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External Environment Analysis


Discuss about the Transformational Vs Transactional Leadership Theories.

The company under study is B.R. Richardson Timber Production Corporation founded by Ben Richardson. This is a small company situated in Papoose and is comprised of four small companies. Three of them are situated in Papoose and are operating in logging operation, lumber mill and laminating plant industry. The study is on the lamination mill of the company that is currently facing some issues. The organization is evidencing decreased productivity due to the lack of motivation and morale breakdown of its employees. Company’s industrial relations officer Mr. Richard Bowman and the president B.R. Richardson is concerned about the situation and seeks help in organizational development for improving production. However, the president hesitates to spend too much money for the cause.

The aim of the report is to analyse the current situation of the company and identify the issues affecting the organizational performance and employees’ motivation. The report will present an in-depth analysis of the current situation of B.R. Richardson with the help of the theories and model of management. The second part of the report reflects the prescribed changes required in relation with the identified issues for development of the situation. The final part prescribes the actions for implementing the changes in the organizational setting.

The external environment of the company is a simple one and moderately uncertain. The overall business is economically stable and running in profit. The lamination plant is reflecting a standard revenue generation since its initiation days. The organization is comprised of four small companies as mentioned earlier. Environment in the lamination plant is excessively noisy due to the machineries such as saw, conveyors and hoists specially planer. The facility is built in a cargo design that makes the atmosphere hot and hard to work in. Moreover, the lack the workplace safety policy and accidents frequently occur due to this.

B.R. Richardson is a family owned corporation with four dispersed companies out of which three are in Papoose. Forest Service and BLM is the primary supplier of timber to the company (Datta, Iskandar-Datta & Singh, 2013). Only 30% of the lumber used in Lamination Company comes from Richardson mill and the remaining 70% is collected from the Orgeon companies like Bohemia, Weyerhaeuser, Georgia-Pacific and few more.

Functional structure is observable in the lamination plant. A clear ignorance of innovative management is visible in the plant that is resulting into significant fall in performance management. This ignorance resulted in dysfunction of the management that is now posing negative impact on the operations. The primary reason of the structure being weak is the lack of technological integration due to short budget set by the president and the lack of teamwork. This is a failure of the management to make the employees work as a team, which could have proposed innovative ideas required for the improvement in operation.

Organizational Analysis

A sure negligence of investing on the technological up-gradation is visible. The communication line in the company is fragmented and lacking adequacy at all levels.

Business strategy followed by the company is cost control strategy that refrains from incurring small innovation, HR Development. The strategy also feels reluctant in implementing proper health and safety standards around the work place as evidenced from the survey.

Human resource department is completely absent in the lamination plant. The higher authority to track the employees’ performance level utilizes no performance management tool. The authority holds old school philosophy in case of employee motivation and compensation benefits, rewards and recognition. Only few top management were select to receive bonus from only if it was absolute necessary. Introduction of safety related incentives took place by not initiated. There is no visible consideration for the contribution of the committed and loyal employees of the company. The authority fails to see through for creating and retaining of the employees (Armstrong & Taylor, 2014).

The case evidences a poor organizational culture and high level of dissatisfaction, unrest and frustration among its employees. The management is production oriented and forces the employees to do overtime during the pick seasons. No humanitarian value is given in the workplace (Alvesson, 2012).

Goal – No clear evidence of goal is present as evidenced from the case study.

Leadership – Lack of leadership skill is present in the organization and lack of coordination between manager and supervisor is present in the organization. Discrimination among the employees are also visible from the case where some are compensated of their absent without clear reason (Northouse, 2015). Moreover, there is no proper guideline for completion the task of the absent employee as some other is command from some other specialization to fill the required position. This also reflects the poor task structure and no recognition is give for job well done (Giltinane, 2013).

The above-mentioned information identifies several issues prevailing in the organization that requires immediate attention. They are as follows:

  • Absence of Human Resource Department
  • The company lacks clear mission and vision statement and strategic goals
  • Lack of communication is another serious issue evidenced in the organization. The problem lies in every level of communication in the organization and the authorities are unaware of each other’s actions.
  • Lack humanitarian culture in the workplace.
  • Absence of performance management tool
  • Appreciation of hard is absent in the organization and the employees never receive compensation or reward. It often demotivates the employees.
  • Deficiency in the workforce to carry out the additional work load of the absent worker
  • Absence of health and safety measurement in the workplace is a critical violence of CSR. The employees only get insurance benefits on the loss of figure or toe during work. Work environment in the summer times gets worse due to the lack of ventilation in the facility.
  • Lack of leadership skills is present among the managers and supervisors that fails to motivate the workers and increase the production.

Organizational change is essential for the organization to improve its productivity. Some of the major issues have been state in the above section. The following solution can potentially address the particular issues.

Health and Safety – The health and safety policy of the firm needs immediate attention for creating work environment in the plant. This will provide assurance to the employees, which can potentially bring back their moral to the organization (Reese, 2015).

Identified Issues

Mission, Objectives and Goal – These three factors play important role in value creation for the organization to its stakeholders. The company needs to set its goals, objectives and mission more performance oriented to encourage the workers. It will keep them focused for a particular target that the company needs to attain. Katzenbach and Smith (2015) argue about the importance of goal and objective of a business organization and demonstrate its capability of focusing and achieving the maximum performance of the workers.

