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TABLE OF CONTENTS
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1. INTRODUCTION____________________________________________21.1 Setting the Stage_________________________________________21.2 The Development of the Indian IT Industry_____________________31.3 Organisational Challenges to IT Companies____________________5
1.4 Need for the Study________________________________________61.5 Problem Statement_______________________________________71.6 Purpose of Study_________________________________________8Appendix II - Score for the factors discussed in the Questionnaire (IVYComptech Company staff)
1.INTRODUCTION
1.1 Setting the Stage
In the past 45 years of the computer age, computer processing power has
increased to an incomprehensible 30 orders of magnitude, 1030, the ratio of
the diameter of an atom to that of the Milky Way. From the 1970s to the
present, computer power has doubled each year following a trend known as
Moores Law. This means computer power increases at 2year, about one million
times every 20 years. And there is no end in sight to this trend: research on
nano-computers predicts that Moores Law will apply well into the next century
(Spencer, 1995). The bottom line: we are dealing with the most amazing
ubiquitous technology, which has been and will be changing the face of the
earth, effecting humans in every possible way.
The computer industry, otherwise called as Information Technology (IT)
industry, has been described as the most dynamic, most prosperous, most
economically beneficial industry the world has ever known (Parsons & Oja,
2011). The rapid development of the industry is promoting global industrial
restructuring, optimization and upgrading, and bring about profound changes
in the human lifestyles and production patterns (Zemin, 2009). Economies of
scale and insatiable demand from both consumers and enterprises
characterize this rapidly growing sector (Economy Watch, 2010). With the
worldwide consumption of IT industry products estimated to be more than US
$ 2.1 trillion annually (Parsons & Oja, 2011), the industry has acted as a key
driver for global economic growth (Economy Watch, 2010).
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Since the beginning of the 21st century, IT has been evolving every single day
with its popularity and applications having significant impact on economic,
political, social, cultural and military development. The IT industry of a country
or region has become an important yardstick of its overall strength,
international competitiveness, and degree of modernisation (Zemin, 2009).
Considering the Indian scenario, IT industry has literally given India a place on
the world map which was otherwise considered a developing country with
inferior infrastructural reliability. NASSCOM - the apex forum for the IT
Industry in India, asserts that IT industry has played a significant role in
transforming Indias image from a slow moving bureaucratic economy to a
land of innovative entrepreneurs and a global player in providing world class
technology solutions and business services. Presently, the industry is
estimated to have grown by 19 per cent in the FY2011, clocking revenue of
almost US$ 76 billion (NASSCOM, 2011).
Poised to become a US$ 225 billion industry by 2020 (IBEF, 2011), India has
climbed 10 spots to reach the 34th ranking on the global IT industry
competitive index owing to its strong human capital and research anddevelopment (R&D) base. Compiled jointly by Business Software Alliance
(BSA) and the Economist Intelligence Unit, this IT industry competitiveness
index benchmarks 66 countries on a series of indicators covering the critical
foundation areas for IT innovation (Economic Times, 2011). Speaking about
this news, Som Mittal, president of NASSCOM , he said India (Indian IT
Industry) is gradually diversifying its services focus to innovation in new
product development and related capabilities reflecting its gradual emergence
as a lead in not just IT exports but soon also in IT products.
1.2 The Development of the Indian IT Industry
The Indian IT industry saw its birth in the 1960s. It was the time when
multinational companies originated in the 1960s, hardware was provided by
multinational firms like IBM had taken their place as global leaders in the
hardware market and the only opportunity left for Indian firms was to
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specialise in the area of IT services. Those were the days when Indian
domestic IT needs were almost negligible making the Indian IT service
companies to rely heavily on export markets. By 1980/1981 when many of
todays Indian major companies were founded, the Indian software exports
reached the 13 million USD mark and, large companies in other sectors of the
economy diversified into the IT sector (Ainavolu, 2007). At that time, the
Indian software industry heavily relied on body shopping that is, flying
professional staff to the sires of overseas clients in order to work on software
assignments. This was mainly due to the large talent pool of English-speaking
computer scientists and engineers willing to work overseas for a fraction of US
wages as well as the lack of appropriate hardware in India, caused by the
limited availability of foreign exchange to purchase computers (Henley, 2007).
Body shopping proved to be the stepping stone for the gigantic growth of IT
Industry that would be recorded in the years to come. During the 1990s, IT
industry saw the prevalence of customised and firm specific software along
with the considerable market for maintenance work and integration of legacy
software systems. It has been argued by some observers that over two-thirds
of all software development efforts are spent in maintaining and enhancingexisting software codes, rather than producing new software (Arora & Athreye
2002). Such work necessitates in-depth understand of the software functions
through face-to-face contact. The building of trust between client and software
provider that was possible as a result of face-to-face interaction on site, was
critical for the development of the software industry.
For the business relations to prosper and Indian companies to get business
deals from the west, they would have to develop strong client trust, in order
that the client shares confidential information with the information technology
provider. Indian IT companies have challenged their limitations over time by
building their infrastructural facilities, intellectual property and human capacity.
Today, India's top technology firms like TCS, Infosys, Wipro and HCL are
readying plans to gain a bigger share of their largest market, US, by
aggressively chasing contracts being served by multinational rivals. Analysts
expect the top IT firms to grow between 23-27 per cent in the FY2012 on the
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back of more number of discretionary projects, improved pricing, and robust
business volumes (Economic Times, 2011).
1.3 Organisational Challenges to IT Companies
An introduction to this subject could not be any better but to pen down the
following mission statement of IVY Comptech company:
While our business is not dependent on physical assets to succeed, it is
heavily dependent on intangible assets such as our brands, technology and
most importantly our people. We aim to attract and retain high performingtalent from around the world and seek to promote and develop high culture.
Our employees are both engaged and well-rewarded for their achievements
and outstanding contributions.
Two of the most important features of IT industry are (1) Unlike other common
industries, IT industry is knowledge-based and (2) Efficient utilisation of skilled
labour forces in the IT sector can help an economy achieve a rapid pace of
growth (Economy Watch, 2010). Being in a knowledge-based industry, ITcompanies like IVY Comptech have identified that the main source of their
competitive advantage is the intellectual capital consisting of human capital
and intellectual property. As seen from this mission statement, IVY Comptech
has identified that attracting, retaining and maintaining high performing talent
is necessary for the IT organisations to stay ahead in the competition.
Indian IT industry has seen several stages of transformation throughout its
history from infancy in the 1960s to the present decade. Principal factors of
transformation, apart from overall investment climate and changes in demand
and supply, have been the business processes, human resources and
institutional capabilities. (Mitra, 2010). Economy Watch (2010) maintains that
one of the most important crises facing the Indian information technology
industry today concerns the human resources aspect. The skill level of the
information technology professionals is one area that needs improvement and
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presents a considerable amount of challenge before the Indian information
technology industry.
Kuruvilla and Ranganathan (2008), stating in Indian context, claim that four
critical and interlinked HR challenges threaten the near and long-term
prospects of IT industry. Macro level HR problems include a shortage of
skilled HR and difficulty in producing high-skilled manpower. The micro HR
problems include high average turnover rates, and the rapidly rising HR costs
in the industry. According to Andersen, et al. (2010), the desired outcomes
from an HR perspective are low employee turnover, low absenteeism, high-
quality customer service and high performance. These outcomes are
achievable only through the result of an integrated and coordinated effort by
the service provider and the client. The desired outcomes can be achieved
using best-practice activities within job design, change management and
contract formulation. These activities should continuously be reassessed by
monitoring the psychological impact on the employees attitudes toward the
activities, the job, the service provider and the client.
