The real root problem of this case is that the owners of Pro-Net, led by Melodie Stewart and her partner Kim Doherty have become overwhelmed by the scope of operations at their disposal. They have managed to grow their operations to the extent that they are getting many jobs that they cannot handle now. They are not motivated to keep working on jobs not within their core competencies since they have to balance work and their personal lives.
The diagnosis of their problem’s fundamental causes indicates that Pro-Net’s continued growth is overwhelming Melodie and Kim. The demands on their time and logistics have become increasingly complex to organize. They are overworking to the extent that they become tired and exhausted trying to keep up with the growing demands of the business. The implication is that they are accepting any form of networking work that is availed to them in their quest to grow and expand the scope of their business. They are not selective enough.
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Various possible alternatives are available to the partners moving forward. First, they should consider the idea of hiring qualified, innovative and experienced individuals that will help them to address the demands of their work. In the analysis of Bach (2021), companies need to bring in extra workers that are supposed to handle additional jobs during the growth phases. It is an alternative that Melodie and Kim can exploit to ensure they cope with the increased demand for their services moving forward.
The second alternative is to ensure that the company’s operations are divided into two broad categories, with Kim in charge of one. At the same time, the other is left for Melodie based on their competencies and interests. In that regard, each will be able to decide on the jobs that can be taken and those that can be disregarded. Aspects of the division of labor and specialization will be encouraged, where each professional will be given the mandate to work independently but coordinate to achieve individual and collective goals. It is a viable option to ensure that Melodie and Kim work based on their potential and capacities.
The third alternative is to ensure that Pro-Net specializes in projects that emphasize the organization’s core competency. The implication is that Kim and Melodie will need to have a comprehensive situational assessment where they will identify the core competencies and also focus on analyzing their common business values and goals to shape the business in ways that satisfy both the clients and the management. It is a situation that Strydom & Smith (2019) associate with focusing on the areas of the market and client’s needs that the companies can properly address while harnessing the talents and competencies of the human resource at its disposal.
The evaluation of the plan of action is based on exploring the decisions and their relevance to the organization. The evaluation of the three alternatives points out that the best one at this moment is where Melodie and Kim have to be realistic by working on projects that emphasize the company’s core competency that is in line with their personal and common business values and goals. The emphasis in that regard is to ensure that they provide top-quality services that the market rivals cannot meet. It is a mechanism, according to Guillén (2020) that can ensure the establishment and sustenance of customer loyalty moving forward.
The case of Pro-Net is important and relevant to the study of business since it gives aspiring entrepreneurs and business executives the impetus to know the various phases of growth of a business. They understand how persistence and consistency can ensure the kicking off of the business and the role played by hard work and resilience. Moreover, the case makes aspiring entrepreneurs realize that they must be motivated enough to move their businesses from the formative to the maturity stages. Tough decisions, market research, and foresight are required at any given moment. Lastly, it is a case of moving out of the comfort zone to take risks and strive to achieve success in the best ways possible.
Section II: The Transformation of Valio
Organizational change can be defined as changing an organization’s state of affairs from one form to another. These forms may involve structural forms, procedures, rules and regulations, technology, and culture. Usually, organizational changes take time before they are implemented or can be planned several years prior to the change.
Organizational changes can result from internal and external factors that alter how an organization runs its operation. Generally, organizational changes involve letting go of the old ways of conducting an organization’s programs and adjusting to the new ways of doing things. The paper will discuss a Finnish organization named Valio and how it responded to the changes initiated in 1995 due to Finland’s accession to the EU.
Identification of the problem
Organizational change is caused by many factors, including internal and external factors. In this case, Valio needed to implement organizational change because of its desire to join the EU. This would eventually suggest that the organization would abandon its strategies and expose it to a stiff competition from other organizations whose membership was in the EU.
The accession of Finland to the EU in 1995 found Valio in a reorganization project which forced the organization to change its business model (Lamprinakis, 2012). Both internal and external factors impact the organization; internal factors include structure, culture, and practice, while external factors include technology, political and economic. However, the idea of Valio’s organizational change was mainly influenced by an external factor which is Finland’s accession to the EU.
Diagnosing the cause
Valio’s management team realized that merging the organization with other organizations could benefit it economically and enhance its productivity and competitiveness. However, the company had to shut down its several units to downscale since the organization perceived that it would benefit economically by being a member of the EU (Perko, 2005). For instance, Finnish dairy products were expensive compared to products from other EU states; as a result, EU membership would enable it to import products from other EU countries and become more productive and competitive.
It will be noted therefore that being part of the EU would enable the organization to obtain bulk products and different kinds of value-added products. Besides, it doesn’t matter whether the cause is internal or external, as the organization must consider internal and external factors to become successful and enhance its competitiveness.
Valio responded to the internal factors where it commenced its project of restructuring that lasted more than a decade. The company focused on downsizing and streamlining its units while continuing to invest in R&D and developing new markets at the same time (Lamprinakis, 2012). The organization invested in marketing for brand strengthening and the project of new market development to respond to external factors. Besides, there could be alternative ways for the organization to respond to internal and external factors.
The organization would establish an extra company instead of downsizing and streamlining its units to fit the requirements. In this case, Valio would remain the parent company while the other extra company holds its other operations. Therefore, the other extra company would enter the new market with new products different from the parent companies, Valio, products.
Recommendation and implementation
Valio made the challenging decision of downsizing and streamlining its unit in order to respond to internal and external factors. Downsizing its unit would mean that the organization had to reduce its workforce, shrink the costs in administration and reduce its production to respond to the organizational change factors (Lægaard, 2006).
However, it decided to continue investing in R&D developments and developing new markets for its products, which would benefit the organization economically. Moreover, Valio would consider the option of pay cuts and pay cuts with an incentive in order to maintain its units. This would act as an option instead of downsizing its units. They could also establish an extra company to transfer its other operations to it instead of downsizing to respond to external factors.
Importance and relevance of the case study
Valio’s transformation in business studies is important and relevant because it enlightens students that there should be environmental scanning based on internal and external analysis of the involved factors before implementing any organizational changes. The internal and external environmental factors impact organizations in various ways; thus, they must be analyzed first. The case study is also important in business studies as it portrays good leadership skills and communication skills in the instance where the organization involved the employees in making the decision to downsize the unit while investing in R&D at the same time. This, in turn, positively impacted the organization as it enhanced its competitiveness.
Before an organization decides to change its operation depending on internal or external factors, it has to plan in advance on how the changes will take place and how they will affect the organization’s operations. Involving the management and employees in the decision-making process is also crucial, as different opinions would be of great importance. Due to the right decisions the Valio management made, Valio remains a significant and well-known brand in Finland.
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Guillén M. (2020). Motivation in organisations searching for a meaningful work-life balance. Routledge.
Lægaard, J. (2006). Organizational Theory-eBooks and textbooks from bookboon. com.
Lamprinakis, L. (2012). Organizational innovation and institutional change: the case of Valio in Finland. International Journal on Food System Dynamics, 3(2), 95-105.
Lamprinakis, L. (2012). Organizational Innovation in the Face of Institutional Change: The Case of the Finnish Dairy Sector (No. 1020-2016-81753, pp. 148-160).
Perko, T. (2005). The Valio Story: From butter exports to international business. Valio.
Strydom J. & Smith M. B. (2019). Principles of business management. Oxford University Press.’