Case Study: Capay Valley Naturals
This company specializes in processing and distributing fruits around North Carolina, Florida, and Georgia. The company has a fleet of 45 trucks that distribute the products to different destinations the farthest of which is 14 hours away from the central hub. It outsources the services of transportation companies to ensure its products reach their intended destinations when they are in the right state of ripeness. Meryl Roberts has been its Chief Risk Officer for over a decade and has vast experience in this field. The company agrees that the trucking expenses are high owing to the increase in the price of gasoline and other logistical challenges. However, it is necessary to rely on these transportation companies to support Capay’s core business. The acquisition of Salem Logistics was seen as a major stride towards the company’s efficiency and cost reduction. However, trouble started when Todd Fulton, the Chief Financial Officer proposed that Salem be made a nonunion company. This thought was supported by Alberto Giannetti even though Meryl Roberts and Jenna Watkins, the Vice President of the Human Resources department opposed this suggestion. The employees of both Salem Trucking and Capay Valley Naturals raised serious issues that impacted the performance of the company.
Lessons Learned from the Simulation Exercise
The simulation exercise is an eye-opener that shows the costs and benefits that an organization (CVN) will experience in case it decides to take an action. Managers should understand that the process of expanding organizations is not usually smooth regardless of their experience or financial and human resources. The structural and cultural differences of these companies made it difficult for their employees and practices to match. Moreover, the different perceptions presented by senior employees of CVN exposed serious challenges that were about to explode within the organization. Other lessons learned from the simulation include the following. First, due diligence is important when organizations expand and acquire the resources of other companies. Secondly, managers should not assume that employees of an acquired company will fit and continue their work within the mother company easily. Lastly, CVN failed to implement successfully the transition stage because it ignored the rights of Salem’s employees and wanted to force its practices without giving them time to adjust. The transitional challenges were not addressed before CVN acquired Salem trucking. The management’s approach to solving the crisis in CVN did not perform its expected roles and seemed to take a backseat at the appropriate time when its intervention was required. The simulation exercise shows the impact of various decisions that organizations make when confronted with crises. Managers should evaluate the costs and benefits of their actions to ensure simple crises do not escalate and cause serious losses. CVN failed to take precautionary measures yet there was enough evidence to prompt the management to act in good time.
Response and Thinking
The incidence of violence between the employees of Salem and CVN was uncalled for and the management should have done much better than just sitting and waiting for the brewing problem to explode. Organizations should have structures where employees can present their grievances without being victimized (Drennan & McConnell, 2014). In addition, the voice of all employees should be given proper attention regardless of the position of an employee. The employees of an organization may sometimes understand it better than some managers.
Moreover, they are the ones on the ground and interact with customers regularly. Therefore, their cries should not be ignored if an organization wishes to enjoy uninterrupted success. I believe that it was wrong for CVN to assume that the practices of these two companies were compatible. The company should restructure its compensation policies to ensure fairness and equity in employee remuneration. The failure to address this issue in time may have contributed to the violence between the employees of these companies because some thought they were being overworked yet paid less than what they deserved.
I will advise CVN to equip its human resource department with adequate resources to take care of the personal issues affecting the performance of employees. There are no social activities to allow employees to relax and forget the monotony of work. Moreover, some employees have family issues that have negative impacts on their performance yet the company thinks that it should not meddle in their affairs. The company has to take care of the social and economic welfare of its employees if it wants to ensure their productivity is improved and sustained.
Moreover, the issue about doing away with unionizing Salem employees should not be a cause of alarm if CVN addresses their needs properly. Workers’ unions attract employees whose employers do not take good care of them. CVN can abolish the membership of its employees if it is sure to provide for all their needs without being forced to do so. I would advise the management not to rush to abolish the membership but offer attractive treatment that would persuade them to deregister from the workers’ union. This process should take not less than six months because it involves restricting employee welfare approaches to ensure they are given proper attention.
