For the purpose of this essay, I have named the organization I work for as XYZ Nigeria Limited. Please note that SCM means Supply Chain Management. Every reference to dollars is United States dollars (USD)
SECTION 1: CASE STUDY ORGANISATION
I work for XYZ Nigeria Limited with head office in Lagos, Nigeria. It is a fully-owned Nigerian company that has provided oilfield support services to the oil and gas industry in Nigeria since 2005 though was incorporated in 1997. XYZ Nigeria Limited is the parent company of five subsidiaries with three operating in Nigeria and the other two operating in Ghana and the United Kingdom. These subsidiaries provide different services in the oil industry.
The UK subsidiary provides expediting, procurement, logistics and international liaison services. This has helped XYZ Nigeria Limited partner with a major American company to provide remotely operated vehicles (ROVs) for major oil companies for offshore projects in Nigeria. Here in Lagos, Nigeria,services like technical manpower , offshore marine logistics, operation and maintenance in addition to supply chain management services are provided.
Another subsidiary in Nigeria is involved in marine services (offshore vessel operations) and subsea services(ROVs and asset integrity management). This has been in operation for just two years. The fourth subsidiary is located in Port Harcourt, Nigeria which is the oil capital of our nation. This company is involved in subsea cable lay, engineering and scaffolding services. They are also involved in facility maintenance and corrosion control services. In 2010, XYZ Nigeria Limited ventured offshore Nigeria to start operations in Ghana to take advantage of the burgeoning oil industry there. This company undertakes engineering, procurement, construction and technical services.
XYZ Nigeria Limited is a medium sized company with 52 permanent staff and over 130 contract staff on its payroll. It is a growing company which started out with 5 staff in 2006 and has significantly improved its balance sheet size from $13.57million in 2014 to $16.59million in 2015.
I work at the head office in Lagos as a Deputy Manager in the supply chain management department. My responsibilities include preparing bids in response to invitations to tender (ITT) for procurement related bid opportunities. I also prepare quotes in response to RFQs (requests for quotes) from clients. I also process purchase orders, source suppliers globally who must be listed in the approved vendors list of the clients. I provide project or purchase order(PO) updates to clients and XYZ Nigeria Limited management team as goods must reach our clients within the promised delivery time indicated on the purchase order. I also prepare invoices, submit and follow up on payment of those invoices and have a supervisory role on clearing, forwarding and logistics of goods to clients.
This role has afforded me the unique honour of bringing in the biggest contracts the company has won. I have prepared and submitted successful bids in excess of $185million within a 5year period. I particularly find my job satisfying as I see the result of my effort within a short time. Sometimes I get arequest for quote(RFQ) on a Monday and I send in my quote by Wednesday. I could have a purchase order of $480,000 in just one week. The results are obvious.
On the downside, my work is quite routine and repetitive. It’s the same cycle every day. It worries me that I will get bored soon. This is main reason I decided on obtaining an MBA so I can fill a bigger, more demanding role.
SECTION 2: INDIVIDUAL
XYZ Limited gives attention to personality but priority is given to intellectual ability or intelligence which is also referred to as general mental ability (Schmidt and Hunter2004)
In recent times during recruitment of fresh graduates or experienced hires, applicants are given psychometric tests which help to identify not only knowledge but also personality. The tests are in two parts; one focuses on aptitude while the other on personality. This organization is keen to employ highly intelligent individuals with ability to work well under pressure.
Although knowledge, skills and abilities of staff are considered, team work is highly emphasized among staff members in order to achieve goals and meet deadlines. In reality, the personality of members of the organisation is never given priority over intelligence. This position can be alluded to by the fact that intelligence has been proven to be the best indicator of good work performance (Organisational Behaviour Lecture1 part 1,2015: 15)
Management is more inclined to use intelligence and the ability to think outside the box in assessing individuals. Staff whose terminal values align with those of the company and individuals whose locus of control are internal are given celebrity status. The way it works here, the IQ of an employee will help him attain market intelligence faster than his colleagues in the same industry. This will help win contracts .The big five personality traits as elucidated by Digman(1990)(cited in Rollinson 2005)are embraced here at XYZ Limited. Staff who exhibit traits like openness to experience, conscientiousness, extroversion, agreeableness and emotional balance fit in well at XYZ Limited. The challenge is that if these staff do not exhibit high general mental ability (GMA), they will be given the back seat in this organization.
