This report seeks to conduct a crucial analysis of W. L. Gore Associates; looking specifically at their global strategy, global organizational structure, leadership and their human resource practices.
The case examines issues related to strategy development, innovation and exactly how W. L. Gore & Associates has achieved sustained competitive advantage. The report also examines Gore's organizational structure and culture, and exactly how these values are developed and transmitted with their associates. This report notes the accolades that corporation has received along with the various milestones achieved (see Appendix 1). The report analyses the critical success factors at W. L. Gore & Associates through the use of a blend of tools, and delves further in the corporation's Strengths, Weaknesses, Opportunities and Threats.
The report also determined the framework and coordination strategies employed by W. L. Gore & Associates in their move from operating locally to regionally then globally. The report also analyses Gore's value proposition and their technique to reaching competitive advantage through their value chain. The review also gives mention to the guidelines in the event and makes the relevant linkages to current literature.
Case Overview
W. L. Gore & Associates was founded in 1958 by Wilbert L. (Bill) and his wife Genevieve (Vieve) Gore and manufactures an array of products namely powerful fabrics, medical products and then generation electronic products. Renowned because of its performance outwear fabrics and its employee centric culture, W L Gore & Associates has thrived forward through the years to be one of the most acclaimed companies both globally. Gore's products can be purchased on six continents and used on all seven continents, as well as under the ocean and in space. Table 1. 1 below gives us a graphical representation of W. L. Gore & Associates timeline plus some of these milestones given the info from the case study:
W. L. Gore's organizational structure and culture
"the aim of the company set forth by the founder wilbert l. (bill) gore was "to generate profits and have fun"]
The organizational culture at Gore serves as a an egalitarian one with no evidently defined roles and job titles, with the objective set by its founder being "to generate profits and also have fun". Gore's culture is characterized by self empowered cross functional teams who coordinate and communicate their activities across different units, regions and divisions. Based on the case W. L. Gore "strove to keep up a family-like, entrepreneurial culture.
Therefore it can be argued that Gore pays particular focus on Maslow's universal hierarchy of needs (see figure 1. 1 below) to ensure that their workers are adequately motivated to execute their duties.
Loyalty and commitment is engrained in the culture at Gore which is evidenced not only due to many awards they have received but also in the length of time that associates are employed with the business. Notably, W. L. Gore has already established just four presidents in its 50 year history; with one of their presidents Terry Hill having previously been a longtime associate of 22 years.
Gore's culture is a by-product of people, its processes and its own organizational structure. In the following section we will look at the organizational structure at Gore and its own impact of the culture. (See Appendix 2 for a brief description Gore's culture).
Gore's organizational structure can be described as decentralized and informal, with its objective being "to earn a living and also have fun". Gore can be an organic and natural organization with a low degree of formalization. The structure can be defined as "flat", with decentralized decision making through virtual teams in a terminology coined a "lattice" structure.
"A lattice organization is one which involves direct transactions, self-commitment, natural leadership, and lacks assigned or assumed authority. . . Every successful organization has a lattice organization that underlies the faade of authoritarian hierarchy. It is through these lattice organizations that things get done, and the majority of us take pleasure in on offer the formal procedures and doing things the straightforward and easy way"
-Bill Gore
The Lattice architecture divests itself from the managerial and executive ladder like hierarchy which typifies most organizations. There is no fixed or assigned authority, and every individual in the business is connected to everyone else. Lines of communication are direct- person to person, team to team so that Information can flow freely unfiltered by an intermediary.
"The simplicity and order of your authoritarian organization make it an almost irresistible temptation. Yet it is counter to the principles of individual freedom and smothers the creative growth of man. Freedom requires orderly restraint. The restraints imposed by the necessity for cooperation are minimized with a lattice organization. " -Bill GoreIn such a structure one may ask where does discipline and direction come from? Gore's core belief is at empowering the individual and building self powered teams which can operate and make decisions minus the bureaucracy. Guidance is given by sponsors and leaders who help the associate to discover a good fit between his or her skills and the needs of this team operating on the general idea that Associates would have to be mentored and supported rather than bossed around. The associates are absolve to go to whichever leader or sponsor who can help them in their unique task. The employees are given the uniform title of Associates so no authority is denoted and the average person and team tasks and functions are organized through their commitment to contributions not consequently of orders dictated management.
