Domtar hiring test

HRM355 CASE QUESTIONS AND REVIEW EXERCISES ANSWER KEY

CHAPTER 1

CASE QUESTIONS

1. How did Domtar’s strategies align with its mission? Explain your answer.

As stated in the text, strategies define how the organization will go about accomplishing its mission. In fact, strategies attempt to optimize the match between the organization’s mission, what’s occurring or is projected to occur in the external environment, and the organization’s internal operations. Domtar’s mission is based on the three pillars of the company: “customers, shareholders, and ourselves.”

The first part of Domtar’s mission is “to meet the ever-changing needs of our customers.” This is aligned with Domtar’s strategic goal of becoming a preferred supplier. This competitive strategy focused on being innovative in product design, high in product quality, and unique in customer service while keeping costs down. In order to successfully implement this strategy, Kaizen was introduced and all employees received corresponding training. Kaizen is a process for developing new and more effective ways of doing things and eliminating unnecessary processes (which reduces costs). As a result, Domtar established a culture of continuous improvement which allowed it to address its constantly-evolving customer requirements. Customer service training was also a part of this strategy.

The second part of the mission is “to provide shareholders with attractive returns.” This part of the mission is aligned with the strategic goal of return on investment. Actions related to this strategy were participation in the consolidation of the industry and increasing its critical mass. This was accomplished through sound management policies and through joint ventures and acquisitions. These actions helped Domtar become more competitive and improve its credit rating on its long term debt, returning it to “investment grade.”

The third part of the mission is “to create an environment in which shared human values and personal commitment prevail.” This was aligned with the strategic objectives of improving employee performance, communicating the Domtar values, clarifying individual roles and fostering better communication between employees and managers. These goals were accomplished through the development of a performance management system and through training so that all employees both understood the proposed changes and gained the skills to achieve them.

SP1243(1508)

2 Given the difficulty of organizational change, what factors contributed to the success at Domtar? How did Domtar’s management at all levels contribute to reducing resistance to change? What else might they have done?

A compelling need for change was established. The reasons for change were communicated and in many ways obvious. Essentially, Domtar was in serious trouble, so this made the changes easier to understand by the employees. As Royer noted that “it is only ‘ourselves’ that are able to have any impact on changing the company.”

Domtar recognized the need for and introduced change at all three levels: the organization itself, groups and their interrelationships and individuals within groups. In terms of the organization itself, Domtar deployed a new mission and strategic direction which acknowledged the value of employees while target- ing areas of change. Top level commitment to the changes was demonstrated through the implementation of Kaizen. The introduction of the new performance management system was also evidence of this commit- ment, and represented a system wide change that provided financial incentives for employees to share in the financial growth of the company. This helped to reduce potential resistance to the changes. In addition, through Kaizen, effective training was structured as a continuous performance improvement process to be integrated with other systems and business strategies.

The Kaizen process itself creates change in terms of how groups work together and how individuals within groups interact. Through Kaizen training and applications, a cultural change of continuous improvement and openness to change was introduced. At the individual level, Domtar addressed employee KSAs and motiva- tion through involving employees in the change process and through education and training. Involving employees develops commitment to the change. Training (Kaizen and customer service) assisted in educat- ing employees regarding the mission, strategy, and objectives of the organization, and how these objectives translated to each employee’s job. The training provided the individuals with the KSAs they needed to make the changes successfully.

Other ways Domtar addressed potential areas of resistance include the following:

Domtar’s management further demonstrated commitment by participating in the training, kicking it off and returning to answer questions. As well, lower level management received skill training on how to address employee issues effectively. As a result this demonstrated commitment to the change and emphasized its importance, which in turn facilitated integration.

It’s clear that the changes at Domtar were successfully implemented. One area that doesn’t seem to be fully addressed is the organizational structure and the design of jobs, ensuring that work is allocated appropriately and organizational systems are supportive of the change. In addition to the training, other mechanisms such as facilities, machines, and equipment could have been put in place to enable the desired performance to occur.