OD & CHANGE - Exercise

Scenario

1. Site “A” manufacturing textiles has been existed since 1950 as part of an international group.

2. Being a manufacturing house for more than 60 years it has a reputation of being a valuable place to work.

3. Since the business has been growing the “Site” has had technology improvement with the following objectives:

Quality improvement to be able to compete in international markets. Improve Cost Competitiveness. Less dependence on labour.

4. A large number of labour employed at the “Site” have organized them as a strong labour union. This labour union has been successfully negotiating on workers’ employment terms and conditions as well as benefits.With continuous negotiations with the management on revising employment terms and increasing benefits of workers result has been:

Higher salaries and benefits to workers. Labour union becoming stronger and challenging management. Prerogatives

5. This has resulted into: High labour cost. Eroding management authority Lowering productivity.

Thus all this leads to cost pressure and competitiveness challenge.

6. There has been a recent change in the labour legislation allowing outsourcing of manufacturing services. This would mean that now employers can re-structure their manufacturing models by moving towards contract employment systems. This would further mean less permanent employees and reliance on contract employees.

7. Management of Site “A” views this legislative change as an opportunity to reduce permanent employment base and moving towards contract employment systems by outsourcing. They expect the following benefits with this change:

Reduced strength of labour union. Getting back management authority. Flexibility in utilization of people at the shop floor. Reduced people cost. Productivity improvement.

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8. Management of the Site “A” over a period of 12-18 months under a new manufacturing strategy:

Bringing in the most modern technology which would reduce dependence on manpower.

Categorizing the whole factory jobs into:o Core ando Non – Core

Core: Being directly related to manufacturing needing skills to be able to perform

Non – Core: Being the ones which are not directly related to manufacturing and technical skills are not required to perform.

9. With the strategy in place the management works out the size of the permanent labour force that will be needed and how many will become surplus. Then they have dialogue with the labour union and separate around 75% of the permanent labour force.

10. With the new manufacturing model in place management feels quite relieved as they see two main benefits:

Labour union’s strength reduced. Management prerogatives back.

11. This system remains in practice for 7-8 years and management gets used to working in a more authoritative way with nearly no challenge from the labour unions and work force. People working through jobs look at the management team members as “job providers” and are willing to do anything on the shop floor to keep them pleased. Further, during this period the management builds more of autocratic style of working.

12. After around 8 years of pressure of labour unions in the country and ILO, the government revises the law stating that people who have been working in manufacturing for more than 3 years on a job will be taken through recruitment process and offered permanent services. This change in the law would mean around 400 people at Site “A” to be permanent.

13. This would mean all these 400 people becoming member of the workers’ union.

14. Whilst management is happy to bring in this change of offering permanent jobs as the business has been growing manufacturing facilities have expanded and technology is well embedded as part of manufacturing; they see challenge more towards behavioural part of both new permanent workers and management who are used to work with authority and with hard approach.

15. Management’s further concern is to ensure that this change from non permanent to permanent employment is transitioned smoothly with no disruption in production, no productivity and efficiency less as this would put further cost pressure which they can’t afford.

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16. Keeping this big change in the management, an OD Consultant with only one objective explained

"From non permanent to permanent employment in big numbers to be transitioned in a smooth manner with no discipline and building collaborative management style.”

Whilst carrying out this exercise

Identify current leadership as well as management style. Current work culture at the shop floor. Current behaviours of management and workers. Changed behaviours of:

o Workers o Union

Behavioural fear of management. How will you approach this in steps?

Expectation from u is to attempt this as a consultant, going in step by step, using OD & Change theories, diagnostic steps & tools, coming up with interventions (how and when to go about) and whilst choosing intervention/s do identify which of the categories of interventions this/these belong to and why and with what expected results this/these are proposed for implementation.

01/12/2010

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