Similarly, Meenakshi Gupta from the premier Indian Institute of Bangalore, inher article on HR Challenges in the Indian Software Industry discussed a
variety of issues hovering Indian IT Industry. They are recruitment of world
class workforce and their retention, compensation and career planning,
technological obsolescence and employee turnover, to name a few.
Apparently, the human resources perspective needs to be studied in order to
adopt an all-embracing approach to understanding organisational issues, their
effect on people and to prepare processes and solutions to improve
organisational effectiveness (Gupta, M., 2004).
1.4 Need for the Study
It is globally accepted fact that the performance of an organisation is vital for
organisations success. Armstrong, & Baron, (2004) describe management of
organisational performance as the continuing responsibility of top
management within an organisation to achieve the corporate objectives by
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planning, organising, and controlling activities with good leadership. He goes
further and states that there are various types of performance measures
however which one is used sensibly lies on the managers.
There have been various studies conducted on managing projects (Lewis, J.
P., 1999) where all the different phases of an organisations lifecycle from
conceptualisation, growth, maturity through decline and closure are looked at.
Now the top management are on an agreement that they needs to ensure that
through all of these stages planning, organising and controlling is executed
efficiently. However yet there are still organisations that underperform and fail
eventually. This shows that there are yet many other reasons why an
organisation fails to perform. These reasons shall be explored through this
research.
Organisations that close down suffer themselves from financial loss however
this also impacts on the workforce and the employment opportunities. Many
other stakeholders are affected by an underperforming organisation which is
why this research needs to be conducted as it would uproot causes which will
help execute corrective and preventive actions.
1.5 Problem Statement
Companies small or large fail due to various reasons and eventually the
cause of concern is pointed out to a single variable. Yet, organisations still do
not have enough information to work with which ensures that their
performance is of good standards and that they do not fail. Closing down ofan organisation or a division of it causes financial loss to its stakeholders, to
the economy of the country as it brings revenues and also employment
opportunities are lost.
1.6 Purpose of Study
The purpose of this dissertation research is to investigate into the factorsresponsible for underperformance of an organisation and to find out what all
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variables of an organisation need to be scrutinised to ensure the company
remains stable and its performance is improved. Potentially there are a wide
range of factors that may be responsible for an organisations failure or
underperformance for which the aims and objective of the research are:
1. To identify the cause(s) controllable and internal to the organisation.
2. To identify the cause(s) non-controllable and external to the
organisation.
3. To explore the primary cause of non-performance or closure of an
organisation.
4. To investigate into the overall performance parameters of an
organisation.
5. To examine the effects of market competition on the organisations
performance.
6. To provide recommendations for monitoring performance of the
organisation.
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1. REVIEW OF THE LITERATURE
The issues of business failure have been perceived in different ways
depending on the circumstances that lead to the failure. Megginson & Smart(2008) view business failure as the unfortunate circumstance of a firms
inability to stay in the business. Though companies may fail due to financial
distress as pointed out by Drapeau et al. (2004), Neophytou, et al. (2001), the
present research is more into taking Greiners (1972) point of view. He
considers a business fails when companies fail to see that many clues of their
success lie within their own organisations and the evolving states of
development. Moreover, the inability of management to understand its
organisation development problems can result in a company becoming
frozen in its present stage of evolution or, ultimately, in failure, regardless of
market opportunities (Grainer, 1972). In a similar fashion, Westland, (2006),
believes that the reasons of organisations to fail would be its lack of
achievement of its predefined business goals.
While discussing on how companies financial turbulence affects their
sustenance, Platt (1999) in his book Why Companies Fail: Strategies forDetecting, Avoiding, and Profiting from Bankruptcy, argued that cash flow is
not the only reason for business failure. According to him, a companys failure
has more to it, than just its financial affairs. As discussed in the introduction,
IT success or failure primarily depends on organisations performance in the
aspect of its human resource management. It can be best theorised by
applying various management theories and concepts in the context of IT, to
assess the internal and external factors responsible for its failure. The
strength of management theories and concepts and other underlying
performance factors related to IT, as appeared in the literature, are studied in
this section.
2.1 Factors of IT Companys Non-Performance
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A keen observation at the industry reveals that IT business landscape is
characterised by significant number of mergers and acquisitions taking place
through the years, as indicated by BPO India (2011). Solganick, Aaron
(2011), founder and President of Los-Angeles based Generation Equity
Advisors, LLC, believe BPO and IT services M&A activity in 2011 and 2012
could continue its increased activity and rise above the sectors pre-recession
deal flow. Since IT is a highly competitive industry, the obvious reason for
M&A could be the need of improvement in the operations and technology or
face the risk of closure or M & A. According to Sople (2009), the IT industry is
characterized by very closely monitored service-level indicators of
productivity, timely delivery and quality related aspects. All customers in this
industry demand prompt reporting on these performance metrics. If these are
not met in time with customers expectations, the vendor has to face the brunt.
Over the years, it has been observed that many IT projects ventures proved
unsuccessful. The results of these failures, usually, tend to hit the companies
involved financially. On this subject, CIO Magazine states, numerous surveys
indicate that anywhere from 17 percent to 53 percent of customers have notrealised business value/return on investment from IT outsourcing (Kaushik,
2008).These unfortunate experiences have made organisations in IT business
approach the issue cautiously. Some organisations tend to avoid potential
failure by concentrating on tightening the contracts and Service Level
Agreements. The approach, however, has evoked mixed response, and it is a
debatable issue. In to a survey done by KPMG on IT outsourcing, 60 percent
of respondents claim that problems with their IT solution providers are almost
always people-related. In essence, successful IT outsourcing is more highly
correlated with relationships between clients and vendors than tight contracts
and SLAs (Rossi, 2007). In Soples (2009) view, accurate and detailed
performance measurement and management are pivotal to the success of
any shared service or outsourcing initiative.
Charan and Useem (2002) in their article on companies failure which was
published in fortune magazine; brought forth the reasons they believe to be
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responsible for companies fail. They concluded companies fail because they
do not have a proper vision, strategy or plan; they have weak or ineffective
management style, or due to inadequate information and control systems and
under capitalization. Other reasons discussed were lack of competitive
advantage and poor pricing. While according to Duening & Click (2005), the
BPO relationship success factors are project management, IT integration,
cultural integration, client involvement and commitment, governance, and goal
alignment. Charles W.L. Hill, a professor at University of Washington, believes
that when companies competitive advantage declines, their profitability falls,
causing organisations to fail. He recommended that a continuous
improvement and learning plans along with a focus on competitive advantage
would guide organisations to their survive (Hill & Jones, 2009).
The success of the relationship between the IT and the client depends on how
the entire lifecycle of the IT relationship is handled in the holistic manner
covering management processes, governance structures, technology usage,
monitoring, service level agreements, and commitment from all stakeholders
(Feeny et al, 2005). Feenyfocuses on three competencies that IT companies
possess. They are Delivery competency a measure of how well the supplierresponds to the clients day-to-day operational requirements;
Transformational competency this represents how well the vendor is able to
improve the offered services on dimensions of cost, quality, performance, etc.;
and lastly, Relationship competency the extent to which the vendor is willing
to invest in building a win-win relationship aligning client and supplier goals
and incentives over the longer run. Continuing the same idea, he further
states the capabilities like business management, technology exploitation,
process re-engineering, governance, program management, organizational
structure, etc., are the critical success factors for IT Companys performance
evaluation.
