QUT MGN 409 Management theory and practice.
Introduction.
This paper covers the environment that The Naval Group Australia operates in and the opportunities and threats that the multinational company faces in 2018 and beyond. The company dates back to its origins of 1631 in France, where Cardinal Richelieu had grand plans to create a naval future for the French, by building a series of shipyards, starting with Cherbourg.
While the company has come in to the nuclear and digital age, many of the issues from 15th century still ring true today, such as meeting the needs of consumers, competition from rivals, and the need to grow as a company and stay viable. The Naval Group Australia has access through its parent company, a range for maritime vessels such as the FREMM (European Multi-Mission Frigate), the Barracuda (Fiszer, 2003) and the Scorpene 2000 submarines, available in both nuclear and conventional propulsion.
These vessels are not the only products available from The Naval Group, as they also offer service for the life of the vessels, transfer of data to consumer countries so that items can be built in their own shipyards with local labour, and heavy investment in renewable energy’s such as tidal, thermal and wind.
Political.
Certainly, the space here is multifaceted. While there can be great financial gains by the generation of sales based on world tensions, an obvious downside is if the planet were to face another true world war, is that all operational areas of the business would become targets. Think of the most hostile of business acquisitions. With only a few base products, level of scalability and customisation is very important, as not to sell the same exact product to the competition of the client, or you may face the same fate as Don Aronow (Fishman, 1993).
There are different mindsets of governments and citizens, so the ability of the propulsion to be modular which allows, for or against nuclear power (Gwynn, 2018) is another key component of this company. The risk is that once you build your set number of vessels, you are open to other vessels being more strategically competitive via nuclear benefits or more modern technology, leaving politicians explaining to dependants the loss of loved ones. Benefits of having key allies in the U.S.A., a nuclear superpower, is that their will to take the fight to others protects Australian shipbuilders to some extent.
Economic.
The weak Australian dollar conversion to the Euro empowers the decision to build the new vessels in Australia. This also allows for 4 main advantages, cheaper Australian labour, re-investing the capital in Australia and Australian materials, creating skilled labour for future construction programs and servicing, and the re-assurance of classified data creation and collection during the build, including technical specifications.
Building the Barracuda Submarines in Australia not only controls the macro environment economic forces but allows the network creation of micro environment forces including supply chains, close ties with the customer and distancing the competitors. It’s these micro forces that creates a stronger economy for Australia and very much supports the concept of creating Naval Group Australia in the first place. Once the vessels have been delivered in to service, the use of allies naval dockyards in times of need who also use a similar craft saves extra time an expense of the vessels limping back to Australia for urgent structural or technical repair. It’s the absolution of the nature of the work, that there is no place for weakness, in ability or operational failure.
Social.
The decision to spend such a large amount of money rests with the Australian government (approximately $50 billion), but the responsible management of the construction of the vessels, and efficient management of the funds lies with Naval Group Australia. While this sounds economic, the social aspect refers back to the poor management of other federal projects such as the National Broadband Network (Ferrers, 2016), and the social backlash of budget blowouts and extended delivery schedules. The people of Australia would like to see value for their money, in a time sensitive delivery of a quality product.
The opportunity for Naval Group Australia is to continue to build a strong brand based on their international heritage, and grow and develop in a new domestic market, avoiding the threat of building a substandard product, production delays and blow out budgets. The selection of conventional power is a straight forward process for Australia. While it could be considered hypocritical, with Australia mining and selling uranium, the benefits of our international partners using similarly manufactured submarines, also creates the risk of nuclear submarines docking in Australia for major technical failures such as reactor meltdowns or cooling leaks. These issues will cause massive social outrage resulting in negative sentiment for the manufacturer.
Technological.
New technology allows for previous barriers in construction to be removed. The density of water allows sound to travel great distances which isn’t good when you’re trying to hide a $3+ billion investment, and greater, protecting national security and interests. The invention of Jet Pump propulsion removes the noise from the previous form, the propeller. While this has acoustic advantages, such as the removing the tiny explosions of air known as cavitation, negatives include reduced capacity to reverse, and decreased torque.
The sharing of information and design form the parent company in France (formally known as DCNS) is a key macro factor in the purchase decision to select the future version of the Barracuda Submarine. Having involvement from the parent company’s designers allows greater customisation during the build phase especially in early construction of the hull (Heil, Unknown), because you don’t know what you don’t know. Opportunity is created with this assistance to develop new technology or to introduce systems familiar to Australian mariners and submariners to maintain a competitive advantage. Quality has also been reassured by compliance reaching the ISO 9001 certification, which is valid for 3 years.
Legal.
VI. Thou shall not kill, becomes somewhat obsolete in 21st century military warfare, but modern vessel construction and operation still has broader legal requirements as described by Professor Lust in 2001. He describes that it comes down to 3 things, The law of the sea, law of neutrality, and laws of military operations. Most people will be more familiar with the term “Geneva Convention”, but others exist such as Collision regulations, Safety of life at sea, and Marine pollution.
