Executive Summary
KTG requires an effective action plan in a new regional office. This need arises from the existing misalignments of management with the values and vision of the organisation in the region together with low employee motivation, which influences its performance.
The report proposes an action plan that involves the development of strategies for enhancing operational effectiveness, communication, and employee motivation. This plan is anticipated to lift the underperformance of the organisation in the region to align with the organisation’s average performance in all other regions.
The report recognises and discusses various challenges that are encountered in KTG’s microenvironment, which also affects its performance negatively in terms of profitability. The discussion forms the pillar that supports the suggested corporate strategy.
By examining the diverse regional capabilities of KTG, the report emphasises the need of developing an effective strategic plan and its proper management. This plan constitutes the only way in which the organisation can establish a competitive edge in a market that is characterised by competitors who offer better value for money to the industry clients.
Introduction
Leadership Overview
Leadership comprises an important aspect of any organisation that seeks to remain resilient to various external and internal operational challenges. Leadership inspires followers to work collectively to achieve specific goals. Leading is an organisational task that not only influences the followers (employees), but also leaders in a manner that ensures that organisational objectives are achieved through change.
According to Lussier and Achua, it integrates and intertwines followers and leaders while at the same time enhancing organisational objectives and missions by engaging other organisational stakeholders1. While leading, followers must be involved. A leader functions as a strategist, communicator, and motivator.
Visions, goals, missions, and objectives guide the daily operations of organisations. Leaders endeavour to ensure that people believe and work towards the achievements of these aspects while managers attempt to administer rules and regulations, which ensure that things are accomplished using an established protocol and procedure.
Hence, their focus is on managing work while that of leadership is to lead people in an unknown future. These roles reveal the importance of leadership as opposed to management in terms of manoeuvring through the challenges encountered by KTG.
A recent survey by KTG’s CEO identified challenges such as demotivated staff, which also have inadequate focus on future expiation of the organisation, lack of awareness of the goals, mission, policies, and values of KTG among its staff members, poor engagements, out–of-date strategic plans and mismatching expertise, and the anticipated growth potentials.
This report confirms that these challenges can be addressed successfully by adopting appropriate leadership techniques as they apply to communication, strategy developments, and motivation.
Company Background
KTG offers architectural, mining, engineering, and environmental services among others. The company has operational centres in 20 cities within Australia, including the capital. Within the last 10 years, KTG has been experiencing tremendous growth across all its operational areas. The only challenge that was encountered was during 2008/2009 global financial crisis when it experienced some retarded growth in some cities.
The formal structure of the operation takes the form of a matrix that has two streams, namely business and knowledge stream. Businesses stream discharges roles such as acquiring contracts, engagement in managing projects, developing an enterprise, and delivery of services to KTG’s customers. The knowledge stream dispenses the function of leveraging and sharing expertise.
It also develops individual capacities and abilities of the organisation as a composite system. All staff members have leaders. One of the heads is in charge of the knowledge stream while the other is in charge of the business stream. Business streams are accountable to the regional head. Knowledge streams are answerable to the chief knowledge officer who is located at KTG’s head offices.
Strategy
Considering the challenges experienced by KTG, it is important to derive a corporate strategy that aligns the projected future position of the company across all its areas of operation with its goals, mission, policies, and values. This way, it can become possible to prescribe an effective direction for each division to yield success.
This requires the availability of an organisational framework for implementation of the directions. To address the challenges identified by the CEO within my regional office, a new strategic direction needs to address areas such as business streams, finance, human resource, and knowledge streams of the company.
In the process of adopting various techniques and tools for developing an effective strategic plan, strategy implementation and management constitutes one of the key things that KTG should consider to bring the performance of my region to at least the company average. In this plan, definition of products and geographical scope is of paramount importance.
According to Yardley, more success can be achieved through narrowing or increasing the product range that is offered by the organisation2. Therefore, determination of the products or services that KTG needs to specialise in within the region acts as a performance game changer.
In some situations, Yelkur says that is important for an organisation to focus on placing its products and services within geographical spread, which it anticipates to yield more sales3. Thus, in the development of KTG corporate strategy, determination of optimal spread of products and service offering verifies the capacity to lift the business performance and financial capability of my region to (or above) the company’s average.
