MANAGEMENT PROBLEMS and SOLUTIONS at CAR COMPANY

CAR Company Report - Hanh Hong Nguyen

MANAGEMENT PROBLEMS and SOLUTIONS
at
CAR COMPANY
Name: Hanh Hong Nguyen
Module: Management Principles and Practices
Tutor: Mr David Mankin
Submission Date: Sep 11th ,2017
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CAR Company Report - Hanh Hong Nguyen

Table of The Contents

Executive Summary
This report inspects the current state of CAR Company and investigates the possible
internal change and leadership management issues that hinder the performance and success of
the organisation. The report approaches these two subjects by keenly exploring the role of
employees and how poor management of the employees affects the well-being and image of
the business. After exploring the issue, the report offers a direction of handling the current

state of CAR and how the new CEO Meg can avoid any unforeseen challenges.

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CAR Company Report - Hanh Hong Nguyen

Introduction
Employees play a significant role in any company and their presence as well
effectiveness is undeniably apparent. Management of the employees plays an important role in
influencing their performance which reflects in the corporate excellence. However, many
companies today still fail to understand that employees are vital resources who are the
backbone of the business. A lot of studies have been carried out to learn how to manage
employee performance and as Hawkins (2009:42) mentioned, employees need to be
continuously motivated to perform and commit to working as a way of driving the business to
success. Therefore, to successfully achieve performance management within any business, the
core understanding should involve knowledge of the various factors that influence employee
attitude and commitment.
In this case, Meg has been appointed to a company that has failing system of employee
and leadership management. The sales of the enterprise are dropping and in addition to this,
the company is losing its partners and employees to the competitors. With the introduction of
new competition from China, it is important that Meg finds a solution soon before the
company ceases to operate. Innovation, employee management, and leadership are some of
the problems that Meg has been facing since arriving at CAR. This report will first conduct a
literature review on employee and leadership management as they are the main aspects of
increasing performance of the business. After this, the report will address the management
problems facing CAR, present potential solutions that Meg can use, and then offer an
implementation plan which will be justified while pointing out potential problems Meg might
face in implementing the plan. At last, there will be a scope for further research and
recommendations.

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CAR Company Report - Hanh Hong Nguyen

Literature Review
Employee Management
Employee management closely relates to performance management. Performance
management is the modern approach to employee appraisal which is a process that increases
employee performance that improves the chances of business success (Bacal, 2011:21;
Kleindienst, 2017:35). Performance management encompasses the achievements of the
business regarding the set goals (Barnes and Radnor, 2008:90). Though performance
management from a broad perspective is commonly related to economic outcomes, the
achievements of these goals are through contributions of individuals within a company and,
therefore, cannot be defined without understanding the role of the employees (Houldsworth
and Burkinshaw, 2008:72; Cole, 1994:131). Understanding the employees is the role of the
human resource management, as it is important to influence and motivate the employees at
work. Some of the factors that must be considered when managing the employees are
employee attitude and commitment (Cooper, 2003:69). Employees with a positive attitude
often give their all at work and stay committed to the company’s policies (Retowski and FilaJankowska, 2013:128). According to Gupta (2015:103), the positive company’s turnover is a
result of highly committed employees and this reflects how the practices of the business are
achieved. Committed employees consider themselves an integral part of the organisation and
anything that threatens the organisation threatens their safety as well (Shahid and Azhar,
2013:250). Hanafi (2016:843) explains that such employees autonomously involve themselves
in the corporate practices to ensure achievement of the business goals, hence, ensuring
success.

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CAR Company Report - Hanh Hong Nguyen

Leadership Management
Leadership and management must always go hand in hand despite the idea that they
are not the same thing. However, they are necessarily linked and, additionally, the two are
complimentary. Northouse (2016:3) defines leadership as the never-ending process whereby
an individual inspires others to achieve a common goal. Leadership management, therefore, is
the process whereby one applies necessary knowledge and skills in handling the available
resources towards the common goal (Jago, 1982:329). A leader who is also a manager must
have a clear understanding of who he or she is as well as his or her capabilities. Besides, the
leader needs to understand the junior staff and the proper ways of communication in
situations. There are various types of leadership and not every style is applicable in every
environment; leadership management, therefore, allows an individual to understand what style
fits a particular group and environment as a way of fostering success within the company.
Some of the factors affecting leadership management include culture and climate (Babalola
2016, p.940). Every company has a distinctive culture dictated by the combination of past and
current leaders. Climate, on the other hand, relates to the feel of the firm, individual, and
group perspective and attitude of the staff (Ivancevich, Konopaske, and Matteson, 2007:127).
Though culture is a rooted experience and practice of the company, climate relates to the
current system of management and leadership regarding the employees. Kouzes and Posner
(2017:88) explained that in business, a great leader should be able to challenge the existing
processes, inspire the staff to have a shared vision, give others an opportunity to participate,
and be a role model even in trivial times (Rowe and Guerrero, 2016:75; Clarke, 2011:422).
Leadership management should carefully follow the Maslow’s hierarchy of needs which
explains that needs motivate every individual; this theory helps managers understand how to
satisfy the needs of the staff to motivate them (Robbins and Judge, 2007:36). In doing so, the
organisational leaders and managers can retain the employees while motivating the employees
to see the company’s vision and work towards the common goal.

