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Fridgecom creates world class refrigeration systems for specialized purposes. The company was originally established in 1956 under the original name of "Wilson Refrigeration Ltd". Wilson has branches and plants all over the world including Nottingham, UK. Fridgecom products are manufactured at one of the most advanced plants in the world. Fridgecom has been market friendly and has understood the needs of the consumers very well.
Fridgecom's departmental is structured so as to have nine departments. The main departments include Accounts, Human Resource, Info. Systems, Sales, Production R&D, Stores and Logistics, Engineering, Managing directors office. All the departments have different roles to play and are interconnected to ensure smooth functioning and proper conduct of the business on the whole in order to maximize productivity and monetary returns along with a boost to the reputation.
However there have been a couple of irregularities with respect to the management of the employees within the organization. There have been reports of the workforce changing rapidly and the management unable to cope with the pressure as the reasons for their absenteeism seems unrecognized. Moreover even the staff turnover seemed to be high. The case here talks about the problems that arose due to this and also provides an iota of idea as to what the solutions might be like.
1: Using specific examples drawn from the case study critically discuss different styles of leadership and potential behavioral responses.
1.1 The concept of Leadership:
"Leadership may be considered as the process (act) of influencing the activities of a group in its efforts towards goal setting and goal achievement". (Stodgill, 1950)Leadership consists of many aspects special to each individual in a position to create their own style in accordance with theory and personal traits, such as emotional intelligence. The concept map shows how all the parts work together in the organization to accomplish goals. The followers are an important aspect because without them, there would not be leadership. The personal relationships built help create a stable base on which the leadership can thrive. This concept map is one example of leadership by an individual with many variations possible. Leadership is diverse and individualized.
Figure 1 Leadership styles and qualities
There are many ways of looking at Leadership and many interpretations of its meaning. Leadership maybe interpreted in simple terms, such as 'getting others to follow' or 'getting people to do things willingly', or interpreted more specifically, for example as 'the use of authority in decision making'. Leadership can also be discussed in terms of a form of persuasion or power relationship. Good leaders develop through a never ending process of self-study, education, training, and experience (Jago, 1982). Leadership is a process by which a person influences others to accomplish an objective and directs the organization in a way that makes it more cohesive and coherent. This definition is similar to Northouse's (2007, p3) definition - Leadership is a process whereby an individual influences a group of individuals to achieve a common goal.
Leaders carry out this process by applying their leadership knowledge and skills. This is called Process Leadership (Jago, 1982). However, we know that we have traits that can influence our actions. This is called Trait Leadership (Jago, 1982), in that it was once common to believe that leaders were born rather than made. These two leadership types are shown in the chart below (Northouse, 2007, p5):
Attention to leadership as a behavioral category has drawn attention to the importance of leadership style. In the work situation it has become increasingly clear that managers can no longer rely on the use of their position in the hierarchical structure as a means of exercising the functions of leadership. In order to get the best results from the subordinates the manager must also have regard for the need to encourage high morale, a spirit of involvement and co-operation, and a willingness to work. Leadership style is the way in which the functions of leadership are carried out, the way in which the manager typically behaves towards members of the group. (Mullins, 2010).
There are many dimensions to leadership and many possible ways of describing leadership style, such as dictatorial, unitary, bureaucratic, benevolent, charismatic, consultative, participative and abdicatorial. The style of managerial leadership towards subordinate staff and the focus of power can therefore be considered within a simplified three-fold heading.(Mullins, 2010).
Leaders use different types of leadership, and the styles may be described in various ways. Certain leadership styles may be suited to certain situations and most leaders choose from a variety of approaches as they deal with different issues. Daniel goleman has described the following six different types of leadership styles; Coercive leaders -demand immediate compliance, Authoritative leaders - mobilize people towards a vision , Affiliative Leaders - create emotional bonds, Democratic Leaders - build consensus, Pacesetting Leaders - set high standards and expect excellence. Coaching Leaders - develop people (Longenecker et al, 2005)
, Laissez-faire (genuine) style - It is where the manager observes that members of the group are working well on their own. The manager consciously makes a decision to pass the focus of the members, to allow them freedom of action 'to do as they think best', and not to interfere; but it readily available if help is needed. There is often a confusion to be contrasted with the managers who could not care, who deliberately keeps away from the trouble spots and does not want to get involved. The managers just let the members of the group get on with the work in hand. Members are left to face decisions that rightly belong with the manager. This is more a non-style of leadership or it could perhaps be labeled as abdication. All different leaders have different approaches to deal with different people within the organization and they adopt what suits best to them.(Mullins, 2005).
