Upload
tim-pennoyer
View
845
Download
1
Tags:
Embed Size (px)
DESCRIPTION
Citation preview
ANALYSIS OF USAHP MERGER WITH MEXCO IN LOURDES, MEXICO
USAHP
Presentation by: Zachary Cannard, Ann Frasier, Christy Montgomery, and Tim Pennoyer
Summary of Case Study
Demographics of Lourdes
Pg. 113-116
Click here if embedded video does not show: http://www.youtube.com/watch?v=wqtSYxu9gPE
Factory Conditions of MEXCO
Never allocated much money for repairs
If it wasn’t broken they didn’t fix
Technicians developed their own ways to fix machinery to keep it in working order
Pg. 113-116
New Company (USAHP)
Salary scales based on job title and responsibilities
Hiring educated people for positions rather than families
Instituted safety standards
Held employees responsible
Pg. 113-116
Merger Mistakes
Lack of communication No explanations for the changes No clear reasons for the changes No communication about the formalization of the
selection and reward system
Hiring of outsiders created tension
Accountability regarding maintenance rather than trust
Pg. 113-116
Fixes
Realized new system wasn’t working
Leadership team formed Included members of all the production areas Formed sub-committees; all areas represented
Clearly stated objectives
Kept long-term key employees and found better suited places for them to work
Pg. 113-116
Lessons Learned
Do research on demographics prior to instituting changes
Perhaps send a team to observe prior to simply making changes effective
Listen to and learn from long time employees
Culture and customs matter
Pg. 113-116
Traditional Organizational Design Analysis of Case Study
Traditional Organizational Design
Clarifies responsibilities
Predictable
Feelings of stability and trust
Clear relationships (Conrad & Poole, p. 68-69)
Traditional Organizational Design
Bureaucracy and Structure
Specialized skills to be efficient and effective
Hierarchical – supervisors directly responsible
Centralized – major decisions made by positions at the top (Conrad & Poole, p. 69)
Traditional Organizational Design
Scientific
Accountability
Time motion studies
Increase productivity by being efficient
Atmosphere of cooperation and mutual gain (Conrad & Poole pgs 70-71)
Applied to USAHP Prior to Merger
They had very specialized workers
Hierarchical Pay and positions were defined
Decisions made at the top
New efficiencies implemented
Employees held accountable for new efficiencies
Applied to USAHP During Merger
Decisions were made by people unaware of the strong cultural organization of the company
Poorly communicated to the employees Changes implemented without explanation Standardization of positions and salaries
Hiring of staff that were from a vastly different socio-economic standing
Solutions
Recognized they were facing failure
Training
Rewards for commitment to new system
Rewards for meeting set goals
Leadership teams formed that included representation from all departments
Traditional Strategies of Rule-Reward
• Traditional approaches exemplify a managerial prerogative in which the chain of command is followed top-down (Allen & Judd, p. 161)
• Rule-reward systems succeed only if they are supported by effective communication (Conrad & Poole, p. 82)
• Rules must be clear enough to be easily understood and specific enough to give employees precise guidelines (Conrad & Poole, p. 83)
• Rule systems succeed only if they are supplemented by a credible reward system (Conrad & Poole, p. 83)
USAHP During Merger
USAHP completely revised the selection and reward system of the former MEXCO.
It based its rule system off of “continuous improvement” and constant monitoring of statistics, but it did not clearly define the criterion.
USAHP management assumed because Mexico largely has a culture of supporting a top-down approach they would accept the new rules.
…but they failed to clearly communicate and provide specific guidelines
Traditional Strategies of Rule-Reward
Employees must be persuaded that the reward system is fair, based on performance, rather than friendship.
If employees see the reward system as fair, their job satisfaction is higher and distributive justice is present.
Procedural justice will be present if the employees see the process utilized to allocate rewards as fair and trust in the organization will be higher
Supervisors use persuasive strategies, such as communicating information about the system, to convince subordinates the system is just (Conrad & Poole, p. 84)
USAHP During Merger
Assumed that MEXCO was a traditional organization and failed to notice the relational and cultural aspects.
