A CASE STUDY OF PEMANCAR

Introduction

In the day to day running of a company, managers are always looking for ways to improve the way they do things to improve the overall performance of the company. There are several vital areas managers observe when they are assessing the performance of the companies. When a company is an underperforming manager is forced to seek answers as to why they are not doing well. An organization being a complicated structure gives the management challenges as to where to start looking for problems. Organizations have to come up with ways to tackle these problems because they affect their overall performance. In this essay, we are going to study the two models, namely the McKinsey 7s Model and Weisbord’s Six Box Model that organizations use to diagnose change. We are going to analyze also a company called Pemancar, an automobile company that experienced changes in management due to mergers with different companies. KLcorp acquired Pemancar in the mid-1980s and by Nova in the 1990s. The two acquisitions had different styles of control, and this affected its overall performances in the 1990s when Nova tried to incorporate its management style to the company. This essay is going to look into the company profoundly and show how the Weisbords Six model of management is going to apply to the current situation of the company (Weisbord 1976:432).

Diagnosing Change

There are different methods of diagnosing change them applied to an organization. For our easy, we are going to look into two models, namely Weisbords Six Model and McKinsey &s Model.

McKinsey &s Model

This is a model that uses the tools of management to analyze a company internally n reference to some pre-set standards and propose where changes need to has taken to realize an objective that is established. It Gauges how effective an organization is by studying how its core values are in line with seven essential elements that is; strategy, Structure, employees, style, systems, and shared values. The aspects are the one which will determine the success or failure of the organization. Strategy evaluates how an organization has prepared itself in tackling unforeseen eventualities that may occur when running it. Structures try to determine how the chain of commands operates in the organization. It works to determine how efficient communication flows through the chains of commands. Systems try to assess how the day to day operation is run in the company. It seeks to establish established ways of running the business are effective in upholding the integrity of the company. Shared values evaluate the culture that is cultivated in the company and how they affect the business performance (Hamid 2011:85). The style looks at the technique used by the organization to achieve its overall objective. The staffs look at the composition of the employees in terms of their age and level of education. Skills evaluate how an organization has deployed the abilities of different people in the company…

Strengths

It helps in combing two or more companies departments and operation during mergers and takeover.

This model has enabled the organization to find a way of achieving its objectives by aligning the essential elements with their vision.

This model has enabled companies to apply policies and effect necessary changes effectively.

Organization can now evaluate how changes in some of its policies will affect the performance of the organization.

This model is used in a real-life situation; hence it is an essential tool that managers can use to improve the overall performance effectively. It identifies where weaknesses are in the organization and offer ways to remedy those weaknesses.

Weakness

This model forgets to address the external factors that may affect the overall performance of the company. It focuses only on internal factors which may necessarily not affect the overall company performance.

Some of the conclusion made by the system does not have evidence to support them. This assumption may lead to implementing the wrong policies in the company if they are not correct.

This model does not capture every aspect of the business; hence some essential facts that are affecting the company directly may be left out by management while they are implementing the strategy (Burke 1992).

This model is used for long term evaluation of the business processes hence cannot be used to diagnose problems the company is facing in the short term.

The more complex a company is, the more difficult is it to use this kind of model in diagnosing the problem of underperformance.

Weisbords Six model

This is a model that is used to find issues that are affecting the performance of the company, which are not apparent to top-level management. This model helps managers to focus on six critical areas of the organization when they are assessing how the company is performing.

Strengths

This model enables the organization to come up with issues which have been neglected by top-level management. It has a systematic way of identifying those issues that are not readily identified by the top management.

This model helps the manager to know where they can start to assess the performance of the organization. The model provides a systematic way in which the company can use to identify issues that are impeding its progress and deal with them.

The systematic way it structures its procedures for diagnosing change make it a useful and reliable tool. The results which are obtained using the system are mostly accurate, and managers can use them to make relevant managerial policies.

This model acknowledges the fact that an organization is an open system which is also affected by external factors. It factors in external issues which may affect the organization when it was evaluating the performance of the company.

Weaknesses

An organization that is complicated in term of their organization cannot be represented well by the six categories outlined in the model

The model is theoretical, and its conclusion can lead to the wrong diagnosis

The six elements do not relate to each other, and this may pose a challenge in trying to link different unit of the organization.

Case study of Pemancar

Weisbords model is the model chosen in this essay to analyze the situation of this company after the takeover by Nova. This model is preferred because it combines both internal factors and external factors in trying to find out why an organization is not performing as expected. It focuses on six key areas that are very crucial in finding what is ailing the company. (Janse 2018)

Components of Weisbords model

• Purpose

Itis the reason why the business is in existence. It is here where the goals of a company are defined, and each staff is supposed to follow it. Pemancar and Nova were both in the automobile industry. They were dominating in different markets; hence this takeover was useful as it enabled them to expand the market for both companies.

