University of Arkansas System
Type of paper: Thesis/Dissertation Chapter
Operations Technology and Organization Structure: An Empirical Reappraisal
Organizations are in constant states of change in structure, procedures, competition, and technological advancement and there is an ever growing desire to improve on performance and service delivery. For the successful integration of change, organizations must administer and implement processes that revolve around employees, process and structure. The sole reason for integration is because one cannot be changed without altering the other. If the integration proves to be difficult, then the organization has to break down and sometimes bits of it either crumble or become separate entities. This was the initial reason for the split of Intercos Asia Pacific from Intercos group.
From the staunch differences in strategic planning as well as direction between management personnel, Intercos Group made it possible for the managers with different opinions to have a separate entity, Intercos Asia Pacific. Many companies validate the theory that organizations most often assume a linear progression from the time of its birth to that of its decline. This concept is based on the organizational life cycle. According to Hayes & Wheelwright (1979), as companies evolve, they are faced with both new challenges and opportunities and, therefore, they must adopt superior management controls and systems. On the other hand, according to Kilzer & Glausser (1984), the challenges faced by companies can be successfully managed through careful planning and growth timing, contingency and tactical planning, maintaining an operational budget and the equitable treatment of all stakeholders. Tice (2007) stated that in order for a business to be successful and remain in competition, then it must be adaptable, decisive, collaborative and self aware, thus fostering innovation and surgically executing the set strategy.
Research collected from interviews conducted with management personnel at Intercos Asia Pacific reveals that there are several factors that companies like Intercos Asia Pacific should learn in order to remain competitive, command a sizable market and have the capacity for growth. The first major step would be to align the company’s goals with the internal and external environments of the company. Being a new business, Intercos Asia Pacific has to find its footing in the market, being a competitor of Intersco Group that has a big head start. Having to start building itself from the ground up is not an easy task for the company given that the market is already cut throat. Several drastic changes shall have to be implemented in order to become competitive and remain profitable as a separate entity from Intersco Group.
Target Group for Research
The main reason why the interviews were conducted with the target being managers was because, at the time of interviews, the managers were not confined to specific departments. The managers involved understood the running of the business in general. Oliver (2004) pointed out that the main ingredients for organizational growth being “talent management” whereby the leaders are able conceptualize. In order to accommodate the challenges that come with growth as well as startups, managers at Intercos Asia Pacific have to develop their management skills, implement strategies at the right time and finally make sound adjustments to their attitude and character. Managers at Intercos Asia Pacific understand that change or transition entails them to have to adjust their personal goals, managerial abilities, operational and strategic abilities. If they are to remain competitive, they have to make the utmost use of their limited resources, because they no longer have the vast resources provided at Intersco Group. However, their experience in Intersco Group should come in handy for the managers since they understand the market, thus not making them completely helpless.
Great managers are always characterized as administrators, integrators and entrepreneurs and the degree in which they utilize these characteristics depends largely on the situation Therefore, the manager’s needs and those of the business have to be in synchrony in order for growth to take place and in the case of Intercos Asia Pacific, for a business to get started. Combating the problem of sales growth can be a tall order for a new business. However, being a small fish in a big sea can have its advantages such as easy maneuverability within the waters. Most large companies are more intent on preserving their reputation and so there is some clientele that they would rather keep away from. For a company like Intercos Asia Pacific such is not the case and this new market should be exploited with zeal and decorum. Although this business has to remain 100% legal, this new market can help Intercos Asia Pacific gain ground. The resources at the disposal of Intercos Asia Pacific may be limited, but this does not mean that that the company has to be a total failure. The business that this market provides can most likely end up being the major source of income for the company.
Customer retention is another problem that Intercos Asia Pacific faces during its maiden days in the market. It is better to have ten loyal customers than to have fifty prospect clients because business can be snatched from the organization’s hands if it does not keep the customers satisfied. Osborne (1994) concluded that successful companies are not primarily based on the management’s competencies, credentials and experience alone. Success of Intersco Asia Pacific has been attributed to the company’s ability to generate income, its team of employees and its business concept. For this reason, retaining customers is a step in the right direction for Intersco Asia Pacific especially being a company dealing with cosmetics. This kind of business heavily relies on recommendations and consistent customers. For this reason, when Intercos Asia Pacific gains ground, it should strive to maintain the newly found clients who in turn shall be the stepping stones for the company. Having to build Intersco Asia Pacific from the ground up shall help Intercos Asia Pacific understand the needs of the clients, the changing trends in the market and the new demand patterns. For this very reason, the company shall have a strategic advantage over Intersco Group who depend on the trends that they have become accustomed. The managers revealed that they were ready to work from the grassroots levels in order to have a customer base that has the services and products from Intercos Asia Pacific tailored for them.
Transformation of Intersco Asia Pacific
According to Ford (2005), an effective transformation in any organization requires changes in the behavior of the workforce. Ford indicated that organizations have to train their employees to be ready to shift tasks in case this was needed of them. This strategy is best executed in line with the company’s vision and mission statement. When interviewed about this, the managers agreed that because of their limited resources at the newly formed company, employees had to serve different roles in different capacities, all for the successful running of the business. Sometimes, managers had to chip in physical effort, not just administrative effort. However, they also reiterated that the expected changes can only be achieved if understanding can be reached in terms of the vision and the strategies of the company.
