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University Degree Business and Administrative studies

Problem Solution: InterClean, Inc.

Running head: PROBLEM SOLUTION: INTERCLEAN, INC.

Problem Solution: InterClean, Inc.

David Lejuez

University of Phoenix

Problem Solution: InterClean, Inc.

The cleaning and sanitation industry is extremely competitive and currently the industry is going through some major changes. These transformations are being forced on the industry by governmental agencies that are now requiring that each organization within the industry is to provide an optimum service and product. In order to compete and meet the regulatory demand in this industry InterClean’s CEO David Spencer has established an all-inclusive service strategy that will demand more dedication from InterClean’s employees. In addition, David Spencer has just completed a merger with Enviro Tech Inc. As the company continues to grow, David Spencer will come under pressure to maintain the morale of his employees while attaining outstanding results.

In evaluating InterClean’s situation the issue is not as obvious as it may appear. Clearly management desires that the company’s employees acquire the proper skills that will meet the strategy set forward by David Spencer. Nevertheless, management must understand that with their intent to grow both domestically and abroad, InterClean will have to establish an effective human resource system. The lack of proper employee training will likely give a serious blow to employee morale and InterClean’s strategy. Management has identified the problem that InterClean faces, and clearly the issue does not evolve around its employees, but rather the implementation approach taken by management. This analysis will provide InterClean’s management with the proper techniques that can attain outstanding results.

In every corporation leaders and managers must establish strategic advantage that will permit the organization to survive over the long-term. “A company’s survival and success depend on how well employees sense environmental changes and alter their patterns of behavior to fit those emerging conditions” (McShane & Von Glinow, 2005, p. 21). When a leader such as the CEO of InterClean David Spencer initiates a competitive advantage strategy, he or she is creating an open system organization. Despite employee opposition in the early stages of a transitional period, open system leaders often envision the organization’s position over the long-term.

Although InterClean is facing some strong opposition to its all-inclusive service strategy, David Spencer has taken the proper steps towards becoming a leader in the cleaning and sanitation industry. Leaders of open system organizations have the responsibility of identifying a weakness in the industry and capitalizing on the opportunities that are presented. “Innovation and change are not infrequent and special—they are built into the organizations’ ways of doing things” (Hellriegel, Jackson & Slocum, 1999, p. 430). Through determination and motivation, InterClean’s management can guide its employees towards understanding that the mission is to ensure long-term survival.

As InterClean explores the alternatives to enhance its growth potential, it must be willing to work closely with members of the workforce. By establishing a performance pay reward system, InterClean will provide employees a motivational incentive to ensure a successful strategy. “Making pay (or other valued job outcomes) contingent on performance should enhance instrumentality perceptions and employee motivation” (Dreher & Dougherty, 2001, p. 54). In most organizations employees often tend to view additional work as a negative prospect of his or her job. Although financial reward may not entirely change an employee’s view, the concept of rewarding an employee will limit hostility while ensuring optimal performance.

In addition to generating a positive view towards the employer, performance contingency pay does produce effective savings over the long-tem. By rewarding its employees for acquiring the proper skills, InterClean will likely see an increase in the productivity level by employees. Furthermore, employees will be willing to devote themselves over the long-term and thus saving the InterClean substantial capital to replace members of the workforce. “The organization must have an effective performance appraisal system, and employees must trust management” (Hellriegel et al. 1999, p. 416). By committing to its employees, InterClean will ensure that the workforce will have the company’s best interest to achieve the desired goals.

In order to attain the preferred profit and market share level InterClean management must establish and develop a training and skill development strategy that involves all key members of the corporation. Often the reason that a strategy fails, is due to employees’ poor performance and the inability to carry out the demands. “Firms must take care to select people with the ability and willingness to learn and develop, and they must establish reward practices that encourage employees to participate in training activities” (Dreher & Dougherty, 2001, p. 7). By providing precise and fundamental training to its employees, InterClean will ensure service excellence to clients.

