(a) One failure as explained by Hazizi is a “failure to understand our organizational culture, the way we do things around here”. Define culture and assess the underlying organizational cultural issues to explain this failure in Triple H Film Productions.
Referring to the case of Triple H Film Production, it is clearly shown that problems started to arise when the company made a decision to convert from partnership to a limited liability company. The conversion helps the company to grow further in the industry and enhance its ability to build a good reputation for Malaysian films. However, the company also need to face several organizational cultural issues regarding the change of management that give impact towards the company in terms of financial and non-financial aspects. Besides, the management is also concerned about the unethical behavior showed by the employees because they were refusing to adapt to the changes. Generally, culture is defined as the values, beliefs, underlying assumptions, attitudes, and behaviors shared by b y a group of people. On the other hand, the co-authors of the book Finding and Keeping Great Employees (AMACOM, 1999) which are Jim Harris, Ph.D. and Joan Brannick, Ph.D., describe another way of defining culture. According to Harris and Brannick (1999), a company’s culture is defined by its core purpose or core value and companies that successfully attract, hire, and retain top talent, align their recruitment and retention practices with their core culture. It is particularly particularly influenced by the organization’s founder, executive and other managerial staff because of their role in decision making and strategic decision. Due to that, in getting the right culture in an organization, the management should set the right tone from the top and demonstrate the way on how to do things around the company. The formation of the organizational culture also should include the involvement from the
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middle level of management because they are the one that gives information and communicate directly to the employees. Related to the case, cultural web analysis is the best model to be used in assessing the organizational culture of the company. Basically, the culture web refers to the assumptions that are core to a company’s culture (Johnson G., 2007). According to Janse, B. (2018), this model not only stimulates the way employees within an organization interact with each other and how they handle their work, but it also stimulates how the organization as a whole relates to the outside world and the various cultures that exist in the outside world. Referring to Exhibit 1, James (n.d) stated that Johnson’s Cultural Web (1992) is a framework that identifies six cultural elements to study the culture of the organization which is power structures, organizational structures, control systems, stories, rituals and routines and symbols. By analyzing each element in this model, it allows Triple H Film Production to see what are the goods and bad cultures and what needs to be changed. From the organizational structure perspective, this element focus on the relationship between people from various layers of the organization. In Triple H Film Production, Mr. Hadari as the Chief Executive Officer (CEO) did not set the right tone from the top. This is because he did not involve in the process of reinforcing and strengthening the new structure of the company’s vision and mission. Instead, he leaves this responsibility to all Heads of Department to manage it. Supposedly, Mr. Hadari as the CEO should find ways to connect with people inside the organization since he is the person that employees will look for vision, guidance and leadership. He should openly and continually communicate about the company’s values and the new rules and regulations in order to ensure that all employees will
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adhere to it. Besides, he also should be present throughout the organization to encourage and reinforce the values. In Triple H Film Production also the communication and engagements between the top management and its employees is not effective. The strategic goals and plans of the company established by the top management were not communicated to the employees since there is an absence of leadership. Because of that, the employees do not clearly understand why the company requires all the employees to go for training programs. In addition, they also did not understand how to embed the goals and plans established by the company in their individual job and responsibilities. On the other hand, the power structure in Triple H Film Production is directly influenced by the top management. This is because all the changes and decision were made by the top management and then they pass down to other members of the organization to implement the changes and work to accomplish the goals. According to Stacy Zeiger (n.d), the top-down decision-making approach is not accepted by most members of an organization because they are not given the opportunity to give ideas and suggestions in the decision-making process. When there is no involvement from the lower level of management, it may results in unrealistic goals and poor employee motivation and performance because they may think that their contribution and existence are not needed. Due to the absence of CEO involvement and top-down decision-making approach, it affects the organizational culture and employees’ behavior. Under the new management, Triple H Film Production is required to venture into new methods of directing which is by upgrading the infrastructure and technology used in order to be able to produce quality films. In relation to that, the employees need to go for training so that they are capable and have
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sufficient knowledge in handling the new technology. However, the employees at the company were refusing to adapt to the changes in management. Most of them were reluctant to join the training programs provided due to several factors such as poor communication and engagement and fear of job loss. Besides, under the new management also the employees started to misbehave and show unethical conduct by taking unnecessary annual leave and did not perform their job. Their unethical conduct affects the company’s operation in meeting the TV station’s deadlines and towards achieving the company’s goal in a long term. These organizational cultural issues arise when Triple H Film Production hired new employees that have the qualifications and experience in IT systems and equipment. These new employees were paid with higher salaries compared to the existing and senior workers with the justification that the company is lack of IT expertise. Due to the imbalance in salaries between the older employees and the new one, it causes dissatisfaction among the employees especially those that have been working in the company for a long time and resulting in unethical conduct performed by them. From this, it can be concluded that the structure of the remuneration packages creates problems for the company.