HR Department – The Company should open its human resource department to smoothen the operation in the plant. The HR policies, planning and strategies will keep the employees attracted towards the company and contribute in creation of intellectual human capital for the organization. It will also influence the recruitment process (Bratton & Gold, 2012). Budhwar and Devrah (2013) in their book ‘Human Resource Management in Developing countries’ has stated the importance of human resource in the business organizations over several developing countries. They have supported their statements with statistical evidences of change in the organizational performances in countries around the world and their progress after adopting HR department.

Leadership – The plant shows poor leadership in managing the workplace and motivating the workers to work. However, many of the employees from the plant show potential for effective leadership that remains untapped. A proper leadership training of the selected employees can reflect potential benefits for the plant Daft (2014) states that the leadership skills have a multiple benefits in the organizational settings. Some of the useful and important parts where it is useful are communication, relationship building, influencing the employees and motivate them for work and many more. It helps the manager to change the overall workplace environment and make it more fun to work in. It also helps in taking efficient decision related to work (Kibbe, 2015; Odumeru & Ogbonna, 2013).

Motivation – The workers needs motivation for dedicating their full potential fort he work. The company lack in appreciating the employees for their hard work and it lacks any sort of reward or incentives that works as a motivator for any organization. It is urgently required for motivating the employees (Miner, 2015; Elliot, Dweck & Yeager, 2017). Moreover, a formal appraisal system will also facilitate in motivating the employees and make the focus on their work. Maslow defined the motivation with the help of his hierarchy theory of need, where he demonstrated that the organizations are bound to look after the various needs of the employees in order to extract the maximum effort out of them and increase the organizational performance (Maslow, 2013).

Prescribed Solutions

Performance measurement – is vital for tracking the employee’s performance that will help in rewarding and promoting them in the higher level (Bititci et al., 2012).

Communication – Lack of formal communication in different level of the farm that should be address to bring transparency in the organization. Better transparency will bring better efficiency and coordination in all level (Grunig, 2013).

Recruitment Process – The Company should not only have a better recruitment policy, it also should recruit more number of staffs to avoid exhausting its current employees. The over shifts is overusing its employees that is facilitating into employee dissatisfaction.

The implementation of the above recommendation requires several training of the workers, managers, supervisors and the directors of the company. The employees will receive training on the communication so they can better communicate their expertise and perform in the field where they can provide their maximum (Ruck & Welch, 2012). Moreover, it will help them to communicate the challenges they are facing in the system to the supervisors and managers. Additionally, this will make them efficient to work as a team and share their responsibilities.

The managers and supervisors will receive same communication training as the employees. In addition to that, they will receive the leadership training that will help them in tactical situation handling. Moreover, the combination of these two skills will enable them to motivate the workers for doing their job efficiently. The developed communication skill will help them to appreciate the workers for job well done (Brunetto, Farr-Wharton & Shacklock, 2012).

The managers will receive the HR training to formulate policies and plans and organize the work culture in the plant. Directors along with the managers will receive this training, which will facilitate in a number of fields. The directors can implement this knowledge in recruitment process. They can also make the workplace healthy and safe for the worker using this knowledge in considering the requirement of the workers.

The director of the organization will receive training for setting proper and compact goal, objective and mission of the organization.


Hence, for bringing organizational development through change, it is necessary to implement the prescribed recommendation accordingly. This will help the B.R. Richardson Timber Production Corporation to motivate the employees without observing resistance from their part. The overall change is in the structure is required to develop the work environment and build an effective work environment. Implementation of the leadership on the other hand will increase the communication with in the organization at all level and motivate the employees. The HR department will help understand the requirements of the workplace and act accordingly for addressing the health and safety concerns and achieving increased performance. Performance management will help the company to keep track of the employee performance. In short, the overall performance could only be achieved if the issues identified in the report are addressed accordingly following the recommendation prescribed. The implementation process described in the final part of the report suggests the way of developing the organization with its existing resources, while including some external resources.


Alvesson, M. (2012). Understanding organizational culture.

Armstrong, M., & Taylor, S. (2014). Armstrong's handbook of human resource management practice. Kogan Page Publishers.

Bititci, U., Garengo, P., Dörfler, V., & Nudurupati, S. (2012). Performance measurement: challenges for tomorrow. International Journal of Management Reviews, 14(3), 305-327.

Bratton, J., & Gold, J. (2012). Human resource management: theory and practice. Palgrave Macmillan.

Brunetto, Y., Farr-Wharton, R., & Shacklock, K. (2012). Communication, training, well-being, and commitment across nurse generations. Nursing outlook, 60(1), 7-15.

Budhwar, P. S., & Debrah, Y. A. (Eds.). (2013). Human resource management in developing countries.

Daft, R. L. (2014). The leadership experience. Cengage Learning.

Datta, S., Iskandar-Datta, M., & Singh, V. (2013). Product market power, industry structure, and corporate earnings management. Journal of Banking & Finance, 37(8), 3273-3285.

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Katzenbach, J. R., & Smith, D. K. (2015). The wisdom of teams: Creating the high-performance organization. Harvard Business Review Press.

Kibbe, M. R. (2015). Leadership Theories and Styles. In Leadership in Surgery (pp. 49-57). Springer International Publishing.

Maslow, A. H. (2013). A theory of human motivation. Simon and Schuster.

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

Northouse, P. G. (2015). Leadership: Theory and practice. Sage publications.

Odumeru, J. A., & Ogbonna, I. G. (2013). Transformational vs. transactional leadership theories: Evidence in literature. International Review of Management and Business Research, 2(2), 355.

Reese, C. D. (2015). Occupational health and safety management: a practical approach. CRC press.

Ruck, K., & Welch, M. (2012). Valuing internal communication; management and employee perspectives. Public Relations Review, 38(2), 294-302.

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