ORGANIZATION DESIGN AND DEVELOPMENT

CASE STUDY ANALYSIS:

NEW HOLLAND INDIA TEAM

Submitted to: Dr. Richa Awasthy IMI, New Delhi

Submitted by: Vinod Gandhi 11PGDMHR59

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Table of Contents
Topic Page No

Table of Contents.................................................................2 INTRODUCTION.....................................................................3 CASE-ANALYSIS....................................................................5 QUESTIONS..........................................................................7 To maintain the team building processes and team based organizational structure at NHI (as shown under recommendation section of this report), there may be challenges. Employees can restrict to further changes in organisational structure. Due to existing high work pressure, employees can take the further restructure as some management strategies in negative sense. This in result can result in employee dissatisfaction........................................10 RECOMMENDATIONS...........................................................10

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INTRODUCTION
The case given is a best example of how problems arise within the team based organizational design. The case provides the information about the various views of employees who are present at different levels and also at different functions of the organization. The analysis given in this document provides the analysis of the structure, processes, people and the environment that is prevalent within the organization. Also, how issues arising within the organization is discussed. Through my analysis I am trying to provide the brief of the problems and also I am trying to suggest the various interventions that may be helpful for the organization in working effectively and profitably in future.

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CASE ANALYSIS

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CASE-ANALYSIS
New Holland Tractors India Pvt. Ltd. was established by Mr. Palani kumar as Indias most modern tractor plant, with products that were technologically way ahead of competitors. Mr. Palani kumar was a highly knowledgeable and experienced person who visualized a team and process based structure to establish a barrier less organization. The organization structure was lean and flat so that even the Chief Managers were easily available. High standards were set in every aspect of business with team work as the guiding radar. The concept of cross-functional teams and team work was given the highest priority. At the same time work pressure and stress levels were high. During the induction period of the new recruits they were sensitized enough with intensive training to work effectively and efficiently in teams. However there were SOME PROBLEMS as listed below 1. Dissatisfaction among employees There were few designations in NHI because of a flat organization. An employee working there for many years and at a senior position would have the same designation as a newly joined employee for similar task. Hence dissatisfaction was led among senior employees that they were not given extra recognition as compared to their counterparts in similar organization. 2. Performance appraisal system The performance of an individual was based on the evaluation of Key Result Areas in both functional responsibilities and team responsibilities in 60:40 ratios. Every employee was a part of multiple teams and most of the time was spent in a number of teams. There was little time left for individual or functional work and hence employee had to work for extra hours or during the weekends. Because of the organizations main focus on team work, hence the employee had to give priority to the team work over individual work. 3. Unrealistic targets 5|Page

Target deadlines were too stringent and high targets were set without realizing its stress effects on the individual. In initial days employees could work with vigour but as time would pass the targets would become more unrealistic and hard to achieve, leading to stress and lack of the motivation among employees. 4. High pressure on employees Priority was given to team work and there were cross functional teams wherein an individual could be in multiple teams at the same time which led to very little time for their functional or individual work. This led to high pressure in employees to work for extra hours or work even on weekends. 5. Low motivation As designation were fewer and no extra recognition was being provided on successful completion of projects, the motivation levels of the employees was low. 6. Ego clashes When there were cross functional teams, then Heads or senior managers of several teams would work together and this led to ego clashes among them. 7. Resource Allocation Each employee was involved with several teams hence their allocation according to suitability of time and project criticality was important which was leading to wastage of time. 8. Employee empowerment issues There were instances where employees complained that suggestions were taken from them but whether they were implemented or not, they had no idea about it as the final decision was on the Chief Manager. This made them feel that they were simply for feedbacks. This feeling is an impediment to the growth of selfmanaged teams as in NHI. 9. Multiple accountability (vertical vs. horizontal) An employee was accountable not only to the team head for which he was working but also to his functional head. Since employees were involved with multiple teams so they were accountable to all the team Heads and had to satisfy all of them at the same time. 10. Role conflict (functional vs. team)

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It became difficult for the employee to decide which role to be given more importance, because with limited time it was difficult to meet the demands of both the roles equally. 11. ERP implementation New software was introduced in the organization to make the process more effective and efficient but since knowledge of implementing the software had to be provided to the employees, they took it as an additional burden. Also the teams were expected to be customized according to the software (and not vice-versa) with more stringent deadlines which made the ERP system drearier.

QUESTIONS
1) Palani Kumar had succeeded in putting in place the most modern tractor plant of India with products that were supposed to be technologically superior to those of the competitors. Yet, that evening something was bothering him. Identify the issue/s which were troubling Palani Kumar. The organization was developed as per the vision of Palani kumar. His vision of building a process and team based organization has achieved and the organization was successfully growing. However, Palani kumar was concerned for the future of the organization because of the emerging issues. As discussed above in this report, there were some problems that resulted in employee dissatisfaction and hence were moving against the vision of the organization. He was sure of revamping the organization from the lessons he learnt from his efforts

2)

What type of organisational structure was operational in NHI?

It was operationalize as barrierless flexible organization to enhance greater communication. The vision was to enable speed of decision and action, focus on deliverables rather than on activities, inculcate result orientation and establish clearly defined measures of efficiency. The organization was as per his vision nimble, flexible and agile. It served the purpose of the organization as the organization needed to tailor make the product for the unique requirements of the customers and hence required an organization structure team and process based. As per the appendix 1 in case, NHI had only 5 designations to accommodate its employees. All blue-collar workers were called Associates having no hierarchy among them shows the organization adopted a flat structure. 7|Page

Emphasis was given to put the right processes in place by work teams. From the very first day, high standards were set in every aspect of business with Team Work. Anybody could work with anyone else across levels and across departments shows a lean and flat organization. 3) Identify the Human Resource interventions required to facilitate a team based organisation design? One of the major problems in the case is that Human Resources department is never involved in the team formation process. HR should be involved in this process so as to prioritize work as per criticality of the task, competencies required and the time period of task. This way proper scheduling of tasks and people can be done, thereby streamlining all the processes.

