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Challenges Faced by the Organisation

Discuss about the Challenges faced by Morgan Car Company.

Many types of challenges are faced by various companies all around the world (Hayes, 2014). In the late 90’s when the age of computers and automatic machines have revolutionised the world, there were some companies like Morgan car which still preferred to make cars by hands (Booth, 2015). These handicraft cars were in high demands. Its competitors like Volkswagen and many others have adopted the modern technologies for their production purpose but Morgan still wanted to continue with the old manufacturing techniques. It was also due to the reason that this was the trademark of the company which attracted their consumers.  They needed rapid changes in their operational mechanism. This essay highlights the challenges that were faced by the company in dealing with the increasing demands. It also showcases about the strategies that help in resolving these problems.

There are many types of challenges that are faced by Morgan Car Company. These challenges are reducing the performance in the company as well as restrict them from having a long term growth. All these challenges have come due to various reasons and the company needs to address this by making changes in the overall operations of the firm. An effective operational management plan is needed by the organisation to make the changes in every aspect of the company or otherwise it will lose its market in the coming years (Oakland and Tanner, 2007). Due to globalisation and introduction of automatic machineries in the car manufacturing industry, the problems of Morgan Car Company has widened. This is due to the fact that they want to continue its business as a firm that makes handmade cars. Some of the problems that are faced by the organisation have been highlighted.

The first and fore most challenge that this company was facing is that they were unable to fulfil the demands of the consumers as the demands were higher while the production capacity was low. In the late 90’s, this company was producing 9 cars a week which was not sufficient to meet the demands of the market, as the consumers were to wait for more than three months to get their cars (Wells, 2012). One of the major reason because of which the company was unable to meet the demand was that they were using the traditional methodologies for manufacturing cars. They considered handcrafted cars their reason of the success over the years. It was also done by the workers who were extremely talented and providing training to the new workers was extremely difficult task. To combat the problems, top leadership decided to make an extra car a week but that was just a small increment in the direction of meeting the demands.

Demand and Supply gap

Another bigger problem that this company was facing is the reluctance of the employees and the top leadership to change its operational methodologies. As they considered that the only reason for their success was a handicraft car which helped them in survival. Even after various efforts by production consultants they were not ready to make changes. Their top leadership lacked the capability that could make this change possible (Seebode, Jeanrenaud & Bessant, 2012). This was also due to the reason that they did not have enough of capitals to make the changes and they did not wanted to arrange new investors for their operations. Leadership was frightened about the consequences that if the investments did not work out then their survival would be difficult. They lacked one the basic leadership skill that is to take risk. The leadership were highly concerned about their suppliers as they did not have the capability to meet the demands of the company for the manufacturing at higher levels. The conservatism in the approach was pulling them back.

The third problem that this company was facing is of the slow growth rate. They were generating very less profits from their business which was not sufficient in the increasing inflation. Morgan Car Company’s leadership were not ready to understand that the demand of the workers in the future is going to increase. For fulfilling these demands, company needs a higher cash crunch. This was also due to the reason that company could not exceed the cost of the cars to higher levels, as this may lead to failure in the competitive market. Cost cannot be exceeded because they would lose their market in the price wars (Cameron & Green, 2015). It was also to be understood that their competitors were generating higher profits due to lower operational or production cost. This was possible due to adoption of modern technologies in the production which this company was not ready to accept.  The accounts report of the company showed that this company was either generating a very low profits and there growth rate was almost constant.

The changes that were taking place in the environment of the company as well as their internal demand need to be tackled with appropriate strategies (Samuel, Found & Williams, 2015). These strategies must be applied in the company since the requirement in the industry was large (Williamson, et al., 2013). Strategies were to be made thinking the fact that they were not ready to adopt technology for their future operation and wanted to stick to the basics. In the initial stage when the company asked their employee to increase the production capacity by one car a week, workers were not totally ready for it. They were over burdened with the amount of work they had. The result in the initial stage suggested that they were not even able to touch production capacity of one extra car in a week.

