The VDOT case study describes the environment of VDOT in 2001 when the newly elected governor of Virginia, Mark Warner, appointed Phillip Shucet to head VDOT. Prior to VDOT’s reputation becoming damaged, VDOT had been widely recognized for its engineering innovations and its cutting-edge research. Due to negative publicity and loss of experienced personnel, the employee morale was low. Management Theories Management Theories exist to assist businesses with their organization, structure and management. By studying the science of management, we can obtain knowledge about many theories and models.
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Based on studies about management theories, we can formulate intelligent opinions and make selection of management models with confidence. VDOT’s desire to change the image and efficiency of the department showed a need to change the way the department was managed (Yemen, 2005). Changing the way VDOT was managed required implementation of new management theories. The three most relevant theories are; System Theory, Theory-Y, and Motivational Theory. Systems Theory is the collection of activities with inputs, processes, outputs, and outcomes (Olum, 2004).
For VDOT, the inputs would include the Six-Year Plan, funding, employees, technology, and equipment. These inputs go through a process where they are planned, organized, motivated, and controlled. (McNamara, n. d. ). Outputs for VDOT would be the completion of projects on time and within budget. Enhancing the quality of life for the public by improving the traffic flow and making the roads safer would be the outcome. Using the System Theory with the integration automated project management tools would organize the projects.
A project management tool would allow for scheduling projects, planning resource usage, planning project timelines, and tracking projects status. Having access to information about the projects would allow the management to be able to publish its progress and accomplishments. This knowledge would give VDOT the necessary information to be able to request any necessary re-prioritization or additional resources. VDOT’s morale was low because there was no clear direction and public opinion was negative. (Yemen, 2005).
Implementation of Theory-Y, along with the Motivation Theory, would improve the productivity of the organization because Theory-Y assumes that the people are willing to work and take responsibility. Theory-Y would emphasize employee participation, involvement, empowerment, and self-management (Schermerhorn, 2010). Employee empowerment would show that management was concerned about the employees. The Motivation Theory requires communication to be an integral part of the organization. With good communication flow, the basic need of an employee to understand the organization’s goals is met.
Meeting this need would facilitate behavioral change and restore pride within the organization. VDOT’s Reaction to Six Management Challenges In today’s workplace, there are common challenges that managers must master. The six most common challenges are; talent, globalization, diversity, technology utilization, ethics and environmental factors. Talent or human capital is critical to the success of any organization and provides a “foundation of organizational performance. ” (Schermerhorn, 2010, p 25). Initially, VDOT’s talent was excellent. There were seasoned, competent engineers and finance managers.
The department offered a series of “buy-outs” in the early 1990’s. As a result, the department suffered the loss of the majority of its talent. In a hasty attempt to fill positions, many inexperienced personnel were added. Employee morale became low. VDOT did not reallocate existing resources, restructure the department, or create a plan to address this issue. Diversity is also challenging. Businesses “must value the talents and capabilities of a workforce whose members are increasingly diverse with respect to gender, age, and ethnicity” (Schermerhorn, 2010, p 25). Whether VDOT valued diversity remains questionable.
In respect to age, VDOT could have retained and promoted workers, rather than offer an early “buy-out”. Globalization is the “worldwide interdependence of resource flows, and business competition that characterizes our new economy” (Schermerhorn, 2010, p 7). Operating as a government agency, the environment was extremely political and the agency itself was highly politicized. As commissioners were appointed by the Governor, there were major political influences from that administration. In general, external global business environments present many challenges in respect to legal-political conditions. (Schermerhorn, 2010, p 62).
Technology utilization is essential in today’s business environment. VDOT’s “six-year program” was put together manually from hand written notes, sticky-notes, and individual’s memories of statistical data. A compilation of manually manipulated data to develop a multi-billion dollar program with tax payer funds was irresponsible. The department had technology available, however, was not utilizing it. This was neither effective nor productive. “Society has high expectations for organizations and their members to perform with commitment to high ethical standards and in socially responsible ways” (Schermerhorn, 2010, p 25).
Managers have to take ethics and corporate social responsibility seriously, especially when that organization is taxpayer funded. VDOT has a responsibility to tax payers to spend tax dollars wisely. By merely giving in to political pressure, becoming complacent, and not having the foresight to utilize technology, they acted socially irresponsibly. “A “general environment” is comprised of economic, legal-political, technological, and socio-cultural conditions”. (Schermerhorn, 2010, p 62). VDOT’s economic condition was related to all of these. Their internal environment was highly political.
