Mba 530

Problem Solution: Riordan Manufacturing

Sonya Coleman

January 28, 2008

University of Phoenix

Problem Solution: Riordan Manufacturing

An organization is a group of people who perform individual duties to meet a common goal. It must communicate effectively and manage conflicts to meet that goal. Everyone who works for an organization should hold the same values and goals. It is important to know organizational culture in order to make improvements to the work environment when necessary. The purpose of the exercise is to examine Riordan Manufacturing's organizational culture. Its goal is to come up with a plan that is thoughtful of future profitability and fair to long-term employees.

Situation Background (Step 1)

Riordan Manufacturing is a global plastics producing company with annual earnings of $46 billion dollars. The company employs 550 employees across three plants: Albany, Georgia; Pontiac, Michigan; and Hangzhou, China (University of Phoenix, 2008). Riordan wants to evolve its business focus by offering tailor-made service packages to clients. The company has changed the way they manufacture and market its products, which is causing uneasiness among its staff. Riordan is moving away from a single salesperson to a sales team system that is not making many employees happy because of compensation issues. Some employees have left the company because of this. The leadership team is in conflict over how to implement changes, if any, to the compensation and reward systems.

Issue Identification

The first major issue that Riordan is facing is low morale amongst its employees. This stems from needs not being met. Riordan's Human Resources department details the company's compensation and reward packages. The company maintains that they will provide an innovative environment and assure that all employees are well informed and properly supported that focuses on the long-term viability of the company. According to the consultant's findings, employees are unhappy with the current pay structure. They feel like they are not being properly compensated. Employees have become slowly disinterested and this has led job dissatisfaction and a rise in retention.

In an effort to increase employee satisfaction Riordan's leadership team is considering an overhaul of the compensation and reward systems. This would be welcomed by the entire staff but the final decision is complicated for two main reasons. First, it will be difficult for the leadership team to agree on how to increase compensation. The current reward system only increases for cost-of-living, seniority, and position within the company (University of Phoenix, 2008). Second, Riordan has to manage the wants and needs of three separate demographic groups within the organization. It will be difficult to manage and satisfy different perspectives on employment, job development, and compensation (University of Phoenix, 2008).

Declining sales has lead Riordan to change its sales process into a customer-relationship management system (CRM) that restructures the sales department from a single salesperson to sales groups (University of Phoenix, 2008). Some employees do not favor this because they fear that will not be properly compensated for a group effort.

Another challenge for Riordan will be to introduce its new service focus and implement those changes in a short amount of time. Keeping employees' attitudes positive while researching and implementing organizational change will also be a major challenge for Riordan. The organization has to decide the best way to do this that does not cause any alarm or friction with its staff. People need to be shown that changes to the organizational structure will work to their advantage (Dreher & Dougherty, 2001, p. 12).

Opportunity Identification

By realigning Riordan's organizational structure with a new compensation and rewards package the company will be positioned to retain and attract new employees. It needs to offer candidates compensation that is competitive with other companies in the industry (Dreher & Dougherty, 2001, p. 2).

Riordan has the opportunity to pay more attention to career development. It has to understand the needs and values of its employees. The company must learn what is most important to employees about their careers. Riordan needs determine strengths and weaknesses of employees and organization as a whole. This shows employees management is thinking of their long-term career needs and goals.

Riordan can also continue its business growth through new innovations and technologies. The company's business strategy along with technology will determine its design and work processes (Dreher & Dougherty, 2001, p. 2). The company will be in the position to hire more knowledgeable and qualified employees if they have systems in place to compete with competition.

Stakeholder Perspectives/Ethical Dilemmas

The stakeholders in this scenario have a direct vested interest in Riordan's success. The key stakeholders are Riordan employees, the leadership team, stockholders, and past and future customers. It is important that all stakeholders needs be considered. Table 2 describes this in detail.

The employees of Riordan are directly affected by any decisions that management makes. The decision Riordan makes about the compensation and reward systems will determine their livelihood. They are concerned that they are not being compensated as the market dictates and are considering finding other employment. Job dissatisfaction has had a greater effect on turnover than incentives that attract new applicants.

The stockholders of Riordan are also affected by the company's plan of action. They each have a vested interest in the company's financial success. If Riordan suffers a financial setback, stock prices may plummet leading some investors to question the stability of their investments.

The Leadership Team has been delegated with the role of making recommendations for the future of Riordan. They must make the most profitable decision for the organization. They also must consider the well-being of their employees. The company faces a loss of employees if no changes are made to the compensation and rewards systems. Riordan's CEO, Michael Riordan, believes that the company has been successful in taking care of its employees and would handle any problems that may arise. Mr. Riordan has become more concerned about the company's value