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Managing Change and Organsation

Behaviour

CM703

Corus Case Study

Tutor: Mr. E Wanki


Names: Suwan Noo Thomson
Ian Nisbet
Yue Gu
1. How would you describe the Leadership and the leadership style of the
company and its relationship with the leadership theories that you are familiar
with

Leadership plays an central part in organisational behaviour, and a good leader can
challenge the actual state, create visions of the future, and guide group members to
achieve goal. Leadership is defined as the ability to influence a group toward the
achievement of a vision or set of goals. (Stephen P. Robbins, Timothy A. Judge,
Seema Sanghi: Organisational Behavior, 2009) In today's dynamic world,
organisations need strong leadership and effective management to oversee day-to-
day operations and achieve competitive advantage.

In this case, Corus has a strong leadership. Managers make a policy that developing
innovative products through continuous improvement and win new business as the
heart of Corus' business strategy. All the staff effort and company behaviour is for
satisfy customers' need, this helps Corus to get competitive advantage in industry.

At present, the relationship between leadership style and effectiveness is dependent


on the situation and relevant situational variables. The situational variables such as
the task structure of the job, level of situational stress, level of group support, the
leader's intelligence and experience, and follower characteristics, make the leadership
style more comprehensive. (Stephen P. Robbins, Timothy A. Judge, Seema Sanghi:
Organisational Behavior, 2009) From the case study, we find Corus adopt a path-goal
theory to improve its group performance.

Path-goal theory is that it's the leader's job to assist followers in attaining their goals
and to provide the necessary direction and support to ensure that their goals are
compatible with the overall objects of the group or organisation.(Stephen P. Robbins,
Timothy A. Judge, Seema Sanghi: Organisational Behavior, 2009) In this case, Corus
uses all the resources it has, including skills, knowledge, and experience in order to
satisfy the customers' need and reach company's goal-increase market share. The
leadership of Corus uses continuous improvement as the heart of Corus' business
strategy, which not only support its new product development to meet the customer
requirements, but also provide everyone a part to play in organisation forward. There
is a strong communication between senior management and staff, a regular training
for staff to understand how CI is improving business, and employees contribute their
ideas and expertise to help the business development. It also empowers individuals to
take on responsibility and provides them with increased job satisfaction. As a long-
term strategy, this helps Corus to outperform its competitors and increase its market
share.

2. In evaluating organisation culture, how would you describe the cultural


philosophy of the organisation, its implication on the workforce and the
organisation performances?
As an international company, Corus has a strong organisational culture that shared by
the members which use it to achieve company goals. It mainly shows organisational
cultural philosophy such as high degree of innovation and risk, people orientation,
team spirit, and instability growth.

Corus has a high level of innovation and risk taking characteristic. Developing
innovative products is one of the company's business strategy, and in order to meet
customers' requirements, Corus invested huge money on new technology
development. Lean production is adopted by the company, it is good for save cost, but
JIT also carries supply risk, this increase the difficulty of management. The CI group
meeting, presentation or employee suggestion encourages employees to participate
into improving work performance.

In Corus, there is more people orientation, which means management decisions take
into consideration the effort on people in company. Lean production and JIT method
helps company reduce cost so that helps to improve the return on investment for the
shareholders. The employees and managers empowerment help them to feel valued
and job satisfaction. This also encourages people to have a working passion and
finish task autonomy.

A team working is also an important philosophy in Corus. JIT procedure requires a


well-organized system to ensure supplies arrive and goods reach customers on time,
and each part of the company need to cooperation. CI works through the whole
organisation, it needs that every employee knows and adopts CI in their work. Corus
worked with Aircraft Carrier Design Team to make sure the product meet the
customer's requirement.

A successful increase of market share brings instability growth of company. For win
the contract with Royal Navy aircraft, Corus invest lots of money, test for product
innovation, and even quality assurance. All of this take huge money, resource, and
time, if Corus did not win the contract, the company would suffered great loss. This is
not good for company stability.

