Reference no: EM131626145

Nampak was a South African–owned bottle and plastics manufacturer with 600 factory workers and 80 managers in the United Kingdom. A typical manufacturing company, it focused on costs, investing in machinery and processes rather than people. Labor costs were low, and the company had been very successful. In 2007, the newly appointed managing director Eric Collins realized that the company had driven efficiencies as far as it could using traditional approaches. He decided to add value through people. Problem Although the company was successful, the organizational culture was poor. People were treated badly and morale was low. The blame culture spread to customers. Complaints at one site reached 25 a month, which was damaging for a company that relied on three key customers. Apart from hiring, firing, and discipline, Nampak had no established human resource management policies and practices. In a staff satisfaction survey in 2007, 80 percent said that they would not recommend Nampak to friends and family as a place to work. Looking at the survey results, the new HR director, Cathie Wright- Smith, concluded, “There was everything wrong with this business that you can think of.” There were also problems with the executive board, who were status-conscious and accustomed to having a high degree of control, with only a dozen people making all the key decisions. Solution Collins met customers to get their critical feedback on the company. But when he met his own employees in “Challenge Collins” sessions, to hear their grievances in person, he was shocked. The level of dissatisfaction was high, and the anger was directed at him. However, Collins wanted to give staff the opportunity to vent their frustrations, and to show that they had a leader who was listening. Wright-Smith ran focus groups, asking staff what would make Nampak a better place to work. Three themes emerged. The first was communication; people did not know what was going on, and they were not involved. Second, staff did not feel that they had training and development opportunities, or a career with the company. Third, line managers rarely provided feedback on their performance. This led to the design of a new performance management system, based on what employees said that they wanted: personal development, and not objectives with tick boxes. Some line managers had never had conversations like this with their staff before, and they now did this monthly. Line managers were seen as “dogsbodies,” although they were key to shaping the company’s culture. To emphasize their importance, they were offered the first training and development opportunities, a “leadership excellence” course, exploring influence, motivation, and team development methods. This was so successful that it generated demand from other managers for similar training. New initiatives developed rapidly. Half the workforce were trained in a range of subjects, assessment centers replaced the traditional selection process, and induction and buddy schemes were introduced. The company launched a senior leaders program, a fast-track route for high-potential staff, undergraduate and graduate placement schemes, and a suggestions scheme offering financial rewards. A corporate social responsibility program linked with local schools, inviting pupils into the factory and sending staff to schools to talk about recycling. Shop floor staff worked with the schools attended by their children, and some staff came back on their days off to show people around the factory, with pride. Wright-Smith ran sessions for directors on leadership and emotional intelligence.Outcomes Collins said, “We’ve had a paradigm shift in culture.” In the 2010 staff survey, 80 percent said that they would recommend Nampak to friends and family as a place to work, reversing the 2007 position. In addition, 90 percent said that they were satisfied with their jobs, and 98 percent said that their managers listened to them. Overhead costs per million bottles made improved by 7 percent. No closures or layoffs were needed to make savings. Customer complaints fell to zero. Collins said, “We’re just a more collaborative, committed organization with pride in our work.” The main costs, according to Collins, concerned the commitment of time and focus (Smedley, 2011). 3. What are the consequences of the negative dimensions of this organizational culture? In what ways are they harmful to the organization, its employees, suppliers, and customers?