Employee reluctance to change

The design department understood that just by making the changes in the design of the cars they can easily increase the production of the car. This can give momentarily success to the car company but at longer run this would also not sustain. As many consultants like David, suggested them that if they continued to follow this mechanism then there will be time when there will be higher eagerness to make changes all of a sudden. They will not be able to do so because of lack of capital. This will be the downfall of the company. As they do not understand the fact that the changes that were made in 80 years were very small but the changes that are taking place in the last ten years was highly significant (Büschgens, Bausch & Balkin, 2013).

There are several strategies that Morgan Car Company can choose. The selection of strategy must be specific and must be truly based on the problems that are faced by the company which has been illustrated in the above section of this report. This company needs strategies that will help in changing the whole operational procedures. The strategies need to be according to the long term plans of the company (Carter, 2008). Some of the strategies have been showcased below.

The strategy that this company can adopt is supply chain management. This strategy will help them in meeting the demands of the consumers as per the requirements of the company (Denning, 2011). For this they have to make plans for the long term. Morgan had to add new suppliers in their group, so that they have sufficient amount of resources for speeding up the manufacturing process. To reduce the time of cars delivery to the consumer, company can add an extra line of manufacturing without changing the methodologies of car production. This would require an additional workforce, who will need skills for developing handicraft cars. For this situation company needs an effective training strategy that will enhance the skills of the older employees and completes the training of the new employees in the quicker time (Gioia, Nag & Corley, 2012). Effective relationship with their suppliers will help the Morgan car to get the resources as fast as possible.

Company needs to train the employees to work on the night shifts so that they can effectively produce larger numbers of cars. Dividing the shift of the employees will help the company in streamlining their production. The work that is major like the designing of the outer body of the cars and the fitting of the parts at their positions can be done in the day shift. The workers at night can do the additional tasks like painting and giving finish to the company. The strategy that they need to adopt under supply chain management is partnership and communication. This means that they need to add the number of more partners in their business as well as communicate everyone to be ready for whatever demands that come to the company and not be surprised by anything.

Lesser Profits

Another strategy that this company can use is to adopt the technologies that do not disturb the handmade nature of the car but certainly helps in increasing the production speed. It can be understood by the fact that they were not even using the power tools for designing of the body, cutting of the metal sheets as well as the tightening of the screws. Presently these tasks were done with the tools that are hand driven. In order to reduce this problem company can take of the tools that are power generated. This will reduce the efforts of the workers as well as save their energy for speeding up the production. This will again require training of the employees to drive these machines as they were used to working on the machines that are hand driven. This kind of changes will not even require huge amount of investment as they are also facing huge challenges related to higher revenues (Jackson, 2016).

Company can also take use of the innovation strategy where the company can find new ways of doing the operations (Reissner, 2011). They can also make innovation in the design of the cars in which unnecessary parts can be removed and the parts that adds the value to the customers remains. This will not only help in increasing the sales but will also help in making the cost cuts and hence help the company in generating higher profits. The innovations must be made as per the future requirement of the industry and not in the ways company has been thinking. Diffusion of Innovation theory can help the firm in understanding the need of the Innovation while making the changes within the organisation.

They can also take use of the strategy of making cost cuts (Myers, Hulks & Wiggins, 2012). This can be done by the making different units where the different parts are made. Lot of time of the company employees gets wasted in shifting car parts from one place to another. They can make the parts at different position and assemble them at one place. Since this company has a complexity of space hence this strategy can benefit them. But the major problem that arises in doing all these is that the company does not want to change their operational methodologies. They do not understand the eagerness of making these strategies and implementing it at the Morgan. Their leadership was assured that because they did not adopt the changes which other companies did, was the reason for their survival even after so many economic breakdowns. But this was a decade were the changes are taking place at one of the fastest rate (Hubbard, Rice & Galvin, 2014). Theory of production or cost theory can be applied for making the cost cuts.

