MMN624062:Organisational Change and Responsible Leadership

Subject Code : MMN624062
University : Glasgow Caledonian University Gradesaviours is not sponsored or endorsed by this college or university.
Subject Name : Management

Executive Summary

The report aims to analyze the issues in management of BCB Home appliance and their implication on the company from the critical perspective.

BCB Home Appliance was founded in year 1990 by three professors, who identified market gaps between the energy saving capacity of the electronic appliances and the rising price and increasing environmental concerns of them. The core values of the company revolves around the principle of innovation, conservation of environment, ensuring well-being of the stakeholders, which include the regional communities where the company operates. Their main production unit were outsourced to China, where the company observed the culture of collectivists and low degree of avoidance in regards of uncertainty. They also focused on ensuring engagement among employees through timely investigation of error and meetings that tend to discuss the corrective measures, apart from this company is also engaged in providing training and development program to their employees. The company is also recognized well for its CSR activities and responsible leadership. It is engaged in providing donation during festive season to less fortunate people in the communities. Altogether the leading position of company in terms of its leadership and CSR activity created a success and reputation of the company in China and India and helped in maintain the positive reputation in the markets of UK and Northern Europe. After operating at the maximum capacity in China, the company expanded their factory operation in Southampton to serve the markets of UK and Northern Europe. However the company faced disaster when the three CEO of company passed away during COVID_19, leading to legal conflicts. Paul Beatty was appointed as a CEO even when he lacked the expertise and experience.

The attitude and behavior of the new CEO detreated the condition of reputation and the overall environment of the organization. The attitude he exhibited was unacceptable as he refused to involve with the stakeholders that created and represented an autocratic style of leadership in the organization and increased the short-sighted attitude in taking decision. His lack of expertise in managing the organization and disengagement with the stakeholders and other power holders diminished the vision and collaboration in the workforce, which previously use to perform well. Due to this, the organizational structure faced turmoil and created the dissatisfaction and increased the rate of employee’s turnover.

The firing of Prof Becker and the continuous loss of the company’s research and development significantly impacted the organization. The focus of the new management of the company shifted from focusing on the well-being of the organization to the extending the working hours of the employee without offering them the considerable amount of benefits and regards as a consideration for their idea. This increased the rate of employee’s dissatisfaction and lead to mass resignation from the part of board of director and other employees. This also created a negative reputation of the company and increased the gap in research and development. The new CEO wasn’t able to collaborate with the local universities and the fire incident caused due to faulty design created a damage on the companies’ reputation.

The closure of the partnership was also resulted in talent drain that created a overall dysfunctional culture within the organization, this created a downfall in the organization. The values of the community were deep rooted in the organization and the organization was damaged seriously.

The existence of BCB is also impacted by a couple of external factors. Negative publicity from the talent drain in industry may

Inhibit the suppliers and distributors to not partner with BCB. This tainted image is also within the consumers who have lost the trust in BCB considering the safety issues in the goods following the fire incident. The lack of employee assistance while commenting over the safety disaster from the CEO might have inculcated animosity and distrust of employees against him. To rebuild their reputation of being high quality and innovative energy saving appliances, they need to get a R&D and supply chain to be efficient which needs to be set from the beginning. The distributor terminated their contract, hence finding a new one is trickier considering the fire incident and R&D gap. Furthermore, the current political and economic situation in UK is unstable which may further impact the growth or funding of BCB. With multiple international and domestic players, it seems difficult for BCB to get back on foots considering the current scenario. Advancing from current situation is never impossible. Training of the CEO for, responsible leaderships, hiring of top management panel with required expertise, shifting the production to China seems fruitful for the organization. In addition the reputation and impression management should begin from targeted digital marketing in UK and Northern EU, alongside initiating new supplier and distributor partnerships. However, this requires a change in leadership style and fresh icons to organization like board directors. To accomplish this, BCB will have to undergo massive transition from the autocratic non-collaborative style to collaborative transformational leadership. In addition, this change should be carried out by the external management at front, as the CEO himself is the root cause of all the dysfunctional ties

Introduction

The purpose of this report is to discuss the management issues related to BCB Home Appliances and explain the implications for the company from a critical perspective.