These objective factors compose organisational culture, and this culture will affect
employee performance and satisfaction, which furthermore impact the culture being
stronger.

3. Critically explore and evaluate both the leadership and the organisation
structure of the organisation and how both have impacted on the business.

An organisation can be structure in many different ways and styles, depending on their
objectives, and the structure of an organisation will determine the modes in which it
operates and performs. The leadership of Corus is followed by the organisation's
strategy, and the organisation structure is closely linked. Corus operates a matrix
structure with a separate management line for people and equipment and a separate
management line for programmes and research projects
(http://www.corusgroup.com/en/technology/organisation/).

Matrix structure in an organisation is often viewed as the most suitable for project work
relating to new product development. Matrix structure is to improve the lack of
horizontal contact, and overcome the lack of flexibility, its characteristics are forming a
special agencies for a special task, combine best of both separate structure, ensure
the fulfill the task.

The advantage of this structure is cooperation; combine the relationship between


horizontal and vertical of the company. For a specific task, specialists in each field
may play a big effect, it increase the productivity of labour and improve the quality of
project. Regular communication helps different department employees learn from
each other and improve management level.

But the disadvantage of this structure is that the responsibility of the manager is bigger
than power. The project members are from different departments, if there is no clear
encourage and punish means. Duo management is the biggest defect in matrix
structure.

This leadership makes an innovation strategy and cost-minimization strategy to help


management achieve its objective, and matrix structure support the organisation
behaviour and make organisation philosophy become stronger. All these are aimed at
the continuous improvement get market shares, and long-term business. An effective
leadership and reasonable organisation structure make a growth. But one thing need
to mention is that for a innovation driven company, a huge input in developing new
production may not have an expectation result each time. If the technology
development failure, there is a great economic loss to company. A balance on
expense and profit need to control well, and Corus should get ready for solutions.

4. How would you describe the issue of motivation in this organisation and its
impact on individual and organisation performances?

“The strength of the company is predicated on the dedication and passion of its
people.” (Bigelow, E 2010)
Motivation is defined as “the processes that account for an individual’s intensity,
direction and persistence of effort toward attaining an organisational goal” (Robbins,
Judge and Sanghi 2009, p193).

Maslow’s hierarchy of needs has no evidence to support it, even though it has wide
recognition among practice managers, however it is easy to understand and apply to
practical situations. Frederick Herzberg’s two-factor theory is more useful, as he asked
the question “what do people want from their jobs?” and concluded from his research
that the opposite of “satisfaction” is “no satisfaction” and the opposite of
“dissatisfaction” is “no dissatisfaction” (Robbins, Judge and Sanghi 2009, p196).
Widely accepted nowadays, Victor Vroom’s expectancy theory is a good practical
basis for any contemporary study of motivation. “Although it has its critics, most of the
evidence supports the theory” (Robbins, Judge and Sanghi 2009, p215). In one of my
first roles in my career, the project manager for the Philips Global Network project told
me that his job “was all about managing expectations” (Sen, S 1998). Vroom’s theory
echoes this same sentiment, that expected outcomes will determine the strength of
tendency towards a job.

In reality, however, most of the theories existing are all valid for describing aspects of
the subject of motivation, while a pragmatic approach leads to incorporating most of
them to build a new more detailed picture. Robbins, Judge and Sanghi present a new
picture which integrates contemporary theories of motivation, as shown in the
diagram.

(Robbins, Judge and Sanghi 2009, p215).

The orange boxes in the middle emphasise workers’ perception of the strong
relationship between individual effort and performance, performance and rewards and
therefore achievement of personal goals. The challenge is for employees to see the
link between their effort and their achieving their goals.
Corus adopted the method of Continuos Improvement (CI) to complement a Lean
manufacturing approach. However, it was necessary to avoid some common pitfalls;
“for most workers, Lean training focuses on how to do the job, not why they need to do
it differently. What's lacking is enterprise-wide motivational training” (Deese, M 2006).
The experience of companies who have successfully implemented Lean, can be
studied to “demonstrates the inestimable value of winning over employees by
involving them in the continuous improvement process toward a fully-realized Lean
environment.” (Deese, M 2006).

