Executive Summary
Ingersoll Rand is one of the brightest examples of the companies, which were able to implement change successfully. In the first place, it viewed mergers and acquisitions as one of the tools to gain an international presence. Nonetheless, the strategy stopped being effective, as the company was lacking the internal consolidation. In this case, Lamach, the new CEO, prioritized new values such as talent recruitment and globalization. Nonetheless, overestimating the significance of the corporate values led to the lack of communication with the employees and middle managers. Finding this connection was one of the major challenges.
In this case, the CEO’s actions were driven by external factors such as the rising popularity of globalization, increasing competition, and the changing role of managers in the business. The company had to face an extended number of challenges, but it was able to overcome the difficulties and become one of the leaders in its sphere. Nonetheless, highlighting the importance of employees in the first place and engaging them in the decision-making process would have helped avoid the adverse consequences mentioned above.
Introduction
Ingersoll Rand is one of the bright examples of the companies with diversified product lines and well-developed customers’ base in commercial and industrial markets (Ingersoll Rand: Our global brands, 2016, para. 1). Nowadays, its primary values pertain to diversity, innovation, sustainability, and inclusion (Ingersoll Rand: Discover us, 2016, para. 1). Nonetheless, financial stability and internal integration were not always prioritized.
Initially, the company expanded its coverage with the assistance of mergers and acquisitions (Carter, 2013). For instance, in 2007, Ingersoll Rand acquired the company Trane to increase the number of its product lines (“Ingersoll-Rand to acquire Trane”, 2007). The previous CEO of the firm, Henkel, stated that “this acquisition represents a significant step in Ingersoll-Rand decade-long transformation to become a leading global diversified industrial company” (“Ingersoll-Rand to acquire Trane”, 2007, para. 5). It was one of the reasons for the company’s international presence today and its first step in pursuing a globalization strategy. Simultaneously, the company needed to change its internal organization and redesign its structure, as the diversity of components created threats to organizational unity.
The firm was required to start its international strategy by implementing various changes. The newly appointed CEO, Lamach, decided to focus on integration and emphasize the significance of talent management and leadership (Carter, 2013). His perception of the values of the company was entirely new, and re-establishing the principles of corporate culture was critical in reaching the goals. Despite Lamach’s positive intentions, the company had to face an extended variety of difficulties on its way to success.
Analysis of Key Strategic Issues: New Globalization Strategy
To overcome the challenges and ensure the synergies between the departments, Lamach, Hawkins, and Mason decided to consolidate their executive knowledge and work together as a team (Carter, 2013). The major strategic issue that Lamach had to face during his first years of being the CEO was the lack of integration in the company. It remains apparent that mergers and acquisitions contribute to the rapid expansion of the organizational operations (Dahlhoff, 2013). Alas, a plethora of mergers made the synergies between the departments almost impossible.
The issue of integration was complex and required the company to face a variety of difficulties. In the modern business world, executives prioritize employees, and middle managers as the most important assets of the firm (McKinney, 2013). The middle managers play the role of intermediary and help deliver the company’s vision and mission. Underestimating these matters was reflected by no connection between different levels of subordination.
Alas, in the past, the top management of Ingersoll Rand had different leadership styles and priorities. In this case, the executives of the company had a tendency to highlight global issues such as the overall values and missions of the organization (Carter, 2013). This international focus led to the fact that the company’s executives underestimated the role of middle managers, who are the actual definers of the organizational culture. After a certain period, Lamach could not even interact with them effectively since he did not understand their colloquial language (Carter, 2013).
Change Drivers: Competition and New Trends
The desire to change organizational culture and structure appeared for many reasons. The company was paying vehement attention to the actions of competitors and trends in the industry. According to Conti and Giaccaria (2013), internal integration is one of the effective solutions to maximize profits. It assists the company in optimizing its financial stability and maintaining its competitive edge at the same time. Overall, relying on these concepts helped the company to enhance its international presence by having an appearance in 54 countries (Carter, 2013).
