Elektra Products Inc. case analysis free essay sample

As to the Company: Elektra Products, Inc. is an 80 year old company, publicly held and had once been a leading manufacturer and retailer of electrical products and supplies. Challenges that have to be addressed: In recent years, the company experienced a host of problems as follows: declining market share due to increased foreign and domestic competition; new product ideas were few and far between; departments such as manufacturing and sales barely spoke to one another; morale was at an all-time low and many employees were actively seeking other jobs. Thus, everyone needed a dose of hope. Players: a) Martin Griffin newly hired, dynamic CEO b) Barbara Russell Vice President for Manufacturing c) Simon Manufacturing Engineer, whos with the company for more than 20 years and Russells friend. d) Department Heads and other employees Scenario Introduction of the empowerment campaign Griffin, the newly hired and dynamic CEO, opened the monthly companywide meeting with a challenge: As we face increasing competition, we need new ideas, new energy, new spirit to make this company great. And the source of this change is you each one of you. Under the empowerment campaign, employees will be getting more information about how the company was run and would be able to work with their fellow employees in new and creative ways, proclaiming a new era of trust and cooperation. Perception Many of the other employees, including Simon were less than eager. Simon later said: Just another pile of corporate crap. One minute they try downsizing, the next reengineering. Then they dabble in restructuring and now Martin push for empowerment. Garbage like empowerment isnt a substitute for hard work and a little faith in the people who have been with this company for years. We made it great once and we can do it again. Just get out of our way. One step forward Russel and her team presented to the department heads and Griffin, the following innovative but easily achievable ideas implementing the empowerment campaign: permit a manager to follow a product from design through sales to customers; allow salespeople to refund up to $500 worth of merchandise on the spot; make information available to salespeople about future products; and swap sales and manufacturing personnel for short periods to let them get to know anothers jobs. Resistance to change When Griffin excused himself from the meeting because of a late-breaking deal with a major hardware store chain, the proposals made by the team were quickly met with resistance from the department heads: the director of human resource complained that personnel changes would destroy the carefully drafted job categories that had just been completed; finance argued that refunds would created a goldmine for unethical customers and salespeople; the legal department warned that providing information on future products would invite industrial spying. Over the latest turn of events, Russel considered the following options: keep her mouth shut; take a chance and confront Griffin about her sincerity in making empowerment work; push slowly for reform and work for gradual support from other teams; or look for another job II. CRITICAL ANALYSIS The company had been in existence for 80 years. Ordinarily, a company that survived that long would have mastered the intricacies and the complexities of doing business, not just any business, but the business of manufacturing and retailing electrical products and supplies. Further, being publicly held, it should have undergone the scrutiny of the investing public, which would make the company somewhat fluidly responsive to the investors needs and requirements But the company failed. Instead of expanding its market share, it shrunk. The company appeared to be lulled by its past glory, that of being the leading manufacturer and retailer of electrical products. Competition is fierce with the entry of domestic and foreign players but Management remained complacent. Management failed or refused to see the tell tale signs of a downward spin. Management may have felt the crunch of being eaten up by competition and in its desire to recoup its former leading position, introduced measures like downsizing, reengineering, restructuring and now, empowerment. These efforts however did not sit well with the employees as they viewed these efforts as one of those management crap or garbage. As in any organization, any act, project or plan that does not have the full support of the employees is likely or is doomed to fail, as in this case. What could have happened is that management simply rammed up the foregoing measures without being transparent with the employees. Distrust pervades. Lack of communication is apparent. With the problems abounding, it is not surprising to see employees morale going down and employees creativity being zapped. If ever new ideas come out, it could have been forced or dictated, not some idea where the author can be proud to own. The situation is not anymore conducive to a free exchange of ideas. The fact that manufacturing and sales are not talking showed an unhealthy clash between the departments. This is highly critical as both departments are essentially dependent on each other. Sales department sells the products produced by the manufacturing dept. and it needs to spell out the specifications of the customers as well as the problems encountered from the use of the products, to manufacturing. On the other hand, manufacturing had to inform sales on the limitations of the machines, the downtimes, the maintenance scheduling and such matters as would affect the production of the desired product. Coordination and communication is not an option. It is imperative to the companys success. III. ANSWERS TO QUESTIONS: How might top management have done a better job changing Elektra Products into a new kind of organization? Top management must be a firm advocate to becoming a learning organization. There must be a complete overhaul on how the companys resources are being managed. Everyone should be enlisted for involvement, from top to bottom. As espoused by Peter Senge, a learning organization is one that facilitates the learning of its members and continuously transforms itself. The concept encourages organizations to shift to a more interconnected way of thinking as employees will work harder for an organization they are committed. A learning organization exhibits 5 main characteristics: systems thinking, personal mastery, mental models, a shared vision and team learning. A thorough understanding, appreciation and application of these concepts will be a welcome start for Elektra, in its quest to turn around its sagging performance and ultimately to survive in the long term. What might they do now to get the empowerment process back on track? Employee empowerment is a top management initiative. This was initially shunned by the employees because of managements failure to sell the idea in such a manner that is acceptable or palatable to the employees. The introduction of the empowerment campaign is ill-timed as the employees are still seething on some managements actions like downsizing, reengineering and restructuring which are just garbage to the employees psyche. Top management should realized that for empowerment to be successful, it has first to be wholeheartedly accepted. For it to be accepted, the employees must understand the benefits it will bring to the employees and to the organization as a whole. The biases that are deeply ingrained in the minds of the employees brought about by managements failures has to be addressed and erased for management and employees to have a fresh start. When this is done, any idea, no matter how small or great, will be received by all with open minds and objective thought, because everyone moves in unison to achieve a common goal, to which each and every one commits and adopts as his/her own. Can you think of ways Barbara could have avoided the problems her team faced in the meeting with the department heads? Barbara could have avoided the problems her team faced, had she consulted the department heads with their inputs. From a functional view of management, the department heads are the recognized authorities in their respective fields, the HR Director, in human resource, the Finance DIrector, in finance and the Legal Director, in all matters relating to legal issues. By not consulting them, Barbara sent a disquieting message I know better than you do. If you were Barbara, what would you do now? Why? I will take stock of myself and inventory the most appropriate options, bearing in mind, the long term interest of both the employees and the entire organization. My proposals are indeed innovative and achievable but are not perfect. I should have an open mind to modify, adjust or score out any proposal which will not serve the best interest of the company. I will have to lower my guard down, initiate meetings with the department heads and other teams, listen to the views of everyone, argue with them and against them and make them understand, with open heart and sincerity, that this time, top management with the full support of everyone will not allow failures to run in its vein again.