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Award name: MBA
Module code: MANA739
Module name: Management, People and Organisations
Module run: 8 weeks
Coursework title: Individual Written Report of ALDI and W.L. Gore & Associates, Inc.
Due Date: 26th March, 2021
Module leader: (In LBU) Shakiya Nisa, Tanbeen mahtab, Mike Prenton
Module tutor: (In TBC) Sunita basnet
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Submission date& time: Date: 26th March 2021 Time: 11:30 PM

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6222 Total Number of Pages (including this front sheet): 26

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Table of Contents

Introduction................................................................................................................................................3
Organizational structure, culture, leadership and management...............................................................3
Management, people and organizational issues......................................................................................12
Organizational Challenges........................................................................................................................17
Recommendations....................................................................................................................................19

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 Introduction

ALDI

ALDI is a German retail chain which includes over 10,000 stores in around 20 countries with a
total annual revenue of more than €50 billion (ALDI, 2021). The two brothers Karl and Theo
Albrecht formed the company in 1946 when they took over their mother's business in Essen. As
per the given case study, Albrecht Discount (ALDI), famously known for inventing the discount
principle in the food retail industry, is divided into 2 parts: ALDI South and ALDI North. The two
regions which are managed by two brothers are further differentiated into several regional
divisions.

Organizational structure, culture, leadership and management

ALDI follows hierarchical, flat as well as functional structure in their organization. In hierarchical
structure, the chain of command flows from the top to the bottom. In ALDI, the regional
director looks after sales manager who is directly responsible towards different area managers.
The area managers look after the store managers who are in charge of directly supervising the
store employees. Even though the hierarchical structure helps to properly define the respective
duties, responsibilities and authorities providing specialty to each employees, there exists a lack
of clear communication between the top and lower level management. There are several
merits of hierarchical structure that are discussed as follows:

 Within the organization, there are clear lines of authority and reporting.
 There is a greater understanding of the duties and obligations of workers
 At various management levels, there is responsibility for actions or decisions.
 Employees may be motivated by straightforward career pathways and learning
opportunities.
 Employees have the opportunity to specialize and gain experience in their profession.
 Employees are closely supervised across a limited range of managerial control.

Even though this structure has several merits, there are some limitations which are mentioned
as follows:

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  The chain of command becomes complicated that can result in the slower decision
making process.
 It can create a delay in the communication process.
 Employees are less connected with the senior level management.

In ALDI, the regional director also looks after the head of various functional departments
including head of administration, head of purchasing, head of store development and head of
logistics. The head of each departments are then responsible for managing their respective
employees. Hence, the functional structure promotes specialization where employees are able
to concentrate on their respective roles. It also helps to establish coordination among the
employees and increases the managerial efficiency. However, in terms of ALDI, it has led to the
lack of communication and cooperation between the employees of functional units.

The company also uses flat structure where most middle-management layers and roles are
removed. In such case, senior management has direct communication with different sales
person, staffs, stakeholders as well as customers. The merits of flat structure includes reduction
in cost, efficient decision making process, clear and fast communication process, and the
requirement of less supervision. It also has several disadvantages which can lead to
misunderstandings and power struggles among team leaders, difficulty to retain employees due
to low chance of improvement in rank, role confusion, etc. (ConnectUs, 2015).

Having more than 4000 stores in Germany, ALDI has to manage a large number of employees. It
follows the up-or-out principle where the employees can either move up the hierarchy quickly
within a few years or else they are laid off. Following this strategy of maintaining their
company’s structure results in severe competition among the employees to achieve higher
positions. While doing so, people might go to extreme level in order to improve their own
position including the habit of snitching others, spying on others, keeping an eye on each
other’s activities, reporting someone’s mistakes and weaknesses to senior management and so
on.

Such kind of behavior shown by the employees highly affects their organizational culture. Any
organization’s culture consists of explicit culture set by distinctive patterns of behavior and

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implicit culture set by certain beliefs, values, norms that influence people’s behavior. In terms
of ALDI, the explicit culture can be seen through the maintenance of an organizational manual
that determines the set of structures and processes carried out in their company. The manual
referred to as ALDI bible includes all the tasks and processes for employees of different
positions in detail and provides suitable solution to different work-related issues. In this way,
they have set a distinct culture of following manuals to solve work-related issues arising in the
company.

