ASSIGNMENT ONE: Case Study

“Farewells at Fern Frond Education and Training”

Organisation Environment

1.

The external environment of any organization is the factors existing outside the boundaries of the firms and has impact on the performance of organization. There are nine external environmental factors which affect organization:

• Customers
•  Competition
• Suppliers
•  Labour Force
•  Shareholders
• Society
•  Technology
• The Economy
• Governments

The organizations should respond to external environmental changes although they have limited influence on what happens externally in the world (Lussier, 2009).

The three external environmental factors affecting the performance of Farewells at fern Frond Education and Training (FFET) are:

• Governments:  The negative publicity of FFET and other PTE’s in New Zealand forced the Chinese Government to force New Zealand Government to  take strict controls like now the PTE’s had to comply with a criteria which put restrictions on the types of courses offered which also restricted growth.
• Technology: Organizational restructuring at FFET lead to an unforeseen and very costly restructuring of the installed IT system. The cheapest system chosen by Lee was very unreliable and needed regular updates and maintenance over a two-year period.
• Customers: The number of customers dropped, as the students from Asian countries were hit by SARS during that period and there were curbing on international travelling (Theunissen, 2007).

 

2.

 

Organizational culture is the social as well as normative glue or bond which holds the whole organization together and through organizational control the organizational culture can be managed. The figure depicted below gives an overview of the different elements of organizational culture (Witte & Muijen, 1999):

Three examples of organizational culture at FFET:

 

·       1^st Example:  Lee took the decision of restructuring the organization unilaterally and numerous employees in FFET were made redundant. This not very typical of culture because in today’s organizational culture the leader takes the opinion of their subordinates before reaching final decision.

 

·       2^nd Example: Several managers knowingly delayed the decision and discussion of redundancy because they themselves were trying to accept this decision and one of them was Mary Ann’s boss. This is again not very typical of today’s culture as in today’s organizational culture the employee declared redundant should get informed beforehand by their senior and should be given proper reasons.

 

·       3^rd Example: Least communication from Board of Directors and Lee regarding informing about the progress of after cost cutting actions and redundancy. This too is very much against today’s culture because there should be proper channel of communication in string organizational culture (Lussier, 2009).

 

·      

 

Problem Solving and Decision Making

 

3.

 

 The kind of leadership depicted by Lee clearly indicates that he made unilateral means single-handedly decide to restructure the organization which means he would not have involved any other employee in the decision-making process.

 

 Decision making process

 

AN efficient decision-making process involves many steps or series of steps which need the input in the form of information during the various stages of process as well as a process of feedback is needed (Baker et al 2001). According to Peter Druker all the actions of a manger are being taken through decision-making. Thus decision making is very vital for all the processes in organization like planning, controlling, organising, staffing, directing and controlling. Characteristics of Decision-making are listed below:

 

·       Implies making choice

 

·       Continuous and dynamic process

 

·       Mental or Intellectual Activity

 

·       Based upon reliable feedback or information

 

·       Goal oriented process

 

·       Related to specific problem

 

·        Time-consuming activity

 

·       Requires effectual communication

 

·       Pervasive  Process

 

There are many steps which need to be taken that too in a logical manner for a perfect decision-making and such process is called scientific or logical decision-making process. The six steps which have been recommended by Drucker (Drucker, 1955) are as follows:

Every step mentioned in the decision-making process is very vital and requires proper consideration of manager or leader in order to facilitate decision-making which is accurate. For accurate decision-making techniques like PERT, CPM or linear programming can be used (AKrani, 2010)

 

 The benefits of evolving employees in decision-making process is that it promotes participative management which refers to the degree or level up to which  the employees have influence    on the process of carrying out  their work and organizing it. There are numerous potential advantages of involving employees in decision-making because it helps in improvement of identification of problem and it also helps in creating synergy in well-managed meeting which helps in generating better solutions. Finally people working collectively give better outputs than individual which picking the best alternatives (Mcshane & Glinow, 2007).

 

 

4.

 

 Since the corresponding complexity and the number of factors are very large in this case so we will use Complex Techniques of Decision-making. Three Techniques which Lee can use to make more effective decision in future are:

 

·       Pareto Analysis: According to Pareto principle by carrying out 20% of selected work we can easily generate 80% advantage of completing entire job and vice versa. It is the best technique to find out the most important problem which is required to solve or it also aids in finding the biggest benefit delivering changes.

 

·       Decision Trees:  These are graphical representation of multi-stage decision problem where in   several independent decisions are being made followed by one another and all the decisions are interdependent on each other. This technique will help Lee in forming a clear picture of the risks associated and the outcomes as well which are associated with possible course of action.

