Ratchettes Ltd. has been one of the most prestigious dealership firms of Lifestyle Cars Ltd. ever since it has attained its franchise. It has achieved a good reputation with the Lifestyle Cars Ltd over the years and is one of the prime dealers of their cars. Because of its large-scale dealership, a lot of employees are working in the firm. Being a multi-functional firm, it has been classified into different departments for the efficiency of the work and to attain goals in a positive way. The firm is majorly divided into sales and after-sales. Sales consist of new cars, used cars, and fleet cars. New cars is responsible for the sales of fresh cars that come directly from the manufacturer, used cars are those that sell second to third hand cars, fleet cars are responsible for bulk orders. After-sales consist of parts and servicing. Parts are responsible to maintain the inventory and concerned with the sales of parts of cars and accessories used in the cars, servicing is concerned with the maintenance of the carspost sales. In all, the entire firm has over 5 departments working simultaneously. “Constantly talking is not necessarily communicating” Joel in eternal sunshine of the spotless mind
One of the major problems that the company is facing, even after 20 years of its existence, is that the employees of the firm are not coordinating well amongst each other. Coordination among the firm is one of the prime factors that will lead the company to work efficiently and hence attain milestones and set better goals for future. Efficiency may require coordinated actions, but coordinated actions can also lead to competition and make collusions likely . At Ratchettes, the employees are paid wages on salary and commission basis. All the employees get minimum fixed salaries, but major source of their income are the commissions that they receive from their individual work, based on the number of customers they attend to.This leads the employees to have a sense of competition amongst each other, which has directly affected the team spirit amongst the members within the department, as well as in between different departments in the firm.
“Groups are the essential feature of an organization. Individuals seldom work in isolation from others. Work is a group based activity and, if the organization is to function effectively, it requires collaboration and cooperation amongst its members.” “Team occurs when a number of people have a common goal and recognize that their personal success is dependant on the success of others. They are all inter-dependant.”
There was a time when employers thought employees to be just another input required for production of output, that is, goods and services. This thinking was changed with the research conducted known as Hawthorne Studies, by Elton Mayo from 1924 to 1932. This study showed that employees are not just motivated by the money, but their attitudes as well
This theory shows that employees strive to achieve equity between themselves and their coworkers. This equity can be achieved when the ratio of employee outcomes over inputs is equal to other employee outcomes over inputs.
Like the other more prevalent theories of motivation mentioned above, the Adam’s Equity Theory of Motivation recognizes the variable factors that can affect employee’s assessment and perception of their relationship with their work and the employer. This theory was created on the belief that employees are de-motivated in relation to their job and employer if their inputs are greater than the outputs. Employees respond their de-motivation in form of reduced effort, increase dissatisfaction and may even become disruptive.
Considering the above definitions of groups and teams, The Adam’s Equity Theory of Motivation and, relating it with the case of Ratchettes Ltd. It is understood that the employees in the firm are working with rather less motivation amongst themselves.Their performance is more individualistic than as a team effort. Hence, it is justified if it is said that the employees in the firm are working in Groupsrather than in Teams.
Employees from different departments have complains with the working of the other departments, which according to them is affecting the standards of their work. The blame-game is being played amongst the departments, where each department is blaming the other for its inefficiency. The following quotes can be considered for the justification: ‘We’d be a lot better off if Parts got their act together.’ (Workshop supervisor) ‘We do the best we can and Service lets us down each time.’ (Used-car salesman) Apart from inter-department issues, the employees of the same department also have a tiff against each other.
This lack of coordination is basically seen in the departments under sales. The employees, in order to get the maximum commission from having more customers, are not aiming to have maximum sales for the firm, but rather for themselves. And in order to get maximum sales on their names, they do not even mind cutting their colleagues client on their day-offs. The following quotes can be considered for the justification: ‘I try to “move the metal” so that I get my commission and keep Lifestyle happy and now they’re saying that I’m too pushy – in this job you have to be, otherwise somebody else gets the deal.’ (New-car salesman) ‘She was my customer, I talked to her first but Debbie signed her up on my day off – I deserve a percentage’ (Salesman)
The above quotes clearly signify that the employees are not well coordinated, individualistic and lack motivation. Due to this, the teams are working in Groups, and the management is supposed to take concrete steps to encourage and motivate their employees to work in unity as a team. “There’s nothing more demoralizing than a leader who cannot clearly articulate why we are doing what we are doing” James Kouzes and Barry Posner
Ratchettes Ltd. has been going through a lot of irregularities in their functioning. The following are the problems that the Ratchettes Ltd. are facing from within the management of the firm.
Authority is the right to give orders and obtain obedience, and responsibility is the corollary of authority. Managers require authority commensurate with their responsibility. There should be a balance between authority and responsibility. If manager has responsibility but not sufficient authority he is not able to perform effectively and efficiently. For example parts manager does not have an authority to keep sufficient inventory level.
According to management principal given by Henry Fayol there should be one and only one boss for every individual employee. If an employee gets orders from two superiors at the same time the principle of unity of command is violated. The principle of unity of command states that each participant in a formal organization should receive orders from and be responsible to only one superior. If this principle is violated “authority is undermined, discipline is in jeopardy, order disturbed and stability threatened”. The principle resembles military organization. Dual subordination should be avoided. This is to prevent confusion regarding tasks to be done. For example, car and after-sales manager both get order from their managing director as well as from Lifestyle regional manager.
