Case Study Of Ecogest: Analysis Of Organizational Problems And Solutions

The Assignment should analyze the Italian Company Ecogest.

Your assignment should consist of three parts:

This section should set the background for your assignment. You need to identify and outline the central problematic case you are focusing on. Furthermore, it is also necessary to introduce the key protagonists and issues. Give enough background related to your organisation so that the problem can be situated in a broader context. Overall, the case must be described in a way that is informative.

Here are some of the questions you can use to make sure you are going in the right direction:

• What is going on? Describe the problem. Ensure that the problem is framed as an ‘organisational behaviour’problem (i.e. not a strategy problem or an operational problem or marketing problem or a human resource management problem etc.).

• For whom is it a problem for i.e. for you, for your group, your line manager, your department, your firm? Try to keep the problem manageable i.e. don’t try to address the future limitations of an entire industry in a 3,500 word assignment.

• List some of the symptoms of the problem so we can see that the problem exists. For example, open conflict, high staff turnover, absenteeism, poor or low morale, group or team conflict, management of change issues related to new projects, new premises, new clients, new boss, etc.

• Who are the main protagonists and how do they behave? For example, you could write a little story, which exemplifies the symptoms and details what is happening.

• What is the context? Give us some basic information about the organisation, what it is, where it operates, some information on the structure and environment and whatever is relevant to outline and identify the problem. Please be sufficiently detailed so that an outsider can understand what was going on.

This part of the essay is the bulk of the essay. It is dedicated to problem analysis, and its final diagnosis.

Students are expected to address each of the following questions as part of their Case Analysis:

• Through which theoretical lenses/framesare you analysing this problem and why?

• What key OB concepts and theoriesare you mobilising as significant to explore the frames chosen? And why are they relevant?

• Where is the evidencein the case that points to the theories you have identified?

• What is your final diagnosisof the underlying cause(s) of the problem in the case? Does your analysis logically flow into and explain the final diagnosis?

Part C. Conclusion

This section is dedicated to approaching solutions to the problem analysed previously. The following question can assist in directing efforts:

• What alternative solutionsto the problem are possible?
• What final recommendation(s)and plan of actions to solve the problem are you offering?
• Why would you go for these final recommendations?
• Does your analysis and final diagnosis logically underpin the final recommendations?

Part A: Problem Statement

The present structure of the Ecogest which is hierarchical under the leadership of the General Manager of Ecogest lacks some of the managerial skills, and technical background which are important for him to have  as the General Manager of Ecogest.. He lacks problem solving and decision making skills. The CEO of the organization is biased towards the General Manager, does not listen much to the employees and their problems, he is usually angry, and fires employees for even small reasons.

Whenever there was an issue in the organization the General Manager, used to take a lot of time to solve problems he often found it very difficult to deal with technical problems, he had to consult too many technical experts for a single problem, consulting too many technical experts would often give him conflicting solutions. Due to his poor decision making skills he often used to take wrong and ineffective decisions. The employees began to criticize his decisions, the employees stopped consulting him for their problems started discussing the problems especially technical problems, because they started doubting the problem solving skills of the General Manager and could hardly trust their manager would give effective solutions to their problems. The employees are dissatisfied and very less motivated to work, there is a lot of inefficiency that can be seen in the employees. The old clients whose trust was gained by Valerio Molinari, from his efficiency and experience are now complaining and losing trust on Ecogest, the complaints from the customers have become very common now a days.  Conflicts are often seen between the Administrative Manager, Cinzia Guerrani and the General Manager. There has been significant increase in employee turnover and absenteeism (En.ecogest-srl.com 2017).

Valerio Molinari is the shareholder and CEO , Salvatore Molinari, Chairman and CTO, Pietro Torchi, Foreign Office GM, Matteo Molinari, logistics, Procurement and Tendering office Manager, Cinzia Guerreni is the Administrative Manager (En.ecogest-srl.com 2017).

 Valerio Molinari is very passionate about his work, and when he is under pressure, he behaves very badly with his employees. He believes that the problem lies with the employees and he can fire them for any reason, he is in strong competition with his father, because he wants to prove to his father that he can handle the situations properly. Because of this a non-objective analysis was caused, that reveals the inadequacy of the GM he has selected.  Firing the GM will be proving him wrong, it will be his failure. Therefore, instead of firing the GM he delegates every decision to the GM who sub-delegates to the others within the organization without assuming any responsibility. Michela Nanni who also is in the board of the directors, does not exercise much of the power (En.ecogest-srl.com 2017).

