Report
Executive Summary
Figgie International, a company which started in 1963 and ended up being bankrupted in 1994. This diversified operating company was organised by Clevelander Harry E. Figgie, Jr. in Dec. 1963. The company was started by merging dozens of small companies and it offered various products like emergency oxygen masks to fire engines. The company once generated $1.31 billion annual revenues, and about $63 million profits for its shareholders .However the glow of the company's earnings and its lofty perch overshadowed some serious problems faced by the company .The company wanted to be "world class" but instead turned out to be a "world class mess ". Harry did not know how to go to that large scale of conversion to world class.
Introduction
What basically led to the downfall of the company is that the company didn't have a proper aim and goal set. There was no motto of the company which it can strive to exist. Aims and objectives are the 'ends' that an organisation seeks to achieve. It then has to decide the means it will use to achieve those ends draw up a plan and devise a strategy. Most organisations have general or overall aims which they can break down into specific objectives, or targets.Setting a company aims and objectives create a sense of responsibility and a target to achieve. The company faced various problems and issues - management issues, centralized decision making, lack of communication between the employees and higher authorities, disagreement with the consultants, no proper dismal policy etc.
Planning is of paramount importance both for an organisation and an economy. Sound plans are essential to effective management, because they serve as guides to all management functions. Lack of well-defined objectives and priorities is the common cause of failure. 'Failure to plan is planning to fail’. For a company to run smoothly there should be a proper planning in the work structure which was lacking in Figgie International. There was no proper planning to meet the deadlines of one work and often there were classes in meeting the deadlines and goals of the project. Lack of human resources created a lot of pressure on the Director who as a result had to work for some 12 hours a day and seven days a week. The company just wanted to be" world class” but there was no clear definition of this term and the employees were not told about how to achieve there.
Figgie International was merely a centralized organization where mostly the decisions were taken by Harry and his sons. As a founder of the company Harry ruled over the company with an iron fist. Assigning the employees with tasks but not giving them control created frustration and anger amongst them. The top management also refused to listen to the employees. As a result the employees were not keen on working and this created a sense of disinterest among them related to their work and they were not able to work effectively.
Early Management Style Adopted by the Company
For a good business company it is essential for each and every employee to contribute his own ideas and views. Figgie International being a centralized organisation lacked this .A centralized organization blocks the room for innovation and creation. While management is given the power of freedom to “run their department as they see fit” they are still held accountable for production . The owner or company executives will rely heavily on management to instil and manage the processes and guideline they have set in place. The employee there would say as it is to please the founders for a promotion and commissions. The management never gave importance to the employees’ views and never did they seek for their advice. This created a drift between the employees and the management. No formal dismissal policy resulted on employees being fired out without any proper reason. Consultants are always known for driving successful changes in an organization across the globe. But in case of Figgie International, the abilities of the consultants are doubted. The consultants never questioned or express their views if the decision of the director is not feasible or economically justified.
Issues Faced by the Company
Human Resource Management; It is responsible for the attraction, selection, training, assessment, and rewarding of employees, while also overseeing organizational leadership and culture and ensuring compliance with employment and labour laws. But this proved to be a key challenge for this organization. A human resource is of extreme importance for a company. The staffs that were not able to meet up the standards were immediately fired .This created lack of interest and decreasing productivity of the employees. And this resulted as a lot of stress for the employees and their lack of satisfaction from their work. The work environment was no longer bearable for them as each and every moment they feared of being fired out. Biased decision proved to be very fatal for the company. Harry mostly gave chances and opportunities to his family members and even agreeing to their ideas and thoughts. Relying heavily on the family members did not left much chances and opportunities for other staffs. This also created some amount of disinterest among the workers. (O' Shea& Madigan, 2003)
The company had low employee morale. However, Harry III had no operating experience and it is hard to convince anyone that he was able to lead the company to modernization. Harry’s wife was a vice president for facilities planning but all she actually did was the job of a “decorating consultant”, but earned between $30,000 and $50,000 a year. Also, recruiting family members contributed to employee turnover and low morale. Old management style of fetching the employees with money was much followed by Figgie International. But, fetching the employees with money does not ensure their satisfaction. The worker's satisfaction lies in their self respect and their importance at work place which was both missing at Figgie International .Harry's habit of firing employees without giving them a chance did not did justice with the employees . This created a low self-esteem amongst them. Harry's capabilities are never doubted as a capable businessman he built an empire that consisted of some 36 divisions. But when the 5 companies grew and expanded he was not able to bear the work pressure and handle everything effectively and systematically. He allotted every division with its own president. A company should take that much responsibility that it can bear.
Suggestions to Improve the Situation
Empower the process of increasing the capacity of individuals or groups to make choices and transform those choices into desired actions and outcomes. Central to this process are actions which both build individual and collective assets, and improve the efficiency and fairness of the organizational and institutional context which govern the use of these assets. Empowerment brings real responsibility and accountability in the employees. People employed in their specific areas should be given the right to take decisions which primarily lacked in the organization. This should be done because this not only creates a sense of importance in the mind of the employees but also they know each and every bit very well and with their experience in their areas and ideas the organization could prove to be very successful.
This organization sets apart many different flaws in it for now a day's company to look up at and learn from the mistakes of this organization.
Firstly, there should always be a two way communication process between the higher authorities and the employees of the organization. It is very essential for the higher authorities to seek the advice of the bottom levels as it is not one single person who contribute a "world class" company. It is the efforts and ideas of the both levels. It is important for the higher levels to have a friendly relation with the employees because sometimes the employees may hesitate delivering any bad news or suggesting their views. So, it is quite essential to have a two way communication in an organization.
Secondly, settling with one single scale is impossible for any company. Each company has its own background with respect to its culture and resource available. No initiatives were taken in case of this organization which is one of the major reason for the downfall of the company. So it is very importance to take initiatives with time and settling up with right scale .The Company should discuss with its employees about the initiatives and the changes to be done regularly.
Thirdly, a company should seek some outside advice for some changes to be made in the company. The company should also focus on modernization. The company should hire some outside expert for some essential strategies to be taken for modernization and for the success of the company. But, the expert advice should be from capable and experienced consultants. A budget advice and allocation of the resources should be taken from the expertise.
Conclusion
For a company to succeed these three factors should be strongly looked upon. Often referred to as the "Dangerous Company", Figgie International is an example for the present day organization to look up at and learn from the company's mistakes and negligence. Figgie International could have been successful had it looked upon the three key factors "innovation, creation and problems". An organization should always keep learning from time to time and bring changes in it. It is the responsibility of the management the company and the employees continue to learn new techniques and strategies. Human resource is what that a company should value before any other resource. With monetary fund's one cannot buy human resource which is the one of the essential resource of a company. Some of the elements contributing to employee satisfaction include: providing company activities of measurements employee perks, empowering employees, treating employees with respect, positive management providing regular employee recognition within a successful framework, expectations and goals, offering compensation and benefits, when compared to other industries in the same sector, Now a day's employee gives more importance to the work environment, organizational background and to company policies. It is important for the company to look up at employees needs and satisfaction.
Bibliography
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