Problem Solving and Decision Making – Establishing a price for a new product using the law of supply and demand
Scientific methods are very important and help in problem solving and decision making process. Having good problem solving skills is essential and takes an organization to another level. Scientific methods assist in decision making process and are widely used in many businesses to increase productivity. The success of any business depends on effective decision-making and problem solving techniques. Businesses are faced with several problems and challenges including reduction in supply and demand. It is crucial for organizations to make appropriate decision without compromising the terms and condition of the business. The law of supply and demands plays a significant role in micro-economics and businesses. The law of supply states that quantity of a product supplied increases with decrease in prices (Gale, 2015). The cost of a products falls with an increase in supply or high demand. Contrary, the law of demand argues that the quantity of a product decreases as the prices increases. Businesses are limited by the law of supply and demand making forcing them to establish equilibrium. Market-clearing price helps firms to find a long-lasting equilibrium that balances both supply and demand. Proper problem solving and decision-making process using scientific evidence has a significant impact on businesses when establishing new prices utilizing the law of supply and demand.
Problem solving and decision making using the scientific method
It is fundamental for companies and businesses to have good decision-making skills and problem solving techniques. Businesses are required to make the appropriate decision when faced with complex issues. It is also important to establish a good approach that can solve a problem (Doctor, 2011). For instance, the law of supply and demand affects most businesses. The determination of prices should be done using scientific models. Appropriate problem solving and decision-making techniques need the application of critical thinking (“Systematic problem solving and decision-making”, 2016). Whenever a business is faced with numerous issues such as reduction in sales, it is crucial to make an appropriate decision. The law of supply and demand may cause the decline in sales. Solving a problem requires some pragmatics and logical reasoning. Problem –solving has been defined as a cognitive and behavioral process that individuals and organizations use to identify, discover and invent effective means of coping with the problem faced.
There are four main steps used to identify a problem namely: problem definition, generating alternatives, evaluation, and selection of alternatives and implementation of the solutions. Defining a problem is the first step in problem solving (Gale, 2015). The business should start by identifying the issue causing the sales to reduce. It is important to diagnose the actual situation facing the company by analyzing and defining the causes. Generation of alternatives to solve the problem is the next stage. It is necessary to propose several alternatives that will increase the sales. Brainstorming the alternative helps to evaluate the alternatives (Doctor, 2011). Multiple alternatives enhance the value of the final decision. It is advised to generate the alternatives before making a final decision including evaluation and selection of the best alternative. Selection of best alternative is critical in the decision-making process. The best alternative should have minimal impacts compared to the rest. The last step in problem solving is the implementation of the best alternative.
Stabling the price of a new product depends on many factors including the law of supply and demand. The cost of production and demand should be used to determine the prices. The company should decide on the prices based on the demand curve and production cost. The cost of production should be minimal to ensure high returns (Doctor, 2011). It is essential to establish a suitable price that is affordable to customers. The product should meet the needs of the customers. If the demand is higher than production, the cost of the product should be elevated to sustain the supply chain. The company should make a decision using the best model.
Making appropriate decision on the prices of a new product is done systematically. The first step is identifying the problem facing the company. The process involve gathering of information, evaluating alternatives and implementing the final decision. Identification of a decision is the first step in the process. It is important to clearly define the decision and state it down. Gathering relevant information is vital and should be done before identifying alternatives (“Systematic problem solving and decision-making”, 2016). The information can be gathered through research and development. The company should involve customers by asking them what they think in relation to the new product prices. Both internal and external information is needed to improve the sales. Identification of alternatives is necessary. There is need to have many costs and choose one with minimal impacts. Weighing the evidences is also crucial. The alternatives should be considered using scientific evidence and methods. The profit margin and production cost is determined using scientific evidence. Choosing the best alternative is important and is done after weighing the evidence (Doctor, 2011). Taking action and making the best decision is the last stage. The prices of the new product should be determined by taking into consideration the law of supply and demand. Reviewing the decision and identifying its impacts on the sales is necessary.
The law of supply and demand is important to all businesses. It limits the companies from exploiting customers. The decision on prices of a new product must be made using the scientific method. The company should identify the problem and use best techniques to solve. The demand for the product directly affects the prices. Prices increase with an increase in demand thereby affecting the supply chain. It is vital for the businesses to establish the best prices after reviewing all the alternatives. The decision should have minimal impact on the business with equilibrium consideration between customer satisfaction and profit margin.
Doctor, R. (2011). Problem Solving and the Decision-Making Process. Physical Therapy, 51(7), 816-818.
Gale, D. (2015). The law of supply and demand. Mathematica Scandinavica, 3, 155
Systematic problem solving and decision-making. (2016). Long Range Planning, 23(6), 129
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Research Title: Effective Managers. “It is often believed that effective managers and problem solvers are born rather than made and have a kind of magical power to understand and transform the situations they encounter. If we take a closer look at the processes used, however, we find that this kind of mystique and power is often based on an ability to develop deep appreciation of situations being addressed. Skilled leaders and managers develop the ability of reading situations with various scenarios in mind and of forging actions that seem appropriate to the understandings thus obtained” (Morgan, 2006).
The major task of the leader is to bring their followers from where they are to where they have not been. Acting like a manager and problem solver is an enormous job. The good and worst manager is remembered by the people throughout the history. From many years people are debating whether the effective managers are born or made. Some researchers believe that the effective managers are born with the necessary personality traits that make them successful (Bernard, 1926). On the other side most of the researchers has a firm belief that the effective managers are made. (Bernard, 1926; Blake et al 1964, Drath et al, 1994; Fiedler, 1967; and House et al, 1974) Let us assume that effective managers are the person born with the abilities to inspire and influence others. We can take a simple example on this statement. Sometimes we see a little girl influencing her brother and parents with their inherit abilities to do the things she wants to do.
If we take effective manager as a person who is courageous and willing to speak for the betterment of the people around him than we can say that the effective managers and leaders are born. In our surrounding we can see people who are introvert and are always in followers by nature but sometimes at a particular situation about which he was passionate will prove himself a good leader or effective manager. So by this we can assume that one can become effective manager by continues training and experiences. Saal et al (1988) stated that leadership is not necessarily in born, some skills could be taught to employees to make them an effective leader.
