The Case Study is 'No Name' Aircraft - open this link (Case Study for Assessment Tasks - see above) to read the Case Study. you will have to give their Airline a name.
Case study: No Name Aircraft
CEO Adam O'Meara of No Name Aircraft has become increasingly concerned about organisational profits. He's worried that a company takeover is imminent. O'Meara realises he needs to maximise shareholders return on investment and obtain a high share price or this international company may be at risk and, of course, this means his job could well be on the line. No Name operates out of Australia and has subsidiaries in three countries China, Singapore and Vietnam. No Name build and sell aircraft to 50 countries around the world. Numerous parts of the aircraft are produced in China and Vietnam and most of the design engineers operate out of Singapore. Aircraft are assembled in Singapore and also Australia.
No Name home country (Australian) teams are not working well and there is a communication breakdown between integrated teams and across teams and management. The culture at No Name has developed into one that is very negative and workers have adopted the mantra near enough is good enough. Staff give the impression they would resist any attempt to make change. This kind of culture extends to communications between Headquarters and the subsidiaries.
One of the home country management teams has identified quality as one of the major problems at No Name and this is directly related to parts from China and Vietnam. Aircraft require small to large modifications even after they have been delivered to customers. Customers, both government and non-government, are complaining about the lack of quality, once very important to No Name. A number of stakeholders have sent O'Meara letters warning that unless quality is improved within six months, they will withhold partial payments and some are quoting percentages certain customers say they will withhold 100 per cent and others are quoting 50 per cent.
One supervisor at No Name is responsible for a sub-design team of 9 people, another is responsible for 11 people who are the wire harness assembly team, and another team of 6 sets the harnesses in place in the aircraft. These are just three of over 50 teams that make up the assembly of an aircraft. There is no integration across the teams. Ben Brown, a member of the wire harness assembly team, notes. the other teams make it really difficult for us to complete our job. We all get in each other's way. There's a lot of resentment.
The teams work to specifications for their area only, and working relationships within and across teams are suffering. The communications both laterally and horizontally are compromised and staff members are complaining about not receiving adequate instructions. Adam O'Meara is worried so he has called upon an internal group of executives to advise him.
Line managers in Australia are responsible for communications between Headquarters and the subsidiaries. However, O'Meara is constantly receiving emails from China, Singapore and Vietnam seeking clarification on numerous points.
Diversity management at No Name is confined to a simple policy that says everyone in the organisation needs to be respectful of race, age, ethnicity, gender, sexual orientation, physical abilities, religious beliefs and other philosophies.
There are issues at No Name related to embracing the rich value of working with diverse people. Firstly, at headquarters there is an intolerance towards working with employees from different generations. Senior staff are intolerant of working with apprentices and working relationships are strained. Secondly, there is a lack of recruitment of people with disabilities in China. Managers are actively ignoring job applications of people with disabilities, even when their skills are above and beyond other candidates. O'Meara fears repercussions of this recruitment discrimination in the form of legal action from rejected candidates with a disability.
Human Resources (HR) does not have a clear set of practices to help employees understand each other. Clearly, the interactions amongst staff are influenced by the perceptions of each other but HR does not appear to have considered the importance of how people perceive each other. At No Name, employees need to better understand each other, to have effective communication and to value the diversity that exists throughout the company.
Diversity needs to provide practices that involve an appreciation of other cultures and ways of knowing more about people within headquarters, each subsidiary and across the subsidiaries. Practices have to ensure there is no organisational discrimination so that people can work together in harmony. No Name needs to realise that managing diversity can create a competitive advantage and be of benefit to a number of different areas of the organisation.
International performance management
There are numerous performance management issues across No Name. International performance is closely connected to international performance appraisals but these are lacking at No Name. Performance reviews are conducted by HR in Australia but there are no performance reviews conducted at any of the subsidiaries. There is no formal performance appraisal process for expatriates.
