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Case Study v1

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  It is a breezy morning when Chia Chee Seng received a call from Sozo Shimano, the chairman of Shimano Incorporations, with regards to the performance of Shimano Components Malaysia in the first three quarters of 2014. Chia was appointed to be the managing director of Shimano Components Malaysia in 1995 and he was given the task to ensure Shimano Components Malaysia produce high quality of bicycle and fishing rode components either to be assembled in China or selling it to other retailers as finish good. Looking at the financial report, and the production report, Chia told Sozo Shimano that Shimano Components Malaysia is performing well. Sozo is satisfied and happy with the feedback, and questioned Chia on the semployee satisfaction level in Shimano Components Malaysia. Chia was surprised with the question because it is the very first time the chairman asked him about the staff satisfaction level. Sozo told him that although Shimano Components Malaysia is gaining profit, but the progress is slower than last year. He asked Chia to investigate the high turnover rate in middle level managers and executives. Chia do not realize that one of his middle-level manager in production department, William, who tender his resignation last month, wrote an email to Chia, explaining to him the reason of his resignation, and the actual situation happening in Shimano Components Malaysia. William started his first job upon completing his degree in Shimano Components Malaysia in 2004. Upon recruitment, William undergoes the on job training program for a year in various departments in Shimano Components Malaysia. In 2005, due to positive feedbacks from the departments he attached with, Queency Lim, the human resource manager, decided to allocate him in production department. William was tasked to learn all production process, and he was given the opportunity to lead a production line eight months later. Unlike most of the production employees who punch out sharp 5.00 pm, William used to stay back to make sure his line production is up-to-date. William is the first executive in Shimano Components Malaysia, who sorts out different measures to ensure there is no backlogs in his production line. In 2007, he was promoted to be the line assistant manager, and line manager in 2012. William started to feel bored with his job as he has spent merely 9 years in the same department, and with the same production line. In 2014, he decided to tender his resignation letter, and accept offer in other companies. Queency was instructed to show him a summary report on employee turnover rate for the past few years and also the exit interview form. According to the report, most of the employee who resigned is executive and middle-level manager level, particularly from production, and warehouse department. He realized that the common reason of their resignation are better offer from other companies, or better prospect in term of career development. Upon reading all the feedbacks from the exit interview form, Chia decided to walk to the floor. During his visit to the departments, he spoke to most of the employees, ranging from officers to senior managers. Among the feedbacks from line employees were poor working environment, especially in the production line. Employees worked in a closed production site with poor air ventilation. The air con is not functioning properly, and the employees need to work under a hot and warm environment for the past 2 weeks. Employees are rotating to take medical leave. Chia understood the consequences if he still allow this to be continued. Supplies might not be able to deliver on time due to the lack of employees in the production site. He called the Azri Hashim, the production manager to ensure this issue to be solved in 2 days.  An email was sent to Queency to arrange a meeting with the all the executives in Shimano Components Malaysia. Executive position is offered to any fresh graduates who completed their bachelor degree in relevant field or graduates with few years of working experience in related field. The meeting was chaired by Chia and only the executives were invited to participate in the meeting. Chia started his meeting with a short introduction of the background of Shimano Incorporations, and how Shimano became the global market player in bicycle and fishing rode industry. Chia told them that it is important to have young executives in the company, as this new blood executive could provide the management with brilliant ideas to improve the drawings or sales performance. Chia opened the discussions to the floor. Joshua, the 2 year old executive from warehouse department, raised his hand. He mentioned that organizations from different industry, for instance, Munchie used to bait them with higher salary and offer them to work in office compared to working in a factory. Shortly after Joshua gave his thoughts, Lee from production department said he is bored with his current task. He has been in production department since 2012, and for the past one year, he has been doing the same task daily. Every morning, he needs to check the daily production quantities and ensure the production flow is smooth. As long as at the end of the day, the production hits the target, then it’s done for them. Lee felt he is not productive and there is no career development in the company. He told Chia that he can’t see where he should put himself in the next 3 years in the company.  