At Corus, after raising initial awareness among senior managers, they had to recruit
and train about 250 CI coaches to ensure buy-in to CI. They hired the lean
consultancy company SA Partners to spend 29 days training each coach over a period
of two years. (Corus, 2006. p18).

“Lean and continuous improvement theory teaches that shop floor personnel are
powerful resources. They have the ability to explain issues, propose possible solutions
and assist in changes. It is essential that they be involved in planning and
implementations.” (Bigelow, E 2010).

To achieve the goals of CI, Corus needed a way for employees to be involved in the
planning process, hence effective communication became a necessity.
“A ‘virtual’ Corus Academy was set up in April 2005, led by a steering group of
executive directors, together with a smaller Implementation Group. The Academy
provided an enabling structure combining technology, experience and expertise. This
encouraged an open learning environment, based on sharing best practice and
maximising the use of common approaches” (The Times100, 2010).

(The Times100, 2010)

“Learning within the company is achieved through opening communication channels. It


also occurs from encouraging everyone to become involved by suggesting and
applying changes.” (The Times100, 2010).

“Companies should encourage employees to make lean decisions because it’s the
right decision, not because they might get some sort of reward. Companies need the
employees to not just understand lean, but to believe in it... Each individual needs to
understand the impact these activities have on the company as well as the impact
they can have on their lives” (Bigelow, E 2010).
Corus CI coaches needed to explain to employees that taking on more responsibility
and becoming team oriented and constantly improving knowledge and skills would
enhance their career prospects. Corus needed to adopt a rewards structure which
rewarded in the right ways for the right reasons.

To practically achieve this it was necessary for Corus to recognize the achievements
of its employees at various challenges in the job. This should lead to advancement
and more responsibility.

An important part of the motivation for employees is convincing them, through training,
that their CI effort is directly aiding Corus to become a leading supplier of steel to
some of the most demanding markets, such as the Royal Navy contract, which was
the largest yet. Employees take a sense of pride in being part of something world-
class. The prior loss of the previous contract was ample evidence that change was
necessary.

The regular presentation to staff is important to recognize the CI work that employees
are doing, to explicitly link it to the company’s achievement of its high goals.
For employees to gain ownership in a the CI work, it was important for their opinions
to be heard and for them to see that they are being acted upon, thus the employees
are empowered and they can see that they are valued by the company.
The nature of the Royal Navy’s work added to an employee’s drive, as he feels the
responsibility borne out of the importance of his work to the taxpayer, in terms of
defense expenditure.

One final point about motivation at Corus is once the benefits became manifest to the
workforce, then it only encouraged them even further. “At Corus Tubes in Hartlepool,
CI has led to a significant improvement in employee motivation. The plant underwent a
major tidy up, with unused tools and paint being put away and equipment tagged and
stored correctly. The problems were due to bad housekeeping in the main. However,
the biggest challenge was the residue given off by the processes. It gets everywhere.
Steam cleaning and a lot of elbow grease on all the machinery and floors was very
hard work, but following painting and whitewashing, it produced positive results for all
to see. Employees were proud of what they had achieved and now enjoy a more
pleasant environment to work in.”(The Times100, 2010).

5. Critically examine and evaluate the environment that led to the change
management currently going on in the company and explain why the change
process is important

In order to explore the environment that led to the change management, there is a
need to understand the key factors of Corus that leads to the product development
and these include;
Competitors: there is a continuous development from main competitors, losing a
contract to a competitor mean loss in jobs and profit.

Innovation: new ideas and technology needs to be continuously implemented in all


aspect of the business. When Corus lost their contract, it was due to the fact that the
machinery and the process weren’t up to standards. In order to meet the
requirements, Corus needed to invest £8m, however, if these innovations were
implemented on a regular basis then it would mean that they have the possibility to
meet any future specifications. This strategy can be costly so Corus must make sure
that the new ideas implemented must be relevant to the needs of the industry to avoid
costly installations and wastage.