Ecogest is an Italian family business, which was established in 1995 with an aim to become the main motorway service provider in Italy, following the Government’s decision to privatize the public Infrastructure sector.  Mr. Salvatore Molinari through the experience he gained while he was the CTO of IRI group decided to start Ecogest with his son Valerio Molinari and wife Michela Nanni. Ecogest has two shareholders Valerio, who owns 90% of the shares and Michela Nanni who owns 10% of the total shares. The board of directors include, Valerio, the CEO of company, Michela Nanni is the Advisor, Salvatore Molinari the Chairman of the Board and also the CTO. The experience and the established Network that Chairman Salvatore have provided Ecogest the opportunity to acquire maintenance contracts from several clients. Ecogest today holds 3,500 Km of maintenance contracts (En.ecogest-srl.com 2017).

Symptoms

The failure on the behalf of Salvatore to use his power over GM and the failure of General Manager to take effective decisions compels me to see the case through political frame. Due to the structural issues, the General Manager of Ecogest, who is not efficient enough to be the GM, do not have a technical background and is still holding the post of General Manager I will also like to use the structural frame for this case. The employees are complaining and they criticize the decision and doubt the problem solving abilities of the General Manager, hence Human resource frame can also be used. There is problem in the core values, beliefs of Salvatore, which is very much affecting the organization culture and makes me see this particular problem using the symbolic frame (Altman,Valenzi and Hodgetts 2013).

The political frame defines an organization that competes within their group for limited resources and time. The political frame is made up of individuals with different beliefs, interests and perceptions.  This different view from different people creates a need and desire for power within the member of the group so that they can satisfy their conflicts. People in order to get what they want negotiate with competing interests. The political frame focuses on the requirement of the power to reach the goals and puts decision making in the centre of the decision making process. The political frame is very important because it gives the detailed understanding of power and authority and the required order of power is used to take conflicting decisions. It also gives deep understanding of the organization and flow of power within the organization (Karkoulian and Osman 2014).

Power gives great responsibilities to the person holding a post, it also gives authority to the person to take important decisions, which are beneficial for the  whole organization, and not just to few individuals. Most often politically motivated managers in an organization who hold higher positions misuse the power and the authority they have, they do not take decisions considering the organization as a whole and only focus on creating a power base by any means (Karkoulian and Osman 2014).

The political frame will be used to see how power used by Salvatore and GM is contributing to the problem, and how other important members of Ecogest exercise and create their power base within the organization. It will also give idea of the leadership style followed by the CEO of the organization (Altman,Valenzi and Hodgetts 2013).

Salvatore the CEO of Ecogest and the GM both of them have different bases of power. Being the CEO of the Ecogest, Salvatore has a legitimate power over GM.  The General Manger also has power over the employees, with power comes authority to take important decisions and provide solutions to the employees. It is very clear from the way Salvatore delegates most of the decisions to the General Manager, that he has referent power over the General Manager.  Salvatore holds reward and coercive power over the General Manager but the referent power here is so strong that the other powers lose its influence. Valerio being the CEO and board of director just because he hired General Manager and does not want to prove himself wrong instead of removing the General manager from the post, delegates all the important decisions to him even the results are not satisfactory. Valerio uses Luke’s first face of power by firing employees, he thinks that the problems always lies with the employees and not the top management, he thinks that he can fire the employees giving any excuse, here the power is used unethically and without responsibility, he does not consider reasoning his actions and decisions. Mr. Salvatore has referent power over his son Valerio, who wants to be like him. The leadership style used by Salvatore is autocratic style. He does not consider the suggestions of his employees. Mateo Molinari has not created his base of power until now. Michela Nanni effectively uses her power as the Advisor of the organization. The Administrative Manager has also created her base of power, which is always in conflict with that of the General Manager.

