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This qualitative case study is an organizational assessment of using current organizational effectiveness theory of XYZ Company

    
         

 i.    Abstract

This qualitative case study is an organizational assessment of using current organizational effectiveness theory of XYZ Company. It also examines the history of organizational effectiveness theory and discusses the attributes and characteristics of current day organizational effectiveness. Organizational effectiveness theories have been tested, implemented, removed, and re-implemented time and time again. Current day organizational effectiveness theory approaches techniques with a more holistic perspective by going beyond producing the most gadgets to producing the most gadgets in the most efficient, employee and environmentally friendly way. Current day organizational effectiveness theory considers employee’s emotions, concerns, and input; and relies on employees for creativity and innovation to create competitive market advantage.

1.      Introduction

1.1. Background

After April 2003 (liberation of Iraq from Saddam Hussein regime) Iraq’s economy has been changed centralized economy to open market economy and due to the need of reconstructing the country after the military operations of the liberation, Iraq has signed several emergency agreements with the World Bank Group – WBG (a United Nation Organization) to finance specific sectors selected by the Iraqi Government, but due to the fact that during the period between 2005 and 2015 Iraq was considered a high-risk country because of the bad security situation and the armed conflict, the WBG was not able to monitor its funded projects on the ground. The WBG considered the option of hiring a third-party monitoring agent – TPMA to follow up and monitor projects funded by the WBG and implemented by Iraqi Ministries.

At this very time an Iraqi firm was established in October 2005, Etiman Management Consulting Services – EMCS, was founded by two ambitious Iraqi Nationals Mr. Madhi Qasir and Mr. Tahir M. Hasoun who wanted to establish a consulting services provider in Iraq. EMCS was located in Baghdad with two branched in Irbil (north of Iraq) and Najaf (mid-south of Iraq) and hired qualified civil, electrical, transport, environmental, communication engineers and qualified accountants and financial staff then started seeking work opportunities by communicating with private sector firms and state-owned enterprises by offering engineering and financial consultancy services.

The WBG announced an international competitive bidding for the TPMA in the DG market site and the UNDB site, many international and Iraqi local firms including EMCS submitted their technical and financial proposals. Due to the high security cost the International firms were rejected, eventually EMCS won the bidding and signed the TPMA contract with the WBG as the Fiduciary Monitoring Agent – FMA for the WBG in Iraq and started the work on January 2006.

1.2. Description of the Organization

The company activities are grouped into two segments:  Engineering Consultancy which covers many of engineering fields such as civil, electrical, transport, environmental & communication and financial and accountancy Consultancy.

EMCS developed the capacity of its staff to the level of international standards by participating in many WBG training workshops which enabled the company to monitor WBG funded projects in Iraq in different sectors; such as water sanitation, construction & rehabilitation of schools, textbooks, roads & bridges and energy.

EMCS monitored projects funded by the WBG through grants (Iraq Trust Fund – ITF), loans (International Developing Association – IDA and International Bank for Reconstruction and Development – IBRD) for the period from January 2006 till the end of the contract with the WBG on 30 June 2016, during this period EMCS provided on job training and technical assistance to the Iraqi implementing agencies according to WBG’s guidelines and procedures, as a result, Iraqi officials built their capacities based on international standards.

The fiduciary contract of EMCS with the WBG was renewed several times thanks to the excellent service provided by EMCS, but in early 2016 the WBG informed EMCS that the last contract ends on 30 June 2016 will not be renewed but will be terminated due the fact that the security situation in Iraq has improved and the WBG staff can now visit the projects on the ground.

EMCS was an added value to both the WBG (by providing close follow up and monitor) and to the Iraqi implementing agencies (by providing guidance and training to familiarize them with WBG guidelines and procedures).

1.3. Statement of the Problem

From January 2005 till June 2016 the researcher served as assistant field manager, field manager and finally sector manager with the financial department of EMCS. With the expected closure of the contract of EMCS with the WBG, the company was concerned with how it will function. The CEO of the company decided to close the EMCS after the end of WBG contract and release the employees.

1.4. Purpose of the Study

The company’s goal was to extend the contract with the WBG for at least two years but the WBG informed EMCS that no further extension will be made to the contract and it will be terminated on June 30, 2016.

The purpose of this study is to question the CEO’s decision and to know if it was possible for EMCS to stay in the business after the termination of of the WBG contract.

1.5. Assumptions of the Study

The researcher assumed that the employees would accept salary partial reduction for a few months in order maintain their jobs until EMCS sing new contract either with state owned enterprises or with private sector firms. This assumption is based on the excellent reputation of the EMCS which was built through working with the WBG for ten and a half years, also on the good relationship with the WBG projects implementing agencies.