W. L. Gore's global organizational design
As noted earlier Gore had a well diversified portfolio of products and services that spanned the globe. As discovered from the case; Gore was divided in four divisions these being Electronic Product Division (EPD), Medical Products Division (MPD), Industrial Products Division (IPD) and Fabrics Division (FD). Gore has taken their lattice framework and has mirrored this in their global operations. The Global organization structure was created as a transnational model; represented in Figure 1. 2. We see from the diagram that all division is interdependent with characteristics of the seven key features of transnational design (Phlippe Lasserre 3rd Edition pg 91-92). See table 1. 2 pages 8 which relate the seven top features of the transnational model to the structure, processes and culture at Gore combined with the related case facts. Within this model the business is split into business divisions, each in charge of something line. However the focus is not on organizational structure but on management processes and culture. Each division and each subsidiary communicates and coordinates to ensure knowledge sharing, innovation and continued growth. (To gain access to the set of Gore's Subsidiaries see Appendix 3. )
Seven Key Top features of Transnational Design
Characteristics
Case Facts
Reciprocal dependencies
Structure - network type set-up
Processes - team based work ethic
Culture - the average person /self is not primarily the focus. But instead the group
C 391, para 4
Non-dominant dimension
Structure - egalitarian leadership style, flat structure
Processes - all employees in a variety of departments are of similar importance to the firm
Culture - Freedom and fairness
Operating systems
Structure - Responsibility of R & D is left to employees/associates
Processes - patents and proprietary knowledge of high value
Culture - learning organization
Interpersonal relationships
Structure - Informal, decentralized authority
Processes - encouragement and coaching between both senior and new employees
Culture - easy communication at different "levels" within the organization
Inter-unit decision forums
Structure - Balance between Central Integration and Local Autonomy, integration of value chain
Processes - active participation of global and functional managers in procedures of subsidiaries
Culture - Sharing and negotiating culture
Strong corporate values
Structure - Shared values between global teams
Processes - people and team orientation
Culture - high quality, high ethical values
Sharing
Structure - Shared values between global teams
Processes - freedom to communicate, share ideas and react to changes and improve
Culture - minimal emphasis on superior - subordinate distinctions
Table 1. 2 - Characteristics of transnational design at Gore
Based on its continual performed well (overall) and has made it to the Forbes listing of the "100 Best Companies To HELP" meaning they are doing most, if not absolutely all, things the way in which a company that wants to reach your goals should do. In performing a SWOT analysis of Gore, we examine the detailed aspects of what has contributed to its successes thus far and what may cause the organization to retool some of its business practices and processes.
The SWOT analysis looks at the business's resource strengths and weaknesses and its external opportunities and threats and provides a snapshot of the current status of the organization and provides insight into that they develop their strategies. Figure *** below shows the main focus of the analysis.
Figure *** - Gore's SWOT MatrixC:\Users\Kevon\Desktop\SWOT_-_Gore (1). png
Strengths
Brand Name/Equity
Gore first started its procedures in the late 1950s and was led by the vision and expertise of Bill Gore who was simply both a business owner and a professional chemist. He built his company by using DuPont's reluctance to improve their business model. He developed a wide range of uses for PTFE and nurtured its growth from the 1950's and created a brand instantly recognized the planet over
Customer Loyalty
After securing its first order from the municipality, Gore's concentrate on providing the "finest quality goods that met and exceeded the needs of customers" has always brought customers back because they can rely on the Gore brand for those qualities.
Unique Products
The uses that have been introduced for the PTFE compound will always be something that would not have been thought possible before.
Technology
The company has been built on technologies (pp C-395, para. 6)> gore's associates have made a conscious effort to talk about technological knowledge (pp C-396, para 6) and their discoveries have resulted in several new, progressive uses for his or her products.
Weaknesses
Limited Presence in non-PTFE Markets
The company has much reliance on its products made from the PTFE variations but has only limited diversity in other products; leaving a heavy over-reliance using one revenue generation stream.
Bad Acquisitions
In an attempt to keep its growth, they may acquire a company that enough due diligence was not performed on and could expose those to new problems not within the existing culture/company.
Lattice Structure
While touted by Gore as responsive, a closer look reveals that some immediate decisions that may be needed may fall prey to the delays of this informal method of leadership.
Poorly Managed Innovation
Innovation creates services and business but is also a costly venture. If associates are permitted to pursue innovation without the proper controls it could be both costly and time-wasting.