Protagonists

The structural frame basically emphasizes on the architecture of the organization. It includes goals, structure, technology, roles and relationships, how all these factors are coordinated.  In the structural frame the organizational chart needs to be considered, the responsibilities, division of labor, rules, policies, procedures, systems and hierarchies that coordinate the various activities of the organization in to one effort. The main difficulties that the organizations face is designing, maintaining and aligning structural forms with the present situations, tasks, technology, the environment and the goals. If the structure does not line up in the correct way, problem situations occur. The structure of the organization needs to be as per the goals of the organization (Bolman and Deal 2017).

The two basic problems that arises due to the structure of an organizational structural designs are, differentiation and integration, differentiation is related to the way task is allocated, the managers needs to allocate task based on the skills and capability of the employees, integration is, how the tasks allocated can be coordinated. Division of labor, or allocating tasks, is the keystone of the structure. The problem arises when the structure does not fit in the situation (Karkoulian and Osman 2014).

Structural frame can be used here because the organization operates in the area of motorway maintenance that requires the employees to be of the technical background mostly who are well aware of technical aspects that are used in the various tasks and activities. The general Manager of Ecogest is not from the technical background, which makes it difficult for him to give effective and the most appropriate solutions to the problems that are faced by the employees. In addition, he is not effective and efficient in decision making which is a very essential part of his responsibilities and duties as a General Manager of the Organization. There is too much centralization of the authority in the organization. The division of labor is not proper here, the position that the General Manager is holding is not at all appropriate for him. It can be said that here differentiation problem can be seen, the CEO of Ecogest has appointed a person as a General Manager who is not efficient and yet holding a position which requires efficient managerial skills (Bolman and Deal 2017).

The managers and the leaders who approach change from human resource frame focus on people.  The human resource frame sees the organization as an extended family, it considers individual needs, feelings, skills and limitations. The main assumptions of the human resource frame are, the purpose of the organizations is to fulfill the human needs, both the organization and the people need each other. The need of people are, career, salaries and opportunities, when the coordination between the organization and the people is poor one or both of them suffer, where there is coordination between the organization and the people, then it is beneficial for both. The human resource framework is very much influenced by psychology (Bolman and Deal 2017).

The employees in Ecogest are very unsatisfied by their General Manager. They used to criticize his decisions. There seems to be very less coordination between the CEO and the employees, the CEO does not consider listening to his employees and the problem they are facing because of untimely delivery of the solutions and poor decision making of the General Manager. The employees are less satisfied and not motivated, the CEO does not take initiative to motivate the employees rather he uses autocratic style and fires the employees by giving any reason, there is always conflict between the Administrative Manger and the General Manager. After analyzing of the problem through the human resource frame, it is very clear that neither the employees nor the Managers are benefitted by the present organizational behavior. The leader of the organization should be such that the employees can easily be motivated and influenced by his charisma and leadership style, skills, but here the skills of the General manager is being doubted. According to the need hierarchy theory of Abraham Maslow, the safety and the affiliation needs of the employees does not seem to be fulfilled. The employees do not feel secure about their jobs because the CEO fires the employees for any reason, it is his perception that the problem is the employees, whenever the employees are not motivated and have too much complaints, they usually leave the organization or problems like absenteeism occurs a lot. All these problems clearly state that the affiliation needs of the employees are not fulfilled because they lack the sense of belongingness towards the organization. The General manger on the other hand fails to influence the employees, the solutions that he provides, does not seem effective to the employees and they criticize it (Giltinane 2013).

Case Background

The emphasis of the symbolic frame is on the use of belief and faith on the organizational culture. Cultures and symbols give meaning and direction to create a collective identity.

The story behind, it explains, expresses, legitimize and maintains solidarity and cohesion, myths originate with the start of any organization, vision and the values of the organization is set from the very beginning of the organization.

Symbolic roles of cultural heroes, living logos, human icons in an organization or social establishment

Culture is the pattern the group learned, how the basic assumptions in the organization are shared.

The symbolic frame can be used to see the problem because the culture of the organization is not of an ideal organization, the organization has a whole has lost its core values, the symbolic hero here is Salvatore. His son does not follow his values, the culture of the organization has changed its meaning over time.  Valerio was very passionate about work, his son is different from him his belief is that the employees are always wrong ( Antonakis and House 2013).

