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In the given case, Rapid Supply Electronics Components Ltd (RSEC) has acquired Electronic Bits Fast (EBF). Both these companies are operating their business activities in Australia by supplying electronic components to the customers in a wide range. Due to such integration the company has taken a rapid growth in the past three years. RSEC is an organization that follows a decentralized approach to manage their six business units as it becomes difficult to handle the operations of six units in a collective basis. Each of these units has considerable autonomy handling their own sales force, customer service department and distribution operations. On the other hand, EBF is an organization that follows centralized structure to handle various functions including sales, customer service and logistics.
After few months, RSEC Board shared its intention to integrate all the functions of both the company and manage them according to what EBF has been doing. This plan was put on hold for sometimes until the introduction of new financial controls. A change plan was developed by the business system manager of RSEC. A new organizational structure was developed to integrate all the functions of both the company by introducing RSEC staff to the organizational system of EBF SAP system. There was urgency from the board to complete the reconstruction so the project manager ended up choosing a top-down directive approach.
This case highlights the dissatisfaction of employees of RSEC who are not getting any benefit from such change. The board members are not aware of lack of morale and disappointment. The organizational structure should be reconstructed keeping in mind the wants and demands of the employees.
From this case study of RSEC and EBF we can analysis that after the introduction of new integrated system the employees of RSEC were not really satisfied by the change. While taking feedback it was found that the employees of RSEC where badly affected by the change. The employees felt down that now they will not be able to exercise their power which they were able to exercise before the change. The staffs working in RSEC failed to see any advantage of centralised integration. They were aware of the fact that many of them among the affected department have to relocate.
From the perspective of the manager it was developed that this change is not progressing well. The change took place in a speed and therefore a larger customer service department was formed, it became difficult to recruit sufficient new staff to fill the roles in enlarged customer service centre. It resulted in a workplace that was very crowded and the workloads very extreme high. The permanent staff working in the company had to give more time to train replacement agency staffs. This brought stress, higher absenteeism and reduction in job satisfaction in the integrated organization. There was a sudden rise in the customer complaints. The Board is still unaware of the fact that this change is not bringing any positive results and there is a decline in the morale of employees. It requires a change as soon as possible to reduce employee turnover and accomplish the organizational goals collectively.
The main issue in this case is that the employees feel that their importance will be lost and they will have to work under pressure and guidance of higher authorities. There will be a lot of interference of senior management in the working system of employees. The employees should disclose their views in this matter to the business manager who is responsible to bring change according to the situation. The feedback of employees should be highly considered if the company wants to maintain sustainability in its operations.
The change in structure can be failed for different reasons. It could be because of lack of focus and inappropriate communication as well. It is beneficial to make small changes projects by improving the process in customer service centres. It is the responsibility of a leader to talk in one-on-one basis to the employees of RSEC and EBF, and group settings to make answers to the questions.
We know that organizational change means to modify and review the structure of management and business process (Basu, C, 2016). Small business should adapt to grow and survive against the bigger competitors. RSEC and EBF should look for ways to manage things more effectively and efficiently to achieve organizational goals. The change should not be feared instead it should be accepted positively and worked towards bringing advantageous results.
In this case the organizational structure should be in a decentralized form so as to avoid job satisfaction and labour turnover, which could bring a bad reputation for both the organization. RSEC is a large company having six different units and centralized approach will not be able to handle the functioning of these various units collectively. This can be explained in details by noting down the disadvantages of centralized system.
Delay in work: Centralization in a large organization will create loss of man hours and will also delay the performance of work. Quick decisions cannot be possible during any emergency in the organization; this causes delay in the office work.
Remote Control: In this system the executives are under pressure of heavy work. So it becomes difficult for the top authorities to handle and take decisions regarding each function on their own. Slackness in work is generated due to lack of control and supervision.
No loyalty: The Company will lose the initiative from the subordinates as they are allowed to do only those work that they are asked to. Extra work and initiatives will not be allowed in the approach. These factors are considered to be the reason behind the barrier of loyalty in work.
No Secrecy: Another reason that why RSEC and EBF should not form a centralized approach is that it lacks secrecy in work as the information and decisions usually flow from one place to another and is conveyed to all.
In this type of acquisition, it is preferable to construct the structure of organization according to the decentralization system. It is that type of structure in which the executives of the company can place the authority of making important decisions in the hands of local managers and front line managers and reserve the critical decisions for the top authority. Decentralization business system is more efficient and effective for that type of organization having many business units. So RSEC should adopt decentralized structure as it has six different units.
