Report on Organizational Continuity and Resilience; Marelli Automotive Systems Europe PLC

EXECUTIVE SUMMARY

The report analyses an interview with Marelli Automotive Systems Europe Plc, a mobility technology supplier, and identifies potential factors associated with the continuity and resilience of the organization. The purpose of the report is to define how the identified issues affect the organization and how they can be addressed. The report offers the most suitable strategies, implementation action plans, and Key Performance Indicators for each strategy proposed to address the continuity and resilience issues. Therefore, through a case analysis of the interview, it was found that the organization is faced with global operation supply chain challenges, macro environment challenges, leadership style challenges, and technological digitalization challenges. The proposed strategies for the identified issues were a comprehensive supply chain resilience plan, adaptive capability to the Macro-environment, continuous technological advancements and cybersecurity, and an adaptive and inclusive leadership style.

INTRODUCTION

Marelli Automotive Systems Europe Plc is a mobility technology supplier working closely with its suppliers and customers to inform future developments in the automotive sector. The company, which has been in operation since 1989, has managed to excel in offering key products that include ride dynamics, electronic solutions, internal combustion powertrains, interior experiences, green technology solutions, and lighting and sensing. The company operates in about 170 facilities and centers in 15 countries across Asia, Africa, Europe, and America, employing about 50,000 employees globally (Marelli, 2023). However, the competitive landscape in which Marelli operates, where there are new business players with creative and innovative technological ideas, challenges the normal of operation (Llopis-Albert et al., 2021). Changing customers’ preferences, new business models, environmental concerns, and supply chain challenges within the automotive industry also challenge Marelli’s normal operation, calling for the need for organizational continuity and resilience. Various key strategies influence business continuity in the process of decision-making, which include risk assessment and management to identify the potential risks that threaten the organization internally and externally. Employee training and engagement through the organization’s continuity plan is essential to ensure that the workforce participates in the plan by playing their roles with a particular organizational goal. Financial preparedness is also an essential strategy to ensure that the organization is in a position to finance all the incurred costs through the planning and implementation of the business continuity process (Hussain and Papastathopoulos, 2022).

The significance of the report in enabling Marelli to cope with disruption challenges involves the identification of the associated risks and issues that affect the organization, hence allowing the concerned team to prioritize mitigation processes. The report also offers recommendations for strategic action plans, implementation processes, and evaluation matrices that could be essential in navigating through the identified issues, hence offering the organization a range of solutions to choose from based on their preference and suitability. Therefore, the key contribution of the report is to critically analyze factors associated with the continuity and resilience of Marelli and offer the organization the most suitable strategies and action plans. Therefore, the research question is;

What are the critical issues that affect business continuity in Marelli, and what strategies can the company adopt to prevent disruptions of its operations?

LITERATURE REVIEW

Personal and Interpersonal Resilience

According to Kuntz et al. (2017), personal and interpersonal resilience are some of the basic components of an organization’s success in continuity and resilience in the rapidly evolving nature of the automotive industry. The study acknowledges that most strategies used to develop personal resilience in a working environment are characterized by the use of stress reliance as an indicator by focusing on personal characteristics and individual rehabilitation. The study argues that organizational resources and support are determinant factors in the assessment of personal and interpersonal resilience. The study found that employee resilience is an adaptive behavior that is created through learning and interpersonal relationships within a supportive environment. Therefore, personal resilience involves the individual’s ability to withstand unfavorable working conditions, navigate various challenges, and cope with stress for the success of the organization, while interpersonal resilience involves the ability to maintain a productive relationship in challenging circumstances at work (Vercio et al., 2021).