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CAR Company Report - Hanh Hong Nguyen

Managerial Problems and Implementation Solutions
Identification of the Problems
The case study of managing change highlights some problems, both internal and
external. Megan arrived at CAR as the new CEO and within the first couple of months she
noted that sales were dropping, highlighting a problem in the sales department. Following this,
she noted the company’s significant partners were joining the competitors and this indicates a
managerial issue. The previous CEO told Meg that he tried to initiate change within the
organisation, but he failed, meaning poor employee management. As competition arrived, it
brought external problems as the company started losing most of its clients to the Chinese
company because of its failing business model showing lack of focus on the vision and
mission of the enterprise. Lastly, the company was losing most of its best employees to the
competitors, highlighting poor human resource management practices. One of the challenges
that Meg faced was deprived organisational relationship, as most of the senior members and
staff did not trust her.
As highlighted from the explanation, the company was mainly failing because of poor
managerial practices that hindered organisational performance. Employee management is one
of the key roles of an organisation, as employees drive the sales and help in building and
promoting the company image. However, in this case, the employee-employer relationship
seems to be the significant factor leading to a drop in the sales, poor performance, and
resistance to change as experienced by the previous CEO. The main reason for this can be
poor leadership styles that affected the culture of the organisation. A leader is solely
responsible for inspiring, motivating, and reminding the company’s staff about the vision and
mission of the company. Nevertheless, poor leadership styles set a bad example for the junior
team and discourage their commitment, as they develop a negative attitude towards the
management. When employees develop a negative attitude towards the company, they fail to

commit themselves as seen in this case study. The staff stopped going the extra length to push
the sales of the company while others were discouraged and left the organisation, leaving

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CAR Company Report - Hanh Hong Nguyen
inexperienced staff to handle critical areas of operation, therefore, resulting in the production
of inferior products that cannot compete in the market. In turn, this slows down innovation as
witnessed in CAR.
The problem affecting CAR is not only limited to employee management, but extends
to relationship management and business strategies as well. Relationship management refers
to the strategy that promotes a continuous level of engagement between the firm and its
consumers as well as the business-business relationship (Cousins, 2007:379). The focus of
relationship management relates to financial and investing aspects of a company as a way of
identifying and enhancing sales and services. Additionally, relationship management also
affects the internal sphere of a company, particularly if it affects the leaders and investors of
the organisation. People want to invest and consumers want to relate to a company that
understands their needs and is quick to respond to external forces smartly (Wessling,
2002:145-190). Since the introduction of the competition within its operational market, CAR
responded negatively by not being flexible to embrace innovation. It is critical to have a
business model that maintains a level of communication between consumers, other businesses,
and
partners.
The relationship between the right business model and the key concepts of the business
strategy are useful in planning and managing any business (Bower, 2001:948); this, however,
is not an aspect evident at CAR. The company does not have a viable business model that can
help it in dealing with competition and enhancing innovation; at the same time, the company
lacks a strategy what would promote performance management. In the end, the business lacks
a proper vision.

Potential Solutions to the Problems
In the business world today, there are constant changes, particularly relating to
technology and innovation of products and services and this only means that there is a need
for organisations to assess how they handle the employees. The previously presented problems
mainly relate to the failure of CAR to promote performance management properly. The best
approach to this, therefore, is to understand the various agents of employee motivation as a
driver for the desired change.
One of the primary goals of change is to increase employee productivity. Employees
need to be constantly motivated to feel like they are appreciated and part of the organisation.
Tripathi (2012:3) mentioned that the core foundation of productivity is high-performing and
innovative employees. To achieve this, the company needs to hire and retain exceptional
employees who can see the vision of the company and remain self-motivated. There are
various ways that the management can enhance the efficiency of the employees through
changing the practices of the company; such include favourable working hours, giving
bonuses and tokens of appreciation, and having open communication channels that can help
employees communicate about ideas affecting their well-being. Also, the employees need to

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CAR Company Report - Hanh Hong Nguyen
have effective managers and leaders capable of setting and executing a direction and this is
because organisational leaders are responsible for defining the direction and roles of the
workforce through coaching and motivation.
The type of leadership that one chooses influences how employees respond to the
organisation’s policies. Bacal (2011:56) explains that management is about doing things right
while leadership pertains to doing the right things. It is, therefore, critical that Meg
understands the different leadership styles and selects one that will perfectly fit in the CAR’s
culture. At this point of desperation, the right style of leadership should be able to motivate

and influence the workforce as well as promote teamwork across the management.
The two best options would either be democratic or laissez-faire style of leadership, as they
possess the qualities needed to foster the right culture of teamwork and allow the employees to
provide ideas that can help promote the desired change.