Secondly, the company did not manage the heatwave and drought crisis properly. Some situations do not require complicated approaches to solve them, especially if they are caused by forces beyond an organization’s control (Drennan & McConnell, 2014). The drought did not only affect the operations of CVN but also those of other companies that rely directly on the environment to provide raw materials. However, this should not be a problem for CVN because it should have had proper mechanisms of mitigating water shortage. A company that relies on natural water should have other alternatives like dams and tanks to store it to be used when drought strikes. Moreover, it is a wise investment to buy water trucks that will be used to collect water from other regions when drought strikes its processing hub.
Aspects of a Response Plan Not Included in the Simulation
Crisis management is a complicated issue that should involve all the stakeholders (Roche & Mericskay, 2013). However, the simulation presented as a way of managing the crises at CVN does not give room to employees to participate in managing the problems arising from their incompatibility. CVN managers believe that they can solve the crisis without involving employees yet this becomes a difficult task to accomplish. Secondly, the company does not consult the former owners of Salem Trucking to know how it managed previous cases of employees unrest. The problems about employees’ fights, dissatisfaction in treatment, and diverse salaries could have been managed more easily if CVN involved key stakeholders in managing them. Moreover, the heatwave and drought problems were beyond the control of this company. The company should have sought the government’s intervention in mitigating the impacts of this crisis but instead chose to remain silent and solve it without external help. It is not easy to solve some problems without the collective efforts of all stakeholders involved.
Hazards and Vulnerability Analysis
The nature of the business of CVN makes it vulnerable to man-made and natural hazards. First, the company specializes in processing and distributing fruits. These products are highly perishable and this means that they must be handled with care. The high percentage of pollutants in the atmosphere makes the operations of this company risky because there are higher chances that they may be poisoned. For instance, the transportation of fruits from the central hub to various destinations is done based on their desired quality when they arrive at their destinations. Cases of pest and disease outbreaks are common during droughts and floods even though governments have invested heavily in trying to control them. CVN should have proper and efficient mechanisms for combating disease and pest outbreaks since they are the most dangerous risks posed to the operations of this company. Secondly, the company risks facing more fights and unrest if it does not address the imbalances that exist between CVN and Salem employees. Lastly, scarcity of agricultural land is a looming crisis owing to the high population increase and the demand for land for settlement, and the establishment of infrastructure (Roche & Mericskay, 2013). The temptation to use genetic engineering to boost production and sales is a serious issue that may discourage the existing and potential clients from buying its products.
Steps To Mitigate the Threat of a Significant Event
CVN employees believe that there are glaring mistreatment and discrimination perpetuated by the highly structured managerial chain. There are serious concerns over the compatibility of Salem and CVN employees and the previous fight was just an indicator that this situation may erupt if it is not managed properly. Fights may erupt between these groups and the company will be the greatest loser. CVN should introduce or implement the existing codes of conduct to ensure all employees abide by the rules that guide their behavior. Secondly, those involved in fights should be suspended but paid to warn others who may be tempted to engage in mischief. However, this suspension may attract resistance and go slow from other employees who may perceive it as victimization. The company should integrate the roles of these employees to ensure they are in contact with each other and learn to work together peacefully. This practice may lower productivity in the short term but become beneficial when employees understand the need to work together. Lastly, the company should not rush to force Salem employees to fit into CVN’s system overnight. They should be given time to acclimatize with CVN’s practices even though this may cause delays and losses.
Recommendations
CVN failed from the outset by acquiring Salem without the proper transfer of employees. The managers forgot that employees are important resources in an organization and thus they must be treated with respect. Secondly, all organizations have different cultures and this means that CVN should have given Salem employees time to adjust ad fit in their new system. Orientation programs should have been conducted to familiarize the employees of these two companies and ensure they understand and are ready to work together. Moreover, cases of drought and heatwaves should be expected since the company’s products are derived from nature. Pest and disease outbreaks, floods, landslides, pollution, droughts, and competition on the available land are bound to happen and thus the management should be.
References
Drennan, L. T. & McConnell, A. (2014). Risk and Crisis Management in the Public Sector. London: Routledge.
Roche, S. & Mericskay, B. (2013). GeoWeb and crisis management: Issues and perspectives of volunteered geographic information. GeoJournal, 78(1), 21-40.