Engstrom’s Organizational Issues: Poor Communication and Management

OL500 Milestone Two
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Engstrom’s Organizational Issues
Engstrom faces several organizational issues that are affecting its performance. These issues include low productivity, quality problems, escalating costs, and low employee morale. The employees of the company have not been paid their bonuses for months and the organization is not addressing their concerns. Given that there are grumblings and complains among the employees, it is evident there is poor communication throughout the organization. The prevalence of grumblings shows that the company has not communicated the reason for stopping the bonuses and the way forward. Without an understanding between the management and the employees, the work environment can be said to be hostile. Therefore, the root causes of the issues of facing Engstrom include poor communication, poor management, and a hostile work environment.
Root Causes
Poor communication is one of the aspects causing problems at Engstrom. From the case study, there have been grumbling and griping among employees, meaning proper channels of reporting their frustrations are either not in place or the firm is not paying attention. There is a lack of employee engagement, which according to Markos and Sridevi (2010), is a predictor of performance in an organization. Communication is what leads to employee engagement, but apparently, that is lacking at Engstrom. It is important to note that communication of financial and other business data is key to attaining organizational goals according to the Scanlon plan (Beer & Collins, 2008). However, from the case, it is deducible that Engstrom is not communicating its business information to its employees. The prevalence of complaints in the company show that they are not on the same page with the firm in regards to bonuses. The company has not provided a way forward for the employees. There is thus poor communication between the employees and management which is responsible for the low productivity and low employee morale.
Poor management is also a root cause of the issues facing Engstrom. The management has neglected the affairs of its employees. Not only has the management failed to pay employee bonus, but it has also failed to inform the employees of the situation the company is in and the way forward. One of the key models of organizational behavior that is linked to performance is the collegial model. As informed by Newstrom (2019), the success of the model depends to a great extent on the partnership between management and employees. From the case study, there is no collaboration between the managers and the employees given that the latter cannot air their views openly. The management members (Ron Bent...