Organizational Behaviour, Management

Organizational Behaviour

M/s. ABC Ltd is a medium-sized engineering company producing a large-range of product lines according to customer requirements. It has earned a good reputation as a quick and reliable supplier to its customers because of which its volume of business kept on increasing. However, over the past one year, the Managing Director of the company has been receiving customer complaints due to delays in dispatch of products and at times the company has to pay substantial penalty for not meeting the schedule in time.The Managing Director convened an urgent meeting of various functional managers to discuss the issue. The marketing manager questioned the arbitrary manner of giving priority to products in manufacturing
line, causing delays in wanted products and over-stocking of products which are not required
immediately. Production Control Manager complained that he does not have adequate staff to plan and control the production function; and whatever little planning he does, is generally overlooked by shop floor manager. Shop floor managers complained of unrealistic planning, excessive machine breakdowns, power failure, and shortage of materials for scheduled products because of which it is impossible to stick to the schedule. Maintenance manager says that he does not get important spares required for equipment maintenance because of which he cannot repair machines at a faster rate. Inventory control manager says that on one hand the company often accuses him of carrying too much stock and on other hand people are grumbling over shortages. Fed up by mutual mud-slinging, the Managing Director decided to appoint
you, a bright management consultant with training in business management to suggest ways and means to put his “house in order”.

1. How would you examine if there is any merit in the remarks of various functional managers?
The remarks of different functional managers can be assessed by taking a feedback from individual departments regarding their operational constraints vis-à-vis other departments. This feedback can then be dovetailed into developing a common strategy keeping the organizational objective of maximizing sales in mind. The assessment of different functions can be evaluated considering the impact of their operational constraints on the overall organizational goal. For e.g. issues related to production can be co-related with the performance of the material management function. Similarly performance of the production department can be co-related to the marketing department’s efficiency in determining the core issues related to the increasing incidence of customer complaints for the company’s products.

2. What, in your opinion, could be the reasons for different Managerial thinking in this case?
Different line managers responsible for different functional business areas are thinking differently since they see only their respective departmental objectives in deciding what ought to be best for the organization. This is evident in the case above. While on the one hand the production department is solely focused on their operational capabilities and constraints, the marketing department complains of getting the wrong goods at the wrong time. In essence, each department is working to meet their own narrow departmental goals rather than seeking synergy in operations and ensuring achievement of a more macro level organizational goal. There is no focused planning approach which is compounding an overall complicated problem.

3. How would you design a system of getting correct information about job status to identify delays quickly?
The need of the hour in ABC Limited is the implementation of a robust MIS mechanism linked to the Key Performance Indicators (KPI’s) for the company. Integrated data collation, reporting and review on the KPI’s by the senior management of the company would ensure focus on the key processes required for achieving improved sales performance, which is the impending problem on hand. There is also a requirement for implementation of a centralized planning cell to ensure synergies in operations of different functional departments keeping in mind the macro organizational objectives. The planning cell will track the progress of various key operational processes like sourcing, maintenance, production and finally, marketing to ensure that delays are eliminated or reduced on a case by case basis.

4. What would you suggest to promote co-ordinate interaction of various people to meet the
scheduled dates?
The situation in ABC Limited calls for a dedicated central planning cell which will co-ordinate the operations within the organization and ensure that there is a systematic method by which production plans are initiated, processed and finally delivered to the end customer. The planning cell would interface the various operational functions in the organization and ensure proper focus and delivery of production targets. The cell would typically comprise of the best functional brains in production, marketing and shop floor personnel to ensure that a co-ordinated action is initiated and implemented keeping all individual departmental objectives in mind. Maintenance and inventory control functions, though essentially support functions would also get adequate focus. This integrated planning approach will ensure timely product delivery. The planning cell would also ensure focus on core products of the company and divestment of non-remunerative product streams.
Posted by Andrew | Posted Date: 7/10/2011 1:06:00 PM

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