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(b) How can Lewin’s 3 Steps assist Triple H Film Productions in facing the changes i.e. what methods may be used to introduce change?
For Triple H Film Production, changes are crucial for the company to grow and to be highly competitive in the business environment. In facing the changes, the company can use Lewin’s change model that consists of three stages which are unfreeze, change and refreeze (Refer to Exhibit 2). According to James (n.d), in the first stage which is unfreeze, the organization’s preparation to accept that changes is needed. It involves making people in the organization aware of the need for change and improving their motivation for accepting the new ways of working to get better results. During this stage, Triple H Film Production need to determine what needs to change and its reasons. By performing a Force Field Analysis, it will help the organization to determine the driving and restraining forces that lead to organizational change. As mentioned by Prachi (n.d), driving forces are the factors that will push the organization towards making the changes while restraining forces are the factors that provide resistance to the changes. When both forces reach a stage of equilibrium, stability can be achieved. In other words, it means that for changes to happen, the driving forces must be strengthened or the restraining forces must be weakened. As for Triple H Film Production, the driving forces from the internal environment are the need for the company to expand from TV producer to film-maker and to be able to produce quality films. On the other hand, the resistances towards changes that the company is currently facing refers to the existing organizational structure itself and the behavior of the employees.
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During the unfreezing stage, effective communication plays a vital role because it will allow the employees to keep informed about the changes, the reason why the changes were made and how it will benefit each employee. When the employees know about the changes made, it will be easy for the organization in getting the support and involvement from them. So, in handling the resistance from the employees, Triple H Film Production should start the change process by informing the employees that the use of advanced technology is needed in order for the company to be able to produce quality films. This will create an awareness of how necessary a change is for the organization so that it can maintain a competitive advantage in the marketplace. The old behaviors, the way of thinking, processes, people and organizational structure must be changed in order for the organization to move forward (Prachi, n.d). For the second stage in Lewin’s model which is the change process, it is where the transition or the actual implementation of change. It involves the acceptance of the new ways of doing things. This stage of transition is not easy due to the uncertainties or employees are fearful of the consequences of adopting a change process. Due to that, the top management of Triple H Film Production should change their leadership style by practicing open and honest communication with the lower level management. According to Northouse (2004), leadership has been defined as a process by which an individual influences a group of individuals to achieve common goals. In relation to that, as mentioned by Laura & Stephen (2002), the board of management should implement the changes by developing a base of influence with employees, motivating them to commit and work hard in pursuit of change goals, and working with them to overcome the obstacle to changes.