Simultaneously, the integration developed a distinct competitive edge, as it helps consolidate diverse departments and work together as a unified mechanism (Conti & Giaccaria, 2013). Using this approach assists in finding a relevant solution to the issues and increases the company’s innovative initiatives. Supporting his actions by these arguments, Lamach believed that “making a difference for employees” would attract more talented employees to the company and increase its positions among the rival firms (Carter, 2013, par. 43). In this case, focusing on providing favorable conditions to the employees and new concepts assisted the company in developing its distinct competitive advantage.
Other potential drivers, which motivated the changes, were the new perception of the middle managers in the firm and the rising trend of globalization. As it was mentioned earlier, Lamach spotted the importance of middle managers in the company’s success (Carter, 2013). He modified his perception of their function in the company to build a trusting relationship with this group of employees. The modification pertained to the changing role of the managers in the modern firm, as they are now viewed the distributors of vision in the company (McKinney, 2013). Similar principles apply to the globalization strategy, as, nowadays, it becomes a central component of any business activities. It has a reflection on marketing, leadership tactics, and mission of the organization, Kotler and Armstrong claim (2011). Clearly, Ingersoll Rand was able to take advantage of these concepts and successfully engage them in its corporate values.
Recommendations: Employees’ Participation
Lamach, Hawkins, and Mason were able to overcome difficulties. However, I believe that there are several aspects that could have been done differently to make the change rapid. For example, focusing on the employees in the first place could have been used as one of the ways to avoid all the obstacles that Ingersoll Rand had to face. Spotting the significance of managers initially would assist in minimizing a gap in communication. Nonetheless, making these mistakes helped the company learn a hard way and become one of the brightest examples of the firms in the modern world. It was able to encourage change within the organization and make it work as a human being, where each organ is responsible for overall prosperity and a healthy environment.
I can freely recommend engaging employees in the decision-making as one of the ways to increase their commitment and build trusting relationships with them. Organizing various meetings, competitions, and conferences can help employees become closer to the managers and vice versa (Attridge, Herlihy, & Maiden, 2013). Additionally, interacting with the middle managers every day will help them understand their decision-making patterns, language, and values. Overall, despite the fact that the company has a well-developed customer-base and recognition in various industries, the current management of the firm can take advantage of these recommendations. It will help the management resolve present issues and avoid similar problems in the future.
Conclusion
In the end, discovering the history of Ingersoll Rand helps to see that it is necessary to monitor and spot the changes at the right period. Its effective transformation from unconsolidated business units to fully integrated organism makes the company one of the successful examples of effective change implementation. This case example helps see how the company’s values modified with its CEOs. In the first place, Henkel focused on the expansion strategy with the mergers and acquisitions as the first step of pursuing globalization. Despite the positive intentions of this approach, it caused a variety of problems, and one of them was the lack of integration.
Lamach had to emphasize other values. He changed its focus to the global integration and talent recruitment. The primary drivers for the need to modify the corporate culture were globalization, new roles of middle managers, intensified rivalry, and desire to increase profits. Nonetheless, his focus on the company’s strategy and priorities solely led to the absence of a connection with middle managers. In this case, the management of the company had to learn from the mistakes and establish new language systems to communicate with its employees. Encouraging the workforce to participate in the decision-making could have been used as a tool to avoid the difficulties. Nonetheless, without making the mistakes highlighted above, Ingersoll Rand would not be interesting to study.
References
Attridge, M., Herlihy, P., & Maiden, P. (2013). The integration of employee assistance, work/life, and wellness services. London, UK: Routledge.
Carter, L. (2013). A leadership makeover at Ingersoll Rand. Web.
Conti, S., & Giaccaria, P. (2013). Local development and competitiveness. New York, NY: Springer Science+Business Media.
Dahlhoff, D. (2013). Marketing related motives in mergers and acquisitions: The perspective of the U.S. food industry. Berlin, Germany: Springer-Verlag.
Ingersoll Rand: Discover us. (2016). Web.
Ingersoll Rand: Our global brands. (2016). Web.
Ingersoll-Rand to acquire Trane. (2007). The New York Times. Web.
Kotler, P., & Armstrong, G. (2011). Principles of marketing. Upper Saddle River, NJ: Pearson Education.
McKinney, R. (2013). Developing middle managers? What matters now? Web.