Be it internal or external, there could be an exhaustive list of causes for the
companies to fail. However, the point to prove lies in the fact that, there could
not be one but several factors causing a company to underperform, which if
not taken care of properly, lead to its closure. However, as Duening & Click
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(2005) rightly drives a point that the main cause of IT Company failure seems
to be the differences between customers expectations and the perceived
results to be provided by the service provider. Eventually, the objective of the
research would be to identify the set of factors representing customers
expectations and another set of factors describing the result orientation from
service providers perception. Finally, the industry-wide validity of these
identified factors over entire IT industry has to be studied.
The disappointments caused to some big names in Indian IT industry could be
best presented by a piece of news as appeared in The Guardian, titled India
Outsources Outsourcing. It states that according to Kris Gopalakrishnan, the
head of Indias giant software company Infosys, there is an economic
phenomenon engulfing the world called Outsourcers are outsourcing
themselves. According to it, once know for sucking jobs out of call centres
and IT departments in the west, Indian technology firms are re-exporting them
to wealthier nations as wage inflation and skills shortages at home reverse the
process (Ramesh, 2007). In the same context, Nasscom press (2010) admits
that the top four companies who have currently outsourced their operations
are Genpact ltd, Tata Consultancy Services BPO, WNS, and Aegis Ltd.
The list of such incidents grows bigger with organisations such as MSN, Dell,
and Bank of America are included in it as well. These increasingly widespread
trends in the industry points to the basic obvious economic reasoning of lack
of exchange of value between the IT service providers and their clients.
Driving a conclusion from the accounts presented above, it could be said that
there is a high opportunity for IT service providers to exchange valuables from
these companies however, considering the increased competition, the
sustainability of operations and the continuation of business with these
companies becomes increasingly challenging.
The literature on IT companies has brought forth list of factors required for
successful operations of an IT Service Provider. The list includes, but not
limited to Human Resource management, Finance Management,
Management style, information and control systems, Competitive Advantage,and Pricing strategies. For the research to take a practical shape the following
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factors are to be considered as the focal point of inquiry through various
methods of data collection and processing. With the intention of selecting a
proper research model that would cover all the points discussed, it is required
to dwell in the conceptual frameworks and theories appeared in business
research.
2.2 Management Theories, Models and Their
Effectiveness
The literature review on IT service providers summarise the endogenous
factors into analysing the success criteria for vendor organisation and the
elements required to achieve the end results. The other factors include the
influence of exogenous variables and the analysis of competitors. In the
subsequent section, literature of management theories and models in terms of
internal factors and external factors are presented to establish a proper
understanding on the subject concerned.
2.2.1 Internal Factors
While defining the objectives of IT organisation, it is necessary to consider the
needs of the client organisation, end consumers and IT service providers. The
essence of these objectives boils down to what the organisation would want to
achieve and to what extent. Considering the fact that each organisation is
different and has a different set of factors associated with it, the objectives
may differ from one organisation to another and may have a different impacton the overall organisations performance.
The internal dimensions or domain of organisations would be the activities
(methods, practices and procedures) performed to achieve the end result.
The end result would be the overall objective of the organisation. External
dimensions or variables may impact on organisations performance thus it may
be vital to investigate into various external factors identified by theorists. In the
subsequent section, a detailed discussion is presented on all these internal
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and external factors. The discussion would be based on models and theories
involving a holistic perspective of these factors along with the possible
conclusions that follow in respect to the objectives of organisations and their
importance.
2.2.1.1 Nigel Slacks Objectives of organisations
Cyert and March (1963) long ago pointed out that organisations are rarely
oriented towards the achievement of any specific goal. Indeed, objectives are
often absent, or ambiguous, or phrased in a general way so as to be not
operational. More likely, there will be multiple objectives that are often in
conflict (Carter, 1992). Why exactly is an organisation operational and what is
it (objectives) aiming at? are the probable questions every employee of an
organisation should identify, know and seek information for. Without the
understanding of this, it might not be sufficient for an organisation to guide or
direct the employees properly.
While giving an insight on organisations objectives, Slack, et al. (2007) states
that well defined organisations objectives primarily fall under five factors.Every organisation has to have their own objectives, and they need to be
clearly understood for the organisation to be aligned with them. Slack, et al.
(2007) asserts that it is a responsibility of the operations function to
understand the (sometimes conflicting) objectives of its stakeholders and set
its objectives accordingly. He has identified objectives as:
Quality - consistent conformance to customers expectations. For an ITcompany, this can be considered as the quality of service offered by the
company to its clients or the support provided to the clients themselves.
Speed It is the elapsed time between customers requesting products or
services and their receipt of them (Slack, et al. (2007). In a simpler context it
is the amount of time spent in delivering product or services to the customer.
The lesser the time taken to fulfil an order the customer satisfaction will be
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more which will give the speed advantage to the company. In the IT industry
scenario prompt servicing to the customer plays an important role to place a
company ahead of its competitors. So, it is very important to deliver the error
free services to the customers promptly which in turn increased the efficiency
and reliability of the product or services.
Dependability It is an attribute for the act of doing things in time for
customers to receive their goods or services exactly when they are needed, or
at least when they are promised (Slack, et al. (2007). When a customer
places an order with the company for goods or services he/she becomes
dependable on the company for the performance of that particular act, so it is
the duty of the corporation to deliver those services or products on time to
build a trustworthy and a stable relationship with the customer. It helps in
strengthening of business ties and customer base which will eventually helps
in expanding the business horizon.
Flexibility It is defined as the ability to change the operations in some way.
This may mean changing what the operation do, how it is doing it or when it is
doing it (Slack, et al. (2007). In present day scenario where competition is stiff
with many substitutes coming in, an organisation has to be flexible in its
approach to cater in the best possible way to the customers. According to
Slack et al (2007) customers will need the operation to change so that it can
provide four types of requirements:
1) Product/Service Flexibility the operations ability to introduce new or
modified products and services.
2) Mix Flexibility the operations ability to produce a wide range or mix of
products and services.
3) Volume Flexibility the operations ability to change its level of output
or activity to produce different quantities or volumes of products and
services over time.
4) Delivery Flexibility the operations ability to change the timing of the
delivery of its services or products.
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So, flexibility is considered to be an important objective for any organisation to
be successful and for creating conducive atmosphere for the customers.
Cost it plays an imperative role in an organisations objective. Every
organisation tends to keep its cost to the lower possible limit, so that its
products or services can be delivered to the customers at competitive prices
and cost advantage can be obtained. For lowering cost it is very essential to
know the operations in which the company is spending. The company has to
do a comprehensive study on all the input variables and chop out
unnecessary expenses incurred and it should also keep a check on the
pricing policies of the company.
After assessing the above objectives in the light of IT Service providers, it has
been made clear that for any organisation to succeed in its operations it
should have clear objectives and they should be communicated to the internal
workforce more precisely, so that they can be taken out with utmost care and
without any negligence.
In this section the organisational objectives are studied and their variousimplementation strategies have been academically identified, which guide us
to the probable internal and external activities obligatory for achieving these
objectives. In the coming section an in-depth analysis of these internal and
external factors will be studied with the help of Mckinsey 7s framework and
PESTAL analysis.
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2.2.1.2 McKinsey 7S Model
The McKinsey 7S Framework model is a diagnostic management tool used to
test the strength of the strategic degree of fit between a firms current and
proposed strategies. It was co-developed in the year 1978 by several
consultants at McKinsey & Co. including Robert H. Waterman, Jr., and Tom
Peters. The McKinsey 7S model addresses the need to build a tight strategic
fit between strategy, organisational structure, and five additional components
of organisational effectiveness (Fleisher & Bensoussan, 2007). Among the
7S, the three core factors are considered to be Strategy, Structure and
System, which are otherwise called as hard Ss. The other four, Skills, Staff,
Style and Shared Values, are supporting factors or soft Ss (Pascale, 1981).