While developing an effective corporate strategy, Huselid reveals how decision-making is a fundamental concept in the strategic processes that are adopted by organisations4. Strategic processes help to share the destiny of an organisation or a nation’s economic status. Over the last five decades, scholarly research has recognised the importance of strategic decision-making in organisational success.
According to Eisenhardt and Zbaracki, strategic decisions are “important in terms of the actions taken against any business obstacle, the resources that are committed to the business, or the precedents that have been set.”5 From this definition, strategic decisions involve decisions, which directly influence organisation’s health together with its survival both in the short-term and long-term.
For KTG, strategic decisions require the derivation of mechanisms of raising its performance within my region. This activity will take place upon the implementation of techniques of aligning workforce anticipations with the strategic goals while at the same time configuring the organisation’s change with strategic goals to foster their achievement.
Considering that KTG employees in the region are highly de-motivated, it is important to introduce programmes for developing and empowering the existing employees with skills and knowledge for their growth. Hiring of new employees with skills and knowledge that is required in meeting the organisation’s goals, vision, and mission also needs to be given a major consideration.
This situation requires preparation and introduction of parallel management tools for enhancing KTG’s performance alongside ways of facilitating technology, people, finance, and other systems to provide sufficient anchorage to a corporate strategy. Strategic management is conducted in a number of steps. For KTG, the model proposed by Jones is adopted6. It is illustrated schematically in fig. 1.
Fig. 1: KTG’s Strategic Management Model
Source: (Jones 2008)
SWOT analysis constitutes one of the effective ways of assessing internal and external factors. As Hill and Westbrook confirm, it involves the strategic planning approach for evaluating the strengths, restrictions, prospects, and pressures that a business establishment encounters7.
An organisation can control and manipulate any internal factors. Thus, KTG has the ability and responsibility to ensure their correct enforcement to enhance its success in any of its operational regions.
Strengths are the traits that enable an organisation have an advantage in comparison with others. They constitute internal environmental factors in any organisation. KTG has the strength of having established strong trust in its market. It has also had well-established market dominance.
It was formally a monopoly in its industry of operation. Possession of large capital base provides a possibility for the organisation to implement effective strategies for enhancing performance. Amid these KTG’s strengths, it has some weaknesses, which also constitute internal environmental factors.
Weaknesses or limitations are the traits of an organisation that place it at a disadvantage in comparison with other organisations in the same industry8. One of the subtle weaknesses of KTG entails mismatches of growth potential and expertise in my region. It has out-of-date plans for operation. Besides, it lacks strategic plans for success in the region.
Opportunities and threats are the external environmental forces that influence the operation of the organisation. Such factors are incredibly difficult for KTG to control or manipulate. Opportunities are the existing external chances, which while utilised make an organisation improve its performance.
Increasing customer needs for the provision of services and products in the renewable energy sector provides a lucrative opportunity that KTG can tap to enhance its competitive advantage. Large prospects exist to justify the utilisation of the organisation’s resources including its human and financial capabilities to exploit the opportunity. However, this mandatory decision must be implemented in full awareness of threats in the region.
Threats are the external chances that impair the performance of an organisation9. The company believes that its long-term presence in the operation industry always gives it a score in terms of competitive advantage.
Consequently, it experiences the principal threat of declining concentration of its products and services in the market. Thus, while exploiting opportunities in the renewable energy sector, a major reflection should be on enhancing concentration of the company products and services in the renewable energy market.
KTG is no longer a monopoly. Thus, it faces the threat of competition. This threat influences the organisation, especially upon considering that competitors have adopted technological developments in their operations to minimise their costs. This strategy permits them to offer their products and services at low prices.
Hence, they are able to offer more services and products at reduced prices, which make them offer better value for money to customers contrary to KTG.
Therefore, the required corporate strategy to lift the performance of KTG in the region needs to incorporate economic, social, and environmental performance. Alternatively, this plan is referred as ‘Triple P’ (people, planet, and profit) or Triple Bottom Line approach to organisational corporate strategy development10. Te approach is illustrated in fig. 2.
