Management initiative is the key determinant of any organization’s performance. It is important to note that the success of any company is directly proportional to its leaders’ focus and the commitment of its employees. This paper is a management consultancy report that analyzes the circumstances that led to the difficulties experienced at Figgie International. It focuses on issues that would be of particular interest to an Organizational Development specialist involved in change management. This will be the central focal point of the report where change initiative at Figgie International will be identified by noting major problem areas relating to change initiative and explaining how the concept of change initiative could have assisted to evade the troubles that estranged the company. The paper then will give a series of recommendations to address the noted issues and thereafter note key lessons learnt from the reading of this case.
Major Problem areas involving Change Initiative at Figgie International
A case study of Figgie International reveals that Mr. Harry made several errors which resulted in various challenges ranging from managerial issues to bankruptcy. The areas are key issues of particular interest to organizational Development specialist in change management. Leader of the company at the time believed he could manage the company without the help of other leaders whom he worked closely with which is clearly shown from the instances of reference from the case of the companies that he previously managed creating similar problems as at Figgie International. Records show that before his tenure, these companies were performing very well but collapsed somewhere along the way after he took over. Some of the reasons were mismanagement of funds. It is important to note that company resources are not personal properties and thus should not be treated as personal assets (Burke, 2008a). Mr. Harry’s poor managerial decisions clearly show that the organization faced various problems as a result of poor governance (Hiatt, 2010). From the case study, the problems include:
- Misuse of power and company resources
- Poor remunerations and embezzlement of funds
- Poor location of company headquarters
- Poor governance
- Self trust
- Mismatch of career.
Ways in which the change initiative would have abated these challenges
From studies and considerations of change initiative as an approach to management consulted for this the writing of this report, Hunt (2003) postulates that there must be proper interaction of various organizational elements so as to meet company’s goals and objectives (Hunt, 2003). It is a collective responsibility of all stakeholders to ensure that all organizational aspects are blended to work together towards these goals. Good Leaders interact with the management team to ensure that they steer the organization to greater heights (Jones, 2008).
In the article; The Social Psychology of Organizing by Weick (2000), he states that a number of privately owned organizations at times collapse due to poor management. As stated in Figgie International case study, the company’s management suffered from nepotism which took to the ground within no time. A number of family members headed various departments despite their poor managerial skills which are crucial for steering the company towards its goals and objectives. The collapse of Figgie International can be surmised to have been caused by poor management and lack of technical knowhow among its executive leaders and this was greatly caused solely by the company’s president, Mr. Harry. This could have been abated had the management under Harry’s leadership considered the core competence of change management that requires wide consultation in management of corporations. New leaders can learn from Mr. Harry’s mistakes for better management. It is important to note that success depends on the combination of an organization’s management and the way in which they are designed to perform the organization’s key roles. Leaders’ mode of conduct plays a major role in determining the final achievement. Whatever plans that are put in place, it is vital for the management to keep in touch with other stakeholders to ensure that mutual goals of the organization are met (Hunt, 2003).
There are a number of change management theories that can be used to describe the changes in management that happened at Figgie International. One of this is Soft System Methodology (SSM) which handles problems whose nature is psychological, cultural or of social origin. Mr. Harry showed presented himself as one who was plagued with multiple challenges that would have been properly understood by the use of SSM (Hunt, 2003). In the same way, hard systems methods which are usually called Structured Systems Analysis and Design Methodology (SSADM) focus on computer implementations that are used to provide insights for solutions of difficult corporate problems. In Figgie International some of the managerial problems that caused its collapse would have been addressed and salvaged by SSADM especially those regarding embezzlement and rampant abuse of office by the chairman.
Recommendations
Good businesses operate with good business models and strategies. Lack of these strategies is the key reason for the collapse of Figgie International. Business model has been defined by Hunt (2003) as the representation of criteria and strategies/approaches that a business uses to create, capture and deliver value dependent results of its objectives such as economic, financial and social milestones among others (Hunt, 2003). It is a profit oriented plan implemented by a firm to generate revenue. It is a vital component of a business as it converts technology into economic value, maximizing on revenues generated while cutting down on expenses incurred. Generally, business model refers to the broad range of information and formal descriptions representing core business aspects including purpose, strategies, organizational structures, infrastructure, trading practices, and operational processes and policies (Hatch, 2006). As a result business models are key structures of any successful company.
