FLAIR ENGINEERING Ltd.

Learning Objectives  Understand how real life organizations develop and implement strategy  Show how staff can be motivated or demotivated by different approaches to strategic change  Appreciate the managers can exercise considerable choice in terms of their organizations strategy.

Backgrounds  Flair is UK company which supply of automotive components to car plants.  It began life in the 1940s as a manufacturer of pressed steel products  In the 1950s it ceased to be an independent company and joined a small, family owned conglomerate.  In late 1970s, declined and was operating as ‘seller of capacity” to whoever was prepared to buy.  In 1980 began to change with the promotion of Managing Director.

 The Managing Director concluded that the company lacked : 1. Product differentiation 2. Distinct competitive strengths 3. A low cost base 4. Modern equipment and manufacturing methods.

A Strategy Emerges  Managing Director believed that the company did have prosperous future, but only if it could be transformed into a modern, competitive manufacturing.  This required it to face up to 4 major challenges : 1. To develop a distinctive product and industry focus 2. To reduce its cost base 3. To improve quality 4. To invest in people and equipment

The first step to achieving these challenges were as follows : 1.To undertake a market survey in order to identify potential and desired customers and products 2.To establish how best to organize the company in order to become a credible force in its chosen field. Having established where they wanted to go, the company needed to win orders from its target market and establish a long term relationship with customers, which are Rover and Ford. In 1983, company began delivering parts to Ford and Rovers.

The Pace of Change  Despite the success with the Ford and Rover, the Managing Director still felt the company’s performance was below what it should be.  He, have full review and have following conclusions : 1. Senior manager were still operating in a reactive rather than proactive mode 2. Key operational problems were being ‘worked round’ rather than analyzed and solved 3. Cost has grown faster than turnover 4. Quality was poor and they were still relying on inspection to detect and correct this.

To tackle the serious issues identified above, the management team set 6 objectives : 1.Reduce costs 2.Reduce stocks and work in progress 3.Acquire new customers in order to gain full utilization of capital equipment 4.Reorganize sales and purchasing into one operation 5.Move to just in time manufacturing 6.Adopt the Deming/Juran approach to quality, beginning with the introduction of statistical process control (SPC). These objectives began to transform company into a world class performer.

In 1985/86 The company has profits of Pound. And it had been chosen as a supplier to the new car factory, Nissan. In 1986, crucial initiative in gaining employee participation with the introduction of cellular manufacture and the move to team working at all levels. In retrospect, the cellular approach turned out to be a key move in terms of achieving a step change in performance.

1991/92 : A turning point Three key events occurred in 1991/92 which have a significant impact on the company strategy and performance : 1.Was the appointment of a new operations director to help managing director 2.Nissan, asked them to take part in a strategy development programme for senior managers. This took 6 moths and allowed them : a) to undertake a rigorous review of their plans for the company future b) to set clear targets, based partly on the Operations Director’s benchmarking exercise c) To focus on achieving world class status

3.The Directors, with a great deal of reluctance, decided to sell the company. Flair was sold to a German conglomerate. The sale did not materially alter Flair’s strategy or approach. What it do was to remove the financial uncertainty and allow managers to concentrate on building world class organizations By 1996, the company had been totally transformed from it was in Turnover was 80 million Pound. The new Operation Directors identified the new differentiators as cost focus, design capability and flexibility.

The Outcomes There are 5 areas which seems important : 1. Constancy of purpose 2. A sense of urgency 3. Redefining managerial roles 4. Delegations and empowerment 5. Managerial stability There are 3 points to note with this case : 1. The transformations of Flair took place over 20 years period. 2. Though major organization and technical changes, the key changes have been in the behaviour and attitudes of staff at all level in the company 3. Flair adopted a Japanese approaches to strategy. It identified a long term, ambitious vision for itself.