Fig 2: Triple P Model for Strategy Change
Source: Jones (2008)
Motivation
Demotivation is one of the challenges identified by the CEO in the region where I should lift KTG’s performance to at least the average levels. According to Wright and Gardner, motivation refers to the force driving the behaviour of people11.
Therefore, motivation induces various behaviours in people, which can be beneficial to the performance of KTG, especially the ones that encourage people to take active roles towards the realisation of the company’s goals and future expectations. While my main challenge is to improve the performance of the organisation in the region, working with demotivated people hinders the achievement of KTG’s goals and vision.
Demotivated people are most likely to have poor job satisfaction. This situation impairs their commitment to the organisation. Hence, their morale is also influenced negatively so that the organisation fails to perform optimally.
Building success in the renewable energy sector calls for alignment of all people with organisational goals, objectives, and missions. The main problem of KTG is how to motivate employees so that they become a source of competitive advantage.
KTG should use motivation as a tool for ensuring that it has people with the right skills, knowledge, and capacity to accomplish various tasks. However, possessing such people is not adequate without the development of commitment to execute tasks that are allocated to employees to attain the best possible standards.
Development of motivation indicators at KTG is important in the process of evaluating the effectiveness of the adopted motivational strategies. According to Crook, Todd, Combs, Woehr, and Ketchen (p.443), positive behaviours such as “taking responsibility, helping colleagues, a commitment to achieving company targets and goals12” may act as indicators for employee motivation.
However, it is also important to develop demotivation indicators so that a leader in the region can identify when strategies of motivation fail to yield any results. Such indicators may include high rates of absenteeism, responsibility avoidance, poor time observance, high turnover rate, and customer complaints on services rendered by employees.
Upon identification of indicators of low employee motivation or high motivation, KTG should use strategies informed by theories of motivation such as Maslow’s hierarchy of needs, cognitive theories, expectancy theory, Claytons ERG theory, Herzberg’s two-factor theory, and Taylor’s scientific theory to either induce or maintain it. People work to satisfy their needs, which keep on evolving.
This assertion means that when one need is satisfied, it stops being a source of drive for working. In this end, it becomes important for KTG to identify the needs that compel its people to report on the work. The Maslow’s theory on the hierarchy of needs is an important starting point.
According to Huselid, Maslow asserts that human needs, which force people to work, can be grouped into five categories, viz. “physical wants, safety demands, social needs, esteem wants, and self actualisation.”13 The first three needs have a monetary reward in the form of salaries and wages attached to them.
This finding suggests persons who belong to these levels can be motivated through remuneration schemes. Maslow’s hierarchy of needs is shown in fig. 3.
Fig. 3: Maslow’s hierarchy of needs
Source: Huselid (2007)
The Taylor’s theory offers competitive salaries and incentive schemes like ASPIRE, which form an important starting point towards the creation and maintaining of a motivated workforce. Crook et al. reckon that salaries and wages are not always a source of motivation, especially for people who seek recognition and sense of organisational ownership14.
This assertion underlines the necessity for KTG to develop its motivational strategies according to the Maslow’s concepts of sources of the employee motivation in higher levels of the hierarchy of human needs’ pyramid. Perhaps, this aspect ensures a departure from the application of the Taylor’s motivational theory in its pure form so that its areas of criticism are not manifested in the motivation strategies deployed by KTG.
The Herzberg’s two-factor theory suggests that employees have two groups of needs in an organisation. These are hygiene (first-class work condition and reasonable salaries) and motivators. The motivators include factors such as “recognition, responsibility, achievement, and opportunities for progression”15. Researchers have confirmed a positive correlation between aspects of this theory and job satisfaction.
For instance, Huselid found that satisfaction with salaries and wages influences employee performance and commitment in their work16. This satisfaction emanates from the capacity of wages and salaries to help the low-ranking employees meet their basic needs.
However, among the high-ranking employees, issues such as assignment of responsibilities, gratitude, provision of opportunities for expansion, and increment of higher achievements in one’s profession act as important sources of job satisfaction.
Motivation is important in driving the KTG’s corporate strategy since it correlates positively with job satisfaction. Satisfied employees are less likely to report to work late, evade responsibilities, waste time carrying out a given tasks by working sub-optimally, and consider leaving the organisation as opposed to their disgruntled counterparts.