Organizational Resilience

Chen et al. (2021), in a study involving a multiple case study of six various organizations, helped access the definition, principles, and measuring ability of levels of organizational continuity and resilience and showed that there are five dimensions of organizational resilience. Organizational continuity and resilience are still in the development stages, for it is still a challenging factor to recommend strategies to help cope with crises, creating mixed conclusions on the preferred plans to navigate such challenging situations. The study employs a grounded theory to define organizational resilience, explore its characteristics, authenticate its structural entities, and formulate a measurement scale that can be used to quantify the levels of continuity and resilience. The study collected data from 526 participants and conducted a validation factor analysis, exploratory factor, validity, and reliability analysis to outline the result of five-dimensional organization resilience. The dimensions include capital, learning, relationship, cultural, and strategic resilience with good validity and reliability. The strategic resilience dimension was identified to be the first consideration by implementing a lean strategy aligning with the company’s development goals, vision, and mission. The second dimension was the consideration of learning resilience and maintaining capital flow to enhance capital resilience to help navigate financial challenges during crises (Tengblad, 2018). Relationship dimensions involve ensuring a good connection between investors who pull resources, customers who are essential for enterprise development, and employees who are enterprise value creators. Cultural resilience is also essential, as identified in the study, as a relaxed operating climate is conducive to improved performance during crises and provides a sense of community-based community for employees to feel at home (Fietz et al., 2021).

Strategic Responsiveness Resilience

Building a responsive strategic continuity and resilience can take various forms and motives depending on the desire for the outcome and available resources. Kim (2021) conducted a study to explore the effectiveness of using an internal communication enhancement strategy to improve organizational resilience and shows the implementation of the strategy. The study’s argument is based on empirical research done in the United States involving 830 employees across the nation and reported that the organization-employee relationship has a direct relationship with organizational continuity and resilience. Therefore, the study recommends a positive communication relationship between employees and managers before the occurrence of a crisis for effective organizational continuity and resilience. However, responsive resilience strategies can also be based on environmental dynamics through circular economy, organizational learning, and resource-based (Do et al., 2022). Werner et al. (2020) suggest that despite the strategy employed for organizational resilience, there is a need for having key performance indicators in monitoring and managing organizational goals to attain continuity and resilience against crises.

IDENTIFICATION OF ISSUES

Marelli Automotive Systems Europe Plc is affected by various business continuity and resilience issues, which include global operation supply chain challenges, macro environment challenges, leadership style challenges, and technological digitalization challenges. The global operation and supply chain challenges are evident from the first phase of the meeting, where it is identified that the organization operates with 170 locations. Operation with numerous locations places Marelli at the risk of encountering global supply chain disruption, as seen by the impact of Nissan’s plant closures, hence suggesting that it is exposed to geopolitical challenges, global economic factors, and logistics challenges. Therefore, Marelli requires a well-established supply chain continuity, resilience, and risk management plan to navigate the global factors.

Mareli macro-environmental factors pose challenges to the organization’s continuity and resilience, as seen with the global economic shock in the Lehman crisis that occurred in 2008, which interrupted the organization’s supply and demand of commodities. Natural disasters have also proven to impact the normal operation of the organization, as seen in the 2011 floods in Thailand and the tsunami in Japan, which affected manufacturing operations and disrupted the supply chain. However, challenges posed by natural disasters are evadible macro-environmental factors, but with a good leadership style and strategy, the organization can manage the aftermath and take the least time to get back to operations. More macro environmental challenges are seen by the geopolitical tension evident in Russia that interrupted the operation plant in the area affected by the Russian-Ukraine war.

Marelli also mentions the issue of technological and digitalization challenges for its success in the rapidly evolving automotive industry. The organization handles various technological components such as headlamp technology and internal combustion energy technology and offers a green technology solution that requires updates to ensure that they align with the latest innovations. The challenge is presented by the ability of the organization to continuously invest and implement technologies that will ensure that it stays competitive in the market above other organizations that offer the same commodities in the connected, autonomous, shared, and electric vehicle production landscape. The organization has also been impacted by technological shortcomings and strategic missteps that can affect the organization’s continuity and resilience, such as the previous decisions on car production that led to financial challenges. There is also a need for digital security on the digitalized vehicles from cyber threats, which calls for leadership to consider investing in software upgrades to address the concern.

