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Strategic Issue Facing the Firm Essay

Peterson Fan is majorly dealing with an employee attitude problem. Employee attitude problems have a very negative impact on an organization and especially on the bottom line performance. Most often, employee attitude is attributed to poor work conditions, employee inadequacy and a lack of employee appreciation programs.

In this regard, employees at Peterson Fan are not coordinated and often show up late at work. These are clear signs of an attitude problem among employees. This is also the main problem Peterson Fan faces and drastic measures need to be taken to ensure the organization doesn’t further slow down in performance and experience low profits.

Firm’s Strategic Options

The first option management has is to get commitment from the employees through a consultative approach. Management therefore has the duty to explain its concerns to the employees so they may understand why it needs to change the status quo. The ideal situation in this kind of strategy would be that employees are supposed to exert some form of self-control and improve performance in the long run. This approach is better than blindly carrying out an order which the employees wouldn’t understand why it’s been employed.

This action is supported by Douglas’s Mc Gregory’s theory Y which advocates for a participative management style. A participative management style would be the perfect management criteria because poor employee attitude is no different from work and play. In other words, it is a natural occurrence and imposing artificial threats to improve employee performance, as management did, was a wrong approach. Essentially, firing poor working staff was setting precedent that employees had to work properly or else they would be fired.

Douglas’s theory Y advances the fact that employees will naturally improve self-control and increase performance without the exertion of external control or imposition of threats. The management of Peterson should therefore expect self-direction from the employees if they give them the liberty to make their own decisions (but after providing a good environment for them to operate in). Douglas’s theory also identifies that employees often accept responsibility and can even seek it if they are given the liberty to work without external controls.

In addition, the participative approach if analyzed in the context of Douglas’s theory Y will improve employee creativity, imagination and ingenuity without being forced or initiated.

This expectation is therefore set to solve organizational problems and improve product development because employees will be more likely to chip in creative ideas on how the company can improve their products for future competitive advantages. This conclusion is affirmed from research studies advanced by the Y theory stating that the capacity for employee creativity and innovation is usually partially utilized.

The participative management theory the company should have undertaken is also supported by Herzberg’s motivational theory which states that employee dissatisfaction and poor performance is not attributed to only one factor as was previously thought.

According to the scholar, employees are normally under the pressure of two needs which is to avoid pain and to grow on a psychological level. In this respect, Peterson management should have undertaken the participative approach because their action assumed at least one factor of the motivational theory. It also totally neglected other prevailing factors of employee motivation

Herzberg’s theory further goes on to state that the motivational factor for employees to work can be advanced in two aspects. The first is related to strong ethical management and social responsibility while the other is the strong psychological contract individuals often have with themselves.

Herzberg’s theory is therefore concerned with the general wellbeing of all the employees in the workplace and supports employee views instead of management’s. This approach is correct because the objectives of management cannot be accomplished if employees aren’t performing in the first place. This necessitates the participative approach to management because it is the only way management can bring employees on board and understand their concerns ahead of their own.

Just like the Herzberg’s theory, more humanity and caring ought to be shown in the workplace because that is what Peterson lacks. The company’s management is essentially ruthless and if perceived from a neutral point of view, the employees have no channel to voice their concerns because management doesn’t provide a forum for that. This is what the participative approach to management will bring (a forum for consultations).

Herzberg’s theory was not just developed for the sake of motivating employees at work but also to factor in the interests of everyone in the organization. Part of his analysis was on the fact that people were motivated by hygiene factors though he identifies that management needs to think beyond that.

This is an important factor if Peterson is to adopt the participative approach because Herzberg identifies that it is not only enough to provide a good environment for the employees (which he used hygiene as a factor) because once employees achieve a level of satisfaction, they are bound to slide back to their initial state of dissatisfaction. This happens because they get used to the improved situation. Herzberg identifies that this is the leading cause of failure for poorly managed organizations.

This intriguing situation brings us back to the initial factors Herzberg identified in the first definition of his theory. He identified that management needs to comprehensively help employees achieve the two levels of satisfaction which are avoidance of pain (which is equivalent to provision of a clean working environment) and the facilitation of employee growth and advancement.

In this regard, the management of Peterson company need to realize that improving employee performance in the organization is a continuous process and after primarily making the working environment conducive, they should embark on facilitating employee career progression.