Waterman asserts that effective organisational change is really the
relationship between Structure, Strategy, Systems, Style, Skills and Staff.
A detailed analysis of the seven elements
suggested by McKinsey model is as follows:
1. Strategy According to Johnson strategy is the direction and scope of
an organisation over the long term, which achieves advantage in a
changing environment through its configuration of resources and
competences with the aim of fulfilling stakeholder expectations. In
other words strategy plays a crucial role in achieving competitive
success for any organisation. It lays down clear objectives for directing
an organisation towards achieving its overall goal.
It was Chandler who first pointed out that structure follows strategy, or
more precisely, that a strategy of diversity forces a decentralized
structure. Strategy is the way a company aims to improve its position
vis-a-vis competition perhaps through low-cost production or delivery,
perhaps by providing better value to the customer, perhaps by
achieving sales and service dominance. (Waterman, 1980)
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Figure 1: McKinsey 7S Model
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2. Systems According to Waterman system means all the procedures,
formal and informal, that make the organization go, day by day and
year by year: capital budgeting systems, training systems, cost
accounting procedures, budgeting systems. In other words it is the
procedure followed by companies for controlling its separate activities
carried out by an enterprise like managing sales force, logistics,
services, human resource activities, Technology used, budgeting
procedures, financial policies, training activities, etc.
It is the system which is responsible for getting the things done in a
proper and effective manner by the employees. By looking at the
system of any organisation one can make out the extent to which it is
going to be successful. For being ahead of competition the company
has to monitor and bring changes to its system of operation from time
to time. Edward Deming in his PDCA cycle meaning Plan, do, check
and act has explained the ways in which a company can validate the
organisations system incessantly for eradicating deficiencies as and
when they occur, so that the system can become stable and efficient.
Samuel (2005) in his Total Quality Management has agreed that for
continuous improvements in a process proper planning has to be
conducted to achieve the desired results. Larson (2003) asserts that
improvement goals must be set, and programs must be initiated to
achieve the goals.
3. Staff According to Chandler, Staff (in the sense of people, not
line/staff) is often treated one of the two ways. At the hard end of the
spectrum, we talk of appraisal systems, pay scales, formal training
programs, and the like. At the soft end, we talk about morale, attitude,
motivation, and behaviour. In Kaplans (2005) view, the staff consists of
people, their backgrounds and competencies; how the organisation
recruits, selects, trains, socializes, manages the careers, and promote
employees. Slack (2007) in his operations management defined staff
consists of people who operate, maintain, plan and manage theoperations.
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Staff occupies a vital place in an organisation because the success
depends on the efficiency and skill set of people employed. So, it is
very essential for any organisation to take utmost care while recruiting
the workforce. If the employees are not competent then the
organisation will not be able to achieve its goals. The organisation must
employ sufficient number of staff personal because understaffing will
hamper the production and overstaffing will increase expenses which
will eventually impede the profitability of an organisation.
Staffing Policies: The companies can adopt any of the following
staffing policies for seeking best of the employees.
1) Geocentric Staffing A policy where important positions in an
organisation is given to talented people irrespective of nationality
i.e. expatriates are made managers.
2) Ethnocentric Staffing In this all the key positions are appointed
to the home country nations.
3) Polycentric Staffing In this staffing policy significant positions
in a subsidiary company are allotted by host country.
1. Skills includes the distinctive competencies that reside in the
organisation. They can be distinctive competencies of people,
management practices, system and/or technology (Vallabhaneni,
2009). Kaplan (2005) describes skills as distinctive competencies of the
organisation; what it does best along dimensions such as people,
management practices, processes, systems, technology and customer
relationships.
To achieve competitive advantage an organisation should consists of
skilled workforce. The company should take time to time initiative to
update employees regarding the necessary new skill sets and train
them as per requirement for obtaining the organisational goal. For an
organisation to flourish the given skills are required Planning and
organising skills, Directing and leading skills, controlling and measuringskills, motivation skills, problem solving and decision making skills,
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Espoused Values: represent the values people say they used
and, in many cases, think they use even if they dont. People
create a positive public image by claiming to believe in values
that other expect them to embrace (Hill, 2008). This represents
those values that are not actually practised but they portray an
image among others that they follow these values.
Enacted Values: These are the values people actually rely on to
guide their decisions and actions. These values in use are
apparent by watching people in action (Hill, 2008).
1. Structure Waterman (1980) in his structure is not organisation
asserts that structure divides tasks and then provides coordination. It
trades off specialization and integration. It decentralizes and then
recentralizes. Previously structure was divided into production and
sales teams but now the scenario has changed because of complexity
in business due to increase in organisations size and activities.
Basically, there are four structural forms functional, multi-divisional,
geographic and matrix. In a functional structure the structure of the
organization follows the obvious division of labour within the firm, with
different functions focussing on different tasks. In a multidivisional
structure the firm is divided into different product divisions, each of which is
responsible for a distinct business area. In a geographic structure the main
subunits of the organization are geographic areas, such as regions within
a country, countries, or multi country regions. With a matrix structure,
managers try to combine two different organizing philosophies in a single
design (Hill, 2008).
For the organisations success the structural chart of the organisation must
be formulated in par with the staffs experience, skills and expertise. It
should clearly define the hierarchy for reporting and controlling purposes.
2. Style In his book titled Leadership Style, Kippenberger (2002)defined style as a way of behaving. It shows the leadership styles
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followed by the top management and it also covers the attitude of the
employees in dealing with the customers and outside world. The
leaders have to be updating themselves constantly about the new skills
and new ways of thinking in terms of customer satisfaction and
continuous improvement, and they must assist employees in making
the same transition. (Larson, 2003).
Kets de Vries (2001) explains an individuals leadership style a synthesis of
the various roles that he or she chooses to adopt is a complex outcome of
the interplay of that persons inner theatre .... and the competencies that the
person develops over the course of their lifespan. According to Larson (2003)
depending on the development levels of individual employees, there are four
phases of leadership styles: directing, coaching, supporting and delegating.
The common attributes for a successful leader propagated by Kouzes &
Posner (1987) are
Challenge the process First, find a process that you believe
needs to be improved the most.
Inspired a shared vision Next, share your vision in words thatcan be understood by your followers.
Enable others to act Give them the tools and methods to solve
the problem.
Model the way When the process gets tough, get your hands
dirty. A boss tells others what to do; a leader shows that it can
be done.
Encourage the heart Share the glory with your followers'
hearts, while keeping the pains within your own.
Rensis Libert in his publication on leadership styles identified four styles as
follows:
i. Exploitative Autocratic In this type leaders dont show any trust
on subordinates by giving orders and pressurize them for
performing.
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ii. Benevolent Autocratic Here the employees are trusted to
some extent and occasionally seek their opinions and idea, but
the style is paternalistic.
iii. Participative In this style the finale decision making is retained
by the leader but some amount of trust is exhibited towards the
subordinates by seeking views and opinions.
iv. Democratic In this style complete confidence and trust is
shown towards the subordinate and their views and opinions are
not only sought but acted upon. (Kippenberger, 2002)
2.2.1.3 Blake and Mouton Leadership
While studying the behaviour characteristics of successful leader, Blake and
Mouton identified two fundamental drivers of managerial behaviour: the
concern for getting the job done, and the concern for people doing the work
(Zeidan. 2009). The concern for both people on vertical axis and production
on horizontal axis is measured through a questionnaire on a scale from 1 to 9.