Moreover, leadership style and personal growth issues are also prevalent in the interview, where the organization underwent a transition during COVID-19. The organization’s decision-making process during the prevalence of a pandemic needs to be revised, for it is a top process from the global level to various regions. The leadership style also poses financial stability, which calls for debt restructuring, for it poses the existence and continuity of the organization. The leader had to communicate with various stakeholders of the company, such as employees, customers, and lenders, during a crisis, which calls for good communication skills in leadership. Therefore, leadership style is challenged by the need to navigate financial crises and unprecedented challenges such as natural disasters, maintain stakeholders’ trust, and adopt technological advancement.

RECOMMENDED STRATEGIES/ACTION PLANS

Supply Chain Challenges Action Plan

The strategy that would be effective in addressing the supply chain identified issues is the Comprehensive Supply Chain Resilience Plan, which is usually characterized by proactive planning of unexpected crises such as geopolitical instabilities, natural disasters, and labor strikes that may affect an organization. Marelli is guilty of the outlined challenges affecting its supply chain operations; hence, it should consider the strategy (Ghobakhloo et al., 2023). The action plan to implement the strategy involves the following;

• Carrying out a risk assessment on the organization’s global supply chain to identify the areas that are likely to present unexpected challenges, such as geopolitical, economic, and logistics risks.
• Outline alternative options for potential disruptions and develop a plan to respond effectively.
• Establish a real-time gauge that will facilitate the monitoring process for early detection of potential risks for a timely reaction.
• Work together with key suppliers to ensure that they align with the goals placed by the organization.

Macro Environmental Issues Action Plan

The strategy that would be effective in addressing the macro-environmental issues is the Adaptive Capability to Macro-Environmental Changes by establishing a culture that is creative and open to implementing new changes to cope with the prevailing challenges (Aligishiev et al., 2022).

• Continuously and regularly review the organizational continuity plans to counter unexpected changes such as natural disasters by considering historical challenges and how they were solved.
• Invest in predictive and forecasting analytics such as time series analysis to identify trends and patterns for preparation for potential risks.
• Establish a response team to disasters with specified roles and responsibilities to help manage challenges effectively and timely.
• Build an agile organization where all stakeholders are proactive in responding to various forms of macro-environmental challenges.

Technological Issues Action Plan

The strategy that would be effective in addressing the technologically identified issues is the investment in continuous technological advancements and cybersecurity measures, which will ensure the organization maintains its competitive advantage, satisfies its customers, and enhances operational efficiency (Kesa, 2023). Continuous Technological advancement is characterized by collaboration with partners to ensure that all stakeholders align with the innovations and enhance an agile organization. The action plan to implement the strategy includes;

• Invest in research on technology to ensure the organization is always up-to-date.
• Establish a team and guide to review the technological innovations to ensure that they align with the goal of the organization.
• Implement cyber security measures on vehicles and provide the latest updates to clients to ensure that they are secure.
• Practice an innovation culture to ensure the organization maintains its competitive position in the automotive industry.

Leadership Style Issues Action Plan

The strategy that would be effective in addressing the leadership style identified issues is the establishment of an Adaptive and Inclusive leadership style (Saja et al., 2018). The adaptive nature of the strategy ensures that changes are embraced by exploring new ideas, encourages innovations for maintaining competitive positions, and flexibility in decision-making making, while the inclusive nature of the leadership strategy is based on the ability to promote collaboration and create a safe working environment (Xintian and Peng, 2023). The following action plan is essential in implementing the strategy;

• Provide leadership development programs to impact leaders with decision-making skills for adaptability and agility during crises.
• Strengthen communication skills, especially during crises.
• Encourage the practice of personal growth and development through continuous learning in the evolving industry to remain competitive.
• Implement a revised decision-making process strategy that facilitates effective and timely response.

IMPLEMENTATION PLAN

Phase 1: Assessment and Planning (3 months)

Supply chain: The supply chain issues should be addressed in this phase by conducting a comprehensive risk assessment using the Failure Mode and Effect Analysis to help outline potential disruptions (Liu et al., 2019). The organization should develop an alternative suppliers network that will ensure that there are no delays in supplies in case of regional factors influencing supplies, hence mitigating geopolitical and logistics risks.

Macro environment: review the previous responses to crises, assess their effectiveness, and outline areas that need improvements; invest in predictive analytics; and foster an agile organization.