Similarly, certain misconducts including serious matters and minor problems are handled by
conducting interviews between the managers and employees. However, more than clarifying
the issues, sometimes such interviews result in bullying and getting rid of unpopular staff. The
manual’s effect can also be seen at the culture of organizing a manager’s desk. It has certain
rules stating that their desktop must be empty apart from a calendar, office supplies must be
kept in the upper left-hand cabinet, several forms, invoices and receipts must be held in the
middle drawer while daily reports, turnover reports, and attendance sheets are all held in the
upper right-hand drawer.

While an organization’s culture help to set distinct beliefs, values and norms towards their
employees, it also helps to determine their competitive advantage. Even though ALDI has
distinct set of culture leading towards maintenance of proper discipline among its employees, it
should make sure that it stays away from forming a toxic environment in the organization. Also,
a highly strict environment can lead to the formation of segmentalist culture resulting in the
limitation of employees to take initiative and develop problem-solving capabilities. It could
majorly hinder the employees from bringing out their creativity and showing their
innovativeness in the organization. Hence, managers should make sure that they set such a
culture in their organization which not only focuses strictly on controlling their employees and
limiting their actions, but also focus on creating a positive environment that promotes
socialization and healthy communication (Joseph, O. and Kibera, F., 2019). In this way, people
can bring out their innovativeness, creativity and strategic thinking abilities emphasizing on

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collaboration and team work that eventually leads a company towards achieving corporate
excellence.

In terms of leadership, the company seems to follow a pseudo transformational leadership style
where leaders think of their self-advancement, follow pragmatic decision making process,
compromise ethical behavior and give priority to strategy over employee relationships (Barling,
J., 2008). The company also follows an autocratic leadership style where the high level
management makes the decisions without consulting the rest of the team. Such managers
rarely consider guidance from their subordinates and make decisions based on their own
thoughts and judgments (WGU, 2020). By following this style of leadership, the managers in
ALDI seem to ignore their subordinates' skills and abilities to provide innovative solutions to
several managerial problems.

The autocratic leadership style followed by ALDI has several merits and limitations. Its merits
are discussed as follows:

 The decision making process in ALDI is faster as the leaders/ managers themselves are
responsible for making suitable decisions.
 There are certain rules/ guidelines specified that helps to maintain a proper discipline in
the organization.
 The overall communication is improved as the manager directly communicates with the
subordinates.
 The workers maintain optimum productivity in ALDI as they are provided with accurate
work description.

Even though implementing this leadership style has various advantages, it is not free from the
limitations which are discussed as follows:

 A leader-based work culture is created in ALDI where the maintenance of ethics,

morality is totally based on the personality of the leader/manager.
 A system of dependency towards the decision of higher authority is prevalent in ALDI
where all the desired tasks should be performed on the instruction of leader.

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  The employees of ALDI have less flexibility to showcase their innovativeness and
creativity.

There are several other people management issues faced by ALDI regarding the control of
employees’ behavior and their autonomy. Some of the major issues are discussed as follows:

 Salary payment: Although the company pay their employees more salary as compared
to their competitors, they make their employees work for overtime without giving
additional pay and expecting exceptional amount of dedication in return.
 Part-time contracts: They tend to focus on hiring more part-time staffs which provides
them with several benefits including: reduced labor costs, reduction in the likelihood of
employees unionizing, no policy of providing sick benefits to part-time employees, etc.
 Security surveillance: Their employees are not informed about the installment of CCTV
cameras and its surveillance causing a legal issue in the company.

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W. L. Gore & Associates, Inc.

