Safe Mint UK Limited manufactures steel shipping containers since 1902. It was inherited by Samson Mint who is the acting chief executive of the company and holds the majority of shares in the company. It has a workforce of four hundred and seven people of which three hundred are employed at the production plant. Recently, the company is facing increasing competition as new entrants have entered this industry. The organization is also facing problems with regards to its employees in form of strikes and reduced output. Its productivity has declined and customer complaints have increased over the years. The organization also faces absenteeism that results in lower output and reported a net loss in 2007. The new blood in the company proposes investment in machinery as well as employees. However, Mr Mint fails to acknowledge these problematic areas and views the expenditures as only costs with no return on investment.
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On the other hand, Docklands Solutions Limited (DSL) produces computer security software since 1997. It has an impressive turnover rate, which is constantly increased by 30% annually over the last five years. The company has won awards in quality and enterprise excellence. DSL believes in investing in its employees to provide the impetus for its growth. The employees at DSL are treated as friends at all levels of the organization. The organization invests in its employees and expects them to perform. DSL uses a team approach to accomplish tasks and employs contemporary ways of communication such as video conferencing and more. The senior management believes in developing its employees so that they perform at every arena in business and beyond. At the same time, employees are held responsible to deliver results and meet organizational standards.
Comparison of Approaches to Teamwork and Team-working
Team effort refers to the synergized output collectively produced by the members working together as a team. Katzenbach and Smith (2005) state in their article that teams consist of a small number of people, who have related skills and are committed to meeting organizational goals. At Safe Mint five teams of sixty employees each are used on the production plant and are managed by three different supervisors. Gratton and Erckson (2007) have also noted that teams generally become ineffective when the number of people included in the team is increased, as conflicts arise and communication breaks within the team.
It can be seen in Safe Mint that the teams formed are not really helping the organization to increase output. This can also be attributed to the ongoing tension between the employees and management of the company. Moreover, the organizational design of the company is very mechanistic and does not provide the environment for teambuilding to take effect. “A team opportunity exists anywhere hierarchy or organizational boundaries inhibit the skills and perspective needed for optimal results” (Katzenbach and Smith, 2005, p. 171).
Ms Stella who represents the new blood in the company has spotted this opportunity for teams. She has proposed that self-managing teams should be set up within the organization to support the falling production of the company. Self-managed teams empower employees and generally contain ten to fifteen members. They also let teams assign tasks, take on responsibilities, plan and control (Robbins and Judge, 2006). The proposed idea seems impressive but it is imperative to analyze whether it will work in the present organizational environment of the company. “Teams have increased communications demands, conflicts to be managed and meetings to be run” (Robbins and Judge, 2006, p.356). The traditional culture of the organization does not allow such communication to take place between employees. To incorporate Self-managing teams the company will need to change its culture and the supervisors will have to learn to deal with teams instead of individuals. Moreover, it could create further problems as the supervisor’s power within the organization will be diminished. (Schermerhorn, Hunt and Osborn, 2002). Therefore, implementing Self-managing teams at Safe Mint is going to be a daunting task and is going to face a lot of resistance. The CEO Mr Mint does not support it in the first place.
On the other hand, DSL thrives on a team working approach towards task accomplishment and achieving goals. Teams are delegated projects and expected to deliver results. Different teams are made for different projects and consisted of employees that have the relevant skills to complete the project. It sets up teams even if geographically located in distinct places and then provides its employees with the right set of technology to eliminate communications barriers. Teams at DSL coordinate through videoconferencing, email and phone. Teamwork is embedded in the organizational philosophy of DSL, as even its founders started as a team of 5 individuals. Moreover, DSL provides its teams with the right organizational environment that enhances team effectiveness.
Comparison of Organizational Structure and Design
Safe Mint uses a hierarchal or mechanistic structure for its organization. It has a clear line of command with the sixty members teams right at the bottom that are supervised by three supervisors for each team. These supervisors report to the project managers who then report to the board of directors. This structure holds the following attributes as listed by Robbins and Judge (2006), high specialization, rigid departmentalization, clear chain of command, narrow spans of control, centralization and high formalization. All of these attributes are visible in Safe Mint UK Limited where Mr Mint makes all the decisions. Robbins and Judge (2006) also talk about the importance of cost minimization for an organization based on this structure.
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The organizational philosophy branches out of its structure, wherein Mr Mint does not believe in investing in his employees or purchasing new plant equipment. He views this investment as unnecessary costs that will not add to the bottom line of the company. As a result, the company is facing problems and is destined for losses because its manufacturing plant is not as efficient as those of competitors and its employees are demotivated. He also does not invest in the training and development of employees of his company that could actually help increase production.