• The Structure

It is a way different functional group in an organization relates and how communication and decision making is passed through. The chain of command should be evident in Structure to enable smooth communication process. Pemancar had a rather tedious bureaucratic structure of the organization which had many levels of the chain of commands. Communication flow was relatively slow, and this led to a delay in the implementation of urgent issues which required consent from above. Nova had a somewhat flatter structure of an organization and this made communication through its chains of command easier and faster. This enabled them to solve their issues faster. When Nova acquired Pemancar, it implemented this kind of Structure on the organization. It also restructured departments, and this led to some employees losing their jobs while others are transferring to another department. This caused unrest among employees of Pemancar.

• Relationship

This is the way different entities in the organization relate. Teamwork and team spirit were emphasized in the company. The interdepartmental meeting was held regularly to try to combine all the activities of a company to achieve an overall goal. The MD is the one who links different departments through their departmental heads

• Reward

This is a motivational scheme that is established to entice employees to produce more. Before being acquired by Nova, Pemancar used to give their employees high bonuses during the end year regardless of the economy of the country. It also encourages employees to work extra hours by providing overtime allowance, which was usually paid using a higher rate than the average salary. When Nova acquired Pemancar, it reduces the bonuses and only awarded people based on their performance. It also reduced overtime working hours.

• Leadership

It refers to the individuals who are task to lead other towards achieving the goal of the company. They are supposed to work together with other employees in realizing the overall objectives of the company. Leaders are supposed to ensure that the resources of the company are used efficiently to achieve the desired result. Nova introduced new machinery, technology and product recipes and specification in a bid to try to utilize the potential they saw Pemancar could bring. The leadership had also set out production targets and level of standard, which Pemancar was supposed to achieve. These changes were done so as to improve the overall performance of Pemancar

• Helpful Mechanism

These are the methods that are used to aid staff coordinate their activities. Meetings were held regularly when Nova took over. The conference aimed to report on the progress of the task which each employee was tasked with. Under the new acquisition, reports were prepared and delivered on a specific date. This enhanced accountability. Segregation of duties was introduced in Nova and employee-only did tasks which they were explicitly assigned to. This ensures the efficiency of employees was improved. Employed were held accountable for their action, and this helped prevent fraud that may arise from irresponsibility. A new way of separating cost was introduced to Nova to help it account for every damage that was incurred during production. These mechanisms were meant to improve the overall performance of the company.

Key issues that need changing

The sacking of some employees of Pemancar is a demoralizing issue that affects the workers who have remained. They are no longer sure about their job security, and this has led them to produce less. The sacking of employees also meant that fewer people were available to provide the product. This contributed to Pemancar not achieving the targets which were set by Nova. Nova should try to find other ways of cutting cost. Nova should also stop reducing the overtime allowance, which is given to employees. These measures will motivate the employee to work hard and provide more.

Nova should have let Pemancar retain its corporate Structure for some time. This would have helped Nova to have a better understanding of Nova, and it would only change those areas in Pemancar which were very necessary. In doing so, it would have avoided those issues that had arisen because of introducing many systems at once. According to Hayes, it would have also reduced the number of people who had lost their jobs, (2018).

Pemancar was making profits before Nova acquired it. Nova should have monitored for sometimes how production was achieved before introducing its ways of doing things. It could have learnt how Pemancar was meeting its targets and only introduces small changes which they would have deemed to be very necessary. This would have saved them money and resources which would have been channelled to other areas of the company.

Nova should have made transfer of personnel to other departments voluntary and would not have compelled people taking roles that they were not good at. The people took the time to understand their new role, and this affected their overall performance.

Interventions Recommended

Intervention is measured that is put by management to solve the issues that were identified during diagnosis. They affect the overall performance of the company. There are various factors (3D model) which influence the type of intervention chosen namely (Cates 2017:6);

• the nature of the problem which has been diagnosed- The diagnosed issue plays a significant role in identifying the response used since it will require specific remedy to be applied to it
• The proposed change the organization needs to achieve- this will influence to high extend the type of intervention used. Management will pick the intervention methods that best meet their needs
• to what extent you want the response to affect the problem

Intervention modes

• Advising

This mode of intervention involves giving a solution to a client on the problem they are experiencing. Usually, advises are provided by an expert who can provide answers to the issues that are being experienced in their line. For Nova, I would recommend them to find ways of motivating workers by the reintroduction of overtime allowance. They should rehire those employees that they have sacked and reassure the current employees of their job security. This will help so much in improving the productivity of the company. I would advise Nova to slowly introduce new ideas into Pemancar and allow the employees to assimilate them into their daily work gradually. For the latest machinery and technology introduced into the company, Nova should take staff of Pemancar to train to help them to be familiar with what has been presented in the company. This will reduce the learning curve of Pemancar employees and enhance their production when they use these new ideas