Established in 1958 by William L Gore and his wife Genevive, W.L. Gore & Associates, Inc. has
more than 2000 patents all around the world and around 10,000 employees in 30 different
countries. Dissatisfied by the hierarchical ways of organization where decisions are
communicated within a closed network in the company, he established the company with an
aim to set a culture of dynamic and informal ways of communicating and organizing. By
following the “lattice” organization structure where no one is anyone’s boss, he believed that it
would lead towards a positive work environment and bring out innovativeness within the
employees. In their system, leaders are selected on the basis of their ability to attract followers
instead of appointing the bosses by the senior management.

Falling under the top 200 privately owned firms in the United States as stated By Forbes, the
company has made more than 3,400 inventions in a variety of areas, including electronics,
medical equipment, and polymer processing. They have developed various products for medical
implants, cloth laminates, and wire, filtration, venting, and fiber technologies for a variety of
industries using proprietary technologies with the flexible polymer polytetrafluoroethylene
(PTFE). In this way, the company has installed over 50 million medical devices around the world,
being able to save and enhance people’s lives (Gore, 2021).

Organizational structure, culture, leadership and management

The structure of Gore consists of “lattice” organizational structure that is highly team-based
allowing the employees to promote and help one another's growth and development. This
structure ensures no authority, no bosses, no chain of command, no fixed network of
communication, self-command and natural leadership where the leaders are chosen for
different activities within the organization based on their merits and ability to attract followers
(Cherry, K., 2020). The company has a decentralized structure where several individuals are
responsible for decision making process and are provided with the autonomy to take required
actions. Likewise, the company has a flat structure with less management layers which results
in improved communication and coordination making the decision-making process easy.

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There are several benefits of implementing lattice structure such as:

 It facilitates the creation of innovative ideas where people can contribute their ideas
regardless of their position.
 As employees are not limited to a particular functional area, they enjoy more freedom
to broaden their experience, skills, and abilities by cross-training and learning about
various components of the sector (Karthikeyan, C., 2017).
 It allows multiple range of work as well as career opportunities to the employees.
 The increased versatility will help to respond quickly to the changing environment.

Even though this structure provides flexibility and improves communication between the
employees, it holds several disadvantages such as:

 It increases the decision making process since coming up with the best solution, requires
a lot of contact between the associates.
 The lack of well-defined objectives and a proper job description can create confusion
and chaotic work environment.
 It can be difficult to manage due to the lack of hierarchy and general independence of
workers.
 It lacks the ability to create incentive arrangements based on skills and experience level
of the workers (Forbes, 2011).

The organizational culture of Gore has been set in such a way that the employees are referred
to as “associates” as they are believed to be the company's entrusted stewards. Similarly, the
term “sponsors” or “leaders” is preferred than bosses. Whenever new associates are hired,
they are assigned with broader job category and are provided with a sponsor who helps them
fit into the gore system. In this way, the new associate starts working with a team and the
sponsor constantly encourages, provides guidance and feedbacks whenever required. Similarly,
innovation plays a major role in their culture as they constantly use their creativity and intellect
to develop new products as per the market demand and needs. This innovative cultural

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background truly helps to reflect their organizational objective of making money and having
fun.

Gore’s culture can be linked with the egalitarian approach as it focuses on emphasizing on
equality and equal treatment to employees in all aspects. Likewise, they majorly focus on
building relationship, team collaboration, and at the same time provide equal respect and
recognition towards their employees. This way, they ensure that their employees are motivated
and driven towards reaching their goals. It can be explained better with the help of Maslow’s
hierarchy of needs theory as follows:

As per the theory, the fulfillment of basic, psychological as well as self-fulfillment needs of
employees help to increase their motivation towards the organization. Gore focuses on
providing several psychological needs including maintenance of relationships, connections, as
well as providing prestige and feeling of accomplishment. Likewise, self-fulfillment needs are
also prioritized in Gore that includes giving priority to creativity, helping one reach their full
potential, etc. leading to increased motivation towards the organization.

In terms of leadership style, their employees who are known as associates have their own
leaders. Various teams are assigned with their own duties where each team leader provides
necessary guidance, support, and feedbacks to their associates. The company uses natural
leadership style where leaders are selected by the associates themselves. The company follows
a Laissez-faire leadership style where leaders trust and rely on their employees’ capabilities and
let them use their own skills, creativeness and innovativeness in order to meet their respective
goals (WGU, 2020). In Gore, the associates are accountable for their own work, have the
authority to use their creativity by thinking outside the box and implementing suitable policies
to meet the organizational objectives.

