Taking Assa Abloy out of a Risky Crisis Situation

TAKING ASSA ABLOY OUT OF A RISKY CRISIS SITUATION

BUSG 581 STR2

04/04/2018

Abstract

Companies all over the world have faced many risks and crisis situations due to the rapid phenomenon of Globalization and the rapid pace of transformation of the Industrial sector. Companies in European Union have faced similar circumstances as power shifts happened and resources became scarce or expensive. To overcome or prevent any probable crisis risk management strategies became paramount. This paper tries to explore the strategies implemented by a Swedish company named Assa Abloy to counter the risks and float through the crisis. The company implemented a successful model using Kaizen techniques and achieved success. Using Kaizen or continuous improvement technique, the company managed to stay ahead of the crisis. This paper enlightens how a small company with little resources can manage a spot at the table by simply devising a good management strategy to tackle risky situations.

Introduction

In all times of Industrialization, the impact of the Industrial crisis has never been more devastating for companies. A lot of companies which were major players went under due to organizational crisis including GE (General Electric), Nokia, Motorola etc. We have seen a rapid shift in major industrial sectors as Globalization and the rapid pace of innovation is happening. It can easily be concluded that companies that do not take precaution and devise strategies to counter crisis or try to prevent risks will be always in a bad shape.

Before moving forward we need to know what crisis management is and how it is different from risk management. According to ( Willmer, 2016), Crisis is an event which occurs in usually unforeseen conditions and causes a lot of harm to the organization in many ways including finances, market, reputation etc. While risk is a probable event that could cause these harms in the future.

Considering strategies to tackle the crisis and evaluate future risks many strategies have been devised by leading managers and engineers in the past. All companies are working on different fronts and so are susceptible to different risks and situations. Manufacturing companies are using the latest technology to speedup up their production process and minimizing the costs. This kind of approach led to the development of specified integrated manufacturing and design processes. Using mockups in virtual scenarios for risk evaluation became avidly used phenomenon (Jakubowski, 2010). Companies later started making up rules to prevent risks, but they failed to understand that this only reduced the risks, but did not eradicate them. Later companies understood how certain risks are out of internal control and were labeled as external risks. Companies need to tailor their strategies according to their company conditions (Kaplan, R. S., & Mikes, A. 2012). Similarly, a crisis has to be dealt with a tailor-made strategy that is in line with the certain company. Strategies like Six Sigma, Lean and TQM (total quality management) have become quite popular for overall company management strategy in the current times.

The lean thinking was a product of tireless efforts of Japanese engineers that were working on JIT (just in time) techniques at Toyota company. This process comprises of continuous improvement in every stage of the industry. According to (Schroeder et. al. 2012), Kaizen works on bases of five principles including 1) value as defined by customer for a product 2) value stream: the process of manufacturing 3) flow means the remaining steps 4) pull the customers create a product rather than the push from the industry 5) perfection by minimizing efforts, time taken, space used, cost and mistakes. Lean management improves existing project management.

Assa Abloy is a Swedish company based in Romania that was a merger of Assa and Abloy in 1994. These were market leaders in lock manufacturing in Finland and Sweden, which after the merger decided to enter Romania to compete with Urbis, the regional leader. (Popescu, D. 2015) performed a case study of how this company sailed from a stormy crisis after the merger and future technology transfer. Initially, the company stayed silent in Romania, after which technology transfer began. This change leads to setting up of new plants. The company diversified its scope of manufacturing which became a major concern for the organization as it was getting difficult to manage such an enterprise. This leads to it getting some processes done from other countries like China and India. A manager