Problem Solution Riordan Manufactuing

Running head: PROBLEM SOLUTION: RIORDAN MANUFACTURING

Problem Solution: Riordan Manufacturing

Paul Robey

University of Phoenix

Problem Solution: Riordan Manufacturing

Riordan Manufacturing is a global plastics producer that over the last two years has experienced a decline in sales and profits. The company most recently has made several strategic changes, one being in sales adopting the CRM system (customer-relationship management), the customer is now being served by a team that formed by each major segment of the company, and the hope is that sales will improve with better customer service. In the area of manufacturing, the company has implemented a Six Sigma quality approach and the plants have been reorganized into self-directed work teams. Riordan is searching for answers; this paper will examine the issues and recommend a solution so the company can concentrate on what is does best, building plastic products.

Describe the Situation

Issue and Opportunity Identification

This company has some serious problems that need to be addressed, sales have been declining over the past two years and profits have been uneven, the company is divided among age groups and has different perspectives on how the company should be managed. Performance data indicates that only a quarter of the employees are high-achievers, most employees appear to fall into the mid-tier range. The reward system is out-dated and needs to be revamped causing morale and work ethic issues. The HR department reports through Finance and the Director has no real power or respect. The CEO realizes that something has to be done and is now in the midst of addressing the major issues and has hired a consultant to help identify the major issues.

Stakeholder Perspectives/Ethical Dilemmas

The stakeholders regarding Riordan are the employees, customers, management team and the consulting firm that has been retained to review the current compensation system.

The HR department reports through Finance and does not report directly to the CEO. The current HR Director is purely a figure head and does not have any power or respect.

Beginning with the CEO, he is nearing retirement age and currently holds 80 % of the stock. He believes the company is good to the employees and is concerned about the company’s health as he approaches retirement. Does he make change for the sake and risk what he has built?

The Riordan management team is only concerned with their self interests and they all have different perspectives on solving the company’s problems. Can they put their own self-interests aside and consider what is best for the company?

The company makes good use of the many different surveys used to monitor their employees. Surveys have concluded that the employees are not being challenged and they can make more money with other companies in their respective fields. The company has historically had low turnover rates beneath the industry average. The majority of employees believe the overall benefit package is fair and the supervisors treat people well. The culture is good for innovation. Are the employees all that unhappy with this company? What has changed?

Frame the “Right” Problem

The underlying issue with this company is that the HR department is tied to the finance and does not directly report to the CEO; therefore these issues have surfaced because there is no clear leadership. It is clear in this case that the leadership team has not been supportive to the initiatives that the HR department wants to undertake. The Director of human resources in this company has been relegated to ordering donuts and taking surveys. She has no real power and no authority to change processes.

Describe the “End-State” Vision

The end-state vision for Riordan is to be the leader in the global plastics industry by serving current and future customers with innovative products and services and to have a happy and productive workforce that feels appreciated and compensated fairly.

Identify the Alternatives and Benchmarking Validation

Google is a company that believes that good ideas can, and should, come from anywhere (Elgin, 2005). Google allows engineers to have one day a week to work on pet projects. Costco is a company that gets low turnover and high productivity from their employees. The company invests in its employees by paying higher wages than the industry standard. According to their James Sinegal (CEO Costco), “we think its good business. In the final analysis, you get what you pay for. Better employees mean higher productivity. We've proven that with our business model. We want to turn our inventory faster than our people. We are a company that promotes 100 % within the company. So it's even more important to hire good people and give them good jobs and good wages. They are the people who are going to run your business” (Conlin, 2004). Southwest Airlines is another company that has a reputation for low employee. According to Colleen Barrett, (Chief Operation Officer Southwest Airlines) “Our top priorities were for our employees and our customers to know we would be there for them. For our employees, we wanted to communicate early and often about all the company were doing to preserve our cash and their jobs. We have never had a layoff in our company’s 32-year history, and we didn’t want the tragedies of September 11 to break that honorable accomplishment. We also wanted our customers to know we would be there for them when they were ready to take to the skies again. We were the first airline