MGT425

Individual Assignment

Submitted By
Maliha Tahsin Shafa
ID: 19104153
Section: 01

Submitted To
Zaheed Husein Mohammad Al-Din
(Senior lecturer, BRAC Business School)

Date:
22nd April 2022
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Executive Summary

For the paper, I chose topic 3, which discusses two scenarios involving succession
management. The following report provides an overview of two companies, JingZang and
K&K Banking Corporation, who are dealing with issues as a result of two senior positions
being vacated due to an unexpected event, the risks of having improper succession
management and not having one, the challenges of succession management, why it's
important to have a succession management in an organization, and how companies can
avoid the consequences of not having a proper succession plan. I gathered material from
websites and other secondary sources, conducted a thorough investigation, and offered
recommendations for both firms to retain them, which may help the firm perform better in the
future.

The report starts with an introduction that gives information about the two companies. The
report then goes into the consequences of not having a succession plan, such as financial risk,
loss of experience, and so on. Then, using secondary research data, it discusses the challenges
of implementing succession management in a company, and ultimately, it makes some
recommendations to help them avoid similar problems in the future. With the knowledge we
gained in our lecture about succession management, I tried to cover those components in this
report.
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Introduction-
In scenario 1, Mr. Lee Juan, despite controlling all operating systems and being a reliable
and vital resource for the company, could not be a fully flawless manager because he failed to
identify a suitable successor. Because of not identifying a prospective successor in advance,
his sudden absence and uncertainty of his return the company is in crisis. Because there is no
designated backup, Mr. Lee's failure to execute his responsibilities has a negative impact on
the organization. Due to the lack of an immediate replacement for Mr. Lee, employees may
compete for the post and indulge in power struggles to fill it, causing the firm to suffer,
resulting in reduced productivity and lower work quality.

In scenario 2, despite the fact that the president of K&K Banking Corporation had chosen
his successor, there was an issue. And the issue is that there aren't enough options for taking
up the successor's role. The president's chosen star employee's son is sick; therefore, the
chosen replacement can't manage the great responsibility and stress of the job for the time
being. Because there aren't many options for the future vacant post, no one will be able to fill
it right away. Because the president had no other employees on his list as potential
successors, choosing a new replacement during his retirement will be a bad decision because
adequate information will be lost without the knowledge transfer and skill in that capacity
under the former incumbents' leadership.

Now I'm going to discuss different aspects of succession management , and

according to Rothwell, there are four key reasons for succession planning. First and
foremost, succession planning is the process through which an organization ensures that "the
appropriate people are in the right spot at the right times." Second, succession planning helps
to mitigate the negative effects of downsizing. Third, succession planning promotes
multiculturalism and diversity. Fourth, succession planning establishes a framework for
developing career routes, training, developmental programs, and individual career
movements.

Since having a succession plan is critical, there are some risks associated with not having
one. Many businesses rely on a last-minute hiring procedure to replace vacant leadership
roles, which is an unintentional barrier to their survival. The drawbacks of not having a
succession plan in place ahead of time, which goes with scenario 1, are described below-

1.Financial Risk-
The uncertainty of a sudden leadership departure is enough to create financial harm. Some
businesses bounce back, while others never do. As we can see in scenario 1, Mr. Lee plays a
vital position in the company, and his unexpected departure might easily frighten some
investors, as stakeholders want the activities of their invested company to run smoothly.
Appropriate talent acquisition corresponds to long-term corporate viability through strategic
succession planning initiatives.
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2. Loss of knowledge and experience-

When a prominent employee like Mr. Lee departs the company due to an unforeseen
circumstance, he takes away the wealth of knowledge about the systems, processes, and
politics of how the company operates that he gained while working here. All of that expertise
is gone after a sudden resignation or retirement, and it is difficult to pass on to the successor.
3. Increase the employee turnover rate-
Because Mr. Lee was forced to step down from his position due to illness, there is a clear gap
to be filled. Employees may compete for the position as there is no clear succession plan in
place, resulting in a volatile work environment where other employees and their subordinates
will be unmotivated to accomplish their tasks, resulting in low productivity and unwelcomed
staff turnover.
4. Failure to satisfy the needs of the client-
Mr. Lee recognized the company's regular clients' preferences and deal viewpoints because
he oversaw all operating systems. Because of his absence and the lack of a successor who can
fill his shoes instantly, the workload on others has grown. In addition, a lack of adequate
experience might have an impact on customer service quality. Many clients will turn to
competitors if their needs are not satisfied.
5. Recruiting or promoting errors to fill the urgent gap-
Because Mr. Lee is unavailable for uncertain timeline, the pressure to fill the post as soon as
possible may lead to the selection of the incorrect candidate. Hiring someone who isn't
entirely qualified for the role, whether it's an internal or external recruiting, can be a costly
mistake. Lack of experience or a cultural fit with the organization can put the company in
jeopardy.