Headquarters takes a very ad hoc approach and does not take into consideration the economic factors that impact on business targets. One manager, Frank Collins was heard to say we are under so much pressure in Australia because of high costs and even higher expectations.
At headquarters decisions are made that affect each of the subsidiaries. For instance, headquarters will issue a decision and make an order for Singapore to produce a certain quota of parts only to find out there is a surplus of the same parts in Australia. Clearly, the implementation of decisions for the subsidiaries result in conflicting performance outcomes.
Fundamentally, there is no policy that underpins performance management at No Name. There are no clear measures. O'Meara told the HR Manager It's time we had better performance measures. we need to measure to manage. Someone will need to travel to China, Singapore and Vietnam and make sure we have consistency. of course, we need to take into consideration culture and local practices.
Training and development
As a function of HR, training and development should be concerned with every aspect of the organisationâ€™s activities. Expatriate training for those leaving Australia to work in China, Singapore or Vietnam is limited to half a day. HR refers staff to their online resources and assumes that every person has the same needs when they agree to work in another country.
There are no feedback avenues for employees to comment on the effectiveness of the expatriate training.
One employee, a mechanical engineer Alice Morgan, previously commented about her move to Singapore there is no training available to help you integrate into your new surroundings once you arrive. People do things differently here and it took me a long time to get used to with no training
The level of performance at No Name indicates there''s a very strong rationale for focusing more on training and development across the organisation.
There is no systematic workforce planning and management development programs at No Name. Management development programs within an organisation work to internally identify and recruit potential managers, and develop their knowledge and skills through career development plans to meet organisational needs. This ensures a clear and effective succession plan for all key management roles. Employees are unaware of their career prospects with the company as career development plans are not utilised. Senior management do not develop junior employees to take over their role for fear of being sidelined for promotion. This lack of professional development has meant that a number of key employees earmarked for promotion have been poached by other companies.
One of the key aspects of management is human resource management (HRM) and it deals with workforce management. Managing human beings is exceptionally difficult and unlike managing other aspects of business. This is primarily because human beings are not only driven by pure rationale but also their emotions, values and beliefs and hence it is imperative that the employer must cater to these also. While the key responsibility of the department is to recruit employees but an equally significant function is to retain them by facilitating career growth, training and periodic performance appraisal (Savage, 2010). Besides, disciplinary action may also be required to be initiated against an employee if case he/she is found to be in violation with the established guidelines. Further, in the wake of increasing globalization of organisations, the task at hand has become even more complex for the HR professionals and hence, organisations are facing various issues whereby retention of employees, communication and loyalty have become key issues (Collins, 2009).
Diversity management and culture
Diversity may be defined as the state where the constituent individuals tend to belong to different cultures and may have significantly different belief & value system but are expected to come together and achieve a common objection under the umbrella of organisational culture. With the increase in globalisation, there is increased mobility of human resources which has resulted in diversity at workface. There are companies which have leveraged diversity as a competitive advantage and have been really successful with stellar results (Fottler, Khatri & Savage, 2009).
However, there are companies like ‘No Name; which have failed to leverage diversity as there is a clear policy lacuna which has led to diversity becoming a nightmare for the organisation. This is apparent from the fact that the company lacks a clear policy to deal with diversity and how it must be embraced in the organisational setting. In such a background, there is a greater likelihood that employees are not appreciative but rather apprehensive of diversity and tend to not go along well with co-workers coming from a diverse cultural background. However, if the company tends to frame a policy on diversity which displays zero tolerance to any discrimination and simultaneously provides employees with require training, then diversity could lead to better team performance and better growth opportunities both personally as well as professionally (Heneman, 2009).
Prudent diversity management practices enhance the ability of the organisation to assimilate employees from different backgrounds under a single organisational culture. This could also include people with disabilities thus providing empowerment to the people who are otherwise neglected and looked down as being non-productive. Besides, with regards to dealing with people with disabilities, it is imperative that the relevant legislations need to be complied with. This seems lacking especially in the China based subsidiary of the company. Instead of providing them with a facilitating environment which could enable them to perform their duties, there is clear discrimination against such vulnerable people when hiring is done. There is high risk of the company facing legal action which besides punitive action would also lead to a reputational loss that would have adverse impact on the company’s brand, thereby enhancing the overall problems (Rubinfeld & Hemingway, 2009).
