Discuss about the Pluto Tele Communications.
Pluto Telecommunications consists of three departments – Sales, Customer Services and Marketing. The job of sales department is to sell to the customers and get their installation completed. Customer Service department consists of reception and engineering staff. The Marketing department is responsible for the product launch and withdrawal along with development of marketing campaigns.
Pluto has been losing new orders and their complaints are increasing. The reasons are:
Lack of Common Goal – The three departments have their own individual goals and targets. Some work on short term goals and incentives while others on annual targets to prevent penalty.
No Communication between the departments – The three departments have no interaction and work on their own.
Lack of coordination/accountability in leadership team – The directors work individually for the targets of their own departments but are not accountable for the achievement of organizational goal.
Department cultures prevailing over Organizational culture – Sales department is individualistic, marketing works as a team, Customer Services department follows processes and is hierarchical.
Pluto Communications saw rapid growth in the last few years. It started encountering problems like loss of revenue, lost clients, customer complaints etc. as it started becoming larger and larger.
The company strategy is not clear down the organization. The employees of the three departments work for their own objectives. The three departments have altogether different strategies – some work on short term goals while others have annual targets. They do not have an understanding of how their individual department goals get connected to the goals of members of other departments and in turn with the organizational goals. The lack of understanding of the work and delivery time of any other department creates process and result gap in the working of the departments. Similarly, the sales department has monthly incentives whereas customer services have annual incentives. The incentives of sales department are based on individual performances whereas the incentives of marketing department are based on the performance of the organization.
There isn’t any communication between the three departments. They work in isolation with each other and do not respect the values of each team as well. Even the Department Heads do not communicate with each other. According to Max Weber’s theory of communication, bureaucracy should be practiced in the organization. It includes division of labor, rules and procedure which are same for all and formal channels of communication (Wrench, 2012). Their goals are dependent on each other and hence effective communication is required to work effectively. The incentives also differ in the three departments. While sales have huge short term incentives, marketing teams have team incentives rather than individual incentives whereas customer service department have penalties rather than incentives. This creates huge dissonance among the team members. According to the research done by Locke, specific goals are more effective as compared to team goals (Locke, 1968). Also, rewards may work in a shorter time frame; however, variable pay systems are more effective and successful in the long run and motivate employees (Pearce and Porter, 1985).
There are leadership issues as well. Ms. Tsang fails to coordinate the three departments and the department heads also fail to lead their respective departments in an efficient manner. All the three department heads do not modify their leadership style as per the situation. According to the Situational Leadership theory, an effective leader is the one who changes its leadership style basis the state/situation of his/her team (Hersey, 1984). Path-goal theory states that the most successful leaders charter the role of their team members towards high performance (Evans, 1970). However, here the focus of leaders is more towards task completion rather than successful performance of their team.
The directors of the three departments lack accountability of the organizational goals and are concerned about their departmental goals. The goals and ambitions of the three departments differ from each other and are driven by different attitudes and behaviors. The time orientation and parameters of incentives among the teams also differ.
The organization is following functional structure currently. In functional structure, employees are divided on the basis of their functions and are governed by the top management of the function. This leads to different units like engineering, marketing, HR, sales etc. being created in the organization (Gupta, 2009). All the employees of a particular function report to the functional director as is the case of Pluto Telecommunications. The focus of the different functions/departments is more on task completion rather than achieving organizational goals (Chimoriya, 2015). Also, it restricts the view of employees/teams beyond their own function. The response time of organization to customer complaints or changing customer needs becomes slow as the functions do not respond until the problem gets broken down to the tasks of their respective functions. This kind of structure is more relevant for smaller setups.
While we look a little deeper into the functioning of these departments, their culture is also very unique. Culture is defined as the unique style of working of an organization (Kilman, 1985), something that is related to the people and the way they do things. The organization does not have any strong culture of its own. Instead, all the different functions are working as smaller units having their own strategy and culture. The sales department does not prefer to work in a structured or hierarchical environment and are self-centered in their approach. They are arrogant and do not prefer to work in a team. The customer service department is very hierarchical and process oriented. Their focus is on not missing their targets rather than achieving them as they have strict penalties and very small bonus component driven by annual targets. Research has shown that this kind of stick has a detrimental effect over employee’s performance (Herzberg, 1968). These factors promote non-trustworthy environment among the team members.
Moreover, due to strict official communication channels, the employees in this department have developed resistance to change. The marketing department has a team oriented culture and prefers to work in groups. However, they do not feel the urgency to deliver results quickly as they take long time to deliver campaigns. This approach goes against the target of sales department which in turn gives rise to conflict in the organization. The employees in this department are comfortable working in their own teams and hence are resistant to connect to employees in the other department and are not concerned with the overall functioning.
