Analysis of a Swiss giant ABB - critical analysis of companies critical problem.

University Degree Business and Administrative studies

BN921 Organizations: Behaviors, Structure, Processes

INTRODUCTION:-

Competing in a global economy is both a challenge and an opportunity for business today. The nature of the challenge depends on a variety of factors, including the size of the organization. While managing the international business, management needs to have to implicate basic functions of planning, organizing, leading and controlling. Although organization of any size can compete in international markets, there are some basic differences in the challenges and opportunities faced by multinational companies, medium-sized organisations and small organisations. As multinational companies have long since made the decision to compete in a global marketplace, they transfer capital, technology, human resources, inventory and information from one market to another. MNEs tend to allow local managers a great deal of discretion in addressing local and regional issues, at the same time, each operation is ultimately accountable to a central authority. Managers at this central authority are responsible for setting the overall strategic direction for the firm, making major policy decisions and so forth. In this report, we would like to analysie a Swiss giant ABB which a world leader in industrial product, automation technologies and power technologies, and try to critically analysie one of companies critical problem, change procedure and will make some recommendations.

COMPANY BACKGROUND:-

The history of ABB goes back to late nineteenth century and is a long and illustrates record of innovation and technological leadership in many industries. Having helped the countries all over the world to build develop and maintain their infrastructures, ABB has in recent years gone from large scale solutions to alternate energy and the advanced products and technologies in power and automation that constitutes its industrial IT offering. ABB is a leader in power and automation technologies that enable utility and industry elements customers to improve performance while lowering environmental impact. The ABB group of companies operates around 100 countries world wide and over 115,000 employees around the world. ABB provides many fields of power, automation, oil, gas and petrochemicals, industrial products. It also ensures the growing companies that it provides more of profit raises the most among shares in the stock market. (www.abb.com)

ABB offers a wide range of information and knowledge about the advancement in each an every field of production, management, and also some firms that come under the ABB managements where knowledge about the products and manufacturers have provided a less amount of information on their by-products which leads to the loss of the industry. ABB holds a wide horizon on power products such as control systems, low voltage supplies, high voltage products, instrumentation and analytical controls. In this industry has less concentration towards its workers as there are so many employed to work for the best efforts to make ...

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PROBLEM IDENTIFICATION:-

Although ABB has a wide spread business through out the world, what we think about the company’s management, is not as much capable to deal with the employees in some part of the world. What we mean by that is that company is not been able to satisfy their employees whether it is about their financial support or it is about their working environment or about their manpower management. The company has some strategic issues to cope up with. This issues has been identifies as follows, unplanned hiring of manpower, communication gap between the employees and the management, employees demand about increase in their wages, employee movement for high pay movement, employees are not ready to adopt format evacuation policies, low focus on knowledge management and even in some part of the world i.e. Asia and Middle East where workers are turning out dangerous to the company operational existent. (Leading Business – H R Monthly – 2003 & ,2004)

PROBLEM ANALYSIS:-

As we have seen above that ABB is having a problem to manage the employees, there are several reasons that we can define that has arose the human resource management problem, but the major reason is that company has most of the time during its lifetime try to concentrate on their market; in this process they have never been able to establish their shelf among their employees as company has not given priority to staff management and their satisfaction, the other reason for employee unrest is due to the communication gap, which means that employees dose not participate in decision making process which directly affect them, lake of knowledge management within the organization. All of this is human resource management related problems, which has created unrest among the employees of the organization.

MODEL:-

Analysis of the problem suggests that ABB’s lake of interest in H R Management has created unrest among the employees, three key reasons has been identified for the employee unrest and has been discuss as below:

Human resource planning and management:

Due to the company’s lake of interest in human resource planning, and management, there is unrest among the employee. Company dose not have formal selection procedure or dose not have criteria for managing employees performance. Which in turn has created unplanned hiring of manpower, high rate of manpower turnover, low job satisfaction among employees and employees unrest demand for hike in wages and remuneration which can be improve using proper human resource planning (Leading Business – H R Monthly – 2003 & 2004).

