Reference no: EM133320423

Hunter Engineering was established in 1936 and is now a public limited company in which the Hunter familyowned the controlling interest. lt relied solely on Government Contracts as primary source of business. Untilthe late 1990s. contracts had been placed on a "cost plus basis, but with the government's shift in policytowards reductions in public expenditure, the method of placing contracts had been changed to "fxed price'Sizes of the contracts were reduced. Instead of relying solely on large contracts involving over a hundredemployees or more for up to 5 years, the company handled contracts that frequently involved less than 15employees for a duration of under two years. Having projects at the right stafhng levels and effhciency drivesmeant that between 1998 and 2012, employee levels had fallen from 1.500 to 720. Staffng levels in theElectrical Engineering Department fell from 45 to 26 over the same period. Between 2012 and 2017, furtherorganisational restructuring initiatives resulted in the loss of over 170 employees.

Peter Green, Project Manager in Electrical Engineering, had joined the company in 1987 as a relatively youngsenior electrical engineer in his early 30s, and for the frst ten years of his employment at Hunter Engineeringhe worked on just 2 very large projects, each spanning 5 years. He had not enjoyed this long-term projectcommitment, so was relieved to fnd himself transferred to smaller projects because of more proiects withower staff levels. After working on 16 smaller projects in various capacities, frst as the Project Team Leader,and later as a full Project Manager, he was promoted to Small Projects Director in January 2017. His promotioncoincided with the company's decision to rename itself Hunter Engineering Group, a signal that it intended todiversify going forward.

Going commercial

January 2018, Peter put forward his ideas to expand the Electrical Department by going commercial andtendering for contracts outside the Government Defense Portfolio. While this had received the agreement orhis Divisional Head, Peter was well aware of the problems facing smaller commercial projects in a companywhere operations had to be defined solely by government interests and requirements.

The company had very high fxed overheads, but more importantly the highly demanding Quality AssuranceSystem, a mandatory for government defense work meant rigid processes that included time-consumingGovernment contracts. For example, every deviation from the issued drawing had to be recorded andapproved with a dated electronic signature from the Head of the Design Unit. Thus, any scope for iudgementwas not permitted by the inspection engineers. Peter realised that one of his frst problems was to introducesome scope for judgement if small commercial projects were to be viable.

Hunter Engineering Group had no experience in tendering for commercial projects. Government contractsrequired very strict and complex approval process, which include documentation with contributions from aldepartments. lt would therefore require considerable effort on Peter's part to prevent these departments fromgetting in the way when it came to new commercial ventures, particularly as most departments were lookingfor work - due to the downturn in recent government projects.

Peter was also concerned about staffng levels. The Electrical Engineering Department's involvement in minoiprojects could be anything from 3 months to 2 years in duration. Yet extra staff could only be recruited if itcould be shown that there would still be a shortage in twelve months' time. The Electrical EngineeringDepartment was always 25 percent understaffed due to difhculties involved in the forward planning of theworkload. Recruitment policy remained unchanged. Peter estimated a need for 6 more engineers. Staff moralewas falling. New graduates that joined required training. The senior engineers in the department were havingto spend more and more time training the new graduates. Although there was a dearth of experiencedengineers between the 25 to 40 age group, these qualifed engineers found higher paying positions outsideHunter Engineering. While new graduates saw their 20-year age gap between themselves and their seniorsand felt that promotion was impossible, so they left at the earliest possible moment.

The Sales Operations Team was also a serious cause for concern for Peter. lt was staffed by ex-governmentemployees who responded to general staff requirements issued by the Government Department. They solconly components and products which the company had already manufactured and approved by thegovernment regulators. They did not explore the market to assess its future needs, nor did they initiate anyinternal research and development activity.

A further problem arose in the Manufacturing Department. The continuity of large projects meant that thestaff employed at the end of one fscal year would be employed only at the start of next year. The FinanceDepartment therefore had become accustomed to delaying the issue of engineering and manufacturing ordeinumbers by up to 6 weeks into the new fscal year.

The HR Department moved slowly. Several weeks could elapse between an interview and the issue of an offelof employment. They seemed unconcerned that experienced engineers were at a premium and that newgraduates steadily left Hunter after two years, thus continuing to exacerbate the age gap. Peter's currentengineering staff on small commercial projects numbered 4 where 3 were new graduates with less than 6months' professional experience, and one was an engineer with merely five years' experience

As such Peter is determined to get more work into the department and to increase staff levels in order tohandle it. He is particularly determined to initiate action change. His priority was to write a change proposal tothe Senior Executive Team, via his Divisional Head. He needs change and he developed a change plan to theElectrical Department by going commercial

Questions

1. What economic, political and culture issues are raised? Justify your answer with evidence from the case.

2. What are the relevant change concepts, theories, and frameworks that can be applied to this case? Provide at least two and justify the relevance of each theory.

3. Outline a change plan demonstrating how Peter preferred strategy or strategies could be put forward toaddress the issues and problems in this case. Provide a brief outline of each strategy and a timeline for theexecution of Peter's proposed implementation plan. Don't forget to include evaluation and maintenanceactions in Peter's plan.