A Critical Evaluation Of The Leadership And Strategic Organisational Design Of W.L Gore & Associates, Inc And ALDI In An Essay.

1. Critically evaluate the leadership and strategic organisational design of the two case studies. `Working without a Boss: Lattice Organization with Direct Person-to-Person Communication at W.L Gore & Associates, Inc` and `ALDI – A Case of Rigorous Employee Control? ` Provide a discussion of the relative merits and limitations of each organisations strategic approach to their employees. In your individual report provide an argument which advocates either; high levels of employee control, or high levels of employee autonomy. Evidence within your report how your chosen approach could, potentially, benefit the case-study with the opposing employee stance.

2. In the light of the developing global business environment, identify the organisational challenges facing W. L Gore & Associates, Inc and ALDI over the next 5 years. Draw upon a range of theoretical concepts covered in the MPO module and present and justify your strategic recommendations for the next phase of W.L Gore & Associates, Inc` and `ALDI’s
development. The report should incorporate the basis of your analysis and be supported by a critical engagement with theory. 

Merits and Limitation of ALDI’s People Management

Human Resources Management (HRM) is the process of handling workforce in the organization and planning for their growth and development so they can support towards the successful operation of the business (Llorens and Battaglio Jr, 2010; Lengnick-Hall, Beck and Lengnick-Hall, 2011). In this context, the department of HRM deals with potential issues faced by the personnel, performance review programs and training and development which ensure their active involvement in the corporation (Armstrong and Taylor, 2014). In this context, the present report discusses the HRM approaches used in different case studies. For this purpose, leadership or employment management approaches used in each case study are critically analyzed by referring relevant academic sources. Furthermore, challenges faced by the organizations of case studies in managing the workforce are also examined along with the suggestions to improve the current way of management. Moreover, recommendations have been provided for the next phase of the businesses by the support of critical engagement with the relevant concepts and theories.

In the given case scenarios both companies follow the different strategic approaches to manage the human resources which have their benefits and limitations. These are explained as follows-

The case study of ALDI shows that paying above average salary to workers tends to reduce the labor cost because it does not have to pay the extra wage for the overtime. Although, it is crucial for the business since it aims to offer to discount pricing for customers in the food retail where the approaches for reducing the cost must be implemented better. This makes it possible for a business to offer the products and services at a relatively low price. In this context, Yukl (2008) asserted that offering product in the lower price is the effective aspect to obtain the competitive edge, but it must not be the result of employee exploitation. However, it has been evidenced in the case study that employees are not being offered the benefits for the overtime work rather they are exploited by paying relatively higher wages for the basic working hours. For example, in the quest for competitive advantages, ALDI hire and pool employees on higher salaries as compared to other food companies which are the biggest benefit provide by the company to attract the employees. However, instead of the higher salary company took extra effort from the employee and did not compensate for extra working life. This overtime may help in increasing the productivity of the company and profit maximization but influences employee working life negatively. In this context, Caruso (2014) asserted that this long hour work shifts directly impacts both physiology and psychology of employees. According to that shift work and long work, hours impacts the employee's health which increases the risk of reduced performance.

Furthermore, the company continues the effort on the more on part-time staff instead of full-time job seekers. In this context, Joyce, Pabayo, Critchley and Bambra (2010) stated that company who follows the part-time employment policy are high in the productivity because this part-time policy reduces the labor cost and provides the flexible working environment. Further, this flexibility attracts more workers by which a manager can schedule them whenever work is needed.  However, this part-time employment reduces the chances of unionization which is beneficial for the company but harmful for employees in the long run. This is because part-time employees often receive no benefits like sick benefits, retirement benefits. On the other hand, employing more and more employees on part-time contracts in its shop enables ALDI to get the higher level of work performance at lower labor cost. This indicates that although business is effectively contributing towards profit maximization the approach of taking more part-time employees might affect the future performance.

