Organizational Overview and Problem Statement
The Fast Moving Consumer Goods (FMCG) industry in Saudi Arabia is dynamic, and many proprietors seek professional consultation to maintain a competitive advantage. As a company offering commercial and marketing services to global and multinational corporations in the country, numerous opportunities exist to excel. The company is divided into critical sections which must work in tandem to achieve the overall goal of increasing its customer base. The human resource, finance, marketing, operations, and IT departments must work together and report directly to the CEO. The critical challenge facing the organization is confusing accountability and constant blame games, which leaves most of the employees working in fear. Most of the company’s functions tend to interact with prospects and share confusing information with clients, making them change their minds. Consequently, the customer base for the company keeps shrinking. Accountability confusion is a misalignment problem that can be a prerequisite for organizational failure.
Capabilities Needed for Success
The antidote to accountability confusion in the organization is to facilitate effective leadership and increase individual accountability. The scenario of different departments getting in touch with prospects with conflicting information about services justifies poor leadership and lack of accountability. When there is a positive result, such as an increase in the customer base, all the departments will take credit. However, when the customer is confused and disagrees with working with the organization, the departments blame each other for performing tasks, not in their jurisdiction. Effective leadership is paramount because each department has a specific organizational role. When specialization and division of labor are implemented courtesy of good leadership, each organization member will understand their particular role and be accountable for the expected part (Robert, 1995). Further, when every employee of the organization is assigned specific roles to play, their levels of accountability increase, and the misalignment between departments and the end goal is eliminated.
The Contingency Theory of Leadership
A leader’s effectiveness is contingent on how the style offers a solution to the current challenge affecting the organization. The theory further underscores that there is no right leadership style as each organizational situation may require a specific technique. The challenge of the organization’s misalignment requires a customized solution to why the departments are confused in their roles and call for a brainstorming meeting to chart the way forward. According to Fiedler’s contingency theory, success in an organization is akin to the strong relationship between leaders and employees, where the leader has the power to reward and punish the employee for an outcome. The situation in the company indicates that leadership capability is missing, and line employees are free to assign roles and implement them. When there is no authoritarian leadership to give parts and ask for feedback, the performance will likely deteriorate in the discourse. The misalignment can therefore be eliminated by implementing a string leadership policy to reassign roles and accountabilities to each department.
Accountability Theory
The accountability theory in the business realm explains the need to justify one’s actions to the organization and describes how the actions or behavior adds value to the organization. Employees can only be accountable when their roles are stipulated and have the chance to introduce creativity to ensure that they perform their function (Popp & Hadwich, 2018). In the case of the misalignment problem in the organization, the confusion results from a single role being played by all the functional units. If finance, human resource, and marketing make direct calls to prospects, they will likely confuse the client as their areas of expertise differ. According to the theory, contacting the prospects should be allocated to only one marketing department whose representatives are trained on how to talk to clients and are aware of the trends.
Whenever a single role is played by one department, it allows for professional communication, and the customer becomes convinced that the company has what it takes to offer the said services. Similarly, the theory urges the other departments to stick to their areas of specialization and have a platform to discuss the outcome. Adjustments in the operations can only be made whenever the people in charge of communicating with the prospects advise the change. However, it is prudent to note that accountability theory encourages constant communication between departments to ensure all staff members know their organization’s status.
Systematic Agreement Theory
The systematic agreement theory, or the theory of organizational alignment, states that an organization can succeed when the structure, culture, and strategy in an organization interact effectively and creates an environment where organizational goals are understood and achieved. The corporate goal is to reach out to FMCG entrepreneurs to offer commercial and marketing services. The plans can only be achieved when the different departments in the organization specialize in their task and are guided by professionalism. With the right team members, the financial department must analyze the current environment and what financial standards are likely to attract more clients. On the other hand, the marketing department must understand the trends in the industry and create offers that meet the customer’s expectations. Success is achieved whenever the different departments or functional units in an organization are aligned and work towards the stated goals (Jurevicius, 2022). Alignment in the organization can only be achieved when the leaders make employees accountable and give them the right tools to make decisions on matters that affect the day-to-day running of the business.
Misalignments in the Organization
Organizational misalignment is where employees, departments, and leaders move in different directions. The current state of misalignment in the organization is between people, structure, systems, and capabilities. Although the organization has an operational structure with different departments, they fail to work on their role and all focus on marketing by reaching out to prospects. By so doing, the confusion in accountability confuses the prospects and consequently leads to failure. The misalignment between the departments makes them strive to reach out to clients at the expense of their roles. The organizational compensation policy rewards any person who introduces a new client to the company. As a result of the compensation package, employees’ and companies’ goals differ. While the organization aims to increase its customer base, the employees strive to increase their earnings by increasing their communications to prospects. The misalignment between the people and the organization’s goals leads to dysfunction and may lead to poor performance.