There are several merits of Laissez-faire leadership style which are discussed as follows:

 Leaders have the right to make their own decisions as there is no defined authority.
 The leaders of Gore are given freedom to use their creativity and innovation leading
towards the fulfillment of their self-actualization needs.

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  The employees have a better chance to attain their personal as well as professional
growth and development as they can critically analyze the decision-making process
themselves and learn from their mistakes.

Even though this leadership style has several advantages, it includes its own limitations which
are discussed as follows:

 This leadership style has provided uncertainty regarding the roles and responsibilities of
the employees of Gore.
 There might lay chances of leaders not being properly involved with their team
members.
 This leadership style cannot be very effective if the team members do not possess
required skills, knowledge or experience. It can therefore lead to less productivity.
 It might be disadvantageous to those people who cannot make their own decision or
have the habit of operating in a centralized environment structure.

There are several issues regarding the organizational structure, culture and leadership of Gore
that includes the use of peer ranking system for compensation, lack of proper job description
leading towards low responsibility, no proper recruitment and selection process, etc.

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 Management, people and organizational issues

ALDI

There are several management, people and organizational issues emergent in ALDI. The various
issues and the suitable recommendations can be discussed as follows:

Salary payment issues:

The salary that the company provides to their employees are comparatively higher as per the
market rate of food retail sector. As mentioned by the company, they do so in order to make
their employees work overtime in return. The main issue lies where they expect employees to
work overtime without providing extra compensation and also does not accept complains
about additional workload. This leads towards demotivation and decreased productivity from
the dissatisfied employees.

Any company should try to maintain a positive working environment for their employees. They
should keep in mind that motivated employees lead to better productivity which eventually
leads a company towards profitability (Lee, M. and Raschke, R., 2016). Hence, instead of forcing
the employees to work overtime, the company could provide adequate level of salary to all
employees and provide extra benefit or incentives to those who are willing to work overtime.
This creates a mutual level of understanding between the employees and the company.

Part-time contracts:

The company focuses on employing more part-time workers as they are believed to provide
higher work performance at lower cost. However, ALDI does not provide several facilities to the
part-time workers including sick leave benefits. In order to keep the employees motivated and
maintain same level of productivity in future, the company should provide similar benefits to
both their part-time and full-time workers.

Manual:

Since an organization’s activities are dynamic in nature, the suggestions provided in the manual
might not always give the right solution. Various problems require various solutions which

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might not always work in terms of theoretical applications. Therefore, the rules and regulations
mentioned in manual can be revised or adjusted according to the change in situations.

Promote healthy competition:

The company follows up-or-out principle where the employees were either able to progress
within a few years or were laid off. This tendency of promoting employees higher in the
hierarchy created a strong level of unhealthy competition in the organization. Hence, in order
to maintain a healthy competition, the managers should strictly prohibit the culture of
backbiting, snitching and spying on others. Likewise, if someone reports certain misconduct or
mistakes, it should be cross-checked and verified before taking actions or decisions based on
such allegations.

While up-or-out principle might provide the employees a clear understanding of what it takes
to advance within the business and motivate them to take charge of their own professional
growth, managers should:

 Properly communicate suitable ways to establish a career path

 Provide internal training and development programs to enhance skills of employees
 Encourage the use of various knowledge management tools
 Provide constant mentoring and feedback so that mistakes can be reduced (Quora,
2020)

Leadership styles:

As the company follows autocratic leadership style, it creates the habit of highly depending
upon the leader to make any decision. Therefore, employees tend to be less involved in
showcasing their creativeness, innovativeness and skills. It results in employees feeling like their
beliefs and values are not appreciated by their managers. The company could follow
transformational leadership style where leaders can work with their teams to define needed
change, create a vision to direct the change through motivation, and then implement the
change with the support of committed members of the group (White, S., 2018).