2.      Literature Review

Etiman Management Consulting Services – EMCS, was founded by two ambitious Iraqi Nationals Mr. Madhi Qasir and Mr. Tahir M. Hasoun who wanted to establish a consulting services provider in Iraq. EMCS was located in Baghdad with two branched in Irbil (north of Iraq) and Najaf (mid-south of Iraq) and hired qualified civil, electrical, transport, environmental, communication engineers and qualified accountants and financial staff then started seeking work opportunities by communicating with private sector firms and state-owned enterprises by offering engineering and financial consultancy services.

EMCS won the bidding and signed the TPMA contract with the WBG as the Fiduciary Monitoring Agent – FMA for the WBG in Iraq and started the work on January 2006, but upon the WBG contract termination on June 30, 2016 EMCS was closed due to lack of other work opportunities.

So, was EMCS another small business failure firm?

The review examines the different perspectives (causal descriptions) under which small business failures have been discussed. We are ending with a critical evaluation of conventional small business failure theories as well as lessons that could be learnt from the existing theories.

The theories indicate that the business success or failure processes are related to certain business management principles or theories to which business owners need to adhere in order to stay in business (Beaver & Jennings 2005:9). These principles may be described as the key success factors for business survival, implying that once they are non-existent the business will have to close. The business management process thus revolves around the nature of objects and their causal powers (Fleetwood & Ackroyd 2004:11; Danermark et al 2006:54). business failure factors need to be understood in terms of how the principles are interpreted by the business owner as per the value judgement in Section 2.7 (Danermark et al 2006:200;

McKenzie & Sud 2008:123).

There is also the fact that a discussion of the business failures would not be complete without taking into account the broader socio-economic environment in which the businesses operate (Shook et al 2003:379). For explanatory theories to be relevant, the local context needs to be taken into account (Wickham 2006:209). The discussion thus ends with an indication of how the above issues need to be taken into consideration in the processes of data collection and analysis to relate the explanatory factors underlying the business failures to local conditions

3.      Methodology

Using assessment tools successfully

The process in which a tool is used is more important than the tool itself. Tools work best in a process facilitated by a skilled consultant. Funders tend to believe it is better to ask a nonprofit to share a summary of its organizational assessment findings with them rather than ask to see the actual results from the tool. Funders do not frequently use organizational assessment tools to assess grantee progress over time. Only a few funders report good experiences using a tool for this purpose, and these experiences were all facilitated processes with a small group (e.g., a learning community) using an adapted or custom-designed tool.

An organizational assessment tool, when used with in a nonprofit learning community, can be used successfully to monitor progress to organizational capacity benchmarks.

Program officers may not feel knowledgeable enough about nonprofit organizational capacity and effectiveness to confidently participate in conversations about organizational assessment; these individuals would welcome some training or help from a more knowledgeable colleague within their foundation.

Why Assess Organizations?

Assessments have longed been used for business and operations management. Assessing can act as a leading indicator for shifting performance (for example, “are we retaining our strong performance in these areas?”) and for identifying program strengths and/or weaknesses (Hallam 2003). In addition to these internal roles for assessment, it is equally important outside the organization. Assessing can be used to create cross industry comparisons or assist in benchmarking against competitors and standards (such as Baldrige). These results can serve to motivate the organization, boost morale, help complete sales (by sharing assessment results with customers) and even receive recognition or awards. When an enterprise assessment is shared with suppliers, it can be used to align and motivate all companies and players throughout a supply chain to drive a smooth production process and boost output. In addition, assessments are becoming an increasingly important tool in process and departmental improvement, and new tools offer organization – wide assessments that provide a holistic vantage for identifying the complex interactions across a broad enterprise. In order to design, execute and measure an enterprise transformation strategy, having assessments that evaluate multiple dimensions of performance is crucial, both in terms of understanding the current state and charting out the transformation plan. Increasingly, enterprises are trying to leverage the multifaceted nature of performance in order to gain a competitive edge and maximize value delivery (Kueng 2003; Burton and Obel 2004). Early stage assessment helps to identify performance gaps and prioritize points of focus and plays a role in helping to generate a future – state vision for the organization as well as investment precedence. By showing problems with process flow or bottlenecks in organizational performance, assessments provide a key tool in identifying opportunities for improvement. As the transformation plan is implemented, ongoing assessment can then offer feedback and a measurement of progress and return on investment. With this feedback, the transformation plan can be reviewed and revised over time. During enterprise transformation, having a strong and useful assessment tool is crucial in identifying where an organization is, where it wants to go, its rate of progress, and how best to approach that future state (Nightingale and Mize 2002). And with so much evidence to suggest that simply measuring something leads to improvement (Hauser and Katz 1998), organizational assessment ties in to the incentives and motivation for the overarching transformation plan.