This issue is still inconclusive although many researchers have found that the effective managers are made not born. In previous years many theories has been given to reach at a specific point. Some of the most known theories on this issue are: Great man theory, Trait theory, and behavioral theories.
Great Man Theory
According to this theory the leaders are different from other human beings. They do not need to develop intellectual brain to lead, but they have the right set of inherited capabilities which is not equally present in all the human beings. The basic assumption of this theory is that effective mangers are born not made and they contain some inherited traits that make them successful. These great people arise with the need.
A lot of research in 19th century was based on this theory. Most of the researchers have developed a link between the Great Man theories and the work of Thomas Carlyle who was a historian. He revealed that the leaders are the person who has naturally gifted capabilities and can capture the imaginations of the masses in a better way.
In earlier times it was considered that the qualities of effective manager is associated with man and this theory is named as a great man theory but in later year when so many great woman emerged as a effective manager that named the theory Great person theory.
According to the great person theory some person born with the necessary qualities that distinguish them with other persons. These inborn traits of a person make him responsible for the position of power and authority. This theory claimed that an effective manager within born attributes can achieve the goals for their followers by facing all the obstacles in his way. This theory implies that those who are at the positions of authority and power are just because of the gifted attributes they have. Moreover this theory also argues that these gifted traits of the effective manager remain stable over the period and in different groups.
Trait theory is basically all about the characteristics of the effective manager. This theory relates to the physiological characteristics including appearance, height and weight, demographics i.e. age, income and education, personality, self-confidence, intelligence and social characteristics with management effectiveness. Successful managers have some characteristics and traits that make the manager different from the unsuccessful manager. Researchers in 20th century have identified the set of the traits that are responsible to make an effective manager. These traits are achievement drive, motivation, honesty, self-confidence cognitive ability, knowledge about the practical things, creativity charisma and flexibility. An effective manager with good judgment, strong analytical skills can better solve the problems of any situations.
This theory is a naturally pleasant theory that tells us about the elements that make the effective manager and the leader. Trait theory of leadership has a great implication in all types of organizations and all positions. By utilization of information given in the theory people can evaluate their position and determine how they can make their positions strong.
Stogdill (1974) claimed that the people who are effective managers have right combination of attributes including achievement-orientation, ambitious and determination.
The trait approach gives rise to the issue that the effective manager is born or made or whether it is an art and science. According to the trait theory sometimes we can consider effective manager and leader an art but still there is a need of some skills to be successful. Even if there are some in born characteristics that make the person an effective manager still some kind of development and encouragement is also need to make him a successful leader.
Behavior theory is based on the assumption that the leaders are made rather than born. Effective managers are basically the learnable behavior. Behavioral theories not actually based on the inborn traits and rather this theory focuses on the actions of the managers and leaders. This theory stated that it is easy to learn than to adopt the short-lived traits. Behavioral theory is contrary to the trait theory. Behavioral theory assumes that the effective manger and problem solver capabilities can be learned but trait theory assumes that these capabilities are inherited. This theory has opened the flood gates to the leadership development.
Leaders are born
The idea that leaders are born rather made is given by the two well-known theories great man theory and the trait theory. Robins et al (2006) stated that every person personality is comprised of unique psychological characteristics. This uniqueness make person different from the others in the sense of their reactions towards the certain things and interaction with the people. This can be clearly observed in the person born with the leader characteristics-the certain make the leaders different from the non-leader. The great man theory argues that the great man and heroes are those who born with the abilities of chrism, intelligence and wisdom which they utilized in such a way that make them successful.
Example for the clarification of the Great Man Theory
If you will see an eagle running on the ground you will immediately find that an eagle is not good in running. This is because it is not naturally balanced and usually compensates it by sticking their wings out. The eagle is not appropriate for running, even if someone give him training. The training to improve the eagle running will not bring the improvement.
Leaders are made
According to the behavioral theories leaders are not born. Leaders can be developed by proper training and observations. Behavioral theories depend upon the actions of the manager not on the psychological or physiological characteristics. Cawthon (1996) revealed that the people born with equal abilities and equal traits.
Knowledge and skills person learn directly contribute in the process of leadership, while the other personal characteristics make the leader unique. According to the process leadership theory people can chose to become the effective manager by learning leadership skills. Werren Bennis is a well know researcher of leadership. He believes that every person can become a leader through years of learning and experience.
Dr Carol supports this argument by saying that people can develop leadership skills by their dedications towards work and hard working. Moreover he said that intelligence and brain is the starting point of the leadership development. Powel said that the effective leaders are made not born. Effective leaders learn from the trial and error and from their experiences. They learn from their failure and use this learning in future for solving the problem.
What make an effective leader?
An effective leader does not need to be holding some specific attributes. Harry Truman the most effective executive in US do not have even one ounce of charisma. When Truman becomes the president of the US he knew that what he wanted to do. He found that after World War 2 he should focus more on foreign affairs. He started his work by taking tutorials on foreign policy. As a result he becomes the most effective president in the US foreign affairs. Similarly while working in some well-known business firms I found CEO’s who were not the stereo typical leaders. These types of CEO’s are all over the world. They are varying in attitudes, personalities, strength and weaknesses. They ranged from extrovert to introvert from easy going to controlling and from generous to economical in nature. This shows that it’s the inherited attributes that make the person leader but they follow some practices that make them an effecter manager.
Drucker (2004) stated that the Great managers can be charismatic or tedious, kind or miserly, creative thinker or numbers oriented. He stated that effective executives follow eight practices that make them the effective manager. These practices include what need to be done? What will be a write decision for the enterprise? They developed a detailed action plan. They took responsibility of making decisions and communicating to the followers. Their main focus is on the prevailing opportunities rather than problems. They arrange productive meetings and they thought as we rather than I.
Importance of emotional intelligence in leadership development
In our practical life we usually go through such stories that a person who was highly skilled and intelligent promoted to the leadership position and get failed and another person with limited skills and intelligence promoted to the same leadership position remain success full. Such anecdotes make our belief strong on the perception that the leaders are born. The personal styles of the leaders also very and in different situation different types of leaders usually emerge. Studies found that the most effective leader is the one with high degree of emotional intelligence. This argument doesn’t meant that intelligence and technical skills are useless in the leader development. They do matters but as a threshold capabilities. These are the basics requirement of the executive position. Goleman (1998) in his research claimed that without emotional intelligence a person cannot become a leader. He pointed out that a person with extensive trainings, analytical mind and endless supply of smart ideas cannot be a good leader unless he has high level of emotional intelligence.