The major strategic changes that InterClean will be implementing require that its workforce attain an unprecedented level of product knowledge. “When organizations undergo major changes, training and development activities often are necessary to help employees make the transition to a new way of doing things” (Hellriegel et al. 1999, p. 407). As InterClean moves forward with its all-inclusive service strategy, the company cannot afford to lose clients due to poor service. Such loss would represent a failure and a loss of confidence amongst the workforce and members of management. A successful strategy will require that employees understand their obligations. As a result of quality employee training, clients will remain confident with the level service provided by InterClean’s employees.

Stakeholders are vital to the survival of any organization. The interests of stakeholder vary within one company to the next. Each stakeholder group has its own views, values and they tend to only focus on the concerns that will be most important to them. “Conflict among stakeholders is common, but so are shared interests” (Hellriegel et al. 1999, p. 202). As InterClean goes about implementing strategies to increase its market, and improve service quality, the company must consider their stakeholders’ interests. Although the all-inclusive service strategy has generated some hostility within InterClean between the employees and management, InterClean must ensure that their strategy meets the demands of their customers. In understanding and addressing the concerns and interests of each stakeholder seriously, InterClean will continue to be a leader within its industry.

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The employees at InterClean are another important group of stakeholders. As with any organization, the main issue for employees at InterClean is maintaining his or her job while receiving equal salary and benefits as other workers in their industry. The employees have a mutual interest to know about of every transitional decision that the management is taking and the impact that the strategies will have on their future. In many ways by being a part of the strategy development, InterClean’s employees will understand the expectations and the role that will be required of them as the strategies are implemented. In return, each employee must provide a level of service that will enable the company to remain competitive and profitable. By being the first point of contact with clients, the employees at InterClean are synonymous with the company’s brand image. Thus, if they live up to the expectation and demands of management, they are eventually assuring that customers remain confident in InterClean’s brand.

In every industry the customer is a key stakeholder within the company. The actions and attitude that a customer takes towards a company’s product will ensure the success or failure of the company. In addressing this key group of stakeholders, management must understand that customers in general rely on receiving quality service and products at a high standard. The constant change in customer’s taste and demand means that InterClean must establish a strategy that will fulfill those needs. By implementing a level of service that will ease the concern of its client base, InterClean is positioning itself as a customer driven and oriented organization. “Organizations with such a focus want to give buyers experiences that exceed any they have had with competitors” (Boone & Kurtz. 2002, p. 499). InterClean’s pioneering strategy means that the company is addressing the expectations and needs of their customers.

InterClean’s management and especially its CEO David Spencer have the responsibility to develop winning strategies and act in the manner that best suits the company. One of its many interests is that the management must meet and deliver strategies that will maximize the company’s value and guarantee its existence into the future. As a sole proprietor David Spencer has a crucial stake to meet expectations and the demands of everyone involved. On the other hand he and his management also have an obligation to look out for the well being of InterClean’s employees. This means maintaining a level of fairness and honesty and keeping employees aware of the direction that the company is heading towards.

Organizations across various industries have faced issues which nearly jeopardized the company’s continuity. Such issues often force management to develop strategies that will present opportunities that allow the organization to realize a solution. However, before a company can implement competitive strategies, the organization must identify the problems and best means to resolve it. In many ways InterClean’s CEO David Spencer, has identified a problem that can present major setbacks in future years.

In addressing the employee’s lack of product knowledge, InterClean’s customer service, management has identified a weakness that could pose a threat to the company’s position in the industry. By implementing its all-inclusive service strategy, InterClean’s employees will be the industry’s first true experts in all aspects of the company’s products. With its capable and talented employees, InterClean has an opportunity to transform the cleaning and sanitation industry and in the process becoming the industry’s premier company. By following its specific objective, InterClean will obtain the majority of market share and establish a profitable line of products and services.

The companies throughout the cleaning and sanitation sector are currently facing extremely difficult conditions as product regulations are emphasizing more responsibilities on the companies and its employees. Although InterClean management team has identified a solution, they are now faced with the prospect of effectively planning and instituting the proper personnel to carry out its strategy. In order to assure successfulness and its long-term survival, management at InterClean must rebuild morale and relationship with employees. The employees must have an equal stake in the company’s development and strategy implementation. Management must understand that “successful transformations begin to involve large numbers of people as the process progresses. Employees are emboldened to try new approaches, to develop new ideas, and to provide leadership” (Kotter. 1995, p. 64). By working together management and employees will be better equipped to address the concerns of their customers.

