>> Management Theories
You need to consider how you will identify the range of issues and problems in the following problem statement:
Wong Manufacturing Company (WMC)-
WMC is a 55 year old company founded by Sofea Wong (with financial assistance and business guidance from her parents) in the early 1960s in Malaysia. The principle business is in manufacturing and selling wholesale cotton and wool fabric to local retailers and buyers, including designers in Malaysia. Before setting up her manufacturing business, Sofea had travelled the world and spent about 10 years in Australia studying and working in the Australian textile industry in Sydney and rural New South Wales. It is from this experience that Sofea developed relationships with cotton and wool growers and saw an opportunity to source high quality cotton and wool raw materials from Australia and use these to create a high quality fabric manufacturing business in Malaysia. Despite taking advantage of Malaysia's lower cost wages, Sofea had always paid her staff above the local wage regulations which quickly earned her respect from her employees. She also gained respect and admiration from local retailers and designers. Sofea had established a highly successful local company based on strong family values that had always been well respected.
Sofea's employees always enjoyed working for her and she had created and implemented many employment reward systems that were ahead of her time. She implemented sick leave, holiday pay, rostered days off and child minding facilities as her workers were from poorer working families. Tradition and tales about the company were perpetuated over the years to the extent that Sofea became a larger-than-life personality and everyone knew about her early years and beginnings of the company. Everyone knew how she worked hard and how she treated all staff like family members. There were many media articles and events that favoured Sofea and her successful business. The WMC factory in Kuala Lumpur had grown to a workforce of over 1000 workers throughout the 1970s. However, by the mid 2000s staff numbers had been substantially reduced to about 600 employees. It was at this time that Sofea was suffering ill-health and was forced to hand over her business to her daughter Hana.
Hana had grown up in this business and knew all aspects of manufacturing. Both Sofea and Hana made business decisions together and they employed the same business practices. Like her mother, Hana had the respect of all employees, retailers and designers. During this time, the common business characteristics were high quality manufactured fabrics using unique fabric processing in manufacturing of high quality wool and cotton from rural New South Wales Australia. All of WMC's sales were to local industry retailers and local designers with consistent employee and customer loyalty and with relatively slow but consistent growth. Since, the mid 2000s WMC has been challenged by increasing low-cost suppliers from other countries exporting poor quality and low cost fabrics and garments in high volumes into Malaysia. All of this has had an impact on the perception of quality, manufacturing, and reduced safety and employee standards - both in Malaysia and from importing countries.
To assist Hana operate the business she employed her two children: her daughter Mira and son Ryan. Both siblings had been educated in Malaysia and at Sofea's insistence - they completed Masters of Business Administration degrees in Australia. In addition to their formal education, Ryan had also completed a post graduate degree in fashion design in Sydney. In more recent times, Mira had been more vocal for change at WMC and Ryan had supported a move to increase the value-added component of design, customer reach and product depth from essentially large-batch production of cloth to making designer clothing for larger international markets. This meant forward integration by not only manufacturing the textile cloth, but also moving to a new manufacturing stage of making and supplying retail firms with designer garments. Mira had introduced to the Board Members the idea of exporting to China, Japan and Indonesia the large-batch production output while simultaneously supplying designer and retail outlets across the world. This conflicted somewhat with the view that cheap imports would hold sway and that customers wanted low-cost products from China and Bangladesh with the Board often pointing to low-cost retailers such as Cotton-On in Australia and JC Penny in the United States of America (USA). Mira and Ryan were persistent in pointing out the opportunities for WMC to sell directly to customers via the web and to implement business to Business (B2B) relationships with quality seeking buyers.
Ryan had also highlighted the increasing need for more visibility at Malaysian Fashion Week attracting up to 50,000 clients. Increasingly, Mira had identified problems with manufacturing safety and control issues in countries like Bangladesh with major brands such as Benetton in Italy, H&M from Sweden, Nike, JC Penny and Walmart in the USA, David Jones and Myer in Australia seeking alternative suppliers. According to Mira, WMC could take advantage of their name by building new relationships with retailers and designers since many were looking for long-term relationships of quality suppliers and the reliability that comes with large volume fabric and garment production. Basically, Mira and Ryan were trying to drive growth and this has led to disagreement and contractions in the Board. At stake was WMC's traditional approach to manufacturing positioned around large-batch production in cotton and wool textiles and fabrics to making designer and retail garments. This promoted many Board members to comment privately that Mira and Ryan were trying to be "too smart too soon" arguing the company would not cope. Similarly, product and manufacturing change needed to be supported by dramatic staff decreases and management restructuring to stream-line cost and efficiency, manage two-way product stretches between the old and new production while tackling competition from other suppliers.
While Hana and Sofea were immensely proud of their children and grandchildren, in a short period of time they had created mayhem in the management ranks prompting local analysts to downgrade the value of company stock and medium to long-term outlook. © Peter A. Murray USQ School of Management and Enterprise
Individual Case Study 2 - Use the WMC case information from Case Study 1.
Based on your analysis of WMC in Case Study 1, you are now required to continue your external change advice to the Board. Case Study 2 requires you to apply change intervention ideas to solve the company's range of change issues. Use the same list of issues and assumptions from Case Study 1. However, if needed, add additional relationship and behavioural assumptions based on less than perfect information as follows:
1. Based on readings a) McFillen et al (Reading 11), b) Rafferty et al (Reading 12) and c) Barratt-Pugh et al (Reading 13) what is the relationship between change readiness and change agents? Use Hayes (2014) Chapter 13 as a reference point as well.
2. Based on your analysis of WMC, now adapt and redraw Figure 15.7 and 15.8 in Hayes (2014) Chapter 15. Explain the reason why you placed an 'X' where you did and use facts from the case to support your answers.
3. Use an open systems diagram similar to Figure 3.1.2 (Module 3) at the organisation level to outline the inputs, processes and outputs of WMC. Populate each box with at least three (3) numbered points and a brief description of the point. Then below the Table, describe in more detail each point.
4. Using Kotter's Integrative Model of organizational dynamics (Hayes, (2014) Chapter 7) redraw and adapt the Figure to suit your analysis of WMC. Now using facts from the problem statement plus your own assumptions from Case Study 1, explain your analysis using the short, medium and long term as described in Chapter 7.