Decentralization will allow the local leaders of RSEC to have more ability to cope up with the local market (Kokemuller, N, 2016). In case of centralized system it becomes very difficult for the local managers to wait for the decisions and order made by the top management as it takes a lot of time. Decentralization system will bring a feeling of morale and importance in the minds of the employees working in RSEC. This can be further explained by describing the benefits that RSEC and EBF can achieve.
Empowering Employees: The employees of both the organization can be empowered by having autonomy to take their own decisions, this will give them a sense of importance and make them realise that their work is being valued (Joseph, C, 2016). This will bring initiative efforts from the employees who will be willing to give better work. They can implement some of their own ideas as per their knowledge and experience.
Preparing for Emergency: In this case study we can see that the employees are losing their interest in the operational function. They want to do only the work which has been assigned to them by the top authorities. And during emergency the decision making does not bring any effectiveness as decision taken by top authorities under pressure and lack of time can bring ineffectiveness as they are not aware about each and every functions that takes place in the business operation.
More Efficient Decision Making: RSEC and EBF can make decisions with ease if they don’t have to consider the activities of both the organization as whole. What may be good for one company may not be good for another. Different departments have different situations and problems arising against them. Collective decisions will not bring an effective change.
Ease of Expansion: RSEC is looking forward to expand their business activities and this type of goals can be achieved when decisions are not made collectively. For example, if the company wants to open a new unit in a different area, it is decentralization that allows the new business unit to make its operation as an independent unit.
The business owners and managers should consider very carefully that which type of structure should be designed in the company. Small organizations should choose centralized business structure as the owners always remain to the forefront of a business (Vitez, O, 2016). On the other hand, large organizations requires a decentralize structure as they have several departments and divisions. The business owners of RSEC and EBF should consider the organizational structure keeping in view the expansion and growth of their business. Business owners simply design a structure on the basis of how they manage employees. The employees usually adjust their work on how the owners are handling their business. This results in a structure created by default, which lacks serious planning. This should be highly avoided to design a suitable structure for the business operations.
It shall be a favourable decision for RSEC and EBF to design their organizational structure according to their goals and objectives. Collective designs for two organizations sometimes can bring dissatisfaction from the employees and this will ultimately result in consumer complaints due to bad services provided by the employees. Presently, in the case the employees are finding it very difficult to cope up with the work loads. Heavy load in business can affect negatively the psychological well being of the employees of RSEC as they are badly affected by such structural change (Thompson, S, 2016). When employees work under stress they cannot increase their productivity and hence given task will not be accomplished as desired.
Therefore, it is recommendable for both the organization to handle their sales, customer services and logistics independently. This will help in allocating the task to the heads to respective functions and it will be easy to hold liable when any person make misconduct in their task. When the change was made the customer service centre is the most affected department as it is becoming difficult to recruit permanent sufficient staff. Employee turnover rate is increasing day by day in this organization and the business manager is not taking this issue as a serious one. Feedback should be taken from the employees and necessary changes shall be made. Independent decisions related to sales, customer services and logistics will bring progressive change in the acquisition.
The implementation of organizational change is can take place only when the management is ready to bring such change (Lotich, P, 2016). The business manager should report to the top authorities and make them aware about the dissatisfaction of employees and labour turnover that is stopping the current structure to bring progress in the organization. The employees of RSEC and EBF will develop a comfort level if the management supports the process. The next process will be case for change; this case can come from various sources. There can be a requirement for change from the customer service feedback, customer comment cards or employee’s feedback. Employee involvement is must to bring organizational change (Root III, G, 2016).
The change whether it is a small or big one, it should be communicated and explained that in what terms the employees will be affected by such change. After this the planned change will clear its way by removing all the barriers to such change. RSEC and EBF should try to remove the barriers that stop then from bringing change with ease. Barriers can be of different types, sometimes it could be the employees, inadequate training or lack of required equipments. ESEC and EBF should remove such barriers and implement the change that is recently designed keeping in view the behaviour and feedbacks from their employees.
From this report we can conclude that the acquisition of EBF by RSEC will bring progressive change only when the change will be made by considering various factors of change that has the capacity to influence such organizational change. The company has implemented Centralization structure for both the companies and this is not really a good decision. Taking collective decisions will not bring satisfaction to the employees of RSEC as they were working as independent staff and their importance was valued. Now they feel inferior and lack confidence. RSEC and EFB should perform their functions by an independent system to bring a progressive success of this acquisition.
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