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Leadership style is vital in the change process of organizational change because it will affect how employees react to the changes. Referring to the case, one of the ways that Triple H Film Production can do to introduce change is by developing a learning organization, a theory by Peter Senge. According to Zeeman (2017), Senge’s areas of special interest are focusing on the decentralization of leadership role in organizations that will enhance the capacity of all people to work productively toward common goals. This is contrary with the current practices at Triple H Film Production which is a centralized leadership role in its organizational structure. In developing a learning organization, there are five disciplines that Triple H Film Production need to apply which are shared vision, system thinking, mental models, team learning and personal mastery (Refer to Exhibit 3). Referring to the first discipline, learning organization should have a shared vision where the vision should be created through interaction with the employees in the organization. By having a shared vision, the employees will perform their jobs and tasks because they feel responsible for it instead of they are told to do so. For the second discipline which is system thinking, it means that each function in an organization must be integrated and receive input and feedback from each other in order to develop a learning organization. Move on to the third discipline which is mental models. It is a theory where the employees must identify the values of the organization and what the business is all about. A correct understanding by all employees will help them to develop further. Besides, the organization also need to be flexible in accepting changes to new mental and a new image of the company. This is because to be the most successful organization, Triple H Film Production need to learn and adapt to new models faster than its competitors. Moreover,
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Triple H Film Production should embrace the discipline of team learning because when a team is made up of diverse people, it will result in more effective decision making and innovative ideas brought in. Lastly, the organization also should let the employees take more control of what they do and how they want to do it because this will build up their competencies and allow them to gain new skills. Besides, in order to make the changes, Triple H Film Production also should get the employees involved because employee involvement is the oldest and effective strategy in formulating the planning and implementing change. Employee involvement seeks to increase members’ input into decisions that affect organization performance and employee well-being. Variety of information and ideas may be generated which may contribute the innovations effective and suitable in the situation, create member commitment in implementing change and employee motivating and leading change effort in work. During the last stage in Lewin’s model which is refreeze, it is a stage where employees already accept the changes and new ways of working. Due to that, in order for strengthening and reinforcing the new behavior or changes in the way of working, the employees at Triple H Film Production should be rewarded and recognized. One of the method that the organization can apply is Carrot and Stick Approach where it makes use of rewards and penalties in order to induce desired behavior (Raksha, n.d). The rewards can be given in the form of money, promotion, and any other financial or non-financial benefits and sometimes the punishments are exerted to push an individual towards the desired behavior. Other than that, the employees also should be provided with training, positive reinforcements, supporting policies or structures that can help in reinforcing the transformed ways of working.
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(c) Mr. Hazizi is experiencing some pressure due to the conflict between his duties and responsibilities as a Chief Financial Officer of Triple H and as a professional accountant in the event of any ethical dilemma within the company. He realizes that it is very important for professional accountants to be aware of ethical threats and to avoid these where possible [HINT: Joint professional and organizational roles are common to most professionals (medical professionals, for example). Although the roles are rarely in conflict, in most cases it is assumed that any professional’s primary duty is to the public interest rather than to the organization]. Compare and contrast his duties and responsibilities in the two roles as CFO and professional accountant. Please refer to Clause 100.2 to 100.7 of the Malaysian Institute of Accountants By-Laws on Professional Ethics, Conduct & Practice, amended August 1, 2018.
Mr. Hazizi as Chief Financial Officer at Triple H Film Production and also a professional accountant should know what are the differences between this two roles in order to avoid any conflicts arise. As for the CFO, its primary duty is to serve the organization while a professional accountant is responsible to serve the public interest. Mr. Hazizi as the most senior person involved in the finance department at Triple H Film Production is responsible in managing all financial aspects of the organization including assessing financial risks and controls, managing budgets, preparing financial statements and providing financial information. The role of Chief Financial Officer is very crucial in the company and he generally works closely with the Chief Executive Officer (CEO) in order to take care of the long-term financial picture of the company. As the CFO, Mr. Hazizi has the responsibility to provide
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insight and analysis to support CEO and other senior managers. It includes communicating financial information effectively and give advice to the CEO and other executives on how to efficiently use resources and align their financial strategy to meet the company’s goals. However, Mr. Hazizi is not only responsible for the current financial conditions of the company but also for the future. He needs to involve in making strategic analysis and predicting the financial future of the company. Furthermore, as the CFO of Triple H Film production, Mr. Hazizi also has the responsibility to encourage ethical behavior and decision making throughout an organization. CFO should set the right tone at the top by displaying professionalism and ethical behavior in order to gain trust among users of the financial statement. When an organization has strong ethical leadership and good governance, it will strengthen the engagement of the employees with the firm and ensure sustainable value creation. This is in contrary to the role of a professional accountant where it needs to comply with several fundamental principles such as integrity, objectivity, professional competence and due care, confidentiality and professional behavior. One of the responsibilities of a professional accountant is to be straightforward and honest in a business relationship. It means that by holding that position, Mr. Hazizi needs to communicate deeply in order to avoid any problems and to ensure that everyone in the company knows about the condition of the company’s financials. He also needs to avoid bias and prevent himself from engaging in the conflict of interest because this will affect his professional and business judgments. Besides, Mr. Hazizi also is responsible to maintain professional knowledge and skill at the level required to ensure that a client or employer receives competent professional services. Other than that, he is also responsible to not disclose any information of the clients to the third