Furthermore, ALDI case shows that to encourage the higher rate of performance ratio, the company follows the up or out principle. According to that employees are bound to grow faster rather they would be redundant. However, the policy of up and out affect the motivation of employees since it does not allow them to work in the team as it increases the intrateam competition. In this context, Macky and Boxall (2007) asserted that command-and-control is not always counter-productive. However, many managers in a position of authority target other employee and monitor their mistake to report upper management to maintain owns position. In this regard, on one side this approach generates insecurity in the employees for a job and they try to work in a more disciplined manner. On the other hand, it also generates mistrust and grievance in employees for the company. Here, Ohly and Fritz (2010) stated increasing complaints and distrust among personnel has a negative impact on the overall performance of the business.  This does not promote the innovation and creative instead force personnel to stay in their boundary to perform their job.

The case study of W.L Gore & Associates, Inc shown that the lattice structure in management play a significant role to encourage the communication and innovation but it also creates challenging situations as it seeks to respond to changes faced by the business to obtain the competitive edge in the marketplace. As shown in case, to maintain the collaborating environment in Gore Company people work as associates, not as employees or managers. In this regard, Kompaso and Sridevi (2010) asserted that the productivity of the business is increased when employees are treated as the business associated. However, Stone and Stone (2013) argued that it is not necessary that all workforce can work independently which may affect the overall progress of the business to a great extent. Besides, Malmi and Brown (2008) stated a company must have a balanced ratio of employees and managers then it may affect the operation of the business. This indicates that it is crucial for the business to appoint a manager to monitor the performance of the workforce effectively. This, in turn, increases productivity as well as the performance of employees.

 According to the case in Gore Company employees have no specific leader as they all are associates and initially they work in the different teams In this context Meyer (2008) asserted that the flexibility of the lattice organization structure enables employees to shape their career by working in the multiple units. However, in such a scenario, it is hard to find specific roles which result in the compensation and performance standards. In this regard, Gumusluoglu, Karakitapo?lu-Aygün and Hirst (2013) stated that due to a lack of standardization in lattice structure it becomes hard for the business to provide the appropriate bonus from a performance of the workforce. This might have a negative impact on the competitive edge of the company in the long-term.  

 Furthermore, to enroll every employee as the innovator and create collaborative environment Gore Company implies the innovation democracy approach. According to this approach, everyone communicates directly to each other without following any particular hierarchy of instruction and they become their leader.  In this context, Widhiastuti (2012) asserted companies without effective leader might face an issue in the long term because the employee will not be able to work with a higher level of motivation. Also, the leaders play an essential role in dealing with the issues of employees and promote the teamwork to increase the business performance. This reflects that Gore company needs effective leadership through which employees can work with a higher level of standards and accomplish the set objectives at the right time. Also, the scope of improvement will not be found if they will work without any leader or manager.

By following the lattice structure, Gore company have highly trained employees and they are free to make their own decisions. In such a condition when the employee feels that they have power and responsible for company operation and progress, they work harder and take personal interest to ensure the success of the business. However, it is not always possible that all employee possessed equal expertise and specialized in their field of work. This is because the workforce has to put efforts to derive the outcome in term of their development and getting the financial and non-financial incentives. According to Medina (2012), a lattice organization requires employees whose discipline and motivation is extremely high. It is challenging to find a group of workers that can show the motivation needed for this lattice structure. Creating motivation is difficult in a structured lattice organization because there is no one to provide motivational activities (Benko and Anderson, 2010; Men, 2014). Another limitation associated with this type of organizational structure is the timeliness that decisions are made. In this lattice structure decision is based on a large amount of interaction between the associates and who come up with the best answer. This procedure tends to be time-consuming which affect the operational activities of the business  (Costanzo et al. 2009).

In the present case study, both the approaches increase the company productivity, but W.L Gore & Associates, the higher level of employee autonomy is more suitable in the current business scenario. As for today's competitive edge in the employee control structure everybody tries to snitch each other position to maintain their goodwill whereas in the lattice structure all are at the same level without any boss. According to Harris (2005), the organizations with the collaborative environment tends to increase innovation and creativity. This needs the extensive support from the management and leader who ensure to provide the training and development facilities for workers so they can accordingly ensure their career growth (Bailey, Mankin, Kelliher and Garavan, 2018). AS in ALDI case, employees work in the pressure that upper management may complain about their silly mistakes like improper office management time, etc. which reflects in their performances. Also, in the ALDI approach, titles are significant they are the sign of their performance, power and way of increasing value in the labor market.