Skills required for effective manager
Much research has been conducted in previous years to see the relationship between the individual trait and the effective manager. The most of the studies revealed that the individual trait alone does not guarantee a success flu and effective manager, Individual needs to learn certain skills according to the prevailing situations to become and effective leader. Kirkpatrick et al (1999) in their study on the “Leaders: Do traits matter” revealed that the person traits is not the only thing that contribute in the success of the manager. They revealed that besides personal traits they need motivation, cognitive skills and the knowledge of the business. The result of the study is also consistent with the behavioral theory that the skills of the manger matters rather than in born traits. Stogdill also revealed that the any individual cannot become the leader by the virtue of the some traits he possesses. Stogdill research shows that personal or in born trait is universally associated with the effective manager, it the skills that person adopt in certain situations make him effective manger. Some of the skills that individual should learn in order to become an effective manager is discussed below.
Cognitive skills are the primary skills that are required for the effective leadership. These are the skills that are related to the basic cognitive capabilities. These are the skills include collecting, processing and disseminating information and learning. Communication skills like speaking are also important to convey the message effectively. Written skills are also important to learn for effective communication. To be an effective leaders need to develop active learning skills this enables leaders to work on new information and to learn its implications. These skills help managers to adopt behavior and strategies to solve non- routine problems effectively. Gilllen et al (1985) stated that the critical thinking is also an important aspect of leadership in order to analyze the strengths and weaknesses of different approaches of work. Kirkpatrick et al revealed that the manager must gather and integrate the enormous amount of knowledge about the functions of the business to become an effective manager. By getting detailed knowledge about the business, manager can effectively formulate the strategies, solve problems and make decisions.
Business skills include the skills that are related to the functional area of the field of the leader. This includes the knowledge about the contexts in which individual work. Business skills also involve the management of the resources and operational analysis. In addition it also involves management or personnel resources to motivate followers for their work. The skills of managing financial resources also come in business skills. Harvard professor Kotter said that the expertise in business is more important the knowledge.
The term social skills refer to the person’s ability of making relationship at the workplace. People with high social skills are found to be mean-spirit. Socially skilled person has wide connections. They have the ability of finding common ground in people of different types. They work on the assumption that nothing can be done alone. These types of people have a detailed network of the people that they can use at the time of action. In every company social skills is considered to be the key capability of the leaders. To be an effective leader a person should develop its social skills. No leader is the island. After all the work of the leader is to get things done by the people and it is not possible without the required social skills.
The strategic skills are the highly conceptual skills. These skills are needed for the understanding of complexity, dealing with ambiguities, and influencing the organizations. Strategic skills include planning-related skills of imagining the systems and problems in different situations. The environment scanning skills is also an important skill that individual should learn to become an effective leader. Environmental scanning skills are related to the identification of downstream consequences and identification of key causes of the problem. These strategic skills also contains some problem solving components including problem identification this help in determining the true nature of a problem that is faced in the organization. Effective leaders also need to learn the solution appraisal and objective evaluation skills in order to evaluate the solution of a problem in an appropriate way.
Organizational culture and Leadership development
The role of culture in making of a leader gets overlooked. The culture of the organization also plays an important role in supporting and hindering the development of the leader. Organization culture is basically the values, beliefs, rules and practices of the organization. Most of the managers do not account the role of culture while making a leader in their organization. The most considerable reason of neglecting culture influence in the development of the leader is their wrong understanding about their culture. But failing to understand the role of culture in making the effective manager can be costly.
Some executives have a wrong perception that sending managers in the leader development program can produce better leaders that can handle the challenges in a better way. But there is more to do with the managers to make them an effective lender. To build an effective manager, organizations need to focus on the context in which the development of the leaders takes place. Organizational culture is the more significant part of the context. For making a good leaders organizations needs to assess the drivers and the culture of the organizations.
Role of Work motivation in building effective managers
Motivation is the psychological and physiological urge of the individual. Motivation helps in activating the behavior and drive that helps in achieving some goal and objective. The motivation level of the individuals very situation to situation. The situations in which individuals are working have an influence on the level of motivation. There are certain ways in which the motivation level of individuals can be improved. These factors are important in making the effective manager
Organizations who want to develop effective manager must design their jobs in such a way that increase achievements, recognition, responsibility and growth. The work assigned to the managers should be compromised of work contents, greater use of skills and increased authority.
Organizations should provide employees with flexi time. This flexi time will help the manager in determining their own work schedules. Providing flexi time with the core time will help in developing effective manager.
Some autonomous work groups should be defined that meet on daily basis to solve some problems. By the help of these groups they will exchange their experiences and ideas on problems. This will help the managers in learning from other experiences and skills.
Organizational reward system and effective managers
The organizational reward system has been found strongly related to the development of the effective manager. Fair pay benefits and promotions motivate the managers to learn new things and to develop the skills. Employment recognition system is an effective tool of making the effective manager. When organizations give recognition and rewards for the task they performed they will motivated to repeat their efficiency in the future days.
Middle and senior level management are seems to be more engaged in problem solving. The results of the problem solving are dependent on the allocation of the resources and work results. The situations in which the problem solving activities are take place are often complex, unstructured and non-routine. Sometimes the problems occur are beyond the control of the manager. Managers lacking in sufficient life experiences and training found problems beyond their control. Effective managers normally follow some steps in order to solve a particular problem. In First step manager identify the problem by gathering and evaluating the information. After gathering the information regarding the problem managers makes logical assumption based on their prior experiences. Tentative alternate solutions are developed and each alternative is than considered in depth. On the basis of decision criteria each alternative is evaluated by the manager. Only that alternative is selected which best fit with the criteria. After selection of the best alternative the solution is implemented. The results of the solutions are evaluated with time.
After the thorough review of the theories and literature it is evident that we cannot support a side and negate the other side when it comes about the discussion of whether leaders are born or made. The studies show that the both in born characteristics and the skills adoption is important to become an effective leader. Leadership can be learned by many ways but cannot be taught, Leaders learn 80 percent of things from their job. They learn by monitoring others leaders, by taking feedback, by coping with the multiple situations. Leadership is basically the life time learning.
