Analysis
The chief executive officer of the company is Gill Reihana who is also the owner of the business. When he started the business, he wanted to maintain a relaxed working environment where creativity was cultivated. He employed young individuals based on how they understood his vision. This created an informal setting, which brought problems especially in the accounts department. To counter this, he employed a more professional staff with experience.
The CEO still maintained the relaxed atmosphere allowing junior staff to attend senior management meetings and encouraging sharing of information within the organisation. The senior management have different personalities and approaches to leadership. While others are mature, patient and nurturing, others are autocratic, ambitious and result oriented. Others still are unorthodox and peculiar in their conduct and management style. This created conflict within the organisation as each used their own style of leadership to meet departmental targets without due regard for the other departments company. This is especially because these departments still work together because they are not yet autonomous.
The company is experiencing growth especially in its web and software design departments. The company is also in the process of launching a laptop into the market. This venture could be successful because the company has a reputation for quality hardware and products customised to the client’s needs. The chief web designer is also highly talented and has consistently produced quality work.
ISSUES
Communication
In the beginning when the company was small, the CEO took time to speak with each employee. He asked about their level of satisfaction in their jobs and got direct feedback. With growth and expansion, this role was delegate to senior managers who are not as keen on these issues. Employees lack an avenue to express their concerns and grievances especially about their departmental managers. Such concerns are brushed aside leaving aggrieved staff frustrated.
Leadership
The senior managers employ different styles of leadership in their roles. The CEO uses a democratic style of leadership. He values the contribution of all individuals in decision-making and is concerned for the interests of all employees in the organisation. The production manager is an autocratic leader. He is strict, controlling and closely supervises his staff to ensure that they meet all production deadlines. Production schedules take precedence over personal issues and concerns. Another leadership style evident in the company is the laissez-faire style. The chief web designer uses this approach to leadership. She hates direction, pressure or conformity, she does not like to be supervised therefore she offers little or no direction to those working under her.
Weak Organisational culture
While the owner, Mr Reihana wanted to create a friendly environment where ideas can be shared freely, the growth of the organization has brought the need for a structured approach to issues. First of all, senior management meetings are open to all. While the idea of involving all staff in decision-making is good, it is important that senior management is given the privacy it needs to discuss the major issues that affect the company without the interruption of junior staff. Their opinion can be sought in departmental meetings or specially organized forums. Another issue of concern is the lack of mutual respect among the staff. During these meetings which lack formality, jokes and nicknames are directed at staff often in bad taste. This cultivated bad blood among employees even though the jokes are often meant to be inoffensive.
Company Policy
Issues such as working hours, professional conduct while at work and remuneration. Production line employees are allowed to work overtime and are paid for it because of the need to meet production deadlines. Staffs from other departments feel that they should also be allowed to work overtime and get paid for it like their counterparts. Senior management, in this case Heather the chief web designer shows no respect whatsoever to the working hours of the company. While one can argue that the most important thing is delivery of work and meeting deadlines, it is important that a certain level of professionalism is maintained. As a senior manager, she should lead by example and set certain minimum standards of conduct for her team. Another senior manager Don Head has been involved in a sexual harassment suit with a secretary. He is known to flirt and even calls himself a lady’s man. This is gross professional misconduct and should be discouraged and completely stopped.
Another issue is the lack of an ethical framework to govern and regulate operations. The marketing manager has gone about lobbying fellow senior management to support the launch of the X-MH laptop despite concerns about certain faulty parts. Don wants the launch to go ahead because he has made extensive campaign plans for the launch and would not like to postpone them. He chooses to ignore the concerns raised by the production manager Jason Palu who understands the technical implications of the faulty parts should the laptop be released to the market as it is. He even goes as far as bribing Denise the chief financial officer with his beach cottage should she support him to go ahead with the launch. This is corrupt behaviour, which should not be tolerated within an organization. The company has also allowed staff to work unofficially with outside contacts to develop products, which are adopted by the organization leading to problems and even legal action against the company.
Short term Solutions
The first solution is to change the management system to a more formal approach. Senior management should establish and document operation procedures for their departments and ensure that their staffs follow them. The staff should also be employed based on their technical competence and their job description and role clearly defined. The organization should also define the relationship between management and staff and the limits for such relationships. There should be a well-defined system of identifying, reporting and addressing staff issues and concerns within the organization. A healthy organizational culture should also be created. The workplace should be a mutually respectful environment where one is not victimized or ridiculed. There should be clear rules on the expected conduct of each employee of the organization whether within the premises or away from work. Behaviour that is likely to jeopardize the image of the company as if visiting strip clubs during office hours should be highly discouraged. All interactions with non–staff should be done with the authorization of the company.
Long Term Solutions
The owner of the business Mr. Reihana has to accept that the business can no longer be led using his charismatic and informal style of leadership. To grow, the business will need a change of leadership and management styles to a stronger result oriented model. He may have to hire a new manager or change his style of leadership, which may not be easy. Some departments may do well with charismatic leaders such as the marketing department. The production department will require an authoritative leader who is still able to listen to employee concerns and address them accordingly.
The business will also have to change its business operation model to a more formal structure. Management levels will be clearly defined with top managers being responsible for coming up with the policies and products while first line mangers supervise the actual work. This will mean that the company might have to hire more staff especially with the launch of new products such as the laptop. The human resource department has already with established with steps being talent to write better job descriptions for the staff. Each individual will therefore be fully aware of his or her role, mandate and the authority they have to perform their duties.
As growth takes place, the departments within the organization will become highly differentiated with time. Product invention, design, manufacture and marketing roles will become more specialized and semi-autonomous. The staff will have work standard, which have to be met. Motivation will be through incentives and fair remuneration as opposed to dedication to the product or organization as was the case at the beginning of the company. Communication procedures will also become more formal since hierarchy, titles and positions will become more important.
Conclusion
The issues that X-Stream Company faces in the course to maturity are not peculiar to it. As a company grows, the friendly model of management and informal interaction with employees leads to problems within the departments. Adoption of change such as introduction of new technology and departments is also met with some resistance. To survive and continue to grow, the firm has to adopt a more formal approach to management and develop mechanisms better direction and control. It also has to diversify to accommodate change, which may be structural or geographical. If X-Stream fails to find solutions to these challenges and adapt, it will decline and eventually collapse.
