There are quite a good number of problems in the case of CCC, among of which one can define, are the following: 1- Job security for the ethnic minorities who run the workshop for years, while being empowered in the age of Harold Cox, they felt threatened by the introduction of the new management system, that was reflected by the defensive attitude of Aziz and his lack of cooperation which also can be the reaction of being marginalized by Wilson while conducting the company review. 2- Lack of managerial training, which was reflected on how Aziz perceives his job as a shop floor manager whose first and utmost concern, is to deliver production no matter what the outside environment is. 3- Market introduction of new competitors, which dictates the need of full review of the operations, budgeting, supply chain and labor competency. Hence introducing more bureaucracy to the current system and might limit the power of Aziz and his team. 4- The centralization and individuality of Harold Cox in running the company helped the creation of a divisionalized structure and culture as well as developing a high degree of autonomy in the production department and a shallow hierarchy especially in the financial and management accounting area.
The main reason why Cox asked Wilson to conduct a company review is to get the company moving forward, such an act could have been shared with department managers, despite Wilson’s conclusions, strategies must be compromises that allow the company to move forward (Johnson, 1992). Johnson also argued that Strategic drift takes many years to affect performance, which validates the happening of the falling results of CCC, such a performance made Cox ask Wilson to conduct the review.
The resistance to change that Aziz showed can be explained via the framework of Herzberg (1987) at which he argued that job security, as part of the hygiene factors can be a source of job satisfaction and motivation. Despite belittling the effect of hygiene factors on the subject, he did not address such an issue “job security” on a minority member. Such a factor can be more important than others whether intrinsic or extrinsic since minority members would possess the feeling of fear of losing their jobs and being expelled by the society and not finding another job. Adding the job status of Aziz would add further complexities to the situation as well.
The introduction of budgeting and operation optimization without consulting the shop floor manager while he represents the core business of the company could have affected his motivation. These new systems would influence the type of the work that can be done in the shop floor greatly and would change Aziz from a decision maker in his part with all the autonomy and credibility he has to just a regular employee that manages what the new system dictates. Such change would affect Aziz’s motivation to contribute to the new system as discussed by Leavitt (2007). Leavitt argues that the increased bureaucracy and the rigid system turns employees into machines performing the work without thinking, and that would be against the human nature that tends to think and innovate.
He also argues that the introduction of IT systems and technologies would be harmful to humans in the work place especially if companies abuse them. He however managed to argue the point from the employee point of view without mentioning the companies perspective at which standardization and new technologies raises the efficiency and performance of the companies and can allocate resources to new departments or new functions. If Aziz were opting the same perspective as without having the picture cleared that this new system (budgeting and operations review) would benefit him as well as the company, he would tend to resist that change.
In the framework of Herzberg (1987), job participation is one of the important myths to job or task enrichment. He emphasizes that giving the employees the big picture and giving them a feeling that they will determine in some measure what they will do in the job; would not be beneficial to the job. Wilson, Straw, Long and Pedder managed to do exactly this part. It would be against Aziz’s benefit if he would resist correcting the situation of the company. He would seem wrong and would hurt himself and his career in CCC if he was explained the current situation and the competitive market condition and how is that affecting CCC and what are the measures needed in the next few weeks / years to correct the competitiveness of CCC.
Aziz should have been offered the chance to contribute to the budgeting and even could have been appointed a task in suggesting the best production and budgeting scheme that would save the company time and money. Bassett-Jones & Lloyed (2005) negated the approach of Herzberg and emphasized on the importance of employee’s contribution to the job in order to grant satisfaction. By seeing their ideas being implemented without delays and with the approval of the manager that this idea will contribute to the best of the company, the employee will have a sense of ownership and commitment towards making the idea work.
Ford, Ford, & D’Amelio (2008) stated that the resistance to change can be the cause of the management’s actions themselves as they fail to develop trust. They failed to argue that in some cases, the employee(s) have their own agenda and they (employees) are the ones to trigger the resistance.
The centralization of the decision making in CCC allowed the formation of a divisional company organization where Aziz’s team form the major part of it. Having this high autonomy formed a specific organization culture perhaps that Aziz is indispensible and hence he is in control. Such a culture would cause Aziz to be reluctant to accept changes specially after CCC lost some of its competitiveness in the market for few years and yet no complain from Cox and/or the management. Meyers & Martin (1987) suggest that as the organization structure form the organization’s culture and beliefs, so does the leaders of the company. It can be noticed that Cox influenced the idea that the minorities in his company are indispensible, since they support him politically and socially because of their existence in CCC.
It can also be noticed that Cox did the interactions with Aziz and the production team on a personal level and hence when changes were mandatory, Aziz opposed it because it did not come from Cox himself and such resistance will not be punished by Cox. It also can be noticed the degree of autonomy in the company when the budgeting scheme is needed, each manager submitted an estimate of expenditure not the actual amount spent the year before or the required budget needed based on the previous year expenditure and the business forecast for next year. The shallow pyramid of hierarchy especially in the management accounting and financial can explain such autonomy.
