Accomplishment of Org. Goals by Strategic Deployment of Policies

October 6, 2017 | Autor: Nikhil Rajendrakumar | Categoría: Lean Management, Participatory Decision Making
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Accomplishment of the Organizational Goals by Strategic Deployment of Policies together with Measures to Enhance the Ownership of Employees towards the Organization by Involving them in the Decision Making Process Level & Effects of Participation in Decision Making (PDM) on employee groups- Exploring the practices in an Indian Automobile Manufacturing firm Sebastian A (Author)

Sandeep Asok (Author)

Chief Manager - CI Continental Automotive Components (India) Private Ltd. Bangalore, India [email protected]

Executive Engineer- CI Continental Automotive Components (India) Private Ltd. Bangalore, India [email protected]

Nikhil R (Author) Graduate Student, Dept. of Industrial Engineering GITAM Institute of Technology, GITAM University Visakhapatnam, India Abstract: Organizational goals are accomplished by the active involvement of employees from top to bottom of the hierarchy level. In the present work, the perfect alignment with the organizational vision through effective interaction with the various departments and adherence to organizational policies are discussed in detailed. Even in organizations having its own defined policies, often it is difficult to deploy the policies due to the extremely diverse nature of the employee groups and their complex mindsets. If it is an organization with the presence of trade unions, then it would be really tricky to deploy the policies. Hence, there should be specific strategies for an organization to strive for attaining the organizational goals by extending its policies to the ground level. This paper discusses the effective development of a strategic vision for an organization and the proper alignment of the departmental targets with that vision. Moreover, the measures to improve the involvement of the employees in the progress of the organization through continuous improvement activities are given stress. Keywords— Strategic Management, Organizational Behavior, Employee involvement, Ownership

INTRODUCTION India’s manufacturing sector is on a high growth trajectory. The Indian auto industry has been recording tremendous growth over the years and has emerged as a major contributor to India’s gross domestic product (GDP). The industry currently accounts for almost 7 per cent of the country’s GDP and employs about 19 million people both directly and

indirectly. New workplace practices such as Employee Participation (EP), Industrial democracy (ID) Employee Involvement (EI) have become relatively common in most of these organizations, largely because these can greatly increase productivity and quality. In recent years, employee involvement or participation in work place decision-making has been a major focus of international attention for researchers, managers, policy makers alike as they seek means for improving communication and co-operation between management and labour. The concern with employee participation has included direct job oriented employee involvement through, for example, teamwork and quality circles as well as representative forms of participation (Markey, 2005:2). Here we seek to illuminate ways in which theoretical frameworks that could be modified to take into account the practice and context of employee participation in a multinational automotive component manufacturer in Bangalore, India. Also the objective is to contribute some useful and adaptable implications for the management of other Indian firms. A Brief Description about the organization The firm which we took for study is a fortune 500 multinational company with manufacturing plants in many locations across the world. So it is indeed necessary for all the

locations to align with the global norms and policies and at the same time cater to the location specific requirements. We will focus our study to the manufacturing side in India (Operations). In Operations’, the firm has around 170 blue collar employees and 130 white collar employees, with a gender ratio, male to female 7:3.The employees come from varied economic, socio, and demographic backgrounds with a variety of around 16 languages they speak.

Literature Review The idea of manufacturing strategy or Operations’ strategy as a separate but related functional component of a business unit strategy was put forward by skinner in his two papers (1969,1974). Manufacturing strategy, concerns the question of how to pursue specific competitive priorities efficiently and effectively according to changes in corporate strategy and the internal and external environment. In the focus and fit perspective dominating this approach, the emphasis is on offering customers what they want (Riis et al., 2007). The vision is sort of complex term to define and has multidimensional view. Different scholars and researchers describe it in different way. Kouzes takes it as “an ideal and unique image of future for the common good” (Kouzes and Posner, 2007). At the other end Jonathan swift states that “Vision is the art of seeing the invisible” Goal setting is one of the most replicated and influential paradigms in the management literature. Hundreds of studies conducted in numerous countries and contexts have consistently demonstrated that setting specific, challenging goals can powerfully drive behavior and boost performance. (Goals gone wild,2009, Lisa D. Ordóñez ,Maurice E. Schweitzer ,Adam D. Galinsky ,Max H. Bazerman). According to Barney and Griffin(1992,The management of organizations), organizational goals serve four basic functions; they provide guidance and direction, facilitate planning, motivate and inspire employees, and help organizations evaluate and control performance. The successful alignment of goals are dependent on factors such as clear and balanced objectives, specific, measurable and durable objectives, hierarchial framework and stakeholder agreement. The individual goals should be aligned to department goals and which in turn should be aligned to the organization goals. There should not be any ambiguity in the assessment of roles and responsibilities of the individuals. Essentially, the top-down aspect of goal setting assumes that the mission or purpose of the organization sets the stage for developing a vision and a strategic plan for achieving and/or maintaining the mission and vision. Lean Production (LP) is a model of organization focused on the customer and delivery of on time quality products,