A diverse workforce could prove to an invaluable asset for the company if it managed prudently. This is primarily because employees coming from diverse backgrounds and experiences tend to bring in a host of perspectives in which a given issue may be evaluated. The presentation of a wide array of perspectives allows brainstorming and improves decision making thus bringing in tangible gains for the concerned organisation. The given company’s performance can be significantly enhanced if the current organisational diversity is managed skilfully as it would lead to greater coordination between the employees at parent company with those working at the subsidiary in China. Besides, it would realistically lead to higher rate of innovation and greater teamwork productivity which would lead to improvement of prospects of the company.
Culture essentially refers to sum total of customs, beliefs and values that is associated with a given individual and is essentially the result of different backgrounds from which employees come. This difference in culture is one of the prime contributors to diversity witnessed at the workplace. Not only individual employees but even organisations tend to have their respective culture which tends to endorse certain practices and values. The organisational culture typically develops over time based on the conduct of the firm with the various stakeholders. The manner in which work is performed and the underlying ethics of these activities are undertaken tends to have a significant impact of employees and their overall productivity. As a result, it may be correct to infer that organisational success is closely related to organisational culture (Fottler, Khatri & Savage, 2010).
In case of “No Name” aircrafts, a negative culture seems to have been established which is having an adverse impact on the performance of the employees. The negative work culture tends to lower the morale of the employees and hampers their motivation as outlined by the Herzberg hygiene theory of motivation. In wake of lower motivation, their commitment to the organisational and their work would be dampened, the net result of which would be visible in the form of dwindling customer satisfaction. This reckless attitude is proving to be a nemesis for the company and could potentially bring about the downfall of the same (Collins, 2009).
For example, the subsidiary is responsible for the aircraft assembly which is carried out in a substandard manner thus resulting in low quality final product. The net result is that the customers have to incur incremental cost in order to ensure that a new aircraft is in line with the requisite standards. On expected line, this is adversely impacting the company’s reputation besides lowering customer loyalty driven by low satisfaction levels. The high level of dissatisfaction can be adjudged from the fact that these customers have communicated to the manager that if the aircraft quality does not improve going forward, then they would have to withhold the payments. In case of withholding of payments, the company could face significant cash crunch and also if the customers refuse to pay, then the losses could be sizable. Further, this incident may act as a triggering point for loss of others customers also and hence need to be avoided (Vaseghi, 2007).
The current organisational culture existing in the organisation is quite negative which is paving way for negative team dynamics amongst the employees. The underlying unity is considerably lacking and it seems that instead of aiding each other, they are creating obstructions for each other. This is hampering the employees from moving towards the attainment of organisational objectives. There is lack of inter-departmental harmony which is adversely impacting the aircraft quality and assembly standards. There is also lack of the established communication channels which is the reason that the employees are addressing letters to the manager so as to put forward their concerns (Pinson, 2008). It is apparent that there is the urgent need of an enabling organisational culture which could bind and unite the employees together and motivate them to achieve the organisational objectives with requisite guidance and support from the management and supervisors (Rubinfeld, Arthur., & Hemingway, 2009).
International Performance Management, Training and Development
One of the key processes in HRM is performance management which is essentially a continuous evaluation process indicating how well a particular employee is performing. For a company like the one given here, then the performance management systems need to be international and cover the employees based out of subsidiaries as well. The performance appraisal for the subsidiaries should not be carried out from the parent but must be conducted by the concerned employee based at the subsidiary who is well adept with the existing situation and therefore in a position to offer a critical evaluation in an objective manner (Savage, 2010).