Misalignment in capabilities is witnessed in the organization since people with expertise in finance find themselves performing marketing. It is paramount that companies attract, motivate and retain employees to serve in their specific roles. A capability misalignment is likely to affect the overall performance and goal setting (Ulrich & Smallwood, 2004). Success can be achieved when each capability is made accountable in its area of specialization. Only leadership and accountability can make people perform better in the organization as per their talents and areas of specialization. The organization’s employees make changes motivated by external optics but do not contribute to the final organizational goals.
Recommendations
Developing a Balanced Scorecard
The identified misalignment in the organization can be solved by coherence evaluation. A company’s strategic direction is defined by its mission, vision, and goals (Leinwand & Mainardi, 2010). Since the misalignment affects both employees and departments, the first recommendation needed to improve efficiency in the organization is to develop a balanced scorecard to investigate all other misalignments and how they can be resolved. A balanced scorecard is a leadership tool that evaluates the outcome of an employee’s actions and determines whether the actions add value to the organization or not (Kaplan & Norton, 2009). The balanced scorecard can be visualized as strategy maps and show how individual employee actions can lead to achieving the business goals in the discourse. The balanced scorecard offers a diagnosis and an action plan to solve the problem. The scorecard gives specific information to the departmental heads and leaders at different levels to act.
Introduction of a Guiding Policy
Since the organizational goals are superseded by employees’ goals of increasing their earnings, confusion of roles is manifested. A guiding policy is a management framework that offers strategic direction on the actions to achieve success in due course. The new guiding policy developed for the organization includes specialization, division of labor, and accountability. Division of labor and specialization is a management term that ensures that the operations in an organization are divided into smaller tasks, and each task is assigned to a specific department with a required level of competence (Lawson & Price, 2003). The departments must be aware of their specific roles and how each role contributes to the organization’s overall success. As more employees focus on customer relations to gain commission, a new client may not find services in the other departments. The policy must therefore specify the key performance index in each department and how each performance Index contributes to the organization’s overall goal.
Introduction of Constant Learning and Restructuring in the Organization
Learning is a continuous process that enables people to understand the trends and emerging issues in their areas of specialization. The misalignment in the company is a result lack of adequate information on the role of each department and the importance of professionalism and specialization. Regular seminars must therefore be introduced in the organization on the importance of working collaboration, teamwork, and accountability. In training, each department understands its roles’ importance and enhances performance. The misalignment also indicates that employees have different interests in marketing and research. Therefore, the company can restructure and introduce new roles for brand ambassadors who will be mandated to work with the marketing department and reach out to customers on the brand they represent. Having specific brand ambassadors working as affiliates to the marketing department reduces the misalignment and ensures that each employee and department works on their specified role to achieve organizational success.
Conclusion
Misalignment is a common challenge affecting business, especially when the business goal and vision are unclear. When the employees in an organization have personal goals that differ from the organizational goal, misalignment occurs, a prerequisite to failure. The problem of misalignment causes a lack of accountability, blame games, and employee dissatisfaction. Therefore, the role of organizational management is to ensure that each employee understands the strategic goals and assigns them specific roles toward achieving the organizational goal. Accountability and leadership capabilities are the antidotes to organizational misalignments as they ensure that employees are assigned specific roles and given the right tools and ability to make decisions that affect the business.
References
Jurevicius, Ovidijus, (2022, August 16). Value change analysis. Strategic Management Insights, 86 (4) 77-92(https://strategicmanagementinsight.com/tools/value-chain-analysis/.
Kaplan, R. S., & Norton, D. P. (2009). Putting the balanced scorecard to work. In The economic impact of knowledge (pp. 315–324). Routledge.
Lawson, E., & Price, C. (2003). The psychology of change management. McKinsey Quarterly, pp. 30–30.
Leinwand, P., & Mainardi, C. (2010). The coherence premium. Harvard Business Review, 88(6), 86-92. https://nine-dots.org/documents/The%20Coherence%20Premium%20-%20June%202010.pdf
Popp, M., & Hadwich, K. (2018). Examine employee behavior’s effects by transferring a leadership contingency theory to the service context. SMR-Journal of Service Management Research, 2(3), 44–62. https://doi.org/10.15358/2511-8676-2018-3-44
Robert, S. (1995). Control in an Age of Empowerment. Harvard Business Review, pp. 85, 55–62. https://hbr.org/1995/03/control-in-an-age-of-empowerment
Ulrich, D., & Smallwood, N. (2004). They are capitalizing on capabilities. Harvard business review, 82(6), 119-27.
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