materials and information without any wastes, i.e., activities that add no value to the products from the point of view of customer. LP had its roots in Toyota company that designed, after the Second Great War, a production system known as Toyota Production System (TPS) (Monden, 1983; Ohno, 1988). It was a book - "The Machine That Changed the World"- written by James P. Womack, Daniel T. Jones and Daniel Roos (Womack et al., 1990) that gave the popularity to the Toyota Production System (TPS). Meanwhile, the LP has evolved into a philosophy of thinking, Lean Thinking (Womack & Jones, 1996), whose basic principles are: 1. Value, 2. Value Stream, 3. Continuous flow, 4. Pull System and 5. Pursuit perfection. There are seven deadly wastes: overproduction, transports, movements, waits, overprocessing, defects and inventories. Companies could save large amount in reducing wastes (Alves et al., 2011). The lean approach reduces throughput times and customer-response times (Fullerton & McWatters, 2001; White et al., 1999;) Kaizen is a Japanese word that has become common in many western companies. The word indicates a process of continuous improvement of the standard way of work (Chen et al., 2000). It is a compound word involving two concepts: Kai (change) and Zen (for the better) (Palmer, 2001). The term comes from Gemba Kaizen meaning ‘Continuous Improvement’ (CI). Continuous Improvement is one of the core strategies for excellence in production, and is considered vital in today’s competitive environment (Dean and Robinson, 1991). It calls for endless effort for improvement involving everyone in the organization (Malik and YeZhuang, 2006). In 1985, Bill Smith of Motorola developed and implemented an approach to achieve near-perfection in product manufacturing called Six Sigma (Breyfogle, Cupello and Meadows 2001). The focus on defect rates and the explicit recognition of the correlation among the number of product defect, high operating costs, and the level of customer satisfaction makes Six Sigma unique amongst other process improvement initiatives (Abdelhamid 2003). In the context of the Six Sigma approach, ‘sigma’ has been used as a metric that reflects the ability of a company to manufacture a product or provide a service within prescribed specification limits (or within zero defects) (Abdelhamid 2003). There are two methodologies used to achieve Six Sigma goals; Define, Measure, Analyze, Improve and Control (DMAIC) and Define for Six Sigma (DFSS), the latter is not part of this paper; therefore, it is not discussed here. DMAIC, a five phase closed-loop problem solving pattern that eliminates unproductive steps, and applies technology for continuous improvement. DMAIC is generally used on business process that fails to meet customer requirements. • Defining and understanding the critical requirements, key factors and expectations of the customer which affects the process output.

Survey was conducted at Continental Automotive Components (India) Pvt. Ltd, Bommasandra, Bangalore).

