Custom Food and Feed Corporation (CF&F) is a major manufacturer and marketer of food and animal feed ingredients. Over the past 10 years, there have been several major investigations and allegations of company mismanagement. In question is CF&F's compliance with federal and state regulatory regulations (safety, environment and quality), Federal and State Labor Laws, and Equal Employment Opportunity guidelines.
In the light of recent negative publicity and to regain and maintain the company's market share, the Board of Directors appointed a new CEO. The CEO has insisted that the president of the company look into the recent allegations and make recommendations for changes in company management practices in resource management. The president has outlined the CEO concerns for change and has tasked the Vice President of Human Resources to analyze the current company culture and to give recommendations to him for change. The Vice President of Human Resources has decided to use the Tech Division for this corporate analysis.
The Tech Division is the newest division, being 12-years old. This division has grown from a single product to seven products. The Tech Division is a non-union facility, which has a staff of 92 managers and 300 hourly employees. This division uses fermentation technology to convert dextrose (sugar) into a variety of food and feed ingredients. This division operates 365 days a year, 24 hours a day, 7 days a week. Following are major results of the study:
- There is no real concern for safety, environmental and/or quality controls.
- Tech's managers use an authoritarian approach to managing human resources. This approach over the years has built many barriers between the hourly employees and management and there has been some talk of unionizing.
- The plant manager's responsibility is to make all the daily production decisions. His staff of production supervisors is to monitor the production cycle and report to him for direction.
- Frontline Supervisors have been promoted from within the company. There was no apparent consideration to who would be promoted and no guidance and training was given to them.
- There is a history of nepotism that runs throughout the culture of this division.
Up until now, the Corporate Human Resource department has been responsible for all of the Human Resource activities for each of its divisions. The Vice President of Human Resources has convinced the president of the company that the first change is to put a Human Resource Manager (HRM) in the Tech division. The president agreed.
You are the newly hired Human Resource Manager for the Tech Division. Your responsibility is to diagnosis the present culture, develop strategies for implementing a plan for change, and implement the plan. The Vice President of Human Resources has pointed out that you will face many challenges and a strong resistance from different levels of management not to change the established culture.
Word about your wisdom must be spreading, because another seminar participant asks you to lunch. He has been hired as an OD consultant for a small privately owned property management company which has 30 residential properties in 10 states, each of which has been run by 10 on-site staff members. A corporate office staff of 12 people supports the apartment sites. After several years of growth and expansion, a slump in the market for housing caused a decline in profits from which the company has not been able to recover. The company has just undergone a hastily planned reorganization, in which one-fifth of staff was laid off. The work of those jobs was in some cases, eliminated, and in other cases, given to remaining staff.
Some remaining staff is complaining of burn out. He has the sense that many key employees are staying, not out of company loyalty, but rather, because of the difficulty of finding other jobs in the current economy.
Management is beginning to recognize the gain in profits from the decrease in payroll expenses. The housing market has not improved, however, and occupancy in their apartments remains at an all-time low. Management believes that the cut in payroll expenses and focus on business essentials will bring a regain in profits long-term. They have hired your lunch partner with the hope that he will confirm their thinking, and that your analysis can be used to motivate employees for success and a return to higher levels of morale.
What do you recommend he do?