Gap Analysis: Riordan Manufacturing

Gap Analysis: Riordan Manufacturing

Riordan Manufacturing, a Fortune 1000 enterprise and global plastics producer, creates custom plastic parts for customers primarily in the automotive industry, aircraft manufacturers, the Department of Defense, bottlers and beverage makers, and appliance manufacturers. Recently however, declining sales and uneven profits have forced Riordan to make several strategic changes in the way it manufactures and markets its products, and management is working to address motivational issues within its workforce (University of Phoenix, 2007).

This following will cover aspects of Riordans' issues, opportunities, and stakeholder perspectives and ethical dilemmas that are present. This paper will also cover Riordans' desired end-state goals as a result from implementing new strategies.

Situation Analysis

In response to declining sales and uneven profits, Riordan has been forced to change its sales process and has adopted a customer-relationship management (CRM) system. Customers are now served by sales teams rather than a single sales person. In addition to the sales person, the team typically includes a product engineering specialist and customer service rep. Riordan has also implemented a Six Sigma quality approach and is ISO9000 certified. These measures were adopted with the hope that sales would improve. Internally however, a recent employee survey revealed that employee motivation, satisfaction and retention are down.

Issue Identification

Riordan is experiencing a number of issues which include but are not limited too; a decline in sales, employee motivation, satisfaction and retention; however, due to the various functional specialists, there are different issues within the company. R&D employees are not satisfied with compensation and decreased satisfaction. The IT group feels they are not being adequately recognized for their contributions.

Due to the decline in sales Riordan has had to revise its sales approach and process to better serve customers, however, with the changes came more issues. Employees are concerned about the fairness of incentives and compensation and do not understand how that will translate effectively into the CRM system. Riordan has a very diverse workforce with a plethora of motivational needs, from valuing interesting work to larger paychecks. Riordan is not effectively communicating to all the various demographic groups within the company. Employees have revealed in the annual survey that many are not satisfied or challenged by their work, and do not feel adequately compensated for their efforts. Motivation is low, and employees do not feel they have sufficient opportunities for development or promotion. These issues have culminated to the point that many employees are actively looking for opportunities outside of Riordan (University of Phoenix, 2007).

Opportunity Identification

Riordan has several opportunities it should pursue which include but are not limited to offering its employees opportunities for personal training and professional development, recognize quality work and the employees who perform above expectations, create a performance management system that would reward employees by performance as opposed to time and grade.

Riordan can develop a total rewards plan encompassing all employees, which includes tools needed to attract, motivate, and retain employees. The elements of a total rewards program be both monetary and non-monetary, and are intended to reward employees' time, talents, and efforts to help achieve business results, for example; Riordan should begin to promote internally with appropriate waged rather than externally and employ "various forms of profit sharing, stock options, and bonuses to tie individual rewards to organizational performance" (Dreher and Dougherty, 2001, p 187).

To help motivate individuals as well as teams, Riordan should modify its compensation system to include compensation based on performance and not tied to its present secretive system of seniority and favoritism. Jack Welch, former General Electric CEO wrote in a letter to shareholders:

In the old culture, managers got their power from secret knowledge: profit margins, market share, and all that... In the new culture, the role of the leader is to express a vision, get buy-in, and implement it. That calls for open, caring relations with every employee, and face-to-face communication. People who cannot convincingly articulate a vision will not be successful. But those who can will become even more open - because success breeds self-confidence. (Welch, J. 2005)

Based on employee comments, Riordans' compensation appear to be below industry standard (University of Phoenix, 2007). Riordan needs to adequately to invest in its people to remain a market leader. Increasing wages will foster hard work, results, and motivation within the organization, and ultimately keeps its present workforce from seeking employment else ware.

Stakeholder Perspectives/Ethical Dilemmas

Stakeholders are individuals or organizations that stand to gain or lose from the success or failure of a system and are often in conflict with one another who in turn can create ethical dilemmas within an organization. Ethical dilemmas are foreseeable when a company or organization introduces change. Stakeholders at Riordan include; senior management, employees, customers, and Human Capital Consulting. The ethical problems faced by senior management is being created in the attempt to align the goals and motivations of all departments to meet the needs of a diverse workforce comprised of many generations, experience, and skill sets, for example; Kenneth Collins Senior Vice President of Research and Development is concerned that he might lose key researchers because of inadequate compensation and would like to add incentives for Research and Development staff (University of Phoenix, 2007).

It may be difficult for Riordan to implement all the strategic changes recommended by Human Capital Consulting, especially when the company is experiencing declining sales and uneven profits. At present time it will be important for Riordan management to effectively communicate and promote the benefits of change which are essential to success.

End-State Vision

Increasing sales and stabilizing profits is the number one initiative of Riordan, however, this must be accomplished from the inside out. Riordan Manufacturing executive team leaders need to improve by working together within the new customer-relationship management (CRM) system. This goal is to implement an effective incentive program over the next six months