• Measuring the process and relevant data to the process primary through Six Sigma metrics. • Analyzing the causes of defects and sources of variation using statistical quality control tools. • Improving the process by deriving in the analysis phase the most critical source of variation. • Controlling and monitoring the process variations using a statistical process strategy to sustain the gains and improvements. The reason for the rise of Employee involvement as a commonly accepted concept is that, from the end of 1970’s trade unions declined in many of the OECD-type economies due to complex mix of economic, political & social factors (Marchington, 1992). Generally, the term Employee Involvement (EI) refers to practices and policies where employees are involved in programs which have been management initiated and directed. Management also utilizes EI to improve the organizational quality and flexibility of the employees and at the same time, assure the employees’ loyalty to the goals and demands of the organization (Guest, 1989). In the literature, EI is sometimes discussed under the topic of direct participation (Marchington & Wilkinson, 2005). Direct Participation is related to the management strategy involving employees in the various management techniques such as team work and TQM in organizations. Under direct participation as a part of EI, unions and other employees’ representative bodies such as work council and managementunion committees have little or no role at all. Donde et al., (1998) contended that participation is a construct that not only involvement of how many and different types of peoples, but also how extensively the people being involved. Black and Gregersen (1997) have reviewed the previous researchers’ works and identified PDM as a multidimensional construct based on the previous researchers’ findings. According to Black and Gregersen, employee’s performance can be enhanced by providing opportunity to participation in planning, target setting and evaluating results. Many of the studies have focused on participation and its effects at the individual or small group level, but we are viewing participation at the organizational level – as a property of the system.It is being viewed, conceptually, as a management tool for facilitating communication, building commitment, and improving implementation of decisions (Locke and Schweiger, 1979), although it is also recognized for being time consuming and “messy.” Later Locke et al. (1997) concluded that the major benefit of participation is as a mechanism for information exchange and knowledge transfer. As noted above, we argue that participation goes beyond knowledge transfer and that the web of relationships developed by participation become the instrument for creative thinking, transformation, and ultimately successful adaptation. The challenge for managers is to achieve the kind of balance that will allow them to move quickly yet seek valuable input, to understand the past but move beyond it, and to recognize when to let go of outmoded practices.

Prof. K. Ishikawa, founding father of Japanese Quality Control, has said, “Quality improvement starts and ends with Education and Training. Training Mechanism – Process: Steps:  Identify the training needs  Create Training Module  Identify trainers  Hold training for trainers  Prepare training timetable  Hold training sessions  Conduct Tests However, it is less clear how much freedom manufacturing should have to develop competencies that go beyond immediate requirements (Hayes and Pisano, 1994), but ever more authors advocate the idea that manufacturing competencies and their development may also create competitive advantage for the company (Hayes et al. 2005). Then, manufacturing strategy is not just about aligning operations to current competitive priorities but also about selecting and creating the operating capabilities a company will need in the future (Hayes and Pisano, 1994). Gruban highlight the fact that the leadership competencies have a great relation with successful organizational change and a competent leader may prove more effective in managing the change process successfully (Gruban 2003). Bennis also acknowledges that special qualities and characteristics are required form a leader to bring successful organizational Change. (Bennis, 1985). “Leaders are individuals who establish direction for a working group of individuals and who gain commitment from this group of members to established direction and who then motivate members to achieve the direction’s outcomes” (Conger, 1992, p18) Practices in the organization under study Being an MNC , it is mandatory for all locations to be aligned with the Global vision and mission. There are 29 automotive component manufacturing central electronic plants for the organization across the globe and to bring all these locations to the same platform is at the same time a challenge as well as a necessity. The standards ranging from quality to delivery to performance and even to the visual management is given utmost importance. Any deviation from these standards is closely monitored with the location management by the global management on timely basis, in metrics of KPI’s (Key performance Indicators). The Global VISION of the organization is “To be the best Automotive electronic manufacturing resource worldwide”. To complement that the MISSION statement reads as



‘’We provide the highest competence in electronic manufacturing  We continuously improve our performance  Our people are the driver for our success”. Keeping this global Vision and Mission in mind, locations have to formulate its mission and vision with adherence to the local business conditions and policy measures. This is carried out by a strategic workshop with the involvement of people holding key positions in the organization. The workshop is carried under the guidance and advocacy of the chief global strategist. Top management with its first reportees will be an ideal group for the strategic workshop. The participants have to have an exhaustive workout on the data related to KPI’s and they should hold close knit sessions with their team members to capture their concerns. A proper understanding of the departmental KPI’s and the past years working data collected from the KPI’s will be an ideal backup for going ahead with a SWOT( Strength Weakness Opportunity and Threat) analysis of the location .The past years’ data as well as the details of the upcoming projects will point towards the focus areas. On the basis of the SWOT and the open discussion we have to formulate the first level plant strategies with reference to the global field of activities. Participants will work in teams to come up with improvement projects that may contribute to the second level strategies.