Strong leaders are able to communicate about their values and the values of the company, which in turn leads to improved company-level performance. Managers also made it clear that Intercos Asia Pacific requires its employees to attend work-related learning so that they can have their cognition, skills attitudes and behaviors sharpened. As per a study conducted by Hayes and Wheelwright (1979), it was decided that in as much as organizations have to keep up with market and technological trends, they also have to maintain a steady learning curve.
The split between Intersco Group and Intercos Asia Pacific led to some major structural changes in both companies. This crisis point led to the loss of managerial personnel in Intersco Group and the formation of a company without enough managers in Intercos Asia Pacific. The managers in the course of the interviews indicated that they understand that for a company to thrive in any market, it has to develop strategies in the form of new systems and structures in order to accommodate the adverse effects of growth and crisis management. Previous research indicates that the company’s size often determines its structure. For example, a company that largely depends on other companies or social environments in most cases has a concentration in authoritative management.
Intercos Asia Pacific being a small company with the potential of becoming a market contender has its focus on structure and coordination rather than authority and command. From the interviews conducted through the managers, it was evident that changes in the structure of management are the result of the company’s transition into growth from start-up and it is sometimes characterized by complexity, decentralization and in some instances, formalization. This was in line with the theory proposed by Olson and Tetra (1992). However, this theory is comparable to that proposed by Pugh that identified six years of company structuring that required specialization, formalization, standardization of control and workflow, configuration and centralization.
According to Churchill and Lewis (1983), small companies like Intercos Asia Pacific are largely influenced by the availability of resources, workers, technology. On the other hand, the workforce in a large company like Intersco Group is influenced by the level of technology. From the research carried out on Intercos Asia Pacific, managers agreed that in order to record continuous development, managerial hierarchies, structures, processes, human resource developments and growth projections were essential and they had to be put in place. The managerial hierarchies that would be implemented in Intercos Asia Pacific would assist the company to match individuals to specific tasks and, therefore, facilitate the creation of value through specialization. When hierarchies are in place, then other benefits like creativity, morale and productivity can increase with measurable input (Jacques, 1990). The structure of tasks in a company largely depends on the technological advancement and the industry. Since Intercos Asia Pacific is just a small company still in its bare foundation stages, the technology and structure requirements are not as complex as they would need to be if the company was effectively and decisively rooted in the market.
Restructuring of Intersco Asia pacific to suit the Market
After an extensive review of the information collected from the research at Intercos Asia Pacific, it is clear that for the transition to be effective in a company there is dire need for a restructure in behavior and the organizational systems in the company. The interviews conducted revealed some of the organizational changes that needed to be affected before a company can commence business. The company maybe undergoing the normal struggles of a small organization, but Intercos Asia Pacific has the advantage of having experienced managers who have worked in a bigger company. This advantage over other small companies shall boost Intercos Asia Pacific to new heights because their management system shall be firmly rooted and invested in the company. Being a company that deals with cosmetics, skin products and pencils, Intercos Asia Pacific has had to deal with some obsolete goods. It is for this reason that new market survey had to be carried out in order to determine what the new market requires of them.
Being a small company with limited resources, Intercos Asia Pacific faces the problem of a large lead time in the delivery of their products. This problem is common to them because they cannot order in large quantities, which can be placed in a warehouse or stores. Unlike during the times in Intersco Group where orders and shipments were not a problem in terms of lead time, Intercos Asia Pacific has to deal with the small quantities that deplete quickly and sometimes there is a delay in the replenishment of their supplies. However, as soon as the company gains ground in the market, then the managers have implemented strategies to purchase products on credit in order to satisfy both the needs as well as the trends of the ever growing market of cosmetics and skin care products.
In conclusion, the literature provided in the research indicates that there is a clear struggle during the startup of the company and Intercos Asia Pacific is no different. However, with experienced and dedicated managers all hurdles, potholes or bumps along the way can be effectively dealt with proper strategies, careful planning, division of labor, and employee education. When Intercos Asia Pacific split from Intersco Group, a major challenge was surviving in a market that already had market leaders and well rooted companies. However, the ability of a small company competing against market giants requires careful timing, strategic location, through research about the market and efficiency in service delivery.
The managers interviewed were very cooperative in provision of information necessary to produce this paper. Their insight into marketing, running of the company and remaining competitive was invaluable in the writing of this paper. However radical or rash their decisions might have been at Intersco Group, the managers seemed to have done terrific work with Intercos Asia Pacific. Possible expansion and market dominance are in the horizon for the company and this is evident in their vision and mission statements. As leaders, role models and mentors, the managers believe that Intercos Asia Pacific is going to be the next big thing in cosmetics and skin care market. They might have had fallout with Intersco Group, but they strongly believe that their strategies shall keep Intercos Asia Pacific as worthy competitors for a long time to come. The managers acknowledged that the road might be tough for them, but it is only when the going gets tough the tough lace their boots and get going.
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