Right from the recruitment and selection process, HRD needs to strategically choose kind of people fit to organization. Flatness of the organization requires H.R managers to be smart enough to select employees. It may require to involve senior managers in assessment process. Employee satisfaction becomes very important. Making a flat organization does not guarantee a satisfied organization. Existing employees may face many problems like in performance management, designation and ego issues, cultural rigidity, etc, as shown in above section of the report. Training and development becomes a crucial stage for such organizational design. It may be required to sensitise employees to a process and team based working culture. New candidates are also to be properly trained with orientation and initial learning processes. HR team may need to regularly update the policies to ensure team participation by all employees. Performance management is also taken care of very seriously as due to many teams; the employee has to have different KSAs and responsibilities. HRD also needs to strategically align the technology upgradation and to modify the requirements to suit the organizational capabilities. HR team can be responsible for the team efficiency and process effectiveness. Also, under certain circumstances the most diligent and efficient employees were involved in numerous teams, which results in high pressure on the employees leading poor quality of output. Hence, HR can fix a tab on the number of teams an employee can be a part of at a point of time. This way the employee should be able to handle both team and functional responsibilities well enough. 4) What were the integrating mechanisms that co-ordinated team working at NHI? 8|Page

Chief Managers played a role of integrating devices in the organization. It ensured that diverse team activities were performed without losing sight of organizational goals. They were a part of top management team at the organizational level and at the same time members and team leaders in other team. Associates had their own teams to address operating concerns affecting production. At managerial level, employees operated in diverse teams to address issues that contributed to the ultimate organizational goal. Communication and clarity of objectives also made a significant contribution. HR Strategies, as discussed in above question, including various policies ensured team work at NHI. 5) At the end of the day what did NHI achieve from experimenting a team based organisation in India? It was only the teamwork that helped NHI to be a lean organization since cross-functional working made people, including heads of functions, take on broader responsibilities. NHI employees were promoted a holistic view about the organization including others functional identities. It also resulted in highest production in two consecutive years, 1999 and 2000. NHIs credibility and respect became well-entrenched among, not only its customers, suppliers and dealers, but also among its competitors. However, it also created some kind of conflict as discussed in above part of the report (under some problems). The conflict between prioritizing functional KRAs and team KRAs directly reflected poor attendance of teams and hence affected the functional output of the organization. It also made NHI realize to implement ERP software technology. However, the company tried to modify the organizational processes and functioning to suit the requirements of the ERP software. Finally, the management felt that there was a need to shift focus on team efficiency and process effectiveness. 6) Identify the future challenges, which NHI may face in its efforts to sustain teambuilding processes, and its team based organisational structure.

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To maintain the team building processes and team based organizational structure at NHI (as shown under recommendation section of this report), there may be challenges. Employees can restrict to further changes in organisational structure. Due to existing high work pressure, employees can take the further restructure as some management strategies in negative sense. This in result can result in employee dissatisfaction. From the company perspective, it may require large amount of resources to sustain the organization culture. HR team need to be involved while making various strategies (explained under recommendation section). The new policies, structure and systems like performance management, technology support etc., require training to the employees. NHI may need to hire more managers. It also needs to train its managers to impart the organizational effectiveness

RECOMMENDATIONS

1. Involvement of HR HR should be involved in this process so as to prioritize work as per criticality of the task, competencies required and the time period of task. This way proper scheduling of tasks and people can be done, thereby streamlining all the processes. 2. Eliminate team redundancy It has been indicated in the case that the number of teams in the organization were much more than required leading to a situation where more than one teams were found to be working on one single objective/task. Hence, again HR can play a role in avoiding such situations. 3. Performance appraisal for teams Since the whole organization works in a team based structure, performance of the team as a whole is critical for the success of the organization. Therefore, due stress should be given to the team performance. Clear and objective metrics should be set in terms of Objectives/Targets achieved, Cost, Quality of output/outcome, Number of suggestions generated, Number of tasks planned and completed, Estimated vs. Actual time taken etc. 4. Performance appraisal for individuals 10 | P a g e

While appraising an individual, the performance of an individual should be measured on a two levels namely, Team level and Functional level giving equal weightage to each of them. Metrics should be specified for each level. 5. Linking incentives/rewards with performance The company should link the incentives and rewards with team and individual performance. Group threshold: Once the teams reach the desired level of targets, the team members should be rewarded as per the relative contribution. Individual threshold: Once an individual within a team reached certain level of targets, the team members should be rewarded as per the individual performance.

6. Customize ERP to suit organization processes One of the biggest blunders here is that the company have invested in ERP software, without customizing it as per the organizational processes. Since the company follows a unique team based work process, all the work processes should be mapped first and accordingly the ERP should be customized. 7. Introduce informal designations As we see there is dissatisfaction among employees regarding the promotion policy of the company. Since the organization follows a flat structure, there aren't many promotion opportunities. Hence, introducing certain informal designations like Team leader, Captain etc. can work. These would give a sense of growth and motivate employees. 8. Team Empowerment in true sense - Suggestions should be recognized - Autonomy

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