I think that two issues that show symptoms of strategic problems are high employee absenteeism or turnover and also deterioration of company image. I chose these two symptoms because they clearly show the lack of strategic management in the executives, bosses, partners, and so and so.
I work in a Business Management Entertainment company where I can clearly see the relationship of these two symptoms with the down pick the company is going through. I have been working with the company for the last year and a half, everything was going okey until one day I saw one of my co-workers leaving the company without "any reason". After few months I saw other two of my closest c0-workers leaving too. I started to wonder myself if we had a revolving door in the building? or what type of strategic management was the company applying for their business? Well I concluded some ideas that I believe have a lot to do with the issues mentioned before.
I think that the partners of the company right now are not paying attention to the competition in the market. Some companies believe that since they are not selling products such as food, cars, or toys they do not have to compete in the market. But yes, service companies also have to compete in the market and the best way to do this is by keeping their employees happy, with salaries or compensations that match or get close to the market. In my company, I found out that they pay employees approximately 45-50% below the market salary range, this is why employees decide to leave the company and the ones who decide to stay just do not do a very efficient job because they don't feel remunerated so; why doing it? This is a problem for the company because it is reflected in the business operations every day. So far I have seen 25 people leaving the company including myself. Next friday is my last day.
Now the other point that I want to make is the deteriorating of the image. I am going to continue referring to the company where I work. They have high-end profile clients including actors, directors, writers, etc. Some clients have found out some discrepancies on their financial statements that in one way have made them doubt about the company. One of the most important tool and goal of a company should be offering a service or good that provides 100% accuracy, reliance, and trust. Most of their clients have been attained throughout the power of word-of-mouth, but now that the image has been deteriorating little by little they have to apply another strategy, set up another goal, and all has to do with the right management of their business.
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3 comments:
Hello Jhoanna! Great example!
I was wondering how someone could prove the rate employee absenteeism to be a deciding factor for where the company was headed! You helped clarify that for me! I also think that company image does play a large part in displaying the weaknesses in strategic management of a company.
A large part of the company's success does have to do with the employee's opinion of the company. If the people working for you can't trust you enough, what makes you think customers will be so open to do it? Employees leaving shows a bad sign to other employees, and I'm sure employees have friends out side of work, through which such worries about company management can spread. This can turn into a negative-word-of-mouth effect.
This could aid in deteriorating the company image as well. I don't think I have to go into deteriorating company image since you have described it so well. But , I do think that your experience at work provides an ample example of strategic management gone wrong.
--- Karup
I agree that lower than market salary wage does lead to high employee turn over. I had worked in a CPA firm before for one year. During the year I was working, there were 6 people left. The company has a very good working environment indeed. The supervisors are nice and new employees like me who was still in college were trained properly and given the chance to work on real case. Nevertheless, the company was paying 50% lower than the market salary rate. I heard many of my co-workers who left before me for this reason.I think it's very important that employee get paid fairly.
Companies should definetely pay their employess sufficiently if they want to attract great talent. it's like the old saying "you get what you paid for". I think your company is experiencing a severy strategic management problems. If the managers think that they will be able to attract and retain a professional workforce for half the price they are sadly mistaking. Good for you that you're leaving such a crummy company and best of luck to you in the future.
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