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W. L. Gore & Associates, Inc.

The several management, people and organizational issues of Gore are discussed along with
suitable recommendations.

Power Struggle:

The lack of properly defined hierarchy and authority can lead to possible power struggle within
the team members (Donohoe, A., 2019). This can result in the hindrance of decision making
process and create confusion regarding the responsible person who is in charge of making
important decisions. Development of alternative procedures to determine actions to be taken
in case such conflict arises can help to ease such problems.

Difficult to adjust:

The lattice structure offers continued growth and development where career paths can move
up, lateral, down or diagonal (Forbes, 2011). However, not all workers have the capacity or self-
discipline to succeed in the absence of management, and the lack of leadership control may
often contribute to a chaotic work climate and a decreased motivation towards work
(Karthikeyan, C., 2017). Since the company provides an opportunity to develop entrepreneurial
skills and become their own boss, only those people who are willing to adjust to such
environment should be recruited.

Grievance handling issues:

Since there are no managers, the resolution of grievance or any conflicts between the team
members also become difficult. Providing several conflict resolution techniques time to time
can help to ease the conflicts and prevent chaotic climate to some extent.

More interaction between team members:

The decisions are made on the consensus basis making the process slow. As large amount of
interaction among the associates is required to come up with best solutions, it can take longer
time as compared to autocratic style where decision is take by the authoritative person. In such

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case, leaders should take responsibility of making necessary decisions and guiding the team
members as per the requirement.

Lack of proper job description:

The involvement of a single person in variety of activities creates a lack of proper job
description. In order to maintain and increase productivity, the associates can be provided with
clarification regarding their roles from the very beginning. Moreover, as their roles keep
evolving, necessary trainings should be provided as per the requirement and situation
(Donohoe, A., 2019).

Recruitment and selection process:

The recruitment and selection process of Gore has an unconventional approach. It might result
into the involvement of less productive candidates who might find it difficult to shift from a
hierarchical or network based structure to a lattice structure. In order to make them more
productive, fundamental steps can be taken to establish optimum performance standard and
performance evaluation can be done on a timely basis.

Peer-ranking compensation process:

In order to implement a fair compensation process, Gore uses a peer-ranking system where
associates rank each other in terms of their contribution towards the organization. It provides a
major strength as associates are responsible for their own compensation and employees will
work better if their success is reflected in their salaries. However, the lattice organizational
framework, like a results-only work environment (ROWE), lacks the ability to create incentive
systems based on skills and level of expertise (UKEssays, 2017).

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 Organizational Challenges

Businesses in today’s world majorly focus on expanding to global markets where they will gain
more reach and exposure. As the business environment is dynamic, the managerial practices,
organizational activities and its functions should be revised and developed as per the changing
need and demand of the situation. Over the period of time, companies may come up with
various new challenges and issues. The company has to properly analyze the global business
environment and come up with potential solutions in order to sustain in the global market for a
longer period of time. The company also has to look out for its competitors and their activities
and focus on attaining competitive advantage so as to attract more customers and increase
their profitability.

The market competitiveness of ALDI and W. L. Gore can be carried out with the help of a SWOT
analysis. The SWOT analysis helps to analyze a company’s internal environment by discovering
the market strength and weaknesses. Similarly, the external environment can be analyzed by
discovering its opportunities and threats.

SWOT analysis of ALDI

Strength:

 Automation: The automation of production process has provided more effective

resource use and reduction of costs.
 Diversified portfolio: Other than food and beverages, ALDI also offers a variety of
discounted products, providing their customers a wide range of options.
 Efficient pricing and quality: They produce high quality products at a comparatively low
price
 Strong presence: With more than 2500 stores, they have a strong presence in Germany

Weakness:

 Small brand: Their brand is small as compared to other brands in the global market.
 Global market: They do not have a major impact on the global market.

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  Low employee satisfaction: As there are limited number of employees who have to work
overtime, the employee satisfaction is low in ALDI (Bhasin, H., 2018).