Opportunities
Culture of Innovation (Innovation unintentionally)
Since the accidental discovery created by Bill, the business's culture has always made associates feel comfortable pursuing new ideas. No pressure is placed on associates to innovate so that ideas that are feasible can be easily implemented.
New Markets, Acquisitions & International Expansion
Gore may already have been global but there may still be markets that Gore can utilize and continue their brand expansion. They can actively pursue expansion and be truly global. Gore can make strategic acquisitions that will permit these to introduce new products to new customers who may already be familiar with the acquired brand's name.
Threats
Intense Competition & Shrinking Markets
Friedman's flatteners have grown to be increasingly prominent and the accepted business paradigm is one of an individual marketplace. This has allowed competitors to be better competing alongside Gore and in markets where Gore has little if any presence.
Expiring Patents/Copycats
As competition emerge alongside Gore, they also look for signs of weakness. A lot of patents to patrol will usually difficult. Competitors will copy products as the patents expire and further erode their market share and growth potential.
Government Policy/Instability
Growing global anti-U. S. sentiment and changing political climates provides future uncertainty (especially income streams) and economies that protect infant industries or politically-affiliated business may put sanctions on Gore that will raise the difficulty of doing business overseas.
BUSINESS STRATEGY
Phillippe Laserre in his text Global Strategic Management presented a Framework for Global Strategy which explained how four key thematic considerations may be used to design or examine a company's business strategy.
In this analysis of W. L. Gore and Associates, Laserre's framework is used to explore and deconstruct the areas of Gore's systematic and successful rise available world and how its business strategy can ensure continued growth and profitability. The business strategy of Gore was adapted and expanded to shape its global business strategy as the business continued to expand geographically and cross functionally.
AMBITION - Definition of the long-term objectives of the company
"The aim of the Enterprise is to earn a living and also have fun doing so"
- Bill Gore
Founder Bill Gore built the company on a set of clear unequivocal beliefs and principles that formed the foundation of W. L. Gore's approach to business since its inception to present day. The guiding principles and values of Gore are detailed in Appendix 2. The fundamental beliefs of the company are plainly defined and ingrained in to the minds of recruits and constantly reinforced in long standing associates alike by training, branding and positive visual messaging. This forms the principal building block with their business plan since it defines what the business is approximately, where they would like to go, how they would like to make it happen and who are the people that they need forming part of the impenetrable team. It cleverly forms a Community through its strong corporate culture which connects Gore Associates worldwide in a standard global bond. There can be an almost nostalgic allure to the simplicity and purity of the family values that is Gore's Corporate Culture and Guiding Principles but it is the actual implementation of those principles in the management of the business enterprise that results in employees themselves becoming invested in the success of the company over time. Employees who understand and accept an organization's culture will likely see their work differently and become less likely to make poor decisions. Expending enough time, money, and effort had a need to create this understanding at every level will lead to a truly empowered workforce.
Case Types of the execution of the principles:
Work sites that are scenic and attractive without more than 200 people per site.
Designing work and leisure spaces within the website which facilitate informal communication
Sponsors
The simplicity of the basic principles in creating a social network is best fulfilled by the one on one communication utilized by Gore rather than technologically enabled as is the norm now. The mass use of technology to communicate can have time, energy and cost benefits however there remains much room for misinterpretation, misrepresentation, segmentation in team objectives and processes, underdevelopment of social skills and more clinical interaction rather than interpersonal.
Innovation is encouraged and fostered e. g. Associates being allowed to require and receive raw materials to try out their ideas. There is a recognition that just as was the case with young Bob Gore, great ideas and perspectives will come from anyone, anywhere, whenever and Gore designed its work processes to allow with the kind of idea generation and innovationeven by accident.
POSITIONING - the choice of countries offering opportunities for strategic development and the business's value proposition corresponding to the global country portfolio.
"All opportunities aren't created equal. . "
- Brad Jones, enterprise leader
In 2010, Gore's products were sold on six continents and used on all seven continents. Gore also offers facilities in 30 countries and manufacturing plants in U. S. , Germany, Scotland, Japan and China. As a worldwide player, Gore has recognized the various opportunities which exist in different regions/countries.