Employees did not see the reward system as fair or just and many voiced dissatisfaction.
The former “familia” basis for promotion and salary was replaced by the hierarchal structure and need for credentials and statistics
Management failed to be persuasive or communicate resulting in chaos
What could the company have done in the beginning stages of the merger to recognize these obstacles?
Solutions
Recognized they were facing failure
Rewards for commitment to new system
Rewards for meeting set goals
Training with clear guidelines
Leadership teams formed that included representation from all departments
Traditional Strategies
It has been proposed that job satisfaction has favorable consequences on work achievement, job enrichment, and a higher quality social context (Staw, Sutton & Pelled, p. 53)
Knowing the requirements of clear communication and precision regarding rules and rewards, what strategies would you implement to define the rule-reward system of your organization?
There has been a sharp increase in Japanese management systems and employee involvement based off of traditional strategies (Wageman & Baker, p. 139)
How does the ever changing role of organizations utilize these strategies in today’s economy? What obstacles present themselves?
Cultural Organizational Design Analysis of Case Study
Cultural Organizational Design
Humans are emotional beings. Feelings of connectedness and community are important aspects of an organization (Conrad & Poole, p.156)
Employees make strategic choices based on their individual beliefs, values, and sense-making processes (Conrad & Poole, p. 156)
Employees form communication sub-cultures with people who share their views (Conrad & Poole, p. 157)
Sub-cultures are fluid and ever-changing
Cultural Strategies of Motivation, Control, and Surveillance
Ways organizations encourage employees to identify and see themselves within an
organization. (Conrad & Poole, p. 158)
Socializing Assumptions Externalization, Objectification, and Internalization
Reinforcing Assumptions
Regulating Emotions
Cultural Strategies of Motivation, Control, and Surveillance
Ways organizations encourage employees to identify and see themselves within an
organization. (Conrad & Poole, p. 158)
Symbolism Metaphors, stories, myths, rituals, and ceremonies
Expressions of cultural assumptions Reproduce cultural assumptions Conrad & Poole, 2005, p. 163
Cultural Strategy Applied to Merged USAHP
Two different organizational cultures combined USAHP & MEXCO
Different hiring strategies, salaries, workforce base, etc.
Two different people cultures within the newly combined organization Lourdes State & Azteca State
Different foods, entertainment, sports, etc.
Two different national cultures comprised both organizations USA & Mexico
The New Changes
Running the merged Lourdes plant in similar fashion to plants in the U.S.
New specialized workforce Brought in from outside the region, instead of
improving current education of employees. Firing overpaid managers.
New values Previously, “Fairness” based on tenure and loyalty, not
qualifications.“Active Management” System based on
Japanese managerial practices “Continuous Improvement” Constant Performance Monitoring
Where They Went Wrong
Wrong assumptions in relation to how the culture would receive changes Cultural management and planned cultural change
are exceptionally difficult ( Conrad & Poole, p. 157)
Cultural Solutions to USAHP
Getting key cultural members onboard to changes before making them.
Anticipatory Socialization: Feeding employee perceptions of a culture strong in
human relations, values, and open systems to raise levels of readiness for change. (Jones, Jimmieson, & Griffiths, 2005, p. 361)
Using cultural symbolism to foster change.Use Warren’s (2004) three strategies for
cultural sensitivity : compliance-gaining, rhetoric, and cultural analysis. (p.
361)
Relational Organizational Design Analysis of Case Study
Relational Organizational Design
A response in opposition to traditional strategies that lost effectiveness over time
Prime example: Hawthorne Studies Study showed positive correlation between workers
productivity and perceived interest level of management (Wrege, 1976, p.31)
Relational Organizational Design (cont.)
Overlapping Groups vs. Independent Divisions Likert (1958) argued that units with this management
style were more productive, felt more team spirit, and were more motivated
Decentralization Decisions are not just made by senior management Lower level employees are empowered (Conrad & Poole, 2005, p.110).