Change in the environment

Morgan can take use of the change strategies like changing at the top. It means that company has to change at the top. Since making changes at the top gets reflected at the bottom. If the upper leadership is ready to incorporate these changes and stands with their employees then it would be easier for the firm to make changes. Since there was a change going on in the top leadership and it is transferring to the next generation hence there is a need that the approach of leadership also changes. Morgan leaders need to take more calculated risk for their operations.

 It is to be understood that the leaders at the top have to be more concerned about the changes that are going on in the entire industry as well as its effect on the longer run (Miller, 2001). This must be done checking the future of the industry in the longer run. If the leadership fails to make plans regarding the change then it will be difficult for the lower level staffs to adopt this. It is also seen in many cases of various industries that the problems are half solved at the table rather than on the work. Risk taking nature of the leaders gives extra energy to the staffs to make changes. In the case of Morgan Car Company even when the leadership got hand over to the next generation there was no strategic change in the operational processes of the firm. This was also due to the fact that top leadership was highly conscious about the failures that may happen while making the changes. Leaders need to attend leadership development program so as to enhance their skills especially like how to take calculated risk. After such program leaders need to access the situation and then find the things that can be done for making changes work. A democratic form of leadership will help in solving the overall problems of the firm.

Another change strategy that will be essential for the company is the communication. This helps the firm in binding the stakeholders as one unit while making the necessary changes. This will also assist in keeping the change process simpler. Feedback strategy must be used by the company. This will help them in understanding the requirements of the market as well as making changes that do not affect the workers. They are the primary resources of this handcraft car manufacturer.

Strategies that this company can adopt

Communication not only helps in making sure that everyone is informed about the change but it also helps in defining the processes using which the changes would be made (Stanleigh, 2008). It is one of the most effective tools in the management related to changes. This empowers the leaders to convey their messages to lower level staffs while it also empowers the lower level staffs to keep their problems in front of the management. With gap in the two levels of the organisation any smooth change cannot be possible. Before making changes, the top leadership need to discuss about all the specific problems in details with all the stakeholders of the company. This will help them in finding solutions to particular problems that will arise in the overall change process.

Action research model has been used for understanding what kinds of changes are required within the firm. This is a thorough research that any company does after evaluating the market demands and their personal capabilities. This model has four stages plan, act, observe and reflect. There are several types of changes that need to be planned by the company. The first and foremost change that they need is that they need to change their operational methodology where one part will be made at one place so that production can be done at the higher speed. Second change that they need to bring is in them is to change the decision making process of top leadership. Including more staffs in the decision making will bring new ideas to the business. Third changes that they need to make are to change the risk avoiding attitude of top leadership. This has reduced the growth rate of the company as the people those are responsible to make the change are not willing to do so.

It is crucial for the Morgan Car Company to make the process of change easier (Sørensen, Hasle & Pejtersen, 2011). This cannot be done without the help of the stakeholders. A more unanimous decision has to be made for the process of change. For doing so they can take use of two tools. This will help in collecting data that will be required for planning the change process.  First is the interview, a series of interview is required so as to understand the problems that are consisting within the company and how these changes can be incorporated. Second is the observation. This is also the process of change in which the changes are done according to data that is collected after observation of many things. This may include observing the behaviour of the top leadership, the approach that is utilised by the company for increasing the production.

Supply chain management

In the last it can be recommended for the company that they can take use of the supply management strategy that will help them in meeting the demand of the consumers. They will have to find new supply routes which are less costly. Company takes use modern powered tools that can reduce the amount of efforts put by the employees. It will help in reducing the time of operation as well as it will bring efficiency in the process and reduce the number of errors due to human mistake (Hill, Jones & Schilling, 2014). This is necessary for effective utilisation of the resources which is necessary in the case of Morgan which is having lesser amount of resource available with it. Company can also take use of certain other strategies like Cost cuts or making changes in the leadership approach. Communication plays a very vital role in the whole change management process.