However, the leadership grid identifies five leadership styles: Impoverished,
authority compliance, country club, middle of the road and team leader whichare described as follows (Lussier, 2007):
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Fig 1.2: Blake and Mouton leadership grid theory.
1. Impoverished Leader (Low production/Low people) In this style
the managers act lazily showing low concern for both people and
production. They want to avoid getting into trouble and are onlyconcerned for protecting their job and job seniority. As a result,
leadership is hampered by discontent, incompetence and
dissonance.
2. Authority Compliance Leader (High production/Low people) In this
the leader is concerned more with production and less worried
about people. People are only considered as a means for the end
and they are not compensated for corporation or teamwork. Here
the production level will be more as the employees are forced to
deliver the desired results and there will be high labour turnover.
3. Country Club Leader (Low production/High people) Here
managers are more concerned with the well being of the employees
as they are not interested in endangering the relation with them.
The only concentrate on giving a friendly atmosphere to the
subordinates by giving less importance to the production.
4. Middle-of-the-road Leader (Medium production/Medium people) It
is a balanced type of leadership style. In this a perfect balance will
be achieved between company goals and workers needs.
5. Team Leader (High production/High people) In this leader pays
elevated attention to production as well as people which results in
high esteem, belief and enthusiasm among employees,
consequently leading to high production level.
Strengths of the Managerial Grid Approach:
This approach helps in measuring different leadership styles.
Helps in discussing performances and upgrading actions.
Facilitates in eliminating deceptions by rating the exact potential of
managers
Limitations of the Managerial Grid Approach:
There are more dimensions of leadership that can be relevant.
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The model basically neglects the significance of the internal and
external constraints, context, circumstances and situation (Zeidan,
2009).
2.2.1.4 Burke-Litwins Model
Burke-Litwin in 1992 published an article in the Journal of management where
they have promulgated a model for examining organisational change and
performance using internal as well as external factors. It revolves around 12
organisation dimensions by demonstrating cause and effect relationship
among them. It is a step ahead of 7 S model where only internal factors were
aligned for reaching organisational goal but in Burkes model they are
considering internal as well as external factors for ascertain the success of the
enterprise.
This model includes several key features which go beyond the previous
models:
Includes twelve theoretical constructs (i.e., organizational variables)
Distinguishes between the culture and climate of an organization Distinguishes between transformational and transactional dynamics
Specifies the nature and direction of influence of organisational
variables
Is based on previous models, empirical studies, and OD practice
(Leadersphere Inc, 2008)
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Figure 1.3: Burke Litwin
Burkes Model 12 Dimensions
1. External Environment The external factors impacting the
organisation internally and externally should be established.
2. Mission & Strategy The top management should lay down missionand strategy from the employees perspective.
3. Leadership It is concerned with the behaviour of the top
management in delegating responsibilities and authority.
4. Organisational Culture It defines the internal environment of the
company. What believes, values and conventions are followed by
the workforce as a guide in achieving organisational goals.
5. Structure It is concerned with the arrangement of tasks that has to
be carried out by the employees.
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6. Systems It includes the policies and procedures followed by the
organisation in carrying out the organisations activities.
7. Management Practices It comprises of the practices managers
follow in managing human and material resources.
8. Work Unit Climate It consist of the feeling of the staff members
while dealing with the superiors.
9. Tasks and Skills These are the skill set required by the workforce
in delivering the tasks productively.
10.Individual Values and Needs The emotional factors that stimulate
the desires and importance for employees performance or views.
11.Motivational Level It prompts the employees in moving towards
accomplish the targets set by the superiors.
12.Individual and Overall Performance Efforts that employees put in
achieving the set goals.
It can be debated that the McKinsey framework of 7S alone may not be
enough to analyse the underperformance of a company, as the 7S factors are
limited to depicting the intrinsic conditions of the company. Hence, the intrinsic
variables affecting the company, in the present case, would be studied with
the aid of external factors.
2.2.2 External Factors
The PESTEL framework is a mnemonic used in strategic management to
group macro-environmental (external) factors to help strategists look for
sources of general opportunity and risk. These factors are fundamental and
changes in them can lead to the transformation of industries, especially over
the longer-term (Witcher and Chau, 2010). Yeats and Wake (2004) asserts
that PESTEL analysis is often combined with a more general statement of an
organisations goal and objectives, which can be defined using the acronym
MOST, where MOST stands for Mission, Objectives, Strategy and Tactics.
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The pestel analysis can stand as a good gauge against which 7S factors of
an organisation can be measured with the organisations objectives acting as
a measuring scale.
One important argument worth discussion would be whether one single
external factor alone could be the reason of an organisations
underperformance or a set of factors drag the organisation towards it closure.
Considering the fact that external conditions are independent of the internal
factors, it could be quite possible that one factor can have considerable
influence over companys failure. Perhaps it could not be accepted that only
internal factors or externals factors would account for the companys downfall.
Hence, a study involving both internal and external factors should be
designed to form an effective tool to gauge companys performance.
2.2.2.1 Extension 7S and PESTEL
Academic debates over appraising the performance of organisations using
either Micro Environment variables or Macro Environment variables have
generated mixed response due to the fact that most of the researchersbelieve in any one of these variables. In order to get a detailed picture, the
present research would adopt an approach that would unite both these factors
to examine their effects in a holistic perspective. The approach, hence, would
involve the integration of McKinsey 7S model and PESTEL as seen in figure
2.
Figure 2: Combined 7S and PESTEL Holistic Approach
The controllable or inside factors of a company that would include the 7S
coupled with the non-controllable or outside factors such as political,economical, social, technological, environmental, and legal, an approach of
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this type aid to capture the holistic view of an organisation. Such an approach,
when used as a management tool to analyse the root causes that influences
the operations of a company guide the research to assess the degree of
impact each of the factor exerts on the overall performance. The root causes
analysed can be used proactively to prepare the strategic objectives of the
company that would result in increase in profits, decrease in operational costs
and better availability of resources, improvement in the quality of output and
the creation of effective processes. All this amounts to providing the company
with the much required competitive advantage to stay ahead in the
competition.
2.2.2.1 Porters 5 Forces
Arguably, the most influential contribution to thinking about competitive
strategy has come from Michael Porter who introduced the five competitive
forces framework. The forces determine an industrys intensity of competition
and the longer-term profitability of all the organisations that make up an
industry (Witcher and Chau, 2010). According to Michael Porter, companiesare affected by various different competitive Industrial factors. These factors
are segregated by Porter as: Threats to Entry, threats of substitutes,
bargaining power of buyers, bargaining power of suppliers, and Intensity of
rivalry among established firms.
Porter argues that the stronger each of these forces is, the more limited is the
ability of established companies to raise prices and earn greater profits.
Within Porters framework, a strong competitive force can be regarded as a
threat because it depresses profits. A weak competitive force can be viewed
as an opportunity because it allows a company to earn greater profits. The
task facing managers is to recognise how changes in the five forces give rise
to new opportunities and threats and to formulate appropriate strategic
responses. In addition, it is possible for a company, through its choice of
strategy, to alter the strength of one or more of the five forces to its advantage(Hill and Jones, 2009).
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Figure 3: Porter's 5 Forces (Adaptation from Porter, 1985)
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Barriers to entrywithin a market are observed when:
a. There is a large requirement of capital or the need to gain economies
of scale quickly.
b. There is an existence of strong customer loyalty or strong brand
preferences in the existing market.
c. And/or there is a lack of adequate distribution channels or access to
raw materials.