On the contrary, in the Gore approach everyone is associate; however, the additional title that Gore’s employee earns is the leader who only used to identify people who have developed followers naturally. This reflects that employees do not have any authority instead of completing the given objectives from teams. In this regard, ALDI rigorous employee control encourages the high level of politics which builds major grievance in employees. This may also affect organizations ethical standards. In this perspective, W, L, Gore lattice structure managed employees seem comparatively useful and the direct communication at every phase reduces conflict. In this way, ALDI might follow certain practices of Gore' structure for boosting the confidence of the workforce.

Organization structure is based on the company’s vision and long-term goal. In the success of any business their organizational structure plays a crucial role (Daft, Murphy and Willmott, 2010; Armstrong and Taylor, 2014) In developing global business environment W. L Gore & Associates, Inc and ALDI both implies a different type of organizational structure which have their own merits and challenges shortly. Here, the significant challenges that can be faced by the companies on the basis of the given scenario are as follows-

Strategic Recommendations

As shown in the case of Gore Company everybody is associates and there is no traditional bureaucracy. In such condition, the major challenge faced by the company will be the seeking legitimacy from outside partners or clients. Also, Gore company have no such specific job descriptions due to its structural design which might become difficult for the growth of the business since the appropriate strategies might not be formed in the absence of manager or leader. In this regard, Downs and Adrian (2012) asserted that it is easier to communicate if people have a rigid job description whereas less systematic structure creates barriers in addressing the issues of the workforce.  At this juncture, employees should be well informed about their job or tasks to be done through which they can ensure their career growth also become can effectively operate with the more significant level of success (Cooren, Kuhn, Cornelissen and Clark, 2011). Apart from this, the case study reflects that consumers will also find it difficult to get their queries resolved due to an absence of a specific department. This may create the situation of switching from one to another brand.

Furthermore, another challenge that company may face is major internal conflicts due to unequal distribution of power and less empowerment. As shown in case that Gore Company discards manager and the all workforce work from balanced approach without any specific span of control.  Such a system may produce confusion about who is in charge in connection to make the critical decision which causes the middle manager to feels powerless even though company states that employees have more freedom to make the decision. This scenario may deviate business from its purpose and it will be tough to determine the success of the company conclusively. In this regard, Mowday, Porter and Steers (2013) asserted that it is not necessary that all employees will have the ability to self-discipline which is needed to operate in such an organizational structure. At this juncture, the semi-skilled workers might affect the productivity and they may also have lower motivation without any learning at the workplace.  

Another challenge which may be faced by the Gore organization will be attracting and retaining talent. As Gore Company is associated in a way that employees are confused about their roles and responsibilities. This confusion about the self-positioning increases dilemma in employees mind over their career development and results in employee dissatisfaction. Here, Medina (2012) asserted that employee dissatisfaction is the basis of increasing employee turnover. This will challenge the organization market position.

The ALDI corporation operates with higher control over its employees by following the hierarchy of instruction. The organization may face the major challenge would be high employee turnover. In this context Manson, (2014) mentioned that high employee turnover is the result of employee dissatisfaction and organizational ineffectiveness. Also, it increases the overall cost of the business of hiring the new employees and giving them the training to be expert in their field.  However, the ALDI company presently high in the productivity but due to its rigorous employee control management such as heavy workload, performance issues and the employee politics may increase the psychological pressure on the employees. These circumstances lead grievance in the employee and they tend to seek another opportunity for their career growth (Briscoe, Tarique and Schuler, 2012). Therefore, the current pattern of the corporation to focus on profitability and customer satisfaction will have an adverse effect in the future.  

Conclusion

As studied ethical standards should be followed by the business for offering them overtime payment and providing them appropriate working condition (Bratton and Gold, 2017; Wright and McMahan, 2011; Chelladurai and Kerwin, 2017). This may increase the aggression of workforce in term of strike and lockouts with a demand for paying the overtime payment. At this juncture, the company may face ethical issue because ethically it is not right to exploit the workforce. These ethical issues may have a negative impact on the overall performance of the business shortly. It is because the workforce requires a portal to discuss their concerns and determine their well being on the cost of their efforts put for the organizational effectiveness. In this regard, Carroll and Buchholtz (2014) asserted that business who are not efficiently following the ethical code or carrying out their social responsibility leads to broader consequences. Unethical behavior may damage a company's reputation in the future and make it less appealing to stakeholders. However, Bowie (2017) argued that in a free market economy the profit is to ensure maximum social benefit, so business ethics are not needed. Employees most fundamental obligation is loyalty to the company regardless of the ethics. Although, in the current competitive environment this scenario does not work and ALDI may need to increase its cost of paying even the higher payment including the overtime payment by considering the issues related to employee turnover and aggression among the workforce.

