CASE 1: CONFLICT OF INTERESTS by A. HARIS AWANG (13th Aug, 2016)

The GM (Works) has problems with manufacturing budgets, meeting cost reduction targets, and dealing with new products manufacturing schedules. When an in-depth interview (non-directive type) was conducted between GM and Chairman of the Company, the GM explained that many things are happening in the Company about which he is ignorant, particularly the preparation, new product integration, etc. He agrees to the view that the Company is interested in high-growth and high-profit, but he has never been given an opportunity to review his own scheme of things and explain to the top management. The production culture of the company has never been assessed whereas the stringent rules are being directed by the finance and personnel departments. And sometimes, show cause notices are being saved to supervisors and senior employees. The company is introducing new products without assessing the capability of the manufacturing system and the resources.

a) Under the above situation, if you are asked to work as a consultant to show the perspective to the Board of Management, what action plans would you suggest?

As a consultant, I would first put everything into perspective by analyzing the relationship that the GM is having among his peers. Then I would assess the company’s culture by looking at the balance in terms of individual dominance among GMs.

Relationship

This is an important aspect of an operation. While it is often unspoken, the company has to review on how well the GMs are interacting with each other. Are they clicking up together or form an exclusive group among themselves such that they are withholding vital information from the GM (Works)? Do they look eye-to-eye when discussing inter-departmental issues?

It is the responsibility of the Chairman of the Company to address the issue so everyone can work together collaboratively. One way is to put them through a team-building course. Top management members, GMs, Senior Managers, etc. should also be encouraged to take up outside activities such as golfing, cycling etc. so they can build trust among each other.

The relationship of each GM with the Chairman has also got to be looked into. To maintain a collaborative working relationship, there can be no favoritism. The company’s wellbeing is based on the success of its operations. The Chairman must prioritized that as number one.

Dominance

It is crucial that the character of each GM is being analyzed. Who among the GMs are dominant? Do they put personal interests ahead of company’s? Are they dominating the other parties in order to expand or protect their personal interests?

The Chairman must send a clear message that the Company’s interests must be put on top and ahead of personal interests. If there’s found that the finance department and HR department GMs are

withholding vital information from works GM, they have to be advised and if there’s no improvements, they have to be removed from the system.

b) Does Business Process Re-engineering (BPR) help in situations like these? Provide your analysis.

Yes, it helps but it also depends on how serious this problem is and how long has it been going on. Is it a deep-rooted culture that has been with the company for many years or is it just a minor set-back that requires some fine tuning and minor adjustments?

If it is a deep-rooted culture, it takes a strong leadership to re-engineer the business. The organization has to be changed. GMs or managers have got to be replaced, transferred or re-assigned. Reporting system has got to be changed so that there’s no dominance by one person or a group.

One way is to analyze the current reporting system. Is it flat or is it multi-level (tower) reporting that makes message from the top difficult to be cascaded down? Is communication open and how do managers communicate with each other? Is it face-to-face or is it by email?

The way people communicate will also have an impact on the way people collaborate. This will enhance understanding among departmental cultures and working system.

Relationship has got to be in place, dominance must be removed from the system and remains the exclusive rights of the Chairman and communications have got to be improved. With these in place, the Company should be able to operate successfully.