• Supporting

This is a mode of intervention that is meant to encourage the purposes of the client, which seem to bring positive results in the organization. It ensures that these ideas are incorporated into the organization. Nova came up with a new way of accounting of cost at various stages of production. This will be useful in accounting how the damage was apportioned throughout the production process. The adherence to timelines when delivering a report was a perfect move that Nova implanted in Pemancar. It ensured that every transaction of the company was accounted for. The introduction of regular meetings was a very brilliant idea in ensuring that the activities of the company were updated on a daily basis. This meeting was also an avenue to meet their bosses regularly and this smooth flow of information from top management to bottom. Nova introduced a culture of accountability to the company. Each person was supposed to account for every action that they undertook. This ensured that people were responsible when they were doing their duties, and they responded promptly to issues that arose when they were doing their job. Segregation of missions was also a brilliant idea that Nova came up with. This improved the general performance of the employee since he would only focus on doing the job that he was contracted for. Segregation of duties also developed the transaction the company was making.

• Challenging

This is a model which tries to question the ideas that have brought forward by the client. One challenges this idea because they seem no to have a positive impact on the performance of the organization. Nova, through restructuring, sacked that employee who was deemed not hardworking. In the end, Pemancar was not able to meet its production target because of an inadequate workforce. If Nova had retained those workers, the issues of not achieving the intended production output would not have arisen. Nova started reducing the overtime allowance given to people who over time. They were trying to cut cost. In reducing overtime allowance to employees, Nova was affecting their earnings negatively. This made workers lose moral. In the end, they produced less. If Nova maintained the overtime allowance of employees, the issue of low productivity could have been avoided. Nova introduced new ideas like technology, product specification and modern machinery at once. They did not give time for employees to accommodate these changes, and in the end, production was affected negatively. If Nova had brought these ideas slowly into the company, none of the production issues would have arisen. The employees would have gotten the chance to embrace the ideas. This would have helped in the improvement of the overall performance of the company. Moving of employees was also an issue that was not taken lightly by them. Since they had to learn how the new job operates. This would affect their productivity since it will take time for them to learn the new system.

Based on the interventions that have been discussed above, I would recommend Nova to reinstate those employees which they have laid off. They should also assure job security to those people who have remained in the job. Nova should also not interfere with the overtime allowance. It should encourage employees to extra hours. Those employees who perform well at the end should be recognized and rewarded. Bonus should be awarded to employees well when the company make profits. This will help boost production because the human resources will be there, and it will be motivated. Nova should take the staff of Pemancar to train so they can learn how to use the new machinery and technology that has been introduced in the company. This will increase the rate at which they gain the new changes brought into the company. In the end their productivity will not be affected. Nova should have retained Mr Adam at the helms of Pemancar because of the long experience that he had served the company. Mr Adam could have been the bridge between the employees of Pemancar and Nova. Mr Adams could have seen some of the proposals set not been implemented very fast. Production would have improved in the long run.

Resistance

The above intervention will not be accepted by everyone, especially Nova, which wants to stamp its authority over Pemancar.

Advising

The number list of Nova is cutting of cost hence will not agree to the idea of reinstating those employees they had sacked because they were viewed as an extra cost. In their calculation, the workers who have remained in the company are capable of meeting production targets if they work extra hard. Nova will not see the need to increase the overtime fee as it will see that as an extra cost which needs to be down away with. In the case of the introduction of new ideas slowly, Nova will see this as time-consuming and costly hence will go alone in implementing the advice. The management of Nova will not know the urgency of taking employees to learn the new machinery. They can learn them while they are operating on them (Axelrod 2004).

Supporting

The need to respond promptly to issues that arise will be met with resistance, mainly if they occur on non-working hours and days. People usually do not like to engage in office-related related problems when they are outside the office. The need to submit a report on a fixed deadline will be resisted by those people who are lazy in delivering the report or feel that the company is doing well and does not warrant any descriptions to be reported. The need to hold meetings very frequently would not sit well with some employees, especially if they held early in the morning. Some employees, especially those who have stayed long in Pemancar will refuse to embrace the new ideas that are pumped in the company. They will argue that they don’t see why changes should be brought in the company and it is doing fine. Those employees who are loyal to Mr Adams will refuse to welcome the new manager. This is because they will consider the new manager as aforeigner who is coming to make their lives difficult. They will make sure that they frustrate each and every new idea that is brought in by him.

Conclusion

Change is a necessary process, and companies must embrace it to compete with the competitive market. Organizations should find ways to diagnose problems that are making them underperform. In this essay, we used the Weisbord Six-Box Model to diagnose the issues that were making Pemancar not perform as expected by Nova. We have been able to find several items that were discussed above. If the problems are addressed, Pemancar will improve its performance; in the long run, Nova also needs to give time to Pemancar to adjust and conform to the standards set out by Nova.

Reference

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