In addition, InterClean management must establish a reliable human resource management system inside of its organization to improve its work environment. As the company is in its initial stages following a merger with Enviro Tech Inc. management must establish a process that will ensure the retention of its workforce. Furthermore, in instituting an efficient human resources system, InterClean will be prepared to implement skill enhancement training programs. This step will assure that InterClean maintain an effective and optimum workforce. By taking these courses of action InterClean can achieve at minimum three SMART (Specific, Measurable, Attainable, Realistic, Timely) objectives. These goals are to implement an efficient human resources system, to rebuild employee morale through a credible reward system and provide a skill enhancement training program. Through these objectives InterClean management will meet its market growth and profit targets.

When corporations develop strategies to resolve their problems, one important aspect of the strategy is the alternative solutions. Although InterClean has established a clear strategy to improve the quality of employee service, management should also focus on other alternatives. InterClean’s management needs to address its most important aspect of its business-the-customers. InterClean needs to aggressively target and maintain the client base that Enviro Tech established prior to the merger. Minimizing the potential number of clients that they could lose as a result of the merger will be crucial. Therefore, by establishing a promotional package plan with additional services, InterClean can aggressively seek to increase its client base. “Some promotional strategies enhance product values by explaining often unrecognized ownership benefits” (Boone & Kurtz. 2002, p. 583).

This strategy would correspond with that used by AT&T Inc. shorly after the company merged with Cingular Wireless. In an effort to become the dominant player in the wireless industry, AT&T became the sole service provider for the iPhone. The promotional strategy in essence eliminated any competition from other wireless providers. As a result, “AT&T said it had activated 1.1 million subscriptions for iPhone users, and that roughly 40 percent of those subscribers were new AT&T customers”(Flynn. 2007, ¶ 11). By effectively using incentives to target clients, AT&T created a positive brand awareness of its services and products. By taking similar steps, InterClean will also attain its desired market share goals. This alternative will in many ways coincide with InterClean objective of providing an all-inclusive service.

In addition, InterClean’s management must implement an effective consulting service to oversee and provide advices on the best method to attain outstanding results. The services of an exterior consulting firm would provide impartial advice. By using the service of outside experts, David Spencer will ensure that InterClean’s human resources system is adhering to the proper guidelines and delivering quality and efficient workforce. The consulting firm would also provide annual audit of each department to ensure that InterClean is functioning within the established regulatory guidelines. Well established consulting firms such J.H. Cohn LLP, have taken the initiative to assist many organizations operate within the Sarbanes-Oxley Compliance guidelines. “Sarbanes-Oxley Section 404 compliance regulations mean that the performance of your company and the actions of your employees place you in the eye of the storm like never before” (http://www.jhcohn.com, 2007, ¶ 2). In order to avoid legal altercations, David Spencer must implement the services of such consulting firms.

When analyzing the alternative solutions, InterClean’s management must establish the creation of an efficient and organized human resources management system (HRM). As InterClean expands and the volume of employees increases, the company must be prepared to be actively meet the challenges that a diverse workforce presents. There are many benefits that an efficient HRM system provides to an organization. “How a company manages its workforce, in large part, determines whether it will be able to establish and sustain a competitive advantage over other companies” (Dreher & Dougherty, 2001, p. 8). In addition, by establishing a HRM system, InterClean will ensure that its employees continue to develop the proper knowledge to meet the expectations of both management and clients. The initiation of an HRM system will place InterClean in a position to meet other management alternative solutions. At the current time InterClean lacks an efficient human resource system. Throughout every industry, successful companies have established a well organized HRM system.

