Assignment 1 Unipart Case Study February 15, 2010 Table of Contents Introduction3 Analysis Methodology4 Unipart’s Strengths4 Unipart’s Weaknesses5 Unipart’s Opportunities6 Reconfiguration Efforts7 Unipart’s Threats 9 Conclusion10 References11 Unipart Case Study Introduction In today’s highly competitive business environment, leadership usually has some level of appreciation for the situational use of various organizational models designed to maximize productivity and profit; hopefully without sacrificing established corporate values and ethics.
Like many of today’s organizational leaders, John Neill’s organization, Unipart Group of Companies (UGC) experienced a conscious shift from a focus on excellence to seeking continuous learning. Pedler (1997) states that it is not only important to achieve excellence, but to stay that way through being flexible, intelligent, and responsive. Change is a constant occurrence in the business environment; there is no such thing as status quo and your organization is moving forward or it is being left behind.
As changes happen in the environment, organizations must also learn to adapt its operations and processes in order to survive and remain competitive in the future. Organizations also need to be flexible and not rigid in terms of its structure, continuous learning, learning to learn, and proactively responsive to changes that take place in the environment that affect its operations. John Neill was able to see that Unipart’s confrontational atmosphere was a barrier to realizing efficiency and achieving improvement in quality and innovation. When John Neill joined the British Leyland (BL) group he noticed the business was “locked into decline. He and another partner decided to carry out a transformational plan to change the climate. John and his colleague’s focus were to convince the dealers of the mutual benefits of working together in order to reach potential gains. Analysis In organizational analysis, strategic planning is a critical factor in a logical approach to running an organization. It is a methodology that translated into Unipart’s mission, goals, and operational tactics. A fundamental step in the process is situational analysis, and is essentially a review of external and internal factors impacting the organization.
Grant (2008, p. 12) describes a process that includes defining an organization’s strengths, weaknesses, opportunities and threats (SWOT). In this case study, the methodology of analysis includes a review of strengths and weaknesses that are internally focused, and opportunities and threats that are essentially externally focused. Unipart’s Strengths John Neill’s innovative thinking and motivating personality was in many ways one of Unipart’s strengths. John was able to envision and through research was able to deduce that only 5% of the efforts in the company were truly adding value to the organization.
Through his transformational plan he was able to convince dealers to work together in order to stretch their gains. When Unipart was split and sold to the six investors John was able to influence the investors to designate a percentage of the share for the employees. John was on the right track as he placed employees at the top of his priorities. According to Isaac, Zerbe, and Pitt (2001), successful leaders develop realistic relationships with their followers by: • Building strong chains of mutual influence • Aligning personal goals with those of the organization • Supporting their followers Paying attention to detail • Lighting the way • Tolerating mistakes made in pursuit of excellence When John realized that Japan and Germany had achieved considerable levels of improvement when compared to Unipart, he was determined to begin a true transformation of the company. He began by creating a shared destiny relationship with all of his stakeholders; customers, employees, suppliers, governments and community (Unipart Group Companies). His vision was to create a win-win for all stakeholders and also to create a system where continuous learning and decision making was integrated throughout the company.
Unipart’s Weaknesses Although Unipart was a well known company it possessed certain weaknesses that promoted continuous decline, which lead to the company being split and sold. Unipart was a high unionized workforce and a confrontational one too. Because the focus was not on stakeholders, customer service, and product quality the company began to see the results of poor quality, labor strikes, work slow-downs, and lack of innovations. It was evident that Unipart had an unhealthy work culture. Brusman (2005), states that “a steady paycheck, great benefits, and perks will not inspire eople to excel. ” Leaders and managers must make motivation an integral part of their daily job if they hope to build the kind of workforce necessary to succeed. John Neill began the transformation of Unipart by first working with the culture, values, and competition of the company. John began by engaging all stakeholders in a win-win process, instead of the win-lose process in which they were accustomed. As shared by Coffman and Gonzalez-Molina (2002), if an organization wants motivated employees, do what superlative managers do: engage them.
Responding to the employee’s emotional needs will build trust and improve their comfort level. When people feel comfortable, it is logical that they will spend more time focused on work and less on watching their backs. When you are trusted, your people will want to work harder for you. This is why leaders like John Neill should: • Focus on employees’ strengths and manage around their weaknesses. • Hold people accountable for achieving defined outcomes-using whatever style fits their strengths. • Acknowledge that success is heavily influenced by the manager. Build on strengths and do not stop the process. • Evaluate the performance, never the person. • Try to bring out what God left in, instead of trying to put in what God left out. Workplaces with engaged employees, on average, do a better job of keeping employees satisfied. It is evident by the outcomes of Unipart and also through the above mentioned information that workplace well being and performance are not independent; rather, they are complimentary and dependent components of a financially and psychologically healthy and motivated workplace (Harter, Schmidt, & Keyes, 2002).