(Cycle of unplanned human resource management)

Lack of reward system:

Reward is something that give an extra benefits other than their basic wages and salary to the employees who has worked hard for the company and their work has been satisfactory to the industry or companies standard. Rewards given to the employees make sure to the employee that he has been rewarded for the work that he has done and this will motivate him to work hard and earn more rewards. In case of ABB company dose not have specific reward system, which had lad to the major failure to the job satisfaction, as their works dose not have been rewarded to the extant it has been necessary as we can see in the figure 5.2 given below, how a lack of good reward system makes jobs for the employee unsatisfactory and make employee unrest and asking for higher wages and rewards for their job, when they did not get it they either leave their job or continue to work with the company but did not work enthusiastically and which lad to the company lower efficiency and companies operation level gone down.

(Figure 5.2 results of lack of reward system)

CHANGE INTERVENTATION:-

We believe that ABB should implement the following changes of HR management, which will be helpful to fill-up the communication gap between the management and employees, and try to build a greater wages and remuneration structure which will be helpful to cope up with the employee unrest and give them a satisfaction for their job, which will be on the other hand will reduce the manpower turnover. We believe that suggestion which has been given below will be helpful to the company to improve their relations with the employees and improve their HR management. (Davidson, 2003)

Improving organizational communication skills:-

Following up, regulating information flow and understanding the richness of different media, are the three most important skills that enhance the communication effectiveness for both the sender and the receiver. Following up simply involves checking after some time to be sure that a message has been received by the proper person and it has been understood as sender want to make out the point. It is necessary to regulate the information flow, which means that sender or receiver takes steps to ensure that overload does not occur. For sender it is necessary that he/she dose not pass to much information at a point of time and for receiver, it is important that he/she doses not has been asked to do too many things at one time. Third and last thing is that both receiver and sender understand the richness of different media, which means to find out proper way of communication in certain situation and use it accordingly. (Davidson, 2003)

Improving reward system:-

When we give suggestion to improve reward system, we need to take a wider view and talk about improving the financial incentive paid to the employees, we must understand that reward system is not only about the remuneration system but it also include the wage-level decision, wage-structure decision, individual wage decisions, and determining the benefits for the employees.

(figure 5.2)

Figure 5.2 explains how it motivates the employees; motivation process begins with needs, or a deficiency. In response to this need, company satisfy the employees, which will in turn boost the moral and satisfaction of the employee, higher job satisfaction of the job will ease achieve goal, it is necessary to reassessed the needs of the employees time to time, by the employers. (Davidson, 2003) There are some points which are as follows needs to be taken in to the consideration and implement as necessary wherever and whenever organization needs to improve their employee’s financial support. This will reward the company by job satisfaction for the employees and brought down the unrest among them, and which will lead to low manpower turnover, which in last will improve the companies position and give strength to the company in the operational market. To set up an effective remuneration system, management must make decisions according to the points discuss below:

Wage-level decision:

The wage-level decision is a strategic decision about whether the firm wants to pay above, at or below the ongoing rate for labour in the industry or the geographical area. (Davidson, 2003)

Wage-structure decision:

Wage structures are usually set up through a job evaluation – a process to assess the work value of each job relative to other jobs. (Davidson, 2003)

Individual wage decisions:

Individual wage decisions should be taken into consideration after wage-level and wage-structure decisions are made. Individual wage decision concerns how much to pay each employee in a particular job. (Davidson, 2003)

Benefits:

Benefits are rewards of value other than remuneration that an organization provides to its workers. There are several types of benefits like, pay for time not worked includes sick leave, holiday and long service leave, Insurance benefits which often includes life and health insurance for employees and their dependants, superannuation scheme, workers compensation. (Davidson, 2003)

That’s how company should enrich its remuneration system which will benefits all the employees financially, which in turn will attract qualified applicants, give employees a job satisfaction, which will stimulate high performance at a reasonable cost for the company. (Davidson, 2003)

CONCLUSION:-

Although ABB has established it shelf in the market as the market leader and looking forward to dominate the market in the future in the industry, to achieve this goal it is not possible for the company to neglect the increasing unrest among the employee, which will increase the gap between the employees and the employers, if company will take some firm steps to resolve the conflicts it will be an advantage for them. To improve relationship between the management of the ABB and the employees company needs to improve their “communication skills” and “employees remuneration system”. A good organization communication skills increase the efficiency of the organization and A good remuneration system will attract qualified employees, retains present employees and stimulate high performance.