Diagonostic Paper on Shifting Strategy and Expansion

                         HR-587 MANAGING ORGANIZATIONAL CHANGE

PROJECT – DIAGONOSTIC PAPER ON SHIFTING STRATEGY AND EXPANSION

                                           ASHWANI PERSWAL        

10.15.10

1.  Executive summary
Beekay (name changed) is a 80 year old very strong material handling company in North America. It is a strong project management company and has great reputation in North America. They already have operations in India. India operation is very loosely tied with the US operation.

They have started a major organizational change process by adopting a new strategy to grow and also meet completion. The reasons are both external and internal. One of the international competitor of Beekay from UK entered North American market 3 years back and has increased the competition. The recession, environmental policies of US government and a big GDP growth in Asian market has also contributed to change in strategy.

Beekay's past strategy was to do technical collaboration with different companies across the globe and do business through them. The direct customer contact in Asia, Europe and Africa was low. Beekay was very selective in choosing the technical collaborator   in any region/ country which paid dividends for a long time. The competition's strategy was however different. They were more into direct contact with big EPC companies, ultimate user (power plant). Every company goes through a   life cycle in the same way as a product goes through. Beekay had seen many ups and downs with the changes in US economy and various recessions. The company was generally into a growth stage (stage 2) of life cycle. Beekay always enjoyed a   reputation due to its superior technology and innovation leading to introduction of many products on a  regular basis. The pressures that called for a radical change in organization culture and doing business were both external as well as internal.
External pressures :
1. Mandated pressures :
The US government was inclining towards "clean energy" philosophies which will lead to the slowdown in new thermal power plants.
2. Geographical pressures:
Change in global economic structures: Asian market was picking up (excluding China which is at maturity and may start declining in next 3-5 years)   and the GDP growth in India was 8-9 % every year. Hence a big strong focus was required on the market.
3. Hyper Competition pressure: The margins in projects started going down. To add to that the UK based competitor to enter US market acquired a small company in same field. This US company was getting good financial, technological and project management support from UK operation to bid, bag and execute projects in US.
Internal pressures:
1. Beekay which was once a leader in innovation and technology was slowly loosing that edge and a renewed strong forces was required on " New product development". Competition was ahead on new technologies, focusing on future environment requirements.
2. India operations was in bad shape. The major problems were:  Projects were losing money. There were no processes and the financial visibility of company was extremely poor.  US management had a loose control over India. There was poor vendor base and no execution strategy.  Engineering design was good but the implementation of same on drawings and documents were due to lack of sufficient systems and processes in place. The project management processes were not in place. Every PM (project manager) had his own way of executing projects i.e. no consistency between processes for two projects even if they were for same customer.  There were no processes in place. The leadership skills were missing in PM's to lead the projects. Construction projects had no skilled staff. No construction processes were in place. Staff was not motivated. Sites were shabbily maintained and the contractors hired for execution were not good. Project estimation processes were not in place leading to more mistakes.