The insight on the previous literature shows that trait is not alone sufficient for making an effective manager. These are the only preconditions of becoming an effective manager. An individual with certain traits needs to adopt certain skills and knowledge to become an effective manager. Possessing some traits enable the individual that he can also become the effective manger by adopting some required skills.
Leadership can be something an art but application of special skills and techniques are required in order to be successful. Even if there are certain inborn qualities that make one a good leader, these natural talents need encouragement and development. A person is not born with self-confidence. Self-confidence is developed, honesty and integrity are a matter of personal choice, motivation to lead comes from within the individual, and the knowledge of business can be acquired. While cognitive ability has its origin partly in genes, it still needs to be developed. None of these ingredients are acquired overnight.
These executives need to accomplish the importance of the culture in the development of the leaders. They need to factor the organizational culture in a way that helps in building leaders. Organizations need to understand their culture. By thorough understanding of their culture organizations can determine that which factors in their culture can hinder and enhance the development of the organizations.
In a nut shell we can say that in born attributes is the pre-condition of becoming an effective manager but to become successful leader individual should adopt some skills relevant to their business. Although a leader born with set of qualities that make it different from the non-leaders but there is an influence of other environmental factors in making him the one of the successful and effective manager.
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This article is intended to evaluate the case study on Electron Corporation and highlights main key points pertaining to team building as well as enhancing the effectiveness of team productivity, established team environment and performance. Building of teams and effectiveness of team performance can be derived from various primary attributes (Zaccaro & Klimoski, in press). Teams are firstly needed to successfully contribute their individual efforts because their certain needs and responsibilities will form the basis of the collective success of the team. Secondly, since teams need to operate in complicated and ever changing organizational environments, they need to tackle multiple organizational team characteristics such as conflicting agendas, load of greater information, swift changes in the situations as well as enhanced dynamic changes (Zaccaro, Rittman & Marks 2001).
A small overview of the company includes; Electron is a small manufacturing organization established in 1997 in North of England. It manufactures components for telecommunication division. It employs 150 people along with 90 people in the manufacturing division. It was originally a department of a huge telecommunication organization and the Electron’s team bought the component manufacturing section as a portion of an outsourcing plan presented by the parent company in 2007. Electron has acquired both full time and part-time employees. In 1990s, its management realized that the company was striving for increasing competition and innovation in the industry. So in order to enhance their competition in the market, they have found the need of a more proficient and effective production procedures while emphasizing on enhancing organization’s culture, customer services, improved performance and responsibility and loyalty towards teamwork.
However, the subsequent sections of the assignment involve literature review which will cover the benefits and dysfunctions of teamwork. The Tuckman’s (1965) model of team building is also been employed in relation to the case study which demonstrates how teams must be efficiently formed. Whereas, the last sections will demonstrate the conclusion of the study as well recommendations on how to enhance the team performance more effectively and the steps that need to be taken for creating a subtle team environment.
The use of teams seems to provide several advantages; they may not be the most appropriate tactic for all types of organizations and not all of the organizations face similar and all challenges imposed by the teams. The influence of teamwork (both optimistic and pessimistic) is dependent upon several features such as company’s culture and environment, efficiency of team leadership, company’s efforts etc. Primarily, a team can be described as a small group of people along with a set of performance objectives, who are responsible to a common goal and the attitude they carry themselves mutually responsible (Katzenbach & Smith 1993). This definition explains that organizational teams should be of a manageable size and all of the team members should be accountable to achieve the shared team objectives. Moreover, all of the team members should be mutually responsible towards their activities and the results of those activities.
The Enticement of Working with Teams
The power of team work roots from several factors particularly when teams are employed. Various researchers demonstrated that teams are increasingly being employed as a response to ever increasingly global marketing competition (Heap 1996; Roufaiel & Meissner 1995; Sundstrom, De Meuse & Futrell 1990). Because of this increase in competition, it is also viewed that catering niche markets is also a growing concern. Since, electron emphasizes on enhancing organization’s culture, customer services and improved productivity; as a result, Electron manufacturers not only need to compete on cost but also strive to compete on innovation by establishing distinctive goods and services that could not be countered by the other rivals in the market. However, this will originate a problem where the company is not supposed to rely on mass production as well as economies of scale in the industry.
Most organizations still believe that working with teams is the only answer to this problem (just as Electron did). In their view teams are the source to optimize company’s innovation as employees have increased self-sufficiency, increased involvement and autonomy for making decisions (Harvey, Millet & Smith 1998). The employees no longer need to be guided about what is required to be done. In fact, they are provided with the objectives or develop objectives along with their team leader and then give autonomy to choose the best way in order to accomplish those objectives. Additionally, organizational innovation can also be optimized if teams are able to provide other enticements to the organization the situation in which they operate.
For instance, firstly, teams can optimally utilize human resources since they permit companies to achieve access to a person’s knowledge and capabilities (IRS Employment Review 1995). Albeit, the enhanced intricacy of the companies means that not all the managers know everything regarding each and every facet of the company’s operations. In this circumstance, it is important to utilize knowledge and capabilities of the employees/teams. Secondly, teams can be utilized to optimize company’s learning as employees are capable to design best strategies being suited to their work objectives (Wageman 1997). Thirdly, Teams are also capable to enhance individual’s performance levels and his/her efficiency, thereby establishing a synergy (Katzenbach & Smith 1993). Finally, team work is greatly associated with various numbers of objectives, tasks and additional accountability for each member of the team, which in turn resulted in enhanced job satisfaction, employee motivation and more work commitment. This will also result in lower employee turnover and absenteeism, thus, decreasing company’s costs and enhancing company’s knowledge base (Kirkman & Shapiro 1997).
Dysfunctions or Challenges Accompanied Teamwork
The employment of teams is primarily a change to an organization as well as a developmental procedure. Thus, teams can be easily affected to any challenge that might emerge during an organizational change. Particularly, resistance among employees may occur when they are needed to work along with other employees who are unfamiliar to them. In this way, teams are more likely to have broken established social relationships. This has already done in the Electron when huge number of new employees was hired and was integrated into one of the Electron’s teams. Those workers were new to their team’s values and consensus where they exerted greater challenge to the already existed relationships among the older employees.
