Organizational Analysis of Eicher Motors Limited (EML)

free essayEicher Motors Limited (EML) is a manufacturing firm that has been in operation for over forty years now. This production giant operates currently in ten countries across the global markets. This firm was established in India in the year 1982, and has managed to sign several businesses strategic partnerships with international firms including the American Polaris Industries Inc. for production and distribution of private vehicles for the mass market. The company started in the year 1900 as Royal Enfield in India and produced its first car in the year 1901. The company recruits workers from different backgrounds, without exercising race, age, gender or any other type of discrimination. The company is appreciated for employing people with disabilities and offering them a chance to showcase their capability without discriminating them (Eicher Motors Ltd., 2009).

Since the company was incorporated in 1982, its history has faced a success after another. This progress has seen the company crossing borders of the American market and making business partnerships with global giants such as Volvo and American Polaris Industries Inc. for the manufacture of executive private cars. However, business challenges have seen some of those companies drawing out of the deals and selling some of their stakes (Eicher Motors Ltd., 2013). For instance, Volvo opted out of the partnership in 2015 by selling some of its shares in the company deal due to the low market acceptance. However, through strategic planning, the company has been able to produce some of the best vehicles for the Asian market, both for commercial and personal use. For instance, the Indian market has accepted the heavy commercial vehicles from EML and showed no signs of regret.

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The management team in Eicher Motors Limited (EML) is comprised of seasoned consultants who are recruited from the world’s most reputable firms so that they can embed the international thinking into the firm’s activities management. The daily activities of the management team are based purely on Nadler and Tushman’s Model, and the results and success of the firm are evident from the reported profits and annual growth trends. Eicher Motors Limited (EML) is more concerned with the way tasks are allocated to individuals in a manner that portrays congruence. Over the years, this motor vehicle production giant has made partnerships with other companies from different markets to ensure that the taste of quality reaches the global markets in different channels. This is the result of strategy implementation with task-individual congruencies as well as dealing with the right motivation systems. Employees need to be motivated and made feel like part of the company for them to comply with the policies, as well as work with the willingness to fulfill the expectations of output per unit of production.

Eicher Motors Limited (EML) is proud of the following benefits accruing from the application of the Nadler & Tushman’s Model:

  • The Nadler & Tushman’s Model assists the firm in enhancing the understanding of the corporate behavior and business attitude. This model helps the firm in putting information in the right business language, which every stakeholder can understand.
  • The Nadler & Tushman’s Model assists the company in categorizing and grouping operational data. There are different forms of operational data that the firm records in every minute of production (Vetro, 2015). All this information put together cannot make business sense, but, when put into appropriate groups, it can be understood to mean progress of concern.
  • The model assists the company in interpreting the recorded data and making business sense out of the calculated figures. Raw data may not mean much to non-mathematicians, and thus, it needs to be presented in a manner that everybody will understand.
  • Nadler & Tushman’s Model helps in offering a standard, common and shorthand business language for the employees and management to understand (Vetro, 2015).

Eicher Motors Limited (EML) has preferred to employ the Nadler and Tushman Congruence Model more than any other available business model. This is due to the economic significance that the model has to the firm’s growth in output and revenue over the years. The model is comprehensive since it touches on all the aspects of production and sales in the firm hence bringing together different departments of the company and compares their operations for alignment. The Nadler and Tushman Congruence Model as employed by the Eicher Motors Limited (EML) works under several distinct assumptions as follows (Aydi, Abbas, & Vetro, 2012):

  1. Organizations operate entirely as open socio-economic systems, which are present within a larger business environment.
  2. Organizations operate as naturally dynamic beings, and changes must be experienced at every stage of operations.
  3. Organizational behavior is experienced at the group level, the system, and in the individual levels of operation.
  4. Operations interactions typically occur between the individual, group and in the systems levels of institutional behavior.

