This case study is focuses on the driven factors that led the management to bring changes in the Oconomo plant of the Lamprey Inc. The Oconomo plant is established and operated since 1921. It’s has been the workplace of about 520 employees in the town of 9000 people, But the Oconomo plant is close to shut down because of the high operational cost, the unions unwilling to cooperate, the competitors’ price advantages and it’s close to overtaking it in product quality.
Jack Ripon the chief executive officer of the Oconomo plant who concern about the operational cost is too high to keep the profit for the company and plan to establish the plant in Mexico. Jack wants Jim Maleschowski who is president of the Wisconsin Specialty products division of Lamprey, Inc to go down to the Mexico to find out the operational cost of the establishing a new plant there and submit the report to him.
Jim thinks that would be wrong as long as there’s chance its costs can be lowered by establishing new plant in Mexico, but he also thinks the boss Ripon is right because the company needs to make a better return on its investment to continue business.
Beside the profit, there are other underlying forces to lead the changes in the management of the company, the changes that required being made. The high operational cost is greatest force that drives the company to look for the changes. The forces made the company have been incurring losses instead of making profits.
1. The union’s unwilling to cooperate. And reason for the unwillingness and resistance are because of the company had tried to reduce the amount of pay and provide the cross-training for increasing the work performance, but the workers are not ready to accept the change of the company and feel they can’t live within that low wage. To solve this problem company should change in people and culture, it pertain to how employee think –change in mind set. (Daft & Kendrick, 2010)
2. The competitors had price advantages and close to overtaking it in product quality. To be more competitive and make changes successful Company must develop improved production technologies; create new products and service desired in the marketplace. (Daft &Kendrick, 2010)
Under above pressures, the company should look for the organizational change. The organizational change is defined as the adoption of a new idea or behaviour by an organization. (Daft, 1982), the organizational change includes the changing and changing people and culture. (Daft, 2010)
In this case, changing people and culture is the primary type of change that needs to be change. Indeed, managers usually report that changing people and culture is t most difficult job. (Rosabeth & Kante, Strategy+Business no.41 (Dec, 12, 2005) )
Closing down the Oconomo plant would cause huge unemployment people. Therefore the mind –set of the union and workers have to be changed. The lower wages and cell manufacturing would enhance the competitiveness of the company. But right now these changes are resisted by the union, so existing mindset had to be the change first.
The Jim has found out that union leaders were nervous actually, they are afraid of losing the job, but they also feel that the change will compromise their job security, so in this situation effective implementation tactics involves below.
1. Consistency communication and education can help the workers to understand the needs of changes. People are most likely to change their behaviour when they both understand the rational reason for doing so and see a picture of change that influences their feelings. (Gerard &Grace very Business Journal Jan-Feb 2003)
The communication can be done by meeting, and survey feedback activities. Education can be done by training for both employees and managers. the education is quite important when change involves the new technology or user...