BCB Home Appliances was founded in Southampton by three professors in 1991, as a private limited company manufacturing domestic energy-saving white goods targeting the UK and the Northern EU market. By focusing on community well-being, environment conservation, and consistent innovation, the research background of three leaders resulted in growing BCB as an organization producing sleek energy-efficient appliances. Even when manufactured in the Chinese factory, the leaders inculcated a collectivistic innovation-oriented collaborative work environment in contrast to the actual power-distant work culture of China. Considering the aim to give back to society, BCB was seriously committed to their CSR evidenced by the charity, scholarships and donations offered by the organization and its employees. The organization reinvested in building the Southampton factory with a fully equipped R&D setup under Prof Becker. The organization also promoted performance appraisal and recognized employees for their contribution in addition to engaging them in experimentation for consistent innovation. However, the passing of all three professors due to the pandemic resulted in legal suits between their families. Thereby, the legal case was won by Paul Beatty, son of Prof. Beatty, following which he was appointed as the new CEO who seemed keen to learn gaining the hope of directors. However, things went awry when he started practicing an autocratic style of taking short-sighted decisions without engaging the directors. His style was limited by other managers resulting in employee conflicts requiring third-party interventions gaining negative publicity. A string of events such as the mass resignation of the board directors and employee dissatisfaction resulted in a severe talent drain, which again inflicted harm to the reputation. Consequently, the pandemic, R&D gap and shortage to meet demand resulted in haste decisions by the new CEO

Diagnosis & Analysis of Bcb Home Appliances: Issues & Implications

The case diagnosis will explain the predominant internal and external environmental concerns related to BCB, with the help of abbreviated SWOT².

Figure 1: Abbreviated SWOT Analysis²
Internal Environment
Strengths	Weaknesses
• Organizational values 011 continuous innovation and community well-being • Renowned - responsible leadership and CSR commitments.	• Autocratic leadership style of new CEO • Lack of R&D facility • Talent drain • Tainted public image • Lost CSR commitment and employee engagement • Weak supply chain • Employee conflicts and weak culture
Opportunities	Threats
• R&D partnership • Manufacturing base in China • Re-hire the past employees • Advancing the training and development process	• Economic instability • Negative publicity • Possible housing market crash • Risk of weak supply chain
	• Distrust safety concern in public • Changes in employee expectation post pandemic At BCB or in general? • High competition in market

The passing away of professors acted as a strategic shock resulting in an unprecedented discontinuous change with the appointment of new CEO resulting overall leadership style change. In order to allow, people to change, the significant step is to share information (lies and

Sutherland, 2001) and convincing people (Diefenbach, 2007). New CEO was reluctant to engage in debates and disregarded the need to share information with employees. In an effort to capitalize the market demand cost minimization strategies like termination of contract were changes in the organizational paradigm undertaken by Beatty which explicate his progressed withtermination of Chinese manufacturing partnership and Prof Becker leading to turmoil at BCB. The lack of strategic focus in decisions, short sighted decisions through autocratic leadership would have resulted in resentment from the employees resulting in talent drain and internal conflicts (Amanchukwu, Stanley and Ololube, 2015). Lack of expertise, discontinued training and development, new employee recruitments imitating the style of CEO further diluted the actual organisational culture resulting in haste decisions against the existing organisational culture and values (Beer et all., 2005; Boyd & Begley, 2002). Even after being warned about the repercussions from termination of Chinese manufacturer, CEO went ahead disrespecting the directors, against the business ethos of BCB, demonstrating autocratic leadership style. Literature conveys that the autocratic leadership enables perception of safety in employees if hierarchy is accepted in team (De Hoogh, Greer, & Den Hartog, 2015), however what happened at BCB was the denial from employees due to centralizing power behaviours of Beatty resulting in power struggles and team clashes. His reluctance to discuss with directors, lack of focus on employee wellbeing and lack of expertise in managing an organisation and its employees showcased the drifting away from core values of responsible leadership and CSR commitment which made it challenging to put forth a relevant value proposition (Linnehan & Conrad, 1999). The sudden change in leadership was contradicting the existing collectivistic culture at BCB which enabled low uncertainty avoidance and higher internal trust (Huff & Kelley, 2003) resulting in uncertainty, internal conflicts, loss of trust of internal and external stakeholders. The internal culture was being further diluted by new employee (Ogbonna & Harris, 2002) where the difference existed in terms of backgrounds culture and so forth, which were actively addressed in the past through expatriation, cross-cultural and language training efforts. By resignation of the directors and consequent talent drain, BCB was emptied of bearers of the organization culture and the community engagement and CSR commitments were compromised. From being a people focused organization, the haste decision regarding the discarded design caused the fire, which depicts misalignment of new leadership with the core aim and values. The transition of organizational culture under new leadership style and strategies, the CEO did not take the step to align the employees with the predominant change. This alongside the external environment issues such as covid-19 pandemic changed employees priorities, compromised CSR positioning economic instabilities , consumer distrust and energy prices exacerbated the challenges for the organization which was resources deficient (Goldman Sachs, 2021; Curran, 2022).