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parties without proper authority unless they have the legal right to disclose it. It means that he needs to keep the confidentiality of clients’ information and cannot use the information for personal advantage or for third parties. Lastly, he also needs to show professional behavior by avoiding any conduct that discredits the profession and complying with relevant laws and regulations. As a professional accountant, he is responsible for managing the financial management of a business. Since a professional accountant serves the public interest, he will have different types of engagement and work assignments. Thus, he will face countless issues and different threats may be created. In relation to that, different safeguard may be required to cater to every threat. Therefore, Mr. Hazizi is required to identify, evaluate and address threats in order to comply with the fundamental principles an d ethical requirement of the By-Laws. In addition, a professional accountant is also responsible in exercising professional judgment to determine what appropriate safeguards are available and can be applied in order to eliminate threats in complying with the fundamental principle. The appropriate safeguard needs to be determined when a professional accountant identifies that threats exist and those threats are not at an acceptable level. Lastly, a professional accountant is responsible in identifying a breach of any other provision of By-Laws. If he identify there is any breach, he needs to evaluate the significance of the breach and its impact on the accountant’s ability to comply with the fundamental principles. In handling this issues, the accountant should take any actions to address the consequences of the breach and he can make a report to those affected by the breach, a member body, relevant regulator or oversight authority.
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(d) Although Triple H Film Productions Sdn Bhd is not a listed company but the elements of corporate governance should be nurtured in the company. Explain the main responsibilities of a CEO and identify the ways in which Mr. Hadari appears to have failed to fulfill his responsibilities. Please refer to the MCCG 2017 in your answer.
According to MCCG 2017, corporate governance is defined as the process and structure used to direct and manage the business towards promoting business prosperity and corporate accountability with the ultimate objective of realizing long-term shareholder value while taking into account the interest of other stakeholders. It is important for Triple H Film Production to have proper governance because it identifies the right and responsibilities of each participant in the company besides provides the rule and procedures for decisionmaking, internal control and risk management. In order for Triple H Film Production to produce long-term value, the company needs to embrace the pillars of corporate governance which are ethical behavior, accountability, transparency and sustainability. On top of that, one of the key principle to have a good corporate governance is the board leadership and effectiveness. Since the CEO usually will be seen as the figurehead for the company in the public eye, he should be able to present a positive image of the company. The board has a critical role in setting the right tone at the top, promote good governance culture and ethical practices throughout the company while overseeing the day-to-day business. As the CEO, Mr. Hadari is also responsible for the long-term success of a company and to deliver sustainable value to its stakeholders. Firstly, he needs to govern and set the strategic direction of the company besides exercising oversight on management. Next, he also needs to review, challenge and decide on management’s proposals for the company, and monitor its
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implementation by management. However, as referring to the case, Mr. Hadari does not monitor the implementation of the new policy by the management. This is because he does not present during the management change and implementation of new rules and regulation. He empowered all Head of Department to manage it while he spends his time to entertain the client. Due to that, he was unable to take immediate and corrective action when conflict arises and employees start to misbehave. As he put all the focus on overseeing the company’s marketing, sales and finance, he did not realize that it is also important to manage the internal control of the company. This is in contrary to the responsibilities outlined in MCCG 2017 that CEO needs to ensure there is a sound framework for internal controls and risk management. In addition, CEO also should set the company’s value and standards, policies and strategies and ensure that its obligations to its shareholders and other stakeholders are understood and met. But, this is not what has been practiced by Mr. Hadari as the CEO of Triple H Film Production since the company does not reformulate the company’s policy to suite with the change from a partnership to Limited Liability Company. One of the poor policy in the company is there is no strict rules and regulations about the employees' ethics and behaviors. Due to that, the employees took this advantage to misbehave in order to express their dissatisfaction and to achieve personal demand. Moreover, the company also has poor policy since there is no reward and punishment system established. When there are no proper rules, this will result in employees doing whatever that they want without receiving any punishment and cause the crisis to arise. In order to manage the problem of internal control of the company, it is essential for the company to formulate a new set of rules and regulations and effectively communicate the new policies to the employees.
