This current flatter setup of organizational hierarchy is the first feasible positive step by Pilkington towards change. Though this setup was implemented in the last phase, it was the most logical option amongst all three options. The main problem with Pilkington Australia was it over eagerness to introduce change in the Dandenong plant. It is clear that the roots of the problem stemmed due to the authoritarian style of management. Since, its start in 1972, the power distance in the organization was immense and over the years, employees have been working under these conditions.
It is only in the recent past, due to competition etc. that Pilkington has realised that there is an issue within their company. Due to its initial orthodox beliefs, the organization was breeding grounds for individuals looking for a job for life; hence, the average age was so high. The point being made here is that the organization itself is to blame for all problems occurring internally. The problem with Phase 1 was the fact that Pilkington did not anticipate the magnitude of change that was required.
The aspects relating to organizational structure change and introducing training programs etc.was a start but definitely not enough. The key characteristic towards success was realized in this Phase and that was of the bottom-up method of contact. Phase 2 was a definite mistake. Again, Pilkington took a hurried approach towards furthering the change process within the company, which meant no employee feedback or suggestions were considered while developing the change processes. This was a main catalyst in the failure of the plan. Apart from this, the training programs developed to broaden employee skills under Phase 1 were scraped under Phase This was the final straw and the plant closed down for a strike.
What Pilkington did not realize was that their style of introducing radical change was too much to handle for all within the company. Also, taking away the trainings program once it was operational and being used was an irrational move. Employees cherish resources, if an allocated resource is removed; reactions are bound to be aggressive. Another problem that Pilkington Australia has faced since change has been implemented and is an ongoing process in the organisation is that of lack of commitment between senior management and middle management, primarily due to the lack of involvement of the Managing director.
The effectiveness of change in terms of: Employee morale- Over the year, employees have come to realize the trial and method approach of Pilkington when introducing change. Humans do not like change and in this case they have had do it more than once. This has created uneasiness and uncertainty. From 1995-97 employee number reduced by 27% which cements the comments made above. The 5. 8% absenteeism rate indicates a low level of job satisfaction which may be a direct result of this aggressive change process.
Productivity- It is stated that a profit of 31% was achieved after the change process. This figure is deceptive as the Return on Investment was a mere 6%. The profit figure is a direct result of diminishing manufacturing costs. Hypothesizing that the tangible manufacturing components remained same in terms of prices, it is evident that a significant drop in the wages and salaries (due to employees leaving) component of manufacturing costs amplified the profits.
Quality- The customer satisfaction rate of 97% solidifies the notion of the bottom up communication model. It is clear that the shop-floor employees were able to communicate their need to the management efficiently, thereby providing effective outcomes. Safety- The development of teams increased the level of safety for all employees. Cost per tonne- Again, the bottom up approach of communication has been effective in this field. Employee Productivity- The figures of 51. 7 units per employee may again be deceptive.
Targeted results are being surpassed not due to higher level of productivity but due to a high level of employees leaving their jobs. Therefore, production remains same but productivity per employee goes up. The discussion above shows that the problems lay at the core of the organizational culture which developed over year through contributions from both the management and the employees. Culture cannot be changed overnight, and a mere common dining area for both management and employees will not create understanding.