Introduction
Ron Carpenter established Custom Ronworking Company in 1954. It is a medium enterprise that deals with making of furniture and cupboards. The company is situated in Industrial Estate in New South Wales where both its head office and the plant site are located. Ron Carpenter who acts as the chief executive officer as well as the chairperson heads the company.
Over the years, the company has been able to gain loyal customers because of making quality furniture by use of hardwoods and native softwood imported from other countries. Today the company sells its product to retailers on wholesale and some of their customers order furniture from them. The company has about 850 loyal employees. As at the end of 2012, the company had an approximated amount of $181,000,000 in total assets. During that year, the company made a sale of $ 93,250,000 and made about $6,540,000 in profit.
However, the company not being able to take advantage of the growth opportunities that present themselves has hindered further development of the company. The company also has a weak decision-making organ that is not able to make crucial decisions for the growth of the company.
Further, the company delegated the task of managing projects to people who were not competent enough and this made the company to incur losses. Examining the issues in the company, the purpose of the report is to point out the mistake made in the company and to provide recommendations on how things should have been done to ensure success.
Problems in the company
Griffin, Zikmund, Babin and Carr (2012) posit that business world is very dynamic in nature. Today businesses need to acknowledge this and should not assume that they can continue operating in the same, way they have been operating but rather need to change with the changing business world in order to ensure that they fully exploit the opportunities presented by these changes (Tidd & Bessant, 2011). This ensures that the organization grows on a continual basis and that it remains competitive in the market. It also ensures that the company adapts better measures and mechanisms of doing things besides being in a position to identify potential problems (Divanna 2003).
Custom Ronworking Company had an issue in adapting the changes that were taking place in the market. The company did not take advantage of the opportunities that the market presented. For example in 2012, the commercial construction industry in NSW experienced a small boom and there was a good chance for the company to expand its operations to other areas. However, the company did not take the opportunity to expand their business but rather opted to remain on its existing premises and Moneysworth and Cashman who were resistant to the changes influenced this.
Planning is a very crucial part for the smooth running of any business whether small or large. Starting a project may be easy but without proper planning it is easy for the project to fail. Planning ensures that a business has a clear direction in order to be successful (Ochtel, 2009). Moneysworth did not give close attention to planning. He did not involve the production crew in the planning process as they were busy and he did not want to waste time before starting the project. He instantly invited Expert Industrial Developers thinking that their prominence in the market will mean that they will do the project at a lower cost.
After signing the contract with EID, the project commenced and two years later, it was time to get the plant into production. However, Moneysworth and Leadbetter had not prepared a plan for the completion and had also not made EID a certificate to allow them occupy the building. All these contributed to the delay in production and this resulted to losses. It also led to missing of customers supply and cancellation of contract by some of the contractors. Further, it led to depletion of finished goods inventories, which in turn led to loss of sales opportunities.
For an organization to come up with quality decision, it is important that all the stakeholders be included in the decision making process (Mostashari, 2011). Involving stakeholders in the decision making process ensures that all they feel part of the organization and thus remain motivated (Edelenbos & Klijn, 2006).
It also ensures that conflicts within the company are minimized. Custom Ronworking Company has an issue with the decision- making- process especially involvement of the relevant stakeholders in the decision making process. Before the commencement of the project, it was important for Moneysworth to consult with the relevant stakeholders including the production people, as they would have provided some insight to the process. The insight provided could have in turn allowed the company to go for the best alternative and hence could have avoided the losses experienced at the end of the project.
Another issue in Rony’s was the way responsibilities were delegated. When Moneysworth voiced the fact that he needed someone to assist him with paperwork, John Carpenter suggested Ian Leadbetter because he was a mechanical engineer. However, no considerations were made about the fact that Ian did not know anything about project management and thus could not be very helpful in ensuring the success of the company. The other major issue in the company was poor communication. Kim Cashman had developed a cashflow chart for the project but never communicated it to anyone.
Conclusion
Poor planning in Rony’s led the company to make a lot of losses and to also lose some of its customers. Resistance to change denied the company to grow through expansion of the business. Further, not involving stakeholders in the decision making process denied the company to choose the best alternative to follow. For these reasons, it was important that the company make changes to the way it ran it business to ensure that that it continued thriving. The changes needed for the company in this report are provided in the recommendation section.
Recommendations
Rony’s needs to adopt a culture of adopting changes to ensure that it continually remain competitive in the market. It needs to ensure that all its employees understand importance of change by creating urgency for that change and communicating it to all the staffs (Shockley-Zalabak, 2011). This helps in reducing resistance to change among employees (Downs, 2012). It is also important that the company improves its decision making process. The company should ensure that it involves all the pertinent stakeholders in a bid to ensure that quality decisions are made (Goetsch & Davis, 2014).
Moreover, there is need for the company to improve the process of communication among all the workers in order to help minimize avoidable mistakes. For any project, the company needs to do thorough planning before embarking on the project. Planning will help the company to know exactly what need to be done and thus ensure success of the project. Finally, it is important that the project managers be trained on the good project management practices to ensure that the project is carried efficiently.
References
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Edelenbos, J., & Klijn, E. H. (2006). Managing stakeholder involvement in decision making: A comparative analysis of six interactive processes in the Netherlands. Journal of public administration research and theory, 16(3), 417-446.
Goetsch, D. L., & Davis, S. B. (2014). Quality management for organizational excellence. London: Pearson.
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Mostashari, A. ( 2011). Collaborative Modeling and Decision- making for Complex Energy Systems. Singapore: World Scientific.
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Zikmund, W., Babin, B., Carr, J. & Griffin, G. (2012). Business Research Methods. Stamford: Cengage Learning.