Lafarge Case Study: Organizational Behavior
Introduction
Organizational behavior entails the relationships, attitudes, and practices in a firm. Organizational behavior is a product of the management style, vision, goals, and values of a firm. This case study reviews the organizational behavior of Lafarge and its influence on organizational culture in terms of social, informal, and formal environment. The social system in an organization affects its organizational behavior since it affects the interaction between human relations. This social system comprises of the organization, its human resources, and the outside world. The behavior between these members affects directly or indirectly on the behavior of the organization or others.
The analysis will review the organizational culture and its impact of the social system, especially Lafarge’s relationship with employees and local communities. The study shows that Lafarge’s organizational culture influences communication, relations, leadership, and team dynamics. These affect how Lafarge’s employees perceive their work, communities, and stakeholders. This is in the ability of organizational culture to influence Lafarge’s employee motivation, community satisfaction, company performance, and stakeholder growth and development. Lafarge’s teamwork has several characteristics, which are exchange of ideas, atmosphere of trust, and progress. The research will use the elements of motivation, creativity, values, and teamwork to analyze Lafarge.
Description of Case Study and Company
Lafarge is a French-based international company dealing with building materials worldwide. The company has over 80,000 employees and a revenue base of $20 billion per year. The main products are roofing, cement, concrete, aggregate, and gypsum. The main organizational problems are environmental and social issues. Lafarge attempts at achieving energy efficiency and reducing carbon emissions are creating significant problems. These environmental problems are especially within Lafarge’s cement and quarry restoration production lines. The company is also experiencing social issues like the relationship between the company and local communities, employee safety, human rights concern, and development of skills associated with automated plants (Laszlo and Myers 2006). The social challenges facing Lafarge emerge from its operations in emerging markets as it faces unique social challenges with local communities.
The social challenges include modernization of old cement plants with a reduced workforce. The other challenge is respect for international labor conventions in the host nations that have a history of human rights. Lafarge also faces problems with corruption practices in these nations, land use issues over construction of new quarries and cement plants. Social problems also arise in some regions, as the company has to deal with management of workforce that has a high rate of HIV/AIDS (Laszlo and Myers 2006). These issues are a challenge to Lafarge as the company is under the guidance of the “Principle of Action.” This principle has a foundation on the company’s vision, commitments, and business strategy known as the “Lafarge Way.” The company’s commitment entails, offering consumers the most innovative building materials, reliable services, and products. This commitment also strives to reinforce its position as a world leader in supplies, customers, employees, and shareholders. The company’s commitment to stakeholders entails the generation of value and the delivery of value creation shareholders expects (Lafarge 2012). In addition, Lafarge strives to give employees opportunities for contribution and talent development. Lastly, the company is committing to the building of a better world for communities (Lafarge 2012). The “Lafarge Way” entails the enabling of employees’ success, delivery of continuous performance, and being a multi-local organization. The social and environmental issues facing the company are a problem in the implementation of Lafarge’s mission. The mission of “Being the Best,” entails a focus on stakeholders and emphasis on the multi-local management style. This management style is a strategy to manage the geographically dispersed groups while empowering them with an autonomous local initiative (Laszlo and Myers 2006). These principles are to be in everyday work, with all employees receiving them in the form of a contract form.
Description of Results
Values
Instrumental values are those goals with desirable conditions on anticipated consequences, while terminal values are the goals without conditions on anticipated consequences. For Lafarge, key values of trust, respect, responsibility, and autonomy form the basis of its corporate culture (Lafarge 2012). Lafarge has set out to create a written “code of action,” to meet its ethical approach that meets these values. The “Lafarge Way” creates the strategy upon which the ethical approach inspires action among its employees globally. The value of trust and respect calls for a commitment to giving employees a means of success. In return, the company encourages its employees to be at their best respecting safety, others, and the international and local standards (Lafarge 2012). Lafarge gives opportunities of success with the expectation of trust and respect by employees, making these values an instrumental value. The value of autonomy entails the encouragement of responsibility and skill development among employees. This also entails the encouragement of a spirit of initiative, motivation, and creativity among employees. Therefore, since this value does not have an attached conditional expectation, it becomes a terminal value.
Instrumental and terminal values are essential to Lafarge since they try to offer guiding principles in an organization. According to Finegan (1994), an organization uses values to create a policy on ethical behavior applicable to employees and the society. The value system gives employees and the organization solutions for dealing with ethical dilemmas. For this reason, Lafarge’s instrumental and terminal values create its value system that also guides its “Principle of Action.” This value system guides employees and the organization towards responsible, respectful, and trustworthy relationships with customers, stakeholders, local and international communities. The value system is part of Lafarge’s “Principle of Action,” that guides the day-to-day work of employees across the globe. The advantage of this principle is that Lafarge can use the value system to give employees in emerging markets a code of ethics by which to work with. This will allow Lafarge to deal with the social issues emerging from the emerging markets.
Teamwork
Lafarge has a daily routine that incorporates on teamwork. This teamwork has several characteristics, which are exchange of ideas, atmosphere of trust, and progress. To Lafarge it is essential its employees share experiences and best practices, while learning from their peers (Lafarge 2012). Lafarge also finds that it is essential that managers care for the development of employees. This is through the creation of an environment in which regular and honest discussions occur. Analyzing teamwork is necessary given that it increases organizational commitment, and fosters improved organizational behavior. Teamwork increases organizational efficiency and effectiveness (Chen 2010; Edward et al. 2006). Lafarge uses different types of teams to meet its business strategy. These are problem-solving teams, managed-work, self-directed, and cross-functional teams.