Another challenge that ALDI company could face shortly is lack of collaboration and teamwork.  In this regard, Galegher, Kraut and Egido (2014) stated that cooperation in the workplace is one of the most critical influences on productivity, especially in the team-based environment. In ALDI corporation management control that limits the team bonding would hurt the motivation level of the workforce. Although, the less motivation personnel negatively affect the reputation of the business through offering poor quality of services to end users.  However, Belbin (2012) mentioned that lack of cooperation adversely affects employee's productivity which directly reflects in the company performance in the long run. This demands business to be positive and supportive towards the workforce to determine their extensive support for increasing customer satisfaction.  

From the above discussion, both the companies can face some significant performance challenges shortly due to its organizational structure which needs to be resolved sooner for long-run sustainability of an organization. The suggested strategies would be effective in securing the competitive edge of the business-

• Flexible work environment-In this context, ALDI employee turnover could be influenced in upcoming years due to its rigorous controlling management structure. In such a state, the company should reform their human resources management in which they should change their approach to managing employees. For this company should adopt flexible working life approach as adopted in case of Gore company. This strategy is beneficial to increase the keen interest of the workforce towards the given tasks as it boosts their morale to improve their performance (Kotter, 2008). W. L Gore Associates had adopted this flexible work-life strategy from the very beginning which is the main reason for their smooth human resources management. Nonetheless, ALDI should apply several changes such as flexible working hours, compensate on overtime and sick leaves, etc. to both full time and part-time employees. This changes in structure create a healthy working life through which employee can enjoy both personal and professional growth and feel connected to the organization.
• Situational leadership-As ALDI has powerful leadership control whereas Gore company lacks in the lead due to its structure. Several studies show that strong leadership plays a crucial role in maintaining and smooth run for the business. In this context Men (2014) asserted that effective leaders bring people together and enable them to work together to achieve a common goal. In such a scenario, companies should focus on the leadership qualities of employee and apply for the situational leadership program. According to that program leader of the companies should establish a vision, communicate by a various strategy to the employee to resolve their issues.
• Employee engagement- Both case studies show the requirement of engaging employees to the managerial decision-making process to increase their expertise and boost their motivation level. Here in such circumstances company should improvise their human resources managerial skills. In this company should appoint a specific spokesperson on certain issues and a supervisor who can monitor employees’ performance and get their feedback. This would be helpful in understanding the viewpoint of employees and also determining their growth by assessing the scope of improvement. These changes will ensure employee that their career graph is consistent in the organization and they feel satisfied.
• Active company culture- As ALDI has employees control management structure which put pressure on the employees to grow upward instantly. This will increase top competition and lack of collaboration behavior. This further influence company ethical and socio-culture in future which can be harmful to the brand image. In such a scenario, a company should promote such type of company culture where the collaboration and the cooperative environment can develop. In this regard, Kompaso and Sridevi (2010) mentioned that to increase the productivity in business management should set specific goals and encourage competition among team by setting the motivators.

Moreover, the company should state company vision and demonstrate various ethical standards promptly. Management should also behave as a role model on moral grounds. Besides, a company should arrange different training and team building activities which can encourage cooperative behavior.  Here, both companies should focus on their human resource management and maintain the balance between their organization structure. In this regard, ALDI should adopt a sort of leniency for employees stressful working condition as evidenced in the Gore lattice structure. On the other hand, Gore company should foster positive leadership and command operated management skills for the smooth run of business in future.

Conclusion

The report mentioned above stated that every organization needs a structure to operate systematically. Any organization can use the organizational structures if the structure fits into the nature and maturity of the organization. In most cases, organizations evolve through structures when they progress through and enhance their processes and workforce. According to several studies, it has been concluded that employee control management can increase productivity at the individual level, but it improves the stressful working life. On the other hand, lattice structure encourages innovation and creation in the organization by direct communication process, but it lacks the specific designation which may impede the future growth of the business.

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