Business Transformation Management Methodology: A Case Study Of Semco

Transformational Plan at Semco

Discuss about the Business Transformation Management Methodology.

Transformational plans are implemented in an organization thereby providing them better facilities and strategies for improving the future growth of the firm. It helps in diagnosing the opportunities that the firm could enhance, thereby providing them with the scope to achieve its vision and objectives. Transformational planning is coordinated with the organizational change, which helps in imposing new and altered business processes or procedures (Gollenia, 2016). It helps in accepting the sponsors of the related systems. The main objective of the transformational changes being implemented in an organization is to transfer knowledge and skills thereby enabling the users to adopt the new vision, mission, and systems and to identify the minimum sources of resistance to the changes.

Semco is an industrial machine manufacturing company with its headquarters in brazil. This company manufactures machine pumps for shipbuilding industry. During the recession era of 1980, the company had faced some tough situations where the company had typical hierarchical management structures with a patriarchal figure as a leader (Mintzberg, 1994). The organization had set some rules and regulations that had the control; over every aspect of the activities undertaken in the firm. The founder’s son Richard Semler had undertook the responsibility of managing the organization and returning back its prosperity as before. In order to do so, he had strategically framed some transformational plans for the firm. He aimed at radically transforming the organization thereby dealing with consistent poor performance (Maresco & York, 2005).

According to the transformational plan that had been undertaken by Semler, he had dismissed all the top management heads and had dismantled the layer of managers in the firm. It reduced the hierarchy of the firm from seven to three. He eliminated the job titles that were used by the employees in the organization, and had rotated the position of chief operating officer among the workers in a span of 6 months. The organization had aimed at maintaining transparency in the salaried that were paid and the workers were given the opportunity to set their own working hours according to their convenience. The organization had accepted diversification rather than the maintenance of heavy reliance on the industry.

The transformational plan that has been implemented by the organization is universally applicable. It is quite motivating and attention seeking dor the workers. These kinds of plans show its total dependency and the importance of the workers that the firm holds. It helps in maintaining the sustainability of the firm and raiding the loyalty of the workers towards the firm.

Motivation Theories and Semco

There are three forms of motivations achieved by the workers of an organization, which helps them in sustaining their trust towards the firm. These categories of motivational theories could be named as content theories, process theories and reinforcement theories of motivation.  The content theories of motivation help us to understand human needs and the response of people with different needs. The process theories of motivation offer additional insights into how people give meaning to rewards and then respond with various work-related behaviours. The reinforcement theory of motivation focuses attention on the environment as a major source of rewards and influence on human behaviour.

According to the case study of Semco, it could be stated that the company had quite efficiently implemented the transformational changes, which had helped the firm in regaining their old profit aspects. Richard Semler had implemented various strategies that would positively affect the workers of the organizations. These facilities were considered as an important tool for the firm to regain the organization from its deceased state and thereby sustaining growth in the market. According to the three categories of motivational theories, the company had implemented the content theories where, Semco had followed Herzberg’s Motivational Theory, Mcclelland’s Human Motivation Theory, Maslows Hierarchy Of Needs Theory and ERG. Under Herzberg’s Theory Of Motivation, it could be stated that the theory deals with the factors which maintains the cause for job satisfaction. Under this context, it has stated that there are two factors, which sustain the satisfaction to be attained from jobs in an organization. These two factors are motivators and hygiene factors (Park, 2013) . Motivators deals with the positive access of work that are acknowledged by the works , whereas, hygiene deals with the status, job security, salary , benefits and other facilities to be enjoyed by the workers. Semco had undertaken this theory by removing the middle managers of the organization. The work was settled among the workers, where it was under their responsibility to produce better products using innovative and cost effective techniques. Secondly, it provided the workers with the choice of settling their own salary. This shows that the firm had followed the theory, fulfilling both the two factors for the workers. Mcclelland’s human motivation theory deals with three dominant motivating factors, affiliation, achievement and power. This theory suggests that in a diversified organization, it is very important to motivate the employees based upon their expectations (Miner, 2015). Semco had been able to implement these criteria where it provides the availability of reward systems, empowerment plan system and the independence of the workers to set their own salary. These two theories have been quite vital in supporting the strategic plans undertaken by the organization.