1.2 The Current Scenario:
Mike Wilson being the MD of Fridgecom exercises good leadership skills and posses qualities fit enough to cope with the internal affairs within the organization. Mike Wilson is the third generation of his family to operate and own Fridgecom. He also holds qualities of a partially receptive manager who is prejudiced by unimportant facts and makes an effort to pay more attention on such issues. In the paternalistic approach, all decision making authority resides with the change agency. This particular approach to change is perhaps the most familiar and widely used throughout the world. Its use has been documented in all types of cultural groupings whose existence is based on shared and strongly held beliefs (eg. Religious and political groups). Paternalism is a directive change approach in which all decision making authority rests in the hand of the change agency, which decides what is best or necessary for the focal group and assumes a condescending attitude towards those it seeks to change. (Larry, 1996). . In any organization structure formal relationships between members arise based on defined pattern of responsibilities (Mullins, 2010). Mike Wilson shows that he demonstrates the Laissez-faire style of leadership. He constantly delegates authority to get his work done through his subordinates. However the case study here shows Mike as a follower of the Paternalistic style of leadership.. Mike within the Fridgecom organization a line relationship exists between Mike and his employees wherein authority flows vertically down. As the managing director he generally delegates responsibilities and aims at retaining traditional form of functioning within the company. According to Farh and Cheng paternalistic leadership is defined as "a style that combines strong discipline and authority with fatherly benevolence" (Pellegrini et al, 2008). Sinha (1990) suggested that the coexistence of benevolence and authority in paternalistic leadership stems from values in traditional societies pertaining to the father figure, who is nurturing, caring, and dependable but also authoritative, demanding, and a strict disciplinarian. Thus it can be said that consultation of the employees is kept at minimal levels and the final call is generally made by Mike himself. This form of leadership shall posse a problem in companies where the manager of a particular department is vastly experienced in his field yet is not consulted for crucial decision making.
Mike Wilson though took superior decisions but he intentionally kept away from problematic situations. He was unable to find out the probable reason behind varying personnel and staff yields. Since staff turnover has a qualified impact on the training of the employees, the organization looses enough cash in training them, only to later find out that the trained employees leave the organization. This also has an overall impact on the competence of the employees. Even though the senior most managers are sentient of the fact that this has a caused some reputational impact on the organization, it is failing to recognize the reasons behind such impacts. Being a leader, Mike Wilson should be well aware of what is happening in his organization. The fact that Veronica had to submit a presentation to enlighten about him shows that he had little knowledge about what gravity the problem held. The point that Mike Wilson gave an ear to his employees (Veronica) shows that he had genuine interest in knowing more about the 'insides' of the organization. With orientation to the present state of affairs, Mike as the managing director has considered the idea of introducing a new information system for the convalescence of the Human Resource department taking into consideration the idea put forward by Veronica.
Veronica King the director of the Human Resource department is accountable for major areas including recruitment and selection, appraisal, payment and reward systems. The company is facing highest levels of labor yield and thus the strain is mounting on the shoulders of the Human Resource head. The costs and time involved in the enrollment and training of the new candidates is proving highly expensive for the organization which has resulted in Veronica facing complexities in relation to the personnel department the time since she arrived at the company. "Where workers are involved in similar work, share a common task or face the same problems this may assist cohesiveness" (Mullins, 2010). . According to her colleagues, Veronica is incompetent of understanding the importance of an issue and will only increase the tribulations of the company rather than doing away with the same. Referring to Veronica's colleagues, Terry the head of the information systems department regards his department to be at the apex of the organization's functioning. He has extensive knowledge in the field of technology and programming skills and thus conducts his duties efficiently. However, the main weakness in relation to Terry as a member of the company is his poor communication skills. Whilst Veronica has succeeded in winning Mike's confidence, Terry has been unable to put forward his views which contradict Veronica's point. This can be considered as the initiation of conflicting views and ideas among the different departmental heads of the company. These conflicts are known as intergroup conflicts that exist when groups of people within the organization such as teams and departments are parties in conflict (Barker and Angelopulo, 2005). Valuable communication is therefore the means by which inconsistencies are impelled and dealt with effectively. According to Terry, Veronica is uncertain regarding what is to be done, whether the solution is realistic and acceptable by everybody else. The new system shall have a negative impact on the company and thereby in his observation, will only add to the overall disbursements.