Gore is split into four product divisions: Electronics, Fabric, Industrial and Medical. The business enterprise strategy is usually to be a diversified conglomerate with unique capabilities to address large, attractive market needs.
In order to do this the company positioned itself globally in emerging countries, platform countries, marketing countries, and sourcing countries by carefully analyzing and handpicking the expansion opportunities based on market size, technology advancement, raw materials/ resource availability and cost, labour, regulatory provisions, political context, limitations to advertise entry.
Gore sought to infiltrate and dominate large industries/sectors but with focused customer segments (i. e. Electronics, Fabric, Industrial, and Medical) and their value proposition is that of a global differentiator. The business was able to recognize the diverse and open fields available to them particularly the Medical environment.
The company's Value proposition is to generate the best quality goods to meet and exceed the needs of customers while maintaining competitive pricing.
The commitment to product integrity is evidenced by only certified and accredited manufacturers being supplied with Gore fabrics and the example distributed by Susan Bartley, a co-employee, of a predicament where there was a cosmetic flaw in finished garments but despite it not being truly a fitness for use flaw, the business bought back the garments from the manufacturer because they didn't want those out on the marketplace.
As part of the value attributes that Gore has chosen, part of the sales strategy is to facilitate positive buyer activities which would be shared among customers and potential customers leading to increased sales.
Gore operates through cross functional and often cross border teams to fulfil the many functions and processes in each Division. The Organisation preserves delivery of its Value proposition through a high amount of standardization of the product/service offering and work processes/operations by maintaining its strong corporate culture throughout global operations.
GLOBAL BUSINESS SYSTEMS - business system design, resource allocation across countries to bolster competitive advantages, mergers/acquisitions/joint ventures, establishing the global value chain.
"From the time W. L. Gore was founded it recognized the need for globalization. "
A business system is the configuration of the many activities that the business carries out to deliver value to the clients and capture value for itself. That is in what Professor Michael Porter describes as the value chain in a number of of his published works.
With Gore's expansion their business system design contains several links in the company's value chain that are spread and integrated across divisions, departments and across the world. This part with their strategy is fuelled by their system of employed in cross functional Teams not by geographical boundaries.
The the different parts of Gore's value chain include Innovative activities, productive activities and customer relationship activities. The business deploys resources, assets and competencies to each activity. Gore's business strategy included using integrated procedures and using globalization of its functions to include value to each component of the value chain in order to establish and sustain competitive advantages.
Strategic method of Innovative activities:
investment in a big range of areas the heaviest being in the Medical Products Division as "this is judged to be the major intersection between Gore's unique functions and large attractive market needs. " At the same time while exploring investment opportunities the leadership at Gore would scrutinize the opportunities to avoid 'big burn' projects. The company is open to ideas nonetheless they are owning a business and must be smart about it.
Sharing and boosting of knowledge: "There's a real willingness and openness to talk about knowledge". Formal and informal connections across geographical, academic, managerial, functional or Divisional boundaries is facilitated. Associates get together at regular scheduled meetings to examine each other's plans and look for connections with other products, such consultations (especially with technical consultants) are incredibly important to ensure there is building upon work of others, cooperation and coordination so that there is not duplication of work or certain associates being stymied by myopic views of an idea.
Ideas are "energetically pursued" and at Gore that kind of 'organic' growth is part of the long term plan. The organic and natural growth being to produce in essence an idea factory- where employees can generate ideas, express critical and constructive views to any associate, experiment, have materials to prototype and develop ideas that are fairly evaluated.
An example of how the global approach pays to in adding value is where Gore has associates from a country which is more complex in technology and has different capabilities and perspectives.
Gore's strategy is also to not merely gather knowledge but to protect knowledge and technological expertise. That is a means of not only gaining competitive advantage but it is the way the company sustains it. Gore has been granted more than 2000 patents worldwide. In addition they only share proprietary knowledge over a need to find out basis. That is noteworthy because within the company which inculcates a culture of freedom and communication, it is still a competitive firm geared at profit generation and also have adopted an extremely intelligent method of protecting the Intellectual Property made by employees for the business.
Strategy in Productive Activities:
Gore has four divisions serving different industries and this protected the company against any 'swings' in virtually any particular industry. As Bob Winterling described just how it worked was like four cylinders where you will have several that are up. That is important especially in a worldwide business system because various factors affect the productivity in several sites and in various industries e. g. legal regulation, labour issues, recessions, inflation, political unrest, Competition.