Power of suppliers is observed to be higher when:
a. A small number of dominant, highly concentrated suppliers exist within
a market.
b. Few good substitute raw materials or suppliers are accessible.
c. The cost of switching raw materials or suppliers is relatively higher.
Power of Buyers is observed to be higher by Firms when:
a. The Customers are concentrated, large or buy in volume.
b. The products being purchased are standard or undifferentiated making
it easy to switch to other suppliers.
c. Customers purchases represent a major portion of the sellers total
revenue.
Substitute Products competitive strength is observed to be higher when:
a. The relative price of substitute products declines.b. Consumers switching costs decline.
c. Competitors plan to increase market penetration or production
capacity.
Rivalry among competitors intensity is observed as high when:
a. The count of firms within a market is increased or if their size is either
equal or higher.
b. Demand for the industrys products declines or industry growth slows.c. Fixed costs or barriers to leaving the industry are high.
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Taking a recap, Moving ahead, organisation objectives, Internal Factors (7S
framework including Blake and mouton leadership style) and External Factors
(PESTEL & PORTER) have been combined to understand the primary
reason(s) for the underperformance of IVY Comptech Company. Perhaps, it
is anticipated that there would be a multitude of factors involved, these
reasons or causes could be analysed by performing a root cause analysis.
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2.2.3 Root Cause Analysis
Root Cause Analysis also termed as the Cause and Effect diagram is said to
have originally developed in the 1940s by Kaoru Ishikawa thus giving it the
name the Ishikawa Diagram (Munro, 2003). Root cause analysis is a process
designed for use in investigating and categorising the root causes of events
such as safety, health, environmental, quality, reliability and production
impacts. Highlighting the benefits of Root cause analysis, Rooney et al.,
states that it helps to identify what, how and why something happened, thus
preventing recurrence. He believes that root causes underlie in the problems,and can be reasonably identified and controlled by the management. The
process of root cause analysis involves data collection, cause charting, root
cause identification and recommendation generation and implementation
(Rooney and Vanden Heuvel, 2004).
Anderson, et al, (2008) stated that problem solving deals with identifying the
cause of the problem while doing so, it is important to identify the different
levels of causes. Upon further investigation, one finds themselves moving
closer and closer towards the actual root cause of the problem and thus would
be able to deploy either a corrective or preventive action. Similarly, Wilson, et
al. (1993), presented the root cause analysis technique as a quality
management tool resulting in providing advantages of reducing costs,
increasing productivity and improving quality.
The graphical representation of Root cause analysis is done through cause-and-effect diagram, which is otherwise called as Fishbone or Ishikawa
diagram. The diagram depicts all the possible causes contributing to a
problem, or can be used to depict all factors relating to a problem or concept.
The shape of the diagram resembles that of a fishbone structure hence its
name (Proctor, 2010). The spine represented in the diagram is intersected
by various causes. These causes are due to their own internal causes which
are called as root causes. The head of the Fishbone or Ishikawa diagram is
the problem (or effect) and the bones are the categories for example,
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manpower, machinery, methods, materials and money, which are further
broken down to identify sources of causes or root causes (Fryman, 2010). The
graphical representation of cause-and-effect diagram is represented below in
the figure.
Environment
Measurements
Methods
Material
Machines
Personnel
Cause-and-Effect Diagram
Figure: Ishikawa Cause-and-Effect Diagram (Source: Minitab)
Limitations of Fishbone Analysis
Ishikawa or Fish bone technique is considered as a reductionist/linear
approach (Coffey, 2010) used in diagnosis of organisational problems. Being
linear in nature, it is capable of answering the list of causes behind a certain
problem, but it does not define a relation between the causes and their
quantified impact on the overall issue. Another limitation to this approach, as
pointed out by Mobley (1999), is about the sequence of causes. He states that
the fishbone or Ishikawa graph provides no clear sequence of events that
leads to failure. This technique can list out all the factors that may have
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contributed to a particular event, but does not isolate the specific factors that
caused the event.
Basically, it does not take a broader approach recognising and focussing on
the causes as with the systems thinking approach where the feedback of a
change in a variable is studied in order to understand the overall system
holistically (Anderson, 2008). For example, the root cause of an issue relating
to the lowering of productivity in a company can be diagnosed as the result of
poorly configured systems. Using this approach, it is clear that the systems
installed at the company may need an up gradation. However, it fails to give a
proper deadline as to these systems have to be upgraded not it is useful in
providing an insight into the impact on other factors that are dependent on the
systems like equipment upgrading expenses and training needs that would
arise as a result of this upgrading work.
Another limitation as quoted by IBA states that the Root cause analysis works
best when someone who has formal training or extensive experience
facilitates a team of experts. The primary concern revolves around the ability
of the facilitator to remain objective, a critical element to effective root causeanalysis (IIBA, 2009).
2.3 An Introduction to IVY Comptech Pvt. Ltd.
IVY Comptech Pvt. Ltd (IVY Comptech) is an eGaming company. The
company is principally engaged in providing software products and solutions
to the online gaming industry globally. Its services include softwaredevelopment such as, product development, life cycle management, system
design and architecture, business process automation, database design and
integration, e-commerce, user interface, as well as navigation and design. In
addition, the company provides IT enabled services; customer services
(contact centre); and transaction services (back office) such as tracking of
transaction processing, risk management and others to PartyGaming Group.
IVY Comptech operates as a subsidiary of PartyGaming Group and is
headquartered at Hyderabad, in Andhra Pradesh, India. (GlobalData, 2010)
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Software Product Development, Solutions and Services Overview
IVY is engaged in Software Product Development and also offers Business
Process Outsourcing, Product Management & Knowledge Process
Outsourcing solutions to the online gaming industry. The companys
Technology culture is focused on integrity, speed, reliability and scalability. By
leveraging the technology expertise and superior customer service, the
company claims to have ensured overall customer satisfaction and redefined
the way the business is perceived. The following are the list of services they
offer to their clients.
Software Product Development
System Design and Architecture
Product Development Life Cycle Management
Database Design and Integration
Business Process Automation User Interface, Navigation and Design
Production/Operations Support
Business Process Outsourcing Services
Customer Support Services
Technical Support Services
Risk Management Services
Product Management Services
Knowledge Process Outsourcing Services
Product Development
Java, Oracle, Flash, Flex, Linux, Tomcat, Apache, JSF
(IVY Comptech, 2011)
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1.RESEARCH METHODOLOGY
3.1 Research Paradigm
Every business has to go through peaks as well as troughs but the effects of
depression on the profitability can be avoided by proper research and timely
actions. In this case study we are attempting to know the causes for the non
performance of IVY Comptech, an Indian IT company. For reaching this
objective it is important to choose an appropriate research methodology and
design. Dr. Pattron (2009) defined research methodology as a highly
intellectual human activity used in the investigation of nature and matter and
deals specifically with the manner in which data is collected, analysed and
interpreted.
Broadly, there are two approaches to inquiry: The structured approach which
is all known as quantitative research and un-structured approach known as
qualitative research (Kumar, 2005).Here a qualitative approach will be used
because it makes feasible to collect thorough knowledge about the meansand effects of information contributed in the governance of an IT company.
Putting in Brynams (1992), a qualitative research would allow wider range of
possibilities to be explored.