Opportunities:

 Expansion to emerging economies: The company could expand its operations to other
emerging economies which could increase its reach and market share.
 Lower inflation rate – A low inflation rate provides more price stability and allows ALDI
customers to obtain credit at a lower interest rate.

Threat:

 Adverse competition: ALDI has several competitors around the globe including Walmart,
Asda, Tesco, etc which provides a potential threat to their company.
 Global political instabilities: The political instabilities of global market can majorly
impact the operations of ALDI.

From the above SWOT analysis, it can be evaluated that ALDI can increase its strength by
providing diversified portfolio, automation, use effective pricing and provide optimum quality
products. In order to overcome their weakness, they can improve their employee satisfaction
and their impact on global market. However, they can grab the opportunity of expanding to
emerging economies and hence tackle the threat of adverse competition. By doing this, ALDI
can be able to gain competitive advantage and sustain in the market for a longer period of time.

Possible challenges in future

The company might face several challenges over the next five years. Some of the major
challenges are discussed as follows:

Employee retention: The major challenge for ALDI can be retaining their employees. In order to
increase productivity of the employees, they provide higher salary than average as compared to
other food retailers. However, they make their employees work overtime without extra
compensation. This culture can lead to employee demotivation where it can be difficult to
retain the employees for a long period of time.

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Governmental policy changes: The company provides limited facilities to its part-time workers.
There might be certain changes in the rules, regulations or policies of government regarding the
part-time workers in future. If the company has to provide extra facilities, it might lead towards
the increment of their product cost that could provide competitive disadvantage to the
company.

Excessive rise in competition: There are several competitors of ALDI including Tesco, Walmart,
Lidl, Kroger, Sainsbury’s, Giant Eagle, etc. that provide similar services at an affordable price.
The increasing number of competition in the global market can result in their customers
switching to their competitors that provide better quality products and services at
comparatively lower price.

Unionization of employees: Even though there is less involvement of unions in terms of part-
time workers in current situation, there might arise chances of employees unionizing to seek for
their rights and facilities.

Negative brand image: The company already has a negative brand image regarding their
organizational culture and strategy of showing rigorous behavior towards their employees.
They should focus on building a positive brand image that could help attract more customers
towards their company.

Toxic culture: The toxic culture prevalent inside the company can have a negative impact on the
employees. The constant bullying, spying on others, snitching habits prevalent in the
organization can demotivate the workers resulting in lower productivity in the organization.

Recommendations

In order to develop and sustain over the next decade, ALDI can implement several strategies.

The human resource of a company play crucial role in its success. In order to manage the
employees, ALDI should implement strategic human resource management that aims to
provide flexibility, innovativeness, and a positive organizational culture. It involves providing
necessary training and development programs, introducing rewards and benefits, encouraging

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employee participation, implementing several health and welfare policies, etc.in order to
motivate and retain its human resources.

The company can implement a performance management system that can help guide
individuals and team to meet the overall business needs, recognize individual contribution,
provide performance appraisal, and provide necessary feedbacks to improve their performance
by focusing on the people factor. They can also implement soft HRM practice in order to focus
on behavioral aspects of their employees.

The culture of the organization can be changed by using the ‘Unfreeze’> Change> ‘Refreeze’
method. A sudden change in culture can make it difficult for the employees to adapt to new
environment. Hence, the given method can help employees to prepare themselves for change
in the unfreeze stage, small or large changes can be made in the change stage and those
changes can be normalized in the refreeze stage.

The company can follow transformational leadership by influencing and inspiring outstanding
commitment and results of the employees. In this leadership, a leader collaborates with teams
to define necessary changes, develops a vision to direct the change through motivation, and
then implements the change with the help of committed members of the group.

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SWOT Analysis of Gore

Strength:

 Brand Name: Established in 1958, W. L. Gore & associates has been renowned for
developing innovative products. It is also famous for its successful implementation of
“lattice” organizational structure where no one is anyone’s boss and all employees are
treated equally. This has given a wide range of recognition to their brand all over the
world.
 Loyalty of customers: By providing the products that are of highest quality, the company
is able to meet the needs and requirements of their customers increasing their loyalty
towards the company.
 Unique products: The company focuses on developing and creating unique products by
constantly encouraging its associates to innovate new ideas. Due to this, they hold an
advantage of product differentiation.
 Technological invention: The company uses various technologies to conduct their
systematic as well as long-term experiments for the development of new opportunities.

