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Performance Management Of Organization

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Question:

Outline and Analyse the Problems Confronting CCC in the Short and Long term and offer Recommendations for their Resolution.
 
 

Answer:

Introduction:

According to Van Dooren,  Bouckaert and Halligan (2015) the process through which any organization systematically and strategically sets some objectives and manages their resources to reach out to the objectives is known as performance management system of the organization (PMO). Through this system the organization also keeps on reviewing the existing system to find out any in-discrepancy within the system that might lead to the collapse of the same. The success of any organization lies in the ways in which it can adopt changes within itself to match up with the external environment and sustain in the business (Hvidman and Andersen 2013). It has been observed that introducing changes in the organization has neither been simple nor can be done overnight. It requires time and is often associated with hindrances posed by the employees and clients in their acceptability of the situation. Changes within an organization can take place in various ways namely, cultural change, technological and even administrative changes. The way in which the organization manages the change depends on the perspective from which the changes have been made.

This report takes into consideration an organization named Cox’s Container Company. This organization brought about a huge changes in their administrative department  through PMOs by implementing central administrative system. At the initial level the report gives a brief idea about the company. Then the report moves on focusing the problems faced by the chosen organization. The problems have been categorized into short and long term issues. After identification of the issues faced by Cox Container Company (CCC), this report shifts its focus on the organizational behavioural theories that have been violated. This report then tries to provide some recommendations which if followed might help CCC to settle internal disputes and manage to bring itself back into a profitable line of business.

Background of the Company:

During the year 1946, Harold Cox established his business which involves manufacturing containers of different shapes, sizes and materials. His company came to be known as Cox Container Company or CCC (www.coxcontainer.com 2017). The business has been looked after by the members of the Cox family who occupies the positions in the higher managerial level of the company. The product range varies from large metal containers for shipping and transportation to medium and small sized plastic containers. Since its inception, being first of a kind company, this organization has experienced a steady growth in their business by capturing both national and international markets. The Cox family having a deep rooted connection with their society provides employment mostly to the ethnic minority group of the region thereby helping them to gain financial and political stability in the economy (Corbett 1994). Recently, CCC has reported to face problems in some of their business area. The crux of this report is to identify those issues and trying to solve through recommendation.

 

Problems of Cox’s Container Company:

The Cox Company after its establishment in the year 1946 faced negligible hindrance in its mode of operation. It is only in recent times that it has been facing several issues in its mode of operation. The hindrances that the company has been facing in regular terms for the last 5 years can be broadly categorized under two sub-headings namely, the long term and the short term.

Short Run Problems:

The short-run problems are those adverse impacts that can be reduced within a short span of time by implementing proper methods and policies. They usually do not create deep-rooted impact on the company (Champoux 2016). Two short run problems that CCC is facing are as follows:

Trust factor: It has already been stated that the company has been engaged in providing job opportunity to the ethnic minority group. As Harold Cox, the founder of the company declared his retirement and handed over the charge to the general manager Erica Wilson, the employees started having problems and trust issues. Erica Wilson tried to restructure the functioning of the company through systematic approach of centralization starting with the recruitment of managerial specialists for different segments of the organization. This sudden action of recruiting new managerial experts in different domain to guide and control the organization gave the senior worker a sense of de-motivation. They felt insulted but kept quiet. However, their motive was identified by the unexpected behaviour of Abdul Aziz, the senior level production manager of the company.

Training issues: The Cox Container Company has been into business for several decades but there has been clear reflection of paucity of skills amongst the employees. Hence, when a new system was introduced they felt threatened and unable to cope up with the newer system. This inadequacy of managerial skills has been reflected in the behaviour of Abdul Aziz. According to his perspective maintain and securing the on-floor production is both a sufficient and necessary part of his job. His behaviour also portrayed that he do not have any interest in the changes in both the external and internal environment of the company.

 

Long Run Problems:

The long run problems are those which cannot be eradicated easily and are interconnected in such a way that changes in one component creates a chain reaction within the organization (Champoux 2016).