Shareholders: the employees at Corus will be the main group that will make the
changes happens and effectively implement them at Corus. The main drive will be the
management and the leaders of the organisation so to effectively lead the change
processes for Corus. However, these changes must also be based upon the
technological changes and the decisions for the implementation must be made with
care and consideration. In order to lead the changes, the management must plan
ahead and make all workers at Corus aware and are prepared through effective
communication and training.

The Market: The market for steel and manufacturing is highly specialized and
competitive. Although there is only one main competitor within the UK, it is till
important that Corus keep themselves competitive by measuring themselves against
the six other main industrial leaders to maintain their high standards.
According to Johnson et al (2008), change is typically a crucial component of strategy.
There are a lot of barriers such as uncertainty and lack of unaccountability amongst
the workers. However, as seen at Corus, the changes allowed them to be competitive
and gained a contract.

6. Examine the nature of team, its structure and how it has impacted on the
organisation’s performances

“Corus employees operate in a teamwork structure. Members of the teams are asked
to suggest areas for enhancement in work practice and processes. Empowerment is
the process of giving more responsibility for decision making to individual team
members.” (The Times100, 2010).

After adopting the Lean approach and CI Corus’ team structure can be identified as a
core component in the company’s performance improvements. “Lean and continuous
improvement theory teaches that shop floor personnel are powerful resources. They
have the ability to explain issues, propose possible solutions and assist in changes. It
is essential that they be involved in planning and implementations.” (Bigelow, E 2010).
Areas of wastage could be spotted more effectively by the workers directly involved in
the work, as it happened, then they could propose remedies to reduce that wastage.
The fact that there had been a team building process, through Corus’ hiring of external
consultants to help manage their transition to Lean, meant that the teams were built to
be more effective. They were no longer just groups of people happening to work near
each other, but they were now people working together on a piece of the single
workflow, sharing specific goals and a common purpose. These are among the
essential elements of the successful team (Robbins, Judge and Sanghi 2009, p363).

Other factors that make a team successful include:


Team efficacy, believing and having confidence in themselves. “The CI coaches being
trained are the champions of CI. They pass on the message to the rest of Corus’
employees. They are able to communicate the value of teamwork and empowerment.”
(The Times100, 2010).

Individual and team accountability is required to ensure that all members of a team are
pulling their weight. In Corus’ case, the team member is highly empowered to make CI
changes, but with that comes the responsibility to account for those changes. Also, the
team is a small unit of people carrying the culture of CI, hence if individuals are likely
to be influenced to adopt the dominant culture.

7. How effective do you think the company’s approach to people management


will be in ensuring improved results and enhancing the change management
process?

“A learning organisation is an organisation that has developed the continuous capacity


to adapt and change” (Robbins, Judge and Sanghi 2009, p698). and “A learning
organisation is one that is able to change its behaviors and mind-sets as a result of
experience.” (Mitleton-Kelly, E 2007) .

Eve Mitleton-Kelly of the London School of Economics goes on to explain that


“Organisational learning needs the right environment to thrive, one that allows time for
reflection on past actions and outcomes and is prepared to accept some unpalatable
truths and one that is not a blame culture in the sense that ‘mistakes’ are
unacceptable. Such an environment makes a distinction between ‘mistakes’ that are
the result of irresponsibility and lack of forethought and those that are genuine
explorations of a new idea or a new way of working. If individuals and teams are
encouraged to be innovative then they need to explore alternatives and to take
thoughtful risks.” (Mitleton-Kelly, E 2007).

The fact that Corus is now structuring itself around specialist teams, empowered to
continuously improve mean that it has changed itself to become a Learning
Organisation. However, it did not arrive at this overnight, as it had to first change to
become an organisation that embraces change. Had the leaders initiated the change
process with a series of directives from the top, then it would have been unlikely to
achieve much, as the Lean project would have been relegated to a ‘flavour of the
month’ fad. “It is vital for a company and its lean practitioners to build a workforce that
is intrinsically motivated.” (Bigelow, E 2010).