 

·       Grid Analysis/ Decision Matrix Analysis:  Multi-Attribute utility Theory (MAUT) is a very vital theory which helps in choosing the best alternative from a wide array of alternatives and it will help Lee in making important decisions wherever obvious and clear options are not available (Ghuman, 2010).

 

 

Planning

 

5.

 

Hierarchical Levels of Planning

 

The planning process consists of three stages which are:

Organizational Mission: Defined through mission statement

 

Strategy Formulation:  Manager analyses the current situation and then develops the strategy which is needed to accomplish the mission

 

Implementing Strategy:  manager decides allocation of resources between various resources just to ensure that the planned strategy is implemented successfully.

 

Levels of planning

Figure 4: levels of Planning

 

Corporate Level:  Decision is taken by Top Managers and they decide in which market the organization should be in and provide framework for other planning.

 

Business Level: It gives details about long-term divisional goals and tries to identify the means by which the organization would be able to achieve their corporate goals and the manner in which business will compete in the market

 

 Functional level: These are the plans which exactly state that how the business level strategies can be accomplished (Kilgour & Eden, 2010).

 

 But we must remember that hierarchal planning does not necessarily lead to central coordination.

 

 6. Planning Progresses within hierarchy through following steps:

 

1. Setting an Objective: here the objective is being planned.

 

2.  Develop the forecasts and planning premises too:  making assumptions or developing premises in relation to future this helps in finding out which plans the organization should close and which products should be phased out.

 

3. Determining varied Alternatives:  Every pan comprises of gaols and the desired course of action to realise that goal and there are many ways to achieve these goals which can be planned in this stage.

 

4.  Evaluating the alternatives:  Plans are the major decisions which are taken today for doing something tomorrow. So you should apply all the decision-making skills for evaluating the alternatives and think through the consequences of every course of action.

 

 5. Implementation and again Revaluate the plan: Final course of action is chosen while deciding everyone’s duties and then implementation of plan. Then periodical monitoring to check that plan is moving as desired.

 

 The whole planning process produces a hierarchy of goals and plans because the vice-president carets a plan for her department the n the department heads again produce the plan for their departments and so on. At the top of the hierarchy the president or CEO sets the strategic goals (Dessler & Phillips, 2007).

 

 

Controlling

 

 7.

 

Control Process

 

Controlling is a management function which is related to monitoring of performance of organization so as to ensure that it is conforming to the plans (Sims, 2002). It makes sure that the right things are happening at the right time and in right manner. It helps in improving the organizations overall performance as it:

 

·       Helps in maintaining compliance with the organizational policies and the rules.

 

·       Helps in ensuring that the directions of groups and individuals are consistently moving with the organizations long and short-term plans.

 

·       Helps in ensuring that the accomplishments and objectives are consistent with each other all through organization (Controlling as Management FUnction).

 

Detection and then correction of the problems arising in organization is what control process does. Thus the manager can ensure quality and as well as manage costs in firm.

 

 Steps in Control Process

 

Accomplishing control becomes easier by comparing the actual performance of organization with the predetermined objectives and standards. Then talking actions to correct any deviations detected from the standard. The three basic steps of process are:

 

·       Establishment of performance standards

 

·        Monitoring performance, then compare them with standard

 

·        Taking necessary corrective actions (Sims, 2002)

 

 

 

8. Methods of control for organization which would make organization operate efficiently.

 

Some traditional techniques for controlling in an organization are listed below:

 

·       Direct Supervision and Observation: It is the oldest technique, where the supervisor observes the employees at work.

 

·       Financial Statements: The financial statements which are prepared by most of the organizations like Balance sheets and Profit and Loss Accounts help in controlling organization.

 

·        Budgetary Control: This is very effectual planning as well as controlling device and budgetary control is an effective managerial control utilising the budgets.

 

·       Break Even Analysis: The Break Even Point is the point of no profit and no loss for the organization and Break Even Analysis is an excellent control, device which helps in finding out organizations performance.

 

·        Return on Investment (ROI): The working capital and the fixed assets of the organization are called its assets and the profit on the investment is supposed to be the reward for bearing the risk in business. If ROI is higher for any organization then the business is performing good and vice-versa. ROI is an effectual tool for enhancing financial performance of company.

 

·        Management By Objectives (MBO) :  It is a planning as well as control method which requires objectives which are fixed for the individuals  by the  subordinate as well as the superior, periodic evaluation and  feedbacks in regular manner in order to evaluate the  performance of individuals. It also requires awarding the individuals on achieving the objectives.