Problem in Centralization: Under the rule of Harold Cox, the company operated with high degree of autonomy in each of the segment, especially in the production department. There has been lack of hierarchical structure in the management and financial department. With the introduction of the new system, Wilson tries to hire specialists who can look after the different segments and thereby the autonomy has been hampered. Through the new system, each department is going to have an managerial executive who is going to be responsible for reporting the happenings of the department to the higher order central authority. This system hampered the senior level employees’ ego. They felt that they have been questioned upon their reliability and authenticity.

All the three factors described above were the internal issues that CCC has been facing recently. On other hand, the external issues that the company have been facing recently have been discussed below.

Entry of new market: The case study suggests that the company has been facing degradation in the level of profit over the last 5 years. This plummet in the level of profit has not been due to rise in the production cost but due to the increased level of competition in the economy. Earlier during the initial years, Cox Container Company did not face any competition from other firms. With the advancement of technology and increase in the level of trade, there has been an increasing in demand for movement of goods and commodities and thereby many new companies have entered in the market to reap the benefit of the growing demand. However, this has created problem for CCC.

Recommendations for Solving the Issues:

Once the issues faced by CCC have been identified, the next step that any company is going to take is to find a suitable ways in which these issues can be resolved by making changes in the organizational behaviour. Identifying the mismatch within an organization can be the first step in introduction of changes. The mismatch can occur as a result of negligence of the worker, faulty management system, ignorance about the external environment by the employees, lack of integration within the system and so on.

Here by using Leavitt’s Diamond Model the internal factors that triggered the necessity to implement the changes has been observed (Kortina 2016).

Figure 1: Leavitt's Diamond Model

Source: Created by the Author

By following this Diamond model it can be identified that the problems triggered from the structural side. Initially CCC having autonomous sub-system within the entire system is now facing issues with adaptation of the centrally administered system. The people belonging to the organization that is the employees are unable to adapt with the circumstances neither are they able to protest against it. Hence, dissatisfaction among them is taking a toll in the task they perform and thereby reducing productivity while increasing internal strife.

In this section of the report initially the theory of organizational behaviour has been discussed. In the following parts some recommendations have been provided which might help CCC in improving their present scenario. Problem solving techniques requires implementing organizational behaviour within the institute (Miner 2015). The organizational behaviour is the systematic way of studying the human behaviour and finding out ways in which the human beings behave within an organization and the ways in which inter organization reacts to the issues. As opined by Hellriegal and Slocum the success of any organization in the long term depends on proficiency of the employees and leaders within the organization (Curtley and Slocum 2016). The company having competitive advantage provides an effective organizational behaviour within any company. The organizational behaviour has been broadly categorised under three types namely, micro level, meso-level and macro level behaviour (Naylor, Pritchard and Ilgen 2013). The micro level organization studies the ways in which an individual interacts within the organization. In the given case study, there is existence of micro-level organizational issues. The meso-level organization deals with the ways in which different work groups within the organization interacts and identifies the glitches faced by them in the interaction. After going through the organizational behaviour theory, the ways in which people behave and the reason behind their unusual behaviour can be understood (Pinder 2014).

Organizational Behaviour Theory:

Recently, it has been observed that the organizations have been implementing havoc changes within their internal environment in order to adapt with the pressure coming from outside. As a result of globalization, there has been a huge change in the technology used, the political pattern within and outside the organization, increase in the level of competition and regulatory condition.

 


The theories relating to organizational behaviour can be broadly categorised under few categories namely, theories of intelligence, motivation, personality, perception, behaviour and attitudes. Since, it has been observed that in CCC the issues mostly arises from people’s side, hence the motivational theory is going to be appropriate for discussion.

