Leading and Managing Organizational Resources Assignment 2 (GC01560)
Executive summary
This paper has critically analyzed and evaluated a case study, named Company A. The finding of this paper discloses that the new Company A has gained success in the perspective of globalization, operational management, information management system, and financial performance through the acquisition. The acquisition has boosted up global presence and customer bases of new Company A that has increased its revenue by 7% to £22.7 million, gross margin increased by 17.9%, earning per share increased by 0.1%, dividend increased by 0.2% in 2017. Therefore, new Company A decided to increase its investment capacity from £0.5 million in 2016 to £1.1 million in end of 2017.
However, new Company A has been facing great challenges with its leadership approaches and organizational culture. This is because the acquisition has changed the ownership, organizational culture, and organizational structure of old Company A that has caused high staff de-motivation and turnover. The autocratic leadership and power culture practiced by the CEO in new Company A has de-motivated staffs, made redundancy of staffs, and caused talent leave. Out of 500 staffs, 10% left their jobs within the few months of acquisitions. If these trends continue, the new Company A might face skills gaps and skills shortage that might affect business performance in future. Therefore, New Company A needs to take initiative to overcome its leadership challenges.
Table of Contents
Executive summary.
1.0 Introduction.
2.0 Contemporary approaches to leadership.
3.0 Organizational culture.
4.0 Change Management
5.0 Power and politics.
6.0 Knowledge Transfer
7.0 Organizational performance.
8.0 Conclusion.
9.0 Recommendation.
9.1 Leadership practices.
9.2 Staff development
9.3 Strategic alignment
References.
1.0 Introduction
Company A is a successful engineering company that has been operating for more than 200 years in the market. It has global presence in USA, UK, and China market. It specializes in designing, manufacturing motors, steam turbine generators, compressors, and pumps. In September 2017, Company A brought major changes in its business through acquisition with a much larger organization, called Company B. Company B is also a reputed engineering company that offers products in system and service, energy, medical and traffic management sectors. This acquisition has created shareholder value and adopted short-timescales for business deliverables. This paper has critically analyzed and evaluated a live project, named Company A. The paper has considered integration and effectiveness of acquisition between Company A and Company B focusing on leadership and management practices, operation management, financial management, and information system used.
2.0 Contemporary approaches to leadership
Mullins (2016) defined the term ‘leadership’ as the capabilities of senior management in a business to turn the vision and mission into reality for gaining organizational goals. Beardwell and Thompson (2014) mainly classified the leadership styles as participative/democratic, laissez-fair, and autocratic style. Clegg, Kornberger and Pitsis (2011) said transformational, transactional, situational leadership styles are nowadays being popular in global business practices.
Mullins (2016) stated that participative leadership is the best suite to gain high staff motivation, performance, and retention. However, Buchanan and Huczynski, A. (2013) said, if the staffs in a business are novice or have poor knowledge about the business operation, the laissez-fair and/or autocratic leadership can be practiced to meet organizational goals. As Company A is a technological company, the staffs are highly knowledgeable. In addition, Company was people-oriented and invests a lot in people innovation and staff development before acquisition. Therefore, Company A practiced participative/democratic leadership by giving freedom of voices, engaging them within decision making. It also practiced situational leadership to meet the changing needs of staff.
According to Robbins and Judge (2014), a good leadership can build up stronger relationship with followers that engage and motivate staffs within business for longtime. The participative/democratic leadership practiced in Company A (before the acquisition) built up relationship and engaged staffs within the business. Thus, there were high staff motivation, retention, and performance in Company A.
However, since the acquisition, the new CEO of Company A has been practicing autocratic leadership. Mullins (2016) said autocratic leadership de-motivates the employees (mainly the high-skilled staffs) that ultimately cause poor performance and high turnover. As Company A is an over 200 – years old technology company, its staffs have competency on its business operation. Therefore, the autocratic leadership by new CEO has de-motivated the staffs of Company A and made 10% of staff redundant within few months of acquisition. However, the present leadership (after acquisition) in Company A is finance-oriented and focuses on shareholder values. Therefore, it has gained significant financial performance including revenue and profits.
Clegg, Kornberger and Pitsis (2011) stated that transformational is the best suite in bringing major changes in business, and situational leadership meet changing needs of staffs and motivate them in workplace. Although Company applied transformational leadership successfully during the acquisition but has failed to practice situational leadership after the acquisition. Thus, the staff de-motivation, redundancy, talent leaving have increased since the acquisition.
3.0 Organizational culture
Organizational culture is the assumptions as well as beliefs of people in workplaces (Clegg Kornberger and Pitsis, 2011). This is the collective behavior in businesses. Organizational culture is mainly classified as power culture, role culture, task culture, and person culture (Mullins, 2016).
Before the acquisition Company A practiced mainly task and role culture by assigning tasks for individual staffs that motivated the staffs to show better performance and productivity. However, since the Acquisition Company A has mainly been practicing power culture that has been creating staff de-motivation, redundancy, and talent leave………..
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