 

·        Management Audit:  It is evaluation of management technique for controlling (Akrani, 2011).

 

Organising

 

 

9. Two structures of Organising for FFET are:

 

·       Line Organisation Structure: IN it the line of authority has the movement direction directly from the topmost level to the lowest organizational level and that too in a step-by-step manner. It is mainly vertical as well as straight. IN this kind of structure the authority and responsibility is defined in clear manner (Marquis & Huston, 2008). In this case the authority moves downwards while the responsibility moves in the upward direction.

Figure 1: Line Organisation Structure at FFET

 

 

·       Line and Staff Organization Structure: In the line and staff organization the staffs that are the specialists and line executives are being combined together. The line executives act as the ‘doers’ whereas the staff is being referred to as ‘experts’ and they mainly act as the ‘thinkers’. Organization which has both line as well as staff positions and the authorities are being assigned from the highest-level of management to the employees is called line and staff organization structure.

Advantage of Line Structure: It is easy to follow and understand by the subordinates as well as the superiors. The line organizations structure because of its simplicity and clarity is easy to comprehend and is very simplistic with regard to authority as well as accountability. This helps it in making prompt decisions in line organization at all the levels because of simple and clear authority.

 

Disadvantage of Line Structure:  Since the power is very highly concentrated in the hands of just few executives so there is heavy dependence upon the limited executives only. Many difficulties arise in cases of transfer/ promotion and replacement.

 

Advantage of Line & Staff Structure:  it helps in making sound decisions because of the help of experts and specialists, Moreover the decision-making involves democratic style which is in consultation with the experts.

 

 Disadvantage of Line & Staff Structure: In this case there are regular conflicts between the line managers and the staff specialist and the reason being disinterest of line managers in the advice of experts.

 

 

11.  Structural Characteristics of Organization and their application to organization

 

·       Centralisation Vs Decentralisation

 

Centralisation means when all the administrative activities of the organization are performed at one place which means the systematic a d consistent retention / concentration of the authority for the purpose of decision-making at higher levels of management (Murugan, 2007). The systematic dispersal of authority and in all the departments and at all the levels existing in the management is called Decentralised characteristic of organization structure , which implies that all the administrative activities will take place at different places (Ferreira, Erasmus, & Groenewald, 2010).

 

·        Mechanistic Vs Organic

 

A mechanistic organization is the one which possesses relatively very high degree of rigid departmentalisation, narrow spans of control, job specialisation, and several layers of management, long chain of command and centralized decision-making. Whereas the Organic  organizations  depicts very low degree of  loose departmentalisation,  lower level of job specialisation, wider spans of control, lesser levels of management ,  shorter chain of command,  decentralised decision-making.

 

They can be applied to the organization by analysing the various factors like the overall strategy of the organization, stability of external environment, and the size of the firm (Gitman & McDaniel, 2008).

 

 

Case Study:  2

 

 

Fryer’s Furniture

 

Organising

 

12.

 

The basis on which jobs are being grouped together is called Departmentalization. Every organization has their specific method of classifying as well as grouping the work activities or tasks and it is done along the five common forms of departmentalization which are:

 

Functional Departmentalization is the one in which the departments are segregated. They are separated from each other on the basis of functions or the tasks performed by them like production department, marketing department etc. (Akrani, Bases Methods Types of Departmentalization, 2012) It is found in most of the organizations and Fryers can implement functional departmentalisation as it will be able to generate efficiencies by putting together similar specialities and staff possessing common knowledge and orientations (Heijden, Bono, Remmé, & Jones, 2008).

 

Geographical Departmentalization  is the one where separate departments are being based in either restricted or  over a expanded area through establishment of branches and offices in different areas or places where company’s operations are carried out (Akrani, Bases Methods Types of Departmentalization, 2012).It can be implemented in Fryers Furniture because it would be helpful in handling the regional issues arising in more effectual and efficient manner (Heijden, Bono, Remmé, & Jones, 2008).

 

Product Departmentalization is the one where separate departments are created based upon the type of products sold or produced by the company (Akrani, Bases Methods Types of Departmentalization, 2012). It is most appropriate for Fryer Furniture as it will allow specialization in specific products and services and help in bringing company closer to customers (Heijden, Bono, Remmé, & Jones, 2008).

 

Process Departmentalization is where the departments are being separated on the basis their role in production process (Akrani, Bases Methods Types of Departmentalization, 2012). It is inappropriate for Fryers Furniture because it can be used in specific industries only like textile etc (Heijden, Bono, Remmé, & Jones, 2008).