As a next logical step, a combination of literature reviews and previous case
studies on IVY Comptech will be used in comparison with the present data
available forIVY Comptech, which will help in investigating and reaching at a
new hypothesis in support of reasons liable for an abridged output and
closure of an IT company. A case study, which is an in-depth examination of
one person, is a form of qualitative
research. Qualitative research is
often used as a source of hypotheses for later testing in quantitative research
(Marczyk et al., 2005).
3.2 Research Approach
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Figure 4: Research Methodology
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The research design sets out the logic of case study inquiry. It should include
the following: the study design per se and the logical arrangements that are
proposed to undertake, the measurement procedures, the sample strategy,
the frame of analysis and time frame (Kumar, 2005). Qualitative approach has
been intended for this case study as a primary research technique and the
information gathered under this approach will be translated into quantitative
figures for statistical analysis to accumulate a more systematic and organised
view on the subject.
An in-depth study is required for identifying the internal and external reasons
for the non-performance of IVY Comptech which entails meticulous
exploration about all the facets of organisations operations. By keeping this
goal in mind an action research would be conducted combined with survey
based research using interview technique and literature reviews for cramming
all the related components of organisation which influence the working of IT
sector.
Action Research
According to McTherte, Action research is organised, investigative activity,
aimed towards the study and constructive change of given endeavour by
individual or group concerned with change and improvement. The
characteristics of the action research are enumerated as follows:
1) It is a process for studying practical problem.
2) It is a scientific procedure for finding out a practical solution for current
problem.
3) The practitioners can only study his problems.
4) To improve and modify the current practices.
5) The individual and group problem is studied by action research
(Singh, 2006)
Considering the above characteristics of action research, it can be implied that
action research method perfectly suits the research objectives in the present
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case study. Action research begins with a process of communication and
agreement between people wants to change something together (Dawson,
2009). The implementation of action research in the present perspective
would take the form of a questionnaire which can be used to draw the
personal opinion of the employees regarding the possible reasons for the
companys closure.
Interview Technique
This is one of the primary data collection methods which involve presentation
of oral-verbal stimuli and reply in terms of oral-verbal responses (Kothari,
2004).This technique will be reinforce with the help of an questionnaire as it is
regarded a form of interview on paper (Singh, 2006). A questionnaire will be
drawn and presented to employees personally or through email.
Literature Review
The researcher must examine all the available literature to get acquainted
with the selected problem. He may review two types of literature the
conceptual literature concerning the concepts and theories, and the empirical
literature consisting of studies made earlier which are similar to one proposed.
The basic outcome of the review will be the knowledge as to what data and
other materials are available for operational purpose which will enable the
researcher to specify his/her own research problem in a meaningful context
(Kothari, 2004)
According to Marczyk the well-designed studies will prove useless if
inappropriate measurement strategies are used in the data collection stage.
To make this case study more effective and meaningful, primarily a general
questionnaire will be drawn for collecting the views of the majority
stakeholders regarding the reasons for the closure of the IVY Comptech
which will be further calculated statistically for identifying the factors
responsible with regards to the members opinion.
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Technique: Questionnaires will be the main method used for collecting the
data. Questionnaires will be circulates using convenience sampling to the
employees at different levels of the hierarchy in the organisation.
The questionnaire
Appendix I shows the sample of the questionnaire that will be used for
performing research on the overall practices of IVY Comptech. It consists of
identification of organisations objectives and there awareness among the
different levels of the hierarchy. It also consists of questions relating to the
McKinsey 7S framework model consisting of strategy, structure, system, staff,
style, skill, shared values and PESTEL factors.
Questionnaire Overview
The questionnaire has been divided into 5 sections along with an Introduction
and conclusive part, as follows:
Introduction:
It consists of the questions regarding personal information of the interviewer
and interviewee like asking names of the interviewer and interviewee,enquiring about the job title of the interviewee, level in organisations
hierarchy, a statement thanking interviewee for giving their precious time, etc.
Section I:
It consists of the questions relating to employee awareness of the strategic
objective and coupled with that it contains various quality, speed, cost,
dependability and flexibility objectives as defined by Nigel Slack.
Section II:
In this section questions are asked relating to the internal factors affecting the
organisations performance which are based on the McKinsey 7s framework
model. Questions are framed to know the extent to which employees are
aware of the objectives of the organisation, structure, strategies followed,
style of working, staffing requirements, skills required for carrying out tasksand shared values by the organisation.
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Section III:
This section contains question on the type of leadership based on Blake and
Moutons leadership grid. The answers to this question can be combined with
that of style from 7S framework to derive a better leadership perspective.
Section IV:
This section consists of the questions relating to external factors affecting the
organisations performance base on the PESTEL factors. PESTEL factors
helps in seeing a broader picture of the organisations working which in turn
helps in taking advantage of the opportunities and minimizing external threats.
Questions in this section throw a light on the political, economic, sociological,
technological, legal and environmental factors in order to show their impact on
the non performance ofIVY Comptech.
Section V:
In this section questions will be structured for knowing the effects of
competitive advantage on the IVY Comptech operations. This section
highlights whether the power of buyers and suppliers has an impact on themarket and industrial competition. It also studies the effects of entry threats
and threats of substitutes which demonstrate the major reason accountable
for the organisations closure.
Conclusive Questions:
This concluding section contains the questions to cover up any overlooked
information or any advice or any extra feedback interviewee is interesting in
sharing. It also asks the questions for rating the impact of 7S framework
factor, PESTEL factors and Competitive forces which in turn will help in
carrying out impact analysis for recognizing the impact they have made on the
IVY Comptech non performance.
3.3 Sampling Technique
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The research work cannot be undertaken without use of sampling. The
sample of the study will be representative of the population. The study of the
total population is not possible and it is also impracticable (Singh, 2006). So,
the present study has adopted convenience sampling technique. According to
Kothari, when population elements are selected for inclusion in the sample
based on the ease of access, it can be called as convenience sampling. In
the present scenario, IVY Comptech Company consists of a team of 600
employees out of which minimum of 20 employees or maximum of 50
employees will be selected for collecting data. For this case study a sample
size of 20 employees from all levels of management have been taken
because of the time constraint. An average of this sample size will be taken
out in order to generalise the outcomes to the entire research group. Data
Presentation
3.3 Data Presentation
Data presentation is used to depict the information gathered statistically.
There are many ways of presenting a data like charts, graphs, tables, etc. For
this case study a tabular form of data presentation will be used combined with
bar graphs or histograms which will enable the readers to understand the
overall impact of the variables collected. For creating tables and graphs MS
Excel will be used and Minitab will be used for generating diagrams.
With the help of MS Excel spreadsheet internal and external variables will be
quantified into percentages and then it will be produced in a form of diagram
representing cause and effect relationship among the variables whichcontributed in the non performance of the organisation.
3.4 Ethical Issues Involved
According to Marczyk, et al. (2005), all studies with human participants
involve some degree of risk. These risks may range from minor discomfort or
embarrassment caused by somewhat intrusive or provocative questions to
much more severe effects on participants physical or emotional well being.These risks present researchers with an ethical dilemma.
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The ethical concerns generated while collecting data for this case study are
as follows:
Reluctant of the interviewees to part with the off the record information
relating to sensitive areas like financial information
The interviewee must be held with respected and dignity
The interviewer must up hold the confidentiality of the collected data
The interviewee at the time of interview must be honest and unbiased
towards the research subject
There may be a possibility of getting the information altered because of
lack of knowledge
There are likelihood that the sources indispensable for the data
collection are not accessible
3.5 Summary
The research methodology used in this case study is interview approach. This
is done with the help of a questionnaire which is filled by employees from
different levels of hierarchy through phone, chat and emails. The
questionnaire has been designed in a manner to know the employees views
on the objectives, McKinsey 7 S framework and PESTEL factors affecting the
overall performance of the organisation and the reasons for its closure. The
findings are thus statistically evaluated to know the exact reasons for the
underperformance ofIVY Comptech.
