Reference no: EM133217347

Assignment:

CASE STUDY

The Transformation of Tana-Athi Construction

PHASE 1 - CULTURE CHANGE

Background: Tana-Athi Construction employs 500 staff and is part of a European-based multinational enterprise. Its main business is the provision of specialist services to major construction projects. As is typical for the construction industry, Tana-Athi operates in a highly competitive and at times hostile and aggressive environment. Disputes between contractors and subcontractors can become bitter and frequently end in litigation, though there have been a number of attempts over the last decade to create better relationships. Just as relationships between organizations tended to be hostile, so relationships within organizations were also less than friendly. Up to 1996, Tana-Athi had been run by an autocratic Managing Director who was feared by his colleagues and who treated the company as his own personal fiefdom.

His style of management was not liked and many felt that it was counter productive but, as one manager commented, 'You didn't challenge him, you didn't put your head above the parapet, or he'd make life hell for you.' When he retired, the parent company took the view that Tana-Athi was underperforming and that much of this was due to poor management and*a lack of cooperation within the company. His replacement was appointed with the remit, to improve the performance of the company and develop its managerial competency. This he did to great effect. Over a four-year period, he transformed the operation, culture and structure of the organization.

Focusing on people and performance: The new Managing Director was appointed in 1996. He had trained as an engineer at Tana-Athi but had then left and worked for a number of other companies in the construction industry. Construction is a close-knit industry, however, and he still knew Tana-Athi and its staff quite well. He came with a reputation as an enlightened manager who could deliver performance improvements. The construction industry was notorious for the antagonistic relations between the main contractors and subcontractors such as Tana-Athi , who specialize in one aspect of the construction process.

The Managing Director recognized, however, that the industry was attempting to change, and conflict was being replaced by 'partnership' initiatives contractors and subcontractors working in a more cooperative and team-based manner (Burnes and Coram, 1999). The Managing Director also recognized that external partnerships needed internal partnerships and team working if they were to be successful. In turn this would require a new style of participative management in Tana-Athi. Therefore, the Managing Director set out not just to upgrade Tana-Athi's management but to undertake a root-and branch overhaul of the company's operations and culture.

As a signal of his way of working, as a first step in creating better relationships amongst managers, he broadened out the Senior Management Team to include key staff who were not directors. In what had been a very hierarchical and status-conscious company, this was a significant change. The Managing Director knew that the staff in the company, particularly at a senior level, were experienced and competent people. He believed it was in the company's interest to retain staff rather than replace them. However, he also believed that they would need to change their attitudes and behaviours and upgrade their managerial skills if the company was to achieve the changes he believed were necessary.

His strategy for transforming the company rested on carrying out two crucial activities in parallel: to introduce new practices and techniques into the company in order to provide a better service to customers (and thus improve the company's overall performance), and to change attitudes and behaviours within the company, especially those of managers. He did not see these as being separate activities or programmes: he saw them as being linked. New practices, such as customer care and customer partnering, were not mere technical exercises. They required behavioral changes and new managerial skills. Therefore, the Managing Director wanted, to create a change programme whereby any change designed to improve the organization's performance.

Whether it be new skills, new techniques or whatever, also had to promote and reinforce behavioral and culture change. The converse was also the case: any effort designed to change culture or behaviour also had to have the objective of improving the organization's performance.

Between 1996 and 2000, the company under took a series of organizational, management and staff development initiatives designed collectively to transform the organization's performance and culture. The main initiatives are as follows:

Date                                         Event

June 1996                    New Managing Director appointed

August 1996                 Kaizen Phase 1

October 1996              Customer Care Programme launched

March 1997                 Investors in People launched

April 1997                   Kaizen Phase 2

September 1997        Customer Care Programme extended to construction sites

January 1998             Construction Supervisors' new role launched

June 1998                   New Senior Management Team formed

November 1998          Kaizen Phase 3

March 1999                Site-based trainers appointed

June 1999                  Tana-Athi culture redefined

July 1999

The Managing Director's first initiative was to introduce a small-scale Kaizen programme. Kaizen is a Japanese technique for achieving small-scale improvements through teamwork (Witzel, 2002). The Managing Director saw his Kaizen initiative as delivering four benefits: it would show the organization that improvements could be achieved on a quick low-cost/ no-cost basis; it would promote team working; it would, give managers confidence to delegate to and empower their staff; and it would allow both staff and managers to acquire new skills. In a traditional company such as Tana-Athi, it was not easy to introduce new ideas and new ways of working, especially where managers might perceive them as a threat. But the Managing Director made it clear he was committed to this initiative and that it had to work. Over the next few years the Kaizen approach was rolled out throughout the organization.

The next initiative, in October 1996, was a customer care programme. This was designed to engender a positive view of customers by promoting joint team working. In an industry where antagonism between customers and suppliers (contractor and subcontractors) was the order of the day, where settling disputes through the courts was almost a standard practice, it was never going to be easy to promote customer care. The Managing Director knew, however, that the future of the company depended on working with customers to understand what they wanted and to give it to them.

Once again, this initiative was a combination of organizational change and management development; but, much more than the Kaizen initiative, it was also central to changing the culture of the organization. It began with a few key customers and a few key managers, but such was its perceived success that a year later it was extended to the actual construction sites.

Other initiatives were introduced over the next few years, including Investors in People, and a redesigning of the Construction Supervisors' role to ensure that the post-holders possessed the skills, competencies and behaviours necessary to work closely with customers and staff under the new regime. Once again this was designed to achieve a combination .of aims, including changes to working practices, the upgrading of managerial competency on the construction sites, and the promotion and development of a more team-based culture in the organization.

By the end of 1999, the Managing Director felt the company had made sufficient changes to its behavior and practices to believe its culture was very much different from when he took over in 1996. However, he felt that the new culture needed to be formalized and consolidated. Therefore, he initiated a companywide review of each manager's leadership abilities and behaviours in order to ensure they were compatible with and promoted the new culture. However, he was aware that the basic structure of the company was unchanged and that he would need to address this issue in the near future.

Required: Attempt All the following questions:

1. Explain Five determinants of successful change.

2. Evaluate and comment upon the extent to which Tana-Athi can be said to have adopted the Culture--Excellence approach to running its business.

3. The transformation of Tana-Athi appears to have taken place with very little resistance or opposition from staff and managers.

4. Discuss why this should be so.

To what extent and why do you agree with the following statement:

The new Managing Director has not changed the culture of Tana-Athi but has merely introduced a new management style.

To what extent does the Tana-Athi case support the arguments of the HumanRelations school in terms of human motivation?