 

  In Customer Departmentalization, departments are being separated on the basis types or groups of customers to be handled (Akrani, Bases Methods Types of Departmentalization, 2012). It is very appropriate for Fryers Furniture as it helps in resolving the customer problems and handling their needs through specialists (Heijden, Bono, Remmé, & Jones, 2008).

 

 

 

 

 

13. 

 

Formalisation means the degree up to which the jobs are specialised and standardised in any organization (Shukla, 1996). Formalisation can be used by Fryer’s Furniture to reduce or eliminate the differences in service levels across every store it has because greater formalisation will reduce the employee’s discretion while dealing with their work.  Clear job descriptions and meticulous work procedures through formalisation will reduce the variability of outputs in it.

 

 

 

 

 

14.

 

 

 

Span of control is the measurement of the number of employees any manger can handle in effective and efficient manner in any organization. Thus this statement of John indicates that the mangers in Fryers are handling more employees than they can. The best example is that all the 16 stores have single store manager and all the 30 staff members report directly to him. Thus there is just one level and one manager in every store which means very wide span of control. According to make the managers work effectively the span of control should be kept minimum.

 

 But in today’s globally competitive environment trend is to keep higher span of control so that the overheads are cut, cost is reduced, increase flexibility, empower the employees, expedite decision-making and to get closer to customers (Heijden, Bono, Remmé, & Jones, 2008) .

 

 

 

 

 

Team Dynamics

 

 

 

15. 

 

 

 

Team building is an ongoing process which helps any group to evolve into a cohesive unit. The tem members of any team share  their expectations for accomplishing the  tasks of group and along with that they develop trust and support with each other while respecting each other’s individual differences in the team (Chapter 14: Team Building). AS a team builder the team leader needs to build cohesiveness and productivity within the whole team. The team has its own life and needs to be nurtured and then only it grows successfully. Team building can be enhanced through managing diversity in efficient manner (Chapter 14: Team Building).

 

 Team building has many befits attached to it like it can lead to:

 

·       Establishing good and better communication with the participants as their team members and the individuals too.

 

·       Team members can be motivated to achieve their goals.

 

·        Leads to higher level of job satisfaction as well as commitment.

 

·        Diverse co-workers are able to work in better manner together.

 

·        Better operational procedures and policies are established.

 

·        Department’s creativity as well as the productivity increases manifold.

 

·        An atmosphere of collaborative and cooperation problem-solving develops in the department.

 

·       High level of support and trust develops.

 

·       Work objectives get clarified

 

Thus John’s every store can build a team by following the below listed steps of effective team building:

 

Step 1: Lead the team effectively

 

Step 2: Consider the ideas of employees as valuable and should be aware of unspoken feelings of employees too.

 

Step 3: Act as influence for harmonising

 

Step 4: Be clear while communicating

 

Step 5: Enhance the trust and cooperation among employees and encourage team members to share information

 

Step 6: Delegate the problem-solving tasks to the team members

 

 Step 7:  Establish the goals for team and evaluate the team performance regularly

 

Step8: Utilise consensus and methods for arriving at consensus.

 

Step 9: Encourage brainstorming and listening in team

 

 Step 10:  The parameters for consensus building should be encouraged.

 

 

 

 

 

 

 

 

 

16.

 

It is very important for John to be aware of the role differentiation because with the increasing roles in group the scope of roles decreases so that none of the roles get ignored. Task related roles need specific behavioural pattern which helps the group to achieve goals directly so these roles will help in group development. Maintenance –related roles need specific patterns of behaviour which help in group development and help in maintaining group cohesiveness, good member relationships and effective levels of conflict, thus these are also beneficial for the group. Self-oriented roles are focussed on the pattern of behaviour which required attention towards individual needs and goals and that too at the expense of the group. Since these roles detract the groups from achieving group effectiveness, so John should avoid these roles. The reason being members playing self-oriented roles are found to be aggressors, blockers and withdrawers (Verderber, Verderber, & Sellnow, 2009).

 

 

 

17.

 

The traditional view of conflicts in team believes that conflict is really bad and always creates negative impact and leads to decline in the team performance as the level of conflict rises in team.

 

 The contemporary view or the human relations view believes that conflict is very natural and an inevitable phenomenon for any organization and it can have positive as well as negative impact depending upon how it has been handled. The team performance may increase due to conflict in teams as per this view but up to certain level only, but will start decreasing if conflict increases.

 

 The interactionist view believes that conflict in teams is very necessary in order to increase the team’s performance. Therefore this approach  encourages and supports eth managers to  maintain an appropriate level of conflict within teams so that the project can be kept  viable, creative,  innovative and self-critical (Verma, 1998). Thus according to interactionist view conflict in teams is necessary for high performance of teams.