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The new policies can be comprised of the definition of acceptable and unacceptable behavior in the company and types of punishment imposed on the employees when they started to misbehave.
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References
1. Janse, B. (2018). Cultural Web Analysis. Tools Hero. Retrieved November 10, 2018 from https://www.toolshero.com/management/cultural-web-analysis/ 2. Johnson G. (2007), “ Exploring Corporate Strategy”, Prentice Hall. Retrieved November 10, 2018 from http://www.tbointl.com/blog/top-down-or-bottom-up-approaches-tosuccessful-change 3. Zeeman, A. (2017). Senge’s Five Disciplines of Learning Organizations. Tools Hero. Retrieved November 11, 2018 from https://www.toolshero.com/management/fivedisciplines-learning-organizations/ 4. Stacy, Z. (n.d). Decision-Making Styles for Organizations. Chron. Retrieved November 10, 2018 from https://smallbusiness.chron.com/decisionmaking-styles-organizations24385.html 5. James, M. (n.d). The Cultural Web. Mind Tools. Retrieved November 11, 2018 from https://www.mindtools.com/pages/article/newSTR_90.htm 6. By-Laws (On Professional Ethics, Conduct and Practice) of the Malaysian Institute of Accountants. Retrieved November 11, 2018 from https://www.mia.org.my/v2/downloads/handbook/bylaws/2018/08/01/MIA_Bylaws_Revised_Jan_2011_updated_as_at_1_Aug_2018.pdf 7. Competency Framework for Chief Financial Officers (“CFOs”) in Public Interest Entities. Retrieved November 11, 2018 from https://www.mia.org.my/v2/downloads/resources/publications/2018/07/20/MIA_Compet ency_Framework_for_CFO_in_Public_Interest_Entities.pdf
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8. Syed, T. H., Shen, L., Tayyaba, A., Jamal, H., Syed, H. H., Ali. (2018). Kurt Lewin’s change model: A critical review of the role of leadership and employee involvement in organizational change. Journal of Innovation & Knowledge 3 (2018) 123 – 127.
9. Malaysian Code on Corporate Governance (MCCG). Retrieved November 11, 2018 from https://www.sc.com.my/wp-content/uploads/eng/html/cg/mccg2017.pdf 10. Jon, K., Carolin, O., James, T. (2016). 10 Principles of Organizational Culture. Strategy business. Retrieved November 11, 2018 from https://www.strategy business.com/article/10-Principles-of-Organizational-Culture?gko=71d2f 11. Catherine, D., CSP, SPHR and Joan P, Brannick. (2002). Assessing Organizational Culture. Retrieved November 12, 2018 from http://www.altres.com/jobseekerapp/pdfs/EArticle_Assessing_Culture.pdf 12. Prachi, J. (n.d ). Kurt Lewin’s Change Management Model: The Planned Approach to Organizational Change. Management Study Guide. Retrieved November 12, 2018 from
https://www.managementstudyguide.com/kurt-lewins-change-management-model.htm 13. Northouse, P. G. (2010). Leadership: Theory and practice (5th ed.). Thousand Oaks, CA: Sage. 14. Laura, L. P., & Stephen, G. G. (2002). Leadership self-efficacy and managers’ motivationfor leading change. Journal of Organizational Behavior, 23(2), 215 – 235.
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Appendices
Exhibit 1
Exhibit 2
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Exhibit 3
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