According to Mike, for the execution of the new system the consultation and approval of Doug was of supreme importance. Also being the union envoy, he is looked up by the other members of the company in times of critical decision making stages.
Having a complete synopsis of the various characters within the organization it can be generalised that a blend of different leadership styles has been adopted by Mike Wilson in order to maintain the company's operations and rescue it from the growing impasse of the depleting workforce. As per Rajan (2002), different types of leadership styles are needed to cope with different situations. As per Rollinson (2008) instead of attempting to recognize a solitary style of leadership that would be suitable universally, a contingency point of view should be adopted which requires a leader to adopt a style of conduct/behavior that matches the conditions in which leadership needs to be exercised. As the Managing Director of Fridgecom Limited it is suggested that a situational approach be implemented by Mike. The current condition of the organization demands a remedy for the high level of labor yield and a resolution for minimizing the complexities of acquiring information of the labor force working for the organization. Mike has dispensed the attributes of a consultative leader who gives an ear to the ideas and suggestions of subordinates before finalizing a particular action. On the other hand, it is essential for Mike to persuade Doug Stalin and help him comprehend the expediency of employing the two external experts. On the other hand Mike can apply the reinforcement theory that increases the frequency of desirable behaviors by linking those behaviors with positive consequences (Griffin and Moorhead, 2009). In other words Doug must be made aware of the benefits that can be achieved by the introduction of the new system in the organization. The IS technology is only beneficial in order to retain the employee related information which shall help Veronica find out the reason for the high level of labor turnover and also make the appropriate changes to keep hold of the employees within the organization. However it is seen that there are interpersonal conflicts prevalent among employees like Terry who is the head of the Information Systems and Veronica. Terry does not consider Veronica to be capable of making valid decisions. In his view the technical problems cannot be understood by others and thus forming a viable solution was way beyond any one else's capability. Mike in such circumstances must play the role of a democratic leader by providing a fair opportunity to Terry to communicate his ideas and suggestions. This leadership behavior if adopted by Mike might encourage Terry to be more elaborate about his view points and also minimize his interpersonal conflicts with other employees of the organization namely Veronica.
Hence to summarize all the above suggestions and recommendations, a leader should adopt a style that enables him to take decisions effectively and the style such adopted must be in accordance with the type of the organization. Here, Mike Wilson should adopt or take recourse of situational style of leadership to resolve issues pertaining to his organization and work on issues so as to improve the productivity and the efficiency of the employees on the whole.
2: "The problems facing Fridgecom are purely technical; wasting time on 'people issues' just complicates our job as IS developers." --- Terry Cole
To what extent do you agree or disagree with this statement?
A Birds Eye View:
2.1 Human Resource Management;
The terms 'Human Resource Management'(HRM) and 'Human Resources'(HR) have largely replaced the term 'Personnel Management' as a description of the processes involved in managing people in the organizations. Human Resource Management is defined as a strategic and coherent approach to the management of an organization's most valued assets-the people working there who individually and collectively contribute to the achievement of its objectives. Storey (1989) believes that HRM can be regarded as a 'set of interrelated policies with an ideological and philosophical underpinning'.
One of the first explicit statements of the HRM concept was made by the Michigan School (Fombrun et all, 1984). They held that HR systems and the organizational structure should be managed in a way that is congruent with organizational strategy. He further explained that there is a human resource cycle that is followed in typically all type of organizations. (Armstrong, 2007).
Figure 3. The Human Resource Cycle (adapted from Fombrun et all, 1984)
The diagram above is a pictorial representation of what exactly undergoes in an organization with regards to the human resource management. The management of the employees is very much essential so as to induce efficiency and thereby increase their productivity.
