STARS QUESTION MARKS
4.6 Feasibility Testing
4.7.4 Cultural Aspect
4.7.3 Command Aspect
There is an element of command in strategy formulation, but not necessarily from the general manager. There appears to be some different loci of controls. The management division can be easily sensed. For example, some managers avoid saying 'we decided', instead they would insist on saying 'the management decided'. Some will say they are not talking on behalf of management, while they are actually taking the position of a representative figure of Blendcor. This reflects their lack of power, thus being pulled by the strategy commanders.
The commanders portray exactly the mighty image. They will really ask in an employee is opposing them. They use too much coercive power. It thus forms part of culture to the employees as they whisper. There are grapevine stories of who actually run the company, but not the general manager.
There is a middle race, Asio-Africans, which enjoy the alteration of job descriptions and minimum job requirements. The conditions of a position are altered to suit this class of employees.
The last class of employees is the lower race, Afro-Africans, which are denied positions. It can be altered to suit a less qualified candidate of the upper races at the expense of a suitable qualified applicant of this class. Or the position is dissolved or frozen.
These are the divisions that dilute the culture at Blendcor. They are direct result of the Group Areas Act.
To emphasize these divisions, the functional heads try to create departmental culture.
These strategy commanders weaken the organizational culture even further.
This analysis indicates an urgent need to transform the culture. Therefore the management face must reflect the new country. Chapter two suggests that the company must transform the management, and employ the people who are willing to change the corporate culture. The organizational culture must reflect the national cultural trend.
4.7.5 Enforced Choice Aspect
To some extent the strategy is enforced at Blendcor. It has become one of the largest blending plants of Shell or BP. Therefore there is a pressure to cut the costs, and achieve economies of scale that are comparable to the best blending plants of the world. There is also a pressure of comparison to the plants of the Eastern countries, which have low-wage labour.
Competition is putting an upper limit to the pricing strategy, thus has to reduce the costs in order to be profitable. Engen is semi-automated, but the concept is not acceptable to the government. Therefore manual operation is enforced to some degree.
4.7.6 Political Aspect
The bargaining power of employees is greatly reduced by contracting strategy.
Therefore management takes advantage of this, and enforces any strategy that is not suitable as far as employees are concerned.
There is quite a lot of time spend by management to dilute the union power. They will go an extra mile in order to prevent the union from gaining the majority. And this has a direct impact on poor organizational culture.
4.8 Evaluation of the Organization
Having evaluated the strategic outsourcing of the laboratory, now it is the time to evaluate the organization in general. For an organization to propose a non- recommendable strategy does not necessarily mean everything it does is bad. There are some merits and flaws as well.
4.8.1 Blendcor Merits and Flaws
The following passage will evaluate Blendcor based on Table 2.1, which identifies the sources of distinctive competence at different stages of the life cycle.
Operations. Blendcor has managed to reduce cost of production. The retrenchment and downsizing strategies has assisted in this achievement. The employment of youth who still have low salaries is a plus in costs reduction; however, there is a trade off as far as experience effect is concerned.
Subcontracting of certain portion of production is recommendable, but there should be a limit to outsourcing.
The shareholders have assisted a lot in ensuring maximum capacity utilization. The joint venture and the recent acquisition of Castrol by BP are great plus in reducing capacity. This is easily observed in stable unit costs of a lubricant produced. If inflation is taken into consideration, this a reduction in unit costs. Therefore these also contribute in costs reduction, which matches the mature lubricants industry of South Africa.
As far as suppliers are concerned, Blendcor has god relationship with them. This is a real advantage, but it is rarely used. The company has not cultivated the conditions of
on time delivery. There are problems of late delivery of products ingredients.
Therefore the company has not taken advantage of the good relationships with the suppliers.
Research and Development. This should be attributed to the marketers. They have managed to reduce the costs by centralizing the research and developments. They each have a single research and development. The other laboratories ensure that the products meet the marketers' specifications and local authorities'.
Personnel. As mentioned above that Blendcor has applied retrenchment and downsizing strategies, there is no need to repeat the same discussion. However, this section will deal with efficiency.
This is a real weakness at Blendcor. As the value chain analysis indicated, there are numerous inefficiencies in this company. The organization has not done sufficiently to improve efficiencies. After retrenchment and downsizing is complete, there is a need for a project to improve efficiencies.
People are different from machinery assets in that they possess emotions. They also have needs. Although this looks costly, they are sources of core competencies. The machinery assets are not since every organization can buy them, and the suppliers are more than willing to sell their equipments in order to increase profits.
The organization has not catered for emotional appeal of human resources. The organizational culture has been ignored. Blendcor is not proactive in developing an environment that promotes strategy implementation.
Maybe it is time to change along with the country's developments. It could be a time for Blendcor to catch up the pace of national transformation. Dwelling too much on the long won political fight could prove detrimental later on, if not now. It is time to cultivate a culture that is up to date and enhances the strategy implementation.