1.RESEARCH FINDINGS
4.1 Background of Data Collection
In accordance with the data collection methods proposed by Dillman (2000),
the researcher conducted an interview with the selected members of IVY
Comptech, and the outcome of the interview has been presented in the
following chapter. The members selected for sampling included the senior
management responsible for setting companys objectives, middle
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management and lower level staff who take lead role in operations to reach
the objectives. Firstly, a personalised e-mail was sent to the entire specimen
selected for sampling. The reason behind the e-mail is to inform them about
the possible study and get their approval on participation in the survey. This
was followed by telephoning the respondents for collecting data through an
interview. The total number of respondents agreed to participate was 25,
which included 1 from top cadre, 8 from high, middle and executive cadre and
16 from the lower level employees.
With the questionnaires developed on scientific and structured approach as
discussed in the research methodology, empirical data has been collected.
The research, being based on hypothetical assumption of possible closure,
does not allow the researcher to experience the real environment that would
possibly happen when the company would shut down its business. However,
taking a solid theoretical basis, questions for the interview has been designed
to capture the real scenario of a closure. However, the reply to the
questionnaire has helped the researcher identify the key issues that would go
about in the case of IVY Comptech Company closure.
4.2 Analysis of Primary Data
The respondents have provided valuable inputs through the questionnaire andthe results of the research are as follows:
The Section 1 of the questionnaire was based on the employees
understanding of the corporate objectives of IVY Comptech Company. From
the 25 members involved in the survey, when they were asked whether they
understand the strategic objectives of the company, twelve of them knew the
important objectives very well. The table provided below has the quantified
details of the results obtained about corporate objectives from the
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questionnaire and the following figure has the graphical representation of the
same.
Question 1A
The first part of Section 1 tests the awareness of IVY Comptechs employees
about the strategic plan of the company. The interviewees are asked to
produce the overall targets and objectives as per their own knowledge.
Are you aware of the IVY Comptechs strategic plan? Y/N
Do you know what are the overall targets and objectives?
When asked about the awareness of strategic plan involving long term
objectives of the company, the top cadre was fully aware on the subject,
whereas the middle and lower cadre provided mixed response. About 20% of
the employees from middle and executive cadre were not fully aware of the
overall targets and objectives set by the company, whereas most of the lower
or frontline employees showed their ignorance on any such plans. Overall,
36% of the respondents were not fully aware of the corporate objectives of the
company.
Question 1B
The subsequent part of section 1 contains a set of questions that are in terms
of the Slack, et al. (2007) proposed objectives of an organisation.
a) Did IVY Comptech have anyQualityrelated objectives?
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Corporate Objectives related issues
Count ofEvidence (out of
25 membersinterviewed)
Impact
Percentage
Staff unaware of corporate objectives 9 36%
Unrealistic/improper quality objectives 4 16%
Unrealistic/improper speed objectives 5 20%
Unrealistic/improper cost objectives 4 16%
Unrealistic/improper dependability objectives 2 8%
Unrealistic/improper flexibility objectives 1 4%
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Did IVY Comptech meet the target of providing quality of services to the
clients?
The top cadre affirm that the company has been doing its best to use the
resources optimally to offer the best service to their clients and provide good
working condition to their employees. In terms of Middle and executive levels,
the clients are served more than eighty percent to their satisfaction. However,
on account of intrinsic work pressures to the employees has created an
uncomfortable working environment. They consider the service offered to
client companies has been satisfactory as per market standards.
The lower cadre employees or the first line employees are the ones who
actually carry out the operations. It is seen that lower cadre employees were
well aware of quality standard that is expected from the client side and they
confirm that the clients expectations are partially met. They further assert that
most of the project undertaken in past one year has achieved quality levels up
to 75% of the set standards. However, they have the potential to improve
upon the quality standards if the company creates a healthier work
environment where the work pressures on the line employee are reducedconsiderably.
Hence, it can be concluded that the quality objectives are in place and the
employee are aware of the quality objectives. To add to it, employees do have
some management related issues, which, if tackled in a proper manner, the
quality of service to the Client can be increased. Therefore, the quality
parameters were specified in the organization, but there were various other
reasons why they hadnt been achieved or the level to which they were
achieved.
Question 1B
b) Did IVY Comptech have anySpeedrelated objectives?
Did IVY Comptech meet the target of providing services on time to the
clients?
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Upon querying on the objectives related to maintaining the deadlines and
speed of operations, the top managerial cadre proudly claims that all the
systems and people follow timelines in order to carry out the businesses
process at IVY Comptech Company. The do have strict regulations regarding
work deadlines that ensures the product and service delivery to the client on
scheduled time.
For the middle and executive cadre, the matter of speed objectives is more
complex that it appears. They agree that the company has set objectives for
timely delivery to the client. In the pursuit to achieving those objectives,
middle and executive cadre asserts that the shorter delivery times exert
internal pressures on the frontline employee. The lower cadre adds to the fact
that they are made to work on large and critical systems which involve
complex operating and timely delivery in such work environments is tough.
Question 1B
c) Did IVY Comptech have anyCostrelated objectives?
Did IVY Comptech meet the target of providing cost of services to the
clients?
In response to the objectives on cost, top managerial cadre was well aware
on the importance and necessity of cost objectives. According to the top
cadre, cost objectives provide a way for the company to keep a check on
operating costs so as to increase the bottom line profits for the company.
They said, maintaining operating costs under control, setting up systems that
reduces cost and provides good quality of product and service delivery on
timely manner is core to strategic plan of the company.
Middle and executive cadre managers find cost objectives as a way to
increase the owners equity for the company. Creating a cost conscious
culture at the company would differentiate profit making organisations from
their loss making counterparts.
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Lower level employees think cost reduction is a way to reap higher profits for
the owners of the company. However, they are not clear on the cost
objectives defined by the company.
Question 1B
d) Did IVY Comptech have anyDependabilityrelated objectives?
Did IVY Comptech meet the target of providing dependability of services to the
clients?
In the aspect of dependability, the top management does seem to have some
definite objective. Apparently, they accept that dependability would come from
the quality of delivery of product and service to the client, and would
encourage vendor loyalty amongst their clients.
When it comes to middle and lower cadres, they believe that their work quality
is an important factor in clients satisfaction which is directly related to the
clients dependability on their company.
Question 1B
e) Did IVY Comptech have anyFlexibilityrelated objectives?
Did IVY Comptech meet the target of providing dependability of services to
the end customers?
The top cadre served convincing replies to the flexibility aspect. They said that
the company offers their clients several flexible alternatives in terms of
product and service packaging and also the onsite and offsite delivery options
at clients convenience.
The Staff considered the flexibility objectives in terms of their work schedules
and flexi-timing offered by the company in order to provide a continuous
round-the-clock service facility to the clients. All in all, IVY Comptech
appears to put in practice the flexibility objectives; probably they do not deem
it necessary to prepare it the form of a document.
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It is commonly seen that strategic objectives either lack practicality or it is not
properly understood by the middle and especially the lower level employees.
Similar is the case with Ivy Comptech as in the present case about 36% of the
employees are probably not fully aware or totally unaware of the strategic
objectives. This strongly shows that top management has to take up the task
of making the staff fully aware of their strategic