The efficiency and performance of staff, and their commitment to the objectives of the organization, are fostered by good human relationships at work. This demands that proper attention be given to human resource management and harmonious employee relations. The manager needs to understand the importance of good managerial practices and how to make the best use of the people resource. The promotion of good human relations is an integral part of the process of management and improved organizational performance. (Mullins, 2010).
2.2 Human Resource Information Systems;
The use of technology in the work place involves the management of people using Human Resource Information Systems (HRIS). The main aim of using this technology in organizations is to increase the productivity of the employees and therefore make the organization more successful.
In an organization that operates with modern management information systems, it is better for human resource department to have the capacity or the ability, in terms of its specific information system, to support the employees and their functions within the organization. HRIS is a computerized system that helps human resource managers gather, organize, store, update and retrieve the information needed for the managers of the employees. These systems are essential to give management the ability to make decisions relating to employee relations. It is important that these systems are regularly updated to make sure that decisions are made based on the right information. (Kleynhans et all, 2005).
The data that is available to the organizations, the information they make out of it and the effective use of the information thus obtained by applying the knowledge they have becomes crucial for the success of the organization. Technology has played a vital role in the above process where use of technology has resulted in growth and success to the organizations that have effectively utilized the available technology. Technology has assisted the companies by allowing the companies to store data traditionally but now companies tend to store information and knowledge by the use of technology. The systems which provide accurate and timely information to employees to make internal processes more efficient and also integrate various business units and link the supply chain and the customers to the organization are called as information systems (Boddy, Boonstra and Kennedy, 2005).
One such advanced information systems that is widely in use is the Enterprise systems (ES) also known as Enterprise Resource Planning (ERP). ERP systems are highly integrated enterprise-wide information systems that automate the core business processes such as manufacturing, human resource, finance and supply chain management (Holland and Light, 1999). All these are done under one single database leading to an effective form of communication between various departments and hence ERP gets the name 'producer-led' (Payne, 2002, pg. 91-92). It is the wide range of coverage that makes ERP an attractive information system that companies tend to go for.
2.4 Information System
Gratton has put forward four basic propositions out of which one explains that there are differences between people as an asset and the traditional assets such as technology (Mullins, 2010). Technology is an element of the information systems adopted by the company. The information system is a set of interrelated components that collect, manipulate, store and misestimate data and information and provide a feedback mechanism to meet an objective (Stair et al, 2009). Organisations require information systems to function and rely on them for the data storage. This system provides and manages data; it supports the value added services to the both internal and external users. Communication between groups of people and actions of individuals can be synchronized by information system. Information system can only succeed if it is implemented in the rational manner. People use information to manage and process outputs; they use raw data which is transformed into information (Boddy et al 2008). As per the Fridgecom case study, information system used by the company is outdated and is not dependable. Veronica who has joined the company few months back is facing dilemma due to poor maintained of data. Data provided by the current system is not trustworthy for making crucial decisions.
Having done the critical analysis in the previous answer, the nature and individuality of Terry Cole- Head of the Information Systems is now simpler to understand. As per the case study Terry Cole has a very weak communication skill, weak enough to confuse other employees. This is plainly because of the high level technical language that he uses to communicate. He is skilled as he holds sophisticated programming expertise and has a varied sense of knowledge about all the technical aspects of the Information Systems. Veronica considers Terry to be a hurdle in every action she tries to take. On the other hand Terry's view of Veronica's solution is completely different as he fails to agree to her solution. According to Terry, the solution offered by Veronica is not viable as it fails to recognize the 'technical problems' existent within the company. Fridgecom Limited is facing grave problems with respect to the unstable workforce and the entire case study revolves around a solution the different members have been trying to derive to solve the same problem. The problems of staff turnover have a grave impact on the training function when considering the time and the cost involved. The company employs valuable time for an employee to understand the job and become effective in that particular role. This however only results into loss of resources and time when the labor leaves the organization. The ground on which the labor turnover is increasing is difficult to understand due to complexities in the existing human resource database. Hence, according to Veronica the most effective method of dealing with the situation is to develop a new Human Resource information system. In contrast, Terry Cole claims that the problems faced by the organization are purely technical in nature and have no connection with the human resource. Thus in order to arrive at an agreement or disagreement with Terry's claim, it is firstly necessary to identify with the meaning and importance of both the information system (technical aspect) and the human resource (people aspect) present in an organization.