In the analysis of Eicher Motors Limited (EML), the elements of the Nadler and Tushman Congruence model include the primary factors such as the business environment, resources, organizational strategies and the history of the firm. These fundamental operational factors have been explicitly conceptualized in Eicher Motors Limited (EML). For instance, the input resources available to the firm such as human resources, financial capital, technology, and information have been utilized to the maximum (Eicher Motors Ltd., 2011). The top management of Eicher Motors Limited (EML) under the strict supervision of the Chief Executive Office, Siddhartha Lal, has the obligation to ensure compliance with the organizational standards and is mandated to ensure that all employees comply as well. Business strategy is the most fundamental input resource to the firm because, through strategy, other inputs are allocated for success in the right and appropriate amounts (Burton, Lauridsen, & Obel, 2002). This strategy system is comprised of such components as informal organizational arrangements, operational tasks, and formal arrangements, as well as the individual elements at work. On the other hand, the organizational outputs include system, group, and systems components such as goods and services, performance, and efficiency in undertaking tasks.

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The Congruence Model for Analyzing an Organization

The above process is a representation of the Nadler & Tushman’s Model, which includes four different fundamental components. The first component of the model is the input chamber where the environmental resources history is evaluated and considered accordingly. Inputs are the most important among the organizational resources since they are the ones that need to dominate the process until they are turned into outputs. The transformational process is where the organization assumes measures to ensure that inputs are turned into outputs through the implementation of strategies and mechanisms (Aydi, Abbas, & Vetro, 2012). In this stage, formal and informal organizational factors are considered. Tasks and individuals are combined into units through congruencies to produce outputs. The outputs are the other fundamental components in an organization. These are the items that get to the market selling the image of the organization as an individual or group. The last component of the system is the feedback that comes from the consumption of outputs. Feedback is collected from the market and sent back to the system to help in improving the congruence formation (Kiran, & Kamran, 2008).

A process that does not have a channel for getting feedback is destined to doom. This happens due to the fundamental details that customers pass through into the system for the sake of future production. For instance, if the company such as Eicher Motors Limited (EML) produces a car that has faulty braking system and releases it to the market, customers are the only way to know that this is not working as expected. Thus, if the firm closes the door for feedback, the production will continue to release faulty cars and with time, the market will know the problem and avoid buying the cars. Avoiding feedback does not mean that the information will not flow in the market (Aydi, Abbas, & Vetro, 2012). In fact, if clients realize that one has locked them out, they become motivated to spread the details to potential clients and the market uptake of the products will shrink by the days.

Environment Resources History Strategy

All factors affecting Eicher Motors Limited (EML) include institutions, organizations, events, individuals, and groups that are found in the external environment of the firm have an influential impact on the operations. The Environment Resources History Strategy takes into consideration the various assets and resources that the firm has access to (Rivkin & Siggelkow, 2003). These assets include human capital, financial capital and information, as well as the recognition in the markets. It also explores the patterns exhibited by the past behavior in the market and the efficiency of production as well as investment. The history of the company included the vital decisions, which have been made in the past concerning market approach, allocation of resources, and approach to meeting consumers’ demand (Kiran, & Kamran, 2008). Eicher Motors Limited (EML) significantly depends on its history of success right from the time it was Royal Enfield in the 1900’s. Every moment that brought success to the firm is cherished. Environmental Resources History Strategy calls for firms to improve on their historical progress and failures to ensure that every step that is passed cannot be reversed economically.

System Components

The system components in Eicher Motors Limited (EML) include the Task/ Individual, the Formal Organizational Arrangements and the Informal Organization environments. The inherent and fundamental tasks covered by the system components include what the company implements on a daily basis in the manufacturing of motor vehicles. The system components take care of the methodology that the company employs in the production, sales and the investment, the processes and structures (Sinha & Ven, 2005). Some of the factors that the system component explores include drug abuse among the employees and management team, the level of staff satisfaction, absenteeism from work, turnover, lateness, discrimination and abuse, among others. It also includes other external factors such as the business environment, utilization of natural resources available for space, corporate social responsibility and market competition. Eicher Motors Limited (EML) employs people from different backgrounds, and the firm does not allow any discrimination among the members of the staff (Eicher Motors Ltd., 2009). The company has adopted staff recruitment and management system, which ensures that no employee is dismissed without due diligence and no punishment is allocated without a reference to the rules governing operations. Eicher Motors Limited (EML) is among the most reputable firms in the Middle East and Asia due to its well managed operational framework and human resource structure.

