Case study analysis for Kenright and Moores Essay
Kenright and Moores, or K and M, is an insurance company of medium size that operates in the city. The company employs about 2,500 staff in its two operation locations; that of East Anglia another in London that serves as the headquarters. This company has always followed the principle of slow growth and can therefore be regarded as a very conservative.
K and M recently dismissed its long serving CEO and chairman, Walter Smith. This was as a result of its poor performance, which called for drastic measures such as the ones taken. The company has also created a different position of CEO in addition to that of chairman and appointed David Moyes in the position.
This paper is a case study analysis for Kenright and Moores in view of its recent developments. It identifies the issues faced by the company as well as any challenges. It further identifies any risks faced by the company and finally proposes solutions that are not just practical, but cost-effective as well.
Issues raise and challenges identified
There is little or no product innovation at the company, a situation that has led to considerable loses as customers go for competitor products. This lack of innovation has caused loss of customer loyalty and a change of brand among them (Snowdon and Stonehouse, 2006). This is because the company has failed to improve its products to meet the ever-changing needs of the customers (Black, 1991).
The company’s loss-making trend is not healthy for its future development and advancement. It will result in damage to its image as well as that of the brand. This is because the customers will always associate the company’s brands with its image of failure. This will in turn give strength to the company’s competitor brands and take over its market share.
The company’s environment policy is a real issue and will affect its performance both now and in the future. For instance, the company has broken its long tradition and abolished the position of chairman-cum-CEO. This will also mean the company adjusts to a new style of leadership and management. The changes have also led to an abrupt change in the company’s organizational structure. All the benefits that go with having a single chairman-cum-CEO, such as simplicity in operations and absence of duplication of roles will be lost.
The company also faces another challenge of having to get used to a new chairman with no executive roles. This is an approach the company has never used, and which is likely going to take time to adapt. This is because the new chairman will have no direct say in the day-to-day running of the company.
The company will have to get used to the new chief executive officer; his personality, temperament, leadership and management style. The new CEO also comes in with reduced powers and roles compared to his predecessor, who served as both the CEO and chairman.
The company will need to develop a new vision in view of these new developments. This is mainly because the vision developed by the previous top management will not work well with the new management since the new management had no hand in its formulation. The new vision needs to take into consideration the new organizational structure. Moreover, it should take into account the recent developments that led to the changes in the company’s structure of leadership and management.
The company’s staff turn-over among women is very worrying, especially those who have served for five years and over. This does not paint a good image for the company; it erodes investor confidence and leads to low motivation among the other staff members. The female staff turnover raises many questions as to why many of them would be leaving the company in droves. This also raises questions in the company’s human resource strategies. Good human resource strategies are supposed to attract, retain and motivate all staff regardless of their gender, race, political affiliation, social status, and religion (Fombrun et al, 1999).
The company’s level of customer satisfaction leaves a lot of concerns. Customer satisfaction should be a core objective for any organization because customers are the backbone of any business entity. The increase in the number of short term sickness is a clear indication of a staff that lacks motivation. Low productivity as well as low quality of productivity will negatively affect the company’s overall performance. Low employee satisfaction means that the employees will only work to earn their livelihood, without an inner drive.
A change in the leadership and management structure will lead problems with motivation among employees. This is because these employees are already used to the previous structure. The new management team will therefore have to work extra hard to raise motivation levels among its employees.
The employees were not involved in the change of management plan. As a result, they feel left out in the company’s decision-making process. There is also a problem of skill development to meet the new management approach. This is because new skills will be needed to make the new management plan a success.
The company will experience a problem of selling wrong policies due to inadequate intrinsic motivation among the employees. Lack of intrinsic motivation among employees can greatly affect its image since it is employees who carry the name of the company wherever.
The company’s McDonaldisation in its work design approach has proved to be a big issue, with unions openly criticizing it. This approach has caused the staff to feel bored since a selection criterion does not exist and there is no explicit policy on redundancy.
Another critical issue presented is the establishment of call centres for training and minimization of travel requirements and expenses. Trade unions are of the view that this is a very bad practice that will end up taking over some of the company’s functions, thus rendering some of the workers jobless. The problem of short term management also presents itself at the company. This is particularly the case at the call centres where the managers’ focus is entirely on times as opposed to the quality of the services.
The employees as well as the management feel that they have been given very little or no freedom. This is as a result of the change in the management approach and the introduction of call centres.