The urgent need is to drive the employees in all departments towards common organization goal. Many steps can be followed. First, the leaders should communicate organization strategy and goal to all the employees. The job of employees should be enriched by making it more challenging and encouraging their full participation (Belias, 2013). This will make their work more interesting and increase their performance levels and productivity. Further, their KRAs should be designed to be linked to the organizational goals with clear Key Performance Indicators defined. Furthermore, the goals should be SMART (Cothran, 2005) in nature.
Specific – i.e. should indicate the level of performance required
Measurable – should measure the outcomes
Achievable – should be attainable within the given market conditions and resources
Realistic – with likelihood of being able to accomplish with little stretched efforts
Time Bound – defined within a timeline
Secondly, the organization should move to matrix structure reporting rather than functional structure. In matrix structure an employee reports into two bosses- one to the functional manager and other to the product manager.
The advantages of matrix structure are that it is dependent on product rather than function. It also includes the functional expertise required for the success of the product. It encourages the employees from different departments to work together and stimulates team thinking. It also aligns the individual goals to organizational goals and makes organization more agile (Horney, 2009).
Also, the Product Manager is responsible for the successful delivery of the product where as in the earlier case the focus of functional manager is only to complete the assigned tasks of his function. A product manager acts as an interface between the different stakeholders of the product and stimulates communication between them (Kuprenas, 2001).
However, implementing a matrix structure is a complex process and requires commitment and dedication of the leadership team. Also, it may create ambiguity for employees in terms of their roles and task prioritization as they report to two managers.
Third, the organization should set standard time frames. All the departments should work on achieving monthly/quarterly/annual targets depending on the organizations time frame and strategy.
Fourth, the incentive system of the employees should also be revised to reach a common bonus scheme with equal rewards for all the departments. Feedback should be taken at regular intervals to ensure smooth functioning.
To encourage communication among the employees, both formal and informal communication channels should be facilitated. Formal department meetings should be conducted to facilitate discussion of any operational issues in the organization including product launch, customer complaints, campaign execution. Also, employees should be encouraged to use other modes of communication like telephonic, e-mail, office communicator etc. Informal communication channels should be encouraged which are done by creating social break-out zones where employees can meet during the breaks. Team bonding should be promoted by engaging employees into team building activities.
The organization is currently facing huge challenges in terms of the ability of leadership teams. This could be resolved by encouraging situational leadership approach (Hersey, 1979). According to the situational leadership model, effective leadership approach/style varies according to the situation in hand. The attitude, psychology and maturity of the followers determine the leadership style to be followed by a leader to be effective in a particular situation. For e.g. the newcomers in an organization may need directive leadership style (task orientation) while with experienced professionals the relationship oriented style would be more successful (Esther, 2011).
Since, in Pluto Telecommunications, the attitude, behavior and values of employees in the three departments varies a lot, the leadership style to be followed by the respective departmental heads should be different. The sales team should have a participative leadership style as they lack a team culture. The marketing team should have a little more authoritative style as the team likes to be confided in their own comfort zone. Also, since the team does not feel any urgency it has to be strictly monitored with stringent targets.
Last, the organizational culture should dominate and determine the cultures of the departments. In collaborative culture, employees work as team towards a common vision and set their respective goals towards the achievement of that vision (Sanchez, 2012). They respect each other and value the differences of each individual as well as team. They listen to the ideas of other employees and are flexible to change their opinion based on the feedback of others.
The organization should start working by defining organization strategy and linking organizational goals with departmental and individual goals. SMART KRAs should be defined for all employees in the organization with similar time frame and equally rewarding incentive schemes. Cross-functional meetings should be arranged so that employees can clear organizational issues arousing due to different departments.
Matrix structure should be implemented so as to make the heads accountable for the success of the product. Formal and informal communication channels should be encouraged.
Matrix team can create confusion among the employees and may arouse conflict between the product and functional manager. Hence, it has to be effectively implemented which results in increase in employee cost, as more people are needed to support the matrix structure.
Also, people may be resistant to change so time should be given.
The recommendations will have to be implemented in a phased manner at Pluto Communications. A long term plan should be formulated with incremental changes to be implemented within a predefined timeline.
First, the leadership team should immediately communicate the current strategy and goals of the company down the organization and take sessions of different workgroups to take their feedback and understand their challenges in the implementation of the same. This will help employees understand the benefits and make them more acceptable and committed towards the change.
After communicating the strategy, KRAs of employees should be aligned to organizational goals in line with the principles of SMART goals. The department heads will have to play a significant role in the same. Also, the department heads will have to create a more collaborative culture and encourage their team members to communicate with each other.
This is a long process which may take some time to deliver the desired results. Also, employees will also take some time to get out of their comfort zone and adapt to the changing environment.
These changes if implemented will definitely help Pluto Telecommunications increase their customer loyalty and satisfaction and hence sales.
References
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