Riordan Mfg

SITUATION ANALYSIS AND PROBLEM STATEMENT: RIORDAN MANUFACTURING

Situation Analysis and Problem Statement

In today's business world in order for an organization to walk the path of technological advancement, increasing profits and remain one step ahead of the curve businesses must possess the ability to solve problems effectively and efficiently. There are different ways to approach defining the problems facing an organization; the focus needs to be on defining the problem correctly (University of Phoenix, 2004). Situation analysis is a widely used tool and is often termed the "three c's" and refers to three major elements: customers, costs and competition" (Wikipedia contributors, 2006).

The context of the paper will examine the case study of Riordan Manufacturing and provide an in-depth situation analysis starting with a brief background of the scenario, identify the issues and opportunities, explore stakeholder perspectives and ethical dilemmas. Continuing through the problem definition guidelines, a problem statement will be developed and end state goals will be identified.

Situation Background (Step 1)

Riordan Manufacturing is an industry leader and global plastics producer and broken into three plants: plastic beverage containers in Albany, Georgia, custom plastic parts in Pontiac, Michigan and plastic fan parts in Hangzhou, China. They are wholly owned by Riordan Industries and employ over 550 people in the United State and China (University of Phoenix, 2006). Sharply declining sales, market share and uneven profits over the past two years has left Riordan Manufacturing in an industry of consolidation and extreme competitiveness. These industry changes has prompted Riordan Manufacturing to reevaluate their sales and manufacturing processes and they have implemented a Customer Relationship Management system, better known as CRM, and self-directed work teams. Specifically, the CRM system consists of sales teams, which includes a sales person, product engineer and customer service rep, versus the traditional single sales person.

A recent employee survey showed a significant decline in overall job satisfaction, particularly in compensation and benefits, and has left Mr. Michael Riordan, Founder, President and Chief Executive of Riordan Manufacturing, to consider the following options:

1) Completely overhaul the reward system, or

2) Use piecemeal solutions to address the most critical issues, or

3) Find new motivational strategies

A consulting firm, Human Capital, has been hired to conduct interviews with employees, departmental managers and the leadership team to narrow down the specific areas of concern. Their task at this time is to provide a summary of their findings, suggested changes and proposal for implementing and managing recommended changes.

Issue Identification

There are four primary issues outlined in Table 1 which Riordan Manufacturing has encountered as they continue through the implementation cycle of the CRM system and self-directed work teams: team conflict, employee turnover, organizational culture and climate, and declining sales and customer.

There is no presence of a unified front or cohesiveness in the leadership team. They appear to have conflicting goals and view points which have resulted in dysfunctional conflict, lack of respect and understanding of each others job functions and ineffective communication. With the ambitious goals of an organizational transformation, rolling out new products, reducing employee turnover and improving sales and customer satisfaction, there has to be a sense of "we-ness" in order for the plan to be successful.

One of the many challenges Riordan Manufacturing faces in turning sales around is high employee turnover. Developing and rolling out new products and services and implementing a CRM system will not achieve the sales goal alone. The key is having a knowledgeable sales force ready, willing and able to embrace and market these products and services in order to increase sales, client satisfaction and gain market share.

There seems to have been an ineffective rollout of the new CRM system and self-directed work teams and has led to increased employee frustrations, higher turnover and an overall decrease in job satisfaction and negative organizational climate. The trickle down effect of this is an increased push on remaining employees to pick up the "slack" until new employees can be hired and brought up to speed and a decline in customer satisfaction.

Opportunity Identification

There are four opportunities outlined in Table 2 Riordan Manufacturing should focus on as look for solutions to the human resource issues they are experiencing: leadership development and team building, redefine compensation plans, develop reward and recognition program, and hiring a consulting firm.

Leadership development and team building are two of the most important opportunities identified because through appropriate leadership development and education managers become strategic leaders which in turn impacts teamwork and collaboration between departments. This will also increase operational effectiveness through effective communication, conflict management, motivation, empowering others and has an impact on the subliminal messaging sent to employees.

With the transition to the CRM system and self-directed work teams and it is vital Riordan Manufacturing redefine the compensation plans to allow for maximized earning potential on behalf of all parties not only as a means of retaining employees but also providing them the ability to attracted new employees. Coupled with this, there is a need to revamp the employee reward and recognition and the current program is ineffective as a motivational tool.

The scope of tasks to be completed in redefining a compensation model and developing an effective employee reward and recognition program are broad ranging from salary survey's and market trends to redefining positions and skill criteria. Some of the key advantages to hiring an outside organization consist of: using experienced professionals to ensure success, allows management to focus on daily job functions and other goals and provides time and cost savings with management being able to focus on the day-to-day operations of the business.

Stakeholder Perspectives/Ethical Dilemmas

According to Wikipedia, The Free Encyclopedia, early definitions of Stakeholders pointed to a person whom held money or property while