The risks facing Kenright and Moores
The main risk facing the company may become subject to a late overbid. There is a high likelihood of the company facing economic difficulties due to due to the current economic conditions. The current global economic crunch will have its toll on the company’s performance.
In addition, Kenright and Moores risks shouldering the consequences of numerous legal tussles, mainly filed by its employees. There are already claims of sexual harassment among some of its employees, leading to the formation of a tribunal. Trade unions have also alleged a number of employee violations during the daily work practices at the company.
A great risk is also presented due to the company’s disregard of the financial services regulation. This is because of the company’s conservative nature in its provision of financial services. The company has been accused by its employees and trade unions of disregarding the rights of employees. There have been numerous cases of employee discrimination, sexual harassment and many other such cases.
The above cases present a great risk to the company because the company may end up paying huge fines (Selwyn, 2000). These cases will also damage the company’s brands, which will greatly undermine the company’s growth and development. It may also lead to a high turn-over of its employees, as well as lack of commitment learning and development. This is likely to lead to numerous complaints among the employees who choose to stay and impact the process of recruitment of new employees.
Going by the company’s level of compliance, the regulator might not be satisfied with the company’s level of training. Particularly, the company’s learning and development level might not be sufficient to satisfy its employees. Finally, the company risks facing industrial action from trade unions; there is a brewing row between the company and its employees and, by extension, the trade unions.
The company needs to tune its strategies in order to be in line with the political, economical, social, technological, environmental and legal considerations. The change in management plan should also involve the employees and not just the shareholders and top management.
The company must improve its management practices to make them more efficient and effective. This can be achieved through innovation, cost reduction, quality enhancement and diversity. The MOSAIC approach is capable of bringing people together. The approach involves a number of requirements that should be embraced by the company. MOSAIC calls for clear missions and values, objective and fair processes and fair practices and a skilled workforce. Moreover, this approach calls for active flexibility, individual focus and an empowering company culture.
The company should boost its competitive advantage through cost reduction, quality improvement, innovation and effective organization (Gupta and Govindarajan, 2001). The company should also encourage a healthy balance between work and life among its employees (Zastrow et al, 2003).
Cost reduction can be achieved by streamlining repetitive and predictable tasks and taking a short term focus as far as these tasks are concerned. It should also have a moderate concern for quality and a higher concern for output or quantity. The company should also take less risk to minimize the costs that come with such risks. Learn under what circumstances should a company’s management team give serious consideration
To enhance quality, the company should also focus on the repetitive and predictable tasks. However, it should have a longer term focus compared to the cost reduction approach. It should also embrace moderate co-operative behaviour and a high concern for quality and process. Just like in cost reduction strategies the level of risk taking should be very low.
To enhance innovation, there must be a high degree of creativity, which must take a long term focus. There should also be a high degree of co-operative behaviour and moderate concern for quantity and quality. This will also call for a higher risk taking and toleration of ambiguity.
To enhance effectiveness in the company, corporate goals and individual goals will have to be incorporated and an appropriate organizational structure developed (Van Vijfeijken, 2004). There is also a need for an appropriate and participative approach to management. There should be equitable personnel policies and mutual trust between the top management and employees and among employees themselves (Margerison and McCann, 1995).
Conflicts should be resolved with open discussion between the two rival parties. The company should adopt appropriate leadership styles. There should also be a mutually acceptable psychological contract between the company and its employees. The employee reward system should have its basis on positive recognition. The employees should also in a position to feel the quality of working life.
The company’s job design should be able to lead to job satisfaction among its employees. This can be achieved by providing opportunities for the employees’ personal development. Moreover, employees should be valued for their contribution towards the success of the company. The company’s management should adopt a culture that encourages loyalty and commitment to the company.
By enhancing work-life balance, the company, as well as its employees, will stand to benefit. Studies have shown that employees work very well when they balance their work with all the other aspects of their life. This calls for joint responsibility in the quest to come up with workable solutions. Policies such as consistency and fairness will go a long way in improving the company’s efficiency and effectiveness.
Employees should be valued by what they contribute towards the company’s success and not merely their pattern of working; this requires proper evaluation and monitoring of these employees. The company should strive to communicate to its employees its dedication to work-life strategies. Moreover, providing leadership from the top will go a long way in encouraging the company’s managers to lead by example (Miner, 2007)
Recent developments at Kenright and Moores have posed a great challenge to the company. It has also exposed it to numerous risks, calling for solutions that are not just practical, but cost-effective as well. These recommendations if properly followed will help lift the company from its current status back to profitability.
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