Performance Management (2~2)

What are the strengths of TRW's [case study] approach to widespread organisational change aimed at performance improvements?

The strengths of Thompson Ramo Wooldridge's (TRW) approach to extensive organisational change, targeting performance enhancements, can be discerned through several salient features. The company's transition towards granting business units greater autonomy primarily signifies an efficient decentralisation tactic (Foss, 2003). This methodology enables each team to adapt its decision-making processes and resource distribution to its distinct requirements, thus cultivating a nimbler and more adaptable organisation.

Secondarily, implementing an all-encompassing set of company-wide behaviours illustrates a pronounced emphasis on fostering a performance-driven and customer-focused culture (Cameron & Quinn, 2006) by harmonising employees' actions and mindsets with these guiding behaviours. TRW aspires to imbue a cohesive and goal-oriented work environment that facilitates the attainment of the company's strategic objectives.

Moreover, establishing a versatile and standardised performance evaluation, professional growth, and succession management system underscores TRW's dedication to uniformity and flexibility (DeNisi & Pritchard, 2006). This strategy guarantees that employees across diverse business units are assessed utilising a shared framework while permitting customisation to accommodate the singular needs of each team.

Additionally, TRW's stress on transparent communication and trust cultivation among its personnel underscores the organisation's acknowledgement of the significance of nurturing a supportive and open work setting (Schoorman et al., 2007). Through advocating forthright communication and individual responsibility, TRW endeavours to create a trust-based atmosphere that stimulates employees to assume responsibility for their performance and contribute to the company's accomplishments.

In summary, TRW's approach to extensive organisational change, targeting performance enhancements, is distinguished by its concentration on decentralisation, cultural realignment, adaptable standardisation, and trust development. These strengths collectively facilitate establishing a more agile, performance-oriented, and customer-centric organisation optimally prepared to navigate the competitive landscape and generate value for its shareholders.

What are the limitations of this approach? Use academic literature for support.

A limitation of Thompson Ramo Wooldridge's (TRW) strategy involves defining a balance between autonomy and control within the organisation. Greater freedom for business units may enhance responsiveness and decision-making, but it could also lead to a lack of coordination and consistency throughout the company (Gupta et al., 2006). Therefore, it is essential for TRW to carefully manage the decentralisation of authority to prevent excessive fragmentation and misalignment with the overall company strategy.

Another constraint is the potential resistance to change among employees, which could impede the successful implementation of new behaviours and the performance management system (Dent & Goldberg, 1999). Beer and Nohria (2000) argue that organisational change often faces opposition from employees accustomed to the status quo who perceive change as threatening their job security or established routines. To address this challenge, TRW should employ effective change management strategies, including clear communication, employee involvement, and ongoing support to facilitate the acceptance and adoption of new practices (Armenakis & Harris, 2009).

Moreover, the dependence on a single, standardised performance appraisal and development system may not sufficiently address the diverse needs and expectations across various roles (DeNisi & Pritchard, 2006). Although TRW has attempted to incorporate flexibility into the system, it is vital to monitor and evaluate its effectiveness in addressing the diverse performance management requirements across the company. Regular reviews and adjustments may be necessary to ensure the system remains relevant and suitable for all employees.