Goals,StandardizedWork,Takt Time,TPM,Value Stream Mapping, Visual Factory, Gemba ,SIPOC Diagram, Process Mapping, Pull and Flow, Setup Reduction/Quick Changeover, Lessons Learned, Eye ball diagram or 7QC tools etc and six sigma tools like Anova,Doe,Hypothesis,Z Levell,Process Capability, Measurement System Analysis, Affinity Diagram, Correlation and Regression,FMEA,Control Plan etc.The organization has identified lean champions for all the lean methodologies followed,thus creating a pool of skilled employees who act as a guide for spreading and nourishing the lean culture. These projects add to the business value of the organization and all the projects adhere to the core values the organization endorses.It enriches the leadership qualities,develops the skill set,solves the problems and moreover brings the teams together.

After the formulation of the Vision of the location and the first and second(tentative) level strategies, each department head has to hold sessions of meetings with the team to inform them about the plant Vision and to have a department vision in alignment with the Operations’ strategies. The team should have brainstorming sessions to improve their contribution to the second level strategies and to find out relevant improvement projects that suffice the department strategy. After the meetings all the HOD’s will propose the improvement projects to the management and a collective decision will be taken in the approval of the projects(on the basis of relevance and feasibility).After the final discussion and agreement upon the projects and strategies it will be rolled out . Timely review dates will be fixed .Road map and Vision statements will be displayed in a prominent location. The projects will be registered in standard project charters monitored by continuous Improvement(CI) department. Timely review will be scheduled by the CI team with the departments.CI will be the custodians of the projects reporting the status to the management. The projects will be of crossfunctioning nature bringing employees of different functions together working on improvements. Labor Union members and shop-floor employees are involved in projects.

In an industry like manufacturing, especially automotive industry, training and refresher trainings play a significant role in helping employees keep abreast with the developments and to help the the ever increasing challenging demands.

Project identification can be a part of the strategic workshop, Brainstorming sessions to identify potential improvements or can be result of problem solving. In the organization the projects are handled under the Business process Improvements.The projects give hands on experience on lean tools like Bottleneck Analysis,Kaizen,Muda,OEE,PokaYoke,Root CauseAnalysis,SMED,Six BigLosses,SMART

The organization has employed strong production systems typical to a lean manufacturing company. A significant observation is the availability of systems that gives employees a freedom to act; systems like JIDOKA,TPM Autonomous Maintenance concept,Suggestions scheme, Quality circles etc ensure the creative involvement and freedom enjoyed by the employees.

There are various sets of trainings for all the categories of employees identified on the basis of organizational needs and employee requirement. All these trainings are tailor made to make the employee enjoy his day to day activities and to make his life easy to face challenges. The trainings help the employee to become a better organizational animal and moreover help sharpen his/her decision making as well as leadership qualities. The employees are exposed to various global communities which discuss the latest technological advancements in areas of production, quality, supply chain, processes etc According to HR Business partner, Operations :Skill, Knowledge, Resources and Attitude are the right ingredients for any individual to take decisions in an organization. Limitations Initial resistance to participation was anticipated and met by some interview candidates; however, the condition of anonymity, limiting the duration of the interview and collecting background research on the various organizations before conducting interviews through the various media available helped ease that resistance. Many companies conducted general surveys through their human resource department to measure employee motivation and obtain

feedback, but this did not necessarily translate to the interests of this study directly. More standardized measures of employee involvement are now available to organizations; however, some are still heavily qualitative and most are conducted within an overall business excellence program. It was beyond the means and access of this research to go through all surveys and detailed audits of the various organizations to find an empirical measure of employee involvement. In addition to the above limitations, the research methods present their own limitations. The case study method provides little basis for scientific generalization (Yin, 2003). Both the case study method and the interview method allow for researcher bias to be introduced (Yin, 2003) (Stewart & Cash 2003), but this is prevented by adhering to the research protocol. Employee involvement research has also “been criticized for relying on single respondents”, (Riordan, Vendenberg, & Richardson, 2005) to explain the organization’s efforts. This gives a limited view of the climate and culture within an organization and may not “capture important process issues”. Therefore, any study relying on single respondents might over- or underestimate the effects of employee involvement. This can be overcome by interviewing or surveying a statistically significant segment of employees. The time and budget constraints of this research did not allow for such surveys. The research had to abide by the set schedule of three months, which does not allow for greater depth in the research. Summary of the study The FDI in automobile industry has infused investment in auto component industry as well and leading to scope of employment and the skill development in human resources; a big plus factor. More over the growth of this sector displays greatly inter-twined with the automobile manufacturers (OEMs). In order to develop a complete understanding of worker training, it is essential to review theories dealing with learning, factors affecting learning, and the methods of learning/training that have been described in the published literature The review of this literature is pertinent if the lessons learned elsewhere are to be applied successfully in manufacturing settings. The sustainability strategy would be implemented with leadership support and at the facility level. This is a case where both bottom up and top down meet to work on the implementation of the strategy. The employees would be prepared with extensive training and awareness programs that extend beyond their job duties. Goals and objectives are set collaboratively and the employees develop suggestions and changes to the processes to achieve the objectives. The final approval of these changes might be at a higher level committee or management level. The program might then be implemented with little resistance or change management practices. The employees view their work through one integrated system and they judge each project and initiative using a triple criteria; financial, environmental and social. An integrated management system may be used and quality