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The Concept of Organizational Congruence

Each pair of the firm’s inputs implies some certain level of congruence or consistency, which is defined in all the company goals, needs, demands, objectives, structures and all the other components. Congruence is used to give a measure of compatibility in the pairs co-joined in the process of production. For instance, every task in the company has a required level of expertise and the qualification determines the compatibility. Since Eicher Motors Limited (EML) is an engineering firm, all the people involved in the process of manufacturing vehicles and motorcycles need to be equally qualified and approved by the relevant authorities to implement  engineering works. Eicher Motors Limited (EML) employs people from different backgrounds to work in the manufacturing plants as well as the distribution points, but one issue that is always considered with deep concern is how qualified each employee is at the time of recruitment. The working system in the firm is divided into different job levels according to what the employee is mandated to carry out. This is the basis for qualification requirements as well as the remuneration of the same (Gulati & Puranam, 2009).

The Congruence Hypothesis

In studying the congruence hypothesis, the aggregate model in operation analysis displays low or high system congruence. The congruence hypothesis states the following: “holding every other factor constant, the higher the degree of congruence between the production elements, the more efficient the company becomes (Aydi, Abbas, & Vetro, 2012).” In this case, effectiveness refers to the extent of the real institutional outputs at the organizational, group, and individual level. For Eicher Motors Limited (EML) to be termed effective, it must have production components intertwined for a smooth transition as well as the running of operations. The congruence hypothesis strategy must comply with the individual and collective demands of the environment by putting more focus on the market tastes of cars and motorcycles. Through understanding the tastes, it will be possible to understand the problems that the process of production might be facing. Congruence hypothesis is used in the process of identifying the problems facing the firm, and also contributing to the healing process (Kiran, & Kamran, 2008).

Scientifically, it is believed that the process of solving a problem begins with identifying the problem itself and then understanding its cause (Aydi, Abbas, & Vetro, 2012). The biggest challenge in the process of getting the right combination of task-individual is how to get the most effective degree of skills demand combination. The problem is not how to manage the employees but how to allocate them the tasks based on the right qualification requirement. Eicher Motors Limited (EML) is known to be very categorical when it comes to employing the best-skilled staff (Eicher Motors Ltd., 2011). This is achieved through an intensive and inclusive process of recruitment, which is assisted by professional recruiting firms so as to ensure that only merit is considered during deployment. The managers in Eicher Motors Limited (EML) are mandated to be familiar with the requirements of every department in the firm so that they can easily detect faults in the running of operations (Eicher Motors Ltd., 2016). This strategy has been working for the firm for years, and the current top management team is working hard to ensure that the strategy is enhanced and updated to include new aspects and make the management smoother than before.

Organizational Problem Analysis

The operational situation in most modern firms keeps changing due to the alterative nature of the markets. This calls for managers to engage continuously in the problems facing the departments and ensure that they keep looking for solutions immediately when a fault occurs (Rivkin & Siggelkow, 2003). Every problem is detected through the visible symptoms, and this is what the managers and their assistants should spend time on gathering data and analyzing for better understanding. Organization’s past performance of Eicher Motors Limited (EML) is what determines the rate of progress making it a consistent affair where the last year’s output makes the basis for improving the current situation. The firm does not believe in avoiding challenges since the CEO believes in tackling the problems and stopping them from occurring again. Identification of the factors leading to problems is the first stage of getting to know where the problems are coming from, and it is the same stage where solutions are based. The production is compared with the best historical times, and the level of input is considered as well as the expected output to find out if there was anything wrong (Gulati & Puranam, 2009). In the process of analyzing the problems, Eicher Motors Limited (EML) uses the following procedure:

  1. Identify Symptoms

How It Works

Identification of the symptoms by listing all the available incidences and data, which may show that there is a problem, is the initial step in the analysis (Brocke, Zelt, & Schmiedel, 2016). The firm believes that the first stage of finding a solution is by getting the available evidence about the existence of a problem and also learning the facts about the genesis of the said problem. Symptoms may not be as accurate as the firm may wish, but they give an impression that there is something that is not going on well with the current state of affairs (Soltani, Lai, & Mahmoudi, 2007). Symptoms can be detected just by the look on the recently recorded outputs, the level of employee fall-out or the rate of customer complaints. For instance, when the top managers begin to leave the firm through resignation, it might show that they have discovered that the company has lost its market direction.