Gore employs a three legged stool approach to integrate their systems of technology, manufacturing and sales which can be tied together by a product specialist. The merchandise specialist for just one product will therefore coordinate efforts across manufacturing, sales and technology functions so there is a more focused, coordinated and regular approach to everything goes into that concerns that product. The support functions of RECRUITING, I. T. and finance also help tie these three legs together.
External acquisitions: Gore will evaluate opportunities to acquire companies so a technology or unique capability can be acquired to complement the prevailing business for growth and continued success. It will be part of a permanent objective to acquire potential competitors. And yes it allows Gore to move into market spaces already well known by those potential acquisitions. Cultural compatibility is crucial, and Gore will not sacrifice its corporate culture by acquiring incompatible companies for short-term gain.
Gore's secondary marketing: leveraging on established brands while reinforcing their own brand for high quality ground breaking materials. The business therefore passed the marketing burden unto the business who was simply selling the finished product. At exactly the same time building a dependant relationship because as Gore manufactures the highest quality product e. g. Gore-Tex fabric, the secondary marketers like Adidas, Puma, North Face etc. had limited choice but to keep coming back to Gore as the supplier. Gore was getting advertising and sales boosts through the sales and marketing efforts of the others.
Gore's recognition of opportunities to earn a living and making strategic decisions not simply in development, growth and acquisitions but also where the product or technology can be sold from the company portfolio as with the deal with Proctor and Gamble of the rights to advertise GLIDE floss whereby Gore continued to manufacture it. The deal was also made staying true to Gore's core principles and the need to retain its trained workers by ensuring any redundant employees were absorbed elsewhere.
Strategic approach to Customer Relationship Management:
As discussed earlier in this analysis, Gore's approach is to add value to these activities through quality control, excellent service thereby enabling the word of mouth spreading of great customer experiences to create sales.
Quick responses to customer concerns e. g. when a concern arose with the vascular graft. Constant innovation is also something geared to customer satisfaction by giving focused answers to specific problems.
Gore's Competitive strategy is targeted around establishing, preserving and leveraging on capacities leading to customer value through performance, quality and brand services i. e. the differentiated value proposition.
List of Gore's capabilities: superior technology, superior quality, Innovation, functionality, customization, Customer services, brand image, finding new market spaces, new solutions, adapting with quick response times and faster R&D.
In addition to presenting a competitive advantage the main element is the Sustainability of this competitive advantage. Gore's business strategy is one that accommodates continued growth and staying true with their guiding principles and processes.
ORGANISATION - the organizational architecture to support the previous three contributors to Gore's business strategy i. e. ambition, positioning, business system.
Gore needed an organizational structure and global organizational model contingent along the way in which the company wished to fulfil its objectives, strategically position itself, integrate and coordinate activities, standardize and maintain its capabilities and competitive advantages.
The company did not seek refuge in a traditional or conventional model but rather crafted the Lattice Structure and the Organization is further supported by Gore's Natural Leadership and Human Resource Practices. These two pillars support the business enterprise Strategy and enable the communication, integration, coordination and knowledge sharing as well as the codification and entrenchment of the Gore Corporate Culture.
It is noteworthy that from the time the business started up as a family business to its growth as a global firm so when it continues upon this path, the Lattice structure model was handcrafted to Gore's needs and has provided a good framework for the business's success and their strategy was never to succumb to the temptation of trying anything that may well not be suited to them and the Culture they may have spent 50 years developing. The company's expansion strategy is one of Deliberate Growth by making smart decisions and by using a structure which can facilitate that growth.
The lattice structure itself is not simply a source of competitive advantage for Gore but because it is not an easily duplicated model/system, Gore is able to sustain its competitive advantages. The lattice structure by its very nature cannot be transplanted into other organisations easily because it necessitates such a drastic cultural entrenchment in its employees and the processes of the business. As is seen from all of the measures Gore has put in place, it requires a clear definition of long term objectives, values and principles, a company understanding and method of positioning and building the competencies of the organisation so as to add value along the worthiness chain.
