GULF STATES METALS, INC. CASE STUDY 1)Gulf States Metal, Inc. Company is engaging in Nickel refining and also produces copper, cobalt, and ammonia sulfate. Its parent comp any is International Metals Inc. GSM created before 10 years by IMI and GSM has been in operation now for 8 years. IMI expected GSM to lose money the first 2 years operation after that it was expected to be highly profitable. In fact GSM has not shown a profit, losing $1million last year. This loses because of variety of factors and demand decrease for Nickel and Copper, the condition of equipment and labor problems. Another problem is price of substitute product is less.
As they have done 20 years contract so as per terms current price for Nickel and Copper the cost of raw material makes it very difficult to show a profit. The plant is operated twenty-four hours a day, seven days a week. Process is monitored through the reading Gauges & the analysis of samples testing. Process control department is responsible for making adjustment in the process ensure quality and flow. Building & equipment are old and corroded. Atmosphere is not proper. Employees are not use safety equipment. Operator’s behaviors are not proper. Plant manager promoted to GM. IMI suggested for OD project at GSM.
There is a poor management of former GM. Future of the plant depend upon new GM. IMI expect immediate Results. GM met some consultants for OD Project. Also no one has had any training in management. Top plant managers are highly autocratic. Major problem is management style of top plant managers. Plant could be more productive if positions matched authority and responsibility. Also maintenance is poor. Cost of Material is too high. Middle manager & supervisor are incapable or unwilling for work. People are not doing their job. Supervisor can’t be trusted for decision-making. Equipment is a problem.
Director of engineering could not maintain his staff. Supervisor is totally intimidated by manager & protecting themselves rather than correcting problem. They have plenty of technical expertise but not utilized. The management was ignoring the resources they have in the production supervisors. The reason of equipment breakdown is unwillingness of operation to allow adequate maintenance of equipment. Middle managers and Supervisors are not allowed to make decisions. They never have given opportunity to contribute although they’re well trained and experienced. Management does not communicate. They need to shut down for regular maintenance.
They don’t have right part of the right tool. There is a lack of trust. Top plant management thinks that supervisors cannot be trusted to make decisions. Maintenance managers and super-visors don’t trust management. The maintenance manager and supervisors don’t provide the maintenance cost regularly. The production supervisor is closer to the operation than they are to their bosses. The production operators are so angry at management (damage the equipment or don’t report problems until they cause shutdown) The issues in this company are at all levels, from the machine operators to the General Manager.
Some of the issues were controllable and others were out of GSM’s hands. One of the uncontrollable issues was the significant change in the market price of the metals being produced at this plant, due to the increased production of an inexpensive substitute. GSM is locked into a 20 year contract in which they have only served 9 years. One of the controllable factors was the company suffers from the lack of effective trust and communication between departments and managerial levels. Top management makes close to all of the decisions and relies on the trickledown effect, and in some cases that information skips a whole level of command.
The company is lack trust and communication, therefore management is constantly playing catch up and is not allowed to be proactive. Also, the plants materials and machines are outdated and high maintenance. , the maintenance team feels to do their job successfully they would like to see the plant find a way to slow down or shut down production in the problem section so they can properly fix it, but upper management is pressured by the profit loss so slowing production is not an option in their eyes. Other problem is that none of the managers had any leadership or management training.
They are highly autocratic and believe that the only way to get the operators to do their job is to “be tough on them”. They just got done dealing with a union walkout that last about 9 months. Since the strike anti-management feelings has been at an all time high. 2) There needs to be a companywide intervention in GSM. The plant will survive for much longer like that. First, all managers at every level and supervisors need to go through some leadership and management training. There is much more to managing people than to just know the job well.
Since the communication is lack, there should be confrontation in the organization to open the communication lines between all levels. Then the company can clearly identify what the real problems are and then can come up with solutions. The staff will come up with a list of the identified problems and prioritize them as they see fit. This would be done by organizing a meeting with all department managers and supervisors and systematically working through the issues. The aim of this intervention is to use employee’s knowledge and energy to improve work and, to eliminate unnecessary work.
Also trust will be build through a process that allows and encourages employee’s to speak out without being fearful, and to engage in the construction of an organization. Another intervention that I could recommend is large group intervention that hopes to include all parties in finding solutions to the company’s problem. From every departments, every representatives from every level of those departments must come together to focus on how to reduce operation expenses. Because this is the certain issue of the company that affects the organization as a whole.
The intervention plan would be organization confrontation meeting because of the limited information about this organization. If all the managers sat down and explained their thoughts and reasoning for them it would be easier to realize the actual issues at play. The way the confrontation meeting plays out is that it obviously starts with gathering all the key players of this business. Once everyone is together the communication lanes are pushed open. People are put into cross-functional groups, called “problem-identification groups. Then once the groups are formed the go off in a private meeting place. One thing that needs to be stressed to make this intervention successful is that communication is vital. They need to make sure that people will not be judged or criticized for their input. Then the groups are given a set amount of time to try to identify the key issues or problems facing the company, and if possible come up with potential solutions for those problems. Then after that is done all groups reconvene at the central meeting place to discuss what has been come up with.
The problems are then prioritized and categorized therefore alleviating overlap. Once that has happened different cross-functional groups are formed called “problem solving groups,” those groups must then come up with an action plan and an appropriate timetable for the plan. Groups reconvene and decide on the best action plan for this situation. Tasks are delegated to certain people and departments and follow up meetings are schedule with detailed goals that need to be met by that time period to keep the people involved accountable and motivated to sustain this change in the long run.
Another important factor is that to adopt or to internalize the company’s proposed plan. Otherwise the change will not be affective. So the General Manager or even corporate sector needs to find a way to make the employees feel empowered and willing to follow the company’s goals. 3) Employee involvement interventions are techno structural change programs aimed at moving organization decision making downward to improve responsiveness and performance and to increase member flexibility, commitment, and satisfaction.
Different approaches to EI can be described by the extent to which power, information, knowledge and skills, and rewards are shared with employees. Major EI interventions are parallel structures, including cooperative union– management projects and quality circles; high-involvement designs; and TQM. The results of these approaches tend to be positive, and the quality of research supporting these interventions is increasing. The predominant feature of the parallel structure intervention is the sharing of decision power with the union and its members.
Problem solving skills and knowledge are also increased but can be controlled by management. Information and rewards tend to be pushed less. The increased use of TQM has replaced the Quality Circles (QC) intervention in many organizations. QC’s tend to push knowledge and skill levels down through problem solving and group training, much like union-management interventions. QC’s tend to push knowledge and skill levels down through problem solving and group training, much like union-management interventions. The cooperative union-management or quality circle application is more likely to fit the current situation of GSM.
The union-management application would have the advantages of strategically addressing the relationships between these two groups of stakeholders and might permit a quicker resolution of “big-picture” issues. For both the union-management and quality circles application, there appear to be plenty of operating problems that groups could work with and get relatively quick results. In either case, a parallel learning structure might be used profitably. This will allow the GM and Plant Manager to retain control over power, information, knowledge and skill training, and rewards.