Lafarge can use teamwork to solve and manage some of the social problems identified in the case study. This is because teamwork is dependent on the external and internal characteristics of the organization (Chen 2010). These characteristics are in turn under the influence of the human resource’s behavior. Creating trustworthy, responsible, respectful, and anonymous teams create a positive image to the society (Lafarge 2012). These teams are useful to Lafarge for they will assist in the creation and application of the principles of corporate social responsibility. Teams will increase a strong social commitment to local and international communities, Lafarge deals with it (Edward et al. 2006). Teamwork increases morale for working and organizational commitment, which can assist the organization to launch HIV/AIDS prevention campaigns in Zambia. Teamwork encourages interaction in the organization especially between management, teams, interaction with clients and employees.
Motivation
Lafarge develops various partnerships and relationships as a way to commit to their stakeholder entailing consumers, employees, communities, and shareholders. One of the key stakeholders is the society or communities in which Lafarge branches. To motivate the community, Lafarge develops strong social commitments through a social, corporate responsibility. One of the key values of the company is to have its employees respect the communities they work. Part of these efforts is towards the respect of social rights as given by the International Labor Organization (ILO) (Lafarge 2012). Lafarge uses employee representatives to have dialogue with communities, raise the international social standards and develop constructive relationships with the society (Lafarge 2012). The company uses key commitments to create these relationships. These are like abolition of child labor in countries practicing the vice and the elimination of workplace discrimination. This also entails giving freedom of association, implementation of minimum wages, and rights to collective bargaining (Lafarge 2012). Corporate social responsibility affects and improves organizational behavior by affecting employees’ behaviors, attitudes, and emotions. The motivationl, relational, and instrumental needs mediate employees’ attitudes, emotions, and behaviors (Deborah 2006).
Lafarge uses this strategy to solve its social issues as seen in its social initiative, in Zambia where it assists in preventing HIV/AIDS. Lafarge’s Chilanga Cement Plant in Zambia was facing serious human resource problems from the scourge among its employees. The company uses appropriate health and safety intervention measures to educate its employees. Through partnerships with organizations like Zambia HIV/AIDS Business Sector Project, Lafarge gives prevention and care services to the workplace and community (Laszlo and Myers 2006). The project increases knowledge on the scourge reduces high-risk behavior thereby reducing incidences of new infections. The program return on investment for the company involves a reduction in costs on absenteeism, leave, loss of workforce, productivity loss, management burden, disruptions, retirement, and medical care (Laszlo and Myers 2006).
Creativity
The three components of creativity, which form the basis of new ideas, are creative-thinking skills, expertise, and intrinsic task motivation. Lafarge made use of a deployment of employee strategy to revive the Morocco cement plan. The leadership replaced the old plant with a modern automated facility. To manage this plant, Lafarge made use of training and development approaches to get skilled and knowledgeable employees, while re-hiring half of the old staff (Laszlo and Myers 2006). Lafarge made use of an employee-based personnel program to hire, train, old and new employees. The program assists in the re-deployment of local company, grants employees to assist in owning small businesses and get them early retirement and transfers for those over 55 years (Laszlo and Myers 2006).
Using the three components of creativity, Lafarge can use increase and develop employee skills, knowledge, and talent. Developing creative thinking skills in employees gives them the ability to think and develop innovative solutions in the factory. This is necessary since half of Lafarge’s new workforce in Morocco is re-deployed old employees. Human resource development approaches such as training, education, coaching, leadership, and management programs, that focus on creativity will assist employees solve problems in the workplace. These activities can assist Lafarge identify, enhance, and reinforce employees’ efforts towards creative thinking. Creative strategies will assist employees find solutions for problems that may face the Moroccan plant. Creative thinking will also assist employees in gaining knowledge and skills that will enable them work with the new automated machines.
Conclusion
Organizational behavior is under the influence of the behavior, practices, values, mission, and culture of an organization. These elements affect the workforce, community, stakeholder’s relationship, and commitment to the organization. Lafarge uses its Vision, Commitment to stakeholders, and the “Lafarge Way,” under the Principle of Action to create an organizational culture. The “Lafarge Way” creates the strategy upon which the ethical approach inspires action among its employees globally. This culture influences the motivation, values, creativity, and teamwork activities, which influence the actions of employees, the society, and stakeholders. Lafarge’s key values of trust, respect, responsibility, and autonomy form the basis of its corporate culture. Motivation is through the creation of opportunities of success with the expectation of trust and respect by employees. This is also through the encouragement of a spirit of initiative, motivation, and creativity among employees. The company’s value system influences how Lafarge solves problems arising from social and environmental dynamics of the markets it operates.
Reference List
Chen, Y-C 2010. The Interaction between Teamwork and Organizational Commitment Influenced by Organization’s Characteristics in Electronics Companies. The Business Review, Cambridge, 16(2), 248-254.
Deborah, RE, Jyoti, G, Ruth VA and Williams, CA 2006. Employee Reactions to Corporate Social Responsibility: An Organizational Justice Framework. Journal of Organizational Behavior, 27(4): 537-543.
Edward, SG, Patricia, BS, Leon, G, and Sarah, M (2006). Work Teams and Organizational Commitment: Exploring the Influence of the Team Experience on Employee Attitudes. Working paper, retrieved 26 Oct 2012 from http://www.colorado.edu/ibs/PEC/workplacechange/papers/WP_012.pdf.
Lafarge (2012). Principles of Action. Lafarge Profile [Online] http://www.lafarge.com/wps/portal/1_2_3-Principes_d_action. [Accessed 26 Oct 2012].
Laszlo, C and Myers, M 2006. Lafarge S.A. institute for Sustainable Value in Business.