Weakness:

 Less presence in non-PTFE Markets: The company is overly reliant on its PTFE-based
products, with only small diversification in other products, resulting in a major reliance
on one revenue source.
 Costly Innovation: The associates have to constantly experiment new technologies and
innovate products accordingly which can prove to be costly for the company.

Opportunities:

 Global Expansion: Even though Gore is operating in several global markets, there are still
other global and niche markets that they can explore and operate.
 Culture of Innovation: The culture of innovating new and creative products have been
set in the organization which drives their associates towards achieving and
implementing more feasible ideas in future.

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  More product division: The company can create more product division to be a global
corporation with distinct capabilities that can meet broad, appealing consumer needs
(UKessays, 2017).

Threats:

 Global political threat: As the company operates in various global market, the change in
any country’s policies, rules, regulations might have an adverse effect in their
operations.
 Increasing competition: Several companies have started implementing similar strategies
of developing innovative environment increasing their competition globally.

Hence, based on the above SWOT analysis, Gore can focus on maintaining the activities that
provide strength to the company, improve on those sectors that are comparatively weak, grab
the incoming opportunities and try to reduce their existing as well as upcoming threats. By
doing this, they can sustain longer in the market by gaining strong competitive advantage.

Possible Challenges in future

There are various challenges that the company might face over the next five years. Some of the
major challenges are discussed as follows:

Technological advancements: New technologies are on the rapid verge of development that
provide competitive advantage to the companies. As technological progress is a driving force
for development, the companies should adopt suitable change in technology as per the need
and requirement of the dynamic environment. However, the company’s cost gradually
increases that can have a major impact on their revenue.

Market Expansion: Globalization has made it easier for companies to distribute their products
all around the world. The expansion of its operations in different markets that can be profitable
in the long run is challenging for the company. The company can face several strategic issues
while expanding to various countries with high power distance (Hofstede’s cultural dimension)

21
where employees mostly do not question the decisions and follow every rules as guided by
their supervisors.

Managing cultural diversity: After expanding the business in more than 30 countries, managing
all the global employees becomes a huge challenge for the company. The diversity in culture
requires proper management of the norms, values, beliefs, backgrounds of people from
different countries that can be challenging to the managers of the company.

Flow of communication: The smoothness of communication is the root of the problem with
virtual teams that need a high degree of teamwork. As members of a team must connect with
one another it can be challenging when operating on a global scale. The team must efficiently
pass information, close communication gaps, and minimize communication breakdown. These
communications often serve as a source of problems related to the increasing need to establish
strong relationships across regional boundaries.

Recommendations

For the development of W. L. Gore & Associates in the next phase, several strategies can be
suitable. As a part of human resource planning, a proper recruitment and selection process can
be conducted to select such employees who can adapt to their values and organizational
culture. In terms of international human resource management, the employees of host country
should be provided with a positive environment where their culture, beliefs, values, are
recognized and respected.

While operating in the global market, the company should localize its global facilities by tying
their facilities to the corporate culture. Companies should be sensible in terms of cross- cultural
norms and values.

Similarly, they can implement a fair compensation process with the help of performance
appraisal. Instead of using peer-ranking system to determine the associate’s compensation
level, they can implement performance related pay method where a healthy culture based on
performance can be developed. In this way, their contribution can be recognized and tangibly
rewarded.

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Likewise, the associates can be provided with a proper job description which helps to outline
their main responsibilities and duties and also outlines the skills required to perform the
necessary activities. There also needs to well-defined objectives of all the employees that can
help to improve productivity in the organization.

Moreover, the lattice structure can be modified by adding some hierarchies in the
organizational structure. In this structure, the employees might not abide by the rules and
regulations in the long run which is necessary for a company to maintain certain level of
discipline.

23
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