The misjudgment of the new CEO by transitioning from the responsible leadership and compromising on employee and community well-being have resulted in major disaster to the public and industry impression of BCB. This provides a clear evident the impact of single handed decision style of CEO that the interest of a single stake, i.e. CEO was focused while the rest were discarded, which was against the propositions of the stakeholder theory (Jensen, 2001). Thereupon, the drifting away from the actual values of the organization , BCB was working distracted from its existing organizational paradigm, against the welfare of the stakeholders which does not confine to the financial claimants, but also the community (Hannan & Freeman, 1984). The awry that the reputational damage can cause from tie up with BCB, the local universities denied the R&D partnership and hence, BCB is yet to address the R&D gap. Honestly, there are no parties who extended support to Paul Beatty and his organization. However, growth can be expected through re-hiring of Prof Becker, and managers who had better idea of the culture. Additionally, training the leadership in how to priorities employee well-being and engagement can help to regain the trustin leader. In public front, it requires hiring of PR team to reputation and impression management through focused marketing.

However, as Benjamin Franklin states, :It takes many good deeds to build a good reputational and only one to loose it” (Eccles, Newquist and Schatz, 2007). BCB have a bumpy road ahead considering the challenges like fluctuating UK economy, political instabilities, possible housing market crash, dampened demand, and high competition. However, the opportunity is rehiring and training the employees to embed the organizational culture and find a R&D partnership wither with Prof Becker or equally potential which can begin with repositioning the company, and then proceed to restarting the CSR activities and communities targeted efforts.

Conclusion

The sudden appointment of new CEO created a paradigm shift from the sound, innovation and stakeholder based organizational culture to a disengaged, cost focused disruptive work environment under diabolic leadership. Consequently, causing lack of engagement and discarding the collectivistic culture, resulted in impaired work relationships, dilution of culture, and compromising of the CSR commitments which inflicted harm on the industry relationships, growth and stature of BCB. The autocratic decisions fueled by lacked expertise of CEO and haste decision to capitalize the demand, resulted in disrupting the supply chain, ethical commitments and employee well-being resulting in scantiness of industry connections and detrimental impact to organizational reputation, growth and culture. This resulted in massive talent drain, termination of contracts and major fire accident. However, there are chances for growth considering the re-hiring of past workforce who are indebted to the founding professors. In addition, he stresses the emphasis for quality and to re-construct the reputation for innovation. To sum up, BCB will need to adopt transformational change rather than the incremental one as the organizational survival is threatened which can recreate the stakeholder focus and thrive for constant innovation.

Appendices

APPENDIX 1: SWOT ANALYSIS

Strength

Weakness

· Company values rooted in continuous innovation with environment protection initiatives.

· Past reputation for superior quality energy saving white goods.

· Committed to responsible leadership and enhancement of the communities associated with the company.

· Loss of three professors, who founded the company and actively practiced the responsible leadership, committed to CSR and community development.

· Autocratic leadership style of Paul Beatty and concerning unacceptable attitude.

· Short sighted decision making style of Beatty without engaging the board members thereby drifting from the earlier leadership style.

· Lack of R&D facilities for the company following the dismissal of Professor Becker.

· High employee turnover and resulting talent drain, resulting in loss of most efficient board directors and workforce.

· Shift from responsible and visionary leadership style practiced by the three professors to autocratic style of Paul Beatty, the employee relation were degrading resulting in major incongruences to the known organizational culture. This further led to the engaging the third parties for settling the conflicts, that attracted negative publicity for the company.

· Lack of focus on the work environment and training of the employee for the change at BCB led to higher level of employee dissatisfaction leading to drop in employee performance and productivity.

· A major gap in R&D due to the loss of R&D facility and inability of Paul Beatty to create collaboration with the UK universities to keep up with the company’s reputation for design and innovation.