I must state that as good as this strategy has been in helping us bring in knowledge experts it is faulty in my opinion. The company has hired a few intelligent individuals who are difficult to work with. They come in and within two years are fired because of theft, rudeness to their superiors and even involving in heated arguments with clients. Last year, a staff in the finance department who was appraised as the best performing staff of 2014, defrauded the company of over $30,000.00. The fact remains that bad behaviour is best predicted by the Big 5 personality traits(University of Leicester School of Management 2015). Where studies have shown that many employees have admitted to stealing from their organisation at least once (McGurn 1988), personality must be given more priority.
At XYZ Limited, people of high cognitive ability are celebrated and financial results are what really matters to Management. In essence intelligence (GMA) is given far more priority over the personality of organisational members.
SECTION 3: MOTIVATION.
At XYZ Limited, motivation is done in various ways but Herzberg’s motivation-hygiene theory, also known as 2-factor theory (Bassett-Jones and Lloyd 2005) is the closest reflection. We are frequently reminded of the company policies as work is supervised. The work condition is good and even improving as we plan to move to our new ultra-modern 5-story corporate head office building by mid 2017. Salary is seen as a hygiene factor and not a motivator which conforms to the two factor theory (Herzborg et al 1959). It is noteworthy that staff members do not agree with this view point. Staff generally believe that salary is a good motivator.
Job security is good and the status of the company is rising fast in the oil and gas sector of the Nigerian economy. Here achievement of goals like winning a contract and the corporate recognition that follows, the demands of the work and the attendant responsibilities are seen as motivators but career advancement and personal growth is given lip service.
I am someone who gets easily motivated. What drives me is the probability that my effort will bring improvement and that the improvement will be rewarded. I get more motivated especially when my effort will yield high reward or valence. This is in line with the Expectancy Theory of Victor Vroom (Miner 2005). I took up an MBA program with a world class University because I am convinced that it will bring a marked improvement in my management skills. I also believe it will affect my world view and that there will be a reward for this effort which I expect to be significant. I expect that reward to be a promotion at my present place of work or a new and better opportunity with a bigger industry player. The attractiveness of the reward drives me. I recall once preparing a bid to supply pipes on a call-off contract and the commercial bid total was over $650million. The Operations Manager promised me a cash gift and promotion for most of us if we won. We were awarded a chunk of the contract for $97million. Staff salaries were revised but the cash gift never materialized. The point is that we worked very hard because of the reward attached to the effort.
I must mention that when my basic needs are met, I find motivation to work harder and achieve higher goals which is in consonance with Maslow’s Hierarchy of Needs Theory (Taormina and Gao, 2013). If I am struggling to put a roof over my head, I cannot function well in the office. I consider myself mentally tough but it is difficult for me to rise above such to focus on higher needs.
When it comes to organizational members, Locke’s Goal setting theory best describes why we work hard. Nothing galvanizes us more that the hardness of the task. As argued by Locke(1996), “commitment to goals is more critical when goals are specific and difficult”. This is evidenced by the fact that we have never failed to meet a deadline no matter the shortness of the time frame or the enormity of the task. The Goal setting theory does not operate in isolation here as it really works with the Equity Theory which makes staff members expect that input will at least be equal to outcome for staff to see fairness in the system. The Equity Theory makes us understand that when input is more than outcome, frustration sets in (Organisational Behaviour Lecture1 part2,2015: 15)
SECTION 4: GROUP
I presently work in a group of five that manage the supply chain activities of the company. The group has a homogenous composition when it comes to work experience but there is heterogeneity in our educational background as we have two mechanical engineers, an economist, a computer scientist and an electrical engineer. Two characteristics that affect my team the most are Tasks and Norms.