  1. Specify Inputs

Specifying the production inputs so as to determine the nature of the environment, resources, the company history and the past strategies are the next stages. The company is very keen on its external environment since it determines the image and acceptance of the products by the market. The resources available are evaluated to see if there are any of them that could cause a problem. This stage entails intensive data collection and analysis to identify the optimal level of production and to compare with the current levels to see the gap (Sinha & Ven, 2005). This is where the company mission and vision are examined to see how to contribute to the running of affairs.

  1. Identify the Outputs

Identifying the outputs that reach the market and evaluate its acceptance by the customers to see whether this could be the source of the problem is the third stage. Analyzing the output helps the firm in determining the level of market success through the current state of production. The managers compare what was produced and what was the intended level, and point out what brought the disparity as the first source of the problem being analyzed (Gulati & Puranam, 2009).

  1. Identify the Problem

Problem identification takes place when the firm compares the desired output and the actual output that reaches the market. This is to examine the level of production and the capacity of the firm with the current state of production. Every firm has its market target and the desired level of production, and this is evaluated using the combination of task-individual ratios (Rivkin & Siggelkow, 2003). The organizational goals are achieved through the right combination of resources, and this is the process, through which managers can pursue analyzing the detected problem. This stage is undertaken after the actual problem has been identified through the previous stages of the analysis. Once the review and comparison show that there is a disparity in the level of production, the firm will be able to note that there is a problem somewhere and dig deeper to find out what it is (Gulati & Puranam, 2009).

  1. Describe the Organizational Components

This particular step focuses primarily on the factors causing the identified problems by relating the information collected to the combination of production components. Through the knowledge of the causes of the problem, Eicher Motors Limited can identify where the openings for the problems are and close them to avoid such a situation in future. As it is scientifically known, the first stage in the formulation of a problem is always the knowledge of the problem itself. Each problem is supposed to be handled independently for the purpose of coherence and conclusion of procedures (Ben-Gal, Tzafrir, & Dolan, 2015). The firm takes the time to identify what the market contributes towards causing and solving the internal problems since the relationship between the firm and the external environment is vital to the running of affairs.

  1. Assess Congruence

In this stage in the analysis of the problems, the evaluation of the congruence in every pair of components put together is implemented. This helps the company in identifying the effects of every individual component in the production system to see how each one of them behaves when put together with others (Soltani, Lai, & Mahmoudi, 2007). This is the analysis of the skills in every member of staff and the compatibility with the system. Eicher Motors Limited (EML) is very categorical with the qualifications of employees, and seasonally, there is recurrent in-house training that is meant to refresh the skills. Since all this is put in place, the managers have the chance to evaluate every employee and the department they hold to see who could be losing touch with their assignments. Congruence is the degree of compatibility between different production components. These include labor force, raw materials, the working environment, management techniques, and strategies, among others.

  1. Generate Hypothesis

The seventh step is very crucial in the analysis procedure since it is where the problem cause analysis is done. This is where the deeper roots of the problems are pointed out. For instance, Eicher Motors Limited (EML) had gone to a deep financial crisis in the mid-2000ies due to low production and market acceptance (Eicher Motors Ltd., 2009). Revenues had shrunk to levels of raising concerns since it had become critical, and the company was almost unable to continue the production. The company ran into a financial crisis, and the only way to run the production was through bank loans. However, after an intensive analysis of the problem, the company figured out that the cause of the crisis were low employee morale and substandard outputs. The solution was to link the two problems and introduce a clear cause of action. The solution that the firm settled for was to adopt a strategy for motivating the employees and making partnerships with other vehicle manufacturers in the bid to gain a name in the market. Some of the top managers and directors had to step down for the company to employ more competent people to revive the production. One of those who stepped down was Mr. Rakesh Kalra who was the managing director in the year 2002 (Eicher Motors Ltd., 2003). The congruence was revived between the production formulae and the individuals driving the strategy. At this point, the company was able to release the first indigenously designed heavy commercial motor vehicle.

  1. Identifying Action Steps

This is the final stage of the problem analysis process where the action plan is formulated and evaluated to introduce a solution. All the marked issues are reviewed to see what is needed for them to work, and it is at this stage that some members of the staff are laid out while the top managers resign willingly (Sinha & Ven, 2005). In this particular stage, the firm focuses on those issues, which require change while those that are positive are enhanced and upgraded. For instance, in the year 2002, Mr. Rakesh Kalra resigned from the managing director position.

