BM1708

STI College Koronadal

Sta. Lucia Street, Brgy. Zone III, City of Koronadal
South Cotabato, Philippines

FINAL TASK PERFORMANCE

IN
OPERATION MANAGEMENT

SUMMITED BY:
Angelica Mae Gedoria
Ques Smith Berdin
Lyka Son Boclaras
Blessie Pama
Syrill Clive Valdez
STUDENTS

SUMMITED TO:
Benjamin I. Gutierrez Jr. MBA
INSTRUCTOR

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January 2023
TASK PERFORMANCE
Lloyd’s Register Group
The Lloyd’s Register Group (LRG) provides independent assurance for quality to companies operating
high-risk, capital-intensive assets in the energy and transportation sectors, to enhance the safety of life,
property, and the environment. This helps its clients to create safe, responsible, and sustainable supply
chains. Safety has been at the heart of LRG’s work since 1760 and the company invests time, money, and
resources to fulfill Lloyd’s Register’s mission: to protect life, property, advance transportation,
engineering education, and research. LRG helps ensure a safer world through their broad knowledge, deep
experience, and close relationships.

LRG is also one of the world leaders in assessing business processes and products to internationally
recognized standards. The standards are either those of major independent bodies or ones that LRG have
developed themselves. From process design to in-service operations and decommissioning, LRG aims to
deliver complete lifecycle and risk management solutions to help ensure the safety, integrity, and
operational performance of assets and systems. Their clients are typically managing large-scale, high-
value assets where the cost of mistakes can be very high, both financially and in terms of the impact on
local communities and the environment. In such setting, organizations need advice and support they can
trust. LRG employs 8,000 people who work in 186 countries. The company upholds the principle that
business assurance is not something the business does; it defines the business. The management believes
that maximum control ensures that their people and processes are linked to their clients at a performance
standard set by the company. The main objective of the company is to gain a significant standing in the
market as their quality system becomes integrated into their normal everyday activity.

Although the company has a well-established goal, it can be noticed that individual strategies of the
employees do not follow a system or a specific metric. The same issue can be observed in the executive
performance reviews since they do not follow a system aside from the financial performance of the
company. These problem areas are attributed to the “closed-loop top management system” that the
company practices where decisions are centralized to the top management of the company. This caused
the employees to lose their voice in the continual improvement of the different processes of the company.
Some of the clients have also relayed through the feedback system of the company that the business
strategy of each individual employee does not have a significant connection to the operational
performance of the entire company. The business strategies of the employees are solely based on a
general course instead of a specific course of action required in a specific situation. After the management
has reviewed all the areas of the company that needs to be improved particularly for their people and
their system, they decided that refresher trainings must be conducted in order to align the individual
business strategies of their employees to the business strategies established by the company in the first
place. The company also plans to set quantifiable targets and goals that will measure the individual
performance of the employees. After all, the goal of the company is to integrate quality to the core
processes of other businesses.

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I. Background

The organizational issue in the case study is that the individual strategies of the employees within
the Lloyd’s Register Group (LRG) do not follow a system or specific metric, and this is also reflected in the
company's lack of a system for executive performance reviews beyond financial performance. Additionally,
feedback from clients suggests that the business strategies of individual employees are not well connected
to the overall performance of the company. This is attributed to the company's "closed-loop top
management system," where decisions are centralized to the top management, resulting in employees
lacking a voice in the improvement of company processes.

II. Statement of the Problem

a. How can Lloyd’s Register Group align the individual business strategies of the employees
with the company’s established standards through employee empowerment? (Refer to
Page 1 of 05 Handout 1.)

