Introduction
The paper is a company analysis of JSC Katavsky Cement. This is an organization based in Russia. It was started in 1915 as a simple production center that later became a research entity in the sixties. In essence, the company prepares cement on commission. It also engages in the manufacture of chalk, fertilizer and clinker. Besides these, it carries out a range of services such as construction and mediation and processing for the Russian Federation.
JSC Cement is one of the most influential Cement companies in the region. In fact, it produced 2.6 million tons of cement in the year 2006. The company is on a path of continuous growth since it boosted production by 13% in 2006 and by 15.4% in 2007. In addition to these accomplishments, the organization boasts of a “Golden quality mark”, “All Russian brand” and the “100 best products of Russia” awards. In the latter awards, it garnered a laureate diploma as well a First Class Diploma.
Analysis of the JSC Katavsky’s internal environment
This internal environmental analysis will examine all the major company elements of JSC Katavsky Cement. These will include company policies, formal structures, organizational resources, managerial philosophies and managerial leadership styles. It should be noted that organizational cultures also form part of a firm’s internal environment, however, these will be examined separately in a subsequent portion of the essay.
Company policies
JSC Katavsky Cement has established a series of company policies designed to guide its managers while making both long-term and short-term decisions. One such policy is continuous improvement and innovation. Currently, the plant is planning an overall upgrade to boost production. The latter move is an indication that this cement manufacturer is always looking for ways of becoming more competitive.
Employees in this company also know that they ought to carry out their respective tasks and responsibilities in a socially responsible manner. Any activity that might put the lives of other persons in danger is strongly discouraged within this firm. One way in which they do this is through their certification system. All cement manufactured in this company is compared to a German standard in order to ensure that the end-user will be safe when utilizing it. On top of these, the JSC plant often updates its equipment in order to make sure that its employees are protected and that their consumers get what they are looking for. Given the fact that the company has received more than one award for its commodities, then this is proof that its company policies must be heading in the right direction.
It should be noted that as a cement manufacturer, there are some unique environmental conditions that are often faced by such companies. This corporation may have to minimize its emissions and make its working conditions more effective.
Its technical aspects are also lacking in that the company’s fuel and electricity usage must be monitored by the installation of a more effective system. The latter can be easily done through the use of an automated system.
Organizational structure
In JSC Katavsky Cement, there is some semblance of order when it comes to the arrangement of people and tasks so as to facilitate information flow, responsibility and decisions and decision-making abilities there. The breakdown of these hierarchies is often represented through an organizational chart and this chart can be found in Appendix 2 below.
As one analysis the latter company’s structure, some strengths can be detected quite easily. For instance, the presence of a formal organizational chart to represent its formal structures promotes communication between different stakeholders in the organization. When employees are not sure of formal lines of authority, then chances are that they may not know who to approach and this hampers communication lines completely. But since this company does not lack an organizational chart, then it has been spared from all the latter mentioned issues. Additionally, studies have shown that technologically centered organizations are best operated in hierarchical structures. The Cement manufacturer has therefore adopted a method that optimizes its returns in the market under consideration.
Company resources
JSC Katavsky Cement has numerous resources at its disposal i.e. its finances, supplies equipment, machinery, infrastructure, facilities and information. In this regard, the company’s policies are accomplished through these resources and they provide mechanisms for changing the organizational environment.
One of the most reliable methods of assessing an organization’s structures is through its financial position. Tables 1 and 2 in the Appendix section reflect how the company has been performing over the past few years. Its positive company returns indicate that it has been utilizing its resources properly. Additionally, production, marketing and distribution costs are all considered when setting prices of its commodities as seen in the table. The national average of cement is much lower than what is offered by the latter company. Consequently, it is safe to assert that since JSC cement has been in a position to offer such an affordable price, then it must be managing its resources quite properly.
Marketing is another important aspect of the company’s production process; this usually takes the form of demand and supply analysis alongside market analysis. One problem that can be easily detected in its marketing strategy is that the marketing team does not contribute towards its product and assortment policy yet they are in a unique position to do so.
JSC Katavsky uses some modern forms of marketing such as internet ads. Additionally, it engages in several exhibitions both within Russia and in other countries in its region such as Ukraine, Yugoslavia as well as Bulgaria. Using regional platforms is an effective strategy; however, there are still some areas that need improvement. First of all, because its products are prepared on commission, the company tends to neglect its advertising. In fact, its attempts can be characterized as weak efforts thus implying that it needs to step up its marketing endeavors.
JSC Katavsky Cement is yet to embrace another opportunity in Cement marketing. Most consumers within this sector come from the construction sector i.e. those who do industrial, civil, residential and house plant constructions. In the past, these have been the target consumers yet they do not represent all the groups that can purchase commodities from the firm. Other groups that can form an important part of this company’s consumer base are members of the civil engineering sector. JSC Cement should target the latter group in order to boost its consumer base.
One of the most valuable resources in any organization is its personnel. JSC Katavsky Cement has not fully utilized such a valuable resource. This is because the company lacks a reward system that would encourage its members to maximize their potential. What this means is that the company’s staff lacks initiative and drive as no efforts have been made by the company to stimulate their hard work. The latter can also be achieved through effective training and development programs.