Challenges to Assessment

The benefits to organizational assessment are many, but  there  are challenges  to  the  assess entire process as well. When looking at program or process assessment, it is easier to find assessments that work across companies and industries. But at the scale of organizational assessment, there is greater variability, both in structure and in values (what should be measured). As a result of this variability, it is significantly more  difficult  to  create  a  one-size-fits-all  tool  for  assessment.  The needs and values of a manufacturing business are quite different than those of a service – oriented business.  As a  result,  organizational  assessments  have  to  make  a  tradeoff  between  industry  or sector  granularity  and  broad  applicability.  Even then,  organizations  will  bypass  assessment, feeling that their unique situation cannot be reflected by a general assessment, but this is often a misconception. Organizations may have unique challenges, but this does not stop an assessment from being useful; instead, the transformation plan and goals must be internally derived to reflect the unique nature of the business.

Other   challenges result from conflicts between leadership and assessment tools.  Organizational assessment may highlight different foci than the leadership intends, or may be tailored or executed in a way  that  simply  reflects  the  leadership’s  desired  outcome.  He nce an important challenge to good assessment is commitment at multiple levels of the organization, both  to  the assessment tool and its role in the broader transformation process. For the value of an assessment tool to be aximized,  an  organization  must  commit  to  using  a  tool  over  a  period  of  time (switching tools in the middle of a transformation plan undermines the role that assessment plays in  the  whole  transformation  plan) ,  so  it  is  often  beneficial  to  begin  assessment  on  a  pilot  basis with selected projects before making a larger commitment. Only as familiarity and understand ding of an assessment tool grow (as well as historic data), will the organization come to fully trust and therefore benefit  from  assessing.  Just  as  with transformation,  assessments  must  be  used  to complement leadership (rather than undermine or blindly support leadership values), and require commitment to accurate and on-going usage from those implementing the tool. A final challenge of assessing an organization is the cost or resource allocation required during the  assessment  process.  Either  the  organization  must  invest  in  an  outside  assessment service or key internal personnel must be recruited  to participate in the assessment process. This challenge can undermine the near-term support for ongoing or regular assessments. Yet as the benefit and importance  to  organizational  transformation  described  above  shows,  the  value  from  assessment often  makes  such  an  investment  worthwhile. One of  the  ways  successful  organizations  justify assessments  is  by  making  them  integral  to  the  transformation  cycle,  as  the  Check  step  in  every Plan-Do-Check-Act cycle. In that light, assessments are a part and parcel of improvement

Assessment Tools

With an increasingly number of organization assessment tools (both public and proprietary), we have opted to bound are analysis to publicly available tools that produce a numeric performance scores (useful for comparing across assessments and measuring transformation success). Of this subset,  we will  address  four  different specific  assessment tools  in  this  paper:  the  Malcolm

Baldrige   National   Quality   Award,   the   Good   to   Great   Diagnostic, the   Lean   Enterprise Self – Assessment  Tool  and  the  Shingo  Prize  for Operational  Excellence. Each  is  introduced below along with relevant  background. Two of the assessment tools are also  business recognition awards,  which  have widely published  their  assessment  criteria  and  process.  These  are  included here  because organizations  have been  able  to  adapt published  criteria  to  create  internal assessment  tools  (Abdimomunova  2010).  Of  course,  such  award -based  assessment  tools  have added  incentives  for  implementation.  In  addition  to  measuring  and  assessing  transformation  or other  internal  processes,  the  organization  focuses  on  improving  qualities  that  can  draw  in national or international recognition. Baldrige Prize. The Malcolm Baldrige National Quality Award is a program funded by the US Department  of  Commerce to  recognize organizations  that demonstrate   performance  excellence, as  well  as  world Class  product  or  service  quality (NIST  2009).  The  program  has  been managed by  the  National  Institute  of  Standards  and  Technology  (NIST) since  its  inception  in  1987.  The program  has  been viewed  as  successful  in   motivating  and  driving  quality  and  performance values,  with  net  private  benefits  to  the  economy  estimated  at  over  $24  billion (Link  &  Scott 2006).

The  program  has  a  clearly  defined  and  published  set  of  criteria  for  the  Baldrige  award,  which includes  scoring  guidelines  and  self – analysis  tools (such  as  preliminary  and  supplementary self – assessments) . Although designed for evaluating and awarding the national prize, the criteria reflect  a  range  of important  organizational performance  indicators  that are used  to  drive  a transformation  plan. The  assessment  involves  mapping  out  key  processes  and  answering qualitative  questions  regarding  organizational  strategies  and  practices;  these  questions  are  then scored  against  clearly  defined  criteria. Each  score  can  then  be  combined  to  a  total  score,  up  to 1,000 points. The Baldrige criteria provide a thorough, quality and performance driven assessment that can be performed internally. It’s  applicable  to  many  sectors,  and  has  complementary  criteria sets specific  to  certain sectors  and  sizes (including  healthcare, education,  manufacturing,  and  small businesses).