Technology: Carry out a gap analysis to find out areas that do not align with the latest innovations and identify suitable innovations for each gap. The organization also needs to partner with research institutions and universities to access knowledge and talents.

Leadership: Implement leadership development programs that are based on communication skills, making informed decisions, and crisis management.

Phase 2: Implementation and Testing (6 months)

Supply Chain: the organization should then conduct a pilot test of the newly identified suppliers, their accessibility, reliability, and alignment with the organizational goals. The new suppliers’ weaknesses should then be assessed to identify their potential impacts on the Marelli operations and have a real tile data sharing platform with the new suppliers for the need of transparency.

Macro environment: The organization will conduct a simulation exercise to practice the effectiveness of the response plan and train the team where there are still gaps.

Technology: The organization will implement a pilot project where the innovations are assessed for their scalability and the available weaknesses are addressed. The organization also carries out cyber security vulnerability assessment testing and educates employees on the need to create a culture of responsible technology so as not to negatively influence other industries.

Leadership: Implement the new leadership practice that embraces continuous learning and personal development, and place a monitoring strategy to continuously assess the effectiveness of the new leadership practice.

Phase 3: Monitoring and Review

All implemented strategies and action plans are to be regularly monitored to assess their effectiveness based on internal and external environments. Data from all strategies from pilot tests and real-world events should also be provided for future reference and to trace the source of errors and make necessary adjustments. Employees and managers should share lessons and best practices throughout the learning and implementation processes to promote a culture of continuous improvement among their fellow colleagues (Richard, 2020).

EVALUATION METRICS

Supply Chain Evaluation Metrics

The supply chain continuity and resilience evaluation metrics would consider a Delivery Schedule Achievement and Reduction in Lead Times KPI to enable tracking the average time taken by suppliers to deliver materials and time taken to deliver finished products to customers as the strategy aims to reduce the lead time (Patidar et al., 2023). Not Right First Time is also used in addition to account for the number of defective materials delivered by the new supplier to help save on cost and maintain competitive advantages.

Macro Environmental Evaluation Metrics

Marelli would also consider using the Overall Equipment Effectiveness to assess the strategies put in place to respond to disaster in a timely manner (Leong et al., 2020). The organization, through the Overall Equipment Effectiveness KPI, would be able to identify the availability of the necessary tools to counter crises and ensure that the organization remains operational.

Technological Resilience Evaluation Metrics

Technological resilience utilizes the Value Added Per Person evaluation metric, which can be used to evaluate product innovation rate, where a high rate can indicate staying ahead in technological advancement and ensuring that the organization has a competitive advantage (Susanto et al., 2023). The organization should also consider the Technological Adoption Rate KPI to quantify the measure of customers adopting newly implemented technologies on their products where a high rate indicates market acceptance (Nkomo and Kalisz, 2023).

Leadership Resilience Evaluation Metrics

The leadership style should be evaluated using the Stock Turns and People Productivity KPI to evaluate the effectiveness of the strategies. High stock turns would suggest that the leadership strategy is effective with better supplier relationships, forecasting, and inventory management. Low stock turns would suggest that there is a lack of adaptability to crises and poor communication between personnel of various supply chain areas. However, high people productivity suggests that the employees are motivated and have developed effective development skills, while low people productivity suggests a lack of employee engagement (Susanto et al., 2023).

CONCLUSION

Marelli Automotive System Europe Plc. It is identified through an interview to be faced by various business continuity and resilience issues, which include global operation supply chain challenges, Macro environment challenges, leadership style, and technological digitalization challenges. The study outlines the Comprehensive Supply Chain Resilience Plan as an effective plan to address supply chain issues such as global supply chain disruption. The study also identifies Adaptive Capability to Macro-Environmental as a potential strategy to address macro-environmental issues such as the unexpected 2011 floods in Thai and the tsunami in Japan. The strategy to effectively address the technological issues is the investment in continuous technological advancements and cybersecurity measures, while the establishment of an Adaptive and Inclusive leadership style is proposed to solve leadership challenges within the Marelli organization.

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