TASKS: The work of the team is task oriented. The team was judged the best performing team for 2015 because of the financial value of businesses generated. We are tasked with turning each request for quote into a purchase order. We are also tasked to deliver all goods on time and in good condition. Team members presently do not share a strong bond with the manager of the unit yet which interestingly has not affected work performance. As noted by Casey-Campbell and Martens (2009), cohesion has both a social side and a task related side to it. Team tasks are clearly spelt out so if there is a failure, it is very easy to know who to point the finger of blame at.
Following Steiner’s taxonomy (1966,1972), the team’s tasks are mainly conjunctive where each team member contributes to the final product. Someone is assigned to respond to a request for quote and another might process the resulting purchase order . A team member coordinates the shipping and clearing of the items at the port. There are times when the task is additive (when we are preparing a bid to get award for a major contract). Other times the task is complementary as each team member is given a chunk of work to do which will be added to the final submission. The fact that work is assigned to different team members, no one wants to drop the ball. We have to work together to maintain the supply chain till goods arrive at the end-users office. This has made the team cohesive in spite of personally conflicts.
NORMS: We have a few norms which guide our work. These are “unwritten rules that define acceptable role behavior of group members” (Champoux 2011). There is a slogan at XYZ Limited that the left hand must know what the right hand is doing. That simply means that all members of the team must be in copy of all outgoing mails to clients. This has helped in avoiding mistakes in percentage of duty cost or the estimation of cost of freighting say 430 pipes Korea to Nigeria for example. This was necessitated because of an error made by a team member some years back who did not know that the pipes we were shipping were welded so incurred a 20% duty but thought they were seamless pipes at 5% duty and we lost almost $13,000 due to that singular mistake.
Another norm is that you only promise what you can deliver. A client might want to give a purchase order of $480,000.00 but writes back to say, they need the items within 4weeks. It is better to lose the PO than to accept and deliver it 10weeks late as it causes many problems including fines. Sadly this norm was not followed by a colleague last year when he submitted a final quote for supply of some pipes and accepted to deliver them by air when he quoted the regular rate for sea freight.
The order was valued at $182,000 and we were contractually obligated to freight by air to meet the promised delivery time. By the time we delivered those pipes, we had spent $246,462.00. We ran into a loss of over $66,000. This loss brought punitive action with no promotion in view for any staff of the Unit.
SECTION FIVE: LEADERSHIP.
This has always been a very interesting point of discussion at XYZ Limited as the Chief Operating Officer always uses the threat of punitive action to get response from staff. It was interesting to see the most beautiful definition on leadership recently. It encapsulates all I believe about leadership and it states that “leadership is the ability to motivate, influence, and enable individuals to contribute to the objectives of organizations of which they are members” (House et al. 2004 cited in University of Leicester:2015). Leadership should motivate, influence and enable.
Before July 2013, I was reporting directly to the Managing Director (MD) mainly because I was a contract manager of a $10.4Million procurement contract with one of the oil majors. I had also helped my organization win a $97million contract with another international oil company which had just commenced execution. The leadership style of the MD on Robert Blake and Jane Mouton’s managerial grid (Molloy P.L. 1998)is almost a TEAM style approach as he is all about performance with a strong concern for people. He tells us repeatedly that he has no favourites and that his disposition to staff is largely on results. If you deliver, you become his favourite. He is a very busy individual with a strong concern for people. This was typified when in 2007(I started working with XYZ Limited in 2006) with a staff strength of just 9, I sent him a message that the security guard was ill and he told me to get him to a very expensive hospital not too far from the office. The young man needed surgery and my MD paid from his pocket the equivalent of over $2000. I was amazed and felt “safe” under his leadership that up till 2013, I had not applied to another company for a job. Now we have every staff under a health care plan and we have better structure.