To align the individual business strategies of the employees with the company’s established
standards through employee empowerment, LRG can implement the following:

o Share decision-making responsibilities with employees and give them the authority to
make changes within the organization. This includes giving them the necessary training,
tools, resources, and time to make effective decisions, to ensure they are confident and
knowledgeable enough to work without supervision.

o Create a work culture where employees feel valued and have a voice in the execution of
their tasks, leading to improved work outcomes, increased employee satisfaction, and cost
benefits through improved employee retention.

o Encourage and support employee career development by providing opportunities for

employees to develop their skills and take on greater challenges and roles within the
organization.

o Management should be committed to and consistently support empowerment programs

and reinforce them in tangible ways, such as creating opportunities for employee
interactions and fostering a positive work environment.

o Managers should act as leaders and role models, and mentor and train employees in
empowerment.

Additionally, LRG management should be aware and prepared for potential resistance from
employees and unions, and work to address any concerns or misunderstandings about the implementation
of empowerment programs. Similarly, managers may need to be mindful of any resistance from their peers
who may be uncomfortable with sharing power or decision-making responsibilities.

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b. What type of total quality tool/continuous improvement method should Lloyd’s Register
Group employ in order to establish a performance metric for the employees? (Refer to
Pages 1-14 of 09 Handout 1.)

To establish a performance metric for the employees, the Lloyd's Register Group could employ the
continuous improvement method of Kaizen. Kaizen is a Japanese concept of continual incremental
improvement, and its underlying value system is the continual improvement of all things, at all levels, all
the time. The implementation of Kaizen involves the participation of all members of the organization, with
executive management responsible for establishing it as the corporate strategy and middle and front-line
managers responsible for implementing policies and training employees. The focus of Kaizen is on
maximizing customer value while minimizing waste through the reduction or elimination of overproduction,
inventory, motion, defects, waiting, and underutilization waste. To support Kaizen implementation, the
group could use tools and techniques such as visual workplace systems, statistical process control, and
standardization of processes.

c. How can ISO 9000 contribute to the overall improvement of Lloyd’s Register Group’s
organizational performance? (Refer to Page 1 of 11 Handout 1.)

ISO 9000 is a family of international standards that sets guidelines for quality assurance and
management systems. By implementing ISO 9000, Lloyd’s Register Group (LRG) can improve its
organizational performance by improving customer satisfaction, achieving continual improvement in
organizational performance, complying with regulatory requirements, and gaining credibility and
confidence from customers, suppliers, and regulatory agencies through certification.

III. Areas of Consideration

a. It must include details and facts from the case that contribute to the organizational
problem of the company.

The areas of consideration in the case of the Lloyd's Register Group (LRG) include the following:

o The lack of a system or specific metric for individual employee strategies, leads to a
disconnect between the strategies of individual employees and the overall business
strategy of the company.

o The lack of a system for executive performance reviews, which focuses solely on financial
performance and neglects other important metrics.

o The company's practice of a "closed-loop top management system," where decisions are
centralized to the top management, which leads to employees losing their voice in the
continual improvement of the company's processes.

o The disconnect between the individual business strategies of employees and the
operational performance of the company, as reported by clients through the company's
feedback system.

o The need for refresher trainings to align individual employee strategies with the company's
established business strategies.

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o The goal of integrating quality into the core processes of other businesses, which requires
quantifiable targets and goals to measure individual employee performance.

IV. Alternative Courses of Action

a. It must contain at least (2) two courses of action for every point stated in the statement of
the problem. It must also present the advantages and disadvantages of each course of
action in resolving the organizational problem.

1. Align individual business strategies of employees with the company's established standards
through employee empowerment:

Course of Action 1: Top-down approach - LRG management creates and implements the empowerment
program with little input from employees.

Advantages: Faster implementation and consistent adherence to established standards across the
organization.

Disadvantages: Lack of buy-in from employees, as they may feel that their opinions and needs are not being
considered. This may lead to resistance and lower overall effectiveness of the program.

Course of Action 2: Bottom-up approach - LRG management involves employees in the creation and
implementation of the empowerment program, encouraging buy-in and ownership among employees.

Advantages: Greater buy-in and commitment from employees, leading to higher effectiveness and success
of the program.