In accordance to Bettenhausen (1991), one way to cope this problem is by forming teams. Building of teams will enhance group productivity by enhancing communication, minimizing conflicts and establishing greater bonds and commitment among all the working team members. Resistance among employee can also occur as a result of other factors. For instance, teamwork may need job enlargement where each team member is required to perform his/her conventional role along with his/her team role (IRS Employment Review 1995). In this circumstance, it is essential to minimize their certain responsibilities or to change the structure of their rewards or compensation.
Besides job enlargement, team work is also coherent with autonomy, ownership and additional commitments. Managers frequently perceive that employees must participate in decision making instead of simply being directed of what needs to be done. However, this might be true for certain situations but not for all situations. This will, in turn, may resulted in employee job dissatisfaction, increased employee turnover and/or reduced work productivity. The similar case is also viewed in Electron, when it hired new employees on temporary basis and let the managers to decide who must be hired on as full-time employee. Those workers initially were also unfamiliar with the team procedures and were expected by the managers to know the team’s values and conform and act accordingly to their team’s norms. Teams at Electron started exerting their concertive control over the new individuals which as a result new employees began controlling themselves and those norms and values become rationalized rules for the new members. There is no simple solution for catering such problem; however, training or changing positions can be probable within the company.
Other associated problems with “empowered teams” originate when there is a lack of trust in the team when they are no longer trusted enough to participate in decision making. This will result in teams and organizations losing full potential to accomplish their desired objectives. The situations in which teams are needed to seek consent before executing any idea or timeliness, ownership is likely to reduce. Organizational innovation will also decrease as teams are compelled to suggest ideas that will be likely to accept (Nahavandi & Aranda 1994). Moreover, team members may also perceive that their management is paying insincere respect to their proposed ideas of teamwork which will certainly result in reduced employee morale.
It is also viewed that when teams are involved in making decisions, they take more time than the system they reinstate. This is also needed where team coordination is required and where team members are independent. This issue can be partly cope by the formation of the team, but this also requires continuous training and development of groups teams. Such kind of training can be specifically appropriate for the new hired staff as there may be no established procedures for them to follow. Also, for effective teams, there must be strong coordination among them (Harvey, Millet & Smith 1998). Similarly, the lack of participation in decision making and coordination among employees for building of more strengthened team culture is seen in Electron’s eight teams (red, blue, white, green, silver, aqua, purple and yellow). This is due the fact that the older and long tenured employees have tried to impose strict concertive rules and procedures to conform to the group norms.
In case of organizational environmental changes and developmental initiatives, culture of the organization and environment must also be considered. It must not be perceived that the objectives and values of the individuals are similar to those of their management or congruent even across the entire organization. The attitude of individuals towards teams will demonstrate the success of those teams. If teams need to be executed more successfully, the extension of already existed values must be there (Carr 1992). Therefore, Electron when working with teams also demand shift in attitudes that a company may turn to it when it wants to accomplish a cultural shift, for instance, when it becomes more quality or customer oriented (IRS Employment Review 1995).
Five Team Development Phases as Proposed by Bruce Tuckman
This model as proposed by Bruce Tuckman (1965) tends to highlight and guides the areas where teams can be successful and/or become failure to achieve desired team goals. For forty years, Tuckman’s classical model of team development delivers ease and new perceptions to managers to either charge to run a team or attempt to function within a team while assuring each member that they are not alone and that the uneasiness is a normal part of the team journey towards an efficient and pleasant unit. Tuckman speculates that these stages are essential and unavoidable. In order for the Electron teams to grow, to face the hurdles, to cope up with the problems, to search for solutions, to organize work and to deliver desired outcomes; these five phases can be elaborated as follows.
Phase One: Forming
In this first phase of team building, Electron teams must be formed. Where the attitude of the individual is driven by the desires which are likely to be accepted by the other individuals and prevent any controversy or conflict. Solemn problems and attitudes are prevented and people are required to concentrate on their busy work routines. Individual members also try to gather knowledge regarding each other, regarding the scope of the task and how to reach it. This phase is considered to be an easy stage but prevention of controversies and conflicts mean that not much objective is actually accomplished. The teams will together meet and learn about various opportunities and confront and then agree on objectives and start to tackle the tasks and objectives. Members of the team will quite behave autonomously.
Each team member must concentrate on his/her team leader by accepting the leader’s guidance and authority while maintaining a respectful distant association with other individuals. At this phase, the leader must open two way communications and be ready to reply any of the queries that may come on his/her way; limitations, potency and vulnerabilities must also be tested including those related to the leader.
Phase Two: Storming
Each Electron group then will enter into the next stage where different ideas for competition are considered. The teams address distinct issues such as what kind of problems they need to solve, how they must function autonomously as well as mutually with each other and which leadership model they must accept to follow. Each team member will have the privilege to confront others’ ideas and perceptions. In most cases storming is solved more quickly while in others, most of the teams never leave this phase (this depends on the maturity of the team). Most team members concentrate on the ins and outs to dodge the problems. This second phase is essential for the teams to grow which could be controversial, distasteful and often excruciating to the team members who are opposed to the conflicts. Tolerance of each team member must also be emphasized because without patience, teams will likely to fail.
This stage can be proved destructive for the teams if they are permitted to go out of control. Managers/supervisors of the teams might be more accessible but need to be directive in their professional and decision making attitudes. The teams therefore, will solve the problems and differences and contribute more comfortably with one another. In this way, they cannot be judged and can share their stand points and ideas easily with each other.
Phase Three: Norming
At this phase of team building, Electron managers will set one objective and one mutual plan for the team to accomplish. Some of the members will be motivated to give up their certain ideas in order for the team to effectively function. At this phase, each team member feels his/her commitment to the team and has the aspiration to work towards the success of the team’s objectives.
Phase Four: Performing
It is probable for certain teams to reach to this stage. The high performing teams can be able to work as one unit as they able to identify best approaches to get their job done mutually, comfortably and without irrelevant controversy or the requirement of any external management because they become motivated and knowledgeable by this stage. When the members of the Electron teams are now skilled, independent and experienced, they can tackle the process of decision making without the burden of any supervision (however, supervisors are also directive and participative at this stage but team make more appropriate decisions). The Electron teams must pass through this stage several times because of the global and organizational dynamic changes.
Phase Five: Adjourning (and Transforming)
This stage involves un-forming the groups which sometimes create a sense of loss often feel by the team members. This stage will include ‘dissolution’ which leads to the end of the Electron team members’ roles and responsibilities, the accomplishment of objectives and minimization of reliance. This procedure can be traumatic specifically when the dissolution is not planned. Thus, team members must be acknowledged at this phase that at the successful achievement of the productivity levels and outcomes, teams will be dissolved and that new teams will emerge for new targets.
