The Gulf States Metal Inc is a large plant that does not bring any profits. The interviews with top plant managers and middle-level supervisors have revealed that the main problem is the lack of solid managerial practices. People are working in terrible conditions, with old corroded equipment, and they are expected to increase production level. The corporate office representatives note that the problem of low production is caused by poor management, and this belief is supported by the plant-wide interview results. Notably, both the top plant managers and middle-level supervisors agree that the problem is rooted in poor management, while no one at GSM has ever been involved in anything resembling process reengineering, and no one has ever had any training in management. Everything they have learned about management has been learned on the job.
According to the interviews with top plant management, the major reason for the lack of profitability is that the cost of the mat is too high in relation to the market price of nickel. Middle managers and supervisors, on the contrary, believe that they are able to help a lot, but they are never given an opportunity to contribute.
Thus, there is no organizational unity, and the cause of poor production is seen differently by all employees.
The Gulf States Metal Inc has no organizational culture and no proper communication between the departments.
Middle managers note that the director of operations and the production manager give direct orders to people and do not even inform their supervisors about it.
Improper managerial practices are the result of the lack of managerial training. Moreover, top management thinks that middle managers and supervisors are incapable of managing people; they cannot be trusted to make decisions because when they are left on their own, the plant falls apart. Middle managers reply that they really are not managers because they are never allowed to make decisions or to change anything. As a result, when they see a problem, they do not correct it, and even if they bring the potential problem to the attention of the management, they are criticized for their initiative. Top management shifts the fault for poor production to the middle manager while supervisors are not given the opportunity to work, manage people, and control the process.
In addition to insufficient managerial policies, there is a problem with information flow: middle managers are not informed about anything; they do not know what is going on around the plant. They find out about changes from the other departments. The lack of communication structure and formal information flow contributes to poor production. As the industrial relations manager has noted, the plant could be much more productive and efficient if the supervisors are given the authority and responsibility in commensuration with their positions. The director of engineering supports the industrial relations manager and adds that production supervisors are totally intimidated by their managers and are oriented to protecting themselves rather than remaining focused on production problems.
In conclusion, the plant will not become profitable until the top and middle managers learn how to cooperate, to distribute authority and responsibilities. Taking into account that no one in the company has been trained in management, there is an urgent need to educate managers and supervisors.
The second step of plant restructuring should include the development of formal organizational policies regarding communication, encouragement of initiatives, and ensuring that employees are given the opportunity to perform duties in accordance with their positions.