Most practically, management should be motivated to offer partial scholarship for the advancement of employee career through extra classes for employees who may be willing to undertake them. This is a good strategy the company can use because as employees advance their careers academically, they will be more motivated to work and also develop some form of loyalty to the organization because it sponsors them to advance their careers.

However, this strategy requires mature employees in order for it to work. In a more ideal situation, the employees should see themselves as part of the managerial hierarchy and also be positively motivated for the strategy to work.

Though all these factors are not present at Peterson’s Fan, management should use the participative management style because it is better than the autocratic approach of giving orders to fire all poorly behaving employees. The implication of this approach is improved employee performance in the long run. This approach is supported by social studies done by Douglas McGregor which emphasize that controls or punishment are not viable methods of solving employee problems.

The second approach the management could have undertaken was motivating employees into good work performance. Motivation should however be done through many structures such as improving the work environment, increasing the pay among other methods.

Management can also review its company policies to ensure they are flexible enough for the employees to feel motivated enough to work. They also need to equally review supervisory practices and hygienic conditions in addition to improving employee appreciation programs and increasing their willingness to promote them. In this manner, employees will feel there is room for growth.

The implications of this strategy may involve an internal restructuring of the company; especially if management is willing to consider employees as part of its management hierarchical structure. The strategy may also force the company to introduce new programs aimed at improving the motivational level of employees.

Additionally, this may involve a change in leadership styles and management attitude. This strategy is also supported by the two-factor theory that identifies hygiene and the need to motivate employees as some of the most important elements in improving employee attitudes.

Company’s Strategy

The company’s management took an authoritarian strategy of firing all poorly behaved employees without any consultations at an employee level. Theory X developed by Douglas McGregor explains this approach but it has been proved counterproductive in most modern practices. This theory is normally based on a fallacy that employees will avoid work at all costs because of their laziness and that typically, employees dislike work. The assumptions to this theory are largely false.

Instead, management should have discussed the poor employee performance with the employees before taking any drastic measure. The confrontational approach the company took was uncalled for because they should have first probed why the employees were behaving the way they were, so as to improve their level of satisfaction in the long run. In this manner, management would have known the root of the problem.

Management should therefore have made it clear to the employees what actions were wrong and which ones were acceptable. The consequences of a continuation of unacceptable behaviors should also have been openly communicated to the employees. In other words, even if management had decided to consider firing poorly performing employees, the least they could have done was to warn the employees and notify them of the consequences of a continuity of their behavior.

Management should also have been straightforward with the employees and refrained from exhibiting any threatening signs. However, before coming up with such solutions and consequences, they should have been willing to discuss their decision with all employees.


The management of Peterson fan took a wrong approach. They should have adopted a consultative approach when dealing with disgruntled employees. However, in the development of a consultative approach to management, the management at Peterson Fan should include the participation of employees in improving overall organizational performance.

There is no practical way that the management of Peterson can achieve this if not through a participative approach. Douglas’s theory Y and Herzberg’s motivational theory also identifies that a participative approach is the best method to curbing employee attitude problems. This strategy has been proved to have better chances of success than the authoritative approach it took.

Management’s approach is therefore not expected to yield much result in the long run because the strategy they adopted is based on false presumptions that employees are lazy and dislike work. They should have therefore discussed the problem with the employees and come up with an amicable solution.

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IvyPanda. (2019, February 14). Strategic Issue Facing the Firm. Retrieved from https://ivypanda.com/essays/strategic-issue-facing-the-firm/

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"Strategic Issue Facing the Firm." IvyPanda, 14 Feb. 2019, ivypanda.com/essays/strategic-issue-facing-the-firm/.

1. IvyPanda. "Strategic Issue Facing the Firm." February 14, 2019. https://ivypanda.com/essays/strategic-issue-facing-the-firm/.


IvyPanda. "Strategic Issue Facing the Firm." February 14, 2019. https://ivypanda.com/essays/strategic-issue-facing-the-firm/.


IvyPanda. 2019. "Strategic Issue Facing the Firm." February 14, 2019. https://ivypanda.com/essays/strategic-issue-facing-the-firm/.


IvyPanda. (2019) 'Strategic Issue Facing the Firm'. 14 February.

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