A succession management process is straightforward, yet it is difficult to put in place due to a

number of challenges that limit the chance of succeeding. One of the challenges-
Elitism-
In scenario 2, we can notice that the president has only chosen one successor. The
corporation was too relaxed and didn't invest sufficiently in anyone else for the role because
the president was confident in his star employee. Keeping only one successor on the list is a
bad idea since it may demotivate other employees who believe their efforts are going ignored.
Furthermore, training only a chosen individual for a senior position may lead to the
perception that he is a "elite," leaving the organization with no options in the event of an
unplanned catastrophe, as in scenario 2.
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How succession management could lessen the severity of the consequences-

The goal is to reduce the negative implications of a key senior executive leaving
unexpectedly, as well as to determine how and when management, ownership, and control of
a corporation will be transferred to subsequent owners. The disadvantages of not having a
succession plan and the negative consequences of having an inadequate succession plan were
discussed in scenarios 1 and 2, respectively. Proper succession management could alleviate
these repercussions by placing the right person in the right place at the right time to meet the
company's needs. Many businesses have unofficial processes in place for developing and
progressing personnel, which may or may not include a list of high-potential candidates.
Succession planning and management entails more than merely compiling a list of potential
successors. Rather, it is a system of development activities and opportunities that are matched
with company goals so that individuals may put their new abilities into practice.

Some recommendations on how JingZang and K&K Banking Corporation can

avoid such issues in the future-
The first and most important recommendation for both companies is to plan and implement
appropriate succession management, which will prepare them in advance to deal with
situations such as unexpected absences, retirement, and departure. There are five steps to
proper succession management:
1.Connect succession planning to the organization's strategic goals-
The identification of key jobs inside a company is one of the most important aspects of the
succession planning and management process (Fulmer & Conger, 2004). It is important to
remember that the future successor for both scenario 1 and scenario 2 companies should be
someone who is capable of achieving the company's future goals and representing the
company globally. Because it is a manufacturing company, the future manager should be able
to handle and expand the operating systems, in scenario 1. In scenario 2, it is a bank, thus the
successor for any top position should be someone who can match the bank's vision of stable
growth and development, as well as high-quality and quick service to financial market
clients.
2.Identify competencies and skills for key areas and positions-
To develop selection criteria, you must first evaluate the competencies needed for the key
areas and jobs outlined in Step 1, such as soft skills like decision-making, communication,
enthusiasm, and the capacity to analyse opportunities etc.
3.Identify employees with great potential-
It's now time to identify the employees who have the potential to fill critical roles and sectors.
There are several ways, such as temporary replacement, that could help cope with the
sudden departure in both scenarios. Then there's strategic replacement, which identifies the
leadership skills required based on the company's ambitions and employs a 360-degree
review process in which everyone from the supervisor to co-workers provides input on
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performance. Also, there should be a list of many prospective successors (a mistake made by
K&K Banking Corporation in not having one); this would ensure that the best candidate wins
due to hard effort and superior training, and there will be alternatives if someone quits.
4.Provide Developmental opportunities and experiences-
Now is the moment to incorporate learning, training, development, and the transfer of
corporate knowledge strategies into succession planning and management of personnel
through methods like as promotions, job rotations, special assignments, mentorship, and
so on. Supply gap-Some essential roles, such as those in scenarios 1 and 2, do not have
immediate backfills. As a result, a strategy must be established that includes actions for
resolving the replacement issue. Marginal contributor- Potential employees whose
performance falls below the industry level will be provided training, and even if no
development occurs, they will be removed from the replacement list.
5.Measure the results-
Both JingZang and K&K Banking Corporation can assess their planning by looking at senior
roles with backfills, developmental positions with new hires, and the movement of people
through promotions, retirements, and departures and so on.

Conclusion-
Finally, in the face of issues like delays in filling critical positions, a lack of qualified internal
candidates, talented employees leaving to pursue other career goals, or internal replacements
failing in new leadership roles within the organization, succession planning and management
have become fascinating, which is why every organization should have one. As previously
said, both companies will be able to avoid future repercussions and gain flexibility by
adjusting to unanticipated occurrences from both the internal and external environments
through practice and creativity if they follow the succession management stages.

Reference-
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Wang, X. (2019). Top Management Change, Succession Source and Enterprise Risk
Decision Tendencies. Open Journal of Social Sciences, 07(11), 215-233.
https://doi.org/10.4236/jss.2019.711015
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