All the units of an organization should be moving towards the same objectives through coordinated and focused efforts. Each group of activities having the same objective must have one head and one plan. This ensures unity of action and coordination. For example there is no common goal between sales department and after-sales service department in Ratchetts Ltd.
The interests of an organization should take priority over the interests of any one individual employee. Every worker has some individual interest for working in a company. The company has got its own objectives. In all the situations the interests of the group company will supersede the interest of any one individual. This is so because larger interests of the workers and stakeholders are more important than the interest of any one person. For example, a technician does not want that there should be any change in payment structure till there payment gets double.
Factory system of production implied that managers served as a link between the owners and the workers. Since as managers they had the mandate to ‘get work done’ from the workers, it should not be difficult for you to appreciate that there always existed the possibility of a kind of class-conflict, the mangers versus workers. Both should realize that each one is important. To achieve this state, Taylor called for complete mental revolution on the part of both management and workers. It means that management and workers should transform their thinking. For example there is not a harmony between workshop and part.
As the workers are getting payment on the base of number of job performed they ignores the quality in order to complete more number of job and this is observed in survey carried by Lifestyle where they find for Ratchett Ltd., that there is high repeated repairs.
Barnard feels organizations are communication systems. He feels it is particularly important for managers to develop a sense of common purpose where a willingness to cooperate is strongly encouraged. He states there are four factors affecting the willingness of employees to accept authority: The employees must understand the communication The employees accept the communication as being with the organization’s purposes. The employees feel that they are not in contact with the high level managers In Ratchetts Ltd. A communication gap present which can be observed from the comment given by part manager, technician, new-car salesman, workshop supervisor, used-car salesman and service manager.
Motivation is need so that employees should complete their work efficiently and effectively. Motivation can be positive as well negative. Factors having a negative motivation impact on the research subjects are the working conditions, salary, job securities, supervisory methods and general company management climate. According to Herzberg, employee motivation is achieved with challenging enjoyable work where achievement, growth, responsibility and advancement are encouraged and recognized. In Ratchetts Ltd. Factors that are responsible for lack of motivation are poor working conditions, low salaries and poor supervisory relations.
Ratchettes ltd. Is a car dealership company facing many problems like authority, responsibility, unity of command and direction, lack of motivation and other problems as explained above. Thus, we will solve these problems using theories and recommendations, which will benefit the company- One of the main problems that the company is facing is that of unity of command which can be seen as the regional manager of either parts or services reports to Alan ratchette and indirectly to lifestyle manager, where Alan ratchette is also accountable to lifestyle who have other targets to meet. Hence, information is not transferred properly leading to failure in completing objectives. This shows that there is a need for a regular communication channel in the company where information is passed through a channel of people and decisions can be taken easily. For e.g. here the regional manager can pass information directly to the ratchettes manager as well as the lifestyle manager who can pass this information to their respective bosses and take decisions accordingly. One more problem faced in this company is the lack of motivation, we will explain this by using Vroom’s expectancy theory which states.
The Expectancy Theory of Victor Vroom deals with motivation and management. Vroom’s theory assumes that behavior results from conscious choices among alternatives whose purpose it is to maximize pleasure and minimize pain. Together with Edward Lawler and Lyman Porter, Vroom suggested that the relationship between people’s behavior at work and their goals was not as simple as was first imagined by other scientists. Vroom realized that an employee’s performance is based on individual’s factors such as personality, skills, knowledge, experience and abilities. The expectancy theory says that individuals have different sets of goals and can be motivated if they believe that:
There is a positive correlation between efforts and performance, Favorable performance will result in a desirable reward, The reward will satisfy an important need, The desire to satisfy the need is strong enough to make the effort worthwhile. Here in this company salaries are low and mainly it is a commission based business where commissions are very low on every sale and not guaranteed to that employee hence to tackle this problem salaries should be increased and commission should be entitled to that employee who does the convincing and not to that who sells the car at the end, this will motivate the employees to work harder and benefit the company. Another example can be seen that of Subhiksha supermarket that got shut because they dint pay their employees and concentrated more on expanding and opening more shops.
They kept their salaries for more than 3 months and thus people started quitting their jobs and the company got a bad name in the market, which eventually lead to closure of the company. The next action to be taken by the company is that they don’t meet their goals and objectives, as they aren’t set correctly. Goal setting is a powerful way of motivating people, and of motivating yourself. The value of goal setting is so well recognized that entire management systems, like Management by Objectives, have goal setting basics incorporated within them. Locke’s research showed that there was a relationship between how difficult and specific a goal was and people’s performance of a task. He found that specific and difficult goals led to better task performance than vague or easy goals. Such a problems can be seen in the firm, which is done by technicians called “beat the book” where after finishing their work they go and do other jobs. This problem can be tackled by specifying certain goals daily or on weekly basis, which they have to meet necessarily in order to earn their wages. Hence, they will strive harder to finish their work on time and this problem will be resolved.
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