The Northwest Industries Company Competitive Advantages Case Study

Introduction

The following case study is an analysis of the issues encountered by the Northwest Industries Company in its quest to sustain competitive advantage with reference to the production of recreational vehicles. The case study identifies the main problem faced by the firm’s top manager [Craig Hansen] in his bid to transform the organization’s performance through restructuring.

The core problem entails failure by managers to adopt effective leadership and change management practices. Subsequently, the organization’s culture is affected negatively. The paper highlights the importance of integrating effective leadership, organizational culture, and change management practices. The problems and recommendations are based on the following detailed analysis.

Analysis

Organizational structure, culture, and leadership

Northwest Industries Company had optimally positioned itself as a growing entity with reference to the manufacturing of recreational vehicles. The firm’s growth potential was further enhanced by the strong demand for recreational vehicles especially in North America. However, the recreational vehicle market segment was characterized by two main business cycles, viz. the high season in mid-June and the low season in winter.

Despite the market changes, Northwest Industries was committed to sustaining its positive performance by boosting production. In a bid to achieve this goal, the firm incorporated a summer apprenticeship program targeting college students. The apprenticeship program was aimed at enhancing the firm’s production capacity by increasing inventory during the low season in all its plants.

The firm adopted a hierarchical structure, which was organized into three levels of management; viz. the General Plant Foreman (top-level), Assistant Plant Foreman and Inspectors [middle-level], Foremen, Lead-men, and Worker [lower level]. Employees at the various levels of management were assigned specific job roles and responsibilities. The firm’s organizational culture was characterized by a top-down communication strategy. The lower levels of managers were required to report directly to the General Plant Foreman, Craig Hansen.

Craig Hansen ensured that all the production activities were completed within a specific period. Therefore, the organization was characterized by a bureaucratic organizational structure dominated by rigid functional work units.

Clear boundaries were established between the respective job roles. New Brunswick’s organizational culture was also characterized by teamwork. Employees at the various levels of management such as the supervisors, workers, and lead-men worked as a team in order to maximize the firm’s production capacity.

New Brunswick considered equity as one of its organizational cultures. The firm ensured that employees were remunerated fairly and equitably. For example, the employees received pay increase depending on their skills, experience, and length of stay in the organization. This aspect led to the development of a strong organizational identification amongst its workforce.

Moreover, the organization’s culture was based on a strong working environment, which advocated the concept of fun in the workplace. Employees engaged in diverse fun activities such as raft races, parties, light refreshments, and bowling. The fun activities remarkably improved working relationship.

The organization’s operations were directed through different leadership styles adopted by the level managers. The top-level manager, Craig Hansen, adopted an autocratic leadership style. Walker and Miller (2010) define autocratic leadership as a style that is mainly concerned with giving orders and expecting absolute obedience. Under this leadership style, the followers’ opinion or input in the decision-making process is usually disregarded. Craig Hansen considered himself as the sole decision maker in the organization.

His leadership disregarded the opinion of the lower-level employees and it was only concerned with completing goals. The General Plant foreman’s ability to control the organization’s production schedule underlined the existence of position power, which entailed inherent power in a particular position (Griffin & Moorhead, 2012).

The middle-level managers such as Joe Mackay integrated the bureaucratic leadership style, which emphasizes on strict adherence to best practices, operational rules, and regulations. Thus, bureaucratic leaders act like police officers (Walker & Miller, 2010).

Joe Mackay was the assistant plant supervisor and his roles entailed assisting the foremen in dealing with work-related problems. In the course of executing his duties, Mackay castigated employees who led to errors in the production process, which underscores the coercive power in his leadership style.

Griffin and Moorhead (2012) assert that coercive power occurs if a particular individual in an organization has the capacity to castigate his or her followers either physically or psychologically. Conversely, Ted Nelson, a regular foreman, adopted a benevolent-autocratic leadership style. Flamholtz and Randie (2007) define the benevolent-autocratic leadership style as “a parental style whereby the leader acts on the assumption that s/he knows what is best for the organization and the individuals involved’ (p. 276).