If aspects that are defined in the Herzberg’s two-factor theory not only act as sources of motivation, but also as sources of job satisfaction, it infers that job satisfaction is an important component of workforce motivation. Therefore, the use of the theory to enhance the employee motivation at KTG becomes significant.
Effective management of workforce through motivation has the ability to improve productivity, enhance improvement of workforce engagement, and alleviate staff absenteeism while at the same time decreasing employee turnover. In the region, KTG can gain from valid viewpoints of diverse and incredibly motivated workforce through increased problem-solving capacities and/or enhanced creativity levels.
This aspect is critical for the success of an organisation such as KTG in the future unknown external business environment. Enhancing and maintaining work motivation for KTG’s workforce in the region can allow it establish a central position in the renewable energy market.
In the context of the above suppositions, motivation acts as a source of power for influencing people to execute their organisational duties consistently with KTG values, beliefs, and vision. In this sense, power constitutes the capacity of an individual such as the leader in the region or the organisation as a whole to influence people to achieve some desired outcomes by boosting people’s attitudes, beliefs, actions, and values.
It is necessary to establish various sources of power among leaders in the organisation to facilitate alignment of the leaders and their leadership styles with employees’ concerns with KTG in an effort to raise their motivation.
Communication
Achieving success in the region requires the involvement of all employees and other stakeholders in KTG’s business. Without effective communication, this goal may be unachievable.
Implications for inadequate expertise in communication strategies are reflected in a research conducted by McFarlin, Sweeney, and Cotton in which 197 management executives from 197 companies were surveyed to unveil their anticipations for success of their communication strategies17. The researchers found out that only 63 percent of all the surveyed executives anticipated their strategies to succeed.
According to McFarlin, Sweeney, and Cotton, the research concluded, “Much of the expectation and performance failures are a failure to execute the company’s strategy effectively.”18 Strategies are implemented through the collective effort of all people who must work to attain given goals and missions for which KTG is established to accomplish. These goals and objectives must be communicated effectively.
Communication links the plans developed by KTG leaders to enhance the success of the actual implementation process of the plans. Developing strategies that can succeed requires ardent communication at all KTG’s hierarchical structures. As Williams and Seaman assert, this strategy is vital since implementation of new business strategies often involves change19.
Poor communication translates into resistance to change, especially where the persons who work in an organisation consider the changes being implemented as threats to their jobs and personal excellence.
For instance, while personnel at the headquarters of KTG may be fighting for standardisation of products that are produced by the organisation to ease supply chain and logistics challenges, personnel at departmental levels within different regions may be opposed to such an endeavour.
Additionally, inadequate communication at the intra-organisational levels may result in different perceptions of brands that can excel in the market. This situation minimises opportunities for channelling all KTG’s energy to profitable brands.
Communicating effectively in an organisation requires leaders to possess emotional intelligence. Leaders are the vision careers. As the heads of organisations, leaders are anticipated to have the ability to manage their emotions so that they do not get out of control irrespective of the challenges they go through while attempting to enhance conformity to their visions as Barrett confirms20.
Thus, KTG leaders need to have total trust of their staff, speak kindly and eloquently, pay attention to concerns of the people they work with as a team, and be at ease to address them. They should also have the ability to make well-informed decisions. All these aspects help in building an effective climate for communication within an organisation.
Conclusion
KTG faces challenges, which may influence its future financial success. Its weaknesses and threats continue to plague the organisation. Thus, it may end up suffering a loss in its competitive advantage. Hence, speedy reform is required in the organisation’s culture.
The company is aware that a new strategic direction is required to ensure its market leadership in the wake of the rising competitors who offer more value for services and products. However, lack of communication or its insufficiency may hinder any change effort.
The challenges of demotivated employees amplify the challenge of the capacity of the organisation to meet any emerging needs of its clients due to poor productivity. Thus, any strategy for increasing the company’s performance must be implemented in an environment of effective communication and existence of sentimental strategies of workforce motivation.
Bibliography
Barrett, Deborah. Leadership Communication, New York, NY: McGraw-Hill, 2006.