Gladly for Corus, this was not the approach that they took. Rather, at Corus, after
raising initial awareness among senior managers, they recruited and trained about
250 CI coaches to ensure buy-in to CI. They hired the lean consultancy company SA
Partners to spend 29 days training each coach over a period of two years. (The
Times100, 2010).

The CI coaches’ training involved looking at case studies and real life problem solving.
By undertaking these exercises they were themselves discovering the concepts and
values of Lean manufacturing and CI.

The CI Coaches would then work closely with their assigned teams to train them and
influence their way of thinking too. This gradual approach meant that no-one felt that
change was happening too quickly. However, talk of change was in the air, so tangible
benefits needed to be brought to the fore in order to win over potential skeptics. “The
hardest part was changing everyone’s mind initially” (The Times100, 2010). By
demonstrating the immediate benefits of working smarter, not harder, workers were
able to be inspired to continue the process of improvement and buy into the new
culture.

Examples of demonstrable improvement include the following:


“External contractors estimated a job would take eight months. It actually took 2
months with in-house help. The changes were implemented after detailed value
stream mapping discovered a lot of ‘work in progress’ (unproductive activity) as well as
potentially unsafe ways of working. It was taking the forklift truck 45 minutes to reach
one steel coil as it had to move many others out of the way. Reorganisation of the
coils into a new racking system has doubled storage capacity.” (The Times100, 2010).

“The new system of palletising spare parts, scheduled by a planner and then removed
by forklift for storage in colour-coded bays has also provided big benefits. Orders can
be cross-referenced to the pallet and fitters can find what they are looking for easily.
Many were sceptical about the CI approach but not anymore. The site is easier and
safer to work in following the clean-up which visually changed the environment from
being dark and dingy to bright and clean.” (The Times100, 2010).

As can be seen from these examples, the company was benefitting and so were the
workers. The key to successful change was to focus on individuals’ needs as well as
company needs, hence employees bought into the new culture of change.
As continuous improvement was a new way of thinking, starting gradually then
becoming a continuous process, resistance to it was minimal, as there was less to
resist. Had the process been huge changes dictated to from the top, then it would
have been unlikely to succeed, as it would have been seen as benefitting someone
else, not the employees themselves.

8. Explore the way individuals and the organisations behave, linking this with
relevant theory that you are familiar with. How would these impacts on any of
the organisation’s change processes?

The employers at Corus are empowered. From the top at senior management level,
staffs are committed to CI. There is a clear and unambiguous message through
presentations, team briefings and newsletter allowing for effective communication
such as ‘TIM WOOD’.

‘TIM WOOD’ (Thetime100.co.uk, 2010)


Each member of Corus can also make contributions or suggestions in order to
improve their working practices. In turn this gives individuals empowerment, value and
job satisfaction.

There are a few theories that can explain the individual behavior such as Maslow’s
Hierarchy of Needs and Herzberg’s motivation-hygiene theory as to why staff at Corus
are motivated and have good job satisfaction. According to Robbins & Judge (2009)
citing Maslow’s Hierarchy of Needs, after safety, there is social, esteem and self-
actualisation. Corus has created a workplace that accepts all level from top to bottom
giving the staff a sense of belonging. The staff are also recognised in their effort and
are seen as ambassadors (www.corusgroup.com, 2010), which gives them self-
esteem. A part of Corus’ vision is that that the employers is ‘by choice’, staff are there
for self-fulfillment rather than just a mean to an end. As far as Maslow’s theory go,
Corus group has managed to create a workplace that fulfills the higher-order needs.
However, by looking at Herzberg two-factor theory it is clear to see that Corus has a
lot of factors that lead to extreme satisfaction such as responsibility, recognition and
achievement.

According to Burnes (2004), ‘communication is an essential element of all the change


activities’. By having a regular and effective communication, Corus has reduced the
level of uncertainty and staffs are more involved.