In order to execute and sustain teams to operate effectively within the organization, sufficient organizational changes are required to be considered as well as various issues required to be catered. Those changes not only influence team members but also the responsibilities and commitments of the supervisors and managers, the organizational framework, work procedures and techniques and employees’ social bonds. That’s why due to the dynamic environmental changes, Electron manufacturers also face multiple challenges which occur as a result of teams’ implementation. However, it is also evident that in case of teams’ implementation, various organizations will not opt for going back to their prior organizational frameworks (IRS Employment Review 1995). Consequently, it is also seen that teams, in spite of the emerging challenges, are capable enough to offer several advantages to firms in the long run.
In case of Electron manufacturers, new hired team members were unknown of the team’s values, norms and consensus that proved greater challenge to the already existed relationships among the older employees. Moreover, managers were also expecting that each new member must be familiar with the procedures and norms of the groups to act accordingly and conform themselves to those groups. However, besides the implementation of their concertive procedures and motivating employees (by providing them rewards), Electron teams still lacking certain key aspects which formed the basis of a strengthened team. Such as two way communication, participation of employees in decision making, lack of trust among team members, sharing of opinions and ideas among each other to resolve any critical issue regarding production and enhancement of work performances and employees’ morale.
Thus, as a result of this, Bruce Tuckman’s (1965) model of team building is employed in the context of Electron manufacturers. According to his model, teams are to be developed step by step by ensuring performance effectiveness in each team building phase. This model consists of five stages i.e. forming, storming, norming, performing and adjourning. This can be concluded as Electron must forge its eight teams in a manner such that each individual must know his/her accountability, change his/her attitude according to the organizational culture so that teams will effectively function with minimum conflicts and controversies (forming). Second, teams must be encouraged to share their wide scope ideas and opinions and can confront the other’s ideas for making better decisions and improved productivity (storming).
Third, Electron managers must establish one objective and direct the team to mutually accomplish the objective which enhances the members’ sense of responsibility towards the team success (norming). Forth, when Electron’s team members become more experienced and capable enough, they will be able to make decisions without any supervisor which in turn, gives employees more autonomy, understanding of each other’s roles, increase employee social relationships, enhance their morale as well as enhance work productivity (performing). Finally, when the production target is successfully achieved, teams will be terminated at the final stage so that new teams will be developed to achieve new production targets with the passage of time and make the organization subtle to dynamic industrial changes with the help of new teams’ formation.
Following are some of the recommendations that can be further considered for making organizational teams more strengthened and intensified.
In accordance to Tuckman’s strength deployment inventory (SDI) model, employees must be nurtured with the help of managers without directing rewards in return. They must be motivated to enhance their self-worth by accomplishing tasks and other significant orders.
Fulk, Bell & Bodie (2011) also employed Tuckman’s five stages of team development to enhance team performance. According to them, the first stage ‘forming’ must also involve hiring and selecting right individuals at the right time who also possess the qualities of solving critical problems, controversies, communication gaps, decision making, setting of plans and goals and organizing tasks within teams.
At the second stage ‘storming’, managers must anticipate to unexpected events that are likely to lead the whole team to the conflicts which are likely to arise as a result of differences in opinions, styles of working and priorities. The managers must be vigilant to take all those conflicts into consideration and encourage teams to take appropriate and productive actions towards mitigating those conflicts.
The third stage ‘norming’ must involve working with teams with specific as well challenging goals and those goals must be present in writing. Here team performance can be enhanced if teams revisit their initial goals, clarification of the goals and the commitments towards those goals.
At the fourth stage ‘performing’, managers must monitor their teams ‘objectives and their feedback on a regular basis in order to enhance teamwork. That feedback must be timely basis as well as concrete to be acted upon.
At the final stage ‘adjourning’ the team members instead of felling a sense of loss, team members must be expected to enjoy their success resulted in successful completion of the task.
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Carr, C. (1992) ‘Planning Priorities for Empowered Teams’, Journal of Business Strategy, vol. 13, no. 5, p. 43-47.
Fulk, H.K. (2011) Team Management by Objectives: Enhancing Developing Teams’ Performance. Journal of Management Policy and Practice, 12(3), 17-26.
Heap, N. (1996) ‘Building the Organisational Team’, Industrial and Commercial Training, vol. 28, no. 3, pp.3-7.
IRS Employment Review (1995) ‘Key Issues in Effective Teamworking’, no. 592, pp. 5-16.
Katzenbach, J.R. & Smith, D.K. 1993, The Wisdom of Teams, McKinsey & Company, New York.
Kirkman, B.L. & Shapiro, D.L. (1997) ‘The Impact of Cultural Values on Employee Resistance to Teams: Toward a Model of Globalised Self-Managing Work Team Effectiveness’, Academy of Management Review, vol. 22, no. 3, pp. 730-757.
Nahavandi, A. & Aranda, E. (1994) ‘Restructuring Teams for the Re-engineering Organization’, Academy of Management Executive, vol. 8. no. 4, pp. 58-68.
Performance Coaching Training (2010) Bruce Tuckman’s Forming, Storming, Norming & Performing Team Development Model.
Roufaiel, N.S. & Meissner, M. (1995) ‘Self-Managing Teams: A Pipeline to Quality and Technology Management, Benchmarking for Quality, vol. 2, no. 1, pp. 21-37.
Sundstrom, E., De Meuse, K.P. & Futrell, D. (1990) ‘Work Teams: Applications and Effectiveness’, American Psychologist, vol. 45, no. 2, pp. 120-133.
The purpose of this report is to analyse the case study on D2 which is an auto-components manufacturer undergoing major structural changes to minimize costs and implement innovation and technology. While managing the change, the organisation had to face different kinds of issues. Thus, the report would be identifying the issues and proposing relevant solutions and their implementation to manage change effectively, by using the 5D-Framework which comprises of definition, discovery, dream, design and destiny.
When a company undergoes change, there are a series of opportunities and challenges that it has to face. Change is not a onetime occurrence but rather could take years to be implemented. When an organisation is undergoing strategic change, it needs to re-formulate its mission and strategies and thereafter align all its business operations with the overall strategy (Cummings and Vorley, 2009). While managing strategic change, implementation is more challenging than just designing the change.