The MD has shown strong leadership. He is not just a transactional leader but a transformational leader because he has motivated me to do much more than is required of me (Organizational Behavior Lecture, 2015: 44). I have worked in the office for 2 to 3 days at various times. A mattress was bought for some of us to sleep on when tired so we can continue working later at night and this was done with joy. However, things have changed with the hire of the present manager of my unit who insisted I must report to him. The structure was changed in 2013.
My present manager’s style is Authority-Obedience as he finds every way to remind us that he is the knowledge expert. The past 18months have been quite difficult and last year, I decided to put out my CV in the job market. I recently undertook a job interview with a competitor and hope to move to change jobs soon. My present manager does not show concern for individuals. Communication is improving as the Executive office had to hold meetings with staff of my department on the poor human relationship environment. My present manager is very effective when it comes to tasks but struggles with people management .
SECTION 6: STRUCTURE
XYZ Limited has evolved over the past nine years of having a corporate office. Though incorporated in 1997, the owner who is also the MD/CEO worked from home seeking contracts until 2005 when the company secured an office space. Understandably, XYZ Limited had no established form. Our structure was horizontal as it was flexible and organized around projects or business opportunities. Today in the Lagos office we have 36 permanent staff and 15 contract staff and the structure has evolved into one that is functional.
The dimensions of structural organization that have had the most impact on the organization’s staff in my point of view are Formalization, Centralization and Specialization.
FORMALISATION: This is seen as one of the building blocks of organisational structure (Carpenter n.d).This was a very difficult process for many of us. When XYZ Limited decided to be ISO9001:2008 certified in 2007, most staff did not know what we were getting into. We had trainings after trainings that including weekends as the consultant said we barely had procedures and processes written down so it was a lot of education which all of us felt was time-consuming and boring. Staff had to write a test which made them become certified ISO 9001:2008 auditors.
Since achieving the certification, we have had to be recertified for ISO9001:2010 undergoing similar training to become certified internal auditors. We were recently informed that a new Quality Management System has just emerged for 2015 and we have to be re-trained. Some staff literarily gasped in shock. As a certified corporate body, the organization has to hold two internal audits a year and two external audits which are all time consuming. Its routine but it has helped the organization a lot. Yesterday, I saw a new hire reading the service level agreement (SLA) of the Admin Unit. This was never the case some years back. My department now has a procedures manual. We have details of all bids submitted since the year 2007. We have a staff handbook and all over the building, you see the company policies hanging on walls. Every staff has the HR policy which I recently referenced to calculate my gratuity should I move on to another job soon. XYZ Limited is high on formalization and it is better for it.
CENTRALISATION: XYZ Limited has a decentralized structure as Heads of Departments and contract holders have decision making authority to a great extent. I decide which supplier to engage and which freight forwarder to use. I also decide which logistics company delivers the goods to the client. This was not the case 3years ago when one of our Directors was the final authority on all things procurement. When mails were sent for status report, he responded late that goods were been delivered as much as 170days behind schedule. This resulted in the suspension of our contract for 9months. As argued by Kessler (2010), centralization saddles managers with too much work. Today, the structure is decentralized, giving me almost 95% authority on that contract. We no longer need to be asking if the Director is presently in Hong Kong to know which number to reach him on to get status reports. This has improved our on-time delivery score from 18% to 73% and our client is pleased.
SPECIALISATION: As XYZ Limited has grown so has specialization. At a time, I would prepare both technical and commercial bids. After winning bids, I will be project manager/contract administrator. I would prepare RFQs and process purchase orders then coordinate shipping and clearing of goods at the port. I was also tasked with overseeing delivery of goods to clients. It was tasking but highly enriching. I know every part of supply chain intimately with a web of suppliers, forwarders and agents I can call on. The new hires in my office cannot say the same because even my manager who joined us in 2012 cannot prepare a commercial bid effectively. Same can be said of my colleague who joined us in 2013. He handles the clearing and forwarding part of SCM and barely knows more than that as there is clear division of labour. As Kessler(2010) suggested, specialization can be problematic when the role becomes smaller.