		· Company terminated the contract with the Chinese manufacturing plant which responded to the Asian market, which was already expanded and expecting market growth. · All types of CSR activities stopped such as donation of old white goods, donations during the New Year and Christmas to charity. · All types of employee engagement and training stopped - like expatriation and performance appraisal systems. · Lack of change agents during the change in the organization. · Lack of accountability from the leader, Mr. Beatty, specifically during the fire incident. · Inability to find distributors for its products, following the termination of contract by the main distributor in UK market following the fire.
External Environment
	Opportunities	Threats · High rate of global inflation resulting in economic downturn, specifically in the western economies. · Negative publicity from the talent drain and the fire incident. · Chances for crash of the housing market resulting in reduced demand for the white goods. · Pandemic induced stoppage of the manufacturing and delivery. · The fire incident from the washing machine at Southampton had negative impact in inducing R&D collaborations with local universities. · Pandemic influenced shift of employee focus to the aspects of work-life balance and work environments. · Organizational culture being impaired resulting in talent drain and dissatisfied employees. · Safety concerns from the consumers arising from the fire incident which may result in lack of trust in the company’s products. · Loss of R&D makes it difficult for BCV to compete in the market with higher competition from the international players · Increased inflation and interest rates can reduce the demand of white goods
· Possibility to retain Prof Becker in order to rebuild the R&D capacity for the company. If this doesn't work, engage in a R&D partnership to address the gap in the innovation and lack of designs. · Re-establish the contract with the Manufacturing partner in China which can enable the company to tap into the Asian markets besides the UK and Northern EU. · Re-establish the employee training Programs and invest in CSR engagement to gain back the lost reputation. · Re-hire the past employees who have better ideas of the company, its culture and take steps to reconstruct corporate values and culture.

	• Global retraining schemes by UK Government enabled BCB to save cost in recruitment.
Social	• Loss of reputation for quality and safety about the products of BCB following the fire incident at Southampton due to faulty design of washing machine. • High cost of living and crash of housing market resulting in reduced demand for the white goods among UK consumers. • Consumers focus on environment friendly products and increased concern on energy saving at their homes, even though a minor percentage engage in active behaviors (Woodward, 2021). • Target market for the BCB is the UK and Northern Europe who have higher environmental consciousness. • Increasing debates and discussions around climate change issues and steps to tackle these might impact the purchase and usage of white goods significantly (Office of National Statistics, 2021). • With the job market being optimistic post pandemic, the job-seekers are being more selective, shifting focus to work-life balance and healthy work ecosystem. • Heyward (2020) in his Forbes article states that the CSR commitment of the organisations enables to attract and retain the workforce, in addition to enhancing the brand perception among the consumers.
Technological	• Cost-effective innovations and technologies can enhance the energy intensity of white goods (Gross, 2019). • Assistance from government in setting up the R&D facility for the company have set up the future high. • Collaborations with researchers to design and build products like earlier would definitely benefit the company. • Reputation and impression management of the company should be conducted by hiring PR and marketing team through targeted digital market.
Legal	• The fire incident from use of discarded design without appropriate safety testing caused loss of life which would have resulted in legal action by the government. • Long hours, disputes and employee dissatisfaction can be attract the attention of the engagement of labor law which ensures employee rights over the employer. • Electrical equipment safety regulations(2016) requires the UK manufacturers to ensure their products meet the safety requirements laid down by the government (Gov.UK, 2022). • Inclusion & diversity at work is ensured by HSE where the government ensures that factory like race, gender, disability will not impact the health and safety of the employee (HSE. 2022).
Environmental	• International Energy Agency (IEA) heading a global campaign to enhance the energy efficiency of the wite goods on global level (IEA, 2021). • Increasing choice of UK consumers towards the sustainable and energy efficient products. • Negative impact of the household appliance production with enormous amounts of fossil fuel being burnt for the manufacturing alongside the disposal of harmful chemicals. • In COP 26, it was mentioned that energy efficiency of appliances is ideal for reaching the net zero carbon (IEA, 2021).

APPENDIX 3: PORTERS FIVE FORCE

Threat of New Entrants	• There are high barriers on entry of the new market player, and less barriers on the exit. It is because of existence of international conglomerates like Samsung. • The white good market have lot of large key players in UK, in addition to the domestic market • Environmental concerns related to the high pollution and climate change have shifted the demand towards energy saving appliances, where new players who are technologically sound can endeavor and prosper.
Threat of Substitutes	• Substitutes include the second hand white goods. • The threat is considered moderate, as the cost of living crisis may prompt the new home owners to buy second hand appliances than the newer energy efficient ones.
Bargaining Power of Suppliers	• It is relatively high considering the cost of components, metals, and plastic. • An efficient supply chain will enable to have smooth running of the firm, which is currently lacking for BCB. • In the background of the fire accident, there are chances that the suppliers will bargain higher. • R&D is something that BCB is lacking currently , which calls for the need to collaborate and partner for efficient designs and innovations for which the company had reputation in the past.
Bargaining Power of Customers	• Quite high, as customers have multiple choices and companies to choose from. • Consumers seek for highly energy efficient appliances at lowest possible market price, which can hamper the profitability of BCB especially at a stage when they are trying to rebuild their consumer base.
Competition in Industry	• Extremely high, considering the presence of the international players such as whirlpool, Haier and Panasonic as well as the domestic players. • However, BCB once has the reputation for continuous innovation and innovative designs with a focus on quality.