Lack of Communication Alignment
Therefore, one of the primary issues witnessed in the D2 case was that the management would have difficulty in implementing the change due to improper communication channel used for communicating the strategy to the rest of the employees. Apart from this, having a balanced strategic change is also a significant challenge since in order to achieve the balance, the organisation needs to assure that its internal management and resources are aligned with each other and with the external opportunities (Bordum, 2010).
Apart from this, environmental pressures are another reason why organisations undergo change. In order to be aligned with the environment, there is a certain organisational structure and a strategic positioning required. One of the key issues in the case was that there has been an outpaced growth of technology over the years and in order to meet that pace it needed to undergo significant innovation and get rid of the obsolete technology. This required greater strategic flexibility which then bore a cost to the organisation since the employees resisted the change and job insecurity arose (Skordoulis, 2013). Moreover, owing to the environmental pressures, it was significantly cutting costs and thus, had to face a trade-off between lowering costs and smooth flow of work. The smooth flow of work would be disrupted since to lower costs, it would have to shut down some of its manufacturing facilities that are not producing enough and would have to redeploy staff to other geographic regions which would require a lot of planning and control. According to Alessa and Kliskey (2012), responses to environmental change management is required which can be done through change agents. These agents can be of three types: the initiators, the supporters and the opportunists. These environmental change agents would assure that the company’s strategy is in correspondence with the changes in the external environment. In the case of D2, the changes in technology were an environmental pressure which required a change agent to manage it effectively and efficiently.
Leadership Issues and Resistance to Change Management
Change management can be of many types, varying from a change in structure to a change in culture, leadership style, operations, systems and strategy. At times one change may lead to another change and while doing so, organisations encounter a number of issues. Another key issue evident in the case was the autocratic leadership style and a centralized management as a result. In identifying the change management areas, the management itself first made decisions and formulated the strategy, and then later informed the employees. As the case stated that the decision was yet to be announced and the workers in UK might be shock to hear it since the firm had made heavy investments in the manufacturing plants. Moreover, while redeploying the employees from one geographic region to another, cultural issues might also be faced which would require heavy investments in training. Thus, a greater resistance might be expected from the employees since they were not part of the decision making process and the organisation’s interests might then be in conflict with the interest of the employees (Banutu and Shandra, 2007).
Trade-off between managing change management and maintaining core competency
Lastly, and most importantly, since the company’s operations are dispersed geographically and one of its core competencies is the pace and quality of its product development, in change management , the company might lose out its current strategic position or the core competency it has, thus, assuring that the pace and quality product development remains the same while re-structuring its manufacturing operations, would be very challenging for the company. Furthermore, change management is not following a planned approach. This might cause D2 to lose out its competitive position in the market which would then be difficult to re-obtain since by focusing on cost reduction rather than value addition, maintaining the sustainability of operations is less likely to happen.
Leadership Issues and Employee Resistance to Change
The underlying problem chosen for in-depth discussion is the employee resistance to change and the leadership issues in bringing about the change. As stated in the case, D2 required an urgent need for change management therefore it cannot go slow in bringing about the change and would require major transformations in its structure and human resource. While deciding which operations to shut down and which ones to expand, it has been taking into account the external environment and the returns it would get out of it. However, in doing so, it has neglected the reaction that might be expected from the employees, and which could majorly impact and hinder any change management process that happens in the organisation. Resistance to change usually occurs when employee needs are not addressed; their goals and organisational goals are not aligned; there is communication gap between the different hierarchical levels as well as in horizontal communication; when there is downsizing and mistrust is created among employees; when there are major cultural issues to be faced as a result of change management ; and when employee participation in decision making is lacking (Bovey and Hede, 2001).
Furthermore, when the leader fails to apply a transformational leadership style where he articulates the vision and re-defines the strategy, the resistance increases further as employees are unclear about the goals and objectives they need to achieve as individuals as well as collectively (Eisenbach et al., 1999). The management needs to keep a balance between the organisational needs and the human needs since ultimately it is the human resource that needs to implement the change (Griffin and Moorhead, 2011). The key issue in the case of D2 was that a feeling of mistrust and insecurity was occurring not only in the U.K. region where it plans to close its facilities but also among the employees working in other subsidiaries located in Spain since the change management process is not communicated effectively and the decision making authority is vested in the hands of a few senior managers indicating that bureaucratic leadership style is more evident in the organisation which means that the increased level of formality between the management and the employees and the lack of communication would result in a decrease in employee morale, and hence, a decline in performance.
In order to address the issues, the leadership styles need to be changed. According to Bamford and Forrester (2003), using a middle-out approach would be of significant advantage in addressing the issue. This would involve giving the middle management the authority to lead the change under the supervision of the top management. In doing so, employee needs would be addressed in a better form since the line managers are more closely linked with the operational level staff and thus would be able to provide adequate feedback to the top management of how to create a link between the overall strategy and the needs addressed. Greater teamwork and participation of the workers would also be required to increase their motivational level and making the flow of communication more efficient. Leadership issues are also one of the reasons why organisations fail in managing the change. Uncertainty often accompanies change and as a leader, one needs to minimize the uncertainty levels and create an environment of greater employee commitment and trust. According to Ahn et al. (2004), globalization and change of technology at an accelerating pace requires that effectiveness in leadership has become immensely important, which is demonstrated through the leader’s adaptability to different management styles that involve greater coordination and engagement among all members of the organisation. According to Ashman (2012), ‘redundancies have become an unwelcome necessity across all sectors of the economy’,and while strategy and procedure in change management are important, the third element, psychology, is not given much attention which focuses on how employee emotions need to be dealt with to prevent any resistance to change management. Thus, this requires that to avoid such issues the message is communicated accurately while the sensitivity of such messages is taken into account adequately (Ashman, 2012).
