• Difficulty developing a uniform order processing system for all five groups for increased efficiency.
• Implementation of team concept for all five groups.
• Consolidating all five OA groups.

• Implement a standard centralized management information system (MIS) for all five groups, and eliminate several stand-alone systems prevalent in five groups.

• Implement team structure with HRM policies, and provide mandatory training for all employees for basic understanding of teamwork and group development.

• Consolidate OA groups after the implementation of MIS and team structure. Design an organization structure with one manager at top (Dorr), and supervisors reporting to manager (Everhart, Fortier, and Haley). Furthermore, provide training in motivation theory, expectant theory, equity theory, and Maslow’s hierarchy of needs for all supervisors so that they understand the impact of empowering employees.

Organizational Background, Culture and Climate:

The words "people" and "involvement" best describe OTI’s culture. The president of the company follows the classic theory Y management assumptions, and is people oriented and encourages the employees to develop their ideas and set goals within an informal work atmosphere. The organizational climate of OTI emphasizes that individuals be rewarded for taking independent action in the interest of the company. The organization also has an extensive network of employee relations personnel to maintain open communication between management and employees.

 
Analysis of OA Function Problems:

The Order Administration functions at OTI appear to have the most human resources and organizational development problems. The OA, consisting of five groups, acts as a middleman between the sales and manufacturing. Some of the general fundamental problems within the OA functions are:
 

• The groups are continually re-inventing the wheel in the administrative system. Automation is incumbent upon the system’s business manager and their staff to figure out what system should be placed, and therefore non-standardization.

• Continuous blame-game because of non-standardized procedures between order processing and manufacturing/sales. For example, three different order processing systems, four scheduling systems, and five different methods of handling OA (one for each group)

• System problems due to computer "downtime".

• Problems encountered in orders itself, usually due to out-of-date quotations, unusual discount allowances, and unrealistic delivery schedule.

• End of the quarter crunch because of compensation design for sales force. Majorities of the orders are entered at the end of the quarter that floods the system.

• No real measurements of the OA processes in terms of efficiency, productivity, or quality of service.

• No records of complaints or nature of complaints to determine potential cause of problems.

• Differences in work system design within the five groups within OA.

• The Los Altos facility where two of the groups are located provides a poor work environment. The floor is dusty concrete with no carpet, noise pollution because of machine operations, electrical lines are dropped from the ceilings to metal conduits on the floor, inadequate ventilation capability, and no privacy for workers at all levels. It should be noted that these problems could eventually lead to OSHA violations inn the future for worker safety.

The above are some of the general problems within the OA function. However, the focus of the problems appears to be in the design of work system flows and worker-management specifically within the two groups -- Original Equipment Manufacturing (OEM) and Laboratory and Medical Products (LMP).

 
Analysis of OEM group:

OEM provides basic systems that are later modified by the customer to meet their requirements. OEM has a large base of repeat customers, and is a large revenue-generating group within OTI. OEM group’s work organization is manually done in a production line manner. The system comprises of open-ended mailboxes where orders are dropped and compilations are picked up. Although OEM has been performing and maintaining the basic function of production standards and goals of OTI, the group is plagued by a variety of human resources problems such as:
 

• The major problem being the management style of the manager - Tim Everhart. Tim Everhart’s management style is described as a baby-sitter, theory X managerial assumptions about the workers, strictly by the book operations, always anticipating problems because of little faith in workers, apprehensive and non-conforming with the implementation of team concept, "do as I say not as I do" type of decision making.

• OEM’s retention of workers is very short (6-12 months). They consistently have to hire from outside partly because internal employees avoid OEM due to the reputation of the group, and partly because of poor interviews and hires of the potential candidates for the jobs.

• Although employees perceived the OEM group to be important to OTI, lack of motivation and direction for the workers created boredom, fatigue, and unsatisfactory working environments for most employees within the group.

• Employees perceived that they got little or no respect from the management, they were told what to do, independent decision making was taken away from the workers, and on-the-job training was poor.

• Performance appraisal was a joint process between the manager and the workers, and there were always discrepancies because the workers had little or no understanding of the OA functions (although they exhibited skills).

In my opinion, the management style of OEM violates the principles of the culture and climate of OTI. In the short-term, the OEM group will prevail because of the nature of the repeat customers. However, the OEM group would have a difficulty generating a larger customer base because of the flawed work system design and management style.