This cost minimization strategy that is directly related to the organizational structure of Safe Mint provides the reason behind only a hundred and seven employees working for key organizational functions of marketing, finance, personnel and sales. The Personnel Manager Mr Scotty was an IT Manager three months ago and it is questionable if he is qualified for managing personnel. His attitude towards employees being “lazy idiots” proves the fact that he is not suited for this job. In the contemporary business strategy employees are treated as internal customers of the organization. They are considered as human capital and developed likewise. Ron Ashkenas (2007) implies that structural shifts are common in the modern-day organization from subtle changes to overhauls and monitoring structural design to incorporate changes in the external environment is necessary. The organizational structure of Safe Mint is unacceptable in the present-day business environment. Structural shifts are common in the modern-day organization from subtle changes to overhauls. This structure begets problems for Safe Mint as the employees feel not cared about, their needs are neglected and they become demotivated. This lack of motivation results in absenteeism and productivity losses to the company.
Communication within an organization is very important to keep the employee morale up and address issues within the company. The information flow also suffers in Safe Mint because of the hierarchal organizational structure. The managers are off-limits or inaccessible and important employee complaints or feedback is lost. As in the case of Ms Stella who has not yet been able to meet the finance manager.
On the other hand, Docklands Solutions Limited does not believe in hierarchy or organizational structures that affect employee potential in any way. It believes that power imbalances created through structures reduce employee productivity, inhibit innovation and disrupts communication within an organization. It uses team structure within the organization, wherein teams are made to address different projects as long as the project lasts. Later, a new team is assigned to a new project and these teams are based on the skills needed to do a particular project. This structure “breaks down departmental barriers and decentralizes decision making to the level of the work team” (Robbins and Judge, 2006, p.550).
The favourable effects of team structure are evident in the increasing profitability of DSL. Its employees are empowered and feel valued, as a result, they are motivated and give in their optimal performance. There is no communication gap between the management and employees. Employee concerns are shared with top management with ease. The top management is open to suggestions at all times and this employee feedback helps the organization to perform better.
Comparison of Cultures
Schermerhorn, Hunt and Osborn (2002) state organizational culture as “the system of shared actions, values, and beliefs that develops within an organization and guides the behaviour of its
members”. Safe Mint UK Limited has a traditional management culture, which does not respect employee input. Employees are expected to follow the set standard operating procedures and not influence the management of the company.
Employees are not believed in as assets of the company but as liabilities that should be thrown out when they do not perform (as indicated by Mr Scotty’s remarks). The CEO Mr Mint who is the organization’s leader and is followed does not believe in training his employees. He does not believe in incurring expenditures or even accept new technology. This attitude of the leader spills over in the organization and the same attitude is likely to be practised by middle and senior-level management. A resistance to change is evident in the company’s culture and an undesirable attitude towards employees is prevalent in the organization. The organization does not have a culture of open communication or feedback from employees. This has resulted in employee and management clashes because employees want to be heard even if through the platform of their unions.
“Organizations must have a culture that learns and anticipates change” (Luthans, 2005, p. 119). Safe Mint clearly fails to acknowledge that it needs to change with the changing competitive environment if it has to survive in its industry. Contemporary business best practices do not allow for such a culture, which has clearly outlived its relevancy. Kaplan (2007) suggests that leaders need to evaluate and align themselves with the changing business environment and ask themselves: “Am I attuned to change in a business environment that I would require a change in the way we organize and run our business”? Clearly, Mr Mint is not asking himself this question and his organization is suffering.
On the other side of the table, DSL is the antithesis of Safe Mint Limited with regards to culture. DSL believes it needs to nurture its employees if it wants them to innovate newer products. The company spends liberally on its employees to provide them with a conducive environment to work. The company was founded by friends and even today is compromised of friends even if the number of friends has now increased from five to a hundred and fifty. Even new inductees to the organization are treated as friends even to the CEO.
There are no barriers to communication and employees are encouraged to develop ties on the job and off the job. This helps to enhance the organizational relationship between employees and increases productivity. Employees are encouraged and empowered at DSL. They are made to feel in control and in charge to foster loyalty to their team and to the customer. The team structure reinforces this culture throughout the organization. The culture also helps the team to perform and the friends together achieve higher results every year.
It is evident that organizational culture, organizational structure and teamwork are entwined with each other. Each supports the other as witnessed by DSL, wherein, the culture of friendship and trust supports the team structure of empowered employees, which results in synergized team performance. Yet Safe Mint because of its rigid culture as well as structure fails to achieve its team objectives due to increased employee dissatisfaction.
Changing the organizational culture, structure and approach to teamwork for the better can actually increase organizational profitability for the long term. Without a good mix of the three an organization is bound to disaster.
Safe Mint should learn from the current corporate trends and undergo complete organizational mitosis. Organizations that keep abrupt with the changes in the environment, monitor their culture or design accordingly will succeed in this ever-challenging business environment.
Ashkenas, R. (2007) Simplicity Minded Management. Harvard Business Review, pp.101- 109.
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