 

 

 

18.

 

Delegation can be considered to be effective if it conforms to certain principles which are:

 

·       Knowledge of Objectives:  Before the delegation of authority the subordinate should be made clear about their responsibilities and duties along with providing knowledge about policies and objectives of the organization. (Akrani, Delegation of Authority Principles and Importance of Delegation, 2010)

 

·       Parity of Authority and Responsibility:  While delegating authority it should be commensurate with the responsibility assigned to the subordinate. This means there should be proper balance between authority and responsibility before delegating it.

 

·        Unity of Command: This principle of delegation suggests that there should be existence of one boss only in the organization. The subordinate should get orders and instructions from just one boss or superior and the subordinate should be accountable to just one superior only. (Akrani, Delegation of Authority Principles and Importance of Delegation, 2010)

 

·       Scalar Principle:  The scalar principle of delegation of authority suggests that there should be very clear-cut as well as direct lines of authority within the organization which should run from the direction top to bottom.

 

·        Clarity of Delegation:  The limits of authority should be made clear to the subordinates before delegating them authority so that they know the limits of their freedom of action and their viable areas of operations should be known to them.

 

·       Absoluteness of responsibility:  According to this principle of delegation only the authority which is delegated not the responsibility. (Akrani, Delegation of Authority Principles and Importance of Delegation, 2010)

 

·       Use of Exception Principle: It suggests that when authority is being delegated, it is expected from subordinate to follow their own judgement and take decisions within the limits of authority.

 

·       Completeness of Delegation: The process of delegation should be accompanied with completeness. (Akrani, Delegation of Authority Principles and Importance of Delegation, 2010)

 

·       Effectual Communication Support System: It suggests that flow of information between the subordinate and superior should be continuous, so that the relevant information could be furnished to subordinate for effective decision-making.

 

·       Reward for Effective Delegation:  There should be reward for effective delegation and successful assumption of authority. (Akrani, Delegation of Authority Principles and Importance of Delegation, 2010)

 

 

 

Staff benefits from having managerial tasks delegated to them in following ways:

 

·       Motivation of Subordinates

 

·        Improves the morale of employees

 

·        Facilitates the efficiency and quick decision-making amongst the staff (Akrani, Delegation of Authority Principles and Importance of Delegation, 2010)

 

 

 

 

 

 

 

19.

 

 

 

 

 

a.      Two- Factor Theory or Motivation-Hygiene Theory basically works on the principle that motivation is two-dimensional and each dimension consists of some distinct factors. The first set of factors are called the dissatisfies or maintenance factors lead to job dissatisfaction if not found in right amount in workplace. These hygiene factors are salary, benefits etc. The second set of factors called motivators lead to motivation of staff members when present in workplace. These factors like achievement, work itself, personal growth responsibility etc. lead to job satisfaction in the workplace.

 

b.     The motivation Theory of two-Factors given by Herzberg can help John to drive change as he can apply the two factors for determining job satisfaction and job dissatisfaction in the organization.

 

c.      Three practical examples  for showing how John can motivate the staff are :

 

1.     Job Enrichment: It suggests that the jobs should be enriched by including the motivating factors which will in turn help in providing the psychological growth to the employees of the organization of John. Growth opportunity should be given to the staff members as well as the managers of the stores by John. This can be best done thorough horizontal job loading by John in Fryers Furniture.

 

2.     Communication: It is supposed to be heart and soul of motivational techniques as it helps in positively influencing the subordinates or the staff.  Open communication turns out to be a good motivator for the staff and leads to positive reinforcement in the organization. So John can train his store managers in positive communication techniques. The managers should be told to give clear instructions, information, clear expectations and this will create positive sense of security, power and respect and control in their jobs (ADams, 1994).

 

3.     Acknowledgement or Rewards and Recognitions: The managers in the stores should learn to acknowledge the efforts or the tasks done by the staff this will motivate the employees in Fryers Furniture and they will deliver positive results to enhance the productivity and profitability of the firm through their high performance. The highly skills employees can be recognised with increased responsibility which will help in developing  new skills in the teams which will help in advancements in future for Fryer’s Furniture. The employee of the week can be rewarded with a trophy or can be awarded with a trophy award.

 

 These techniques are bound to boost the employee’s job satisfaction as well as the motivational level. Moreover the best part is that these motivational techniques are very low cost and or rather no-cost motivational techniques which can be followed by John to motivate positively the whole staff and teams in the firm (Pride, Hughes, & Kapoor, Business, 2012)

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NATIONAL CULTURE