Space Electronics Corporation

Executive summary

The Space Electronics Corporation is a subsidiary of a major firm with sales in excess of $200 million. The company held substantial positions in commercial and military electronic systems markets, however, profitability and market have been declining. The company became aware of two R&D projects that were coming up in the next few years, the projects were the stealth bomber and the Star Wars proposals.

Previously the company involvement in the projects was through sub-contracting and they landed only one project, whereas the current project they need to participate as prime contractor. This as a result of changes in the business environment that resulted in competitive market and declining market share, which impacted on profitability the company and availability of projects. The executive committee needed to make the decision on whether they will be biding for this upcoming projects or not. At the same time there was great pressure from headquarters to tender for the projects.

The organisation president, Reade Exton, called the Exco committee to make decision on whether to bid and not to bid. This is despite the fact that headquarters has made its intentions clear that the projects must be pursued. From the meeting, there were different views on what is the cause of current organisational performance and how the organisation can be turned into profitability and market position. Instead of the meeting deliberating of the strategies and tactics that will be give the organisation an upper edge on the project, the focus was more on justification and denial. This attributable to poor leadership and complacency of Exco committee members.

Transformational change management is required to improve the organisation profitability and position in the market. The problems and their underlying causes is discussed in the assignment and recommendations on strategies and steps needed for implementation of transformation is outlined.

Question 1 Identified problems and their causes

1.1 Lack of leadership

According to Fred Fiedler, leadership performance is based on two interrelated factors

1. The degree to which a situation gives the leader control and influence to get the job done(position power)

2. The leaders own motivation i.e. the level of self-esteem in accomplishing the task and having close supportive relationship with others. The model provides for situational control, leader-member relations, and task structure.

Situational theories propose that the effectiveness of a particular style of leader depends on the situation. According to Robert House goal-path model, a leader behaviour is acceptable when subordinates view it as a source of satisfaction. In addition, leader behaviour is predicted to be motivational to the extent it

1. reduces roadblocks that interfere with goal accomplishment,

2. provides the guidance and support needed by employees,

3. ties meaningful rewards to goal accomplishment.

House further postulated four leadership styles (directive, supportive, participative and achievement-orientated). The leadership that is best suited when there is a lot of uncertainty is directive leadership because it entails guiding employees as to what should be done and how, planning, scheduling, prioritizing, and maintaining standards of performance.

From the Space Electronics Corporation, the company profitability and market share was declining, they were successful on one project only and there is pressure from head office to pursue additional projects. It is evident that the kind of leadership provided by Reade Exton, the president, was ineffective and inappropriate. Based on the company performance and status, instead of guiding the management of what need to happen, he is showing concern and treating workers as equals, which result in lack of decision. The fact that after the Vice Presidents has voiced their concern and he still cannot make the decision unless there is consensus, this indicates a weakness in the President leadership.

1.1.1.Underlying Causes

One of the key strategic roles of managers, whether they are general or operations managers, is to provide strategic leadership for their subordinates. According to Hill and Jones (2001:15), strategic leadership refers to the ability to articulate a strategic vision for the company, or a part of the company, and to motivate others to buy into that vision.

From the case study, the causes of lack of leadership at Space Electronics Corporations is attributed to the following:

a) The President did not encourage innovation behaviour, entrepreneurial creativity, experimentation and risk taking

b) The President did not build teams and promote teamwork, and recognize achievements.

c) There was no strategic intent, which is normally articulated through the vision and mission. This helps the organisation in setting ambitious goals, which stretch a company, and then finding ways to build the resources and capabilities necessary to attain those goals. The argument for setting an over-arching goals is that

* It gives a sense of direction and purpose to people within the company

* It helps strategic decision making and resource allocation

* It forces managers to look for significant improvement in the way they do their business

d) There was no values- the values of a company state how managers intend to conduct themselves, how they intend to do business, and what kind of organisation they want to build. This is seen as the bedrock of a company culture and driver of competitive advantage.

e) There was no clear goals- this are desired future state that a company attempts to realise, this must be specified with precision as well constructed goals provide a means of evaluating the performance of managers. Goals can be short-term and long-term.

The above attributes form the guiding principles of a successful organisation were lacking in Space Electronics Corporation. Hence the president, Reade Exton, resorted to his managers for advise on what need to happen, whereas his managers were looking upto him. It is not clear as to how Space Electronics Corporation links up to the parent company.

1.2