Analysis of LMP Group:

LMP provides specific and unique combination of OTI systems to their customers. The customer base is one-time with few repeats. Although a smaller revenue generating group, LMP has sustained supporting and integrating the culture and climate of OTI into their operations. LMP group’s retention is excellent and is predominantly by internal hires. LMP’s work organization is efficient and organized through the use of a management information system. LMP tracks orders, distribution of schedules, billing, and shipping in a "cradle-to-grave" concept. Each group within LMP acts responsibly to inform each other about the process, and therefore takes initiative and responsiveness. The success of operations is primarily due to the following:
 

• Supportive management style of the supervisor - John Fortier. Fortier’s management style can be described as a typical theory Y managerial assumption of workers, allowed and supported workers to make responsible decisions with freedom to exercise options, and promoted team concept and effort.

• Employees liked their jobs, and associated with product lines, production team, and supervisor.

• Employees felt committed, respected, rewarded, and recognized.

• High flexibility within multiple functions, and open communications.

• Perceived opportunity for growth and development.

• Exhibited high morale, cohesion, enthusiasm, and understanding of OA tasks.

Emerging Problems:
 

• Difficulty in developing a uniform order processing system for all five product lines in the OA function to increase the efficiency of OA operations by providing timely shipping and accurate invoicing. Although all groups have agreed on the need to have a uniform system, anticipate resistance from each group because all want to implement their system.

• Implementation of team concept. Fortier and Haley will not have any problems because of team concept in their current operations, however, anticipate resistance from Everhart.

• Consolidation of all OA groups and reassigning the managers and supervisors in the changed environment. This area will create a larger problem and resistance, and may even lead to loss of some personnel if handled incorrectly. In my professional opinion, Everhart and Fortier will have difficulties working for each other. In addition, Fortier’s staff will not sustain the same efficiency if moved under Everhart’s current management style.

Recommendations:

Uniform Order Processing with OA - the comprehensive OA functions of all the five groups can be solved with an implementation of a centralized standard management information system (MIS). The MIS will assist the group with meeting the functional requirements and set boundaries and measurement performance. It will eliminate the several stand-alone operations that are predominant now. The sales and manufacturing will have a standard procedure for order input and schedule for manufacturing. All five groups will also have a standard uniform method of processing an order whether it is a new or a repeat customer. A consultant team may be required to analyze the variety of problems (for uniform method processing), determine MIS functions, prepare performance measures, provide goal support, and determine cost for such system. Perhaps create an independent MIS based upon the need so all groups are satisfied and in compliance.

Implementation of team concept - this is a crucial requirement before the implementation plan of consolidating OA functions. A team is a task group whose members are charged with working together to identify and resolve problems in relation to a particular task or organizational area. It is imperative that Everhart support the team structure (especially if he will lead the OA functions in the future at one time) because lack of top management support will trip up the team concept. OTI should have a HRM policies and should provide adequate training in group and team development (that addressees the five stages - Forming, Storming, Norming, Performing, and Adjourning). These training should be provided for both the managers and the employees.

Consolidation of AO groups - this is a major change for all involved. The consolidation should be across both the Los Altos and Menlo Park facilities. In the earlier stages, Mr. Dorr should remain at the top overseeing all operations of both facilities until the MIS and team concept is integrated and working. Everhart and Fortier will need to understand how they can work together in a consolidated environment. Frequent meetings between the supervisors and Mr. Dorr may be required for effective integration and consolidation of OA functions. Other training in issues such as the motivation theory (the set of processes that arouse, direct, and maintain human behavior), the expectant theory (people are motivated to work when they expect they will be able to achieve the things they want from their jobs), the equity theory (equal input vs. output), Maslow’s hierarchy of needs to be understood by both Everhart and Fortier to effectively work together and manage together. Eventually, consolidate OEM and LMP with Everhart, Fortier, and Haley working as supervisors (perhaps task supervisors rather than group supervisors) and Dorr as the manger of the five groups (see revised organizational chart).

References:
 

• Human Resources Management: An Experimental Approach; H. John Bernardin and Joyce E. A. Russell, McGraw-Hill Companies, Inc. 1997
• Management, Third Edition; Kathryn M. Bartol and David C. Martin, McGraw-Hill Companies, Inc. 1997