The creation of the subgroup and hence the subculture allowed the lobbying in the production department to happen and to resist any change as long as it is not in their direct favor. Such collectiveness behavior was developed by the centralization of decision making by Cox and the high degree of autonomy he allowed for such a group. In his study, Polzer (2004) has concluded that subgroups and subcultures in organizations tend to have harmful effect on collective welfare that extends beyond the boundaries of this individualistic subgroup.
In CCC case, if the production department’s employees feel threatened; they can trigger actions to stop that threat, such as calling for a strike or threating to collectively resign and hence hurt the company by stopping the production. They are well aware that hiring such a large number of employees in a short time will be deemed impossible especially with all the experience they have. Even if the job has high degree of analyzability and does not require specialists to perform it. Moreover, collective resignation would hurt the image of the company and would cause business to be lost to competition even if it is on a temporarily basis.
Perhaps what triggered that defensive mechanism with this subgroup is the introduction of the outsiders even if they were completely in a different department. As proposed by Johnson (1992), introducing outsiders can help in managing the change since the outsider shall have a fresh view of the organization or the department that is undergoing the change. However, he did not mention how that would affect the change recipients themselves and how far would they accept the outsider. He also did not identify if the outsider came from inside the organization (i.e. internal transfer) or from outside the organization and what difference would that make. Alternatives:
So, what would CCC management do to resolve the current situation?
1. Do Nothing.
The benefits of calming down the current situation and the production department are to ensure the company is kept in operation. Although margins are dropping, the company is sill profitable. However, the disadvantages of this situation are more than its advantages. The operation department will tend to increase its power and influence on the company since now they felt powerful and indispensible, also, they might try to find another alternative or group together and establish another competing company and resign collectively which would put the company out of business.
2. Use a sacrifition sheep:
Firing Aziz and the seniors in the production department and replacing them with other seniors from inside the department can be a solution to send a clear message to the rest of the crew that the change is happening regardless of the opposition. This can benefit CCC by establishing a clear strategy that the company is moving forward with the change and personnel have to choose. However, if it backfires, the company can lose too much and we can revert back to the scenario in solution No.1.
3. Driving changes smoothly and in the welfare of the production department: There is no doubt that political consideration has a major play in such situations and it can resolve lots of issues. By calling Aziz and the seniors in the department and explaining the change to them and how would introducing new budgeting system and/or new operation schemes would benefit the company as a whole and the department specifically; they would tend to comply with that change. Asking for their assistance would be a better
solution than resisting the resistance. The situation can be transformed to the benefit of CCC if the production department personnel understand the current challenge and start to challenge the status quo themselves, knowing that what will be done will be reflected on their welfare.
By adopting the DICE methodology explained by Sirkin & Jackson (2005) to drive the changes as follow: I. Set the Duration of the transformation process with clear and concise milestones. Milestones keep goals tracked and in prospective, encouraging everyone to participate by some sort of recognition would help the process. II. Identify the required personnel and allocate tasks according to their capabilities and traits. That would keep the project Integrity intact and minimizes the risk of duration slippage and/or wrong interpretation of tasks and their requirements. III. Management participation and Commitment to the project as well as employees affected by the change. Management as well should demonstrate how these changes are going to change the welfare of employees and how committed they are to doing so. IV. It should be clarified that each and everyone concerned with this change process should be expected to exert an extra Effort until the transformation is completed. The management should lead by example in this regard and make it clear that any extra effort exerted in this period shall be rewarded on both the long and short term.
It is recommended to follow resolution No.3 above, since CCC is considered an SME not a corporate and since they are bound to the acceptance of the strongest department to change. Moreover, this resolution addressed the concerns discussed in the study above which mainly are the job security, motivation, job enrichment of the employees while helping in changing the company culture on the long run by getting the employees to exert extra effort and see their ideas come to live, that would develop a sense of belonging to the company which will benefit the company on the long run. Also, that approach would strengthen the concept that the company is willing to accommodate their employees and work out the changes with them for the best interest of both parties.
Plan of actions:
Harold Cox, Erica Wilson along with all the company seniors should demonstrate participation and ownership of the change process. It was not a good idea to leave the interaction being led by the new appointee(s) considering the company culture. The involvement of the top management whose faces are familiar with the production team would ease the effect of the change and indicate that the change are being driven from within not that the outsiders are taking over the company.
Depending on the change required; the process duration should be set. Would the management desire only a cost control and lean operations concepts to be implemented or they would require production enhancements by increasing the throughput of the company? Would they procure new technology, which would require training, installation and production scheme change? Would they introduce differentiation either horizontally or vertically to the current products? The easiest change to start with is to introduce cost control and operation optimization associated with achieving the minimum efficient scale of the factory and then drives another change. Driving a major change at once would again be resisted.
Mainly the production department would be affected, other departments too, such as financial and management accounting. The latters would be expected to drive the major portion of cost control through supply chain optimization. Introducing operations management department would also help enhancing the operations of the whole company and helping the company to slim the inefficient operations in all departments.
It would be expected that some side effects such as additional expenses would follow as sort of rewards to the contributors in the change process to encourage the participation. Also, production lag would occur until the change process is finalized, that could be due to shop floor adjustments or personnel getting accustomed to the new change in the production process, hence, it would be a good idea if the company could produce some reserve capacity to cover this aspect.
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