Closing Down the Oconomo Plant
This plant is important to the society because it has created employment opportunities to local residents. However, the plant is in the verge of shut down. Jack Ripon , Chief Executive officer of Lamprey Inc. is concerned about higher cost of operation which has decreased profit for the company. The plan is to close down the Oconomo plant and establish a new plant in Mexico. Jack wants Jim Malesckowski, President of Wisconsin Speciality Products Division of Lamprey Inc. o find out about the operational costs of establishing a new plant in Mexico and submit the report to him. Jim thinks that the action to shut down the Oconomo plant might be wrong as long as there were chances to lower the costs.
But he also thinks that Jack is right because all the avenues for decreasing costs at the plant have been closed. Besides money, there are other underlying factors that have led the management to bring some changes in the company. We will look at some of the forces that drive Oconomo plant to anticipate for change,changes that are required to be made, and the reasons why union leaders are reluctant to change. . What forces for change are evident at the Oconomo plant? The greatest force that drives the company to look for change is its high operational cost.
The plant has so high operational costs that the company has been incurring losses instead of making profits. The management is anticipating changes so that the company will make profits in the future. In order for a company to run successfully, it should realize some returns from the investment made at the plant. Having invested in the company, shareholders also expect return for their investment.
It is important for the company to make enough money for the satisfaction of shareholders and the existence of the company in the market. By any means, Lamprey Inc. should reduce its operational cost to withstand the fierce competition in the marketplace. For the compaby to make it in the market, it must change its working conditions so that they fit with the current market situations, (Daft & Marcic,2010). Another force that is evident for the change at the Oconomo plant is the uncooperative labor union. Workers have been consistently refusing to cooperate with the management.
The company is planning to reduce the amount of pay it’s going to provide to workers. In order to decrease the labor cost, the company is proposing changes but the union leaders have turned a deaf ear to the management’s plan . It’s a great problem when workers are unwilling to listen to the management for possible solution. The situation will get even worse when the workers are not ready to accept the desired change of the company. Competition in the marketplace is also prominent force that is evident for change in this case.
Lately, competitors have threatened Lamprey Inc. from the services and products that they are providing to the society. It has been a challenge for the company to manufacture the quality products and beat the competitor’s price. While the competiton is being fierce in the marketplace, Lamprey Inc. has been struggling to sustain the operations. If the same situation persists, the company would not have a way to exist in the market. 2. What is the primary type of change needed—changing “things” or changing the “people and culture?
Can the Wisconsin plant be saved by changing things alone, by changing people and culture, or must both be changed? Explain your answer. Primary type of change required in this case is changing people and their culture. If people and their attitudes can be changed, work environment will be comfortable and other changes are easy to implement. The attitude of employees especially that of union leaders is not right in the given case. They are disobedient to the management. As long as employees don’t have respect for management, it is hard to bring any other changes.
People’s culture is of great significance in the way the company operates because if the culture or people fit in the objectives of the company, rest of things will work accordingly. In changing anything with respect to company, people and culture should be considered at first. If the people working in the company are unhappy with the change, the objectives of change might not be fulfilled. In this particular case, employees are scared of change and in fact don’t let management bring any changes. Such culture is detrimental to the company.
Culture should be established in such a way that people are ready to accept the change and welcome the efforts of the management with open heart. Although changing people and their culture is a primary thing, changing things is also important and should be considered for quality and workable plans of the company. Lamprey Inc. needs to bring some change in the products to save its position in the market. If the products are of low quality, the market share of Lamprey Inc. will be directed towards the competitors. In this case, the company has not put enough effort to upgrade the quality of the products.
If the same situation persists, it will not be able to face the competition in the industry because competitors are developing quality products at affordable price. A company can’t operate on just a single type of change. It’s important to put into consideration both changes when designing any type of change in the company. In order to change the products, the entire team of the company should be ready and thus change is required in people of the company. To meet the objectives of the desired strategy, the company should take consideration on both types of changes.