Mismanagement of company resources and Embezzlement of funds
Business strategy comprises some of the processes that are used in designing business models. Usually, businesses endeavour to implement business models into operational business structures like HR, organ grams and workflows among others. They also seek to implement them as systems like information, production lines, and technology architecture. Lack of good models or poorly structured business models are the downfall of many organizations/businesses. This was the case at Figgie International. Mr. Harry being the manager of the company was obligated to embrace and respect laid down business models and strategies. Incidences of mismanagement of funds were because of poor or lack of proper business strategies. Good strategies account for company funds and resources as they spell out how the generated funds through sales and promotions are supposed to be managed. They also give a close follow up on the expenditure of the company thus holding the company’s managing team accountable for the decisions they make in regard to funds and resources (Jones, 2008). A good business strategy ensures a credible account for the company’s funds and resources thus eliminating incidences of embezzlement of funds and mismanagement of company resources (Weick, 2000). Embezzlement of funds and
Misuse of power or poor management
Misuse of power and poor governance were the other key challenges faced at Figgie International. The recommendation for this is a complete change of business model. Weick (2000) indicates that there are instances in a business’/organization’s life that existent business models may be found inappropriate and this therefore calls for devising of newer models to be used (Hatch, 2006). This can be achieved through models of change. The importance of a business model cannot be underestimated since the entire success and innovation of a business venture rests quite squarely on the preferred business model. This means that a firm may have great resources and financial expedience but without a proper model to direct its business endeavours, all these financial and resource muscles may be wasted with a redundant performance and non-profitability. The new model should be devised in a way that it respects the company’s goals and objectives. For instance, it should provide for regular and proper checks and balances to test the credibility of the managing team. In so doing the company would be able to hold its management accountable for any incidences of misuse of power or poor management.
Poor remuneration
Staffing of a company is a very vital activity. It is important to take note that people are not hired into the organization on the basis on relationship. This weakness is clearly illustrated in Figgie International where Mr. Harry III employed a nurse on the basis of love which is really ridiculers. This does not only affect the performance of the employee but also bring a negative impact on the managerial aspects of the organization. To control this problem it is advisable for the leaders to employ staffs on the basis of merit and qualification (Burke, 2008b). A similar challenge faced at the organization is mismatch of careers. At times this is caused by the constraint in the job market. However, it’s important for anyone working in any organization to have the necessary skills for the betterment the company’s general performance. In Figgie International, the employees lacked the required skills because of the effects of nepotism.
Mismatch of careers and self-trust
It is highly recommended that the staffing exercise at the company is taken with the seriousness required (Scott & Davis, 2007). The exercise should be done openly where job vacancies are advertised stating the required professional qualifications. Applicants should then be vetted with unbiased panel then hired on bases of merit, educational and professional qualification and probably experience. Upon hiring, the management is highly recommended to work closely with its staff for the betterment of the company at large. Mr. Harry’s self-trust largely affected Figgie International. Robbins (2007) writes that managers and people in leadership have great influence on their employees and subordinates. They are expected to provide direction and appreciate or motivate them. In the process, managers can use various methods to achieve this. For the case of Figgie International, its leadership should embrace the five bases of power. However the concept of authority is very vital when evaluating these bases of power for in the end, it is not the person with the power that counts but how that power was exercised. Therefore power and authority are intertwined (Simon, 2001).
Lessons and Principals that can be drawn from the Case
From the case study the following are the lessons that can be learnt:
- Leadership is not a one man show as it requires the critical input of the entire management
- Biasness in leadership towards favouritism of whatever form is a quality that is in direct contravention of the concept of change initiative and one that promises failure of such a structure
- In the event of difficult in management, it is appropriate to have an independent committee that would review the performance of the leaders so as to fairly recommend appropriate action and avoid collapse of such a company.
- There is need to ensure that there are structures of leadership and management that put the presidents (and influential personnel) of companies in check so as they do not misuse their powers and authorities to collapse companies
- Leadership is an art that can be learnt and is not inherited thus everyone interested in leadership should be ready to learn and practice laid down procedures
- When authority is conferred so much to one person, there are higher chances of them getting overwhelmed by it and turn tyrannical with their leadership; there should a system that checks such authority
- Change management is a concept that when appropriately used in leadership of corporations would realize great fruits especially as regards its dependence on maximizing human capital and reinforcing of interpersonal relationships
- Corruption is an immoral act and can bring down any organization regardless of its structures, might and prominence in any market
- Among the greatest lessons is that even large corporations can crumble with poor management and therefore financial might and market share is no guarantee for continued success of a company.
- It can also be learnt that leaders who are open to correction and consultation are more likely to steer their organizations to higher grounds than those that are adamant with change; this is among the most imperative concepts at the centre of change initiative.
References
Burke, W.W. (2008a). Organization development. Encyclopedia of applied Psychology Oxford: Elservier Ltd.
Burke, W.W. (2008b). Organization Change: Theory and Practice. California: Sage Publications.
Hatch, M.J. (2006). Organization Theory: Modern, symbolic, and postmodern perspectives. Oxford: Oxford University Press.
Hiatt, J. (2010). The definition and history of change management. Web.
Hunt, J. (2003). Chapter One: The Anatomy of Organizational Change in the Twenty- First Century. In R., Weisner & B. Millett (Eds.), Human Resource Management Journal Challenges and Future Directions. Milton: Wiley.
Jones, I. (2008). The Human Factor: Inside the CIA’s Dysfunctional Intelligence Culture. New York: Encounter Books.
Robbins, S.P. (2007). Organizational Behavior, Concepts, Controversies, Applications. Ohio: Pearson Education.
Scott, W.R. & Davis, G.F. (2007). Organizations and organizing: rational, natural and open Systems perspectives. Ohio: Pearson Education.
Simon, H.A. (2001). Administrative Behavior: A Study of Decision-Making Processes in Administrative Organizations. London: Pearson Education.
Weick, K.E. (2000). The Social Psychology of Organizing. New York: McGrawHill.