Ted Nelson executed this approach by undertaking corrective actions on work-related challenges encountered by employees. In spite of this strategy, Ted adopted the hands-off approach as evidenced by the failure to explain the source of the problem encountered in the organization.

Problem statement

In an effort to stimulate organizational-wide performance, the General Plant foreman undertook a comprehensive organizational restructuring. In its restructuring, the firm divided the operational activities into two main lines. Older and regular employees dominated four of the normal lines while young well-experienced employees held the other two lines. The young professionals were required to work in collaboration with college trainees.

Despite the restructuring efforts, the initiative led to unhealthy competition amongst the young and the older employees. The young employees were more efficient as compared to the older employees. Subsequently, the younger employees looked down on the older employees due to their inability to execute production runs efficiently. Additionally, the working relationship between employees was affected adversely by the engagement in work sabotage amongst some employees.

Despite the deterioration in the working relationship amongst employees, the firm’s General Plant foreman adopted a hands-off approach. Therefore, the employees were provided with minimal support in adjusting to the organizational changes. Due to the poor working relationship, collaboration amongst the diverse levels of management was affected adversely.

This analysis shows that the top managements’ approach in implementing the new plan affected the firm’s ability to attain the desired production goal. This aspect arose from the lack of synergy amongst the various departments. Amory (2014) asserts that collaboration between the various levels of management is fundamental in enhancing an organization’s competitive advantage.

This assertion arises from the fact that employees share valuable information and knowledge, hence promoting their productivity. However, the new plan greatly hindered collaboration amongst its workforce. Thus, the likelihood of the firm sustaining it market dominance was greatly threatened. Therefore, failure to implement the best management practices can limit New Brunswick to cope with the business cycles.

Recommendation

New Brunswick had an opportunity to attain sustainable competitive advantage due to the strong organizational culture and market demand. However, the top management erred greatly in the organizational restructuring. In a bid to sustain its performance despite the business cycles, a number of issues are critical.

Organizational leadership

New Brunswick is characterized by diverse leadership styles across the various departments. This approach affected the organization’s operational efficiency significantly.

Additionally, the different leadership styles hindered the development of a harmonized organizational culture. For example, the leadership styles affected the organization’s capacity to transform itself successfully into learning and knowledge-based institution. The firm’s ability to position itself as a knowledge-based entity depends on its appreciation of the concept of knowledge sharing.

Change management

The firm’s management team failed in its organizational restructuring process. The failure arose from the lack of employee involvement in the change implementation process. The management team adopted a lone-approach in instituting the required change without seeking the opinion of the lower-level employees who had the duty of implementing the required organizational changes.

The employees’ involvement constitutes a fundamental element in an organization’s change management process due to its capacity to ensure that employees own the change initiative. One of the critical elements in ensuring employee involvement entails effective communication on the change and the desired outcome. The firm’s success in enhancing internal communication is based on its effectiveness in integrating lateral communication.

Organizational culture

The change initiative affected the organization’s culture as evidenced by the firm’s inability to sustain its concept of ‘fun in the workplace’. It is imperative for the firm’s management team to evaluate how fun can be integrated into its operations in order to entrench organizational identification amongst the workforce. Moreover, the consideration of the employees’ personal development objectives is critical to its long-term survival.

References

Amory, D. (2014). Influencing personal and leadership skills. Chicago, IL: Lulu Press.

Flamholtz, E., & Randle, Y. (2007). Growing pains; transition from an entrepreneurship to a professionally managed firm. San Francisco, CA: Jossey-Bass.

Griffin, R., & Moorhead, G. (2012). Organizational behavior. New York, NY: Cengage Learning.

Walker, J., & Miller, J. (2010). Supervision in the hospitality industry; leading human resources. Hoboken, NJ: Wiley.