Morgan also needs to train their employees in a new manner that reduces the overall time of training. This training must incorporate the things that help them in building the skills that is required by the company in their future endeavours as well as their personal need. One of the most essential things that this company needs is to add more number of investors. For adding of new investor company requires to change its methodologies of working. This is required because the new investors will see the Return on Investment and the future of the company but in the case of Morgan motor cars company the future remains uncertain. There are lots of opportunities available with the company as the car market is going to increase and hence company will have to increase the production speed so as to meet the demands in the market. This is due to the reason that consumers are not willing to wait for longer time to get their orders delivered.

References

Booth, S.A 2015, Crisis management strategy: Competition and change in modern enterprises. Routledge, London.

Büschgens, T, Bausch, A & Balkin, D.B 2013, ‘Organizational culture and innovation: A meta?analytic review’, Journal of product innovation management, vol.30, no.  4, pp.763-781. Available from: Wiley Online Library. [03 April 2018].

Cameron, E, & Green, M 2015, Making sense of change management: A complete guide to the models, tools and techniques of organizational change. Kogan Page Publishers, London.

Carter, E 2008, Successful change requires more than change management. The Journal for Quality and participation, Vol. 31 No. 1, p.20. Available from: EmeraldInsight. [03 April 2018]

Denning, S 2011, How do you change an organizational culture. Forbes Magazine, 23, New York.

Gioia, D A, Nag, R & Corley, K G 2012, Visionary ambiguity and strategic change: The virtue of vagueness in launching major organizational change. Journal of Management Inquiry, Vol. 21 No. 4, pp.364-375. Available from: Sage Pub. [03 April 2018]

Hayes, J 2014, The theory and practice of change management. Palgrave Macmillan, Basingstoke.

Hill, C W, Jones, G R and Schilling, M A 2014, Strategic management: theory: an integrated approach. Cengage Learning, Boston.

Hubbard, G, Rice, J and Galvin, P 2014, Strategic management. Pearson Australia.

Jackson, D, 2016, Dynamic organisations: the challenge of change. Springer, Berlin.

Miller, D 2001. Successful change leaders: what makes them? What do they do that is different?. Journal of Change Management, Vol. 2 No. 4, pp.359-368. Available from: tandfonline. [03 April 2018]

Myers, P, Hulks, S and Wiggins, L 2012, Organizational change: Perspectives on theory and practice. Oxford University Press, Oxford.

Oakland, JS and Tanner, S 2007, Successful change management. Total Quality Management & Business Excellence, Vol. 18 No. 1-2, pp.1-19. Available from:tandfonline. [03 April 2018]

Reissner, S.C 2011, Patterns of stories of organisational change. Journal of Organizational Change Management, Vol. 24 No. 5, pp.593-609. Available from: Emraldinsight. [03 April 2018]

Samuel, D, Found, P & Williams, S J 2015, How did the publication of the book The Machine That Changed The World change management thinking? Exploring 25 years of lean literature. International Journal of Operations & Production Management, Vol. 35 No. 10, pp.1386-1407. Available from: Emraldinsight. [03 April 2018]

Seebode, D, Jeanrenaud, S & Bessant, J 2012, Managing innovation for sustainability. R&D Management, Vol. 42 No. 3, pp.195-206. Available from: Wiley Online Library. [03 April 2018]

Sørensen, O H, Hasle, P & Pejtersen, J H 2011, Trust relations in management of change. Scandinavian Journal of Management, Vol. 27 No. 4, pp.405-417. Available from: Pure Sfi. [03 April 2018]

Stanleigh, M 2008, Effecting successful change management initiatives. Industrial and commercial training, Vol. 40 No. 1, pp.34-37. Available from: Emraldinsight. [03 April 2018]

Wells, J  2012, Morgan motor car company: maximising workflow efficiency. [Online]. Available from: https://www.morgan-motor.co.uk/img/news/vegas/vegaspdf.pdf. [30th March 2018].

Williamson, D, Cooke, P, Jenkins, W and Moreton, K M 2013, Strategic management and business analysis. Routledge, London.

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