Culture of HS Engineering. HS Engineering as a company is facing some potentially drastic changes to its values and identity

by toasty297 (student)

University Degree Business and Administrative studies

Organisational Dynamics

Organisational Culture

HS Engineering

Introduction

HS Engineering as a company is facing some potentially drastic changes to its values and identity. With the planned relocation of low-end manufacturing over to Malaysia and taking this opportunity as a springboard towards internationalisation, this move is seen as way to stay competitive within the automotive market and can be potentially very lucrative and help the firm grow exponentially. This is an incredible opportunity for HS Engineering to reinvent itself as a company and change its culture for the better and setting up the stage for new site in Malaysia. However, there are conflicted opinions towards this move within the board of directors, as with many firms facing change, resistance to change is very normal and to be expected (Coghlan, 1993; Steinburg, 1992; Zaltman and Duncan, 1977, cited in Bovey and Hede., 2001). There are also many other implications from relocating a factory to Malaysia, such as; the drop in morale over job cuts in the UK, moving away from its current identity as a family run firm, the risk of the factory in Malaysia becoming another site like Wolverhampton with little loyalty towards the firm. Using an analogy of an overseas war, this will be fought on two fronts; the home front and overseas. The approach on each front will determine the future identity and profitability of HS Engineering.

As with any major changes, one must always start with the home front, and the importance of eliminating any problems before the move cannot be stressed enough. Bower (1966) described corporate culture as “the way we do things around here.” Using this loose description, HS Engineering has traditionally established itself as a family run firm, with many family members in key posts within the firm. The plan to move to Malaysia is a major change to the firm’s culture and identity, and has been opposed by some family members on the board. Like many other family-run firms, its own hiring and HRM practices along with personal relationships can prevent objective decision-making and may be impeding progress and growth within the firm (Reid et al., 2004). Resistance to any change is to be expected (Coghlan, 1993; Steinburg, 1992; Zaltman and Duncan, 1977, cited in Bovey and Hede., 2001). However, managing this resistance and overcoming it will be vital (Lennox, 1994), as many large-scale organisational changes have failed due to resistance originating from within the organisation (Maurer, 1997; Spiker and Lesser, 1995; Regar et al., 1994, cited in Bovey and Hede., 2001). So one must “win over the hearts and minds” of the one resisting the change by establishing trust through a strong mission statement with clear goals and shared values (Pennington, 2003; Sopow 2007). Using Denison culture model (Denison, 1990) which evaluates organisational culture against four key traits,

Mission – A mission or long-term direction provides purpose and meaning. A clear direction will help outline the appropriate course of action, shaping the current behaviour through the vision of a preferred future state. So in order to start this change, the firm must set long-term goals and objective; such as sustained profitability and growth; and that the move to Malaysia is a step towards achieving such goals.
Adaptability – Being able to meet the demands to changes of the business environment and make the changes needed. One such factor is the decline of the automotive market within Europe, ...

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Mission – A mission or long-term direction provides purpose and meaning. A clear direction will help outline the appropriate course of action, shaping the current behaviour through the vision of a preferred future state. So in order to start this change, the firm must set long-term goals and objective; such as sustained profitability and growth; and that the move to Malaysia is a step towards achieving such goals.
Adaptability – Being able to meet the demands to changes of the business environment and make the changes needed. One such factor is the decline of the automotive market within Europe, and the move to Malaysia is to counteract the effects of this decline, maintaining profitability and staying competitive.
Involvement – How engaged and committed are people to the mission? This is very important point, as one reason why there is resistance to change is exactly because they are invested in the current culture of the firm. So in order for this change to be successful, genuine and long term; the firm cannot rely on outside help or consultants, it should arise from within the firm. There must be commitment from top-levels of management, and that this change isn’t happening over them but involves them.
Consistency – Defines the values and systems that are the basis of a strong culture. This is whether everyone is on the same page, in terms of beliefs and values. Setting some core-values and creating mutual understanding will help unify the firm, such as a value of creating a quality product as something the firm can be proud of.

During this time of change, Pennington (2003) states there are certain transitions steps should be taken, such as;

Stating what will change and what will stay the same, such as assuring employees that there will be no further job cuts after the closing of the Wolverhampton and Oldham sites, and must be maintained in order to establish trust.
Maintain that the “important stuff” continues. The benefits and wage rates of the Leeds site has long been attractive such tradition should be kept and promised to help maintain loyalty to the firm.
Setting the stage for the future and recognising that change will occur again when the needs arises. This is one point that needs to reiterated, as establishing a solid foundation of culture will be vital to impart to the newly established site Malaysia.
Creating opportunities for ownership, as people will feel a connection with what they help to create. Thus another important change is to move away from the “Smith” family image of the nepotistic firm, and establish a more egalitarian image as the “HS Engineering” family, where promotions to key roles are through performance and proficiency.

Using David Hall’s strategy models cited by Lennox (1994) to manage the resistance to change and Pennington’s (2003) ideas that improving performance to enact a strong corporate culture with strong values within the company will inadvertently lead back to improved performance within the firm, setting the stage for the new site in Malaysia (Rashid et al., 2004).

Malaysia

While on overseas front, the strong mission statement and values established in the UK should be carried over and strongly embedded. Establishing a strong culture early on will prevent another situation like the Wolverhampton site (little loyalty to the firm). A profile based upon work from Hofstede (1980, 1984), finds that Malaysia is a collectivistic society. Hofstede (1980) states that in collectivistic societies, members tend to identify with organisations and act in unison to achieve its goals. This sense of loyalty and interdependence helps foster a more co-operative environment while working towards achieving set goals. However, newer data collected has shown that an individualism factor within the working-life of Malaysians has rising over the years as Malaysia becomes more affluent (Noordin and Jusoff, 2010). Using this knowledge, opportunities should be taken to instil employees with the same mission and values as the UK, in order to create a healthy culture within the Malaysian site.

