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Riordan Manufacturing

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Autor:   •  July 17, 2011  •  Research Paper  •  1,797 Words (8 Pages)  •  1,722 Views

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Gap Analysis: Riordan Manufacturing

This paper will begin with a situation analysis of Riordan manufacturing. It will identify the issues and opportunities facing Riordan Manufacturing. Second, it will list the stakeholder prospective and any ethical dilemmas that may be facing the organization. Third, it will identify the end-state vision for Riordan Manufacturing. Fourth, it will detail a gap analysis between where the organization currently is and where it needs to be at a future state to be successful manufacturing company. Possible solutions for the issues facing Riordan will be examined. If the solutions are successfully implemented, Riordan can look forward to some major turnarounds which included increased employee and customer satisfaction.

Situation Analysis

Issue and Opportunity Identification

Riordan manufacturing is a global plastics producer. The company produces plastic beverage containers in Albany, Georgia; custom plastic parts in Pontiac, Michigan and plastic fan parts in Hangzhou, China. In the past two years, sales have declined and the company has had uneven profits.

Recently, Michael Riordan made several strategic changes in the way it manufactures and markets its products, in hopes of increasing sales and customer satisfaction. Changes were made in the sales and manufacturing department. The company changed its sales processes by adopting a customer-relationship management system. Customers are now services by a sales team rather than a single salesperson. The teams are made up of a sales person, product-engineering specialist, and customer service representative.

The company changed its manufacturing processes by redirecting some work to a new facility in China, and plants have been restructured into self-directed work teams. As these changes have been implemented, employee retention rates have declined. An annual employee survey discovered a decrease in overall job satisfaction, mainly in the areas of compensation and benefits.

Performance data identified 25 percent of the employees as high achievers, 70 percent mid-tier performers and a small group of people not performing well at all. The current reward system is not based on performance; instead, it is based on cost of living increases, seniority, and position. This type of reward system gives little or no motivation to work hard.

Stakeholder Perspectives/Ethical Dilemmas

Riordan Manufacturing has a blend of new and old faces making up their employee and leadership team. The company needs to get all of those employees aiming for the same goals. Its stakeholders include stockholders of the company, the senior leadership, customers, and employees. In the last decades of the 20th century, the word “stakeholder” has become more commonly used to mean a person or organization that has a legitimate interest in a project or entity. In the decision-making process for corporations, the concept has been broadened to include everyone with an interest (or “stake”) in what the entity does. This includes not only its vendors, employees, and customers, but also even members of a community where the factory may affect the local economy or environment. The value of the stakeholder perspectives is to create and maximize joint outcomes. For example, programs that satisfy both employees’ needs and stockholders’ wants are doubly valuable because they address both sets of stakeholders at the same time. By addressing customer wishes in addition to employee and stockholder interests, both of the latter groups also benefit from increased sales. (Freeman, 1984).

There are several dilemmas facing Riordan Manufacturing. The current reward system is not based on performance and does not give the employees motivation to perform well. The employees are dissatisfied with the reward system in alignment with the new strategy. The development of a performance appraisal process to ensure clearer alignment between business strategy and employee rewards would give employees a clear understanding of what is expected of them and the rewards they can receive based on performance. Manager’s decisions about compensation and reward systems should attract high-quality employees to its firms, help them retain its valuable contributors, and help to maintain positive morale among employees (Dreher & Dougherty, 2001). In order to align pay with the average pay level offered by companies competing for employees with similar skills, a salary survey should be conducted. This survey will help in determining market positioning and salary adjustments will be based on the results of the survey. The result of this will enable Riordan manufacturing to maintain external competitiveness in compensation.

The second dilemma is the company has not provided a lot of detailed information about existing career options and paths, along with information about the knowledge, skills, and experiences needed to make career moves. Part of the results of the external analysis indicated employees felt the current system is secretive. Succession planning in business represents both training and development activity and a staffing activity ( Dreher & Dougherty, 2001). To be ready for future staffing needs, Riordan must forecast both the demand for and supply of talent for key job assignments such as research and development, information technology and sales. When forecasting supply, Riordan must focus on how many people will be available in the future and the knowledge, skill, and ability mix to be represented by these people. Riordan’s employees are currently baby boomers, and will be reaching retirement in the near future. GenXers and GenY employees have radically different perspectives on rewards and motivation, valuing everything from job satisfaction, job interest, and pay. If future skill shortages are predicted, and the current mix indicates this is true, one of two remedies may be called for. Either Riordan will need to accelerate training and development, or pursue a more aggressive external hiring strategy. The business strategy, labor market conditions, and technology need to be considered when making decisions about initiating succession planning.

End-State Vision

Riordan Manufacturing has successfully made organizational strategy changes that has increased innovation, recognized the value of teamwork, and reached new customers with new products. Sales have steadily increased. All executive


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