As per the main text “This empowerment of employees and managers helps them to
feel valued and gives them job satisfaction. Corus benefits from becoming a more
profitable business by reducing costs, securing high value orders and maximising the
time its rolling mill operations are in use. Corus Research & Development benefits
from the business’ commitment to improvement by developing expertise and
knowledge.”

9.Explain how this company has managed it change process and argue whether
or not it has benefited the company

Corus has used two main principles to manage it change process which includes the
Lean management and the Just In Time procedures.
Since the adoption of the Kaizen (or CI), the change process is already starting and is
managing itself. The Kaizen technique focuses on making small continuous
improvements through out the organisation. This CI has allowed for Corus and its
worker to adapt to changes quickly throughout the whole organisation. The table
above shows TIMWOOD, shows the effectiveness of the communication that
strengthens and smoothen the change process. Lean management has decreased
waste, smoothen flow of work and allow the business to focus on the customer needs.

The JIT principle means that Corus produce and supply and goods as they are
needed, however, the principle also contains a lot of risk. As Corus will only stock to
meet the demands, there may be times when this may not always work or if part of the
process fails. The JIT process allow for staff to meet the demands and they require
them which means that they would have to work to changing requirements and
deadlines. This ever-changing environment gives flexibility to staff and compliments
the lean management of Corus.

10. What future recommendations for improvement would you recommend to


the company?

JIT production has become under scrutiny in the recent months from Toyota. However,
from studying the Toyota’s case through various literatures, it is clear that the JIT and
lean management was not at fault for the massive recall at Toyota. However, it is clear
that through the JIT and Lean management, the problem is when there are extreme
orders and the demands are too high that short-cut are taken and procedures are
compromise. In order to avoid the same mishaps, Corus must make sure that they
review their procedures regularly and also make contingency plans for future changes
within the organisation.

Operating an organisation such as Corus can also be difficult as large organisations


are very hierarchical and normally have a complex structure. The complex structure is
normally a barrier to communication and there is a distant between the employees and
the managements. In order to effectively continue their strategy, Corus must have
effective leaders to link and carry out the changes needed by top management. The
leaders must also have some level of autonomy and control of their area so that they
can make any on spot decision i.e. like an organisation allowing freedom to regional
offices. This level of responsibility will only come with experience and proper training,
therefore Corus must continue to train their staff so that they can be proficient and
capable.
Reference

Books:

Bernes, Bernard (2004), Managing Change, 4th Edition, Gosport, Prentice Hall, FT

Robbins, Judge and Sanghi (2009), Organisational Behaviour, 13th Edition. India, Pearson
Prentice Hall, FT

Rollinson, Derek (2009), Organisational Behaviour and Analysis, 2nd edition, Prentice Hall, FT

Johnson, Scholes and Whittington (2008), Exploring Corporate Strategy, 8th Edition, Prentice
Hall, FT

Online Reference:

Bigelow, E 2010. Lean and the true root of motivation


[Online] Updated Jan. 27, 2010
Available at: http://www.reliableplant.com/Read/22991/lean-true-root-motivation [Accessed
11th July 2010]

Corus, 2006. Corus Corporate responsibility report 2005


[Online] Available at:
http://www.corusgroup.com/file_source/StaticFiles/Functions/HSE/CorusCRR05.pdf
[Accessed 11th July 2010]

Deese, M 2006. Mastering Lean Vs. Employee Resistance: How To Bridge The Gap
[Online] Updated Dec. 6, 2006
Available at: http://www.industryweek.com/articles/mastering_lean_vs-
_employee_resistance_how_to_bridge_the_gap_13168.aspx [Accessed 11th July 2010]

Mitleton-Kelly, E 2007. What are the Characteristics of a Learning Organisation?


[Online] Updated Jan. 3, 2007
Available at: http://www.gemi.org/metricsnavigator/eag/What%20are%20the
%20Characteristics%20of%20a%20Learning%20Organisation.pdf [Accessed 11th July 2010]

The Times100, 2010. Continuous Improvement – The Corus Way


[Online] Available at: http://www.thetimes100.co.uk/downloads/corus/corus_11_full.pdf
[Accessed 11th July 2010]