Riordan Problem Solution

Running head: PROBLEM SOLUTION: RIORDAN MANUFACTURING

Problem Solution: Riordan Manufacturing

University of Phoenix

MBA530

February 5, 2008

Problem Solution: Riordan Manufacturing

The purpose of this paper is to assess Riordan Manufacturing's present dilemmas and offer suggestions that may bring positive conclusions to impending quandaries. This paper will evaluate Riordan's situation, existing opportunities and challenges and conclude with pivotal suggestions that will produce positive outcomes. In addition, via end-state goals, concepts are provided in which Riordan Manufacturing may improve organizational human resource practices that will give Riordan a sustained competitive advantage.

Situation Analysis

Issue and Opportunity Identification

In the United States of America the one key issue Riordan Manufacturing is addressing is employee retention. Many comments have been made regarding employee attrition and the cause for this attrition is competitors paying higher wages. Additionally, Riordan's Research and Development Department (R&D) is experiencing major turnover and huge loss of employee knowledge due to attrition. Furthermore, Riordan's employee incentive program is faltering and is a foremost concern with Riordan's management and employees'.

Present sales incentives are structured for individual salespersons' as an alternative for a team approach. "The new philosophy is to initiate changes in business practices that will result in revisions to current sales methodologies of individual sales representatives account management to that incorporates a salesperson, a product-engineering specialist and a customer service representative with support from R& D" (UOP Scenario, 2008). Though Riordan's Sales Department sales department processes have changed, the current incentive/bonus programs are lagging and are not strategically aligned with the new and revised programs that Riordan is attempting to implement.

Riordan has done a small amount of promoting or developing their employees in past years and a key strategic advantage for organizations is to make available the means for employee growth and development. Hence, "...training and development not only helps to attract top performers but will also provide incentive for retention" (Dreher & Dougherty, 2001; p.92). Riordan should look at the possibilities of providing development and training, but such development and training should be provided under a caveat towards the best interest of the company.

A key miscalculation in the holistic human resource management initiatives at Riordan is the absence of Riordan's Human Resources Department's influence on the changes concerning the business plans at Riordan. Human resources department presently reports to the finance department and has no formal lines of communication the CEO concerning Human Resource matters. Riordan may need to consider their business structure due to the continuously developing business environment and many Human Resource concerns . Therefore, in efforts for Riordan to realize and gain strategic advantage in the area of human capital, "...a superior human resource management system must be in place" (Dreher & Dougherty, 2001; p.35).

Increased stock price is also an opportunity that may be realized if Riordan Manufacturing can effectively communicate and implement their plans while avoiding some of the negative issues. If investors see some potential in the plan, they may view the current stock price as a bargain resulting in additional stock offerings and purchases. The subsequent stock offerings and purchases will increase value, cash flows and acceptance and momentum for the growth plans. Riordan should only consider this measure for supervisors, managers and directors as an incentive. It should not be made openly available to general staff of public.

Stakeholder Perspectives/Ethical Dilemmas

As with any operating organization many stakeholders must be considered when organizational changes are initiated and ongoing. Since Riordan has experienced a decline in share value in the past, Riordan must carefully detail and communicate forthcoming changes to all stakeholders.

Riordan Manufacturing must be ready for "...labor management-cooperation where cooperation between labor and management may feature employee involvement in decision making, self-managing employee teams, labor-management problem solving teams, broadly defined jobs, and sharing of financial gains and business information with employees." (Noe-Hollenbeck-Gerhert-Wright, 2003; p.83). Understand that financial gains and business information to anyone lower then the board should be only specific to that departments need to know.

Therefore, Riordan's Executive Management Team must find the means to implement growth strategies and see a Return On Investment (ROI) as immediate as possible in effort to rectify the past decline in share value and profits. Mr. Riordan trust the customer-focused team approach will indeed improve share value and bring higher standards and quality current and future product and services offerings.

A recent employee satisfaction survey revealed deterioration in employee job satisfaction and senior management disagrees on effective plans to assure efficient progression towards achieving strategic goals.

The political environment at Riordan is common with the type of organizational structure and culture in place at Riordan. Department managers protect their scarce resources by practicing "...self-serving behavior in order to gain self-interest, advantages, and benefits at the expense of others and sometimes contrary to the interests of the entire organization or work unit." (McShane-Von Glinow, 2005;p.58).

Riordan's human resources could use the "...mutuality of interest theory that involves win-win situations in which oneself interest is served by cooperating actively and creatively with potential adversaries." (Kreitner-Kinicki, 2004; p.9). This type of practice would allow a powerful sense of mutual cohesion across the management team resulting in higher successes in the long-term. "Employees who identify their own personal self-interest with the quality of their organization's output understand mutuality and strive to maintain it in their