Implementation Plan for Change
The best implementation plan of change is one which engages the employees during
the time of alteration and transition. Georgiades (2015:10) mentioned that employee
engagement is understandable as to how employees handle their emotional state and their
behavioural reaction in a particular work environment. The previous CEO Bob might have
failed in implementing change because he never considered the role of the employees during
the time of change and solely focused on the goals of the change. As already mentioned,
employees are the backbone of any success.
The first step of this plan is to understand the direction and vision of the company
(Dibella, 2007:85). Doing so would help the management remember the reason as to why the
company started, in addition to what has helped the business obtain a competitive advantage
prior to its fall. Understanding the vision would contribute to planning the direction as well as
to realising the necessary resources that can help CAR restore the relationship it previously
had with the public.
The following step is to understand the emotional state of the employees to understand
employee engagement; this would entail understanding the focus, passion, and motivation of
the workforce (Brazzel, 2014:263). After having this knowledge, Meg will have to employ
tactics that would motivate the employees to do whatever it takes to resurrect the reputation of
CAR. Furthermore, realising behavioural management will help set lucrative bonuses and
tokens which will attract a competitive and experienced workforce. The most famous theory at
this point is the ‘Maslow’s Hierarchy of Needs’ that will help Meg develop a system of
understanding the needs of the employees. The idea is to motivate the employees to attain
organisational goals while achieving personal goals (Pettinger, 2012:323).

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CAR Company Report - Hanh Hong Nguyen

In short, the first part of this can be explaining to the employees the challenges they
are facing in the company. After this, the management can tailor a culture which will motivate
the employees to commit to the plans of the goal. However, it is very critical that when
instituting this culture, both sides of the employer-employee relation are keenly considered so
that the one hand is not favoured over the other. In turn, this will create an open
communication channel and foster trust across the organisation.

Identified Challenges
In implementing change, it is not guaranteed that every individual will be receptive to
the presented idea and, therefore, better planning entails looking ahead on what might hinder
changing efficiently. Anticipated barriers help in avoiding them before they develop into a
significant problem that will affect the general plan.
According to the case study, Meg was not familiar to most of the executive members
and they gave her the feeling that she cannot be trusted. On its own, unfriendliness from the
organisational members stands as the first challenge that Meg would face and this would lead
to lack of consensus. It is highly likely that not everyone would support her idea of corporate
and organisational change. The decision to execute change should start from the top-level
management and, therefore, everyone needs to be on board (Waldersee and Griffiths,
2004:428). However, in this case, there is a chance that other members would oppose her
ideas and hinder the progress to change.
The second barrier would be poor communication. Failure to communicate the plan
and need for change properly would encourage rumours and fear in the company, especially if
the change entails downsizing some of the workforces. The feeling of uncertainty when the
message of change is poorly communicated may leave the employees feeling like they are not
part of the decision and company.
The last challenge would be facing employee resistance. Not every employee will be

comfortable with the plan of change and, hence, they will become uncomfortable with the new
management (Lilley and Mckinlay, 2009:131). This will cause unsettlement, as change is
disrupting their familiarity. The other reason behind employee resistance would be the idea of
relearning their roles in the workplace.

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CAR Company Report - Hanh Hong Nguyen

Scope for Further Research
This report has presented groundwork for preparing and planning for change within an
organisation by offering background information on the various factors that affect corporate
excellence and employee performance. There is, however, still work that needs to be done and
this relates to relationship management. Despite altering how the organisation works, there is
a need to understand how the clients and partners will be gained back, especially after the
company performed poorly in the market. Recently, after the introduction of the competition
in the market, customer perspectives have been altered and it is important to understand the
necessary marketing strategies that will help the company gain competitive advantage.

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CAR Company Report - Hanh Hong Nguyen

Conclusion
This report has identified the significant managerial issues that resulted in the downfall
of CAR and, at the same time, the obstacles that hinder the desired change within the
company. Some of the challenges as noted are misunderstanding the external forces that
cannot be controlled, like the introduction of the Chinese company in the market. However,

the main problem affecting the performance CAR is poor employee management which in
turn makes the employees less motivated to work and stay committed to the company’s
policies and vision. The performance and efficiency of the employees are dependent on the
managerial practices that influence employee attitude towards the organisation. Therefore, for
Meg to help the company recover its previous competitive advantage, she will first need to
change the managerial practices to motivate employee attitude and commitment to CAR as
well as attract new talent.

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CAR Company Report - Hanh Hong Nguyen

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