During the initial days of setting up the Malaysian site, sending over experienced managers from the UK will be unavoidable. However, the candidates should be chosen very carefully; they will be required to have knowledge in cross-cultural management skills and an understanding of the complexities of Malaysian national culture (Selvarajah and Meyer, 2008). However, to maintain a healthy culture of involvement and to avoid an air of cronyism (Norhashim and Aziz, 2005), local candidates should be trained to become leaders and be allowed to rise up the ranks in this “HS Engineering” family.

Care must be taken during the selection of local candidates for leadership roles. As Malaysia as a nation is quite unique; it is a multi-cultural society with a mix of three distinct races, with the behaviour and values of managers more akin to their ethnicity than their national culture, creating issues such as cronyism driven by race consideration (Selvarajah and Meyer, 2008). Therefore, a high level of transparency must be maintained during such a selection process and any future hiring processes, in order to avoid any potential cronyism/nepotism that might occur (Norhashim and Aziz, 2005).

After the initial set-up phase, a culture of knowledge management should be encouraged, where knowledge is shared between the two sites in order to maintain competitiveness (Lim and Hase, 2008). With this knowledge sharing in place, the plan to use the Malaysian site as springboard into the Asian market will come a lot easier.

Conclusion

So in conclusion, in order for this change in culture to be successful and long-term, change must come from within the firm, without reliance on outside help. Following this change, a strong culture must be established within the UK site first, by giving the company a new mission and set of values, leading to improved performance.

Following up by instilling the mission and values from the UK site into the Malaysian site early on will help establish a healthy culture. After the initial set-up phase, encourage involvement by training local employees as leaders and managers. With understanding and care, this will help HS Engineering remain competitive and profitable.

References

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Bower, M. (1966), “The Will to Manage: Corporate Success Through Programmed Management”, McGraw-Hill, New York

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Hofstede,G (n.d) Malaysia Profile [Internet], Availble from: <http://geert-hofstede.com/malaysia.html>[Accessed 10th April 2012].

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Lim, W.T. and Hase, S. (2007) "Knowledge management in the Malaysian aerospace industry", Journal of Knowledge Management, Vol. 11 Iss 1, pp 143-151

Maurer, R (1997), "Transforming resistance", HR Focus, Vol. 74 No.10, pp.9-10 Cited in: Bovey,W.H, Hede, A (2001) "Resistance to organisational change: the role of defence mechanisms", Journal of Managerial Psychology, Vol. 16 Iss: 7, pp.534 – 548

Noordin, F. and Jusoff, K. (2010) "Individualism-collectivism and job satisfaction between Malaysia and Australia", International Journal of Educational Management, Vol. 24 Iss: 2, pp.159 – 174

Norhashim, M. and Aziz, K.A. (2005) "Smart Partnership or Cronyism? A Malaysian Perspective", International Journal of Sociology and Social Policy, Vol. 25 Iss: 8, pp.31 - 48

Pennington, R. (2003), "Change performance to change the culture", Industrial and Commercial Training Volume: 35 Issue: 6 2003

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Regar, R.K, Mullane, J.V, Gustafson, L.T, DeMarie, S.M (1994), "Creating earthquakes to change organizational mindsets", Academy of Management Executive, Vol. 8 No.4, pp.31-46. Cited in: Bovey,W.H, Hede, A (2001) "Resistance to organisational change: the role of defence mechanisms", Journal of Managerial Psychology, Vol. 16 Iss: 7, pp.534 - 548

Reid, R., Morrow, R., Kelly, B., McCartan, P. (2002) "People management in SMEs: an analysis of human resource strategies in family and non-family businesses", Journal of Small Business and Enterprise Development, Vol. 9 Iss: 3, pp.245 - 259

Selvarajah, C. and Meyer, D. (2008) "One nation, three cultures: exploring dimensions that relate to leadership in Malaysia", Leadership & Organization Development Journal, Vol. 29 Iss: 8, pp.693 - 712

Sopow, E. (2007), “The impact of culture and climate on change: Distinguishing between culture and climate to change the organization”, Strategic HR Review Volume: 6 Issue: 2 2007

Spiker, B.K, Lesser, E (1995), "We have met the enemy", Journal of Business Strategy, Vol. 16 No.2, pp.17-21. Cited in: Bovey,W.H, Hede, A (2001) "Resistance to organisational change: the role of defence mechanisms", Journal of Managerial Psychology, Vol. 16 Iss: 7, pp.534 - 548

Steinburg, C (1992), "Taking charge of change", Training and Development, Vol. 46 No.3, pp.26-32 Cited in: Bovey,W.H, Hede, A (2001) "Resistance to organisational change: the role of defence mechanisms", Journal of Managerial Psychology, Vol. 16 Iss: 7, pp.534 - 548

Zaltman, G, Duncan, R (1977), Strategies for Planned Change, John Wiley & Sons, New York, NY. Cited in: Bovey,W.H, Hede, A (2001) "Resistance to organisational change: the role of defence mechanisms", Journal of Managerial Psychology, Vol. 16 Iss: 7, pp.534 - 548

Culture of HS Engineering. HS Engineering as a company is facing some potentially drastic changes to its values and identity

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