Victoria Heavy Equipment is currently experiencing a lack of effective communication within its divisions. Clear goals and measurable terms are necessary for each division, whether it operates as a cost or profit center. These goals have been overlooked, leading to overspending in many centers. Given the anticipated slower market, this is something that we cannot afford.
Brian Walter Jr. expressed a strong desire to avoid becoming a "bureaucratic, quantitatively, grey-suited manager...", but he did not clearly specify an alternative. Currently, Victoria Heavy Equipment Limited (V.H.E.) is facing challenges with lower sales and dissatisfied employees, making it a troubled organization. If the decline in sales continues, as we anticipate due to the troubled real estate economy, V.H.E. will soon find itself in a crisis. Meeting the ambitious goals set by Brian W. Jr. or any new
...similar goals that we set will be even more challenging if we enter this crisis zone. It is not my intention to make changes to the existing structure of V.
H. E, I do not perceive any issues arising from granting more autonomy to division managers and line workers. Nevertheless, it is imperative to enhance (or establish if absent) communication and a sense of responsibility among divisions. Precise communication and consensus on attainable objectives for each individual division are crucial in boosting morale and motivation among workers and managers. A prime illustration of this necessity is that V. H. E cannot support an R&D division that creates products according to their preferences without any involvement from the marketing and manufacturing divisions.
It is well-known that this situation has happened multiple times at V. H. E. The goals and functions of our R&
department are not clearly defined. The LTM-1000 crane was developed in 2006 with a significant design cost. However, there has been no increase in engineering costs before 2006 or decrease after that year (see Exhibit 1 in the appendix). This suggests a lack of communication between the R&D and Finance departments. Additionally, there was a need for better communication during the design phase of the LTM-1000 between marketing and our customers in order to prioritize their needs.
Rather than assuming that our customers would buy a monster, we should have had effective communication guidelines between finance, marketing, and R&D. If we did, we could have convinced LTM 1000's target customer to help cover some of the development and prototype costs. I understand that LTM 1000 was on Brian's Want-List and couldn't be ignored, but with better consultation with other departments, it could have become a more marketable product instead of just being successful at attracting a crowd. The first step is to establish, agree upon, and emphasize our hard goals as a team.
These goals for each division are expected to be similar to the goals set by Brian for V.H.E. Once that is done, each division is expected to present their SWOT analysis or a similar analysis for their individual center. Once these tasks are completed, each individual center manager and I can set and agree on specific goals for that division, along with a strategy to achieve those goals. For instance, the goal of reducing waste, including high-level inventory, will be included in the goals for all profit centers. The profit sharing plan will be revised to reward only those divisions that have achieved or
surpassed their goals.
Similarly, divisions that do not meet their set hard goals will be given an opportunity to explain the reasons behind their underperformance. However, if these divisions continue to exhibit the same trend, a new strategy and potentially tangible targets will be created as a final opportunity for them to achieve their goals. The second step involves establishing a clear communication protocol between divisions. Instead of reinventing the wheel, V. H. E. can utilize established procedures such as AIAG procedures and protocol, which are currently employed by numerous OEMs.
These protocols aim to improve communication practices among different divisions within V. H. E., including manufacturing, R;D, and finance. To enhance communication effectiveness, it is essential to conduct employee opinion surveys through a third party in order to empower workers to express their concerns. Additionally, these surveys should lead to the establishment of soft goals that division managers can be held responsible for. Drawing on my fourteen years of managerial experience, I am confident that I can help Victoria Heavy Equipment Limited achieve the hard goals set by Brian and restore the company's desired operating quadrant.
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