APPENDIX 4: STAKEHOLDER ANALYSIS

Stakeholders	CEO	Directors and Managers	Employees	Consumers
Values- what do they value?	Autocratic, leadership, keenness to learn, control over business decision without consultation, capitalise on current demand	Favors visionary and responsible leadership, seeks collaborative decision making, farsighted decision making, CSR and community engagement is crucial.	Collaborative working culture, space to potentially experiment with their ideas, self- management, training and development, opportunities, fair wages and work hours, close relationships at work, knowledge sharing, understanding from leaders and recognition.	Quality, Safety, Designs, Energy Efficiency, Environment friendly
Norms and expectations - how do they expect to be treated?	Complete subordination of employees, be treated as autocratic leader, expects no question about their authority, needs to have final power to make decisions	To be engaged in case of decision making, interested in putting forward arguments considering the culture of company, arguments should be accepted and agreed by CEO, seeks respect considering their longest tenure with company.	Equality and Inclusion at work, respected and engaged in case of opinions, obeys the corporate policies and leaders announcements, seeks for recognition and being respected for ideas.	Meet their expectations with respect to pro duct quality, be truthful while committing to environmentally conscious and CSR actions, seeks honest actions from company.
Perceived interests- what are they	Takes charge of power, have say in every business decisions, Being addressed as CEO while escaping in incidents of chaos, lack of openness to collaboration	Engagement of employees’ well-being of employees and community around, strict focus on organisational values of environmental protection, responsible leadership and CSR commitments.	Jon satisfaction, Engagement and relationship building at work, Recognition for their performance, Good reputation of company, Stable income and tenure at work.	High end innovative, energy efficient white goods.
Preferences - How would they prefer things to be ?	Organisational change accommodating the CSR commitments, reconstructing lost reputation, retain product quality, and design innovation, build engaged employee well-being, growth of company sales and trust among consumers.	Engagement and cooperation with employees, collective decision making, team level management.	Better engaged work in a company with retained reputation reduced conflicts and improved work environment, recognition and rewards, performance appraisal systems.	RE-produce the product of high quality and innovative designs which are highly energy efficient to continue the grace of BCB as created by the three professors.
Needs: What do they need/ how can we help them through the transition?	Assistance to develop and transition to responsible leadership style	Encouragement to trust in the leader, assistance in decision making, seek middle ground in decisions with leader.	Employee training for adapting to organizational change	Improved quality of products being consistent in terms of designs, innovation and energy efficiency claims.
Power –What type/ strength of power do they have ?	Highest power at BCB , while they can indulge iin collaborative decision making	Highly influential with respect to their connection with employees, can impact the decision making of CEO.	Talent drain is ongoing, hence the right candidates can bring new perspectives and hold managerial positions.	Their own attitude towards the company can result in positive or negative word of mouth of the company. Hence, highly influential in terms of their connect to the consumers.

APPENDIX 4: STAKEHOLDER ANALYSIS

STAKEHOLDERS	CEO	DIRECTORS AND MANAGERS	EMPLOYEES	CONSUMERS
Values - what do they value?	Autocratic leadership, keenness to learn, control over business decisions without consultation, capitalise on current demand	Favors visionary and responsible Ieadership, seeks collaborative decision making, far sighted decision making, CSR and community engagement is crucial	Collaborative working culture, space to potentially experiment with their ideas, self- management, training and development opportunities, fair wages and work hours, close relationships at work, knowledge sharing, understanding from leaders and recognition	Quality, Safety, Designs, Energy Efficiency, Environment friendly
Norms and expectations - how do they expect to be treated?	Complete subordination of employees, be treated as autocratic leader, expects no question about their authority, needs to have final power to make decisions	To be engaged in case of decision making, interested in putting forward arguments considering the culture of company, arguments should be accepted and agreed by CEO, seeks respect considering their longest tenure with company.	Equality and Inclusion at work, respected and engaged in case of opinions, obeys the corporate policies and leaders announcements, seeks for recognition and being respected for ideas.	Meet their expectations with respect to pro duct quality, be truthful while committing to environmentally conscious and CSR actions, seeks hon est actions from company.
Perceived interests - what are they	Take charge of power, Have final say in every	Engagement of employees, well- being of	Job satisfaction, Engagement and relationship	High end, innovative, energy