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SABU Holzbau Gmbh From A Leadership Crisis To Qualitative Growth’ (A) & (B) Case Solution & Answer

SABU Holzbau Gmbh From A Leadership Crisis To Qualitative Growth’ (A) & (B) Case Solution

Introduction

SABU Holzbau GmbHis one of the leading and valuable construction companies in Bavaria, Germany, which was founded in 1924 by Jakob Buchen. The company prides itself on providing various products to its customers, which include:       construction trailers, garden sheds, prefabricated wooden houses and wooden storage boxes. The continued growth and success of the company is a result of product portfolio expansion and specialized in turnkey projects based on timber construction system. The yearly turnover of the company was€7.5 million in 2013, with 40 employees. The company is specialized in erecting the public buildings with the use of the prefabricated and innovative module construction technology.

The report sets out to investigate the ways through which the company was able to overcome the leadership crises emerging in the organization, with the help of the team of consultants who supported and helped the company through a change process that significantly altered the company’s culture.

What are SABU’s competitive advantages and disadvantages?

Competitive advantages

SABU Holzbau GmbH is recognized as one of the finest construction companies, which specializes in establishing the public buildings by using prefabricated technology. With the passage of time; the modular construction offers an opportunity to the industry to make a step change by shifting the number of aspects of building activity away from the traditional construction sites as well as into factories with offsite and manufacturing style production.(Nick Bertram, 2019 ).

SABU Holzbau GmbH has been experiencing great success through the number of strategic moves, for the purpose of defining the company’s focus on its role in the erecting public buildings. Furthermore, the company has attempted to specialize in turnkey projects on the basis of innovative timber constructions systems, particularly used for many public sector building, such as: administrative offices, childcare facilities and schools.

Friedrich Nagel was one of the best generators of the competitive advantage, because he provided new technical improvements and solutions to the company. He was the main driving force behind the development of the innovative module timber construction system of the company. With this new system, the company was able to prefabricate ceilings, walls as well as base elements. The experience and expertise in the innovative module timber construction system allowed the company to realize the larger projects in relatively shorter time period, which in turn provided competitive edge over the market peers that worked with the steel modules.

Employing the top talent and developing the forward thinking solutions and technologies with the focus on continuous improvement remains the cornerstone of the company as it has immensely positioned itself in the building product market for the future growth, with major emphasis over modular designs, hybrid construction and timber construction system. The company is a pioneer in the hybrid construction field that contracts building that are excellent in energy efficiency and meets the Germany’s high passive housing standards.

Another competitive advantage is the company’s sustainable business operations as well as the accelerated efforts of the company towards using environmentally friendly construction material without any harmful effects over the residents’ health.  By doing so, the company has made itself enable to portray the positive image in the market and among its customers. It is because of the fact that the green building is officially the international trend and the conservation of energy is one of the top priorities for people. The shift is being driven by the consumer demands followed by the healthier buildings and environmental regulations. Even better – the green building trend is expected to grow in the near future. Thus, the increased usage of the green building and eco-friendly materials for the construction provide solid competitive advantage to the company.

Furthermore, the materials’ quality management is of increasingly significant concern for the company, due to which the company makes sure that the processes and products have high quality standards. By doing so, the company is able to increase its customer satisfaction and its financial as well as the non-financial returns.

Over the period of time, the company started to follow the ever-changing and evolving trends and opportunities in the construction industry, which helped the company in-leading the market by understanding the trends and customers requirements. The company also had the highly qualified and competent sales team, which was responsible to communicate with customers and bring in some creative and innovative ideas. The long term partnership with subcontractors and suppliers allowed the company to reap many benefits, such as: efficiency of resources, strong financial position, high level of understanding, competitiveness and an improved quality.(Pellew, 2000).

Competitive disadvantages

In contradiction to the number of competitive advantages;there are various competitive disadvantages as well. One of the competitivedisadvantages of the company is high employee turnover. It was because of the reason that the employees had started to feel overburdened with work and were unable to manage their duties efficiently. There were three key employees, who decided to leave the organization in the wake of the poor leadership and an increased work pressure. The high employee turnover had resulted in the loss of competent and experienced employees, loss of productivity and profit returns. The employees were dissatisfied with their job and were highly prone to grumbling about it. The primary cause of the disgruntlement among employees included lack of recognition, lack of collaboration, poor performance evaluation and perceived disrespectful treatment etc.

Moreover, the negative feedback from clients and an increased rate of customer dissatisfaction are the main sources of competitive disadvantage. Due to the chaotic situation emerging within an organization and lack of enthusiasm among employees towards achieving the goals of organization; the company was unable to meet the agreed deadlines, due to which the customers started questioning the invoices which they received and they consequently reduced the payment morale. Thus, the company was unable to step up its customer service and had lost its focus on providing the best possible experience. Hence, due to lack of motivation, inadequate training, lack of direction, ineffective management, and lack of effective leadership and poor treatment of employees;the company lost its market shareas well as its competitiveness.

What are the main reasons that led to the crisis situation that the company was facing?

In time of adversity within an organization;there were many factors involved in crises leadership,which are listed below:

  • Lack of interaction& communication.
  • Lack of empowerment among employees.
  • Hierarchical distance.
  • Unclear distribution of roles and communication process.
  • Lack of responsibility at work.
  • Distance of the employee-organization relationship.
  • Lack of reward system and recognition and so forth.

The combination of all these reasons, led to the crises situation that the company was facing.

The first and foremost reason is the lack of an effective management or leadership, because if there was an effective leadership; the product would not have been successful. Moreover, the lack of effective leadership with an organization emerged various problems, which were ranging from the unclear distribution of task and roles to reduced employee morale and satisfaction. The bad or ineffective leadership led to the poor employee retention and disagreed deadlines and low customer satisfaction. The importance of clear and directed vision must be determined by the company in order to create a plan, and to set objectives or goals.The vision would help the management to narrow its focus on the effectiveness of the product especially in stressful and complex times.

In addition to this, the lack of recognition, lack of financial opportunities and performance appraisal, perceived disrespectful treatment, negative interactions with peers and management staff resulted in the disgruntlement among employees. The employees were not provided with training and development opportunities and monetary reward due to which they lost their concentration and enthusiasm. The lack of motivation among employees was because of no appreciation shown for their hard work, which resulted in feeling of undervalued or invisible, reduction in productivity and performance, reduction in quality of work etc………………………

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