Good  to  Great  Diagnostic. The  Good  to  Great  Diagnostic  tool  is  based  on  the  book Good to Great: Why Some Companies Make the Leap… and Others Don’t by  Jim  Collins  (2001).  In  this book,  1435  good  companies  are  examined  to  identify  those  that  made  a  substantial  and sustainable  in crease  in  performance  (a  sudden  inflection  point).  Of  those  that  made  this performance  shift,  11  were  selected  and  examined  to  understand  what  indicators  and  common elements  may  have  influenced  their  exceptional  performance.  From  this  analysis,  a  book  of observations  and  best  practices  was  created  as  a  guide  for  achieving  “greatness” in  companies (Collins 2001). Along with the book, Jim Collins developed a diagnostic tool for differentiating between “good and “great”. The assessment includes ten key inputs (concepts that need to be implemented) and 3  key  outputs  (indicators)  to  measure  both  the  implementation  of  the  concepts  identified  in  the book as well as trends in their implementation.

The  tool  is  broadly  applicable  (the  11  companies  used  were  from  a  range  of  industries  and sectors,  and focuses  on  the  common,  cross-

sector  best  practices).  Overall,  it  examines  quality leadership  and  commitment  to  core  values,  with  a  willingness  to  approach  all  others  ideas  with flexibility and honesty.

The  Good  to  Great  Diagnostic  is  easily  implementable  and  provides  a  summary  of  some  top level, broadly assessable indicators that are associated with  and demonstrated by companies that are able to achieve strong growth patterns over a substantial amount of time.

The researcher conducted an organizational assessment after the closure of EMCS to see if the decision of the CEO was justified or not by using assessment tools

S.M.A.R.T. assessment tool;

  • Specific

The researcher goal of this study is to see the possibility of EMCS to stay in business and keep working in Iraq by partially reducing employees’ salaries till the company secure other opportunity, the employees will bear with the company for short time (2-6) months, the only limitation was that few employees refused partially salary reduction for a limited time.

  • Measurable

Keeping EMCS in the business can be measured by several ways; qualified staff, understanding the circumstances of the company, reduction of salaries, taking unpaid leaves to lessen the overhead cost to the minimum till other opportunity is secured.

  • Attainable

From our perspective, Keeping EMCS in the business is attainable, it will not be easy for the employees to accept salary reduction but taking into consideration that this reduction is temporary and the result will be to maintain this highly qualified staff then the employees will accept this tiny sacrifice.

  • Relevant

This tool shows how relevant it is for us to achieve our goals,

  • Timely

In our case a deadline was set for three months after the WBG contract ends, for searching other opportunities and since it is reasonable time the employees will accept salaries reduction for the coming three months and to keep working with EMCS in return.

S.W.O.T. assessment tool;

  • Strengths: EMCS reputation in technical and financial sectors was the biggest strength as it was build throughout 10 years and a half of hard working with the Iraqi implementing agencies.
  • Weaknesses: the only weakness I can identify is that EMCS didn’t use its good relationship with the Iraqi implementing agencies to seek other possible contracts.
  • Opportunities: EMCS diversity of specializations could make it easy to seek opportunities in various fields with almost no competitors.
  • Threats: with no possible competitors and diversity of staff specializations, the only risk observed is spending a couple of months seeking new opportunities.

P.E.S.T. assessment tool;

  • Political: the political situation in Iraq was not stable.
  • Economic: the economic situation in Iraq was good due to the high oil prices.
  • Sociological: its hard to say that the surrounding society can affect the company, as there is no direct contact.
  • Technological: most of the staff was highly qualified so no effect can be seen for emerging technology.

M.O.S.T. assessment tool;

  • Mission: most likely the business will go supporting public sector.
  • Objectives: highly qualified staff and good firm reputation will help attain the mission above.
  • Strategies: temporary reducing staff salaries till assuring new opportunity will definitely help move forward.
  • Tactics: discussing the current firm challenges with the staff will create a common understanding to how firm strategies will be implemented.

4.1. Conclusions

The decision of the CEO was wrong, and it was possible to keep EMCS in business.

Results and Conclusion:

EMCS was a well-known and highly professional Iraqi private sector consulting firm, but the fact that it was closed upon the end of the one and only WBG contract was a loss for the local market and a loss to its professionals. EMCS should have been seeking other opportunities instead of relying only on the WBG to work with.

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