Another crucial alternative solution is for InterClean to ensure that management retains its employees and restructures the company’s current employee incentive program. Clearly the company must share its goals and long-term vision with the employees before both parties can discuss the prospect of incentives. The main goal for management is to increase profitability and gain market share through the dedication and hard work of its workforce. These goals can only be met through every employee. “To be effective, incentives must be aligned with the behaviors that help achieve the organization’s goals” (Hellriegel et al. 1999, p. 416). This alternative solution is impeccable to ensuring “savings results from productivity improvements and from the organization’s ability to match compensation costs and performance levels better” (Hellriegel et al. 1999, p. 416). Through a successful HRM system, InterClean will be fully capable of establishing a new employee incentive program. The significance of a strong incentive program can often be seen through the success that an organization experiences. If InterClean is serious about capturing a large share of the market, management will need to provide the workforce with a financial motivation.

Prior to implementing its all-inclusive service strategy, InterClean’s management must institute an effective skills enhancement training program for employees. As the company looks to become a dominant leader within the industry, management must ensure that employee talent and quality are in line with the vision. The most successful corporations built their success through the knowledge and expertise of their employee base. “High-performing firms display a greater commitment to training and skill development than their lower-performing counterparts” (Dreher & Dougherty, 2001, p. 7). When management and employees have an understanding of the company’s goals, they are able to resolve conflicting dilemmas and move towards a common goal. Therefore, a comprehensive training program will be vital to establishing the expertise and knowledge of each worker.

InterClean management must utilize all alternatives that are at their disposal. Although some options will carry some level of risk, InterClean will avoid the risk of failure. By implementing successful strategies and avoiding failed strategies by companies in other industries, InterClean’s management will successfully attain the maximum result. By eliminating poor performing sectors, and establishing an incentive program to maintain Enviro Tech employee base after the merger will yield promising results.

By eliminating poor performing sectors, InterClean will most certainly be eliminating some of its less than competent employees. This cost cutting strategy will be in line with that of Gillette when its CEO said that, “25 percent of the company's products accounted for 95 percent of the sales. The other 75 percent of Gillette's products will be eliminated” (Barnes. 2001, ¶ 11). As a result of the CEO’s strategy, “the company's sales rose 5% after his first year on the job, then rose 10% the second year and continued to thrive, along with Gillette's stock price, which climbed 20% between 2001 and 2004” (Roman. 2007, ¶ 10). In implementing this cost cutting strategy InterClean will liquidate potential overhead issues, while allocating skilled employees to focus on developing products.

The other important aspect of the risk assessment will be to establish an incentive program that will benefit Enviro Tech employees equally. When a merger is completed, often employees sense some hostility from employees at the parent company. An example of such opposition can be found between Canadian Airlines pilots and Air Canada pilots, “many Air Canada pilots believe the Canadian Airlines pilots should be placed at the bottom of the seniority list because Canadian Airlines would have gone bankrupt if Air Canada hadn’t acquired it” (McShane & Von Glinow. 2005, p. 392). In order to avoid a hostile working environment such as that between Canadian Airlines pilots and Air Canada pilots, InterClean will have to institute an incentive program that benefit both employees equally. Furthermore, by establishing such program, InterClean management will set the tone that the organization will not be divided into two companies.

Management often builds their strategies with a vision on attaining optimal solutions for the issues that the organization faces. In the case of InterClean the development of an HRM system will ensure that the organization attains its growth potential. “Most organizations devote considerable attention to human resource management, the function of attracting, developing and retaining enough qualified employees to perform the activities necessary to accomplish organizational objectives” (Boone & Kurtz. 2002, p. 326). While it appears that establishing a HRM system seems to be a major task, the benefit of such system will reward InterClean with the prospect of a top tier professional workforce. In addition, an effective system can yield a cost effective employee base.

Clearly the establishment of an effective HRM system by InterClean will also prepare management to engage in its desire to be a dominant organization in foreign markets. Organizations that have successfully established themselves abroad have done so by recruiting top tier global managers and employees through its human resource system. By implementing a human resource system, InterClean will be capable of identifying which employees possess the skill level that provides the company with an edge over the competition.