The major drawback that specialization has brought is that staff do not really have a holiday. When I am on vacation in New York or London, I have my blackberry receiving official emails and my laptop filled with corporate data to respond to emails or prepare a quote. We only have working vacations.
Section 7: Culture
Organizational culture can be seen in “artefacts, values and underlying assumptions” as suggested by Schein(1990). Some underlying basic assumptions can be seen at XYZ Limited. I will address two of such below.
COOPERATION AND GROUPISM: This is seen in our informal dress codes, banter heard across offices, the observation that every member of a department can be found in the same office space including their functional managers. Each staff member can park cars anywhere within the premises. Next week, all Unit heads, with Managers and Deputy Managers will be at the company’s annual retreat. We will eat together with members of the Board of Directors. We will swim, learn and have some fun together.
During staff appraisal, if a staff gets the highest score and the department gets a lower score, that staff is marked down to the level of the department. It is tough to take but it is just a pointer that the individual success cannot be celebrated over departmental success.
DORMINANT/PROACTIVE: Every member of staff has heard the story of how the MD/CEO left his father’s wealth which was handed to the eldest son(this is a culture that is seen in many African societies).He moved to Lagos after his MBA program in one of the UK Universities to start a business from his laundry room with a desktop, printer and scanner. His dad was one on the richest men in Nigeria.
One word we hear a lot is the word “proactive”. A staff that has been at XYZ Limited for 3months can be heard using that word at least once a week. Our MD saw the opportunities in the oil industry and positioned himself. He won a $2M contract from that laundry room and today the company is managing contracts worth over $250million. As Ravenhill (cited in Jeff Piersall 2014) observed “the opportunity of a lifetime must be seized within the lifetime of the opportunity.”
Section 8: Recommendations for improvement
LEADERSHIP: I believe some are born leaders while many develop leadership abilities. Some people are innately leaders. This is in consonance with the Traits Theory on Leadership (University of Leicester School of Management 2015). Trait Theory assumed that leadership depended on the personal qualities of the leader (Judge et all 2002). Leadership traits must be looked for in a more systematic way during recruitment. I know of a global company where I have had friends do interviews. After the tests and oral interviews, they were sent to work in their office for five days doing regular day to day work and after that a decision was made on whom to hire. They were looking for those with interpersonal skills and team players. This will help avoid the problem of hiring just cerebral people who lack people skills and disturb the work flow of other staff members.
MOTIVATION: Organizational members have a habit of evaluating what they contribute to the organization as compared to what they receive in return. The minimum expectation is that inputs must be equal to outcomes. If a small procurement team achieves a total of over $5.3million in purchase orders in one year and commensurate bonuses are not given, it de-motivates team members.
Two years ago, we were told that for any new business we bring into the organization which is not within our existing contract, a reward of 2% of the profit would be given to staff. It meant that if I brought new business of $200,000 and the profit was $20,000, I would be given $400. The reward was low on valence so no one took the opportunity till date.
The fact is that there will be questions like “does the pay fit the effort”(Colquitt 2001 cited in Miner 2007). Until staff feel there is a commensurate reward for their effort, motivation will be low. It has been argued that financial rewards can lead to lower performance(Sundheim 2013) but this should not mean that staff should not be rewarded in other ways. I will recommend that a small percentage of the profit be shared with high performing staff. They can get paid holidays or even stock options.
Section 9: Engagement in the module’s activities
There are 7 Activities in this module. I have completed all three elements
of the Activity, i.e. completed the required analysis using the Activity
Questionnaire, posted a message on the Discussion Board addressing the
topic(s) suggested in the Activity, and discussed the topics with other Study
Group members, for at least 6 of these activities.
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