Leadership
W. L. Gore founders and leaders has sort to preserve and maintain a very egalitarian culture, inside a lattice based structure (rather than hierarchical). This lattice is team based, and connects everyone to everyone else in the plant. According to the Gore website - "You will find no traditional organizational charts, no chains of command, nor predetermined channels of communication. " Gore has a very few levels/titles incorporated in to the organization's pyramid; a CEO who's also the President (Terri Kelly) and a CFO (Paul Kaniefski) and of course the associates. While the organization has leaders and is split into the four main business sections, it is relatively void of the original authority. Expertise, unique knowledge, involving others in significant decisions and history of successes determines how leaders are manufactured. This leadership is commonly known as "followership" at Gore and describes it in a situational aspect- "if you call a meeting and no person turns up, you're probably not a leader because no-one is willing to follow you. " The company embraces this "natural leadership" driving leadership to be earned rather than assigned. Gore determinedly resists titles within the organisation.
Gore describes its leadership style as fluid, defining the "lead" as the associate who has the expertise and knowledge to help make the right decisions (Knowledge Based Decisions). This fluid leadership is continually changing and information flows freely within the organisation nevertheless they have a need-to-know guarding of propriety knowledge. Teams are usually centred on a product: technology associate(s), manufacturing associate(s) and sales associate(s) that are tied together by a product specialist to coordinate efforts and supported by human resources, it, finance and other support systems. Leader of various types take form as Bill Gore describes the 10 types of leaders:
1. The expert,
2. The commitment seeker: coordinator,
3. The commitment seeker: objectives,
4. The compensation sponsor,
5. The merchandise specialists,
6. The plant leaders,
7. The business enterprise leaders,
8. The functional leaders,
9. The corporate leaders and
10. The sign up leaders.
"Gore's philosophy is that individuals don't need close supervision; what they want is mentoring and support. " With every new associate at Gore a "sponsor" is assigned. The sponsor helps the new associate change to the initial culture at Gore- "decode the jargon, demystify the lattice, and circulate her or him among several teams", essentially the sponsor seeks to find a good fit between the associate's skills and talents and the business. At any time an associates is free to seek out a fresh sponsor if indeed they wish.
Sponsor
Leader
Sponsor/Leader
A two-person relationship
A group or team environment
Sponsor and leader aren't necessarily two different associates
Focus over a person
Focus on a business
opportunity
Often two different roles of one person (at different occasions, at differing times of career)
Helps associate grow in
contribution
Aligns associates to
business goal
Sponsoring potential can be starting platform for natural leadership
Table : Differences and Similarities between Sponsors and Leaders
(Modified version)
At Gore associates receive the to challenge decisions made out of the team. The leader gets the burden to describe, and defend decisions and to input it in context of the company's four (4) guiding principles established by Bill Gore: fairness, freedom, commitment, and waterline. Decisions in a lattice based structures, arguably, may often be long, drawn-out processes, however associates at Gore believe time spent initially, pays off during the implementation phase. They (associates) also think that a choice made through an authoritarian structure may save time initially, however in the end the grade of the decision may not be the best that might have been made and the implementation phase will need longer because leaders will seek consensus post decision rather than during as currently done at Gore.
In essence the features within Gore's culture and lattice such as; direct lines of communications, lack of fixed authority, having sponsors not bosses, natural leadership, setting of objectives by those who must make sure they are happen, and allowing tasks and functions be organized through commitments, ensures the facilitation of the fluid and flexible leadership structure.
Analysis
Today's organizational structures have become flatter. "Flattening of organizations, decentralization of decision-making authority, and the elimination of middle-management layers are certainly consistent with anecdotal evidence in the business press layers of intervening management being eliminated and the CEO is getting into direct connection with more managers in the organization. " "Technological advances and monetary trends imply that work is increasingly virtual, globally dispersed and team-based. "
At Gore the leader's job is not to be the strategist or the main one with the best ideas but to ensure culture is healthy, the system is working, teamwork is happening, and the ideas are being produced. "It positions leaders to develop the strengths of the followers" - known as Strength-Based Leadership- David Burkus; Journal of Strategic Leadership. This sort of leadership seeks to keep carefully the organisation innovative.
Bill Gore appeared to be influenced by McGregor's theory Y and Abraham Maslow (see Exhibit 1 of case). According to McGregor's theory Y, humans are self-motivating and seek to find meaning with their work and work is really as natural as play and rest and Maslow's theory theorises on how people react when they're not feeling safe and sound. These philosophies helped set the building blocks for the business's values creating the business leadership style, unique culture, and lattice structure which formalized the underground, informal networks usually observed in other organisations.