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Future Directions

Once the firm finds out the solution to the problems, it is recommended that the process is upgraded and well maintained for the sake of the future. The model used in getting a solution should be managed and integrated into the plans so that goals can be achieved and the progress maintained. For future success of the organization, the following things need to be done:

Organizational Change

Scholars and research analysts have thoroughly researched organizational change in Eicher Motors Limited (EML) and its operational components. The fundamental question being handled is how to ensure that whatever was done to raise the company from the financial crisis is maintained and embraced for the sake of bringing change in the future.

Organizational Development over Time

Firms undergo different stages of development in their business life, and Eicher Motors Limited (EML) is not an exception. In these stages, organizations encounter varied challenges and crises, most of them being financial and managerial. Most of these crises come in similar ways making it easy for the firm to predict their recurrence (Rivkin & Siggelkow, 2003). Eicher Motors Limited (EML) has put measures in place to ensure that the market acceptance is maintained by making partnerships with world motor giants.

Organizational Pathology

The organizational pathology suggests that the problems facing organizations are never unique and that they are usually expected and detected once they set in to occur. However, most of the times employees tend to give excuses not to perform and solve the problems terming them as unique and unpredicted. Therefore, it is  the duty of the top management together with the human resources department to make sure that some of these issues are addressed professionally to stop employees from making lame excuses for not performing adequately (Rivkin & Siggelkow, 2003). Eicher Motors Limited (EML) has a special team that deals with issues of employee negligence and non-performance which is headed by human resources experts. This team is mandated to evaluate each employee individually to confirm their knowledge and willingness to perform to their capacity. However, every decision that is adopted regarding the conduct of employees in Eicher Motors Limited (EML) has to be in line with the organization goals and expectations from every department (Eicher Motors Ltd., 2016).

Organizational Solution Types

This process involves intervention, mitigation and treatment of institutional problems. Since solving organizational problems is a matter of setting priorities right and right allocation of resources, the congruence model comes in handy in this process. The congruence model can help the senior managers and especially the human resources department in allocating employees to the departments where their skills fit with the requirements (Brocke, Zelt, & Schmiedel, 2016). Every challenge facing the Eicher Motors Limited (EML) is addressed separately from others for it to be solved end-to-end. Nadler & Tushman’s Model helps the company in utilizing the feedback that comes from the market in the formation of congruencies. This company believes in solving problems through structures rather than policies since structures are meant to last, but policies can be changed at any moment in time, without affecting the system in any way. Thus, there is a dire need for structures to be maintained and evaluated regularly for the sake of getting the fits and congruencies within the transformation process.

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Eicher Motors Limited (EML) is a living example showing how the Nadler & Tushman’s Model can become a fundamental tool in managing a workforce in an organization. The model addresses the challenges and problems facing firms by setting up structures of how to handle each one of them individually. His strength and the effectiveness of the model consists in the ability of the top management to implement structures and policies, which ensure congruence within the allocated tasks. The managers need to assess the decisions they want to implement before they can roll them out to the employees since a wrong move at the start can haunt the strategy up to the fall of the firm. Using the Nadler & Tushman’s Model, firms need to be sure of every decision that is made, and it has to be in line with the current institutional objective.

Eicher Motors Limited (EML) portrays a good image of how this model can transform a firm within years and capture the expected market with consistency in output results. However, experts send a word of caution to the firms not to take the model theoretically and fail to implement it practically. In most cases, companies fail to achieve their goals due to the failure of managers to motivate the employees who are supposed to be the pillars of success. Thus, Eicher Motors Limited (EML) has been keen on how employees are allocated tasks and the level of motivation that every department gives to the workers. There is a special team dealing with issues of motivation and punishments to ensure that good employees are rewarded while those who do not cope with their responsibilities are dismissed accordingly. One factor that the company addresses with seriousness is discrimination. This company employs people from different races and backgrounds and does not discriminate against people with disabilities as far as they can be able to perform their duties. There is a strict policy that prohibits discrimination within the firm. This helps in ensuring that merit is the only factor holding the relationship between workers and the company.