The unwillingness to utilize technology created an inability to track construction projects, finance projects, compile statistical data or provide a principled six-year plan. VDOT Environmental Analysis Strategic, Tactical, and Operational Plans It is understood that “a high-performance organization consistently achieves excellence while creating a high-quality work environment. ” (Schermerhorn, 2010, p 49). For years VDOT had experienced a reputation of excellence. However, once the agency was politicized, the internal morale had deteriorated, and their reputation was now suffering.
By examining the environmental factors, both specific and general, leaders could create solutions and make projections for VDOT’s future. It is apparent that VDOT’s internal environment needed a major overhaul. The specific environmental issues involved, the organizational structure, lack of communication from upper management, external political control, duplicity of tasks, unclear direction and low morale. The general issues were; funding, and a lack of reporting capability on projects. The first step for change was made with the external hiring of Commissioner Philip Shucket.
He would bring new ideas, plans and management philosophies. However, his presence would not be enough. The second step would be to cut off the external control which would give the commissioner the opportunity to manage effectively (Yemen, 2005). Shucet could then put plans into place to begin implementing change. These changes should include; technology utilization which would provide timely project reports, unification of management to promote teamwork, organizational structure; clear communication, budget goals, redefining jobs, employee development and projects deadlines. Strategic planning begins with a vision.
The management team at VDOT should develop a vision statement that reflects management’s view, the purpose of the organization and expresses the organization’s hope to reclaim their reputation. With a well communicated vision, tactical and strategic plans should be developed and used to implement the vision. VDOT should develop short -term, mid-term and long-term goals. Plans were needed to address the completion and funding of current projects and the Six-Year Plan. Management should use the plans to address how to immediately respond to the poor image problem and the low morale.
Short-Term Goals would include; performing an analysis and formulating a strategic plan. It is imperative that the agency identifies its strengths, weaknesses, opportunities and threats in order to create an intelligent strategic plan. The plan would include the agency’s mission, values, organizational chart, staffing, technology, daily operations, and the agencies policies. Mid-Term Goals include creating communication across managerial levels and employee development. Employee’s need to feel management is concerned and views them as worthy and promotable.
Long-Term Goals include completing projects timely and regaining premier status. Motivational Problems and Shucet’s Motivational Explanation Managers need a clear understanding of motivation theories in order to put into practice a way of leading through motivation. The “need” theories would best describe the reason Shucet accepted the job as the VDOT commissioner. This is based upon Herzberg’s definition of the two factor theory. It states that people are influenced by hygiene factors and motivational factors. (www. valuebasedmanagment. net).
Typical hygiene factors consist of working conditions, quality of supervision, and the employer itself. Motivational factors are achievement, responsibility for task, and interest in the job. Some of VDOT’s motivational challenges were; leadership, low worker morale, low worker output, lack of synergy between workers, projects and departments and not meeting projects on time or within budget. When Phillip Shucet first joined VDOT, he initiated the idea of several incubator programs to deal with the logical resources of the agency, deliver knowledge to the management staff, and a new learning center.
Shucet assumed that his Knowledge Management (KM) program would focus on the relationship of sharing critical institutional knowledge. The learning center would guarantee that the organization would fit knowledge and primary skills into training and learning opportunities. The knowledge management program goals were to preserve and make accessible institutional knowledge and memory, to establish an environment that supports knowledge creation and sharing, and to help the organization know what it knows.
(Knowledge Management, 2003). Leadership was also a motivational problem that Shucet could have resolved by using the two factor theory. By focusing on that particular content theory, Shucet could motivate the employee’s interpersonal relationships, working conditions, and improve the quality of their work. Because the departments were not working together to obtain a common goal, friction existed. With the process theory of Adam’s Equity, the company’s give and take relationship could have promoted unity among departments.
BF Skinner’s reinforcement theory could have been used to promote the right people and restore morale, and deal with the mishandling of finances. Conclusion In examining the VDOT case study, we have discussed three management theories that would be applicable in managing VDOT. We have also looked at how VDOT reacted to the six challenges that face 21st century managers. We discussed what factors operate in VDOT’s general and specific environment, including short-term, mid-term, and long-term goals that VDOT could adopt to improve departmental operations.
Strategic, tactical and operational places were considered. A motivational theory was discussed that explained the reason Shucet accepted the position as Commissioner. The motivational problems at VDOT were discussed and suggestions were made as to how Shucet should motivate the employees. Under the leadership of Commissioner Shucet and with his restructuring of the department and new automated management tools, VDOT will be able to reclaim their previous reputation for being a premier department of transportation.