Business Analysis of Gulf States Metals Inc.
Gulf States Metals Inc. (GSM) is a large nickel refinery plant that
has suffered poor financial performance and is under the threat of
being shut down by its parent company International Metals Inc. This
paper aims to, firstly, analyse the issues that are contributing to
the low performance, secondly, to provide some options for moving
forward and thirdly, to present a set of substantiated
recommendations. The analysis will be tackled through a multi-frame
approach, incorporating a structural frame, human resource frame,
political frame and symbolic frame as proposed by Bolman and Deal
Structural Frame Analysis
The structural frame asserts that organisations exist to achieve goals
and objectives, and that they must be designed to fit the
circumstances according to goals, technology and the environment.
Organisations are thought to increase efficiency and enhance
performance through specialisation and division of labour. To ensure
that the divisions work together, appropriate forms of coordination
and control are essential to ensure that individuals and units work
together in service of organisational goals. The structural frame also
assumes that problems, and performance gaps, arise from structural
defects and can be remedied through restructuring (Bolman and Deal,
1997; Burnes, 1996).
GSM's overall structure is hierarchical and based around functional
groups. Directors are assigned to the main sections of the business
according to function, these being operations, engineering and
administration. Within these directorial areas there is a structure
based around process and time. There are supervisors that oversee one
of each the processes of material handling, copper extraction, cobalt
extraction, ammonia sulphate extraction, and nickel extraction. There
are also supervisors who manage production for swing, graveyard and
In the case of GSM, there is an absence of integration to bridge the
division between the operations and maintenance. The two areas are at
odds and compete for access to machines. Production requires the
machines to continue running and producing nickel, while Maintenance
requires windows of time to perform maintenance of those machines.
This systemic conflict between Maintenance and Operations is a classic
example of allocation leading to sub-optimisation. Rather than
focusing on goals of the business, each division is narrowly focussed
on their own goals.
The structure within the Operations Division may also be contributing