Relational Strategies of Motivation, Control, and Surveillance
Relational Motivation: Maslow’s Theory of Motivation For a deeper dive on this topic, click here
Methods Beyond Money Doing bigger things
Participatory Decision Making (PDM) Employee is more satisfied when PDM is implemented
(Schaubroeck, & Jennings, 1991, p.49)
Relational Solutions to USAHP
Set up informal communication networks Potential result: “spur collaboration and unlock value”
(Bryan, Matson & Weiss, 2007, p.44).
Telling, Selling, and Delegating Hersey-Blanchard situational leadership
Person-Centered Communication (PCC) Positive correlation discovered between PCC and job
satisfaction (Fix and Sias, 2006)
The Take Away…
Would the problems have been similar if the laid-back MEXCO had acquired USAHP instead?
How can the lessons learned by USAHP help you with a change within your own organization? Have you recognized cultural aspects? Have you clearly communicated? Have you gained employee buy in?
Links for Continued Exploration
http://www.neiassociates.org/connolly.pdf Excellent paper on the cultural aspect of
organizations
http://www.pbs.org/ampu/crosscult.html This link contains: Six Fundamental Patterns of
Cultural Differenceshttp://www.youtube.com/watch?v=BrJTf97Ev8o
Cross-cultural training video
http://econ-www.mit.edu/files/3117 Paper on the pitfalls of participatory programs
References
Allen, J., & Judd, B. (DATE). Participation in decision-making and job Satisfaction: Ideal and reality for male and female university faculty in the United States. Human Communication. 10, 157- 180
Bryan, L. L., Matson, E., & Weiss, L. M. (2007). Harnessing the power of informal employee networks. McKinsey Quarterly, (4), 44-55. Retrieved from EBSCOhost.
Conrad, C., & Poole, M. (2005). Strategic organizational communication. Belmont, CA: Wadsworth.
Fix, B., & Sias, P. M. (2006). Person-centered communication, leader-member exchange, and employee job satisfaction. Communication Research Reports, 23(1), 35-44. doi:10.1080/17464090500535855
Freeman, R., & McVea, J. (2001) A stakeholder approach to strategic management. In M.A. Hitt, R.E. Freeman & J.S. Harrison (Eds.), The Blackwell Handbook of Strategic Management. (pp. 189-207). Hoboken, NJ: Wiley, John & Sons, Inc.
Henderson, J. (1993). Strategic alignment. Ibm Systems Journal. I1, V32. Retrieved from http://www.dl.acm.org.
Hersey, P. and Blanchard, K. H. (1969). Life cycle theory of leadership. Training and Development Journal, 23 (5), 26,34.
Hunt, J. & Weintraub, J. (2006). The coaching organization. Thousand Oaks, CA: Sage.
Jones, R. A., Jimmieson, N. L., & Griffiths, A. (2005). The impact of organizational culture and reshaping capabilities on change implementation success: The mediating role of readiness for change. Journal of Management Studies. 42. 361-386.
References
Likert, R. (1958). MEASURING Organizational performance. Harvard Business Review, 36(2), 41-50. Retrieved from EBSCOhost.
Miles, R., Snow, C., Meyer, A. & Coleman, H. (1978) Organizational strategy, structure and process. The Academy of Management Review. 3. Retrieved from http://www.jstor.org.
Schaubroeck, J., & Jennings, K. R. (1991). A longitudinal investigation of factors mediating the participative decision making job satisfaction linkage. Multivariate Behavioral Research, 26(1), 49. Retrieved from EBSCOhost.
Wageman, R., & Baker, G. (1997). Incentives and cooperation: The organizational strategy, structure and process. The Academy of Management Review. 3. Retrieved from http://www.jstor.org.
Warren, T. L. (2004). Increasing user acceptance of technical information in cross-cultural communication. Journal of Technical Writing & Communication, 34(4), 249-264. Retrieved from EBSCOhost.
Wrege, C. D. (1976). Solving Mayo's Mystery: The first complete account of the origin of the Hawthorne studies-the forgotten contributions of C. E. Snow and H. Hibarger. Academy of Management Proceedings (00650668), 12-16. doi:10.5465/AMBPP.1976.4975490