Disadvantages: Slower implementation, as more time is spent on gathering employee input and feedback.
There may also be inconsistencies in adherence to established standards across the organization.

2. Establish a performance metric for employees using a total quality tool/continuous improvement
method:

Course of Action 1: Six Sigma - LRG implements Six Sigma methodologies such as DMAIC and DMADV to
identify and eliminate defects in processes and improve overall performance.

Advantages: Six Sigma has a proven track record of success and provides a structured methodology for
identifying and improving processes.

Disadvantages: Six Sigma can be complex and time-consuming to implement, requiring specialized training
and the involvement of certified Six Sigma professionals.

Course of Action 2: Lean methodology - LRG implements the lean methodology, which focuses on
eliminating waste and maximizing efficiency in processes.

Advantages: Lean methodology is relatively simple to understand and implement and can be led by front-
line managers and employees.

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Disadvantages: Lean methodology may not address deeper underlying issues within processes and may not
provide the same level of improvement as Six Sigma.

3. Improve organizational performance through ISO 9000 implementation:

Course of Action 1: Full certification - LRG commits to fully implementing ISO 9000 and achieving
certification.

Advantages: Provides external validation of organizational performance and credibility with customers,
suppliers, and regulatory agencies.

Disadvantages: Can be a costly and time-consuming process, involving the development of documentation
and training for employees, and regular audits to maintain certification.

Course of Action 2: Self-declaration - LRG adopts the guidelines of ISO 9000 but does not seek formal
certification.

Advantages: Lower costs and less time involved in implementation as the certification process is not
pursued.

Disadvantages: There may be less incentive for employees to follow the guidelines, and there is no external
validation of performance improvements.

V. Recommendation
a. It must present the best course of action among the presented alternatives in resolving
each organizational problem.

It is recommended that the Lloyd's Register Group (LRG) take a multi-faceted approach in resolving
its organizational problems by implementing a system for employee performance metrics and reviews that
aligns with the company's overall business strategy and provides a clear, measurable way to evaluate
individual employee performance. The company should increase employee involvement in decision-making
and strategy development by creating opportunities for employee input and participation in the process to
empower them and improve problem-solving. Additionally, conducting refresher training can align
individual employee strategies with the company's established business strategies and improve the
understanding of the business strategy. To provide a clear way to measure and track performance and
progress toward company goals, the company should establish quantifiable targets and goals for the
company and for each employee. This will provide a structure for the employees to follow and align with
the company's strategy. It is important to note that the success of these recommendations will depend on
the company's ability to effectively implement and communicate the changes to all employees and to
monitor progress.

VI. Management Lessons Learned

a. It must discuss the takeaways from the case and the relevant things that the company
should or not do in order to avoid the given organizational problems.

The case of Lloyd's Register Group (LRG) highlights several important management lessons that can
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be learned in order to avoid similar organizational problems in the future. The first lesson is the importance
of having a system for evaluating employee performance and aligning it with the company's overall
business strategy. Without such a system, it is difficult to accurately measure the performance of individual
employees and identify areas for improvement. Another lesson is the importance of involving employees
in decision-making and strategy development. When employees are empowered and involved in the
process, they are more likely to take ownership of their roles and strategies and be more engaged and
motivated in their work. It is also important to regularly review and align employee strategies with the
company's established business strategies. Refresher training can help ensure that employees are aware of
the company's business strategy and how their work fits into it. To measure progress and performance, it is
important to establish clear and quantifiable targets and goals for the company and for each employee.
This can help provide a structure for employees to follow and align with the company's strategy. Lastly, the
management must be open to feedback and must take all feedback into account to improve, a closed-loop
management system will only hinder the growth of the company, as employees may feel their voice is not
heard. To avoid similar organizational problems in the future, companies should prioritize implementing a
system for employee performance evaluation, involving employees in decision-making and strategy
development, regularly aligning employee strategies with the company's established business strategies,
establishing clear and quantifiable targets and goals, and create an open communication and feedback loop.

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