In order to implement a strong plan, management must clearly identify the means in which the strategy will be delivered. The first step for management is to establish a set of program guidelines and policies that will ensure that each employee receives the proper skill training. This action will show employees that InterClean is dedicated and committed towards the development of each employee. This means that management must ensure that all employees receive quality training to better perform their jobs. This process must be established immediately by senior management. “In addition to helping people acquire job-related knowledge, skills, and abilities, employers have a stake in helping employees develop from a career and personal perspective” (Dreher & Dougherty. 2001, p. 131). By taking this action, management will begin to ascertain that InterClean is taking progressive approach towards its employees.

Another key implementation plan is to create an incentive pay program that reward optimum performance. “In addition to increasing employee motivation to perform well, incentive pay can reduce turnover among good performers” (Hellriegel et al. 1999, p. 416). This program will also serve as a measurement to analyze which employees are improving and meeting the goals set by InterClean’s management.

The other major implementation plan is to identify consumer dissatisfaction with InterClean’s products and services. Employees must inform management immediately of the primary cause for the loss in market share and the main dissatisfaction that customers have with the company. Since employees are mainly interacting with customers, they will have a better knowledge on providing management with an accurate complaint data. Management will then identify the major findings and act on resolving those issues. This process must be the first step taken towards establishing a market share.

When implementing a strategy, management must take into consideration the obstacles that the organization will face as it attempts to achieve its objectives. In the case of InterClean, management has taken the proper initiative to address an opportunity and a niche in the market. Management must be prepared to take on costs that will be directly linked to the implementation of a human resource management system, employee trainings and an incentive reward system. While the costs will be extravagant in the short term, by addressing these basic resolutions, InterClean will find itself with a more receptive workforce.

In taking these initiatives InterClean’s management, specifically CEO David Spencer will send the message that InterClean is moving towards addressing the concerns of its employees. After implementing these strategies, InterClean should see a significant increase in profit as well as in its market share. While the time frame for proper implications appears to be on short notice, employees and management understand that InterClean is facing an unprecedented task. The decisions that are made must give the company quality results, every decision must be considered carefully and thoroughly before management can implement its all-inclusive service strategy.

After analyzing InterClean’s issues along with the opportunities, the company appears to be moving in the proper direction to address the demand of its clients. Arguably, the company possesses some of the industry knowledgeable managers and employees, and they find themselves in a position to become the main player in their industry. InterClean management must use the knowledge and expertise of their employees and establish a competitive advantage by properly using them instead of replacing them. The management at InterClean has several alternatives to implement optimal strategies. The solutions presented to InterClean will ensure that the company remains a top performer in the short term while it thrives in the long-term.

Despite the strong need to maintain its employee base in place, InterClean must also work closely with employees of newly acquired Enviro Tech to assure that the client base does not depart to other competitors. Finally, by revamping its current human resource with an effective human resource system, InterClean will be able to put in place a workforce that will meet the company’s new product service. A failure to implement an effective HRM system will likely impede potential success and place the company in jeopardy. This means that management must execute innovative solutions for the short and long-term.

References

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Boone, L. E., & Kurtz, D. L. (2002). Contemporary Business (10th ed.). Orlando,

Florida: Hartcourt Inc.

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Perspective for the General Manager (1st ed.). New York: The McGraw-Hill Companies.

Flynn, L. J. (2007, October 24). AT&T Profit Surges 41%, With Help From iPhone. New York Times. Retrieved July 10, 2008, http://www.nytimes.com/2007/10/24/business/24phone.html

Hellriegel, D., Jackson Susan E., & Slocum, J. W. (1999). Management (8th ed.)

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http://www.jhcohn.com/content.asp?sectionID=21

Table 1

Issue and Opportunity Identification

Table 2

Stakeholder Perspectives

Table 3

Analysis of Alternative Solutions

[Click twice on table to change, see instructions on next page. The alternatives and their ratings as well as the goals and their weightings shown below are for illustrative purposes, you should enter your own. Delete this paragraph when done.]

Table 4

Risk Assessment and Mitigation Techniques

Table 5

Optimal Solution Implementation Plan

Table 6

Evaluation of Results