Crook, Russell, Samuel Todd, James Combs, David Woehr, and David Ketchen. “Does human capital matter? A meta-analysis of the relationship between human capital and firm performance.” Journal of Applied Psychology 9, no.6 (2011): 443-456.
Eisenhardt, Kathleen, and Mark Zbaracki. “Strategic decision making.” Strategic Management Journal 13, no. 3 (1992): 17-37.
Hill, Terry, and Roy Westbrook. “SWOT Analysis: It’s Time for a Product Recall.” Long Range Planning 30, no. 1(1997): 46–52.
Huselid, Mark. “The impact of human resource management practices on turnover, productivity, and corporate financial performance.” Academy of Management Journal 8, no. 3 (2007): 635-672.
Jones, Palsen. Good essay Writing: Leadership Guide. London, Open University, 2008.
Lussier, Robert, and Christopher Achua. Leadership Theory, Application, Skill Development. Minnesota, Southwestern, 2004.
McFarlin, Dean, Paul Sweeney, and John Cotton. “Attitudes toward employee participation in decision-making: A comparison of European and American managers in a U.S. multinational.” Human Resource Management Journal 31, no.4 (2003): 363−383.
Williams, John, and Alfred Seaman. “Predicting change in management accounting systems: National culture and industry effects.” Accounting, Organisations and Society 26, no.5 (2001): 443−460.
Wright, Patrick, and Timothy Gardner. “The relationship between HR practices and firm performance: Examining causal order.” Personnel Psychology 8, no.5 (2005): 409-447.
Yardley, Lucy. “Dilemmas in qualitative marketing research.” International Journal of Marketing Research 15, no.3 (2000): 215-228.
Yelkur, Rama. “Customer satisfaction and service marketing mix.” Journal of Professional Services marketing 21, no.1 (2007): 105-115.
Footnotes
1 Robert Lussier, and Christopher Achua, Leadership Theory, Application, Skill Development (Minnesota, Southwestern, 2004).
2 Lucy Yardley, “Dilemmas in qualitative marketing research,” International Journal of Marketing Research 15, no.3 (2000): 215-228.
3 Yelkur, Rama. “Customer satisfaction and service marketing mix.” Journal of Professional Services marketing 21, no.1 (2007): 105-115.
4 Mark Huselid, “The impact of human resource management practices on turnover, productivity, and corporate financial performance.” Academy of Management Journal 8, no. 3 (2007): 635-672.
5 Kathleen Eisenhardt, and Mark Zbaracki, “Strategic decision making,” Strategic Management Journal 13, no. 3 (1992): 17
6 Palsen Jones, Good essay Writing: Leadership Guide (London, Open University, 2008).
7 Terry Hill, and Roy Westbrook, “SWOT Analysis: It’s Time for a Product Recall,” Long Range Planning 30, no. 1(1997): 46–52.
8 Terry Hill, and Roy Westbrook, “SWOT Analysis: It’s Time for a Product Recall,” Long Range Planning 30, no. 1(1997): 48.
9 Ibid, 49
10 Jones, 43
11 Wright, Patrick, and Timothy Gardner. “The relationship between HR practices and firm performance: Examining causal order.” Personnel Psychology 8, no.5 (2005): 409-447.
12 Russell Crook, Samuel Todd, James Combs, David Woehr, and David Ketchen, “Does human capital matter? A meta-analysis of the relationship between human capital and firm performance,” Journal of Applied Psychology 9, no.6 (2011): 443-456.
13 Huselid, 642
14 Crook et al. “Does human capital matter? A meta-analysis of the relationship between human capital and firm performance,” Journal of Applied Psychology 9, no.6 (2011): 443-456.
15 Huselid, 639
16 Ibid, 649
17 Dean McFarlin, Paul Sweeney, and John Cotton, “Attitudes toward employee participation in decision-making: A comparison of European and American managers in a U.S. multinational,” Human Resource Management Journal 31, no.4 (2003): 364.
18 Ibid, 380
19 John Williams, and Alfred Seaman, “Predicting change in management accounting systems: National culture and industry effects,” Accounting, Organisations and Society 26, no.5 (2001): 443−460.
20 Deborah Barrett, Leadership Communication (New York, NY, McGraw-Hill, 2006).