One of the ways in managing the issues is to adopt a planned change management approach. The 3 step model of Lewin is applicable here which suggests that the organisation needs to plan change management in three stages: unfreezing, moving, and re-freezing (Burnes, 2013). In the case of D2, a sense of urgency was created and the change was seen more as an emergent one rather than a planned one. However, to make the change more sustainable, carrying out the planned approach would decrease employee resistance, since the unfreezing stage would first help in abandoning the old ways of doing work and preparing the employees for change. For instance, D2 could have addressed the issue of mistrust among its employees in other regions as well as in U.K. by defining the need for change and how it would benefit the organisation as a whole. It should then also point out the alternative employment opportunities available and how these would be a better platform for their growth. The moving stage then would involve applying the change process such as re-structuring, changing leadership styles, re-articulating the vision or changing the strategic position. This is when D2 should start shutting down its facilities and redeploying the staff where expansion is happening. The moving stage would then be followed by the re-freezing stage where the new practices would be adopted in a more permanent basis by providing training and aligning the new behaviors with the organisational strategy and culture (Bamford and Forrester, 2003).
Another potential solution of managing organisational change would be to conduct training programs and adopt situational leadership style. The situational leadership theory states that there is no one best style of management and the leader would have to either adopt a relationship-oriented style or a task-oriented style depending on the situation being faced (Griffin and Moorhead, 2011). Similarly, motivational levels of employees would also have to be taken into account and the purpose of the chosen leadership style would be to boost employee morale and assure that they have a positive attitude towards the change.
Also team building should be the ultimate focus of the organisation. This should involve self-managing teams, cross-regional/cross-cultural teams and cross-functional teams (Sisaye, 2005). The purpose of having such teams would mean greater diversity and flexibility among employees as well as greater coordination between different divisions and manufacturing facilities. By having cross-cultural teams, the employees would be more familiar with the cultural differences between Spain, France and U.K., thus, any issues arising as a result of change in culture could be better handled through cross-functional teams. The team performance model suggests that in order to create a team there needs to be orientation, trust building, goal clarification and commitment; and in order to sustain that team there needs to be implementation, high performance and renewal (Cooperrider and Dan Whitney, 2001).Therefore, the employees and the management should get involved in formulating the teams before the change management process and since this change is more about implementing new technology while cutting down the costs, the teams may focus on how the technology can be implemented. This would also be accompanied with extensive training to avoid any ambiguity among the employees.
The firm’s strategy of achieving cost leadership while maintaining the pace and quality of product development requires that it should, it focuses on value addition. This would mean cutting down costs by minimizing any wastage of resources and streamlining processes. At the same time, it would also be adding value through the innovative tools and technology used. This strategy would have to be defined by the leader after taking employee opinion and feedback using the bottom-up approach and would then have to be implemented across the organisation.
In order to implement the proposed solutions, careful planning and formulation would be required. The use the planned change model can be implemented by having a leader who first identifies the potential areas that require change in terms of employee attitude and behavior Also, while addressing the need for change, the leaders should first conduct a field force analysis to identify the factors that are for and against the change (Schwering, 2003). The leader could then use the forces that can help in driving change as an advantage. This would include the consumer demand for more innovative auto components, availability of technology, upgraded technology in the other two manufacturing facilities and the identification of a new strategy. The drivers against change management would include employee resistance due to increased mistrust, decrease in morale in case of deployment and fear of exploring the new methods of working. Thus, once the forces are identified, in order to overcome any barriers, training programs should be conducted throughout the change process, that is, the unfreezing, moving and re-freezing stage. These training programs should involve two way communications which would mean delivering the new company strategy to the employees and also taking their feedback on what concerns they have and how they think it can be improved further (Hoag et al., 2002).
Apart from this, in helping leaders being aware of different leadership styles, leadership workshops should also be conducted. These might include assessment centres and activities where the management can be given different scenarios and asked to adopt an appropriate leadership style (Cummings and Vorley, 2009). The workshops would then be concluded with feedback and suggestions. Also while change management is being implemented, the performance should be monitored and measured more frequently in order to understand employee behavior and their progress. In case of teamwork as well, the leader would have to assure that there is no group think that could result in in-group conflicts, and the goals of the team are aligned with that of the organisation (Raza and Standing, 2011). The management would have to be more decentralized in its approach by practicing open door policies and being on the floor to address employee needs. The alternative employment opportunities available for the employees need to be clearly identified before the change process in order to conduct the implementation smoothly. Similarly, while communicating the new strategy to the employees, the opportunities available to them should be delivered first, which could act as a buffer to the disappointment they might have on hearing the shutting down of operations.
In order to cut down costs while maintaining the core competency, the organisation should align its operations with the new strategy. This would mean implementing change management simultaneously. The firm should first start expanding its operations in France by investing in new technology and setting up the production design, it should then plan out staffing requirements and communicate the strategy to the employees in the U.K. as well as Spain regarding how the expansion could help organisation grow and how the operations in U.K. might decline the overall progress of the organisation. Online video conferencing or virtual teams can also be formed where there could be cross-regional communication to assure that all its units are at the same pace and the goals of the organisation are communicated clearly across. Also by using internet as a platform for communication, organisation would be further saving on its time and costs in coordinating the teams.
In implementing the proposed solutions, the possible limitations that might be faced include the heavy investment costs associated with training. This would conflict with the overall strategy of the firm of cutting down the costs. Therefore, in order to minimize the training costs, the management can focus on more informal ways of training such as in-house training where the costs of additional trainers and location can be saved. Similarly, the organisation could identify change agents who are trained and competent enough before the change takes place and then these agents could help other employees in carrying out the change (Griffin and Moorhead, 2011).
Furthermore, in identifying leadership styles, one of the factors that have been ignored is the number of cultural issues. For example, the effectiveness of relationship-oriented style is not only dependent upon the organisational situation but also on the culture where it is operational. There might be differences in terms of collectivism and individualism, and power distances (Kirsch et al., 2012). To overcome this limitation, the leader can identify the similarities in culture that can help employees adjust in the other two regions and make them aware of the differences to avoid any cultural shock.
While implementing the solutions, another possible limitation is the effectiveness of the feedback. Employees might be reluctant to speak up any negative feelings regarding the process or the feedback might be unstructured and more intuitive rather than formulized. To overcome this limitation, the management can take anonymous written feedbacks and then re-evaluate performance after the feedback is taken into account, in order to measure its effectiveness.
Thus, by strategizing the change process and aligning the structure, the culture and the processes with the overall strategy, implementing the change process would be more effective, reducing any potential resistance of the employees through greater involvement and empowerment in decision-making. Also by applying the three-step planned approach to change, the employee attitudes would be more positive towards change, removing any ambiguities that might exist regarding the strategic change.
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