Anik Das from marketing department adds on, and shared that most of the time, during the marketing meeting, he voiced out many good ideas to increase the fishing rode sales. He presented the report to his direct superior, but his idea was rejected. Few weeks later, during the management meeting, he was summoned into the meeting hall, and was asked to present his idea. Anik Das was happy with that, but then later, he realized his superior claimed the credit to himself only. Anik Das felt that Shimano Components Malaysia is too centralize in its organization structure, whereby he was told that he should report only to his direct superior. Upon hearing all the feedbacks from the floor, Chia understands that the situation is not siding him. Shimano Components Malaysia provides an excellent on job training to the employees whereby new employees will be trained in different department for a year, before allocating them to a department which suites them. Chia worried the brain drain trend will continue and spread to higher level management position. He agreed to get consultants from Deloitte to counter the issue. Jimmy Lee, senior consultant from Deloitte was chosen to handle the issue. Jimmy and his team flew to Johor in order to meet and to understand the situation better. For the past 10 years of operations, the sales were excellent. However, by looking at the sales trend in 2013, the sales are still increasing, but at a declining level as compared to those days. The brain drain trend had changed the sales performance. The market became more pressure when customers start to compare the products quality and response rate. It is essential for the employees to practice interaction in attaining Shimano’s goal. It was insufficient to rely on top management to do the interaction with the employees. The interaction should come from all the employees, but the issue here was that the middle level managers and executives  As Jimmy walked to his hotel, his brain was full of what will be his next step. The company is facing brain drain, and the diminishing of profit. In long run, Shimano would have lose its competitiveness in the market. Furthermore, he highlighted the traditional management approach, which is the “Yes Boss” mentality should be abolished so that all the employees could share their ideas openly without fearing the ideas being stole by their superiors. He sat on his bed and on his laptop, preparing the presentation slides to Chia the following week. The first question he wanted to post to Chia was, should Shimano maintain its current practice of “letting - go” t heir employees? Jimmy was in a dilemma whereby if he proposed to Chia to review the salary of the employees, will they take this as an advantage to “threaten” the company to revise it again ? In his proposal, he mentioned that a new management approach should be implemented and career development opportunity must be prepared to all employees. “Knock, knock, knock”. Jimmy entered to Chia’ s office. Jimmy began his presentations with the importance of employee towards an organization. Employee is a valuable asset to an organization. Employee is the closest people to customers and products. Employee is the front line of any organization, and if they are unhappy with the company, the productivity of the department will goes down as well. If any employees wanted to tender their resignation letter, the officers in charge should ask them the actual reason of their resignation. The exit interview session should be done professionally, and try not to give indirect stress to them. Counter-offer should be offered to any employees whom the management considers a worth to maintain. The resigned employees might leak some of the company planning or standard operation procedures to the competitors. The higher the position, the more information might be leaked out. Jimmy unde rstood that it’s easy for Shimano to recruit new employees via recruitment website (e.g. Jobstreet) or head hunter, but it’s not easy to recruit an experience and loyal employees in the market. Jimmy planned to propose to Chia to revise employees’ salary p ackage, especially to the middle level managers, and executives. He noticed that employees in Shimano are only given basic salary and no over-time payment will be given The working environment should be improved and whistle blower policy should in introduce. Employees are worried if they “comment” too much. Therefore, with this new policy, the employees do not need to feel afraid of blowing the whistle to the top management. Based on the exit interview feedback forms, some of the employees were scolded for commenting a broken wire and air-conditioning not working, thus, they need to work under a hot working environment for few days. Fresh executives will have culture shock with it. Manager level employees should be trained ways to delegate task to their staffs and how to appreciate the people under their supervisory. Credits should be given to those who contributed the ideas. In return, the managers will be appraised as they managed to train the intelligent staffs. The employees will feel being appreciated by the company if they were being rewarded from the ideas they shared.  Ultimately, the employees will feel themselves part of the company. Last but not least, he proposed to Chia that it is vital for any organization to prepare a career development route for the employees, so they could progress into a different stage and being given the opportunity to hike to a higher position. Employees will feel bored if they stay in the same position for a long term. Potential employees should be given an opportunity to fill themselves in the junior level management position. After 2 hours of meeting, Jimmy walked out from Chia’s room. Chia stared at the bicycle which was presented by Sozo 3 years ago, and wondered what he needs to do now.
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