZ is very disastrous given the nature of competition in the environment. As Booker (2006) observes, most successful businesses have been keen to dissociate family relations from the management structure as a way of improving efficiency. This does not means that family members should not hold any position within the firm. Any family member who has the qualification to hold any given position within the firm should not be denied the chance. Similarly, any other individual with higher qualifications should not also be ignored on the basis that he or she is not a member of the family.

The top executive positions of the firm should be left to the most qualified officers who can help this firm achieve its vision and remain competitive in the market. XYZ Company is undergoing a series of challenges because the existing leadership lacks the capacity to drive the firm to the desired heights. This is made worse by the fact that other employees are aware that these managers lack the ability to hold their current position. The employees therefore, have no confidence with the leadership.

They see no future in the firm. Those who are futuristic have left the firm. This means that existing employees are a bunch of lazy individuals who are either sympathizing with the firm and its initial managers, or are simply there to continue earning their monthly salaries. If this does not change, this firm may soon close down because it will start running at loses. The market has already made it clear that it needs more modernized products that the firm cannot deliver. This puts this firm at a precarious position where its products can be rendered irrelevant in the market. It may not take long for this to happen, and when it does, XYZ Company will be forced to close down its operations.

Organizational mission statement

According to Kotter (2008), a mission statement is always important in guiding employees towards achieving goals of an organization. It defines the path that an organization would take in order to achieve the set objectives. XYZ has a mission statement that has been guiding its operations for the last thirty-two years. This mission statement has provided it with a path that saw it reach its current position. The following is the mission statement for this firm.

To produce the best product at the most reasonable cost for the marketplace

The mission statement given above focuses on two factors that guide operations of this firm. The first factor is the need to produce the best products. This firm envisions a scenario where it will produce the best products that meet the needs of the market. It is important to note that this firm is already off the track as far as this first aspect of the mission statement is concerned. This is because the market is demanding for more innovative rubber products, which are in line with new design brought about by changes in technology in the market. This firm is unable to sustain creativity and innovation in its operations, a clear sign that it is unable to deliver what the market desire.

The second aspect of this mission statement talks about production at the most reasonable costs. It is important to note that as far as this second aspect of the mission statement is concerned, XYZ is once again out of track. Production can only be at the cheapest cost possible if the firm uses creativity and innovation brought about by technology. XYZ is not doing this. This means that it is not operating within this aspect. It would therefore, be true to conclude that this firm is no longer operating within the confines of its mission statement. The mission statement of this firm is therefore, irrelevant given its current operations.

Vision for the future

The vision of an organization always helps it define the future. It helps in forecasting where a given firm should be in days to come, and how this can be made a reality. The initial top managers of XYZ Company developed a vision statement for this firm. This is given below.

To be the primary supplier of specialized rubber internationally

When developing this vision statement, the owners of this company were visualizing a future scenario where the firm will be the primary supplier of specialized rubber internationally. The initial operational activities of this firm moved this firm closer to realizing this dream. The vision statement has two aspects that the management has to be keen on in order to operate within its confines. The first aspect is the need for this firm to be the primary supplier of specialized rubber, not just any rubber. The current position of this firm shows that it is off the track as far as this vision is concerned.

This is because the specialized rubber currently needed is more innovative, based on the current technologies in the market. This firm is not able to deliver this type of rubber given its current operations. The second aspect of this vision statement is to be the primary supplier of this rubber internationally. The move to establish sites in the United States and China is a clear demonstration that this firm is walking along the path defined by its vision statement. What remains to be seen is whether the current top executives can go beyond what the previous top managers did.

External economic environment

External economic environment always have direct impact on a firm. The economic environment is part of the main environmental factors that always affects operations of a firm. The two main countries where this firm operates currently are the United States and China. These are the two leading world economies. The United States has the highest purchasing power in the world. This means that XYZ must consider a way of monopolizing this market.