"Bill Gore figured that if people don't feel valued for what they bring to the business enterprise and if they are not encouraged to collaborate, innovation will not get a chance. A hierarchy based on authority has some serious design-flaws working against collaboration and involvement. A network will not suffer from these design-flaws. " This decision provided the framework for the evolution of Gore's "fellowship", natural leadership", "sponsors and the development of this unique lattice structure.
Gore model changes the traditional role of the leader and its own unique lattice structure allowing for a set management structure that has allowed the business to remain innovative. Gore is therefore able to foster a safe, secure, collaborative, and creative problem solving environment, enabling the company to attain high rankings for innovation and spot to work.
HR PRACTICES
The Human Resource (HR) factor at Gore and Associates has been a substantial factor in the success of the business over time. Gore has been known as one of the 100 Best Companies to IMPROVE in America, first in a book by that name published in 1984, as at January 2013, is one of the select few companies to appear in all sixteen editions of Fortune magazine's list of "Best Companies to HELP". One of the primary reasons is the resonance of the culture that Gore has generated and maintained as time passes.
As mentioned previously, these were able to develop a corporate culture such that they never had titles, hierarchy or any of the conventional structures associated with enterprises of its size. Due to the laws of incorporation, the titles of president and secretary needed to be used. Most of the HR initiatives were made to support the business's philosophy that all associates were stakeholders in the enterprise and had a shared responsibility for its success. Gore understood the importance of human resource management and exactly how it is advisable to general management, largely because of this of its role in providing competitive advantage, as well as an awareness of the demands of the technologically advanced environment of the future. The employees were encouraged to look everywhere for opportunities to make something that is not currently on the market. Through this environment, a number of "best practices" were used at the company, which will be mentioned in further detail.
Jeffery Pfeiffer argued that we now have seven HR guidelines for achieving competitive advantage; these practices revolved around putting people first and included:
Providing employment security,
selective hiring,
extensive training,
sharing information,
self-managed teams,
high pay predicated on company performance and
the reduction of status differentials
In the following sections, the aforementioned points will be seen in Gore's functions and described more detail through the analysis.
Recruitment, Selection and Retention Process
Employee recruiting serves as a the procedure of identifying and attracting people in the business. In order to attract the best people for the job, it entails getting visitors to apply for positions, keeping applicants interested in joining the organization, and persuading the best candidates to accept job offers. Organizations that recruit well generally have significantly more options as it pertains to hiring new employees and also therefore have to hire the best of the lot.
The recruitment process at Gore is not unusual in comparison with other modern day organizations. When the applications are received, these are in the beginning screened by Personnel Specialists; then an interview is conducted by a group of associates from the precise team which the persons works. Before employment offer is manufactured, Personnel will contact several references in order to get a better understanding of the applicants. This process supports Pfeffer's point on selective hiring which is essential for competitive advantage. Recruitment at Gore was described in the case as a two way process: learning the applicant and the applicant getting to know the associates and company culture. They perform a thorough investigation of the actual employees in order to find out if the person(s) are best suited for the organization's culture.
Once hired, the selected recruits, called associates, proceed through an orientation programme to find out about their jobs and the organization's structure and culture, and also how their jobs are critical to the organization's success. They are anticipated to focus on building relationships for the first three to six months of their career. This is an important part of developing the human resource capacity in that the orientation allows the associates to get a first go through the organization's culture in order that they have an idea of what's required to fit into the company. It also enhances the associates' degree of engagement, providing them with the sense they are an integral part of the business.
Statistics show Gore & Associates has a very low turnover rate (8% by 2009). This suggests that the persons which were recruited in the organization were generally able to deal with the customs, and the infamous lattice structure. In addition, it implies that there's a degree of employment security in the enterprise (aligned with Pfeffer's principles).
There were a number of "best" practices established at Gore that fostered healthy relations among the leaders and associates. For example, there were no reserved parking spaces for leaders, one dining area per plant as things for employee interaction, and a fireplace in the middle of lunchrooms (this is good reduced amount of status differentials principle). Sites were selected based on transportation access, nearby universities, beautiful surroundings and climate appeal. The leadership recognized that the plant design and location was critical in ensuring that the employees were comfortable and really appreciated working at Gore. This was very significant in the attraction and retention of employees.
