Custom «Wallace Group» Essay Paper
Organizations have different reasons for diversification. One of them is to gain synergy among business units. The Wallace Group diversified vertically by acquiring suppliers, but the business did not perform as expected. This essay will evaluate the most critical problems that the Wallace Group is facing, as well as discuss appropriate strategies to solve the issues and provide an opinion on Wallace’s diversification plan.
Poor leadership is the first important problem that occurs at Wallace. Leadership is the means through which a person influences others to attain an objective (Hoyes 60). The effectiveness of leaders depends on the followers’ perception of them and the extent to which they agree with the leaders’ philosophies and values.
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The unsatisfactory leadership at the Wallace Group emerges because of the President’s inability to influence the rest of the workers. First, he does not appreciate the contribution of other employees. Consequently, they become frustrated. Everyone in the company invests to its health and awareness regardless of the position they hold in the organizational structure. Therefore, the failure by the President to harness the potential of the employees has affected the performance of the enterprise negatively. As a result of the inadequate management, the Electronics, Chemicals and Plastics functional groups work as independent units instead of being cohesive parts of the Wallace Group. The lack of coordination has prevented all three divisions of the company from achieving the synergy and complementarity.
Leaders must take a systemic thinking approach, which allows them to see how the different parts of the organization fit into the corporation’s strategy. Since each of the units functions independently, Wallace cannot determine what the problem is, and that is why there was a need to hire a consultant to advice on how to run the organization. Before deciding to diversify, Wallace did not create a strategy that would outline the tasks and the people accountable for them. Consequently, the staff of the organization is determining each person’s responsibilities while promoting the technical people at managerial positions despitetheir inexperience. The corporate employees are not efficient enough to provide guidance and coordination to the functional units of the company because they are at their learning stage.
The second essential problem at Wallace is the inadequate management of the personnel. The first admission that Wallace made to the consultant was that managing people was problematic. The company has no human resource policy on job descriptions and the modes of deciding the qualification of workers. Thus, the administration hires unqualified people for the engineering and advanced systems. Both the directors of engineering and advanced systems reject them, creating a shortage of skilled employees. The current workers are overwhelmed with their duties, which contributes to their low morale.
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Moreover, the company has no benefits and reward systems apart from the stock ownership program. The stock option may not motivate the workers enough because it is dependent on the company’s performance, which is currently minimal. The absence of a training and development program also highlights the personnel management deficiencies. Those holding the management positions without prior experience cannot improve the situation, and thus, will continue underperforming. The process of training and developing workers relates positively to organizational effectiveness (Niazi 43).
The first recommendation for Wallace to solve the above-mentioned issues is to create a collaborative work environment where people from all the units can contribute to the decisions of the company. Such an environment is the first step towards creating policies and strategies that are effective. To achieve this objective, Wallace needs to involve all the vice presidents and program directors in making decisions. Their opinions will provide the administration with a holistic view of the organization and give suggestions on how to eliminate the current problems.
Secondly, Wallace should promote the creation of a unified strategy that will outline the role of each functional unit and their contribution to the organization’s performance. Leadership is critical in both the creation and implementation of the strategies (Azhar et al. 33). Sincee the realization of the strategy depends on all employees, involving the leaders at various levels, it is critical to encourage the frontline employees to accomplish it. In order to solve the non-cooperation among the functional units, the leaders at Wallace should create cross-functional teams to work on various projects jointly. The teamwork will enhance understanding of each group’s contribution and challenges, which in its turn can eliminate conflicts and misunderstandings.
The industrial relations should formulate a human resource policy to address the personnel problems. The policy formulation should engage the heads of each of the three units because they understand the skill set they want. As such, only qualified people will be hired, which will reduce the workload of the employees. The corporation should introduce a training program, especially for technical employees who may wish to advance to management levels. The program can enhance understanding between the corporate and the functional groups. Finally, the Wallace Group should create an employee benefit and reward system, which is likely to raise the morale and productivity of the workers.
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To my mind, the diversification plan was a good idea, but the manner of its implementation was wrong. The company tends to gain from diversification through the synergy benefits that accrue from complementarity. The three units would have completed each other if there was a strategy to coordinate their activities. Although such harmonization would have resulted in spending additional costs (Zhou and Robert 625), it would have been cheaper than the loss the company is experiencing due to the chaos among the units. However, since there was no particular plan for the diversification, the operations director now finds it more expensive to purchase from any of the Wallace’s groups than from outside suppliers. Consequently, the diversification venture is more a burden rather than a benefit to the company.
In conclusion, the two main problems affecting the Wallace Group include leadership and employee management deficiencies. The recommendations contain the creation of a collaborative workplace, a clear strategy, cross-functional teams and a human resource policy.
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