Maslows Heirarchy of Needs: Abraham Maslow proposed this famous theory of hierarchy of needs. According to his theory, people’s level of motivation moves through several stages. The stages identified by Maslow are formed into hierarchical level starting from psychological need at the base. The other stages are safety, belonging, esteem and self-actualization (Cherry 2015). The physiological needs are the things without which people cannot survive. These are food, water, breathing and sleep. Safety needs is another requirement that people must have so that they have mental stability. Safety can be ensured by providing personal, financial, health security. The other level includes feelings of belongingness and attachment. Self-esteem plays a crucial role in motivating people in their workplace (Wilson 2013).

Implication of Theory into CCC:

The employees of CCC lacks in self-esteem and their egos have been hurt. Their sentiments have been tampered by implementing the new system. They feel that their financial safety is at threat. According to the statement of Abdul Aziz it seems that he and the other employees felt that the newly introduced central administrative system have been busy trying to prove that the old system is full of flaws and their view is correct in managing and bringing in synchronization within the organization. He felt that since he has been able to handle the production process without any defect and deliver all the consignment within time, so the working system and culture that he follows is impeccable. In this case study Aziz can be considered as the spokesperson voicing out the grievance of the entire employees. From the theory of Maslow, it can be clearly understood that the employees have been stuck at the base level of the hierarchical need. Few employees have been able to reach the second hierarchy but none was could reach out to the third stage and hence this outburst of grievance took place.

 


Hence, under this situation, in order to bring back the confidence of the people on the company and ensure the fact that they are still an asset of the company few changes can be taken up on the company’s part. The possible changes that might prove to be helpful in regaining the confidence back are given below:

Improving Communication: The approach of the new managerial specialists should be such that the old employees can relate themselves with the higher officials.

Spreading awareness: The old employees are indeed dedicated but ignorance in their understanding in the external environment causes all the problems. By making them aware of the ways in which competition has increased and the need for having a centralized system might have solved the problem.

Skill Development: CCC can provide incentive to those employees who are willing to take up the necessary training in skill development.

Administrative participation: The employees can be made to believe that they are part of the system by allowing them to take participation in administrative purpose. The company can take in their opinion and discuss with them any issues prior to directly taking any decision.

Conclusion:

After going through the case study and trying to understand the entire scenario it can be said that like any other organization Cox Container Company has started facing problems in their organization. The company has been able to maintain its position for so long since 1946. Four factors have been identified as the root of the chaotic situation that the company has been facing in the past 5 years. Three of them being internal factor has been justified using motivational theory as proposed by Maslow. The fourth factor being external to the company cannot be reduced by any theory and has to be dealt with by improving the efficiency and productive capacity of the company through the newly launched centralized system. This system has been facing several hurdles in its implementation but can surely be removed if few such recommendations that have been mentioned can be followed.

 

 

References:

Champoux, J.E., 2016. Organizational behavior: Integrating individuals, groups, and organizations. Routledge.

Cherry, K., 2015. Hierarchy of needs. The Five Levels of Maslow's Hierarchy of Needs. About. com Guide.↑| Link.

Corbett, J.M., 1994. Critical cases in organisational behaviour. Macmillan.

Cortina, J.M., 2016. Defining and operationalizing theory. Journal of Organizational Behavior, 37(8), pp.1142-1149.

Curley, A. and Slocum, J., 2016. Organizing a Startup Business According to Differentiation Strategy and Virtual Design.

Exceeding Expectations. (2017). [online] Coxcontainer.com. Available at: https://www.coxcontainer.com/ [Accessed 21 Feb. 2017].

Hvidman, U. and Andersen, S.C., 2013. The impact of performance management in public and private organizations. Journal of Public Administration Research and Theory, p.mut019.

Miner, J.B., 2015. Organizational behavior 1: Essential theories of motivation and leadership. Routledge.

Naylor, J.C., Pritchard, R.D. and Ilgen, D.R., 2013. A theory of behavior in organizations. Academic Press.

Pinder, C.C., 2014. Work motivation in organizational behavior. Psychology Press.

Van Dooren, W., Bouckaert, G. and Halligan, J., 2015. Performance management in the public sector. Routledge.

Wilson, F.M., 2013. Organizational behaviour and work: a critical introduction. Oxford University Press.

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