There are too many issues with the organization, the General Manager of Ecogest does not give effective solutions to the employees on time because he is not from technical background. In addition, he lacks the decision-making skills, which is again because he lacks sufficient knowledge and expertise in technical aspects of the situations for which is responsible to take effective decisions. The CEO even after knowing that the decisions taken by the General Manager are ineffective, he is unable to provide quick and immediate solutions to the problem of the employees, does not remove him from the power. The reason behind this is very simple that the General Manager was hired by him and he does not want o prove himself wrong (Champoux 2016).

The employees criticize the manager, but the CEO thinks that it is the fault of the employees, this makes the employees feel that they are not secure in the organization because the CEO does not think twice while firing the employees for any reason. This has led to employee turnover and absenteeism, also the employees have lost the motivation to work as a result the customers have started complaining, they have started losing faith on the organization, the legacy of the organization established and maintained by Valerio is at danger. The Administrative Manager Cenzia Guerrani and the General Manager are always in conflict, since they have almost similar power and authority, Cenzai is quite good at taking decisions but the General Manager often contradicts her decisions. The Advisor and the Matteo does not exercise their power much (Karkoulian and Osman 2014).

Ecogest, is an organization that is working with a very good mission to make green motorway nationwide. The company needs to focus a lot in its organizational behavior, the CEO should look carefully in to the problems faced by the employees because of the inefficiency of the General Manager who does not provide the solutions to the employee on time and also has poor decision making skills. The CEO, Salvatore should consider appointing a different person as the General Manager of the Organization, who has a technical background and would be able to give the right solutions to the problems of the employees without taking much time and also be good at taking important decisions. Decision-making is a quality that comes with experience, instead of hiring any new General Manger he can consider choosing Cenzia, the Administrative Manager as the new General Manager. She has adequate experience because she has been working in the organization for a very long period. She would be able to perform this job properly, or the CEO to improve his skills and focus on decision-making should confront the General Manager. He can be provided proper development programs that would help his decision-making skills better than before. The CEO should try to focus and evaluate the present situation of the organization that why he thinks that it the employees who are wrong. The CEO should conduct sessions with its employees and address their problems and grievances. Instead of finding faults in them, the CEO can help the employees improve better. For every organization, it is very important that the employees are motivated so, the CEO should always try to motivate the employees. He should also advice the other important members to exercise their power and authorities.  

Possible frames under consideration

The structure of the organization should be changed, division of labor should be very properly done, and it should not be that a technical post is given to a man who is not efficient enough to hold it. The people holding the important positions should not be politically motivated, political motivation often leads to misuse of the power and authority, the CEO should not misuse his position by being bias to a particular employee. It is also his duty to properly delegate the authorities and duties to the managers and there should not be any conflict in their authorities. Michela Nanni and Matteo should also exercise their power, Michela should be given equal opportunity to give her suggestions.

The leadership style that is followed by the CEO is not at all proper, he should follow democratic leadership style where the employees are also given opportunity to participate in the operations related decision making, give their views. An organization with inappropriate leadership style does not have a proper organization culture. The managers and the CEO should focus on finding the reasons behind the dissatisfaction and the complaints of the customers, and find ways to build up an organization that focuses on fulfilling the needs of not only its customers and its employees. Conflicts should be reduced between the mangers and they should work as a team, whenever there is a conflict it should be immediately sorted out with proper communication methods. The CEO of the organization should try not to be rude towards his employees when he is under pressure. He should know how to perform and take crucial decisions and not take hasty decisions under pressure. He should focus on his anger issues and try to manage it because it causes problems for the employees of the organization and is one of the reasons of employee turnover and absenteeism.

Conclusion

It can be concluded from the case study that the Organization has serious problems in its organizational behavior and culture. Ecogest, is an organization that is working with a very good mission to make green motorway nationwide. The company needs to focus a lot in its organizational behavior. It has been seen that the company problems are in its division of labor. There is too much of Centralization can be seen in the structure of the organization. Ethical use of Power is not seen here because the General Manager of the company is not efficient to hold the position but still the organization has not considered removing him from the post, rather than the employees of the company are removed for even minor reasons. General Manager fails to give solutions to the problems to the employees, which affects the production and hence ultimately the customers are unsatisfied, customers’ complaints have increased, there is increased number of employee turnover and absentees. The Administrative Manager is always in conflict with the General Manager, who does not have technical background. The company in order to resolve all these problems needs to revise the structure of its organization. 

Part B: Political Frame

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