As the stakeholders of Unipart began to learn how to collaborate and cooperate, they were able to face the competition, increase production, and raise the core values of the organization. The stakeholders were able to work through their confrontational weaknesses and become a stronger corporation of continuous learning. Unipart’s Opportunities As part of the transformation, Unipart included diverse opportunities for their employees to excel. After Unipart’s visit to Japan, the group adopted “lean production methods” which were part of the “whole process thinking” strategy used by Japanese corporations.
The “lean production method involved: just in time manufacturing, continuous improvement, quality circles, and cross functional teams. Reconfiguration Efforts On the groups return to Unipart, there was great anticipation about the utilization and implementation of the tremendous amounts information learned from the Japanese. This was a new way of thinking and reinventing the company using Porter’s Five Forces analysis (Porter, 1980): understanding competitive rivalry, supplier and buyer power, threat of new entry and threat of substitution.
These items were all integrated into the organization’s plan. The leadership team was ready to share what they have learned with the employees and others to ensure the success of the business. Back at the shop with employees, these new concepts of utilizing space, team leaders, and skills in handling particular production and eliminating non-value-added waste would assist with driving down manufacturing cost. This was the beginning of developing a lean organization that could reinvent itself, when conditions demanded a shift in how to conduct business.
Most learning organizations have the characteristic of adaptability that is able to respond to changes when beaconed by the environment. The leadership at Unipart recognized their condition as being unable to emerge from a spiraling situation that required immediate attention. They decided to develop a business model that supported innovation and integration of Porter’s Five Forces, into learning organization to strengthen corporate, business unit, and functional levels. The team tried to implement the new strategy, but found employee resistance to the new concept.
However, the team continued their efforts and created “u-cells” or work teams with a small experimental team. As other employees saw how well the team worked and witnessed the supportive and motivating atmosphere as a result of the “u-cell”, they then became interested in learning the new strategy. According to Clawson (2006) there are specific aspects that define a team: • Shared leadership • Team accountability • Distinctive purpose • Shared work • Open-ended meetings • Collective measures • Real work John Neill and his team were able to involve the employees, improve productivity, and significantly reduce work space used.
Along with the “u-cell” concept another process was introduced into the company to continue employee involvement, improvement, and continuous learning. “Our Contribution Counts” (OCC) circles were another way employees were given the opportunity to work with management and suppliers to: improve or develop skills, offer trainings, and educational opportunities. These OCC circles were used as a problem solving process, when an employee noticed something could be improved or had an innovative idea he or she would register a circle and along with other interested would create a team to improve or create the product, method, or idea, etc.
In recent years work teams have become a popular form of problem solving for large organizations. More and more organizational leaders, like John Neill, have come to the realization that work teams produce more positive outcomes for the business. Since one of the dynamics of a work team is diversity, work teams are able discuss tasks from different points of views. It is essential to the effectiveness of the work team to have a fair representation of the organizations demographics in the composition of the team. Kolb, Osland, Turner, & Rubin (2007) recommend a heterogeneous ix of tasks and interpersonal skills. When the right team is finally created every member of the work team accepts and acknowledges every other members opinion without judgment, this is part of shared leadership. As a result of the OCC circles Unipart was able to dramatically eliminate waste, improve productivity, and positively impact its culture. Unipart’s Threats As Unipart continued to build upon each step towards their ultimate success, they faced some threats along the way, like any other business. In 1995 Unipart meat its greatest challenge, rumors that Rover had intentions of taking over.
Bavarian Motor Works (BMW) acquired Rover, and the long relationship between Rover and Unipart was threatened. After many years of partnership Unipart did not know if the rumors were true. Of course, Unipart’s stakeholders strongly supported the company and believed in its values and culture. The stakeholders believed the company could stay independent. As John Neill created his transformation plan he was sure to include any future possible threats such as entities with power, rivalries, trade-offs, and barriers making Unipart a strong organization with strong supporters.
Because John Neill was able to create a culture of unity and support among all of Unipart’s stakeholders, the company became a lean operating company. Conclusion Unipart reinvented itself by taking value from innovation and by selecting an appropriate business model that would convert new technology to economic value, in a cost effective manner (Chesbrough & Rosenbloom, 2001). Not only is the business model important, in some cases, the innovation rests not in the product or service, but in the business model itself and its stakeholders.
The Unipart case study was very interesting because of the owner’s response to a company that was complacent and non-competitive. Unipart is a large corporation that was having difficulty with maintaining profit and cutting cost. John Neill and his team were able to assemble and learn what was necessary in order to regenerate a company by rethinking collaboratively, without compromising quality. The trip to Japan was innovative because it provided an out of the box experience. Additionally, it answered, and resolved critical situations that were hindering the organization.
The transformation plan was methodical, which proved to be thoughtful and calculated. Unipart became a learning organization that embraced the knowledge and skills needed to implement and transform the company. It was a difficult task and took a lot of financial resources to turn the organization around and to reflect an upward direction of generating profit through high productivity.
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