Training and Employee Development
The overall objective of training and development in all organizations is to sustain or enhance the performance of employees. By doing this, employees will have the necessary skills to implement the firm's strategy and ensure the success of the business.
At Gore & Associates, there was considerable training which facilitated the development of self-managed teams and individuals in the organization. There were lots of opportunities such as in-house trained in technical areas as well as leadership development. Additionally, they had cooperative education programmes with universities and outside providers.
When persons are trained, they are anticipated to improve how they do their jobs, that they relate with others, or there could even be changes in terms with their job responsibilities (for example promotions). A vital area of the training process is to look for the effectiveness of the various training programmes on employee performance and by extension the organization's performance. The truth didn't identify whether or not Gore has an employee performance management system. It only noted that team members rank each other's performance on an annual basis and touch upon their rationale for the ranking, this can have positive and negative effects. Among the benefits can be that the associate will dsicover how others view his/her performance within the team and know what is necessary for improvement. The drawback to this approach could possibly be the instance of biased evaluators and subjectivity, which will not help the employee in bettering performance.
In conditions of development, Gore had significant impacts on their external communities. Associates gave back again to their communities through schools, sports clubs, universities and other local organizations. The case mentioned that Gore has an outreach programme for associates to provide up to eight hours of paid time off for community service, and occasionally they actually volunteered more of their personal time than the eight hours. This is an excellent exemplory case of corporate social responsibility in the sense that whether or not the organization's operations affect the social and/or physical environment, the employees make a habitual effort to attain out to their communities and give back.
Another initiative that may be considered a best practice at Gore was the Sponsor programme. The sponsor needed to essentially take the associate "under its wing" and groom him/her into a well-rounded professional in the organization. Sponsoring was not a short-term programme, which means the person must have the capability to balance their work and mentoring duties effectively. This practice benefits both parties because the newly hired person is learning from a specialist already established in the field, and the sponsor is engaging in succession planning by sharing information (see Pfeffer's principles) on what is required for the individual's growth in the business.
To take a quote from an associate mentioned in the case
"Losses are what you make happen by stymieing people and putting them in a box".
There was no instance recognized of associates being left behind in the production at Gore; every associate works with a sponsor who would encourage him/her to progress in the business. Another best practice that was equally important is the organization's emphasis on direct communication. The sponsor programme is merely one avenue; the business also has digital voice software called Gorecom, which facilitates the virtual collaboration of employees throughout the business. Associates also had many face to face meetings; newly hired staff would have sit-down conversations with their sponsors, team members and leaders travelled a lot and would meet in person with personnel from other divisions. So in essence, this strategy of direct communication was embedded in the culture at Gore and it led to better decision making and efficient work processes.
Reward/Compensation Measures
Gore's compensation system comprised of three separate components: basics salary, a motivation pay system and an indirect (non-monetary) compensation component. The bottom salary is standard, and Gore uses a benchmark method of paying its associates to ensure competitiveness. Secondly the incentive pay system is one where employees receive additional remuneration predicated on individual, divisional and/or organization-wide performance. The indirect compensation extends beyond monetary payments provided at Gore's discretion. The diagram below gives a detailed listing of the compensation system.
The incentive pay system for the sales staff has some differences in comparison with other companies, the truth mentioned that salespeople at Gore don't work for a commission; rather they get a salary along with stocks and profit sharing. This demonstrates the sales team members are not competitive amongst one another; the mentoring practice (like the sponsor programme) is applied in the organization's sales strategy. Therefore the "incentive" is not about making the sales numbers, rather the experienced salespeople motivate or "incentivize" the newer sales associates to fulfill their responsibilities.
The profit sharing aspect of the incentive pay is directly linked to financial performance, i. e. the high pay predicated on company performance has been applied since inception, and the situation determined profit sharing occurring since 1960, which was two years after the company was founded.
In in the years ahead, Gore's compensation system must grow and evolve in tangent with the organization in order to ensure that what's actually being rewarded is regular with the organization's strategic objectives. Therefore strategy and compensation are linked in terms of the amount of performance required. To aid this aspect, Edward Lawler (1995, p. 14) explained that all organizational systems must focus on business strategy because "it specifies what the business wants to perform, how it wants to behave, and the varieties of performance and performance levels it must demonstrate to be effective. " In developing a compensation/reward strategy, identifying Gore's business strategy, in conjunction with individual and organizational performance are needed.