In the case of the given company, confusion arises as performance management as this process is not decentralised and carried out from the parent firm only and made applicable to the various subsidiary firms. This, however, is not a prudent practice as the underlying capacities of subsidiaries and the conditions that exist there is not taken into consideration and the performance standards are not designed taking these into frame. The net result is that the performance appraisal tends to become a gimmick and leads to increased level of dissatisfaction amongst the employees especially those employed in subsidiary firms (Abrams, 2013).
The performance management system tends to vary in accordance with the environment and the business. Since the performance management system has to be do with the workforce or employees, hence consideration must be paid to underlying cultural background of employees along with organisational culture. This is particularly significant when the parent company has subsidiaries that are located in foreign nations. In order to ensure that these are successful in those locations, it is imperative that requisite customization should be carried out so that the system tends to fit the respective subsidiary. Further, the performance management system should enhance the overall of the employees by relying on constructive criticism (Cropanzano, 2008).
Training and development
A critical aspect of HRM is providing training and development to the employees. This function is specially significant in the dynamic business environment where the employees regularly need to update their skills in line with the expectations of the job. In this endeavour, it is critical that the organisation must make requisite investments and provisions for the professional development of their employees which not only enhances employee loyalty but also improves productivity. Also, it allows the employees to carry out their entrusted tasks and job responsibilities while meeting the desired performance standards. Failure to provide the requisite training in time may result in loss of competitive edge by the company which in the long term could prove disastrous especially at a time when business environment is highly dynamic.
However, for the given company, training was approached with a negative attitude as it lead to insecurity because higher ability of employees could potentially lead to a hostile takeover. As a result, no stimulus was present so as to motivate the employees to continuously improve their skill sets so as to maintain their relevance. Further, in the long term with such a policy and mindset in place, no organisation can sustain for long (Sahlman, 2008).
Considering that the given company has international presence, it is pivotal to provide requisite cultural training when the employees go to foreign locations to serve. A specialised training in this regard is the expatriate training. This training goes a long way in enhancing the overall performance of employees in foreign offices (Heneman, 2008). However, in the case of given company, this clearly seems lacking as the employees themselves are complaining that on account of lack of orientation training, they are not able to perform to their optimum level in the foreign location.
Further, in designing of the expatriate training program, no platform exists whereby it is possible to solicit the opinion of the trainees as to what do they consider pivotal in the training. As there is no platform to seek suggestions from employees, it is quite disrespecting for the trainees as it indicates that there is no respect for their opinion. Besides, the training program so conducted would not be efficient. Hence, it is suggested that proper training must be given to employees based on their perceived needs and regular opinion and feedback should be collected from employees so as to enhance the overall performance and efficiency of the training process (Folger & Cropanzano, 2008).
Conclusion and recommendations
It may be concluded from the above discussion that human resource management is critical for every company. If the company is able to perform HRM functions with efficiency, it results in prudent leveraging of the employees as a key business asset (Sastry & Pandey, 2010). However, this is clearly not the case with the given aircraft company which clearly has a very poor performance in this regard. The company has failed to embrace diversity which has resulting in non-integration of workforce. One of the key reasons in this regard is policy lacuna which needs to be overcome by ensuring benchmark of the policy to the best in the business. Also, relevant training must be provided to all employees at various levels so that they understand diversity and are more open to this critical notion.
It is apparent that the current organisational culture is a inhibitor of employee performance and there is an urgent need to alter the same so that a more facilitating culture can be made available to the employees. This would require wide organisational changes which need to commence from the very top management. Currently it seems to be lacking a prudent strategy which could bring out the company out of this crisis and the same need to be formulated and communicated to the employees so that they could accordingly prepare themselves and coordinate their efforts (Greenberger & Heneman, 2008)
Also, there is a strong case for the improvement of the expatriate training design and infrastructure which needs to be increasingly trainee driven. In this regard, establishment of open communication channels need to exist (Pandey, 2010). Besides, the performance management system also needs to be decentralized so as to account for variation in conditions of subsidiaries which tend to have a significant influence on the actual output which can be achieved. Further, the organisational culture also needs to be improved.
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