Bureaucratic Design at Semco

According to Maslows Hierarchy Of Needs Theory, a particular pattern of psychological, safety, belongingness, esteem, self actualization and self transcendence have been taken into consideration (Lester, 2013). It states that according to the complexity of the human brain, this theory had been developed which helped in acknowledging the likelihood of the people thereby identifying the basic forms of motivation the company need to implement. Semco had evaluated Maslow’s Hierarchy Of Needs Theory, thereby analysing the most important factors for the workers of the firm. These factors are transformed into extra benefits, services, reliability, and job satisfaction. Among the listed factors, the major factors selected by the firm are psychological needs, love and belonging towards the family and self-transcendence. The ERG Theory under motivational needs have been implemented by altered further. It aims at providing the basic requirement and necessities. It has three dominant characteristics of existence, relatedness and growth (L?z?roiu, 2015). Semco had been quite crucial in maintaining the factors to affect the reliability of the workers towards the firm. Semco has granted the opportunity to its workers to discuss the main matters of the organization, thereby disposing the manuals of the previous regime. It provided its workers with the opportunity to include their own ideas and innovative measures of production. He empowered his workers with a negotiated salary along with a percentage of the company’s profit.

The existing structure of Semco was a part of the bureaucratic design where a bureaucracy can be described as a form of organisation based on logic, order and the legitimate use of formal authority. Its distinguishing features include a clear-cut division of labour, a strict hierarchy of authority, formal rules and procedures, and promotion based on competency. Semco had been facing various kinds of tensions that could have been solved and handled in a better way. Hence, a transformational change for such existing scenario of the firm was necessary. One of the most important sources of tension in the existing structure was the organizational structure. Semco was considered as a typically hierarchical management structure with a patriarchal figure as leader. The organization had a core management layer of seven steps, where the managers had been experiencing a fixed position. By following this method in the company, the lower level workers and members of the firm had been facing severe issues with the management team. While taking a particular decision regarding the well-being of the firm, the workers were not included. Various levels of managers were given the authority of making plans for the firm. By implementing the transformational change over the structure of the organization, Semler had provided the incentive for the firm to implement variations in the organization with lesser complications (Birkinshaw, 2015).

The second source of tension with the existing structure of the firm was related to the various job titles and maintenance of non-transparency in salaries.  Bureaucracies become unwieldy and rigid in nature, which needs to be implemented from the high authorities of the organization (Gollenia, 2016). Various job titles in the organization, makes the organizational structure complicated and distributive. There is a los of unity among the members of the firm. Along with the job titles, there had been narrow span of control of the firm, where only the management team was responsible to take decisions. By implementing the transformational change, Richard Semler had been able to overcome the issue of job titles by eliminating them. It had even maintained the transparency over the salaries provided by the firm (Neubert, 2016). The salaries were written on the blackboard thereby not providing any scope for the workers to feel de-motivated. It provided the workers with the title of associates in the organization, where it had given them the opportunity to frame their own groups depending upon their needs, choose their own package of salaries, and shift time for work.

Transformational changes undertaken by an organization is considered to be adhered to certain changes that would be totally opposite to the past structure of the firm. These changes prove to improve the current situation of the firm, along with some risks to be inferred. The risks that are associated with the transformational changes for the organization must be adhered to, so that it does not alter the motive for such changes in the company. The changes that were undertaken by Richard Semlar in Semco were quite different from the normal business practices that had some associated risks with it. One of the most important risk associated was the change in the management structure of the firm. Tough it had reflected positively in the well being of the organization, yet, dismissing all the top management of the organization might pose severe risk. The senior management team were solely responsible for the past decisions that had been taken. These past decisions and their experience might have been helpful in implementing the plans. The second risk associated to the change plan transparency in income. With the transparency in income of all the partners, counsellors and associates in the firm, there was a possibility of de-motivating the workers in spite of motivating them. Transparency without a clear salary policy generated by the firm poses certain threats to the well being of the firm (Wang, 2016. ).

The third risk-associated with the transformational plan had been the implementation of empowerment plan in the company. According the plan, the workers of the firm had the authority to enjoy certain percentage of the company’s profit along with their salaries. This plan had given them the incentive of working better for their organization. Semler himself was not sure regarding the success of the empowerment plan. Though the plan had affected the company in a sustainable and positive manner, yet, with a slight change in the views of the workers, the plan would have been quite abrupt in nature (Hayes, 2014). The workers might have been over confident regarding the importance provided to them, thereby posing a threat for the firm to function negatively.

Semco has been one of the ideal companies that had been positively affected by transformational changes. It had quite beneficially implemented the changes, which existed in the firm. In order to manage the firm better, there must be a provision for motivating the people with respect to the diversified nature.

Reference

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