programs and/or business excellence programs provide the needed framework for employees to get involved in continuous improvement and organizational sustainability. The systems are coordinated and integrated enough to make them practical for the employee to use. The programs are tools not goals in themselves. The suggested changes would affect this one system rather than extend the effects and to study them on several management programs and their respective managers. In this case the implementation should be improved. The program itself might be more affective at enhancing the performance of the core processes of the company and achieving its set objectives. This program would have greater momentum and would transform the organization into a learning one. To study the implementation of a strategy over time, the interviewing framework was built around an organization’s: Approach, Deployment, Results, and Improvements (ADRI). The ADRI framework (SAI Global, 2007) was used to evaluate the two key factors being considered, because it is an effective framework to evaluate the timeline of the implementation, the intent and the results. It gives a more detailed approach over time and throughout the learning cycle and follows the plans through, from the initial approach all the way to final improvements. From this case we could find enough evidence for the Employee involvement and integration within the different processes. The goals and scorecards in this case were done in a participatory manner built through cross-functional teams and executives. Employee's input was sought and included. Employee involvement was planned for with communication, training and feedback tools. Although the literature supports a plan for employee involvement, researchers are quick to point out that training alone and a change in attitude will not change behaviors. A change in behavior requires the combination of having a clear vision that is detailed operationally, that focuses on tasks and processes, and that prepares the employees with the right training. The organization here is proactive in looking for internal communication vehicles to raise awareness at a high level or they may pick one of the initiatives or projects that have been successful and try to make sure that they get it into a variety of employee communication vehicles. An attempt is made to bridge the cultures of the various functional and operational departments of the organization by unifying the language of sustainability and its goals through out the departments and processes. Employees are rewarded for their improvements and their projects. This differs according to organizations as some prefer a team reward approach while others favor individual awards and certificates. Employee involvement metrics are not fully developed yet. Organization measure through performance evaluations and if the goals and objectives were met or not. Web-based tools are used to share lessons learned and monitor projects and progress. The organization conducts both internal and external audits and values documentation of results for their goals. The organization owns the results of audits and publishes a total

overview of challenges and advances. The employee is a stakeholder who is engaged and respected. The culture encourages transparency and involvement. It thrives on continuous improvement. Middle managers are required to meet the goals set by the top level. They are the link between top management, functional managers, operational managers and workers. They are regularly expected to perform miracles. They are asked to break down the higher goals to process goals and objectives. All the requirements of compliance and conformance pass through the middle manager, who must be provided with the necessary tools to perform these tasks. There needs to be a conscious effort to engage employees. Organizations that seek employee involvement need to examine their existing culture, structure and processes. Employee involvement needs to be planned for and included in the implementation of a sustainability strategy. This might lengthen the planning phase but it ensures the engagement of a key stakeholder -- the employee. It will result in a more widely accepted program that makes certain the change is sustained and maintained by engraining it in daily tasks and processes. Future Research Suggestions Far more questions than answers are being raised by participation research to date in spite of its fundamental importance as an organizational phenomenon. A qualitative nature of study can be carried out to determine the situation in relation to PDM in an organizational setting. Based on the understanding of fundamental behavior in the organization gained from this activity, survey instruments or interview schedules could be constructed and administered to the total sample. This type of methodology should improve the reliability of measures and the validity of conclusions. Is participation necessary in all levels of the decision making process or only in a few? If so, what are they and why does it happen? Moreover, recent research has shown how participation is encouraged in this digitized age. This could be another avenue for further research, especially in the Indian setting.

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