Relating the above concepts with the given case study it can said that although huge efforts are made for the selection and training process, very little light is thrown upon the significance of maintaining records and statistics in relation to the workforce. An appropriate background is therefore not available for analyzing the reason for the high level of labour turnover. Added to this drawback the personnel department of the company fails to recognize the difficulties faced daily by the production department. Due to the improper system of preserving information, a problem occurs when decisions relating to the human resource are to be taken. As a remedy for the problem, the introduction of a new information system can be looked at as a significant solution. Not only will the system aid in maintaining records of the workforce but will also provide a basis for contemplating the labour related problems. In this manner effective decisions relating to the people aspect of the organization can be made smoothly.
With respect to the discussion done regarding the ERP concepts, the managers in order to ensure smooth functionality among the department must go in for an ERP system that minimizes all the inter-departmental conflicts and the manager is well aware of the happening within the organization So an ERP system throws a light on the areas which are problematic so as to help the manager come up with a solution for it. ERP is an essential IS system which could not only enhance the technical aspects of the organizations but also provide a boost to the Human resource System so as to ensure a smooth conduct of the activities within the organization.
Analyzing Terry Cole's statement, "people issues' and the technical issues have a lot of similarities and are interconnected with one another. 'Socio-technical theory refers to the interrelatedness of 'social' and 'technical' and is founded on two main principles. One is that the interaction of social and technical factors creates the conditions successful or unsuccessful system performance. These interactions are comprised partly of linear cause and effect relationships, the relationships that are normally designed, and partly from non linear, complex, even completely unpredictable and chaotic relationships, those that are unexpected'.( Walker, 2009). The technical problem here is the lack of software or a system to record databases of previous employees and as such Fridgecom Ltd lacked a decent one. This caused grave problems for Veronica which has already been mentioned earlier in the previous answer. The technical issue here is lack of a program to facilitate the smooth functioning of matters related to the Human resource. Terry on the other hand is against the implementation of Mike's new IS project which facilitates the working and finds a solution for the 'people issue' problems. This is because Terry feels that, the implementation won't have any effect on the ongoing process as the issue seems to be a technical issue.
This can also be viewed as a people problem as the reasons for the absenteeism seems unknown. The labor turn over seems to be on a all time high basis. This only shows that Fridgecom ltd has a sleek knowledge about their human resources and the management seems to be very poor. The reason for this might be lack of a proper information system to facilitate the ongoing process og managing people. However as suggested by Veronica, the solution offered by her may not be true because the actual reason for the high level absenteeism and work turnover is not yet known.
Terry feels that too many systems will make his job more difficult as he is already in the process of patching legacy systems who fail to communicate effectively with each other. Moreover Terry having notions about Veronica feels that her proposal of introducing a new IS system is futile as the problem is technical according to him.
The problem here is that of a lack of an IS which has features of both the HRIS and the ERP, so as per the theories and the concepts discussed, a new IS for the human resource should be introduced having done a thorough analysis of the consequences with regards to the benefits that it may achieve in the future that Fridgecom would derive.So an IS system should include feautures capable enough to deal with the social issues with respect to the problems of high work turnover and the reasons for absenteeism.
In conclusion to all the above answers, theories and concepts, it is very much essential for any organization to firstly recognize problems, secondly to find the reasons for the problems and thirdly to find a solution suitable enough to solve those problems. Fridgecom Ltd, should have a IS system that can ensure that there is smooth functioning, a leader who is well aware of the happenings in his organization and someone who people look forward to. Fridgecom ltd needs a leader who is capable enough to take decisions during the times of difficulty and who is knowledgeable enough to handle pressures without delegating all the work to the subordinates. The organization needs to keep its options open while choosing the best IS for the organization. HRIS or ERP would be among the best suited for organizations that generally have human resource issues along with technological drawbacks.