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The most fundamental step in the establishment and leading of a successful organizational change commences with having a comprehensive understanding of the organizational dynamics and performance. It is impractical to adopt the appropriate change strategy without conducting diagnosis on the nature and intensity of the problems that the organization is facing (Marilyn, 2012). The fundamental argument is that without a wide-ranging roadmap for understanding the multitude of the performance issued within the organization, there is a high likelihood that organizational leaders and managers will adopt change strategies that address the symptoms instead of the causes. This can result in the failure to detect the actual issues underpinning the performance of the firm (Marilyn, 2012). The basic implication from this approach is that organizational performance is determined by the interaction of the organizational outputs at the different levels. Using this theoretical framework, this paper deploys the Nadler-Tushman Congruence Model to conduct an analysis of the outputs at the Industrial Services of America (Marilyn, 2012). Outputs at the organizational levels refer to the products and services that the company offers to its customers. In order to achieve the objective of the paper, the outputs at each of the three levels within the Industry Services of America will be identified. The paper will also identify the goals that the company has set and its current performance. After an analysis using the Nadler-Tushman Congruence Model, the paper makes a case that the interaction of outputs at Industrial Services of America Inc from the three different levels of the organization interact to generate medium performance of the overall organization.
Outputs of Industrial Services of America at the Three Levels
The interaction of outputs at the organizational level serves to reflect the performance and effectiveness of the system functioning within the Industrial Services of America Inc. One of the outputs that denote the performance and effectiveness at the organizational level is through the achievement of the projected goals of production (Kletter, Harry, 2011). In the light of this view, the Industry Services of America stands out as a progressive leader in the global metals market. In addition, the company offers a direct supply of quality raw materials to mill both within the domestic and foreign market. On a yearly basis, the Industry Services of America produces approximately 250,000 tons of ferrous metals, 18,000 tons of non-ferrous metals, and approximately 100,000 tons of stainless steel. Since the establishment of the company way back in 1954, the company has had a weighty influence in the scrap metal recycling industry through establishing itself as the first publicly owned waste and recycling companies in the US. In line with the achievement of the desired goals and objectives of production, ISA has adopted every strategy to offer quality service and products (ISA, 2012).
Another output that can be used to measure the performance and effectiveness at the organizational level is through its financial outputs. The company sales for ISA for the third quarter ending September 30, 2011 were $55.8 million, which was a net loss of $ 4.2 million compared to the third quarter of 2010 (Kletter, Harry, 2011). This was mainly due to the economic decline that resulted in a reduction in the prices of steel and nickel. Despite the net loss, notable highlights for the company were a strong financial position, stability in the orders received on ferrous metals, an upgrade in the inventory and yards, an upgrade in the shredder to increase processing capacity and an addition of the industry veterans to facilitate the stainless steel operations management. This is an indicator that the company strives to use the available resources optimally in order to ensure that it attains its goals of production (ISA, 2012). With regard to the adaptability to the external demands, it is arguably evident that the company’s financial performance during the 2011 third quarter was affected by the weak economy and a reduction in the steel and nickel prices. On a yearly basis as outlined in the 10K report, the 2009 revenue improved by $81.1 million compared to the 2008 revenue (Yahoo Finance, 2011). The profitability of the company doubled during 2009 when compared to 2008. It is arguably evident that the financial output of the Industry Services of America tends to support its profitability in the long term; this also plays a vital role in creating the shareholder value. Customer relationships at the ISA can be considered healthy because the company owns a world class facility, strong financial position and its organizational behavior are inclined towards being organic (ISA, 2012).
According to the Nadler-Tushman Congruence Model, the performance and effectiveness at the group level is mainly determined by cases of intergroup conflict, the effectiveness and quality of intergroup communication and collaboration. In the light of this view, the functional groups/divisions of Industry Services of America include recycling, alloys, logistics and WESSCO (ISA, 2012). Each of the functional groups at the ISA makes significant contributions towards the financial success of the firm and the attainment of its projected goals such as long term profitability. In addition, the company has been a leading supplier of its on-time service customers, who are located approximately 50 miles from their radius of operation. Because the organization is organic in nature, intergroup communication and collaboration are arguably excellent, this is because the company is experiencing an organic growth due to its investment in people and assets (Marilyn, 2012). The organic nature of the firm can be argued to have contributed to its financial performance through intergroup collaboration and communication. For instance in the recycling business unit, the revenue during the 2009 trading period for stainless steel totaled $ 112.6 million, approximately 66% of the total revenue; the ferrous and shredder operation contributed $38.8 million, approximately 20% of the total revenue. The revenue for the non-ferrous metals was approximately $ 4.5 million, which was approximately 14% of the total revenue. As a strategy to invest in the people and assets, the company increased the number of employees by 39 during the period from 2008 to 2009 in order to enhance the efficiency of the operations management in the steel business unit (Yahoo Finance, 2011).
At the individual level, performance and effectiveness of the output is mainly determined by individual productivity such as employee turnover, levels of employee motivation towards the achievement of the organizational goals and objectives and the off-the-job activities that have an influence on individual performance (ISA, 2012). The recycling industry is skill intensive industry, which requires people with varying skills and knowledge to undertake the firms operations that are aimed at enhancing its profitability. The fundamental argument is that a greater match between the expertise and knowledge with the individual results to improved organizational performance. ISA has increased its human resource base, especially in the stainless steel business unit in order to enhance the effectiveness of its operations management. The composition of the firm’s top management comprises of the skilled managers who are well conversant with the scrap, waste and recycling industries (ISA, 2012). In addition, the effectiveness of operations management with the firm can be attributed to the wide human resource base having expertise and knowledge in the waste, scrap and metal recycling operations.
Employee productivity at the ISA is relatively high because of the improved employee turnover and minimal cases associated with employee absenteeism and drug usage. The work climate within the firm serves to increase the levels of employee satisfaction, which is in turn a source of motivation towards the achievement of both individual and organizational goals. An inference that can be made from this is that interactions at the individual level play an integral role in enhancing the performance and effectiveness of the organization.
Basing on the Nadler-Tushman Congruence as an analysis model, it is arguably evident that the needs, goals and objectives of the organizational levels are consistent with the goals and objectives of the larger organization. The interactions of the outputs at different organizational levels within the ISA can be argued to make significant contributions to the medium performance of the company.