The recent recession that hit the United States in 2008/2009 economic year had a massive negative effect on this firm. This is because it reduced the purchasing power of the market. Many of the electronic firms experienced reduced sales and this forced them to lower their production levels. This means that they would buy les of XYZ’s products. In China however, this economic recession was not experienced. This meant that the sales of this firm in this country remained stable. It was a relief that recession brought to an end in 2010. It is important to note that the current crisis in the United States budget that could render hundreds of thousand Americans jobless may also affect the economic environment of this firm.

This makes it important for this firm to find alternative markets that can cushion it in hard times. The Chinese market remains to be attractive even though the country’s economic growth slowed. The country is home to over 1.3 billion people, making it the most populous nation in the world. This large population is a ready market for the products of this firm. The electronic firms in this country are forced to manufacture more products to meet the local demand, and this translates to more sales for this firm. China is also considered as one of the leading exporter of electronic products. This would translate to increased sales for this firm.

Industry

In order to be successful in the market, it is important to understand the industry in which a firm operates, and its area of specialization (Lawler & Worley, 2006). XYZ is operating in the rubber industry. This industry is developed because it has been in existence for some time. However, it is important to understand that this is a large industry with different firms specializing in different segments. XYZ Company has specialized in the manufacture of special type of rubber that is used primarily at the base of laptop computers. This industry has a number of other players both in the United States and in China.

The management of XYZ Company must realize that this stiff competition can only be managed if it is able to understand the industry dynamics. Some of the leading firms in this industry include Alliance Rubber Company and Minor Rubber. XYZ Company is facing stiff competition in this industry from Minor Rubber, which has been in existence since 1914. This means that this competitor has been in this industry over twice as long as XYZ. This makes it able to understand industry dynamics and deliver products that meet market needs.

Understanding this industry will be one of the main steps that will help the firm restore its glorious position and achieve its vision. The management of XYZ Company must understand that there is a lot of pressure on laptop manufactures to produce better products. This means that these manufacturers will continuously demand for improved products to meet the market demands. Failure to do this may force the firm out of the market.

Conclusion and Recommendations

It is clear that XYZ Company may soon lose its glorious position in the market that has taken many it years to achieve. It is clear that when the two brothers started this firm, they had a clear vision of where this firm was to be in years to come. For thirty-years, these two brothers worked very hard as the top managers to ensure that this firm becomes successful. This success was demonstrated in the ability of the firm to open several sites in the United States and China.

The team worked very hard to the extent where this firm was able employs 5,200 employees. However, this glory may be lost with the new crop of leaders who have taken over executive position. The culture of this organization that demands that top leadership should be left to family members may cost this firm its current glory. This is because some family members who assume leadership lack skills that can make them effective managers. The firm should consider the following recommendations to remain competitive in the market.

  • The policy, which demands that top leadership must be left to the family members, should be abolished. The top executive should be selected based on qualifications.
  • The management must embrace creativity and innovation by creating an enabling environment that can encourage creativity among employees.
  • The management must realize that sustained organizational change initiative starts with the management being positive towards change.
  • The management should avoid high rate of turnover of its employees, especially the specialized employees such as its engineers.

References

Booker, J. (2006). Financial planning fundamentals. Toronto: CCH Canadian Limited.

Kapferer, J. (2012). The new strategic brand management: Advanced insights and strategic thinking. London: Kogan Page.

Kotler, P., & Keller, K. L. (2012). Marketing management. Upper Saddle River: Prentice Hall.

Kotter, J.P. (2008). A sense of urgency. Boston: Harvard Business School Publishing. New York: Cengage.

Lawler, E.E., & Worley, C.G. (2006). Built to change: How to achieve sustained organizational effectiveness. New York: Jossey-Bass.

McNally, D., & Speak, K. D. (2011). Be your own brand: Achieve more of what you want by being more of who you are. San Francisco: Berrett-Koehler Publishers.

Simerson, B. (2011). Strategic planning: A practical guide to strategy formulation and execution. Santa Barbara: Praeger.

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