In theory X of management, managers assume that their employees are incapable of making strategic decisions and that they need to be directed constantly. Theory Y on the other hand offers a radically different approach. Here, it is assumed their employees are well aware of their responsibilities and can therefore be granted decision-making powers. The managerial philosophy that has been adopted in the case study is a platform for self fulfillment in that it has affected employee behavior and harmony in the company. This Cement manufacturer has elements of both decentralized and centralized decision making. In other words, it has attempted to place some responsibilities among its employees while at the same time leaving a lot of authority in the hands of the company’s managerial staff. In this regard, it can be said that the Cement manufacturer tends to lean towards theory X than Y. More needs to be done to delegate authority in this corporation.
Leadership styles
Human resource experts describe empowerment as the process of delegating authority to one’s subordinates; such a process entails granting them skills, autonomy and freedom. JSC Katavsky Cement has not made the move towards encouraging active participation from members of its team. This is obstructing the company from operating at its optimal production rate. That aside quality issues can be greatly improved if the company’s leadership style reflects the concept of empowerment. It is likely that when employees are empowered, then they can respond to situations almost immediately as information need not pass down the organizational hierarchy. All these issues can be seen through better customer service, heightened creativity or innovation, lower costs and even greater commitment. JSC Cement is therefore missing out on all these positive aspects that other competitors are embracing.
Competitors
No internal environmental analysis is quite complete without looking at the competitive arena. JSC Oskoltsement is a force to reckon with in the Russian cement manufacturing sector. It is a relatively new firm with a lot of modern equipment. The latter aspects place it in a more competitive position because cement manufacture is best done with recent technology that has not undergone excessive wear and tear as is the case with Katavsky. This company is also a threat to the case study because it has recently introduced a Finnish packaging line designed to minimize wastage during calibration. While their quality may not have exceeded the case study’s levels, their production processes are much more effective (at a ratio of 1: 1.5). This gives the competitor an incentive to reduce their prices and therefore boosts their position.
Organizational culture at JSC Katavsky and how it impacts organizational performance
organizational culture within any organization refers to the system and policies applied there. It is usually depicted as the morals, customs and expectations of its members. In JSC Katavsky, there is an overall culture that reflects the social influences in the company and these have been shaped by the geographical setting of the plant’s premises – the latter depiction of culture is difficult to change.
Some basic elements guide the ‘personality’ of this company and they include;
- Social networks
- Rites and rituals
- Heroes
- Values
Values refer to those aspects that JSC Katavsky Cement cherishes in its employees. In this regard, the latter company cherishes productivity among its members. However, there is much that needs to be covered in terms of boosting aspects of the company’s management style. For instance, the company has several subcultures inherent in its various departments. Its line managers have different values and so do their senior managers as well as line employees. This often leads to conflicts between the various groups and eventually hampers effective productivity.
Since the firm was started in the early twentieth century, it can be difficult to call the company’s founder its hero because a hero must be someone who represents the company’s attitudes and values. In other words, the company needs to carry out positive efforts of identifying such a character and promoting him as someone to look up to among its staff members.
Rites and rituals entail all the ceremonies, routines and components that the firm values. Many companies often carry out annual meetings, awards, banquets and other ceremonies designed to inspire employees to work harder and some of the latter apply to JSC. This company normally carries out a general meeting for shareholders. While JSC Cement has carried out some rites and rituals, it is yet to fully exploit the potential that such activities can have in boosting their competitive advantage. Therefore, the company needs to embrace more forward-looking ideas that could enhance its organizational culture. For instance, the company needs to introduce general meetings that involve other members of the organization as everyone has an important perspective that they can bring to their discussions.
Social networking involves all informal communication that goes on in an organization. Such networks can sometimes be detrimental to an organization’s performance if they take the place of more sound concepts like merit and hard work. However, when kept at a minimum, it can be useful in motivating employees who may aspire to be like the heroes of their times.
The work environment within JSC Cement can reflect upon the kind of work culture that prevails within this organization. For instance, one can detect some negligence on the part of the company because of its dirty dining room. The company also rarely carries out renovations and other sorts of initiatives. Consequently, it can be said that there is still a lot that needs to be done in terms of making the work culture more positive for staff members.
In the Schein model of organizational culture, every company has several attributes. The first level is what can be observed by the outsider who judges culture through the furnishings, offices, visible awards among others. As it has been asserted earlier, these aspects are weak in JSC Katavsky Cement. The second level is composed of all the slogans, mission statements and values depicted through members’ behavior. As it has been seen earlier, the company needs to make these aspects more important in the day-to-day running of the company. Lastly, there is the deepest level of any organizational culture are the assumptions carried forward by different members. These can only be fully understood by deeply interacting and understanding members of an organization. The latter perspectives can be used to the advantage of the company if it embraces them during organizational change processes.
Combined analysis of the strengths and weaknesses
Conclusion
There are a number of strengths that stand out in the company analysis. First, the company has built a good reputation through its many years of production. Also, the quality of their products is very high thus explaining why it has received several awards. It has high volume outputs; this is why it is doing relatively well in financial markets.
Some of its major weaknesses include its lack of new cement manufacturing technologies, lack of cost-saving techniques, lack of environmental schemes and lack of effective personnel.