Beyond compliance, being such a vast company with enormous assets and expenditure, being responsible, accountable for their decision making and actions, transparent with information making it publically available, or at least to the overriding powers that be, and consulting relevant authorities when necessary allows for best practice.
Environment.
Issues arise from a turbulent federal government within Australia, and while opinions differ on most topics, the support for military operational capability remains steady. Construction capacity is strong based on availability of quality steel locally, although strengthening of the United States of America to source steel internally may force in influx of cheap foreign steel in to places like Australia, forcing the price of steel down.
Other countries in our region are also strengthening their submarine fleet with Indonesia buying 8 Korean submarines to be completely in service by 2024. These vessels are only half the length of the Naval Group Australia product, but deliver a very similar size diameter projectile (21 in.). While current predictions expect that the aging Collins class submarine will need to carry on for some years yet, the increased capability of this new product to service the Royal Australian Navy, aid tri service forces, and increase national security in our region is greatly anticipated.
Evaluation
The idea, creation and development of the Naval Group Australia is steadfast and born out of necessity, and its heritage from French manufacturers underpins the quality of the products that they will deliver to the Australian government, introducing increased design and new technical specification. The gains from sourcing local suppliers, using local labour, and the future development and networking created with sustained servicing of the fleet with in Australia will furthermore strengthen economic principles which this idea was based upon.
While disappointing that the countries of the world feel they need these machines, the result of not having them is exponentially worse, and its owes credit to the people of many nations who develop technologies and designs to further the cause. The goal of this company is to be able supply the customer a product that will achieve the all of the objectives required to increase stability and safety in its region.
Assignment 3.
Introduction.
In this second component researching Naval Group Australia, we look in to the management decisions and capacity to perform as required at this level. Certainly, arriving at the decision to sign the agreement with The Naval Group was a drawn out one, especially when at one stage former Prime Minister Tony Abbot was doing hand shake deals with the Japanese government to buy an off the shelf submarine package. This current arrangement is a complex one, because we are trying to build 12 conventional powered submarines based off a nuclear submarine design that has ever been built yet either. This tension grows with some businessmen (Johnston, 2017)saying that with the aging Collins Class Subs coming to the end of their lifespan, Australia may face up to 15 years without a submarine capability in our defence force.
Organisations Mission and Governance.
Give the information available on the Naval Group Australia website, you would be forgiven for thinking that each person on the board is trying to prove their relevance to be in that position, but certainly you can believe that the assembled group has enough combined history on large commercial projects to get the job done. The French partner in the build, who is supplying the designs for the submarines, and during the build phase, will also be manufacturing the nose cone which will be shipped over from France. Whilst the Australian defence minister is promoting massive jobs growth in Adelaide to the tune of 1700 jobs, some confusion has come from Naval Group in France saying that this collaboration with Australia will create 4000 jobs (Fisher, 2017), in France alone.
A major concern for me is Jean-Michel Billig, because when looking at his employment history, he doesn’t hang around long, usually less than 4 years. You would also look twice when he started his career at a company which later became Airbus, but who now claims to be a Commander in the French Naval Reserves (Australia, 2018), how does this happen? Now at age 55, Billig may be looking at his last project before he retires or becomes a consultant, so what real input will he be prepared to devote over the next 3 years, most probably before any construction begins on the first of the twelve subs.
When looking for integrity and sustained accountability, independent board of director’s member, Paul O’Sullivan has a long history in high placed roles in Australia and New Zealand working for the Australian Government and protecting their interests. Pauls history working in ASIO (Australian Secret Intelligence Agency) will give him enough security clearance to give authority to any decisions that need to be made, and access to information to aide those decisions.
Strategic Position. SWOT
The choice of the French designed submarine and the ability to bring the build to Australia is a key component of this exercise. Put simply, if we didn’t build these 12 submarines in Australia, they wouldn’t get built (The Weekend Australian, 2017). Think back to 2009 when Kevin Rudd gave $1000 to every person who paid tax in Australia the previous year, essentially the government gets it all back in tax, and it circulates money through the economy. Think of this submarine deal as something similar, the boost to the South Australian economy will be felt for decades.
When looking at Porters 5 Forces (Narayanan, 2005), bringing the build in house eliminates a lot of the issues that otherwise could have been huge stumbling blocks. You have mostly eliminated supplier issues, there is no longer competition by other submarine manufacturers. Not everything will be plane sailing as a major supplier to the project is the U.S. company Lockheed Martin, supplying the Combat Systems Integrator (AN/BYG-1 combat system). Ensuring exact technical specifications are met and tracking any updates to the systems is crucial, as either company will not be looking to adjust their manufacturing process.
Previously when looking at the environment I wrote about turbulent federal governments. No politician looking to be elected, or re-elected will threaten this deal in South Australia, even limiting the build number as they won’t get elected. While I don’t expect this will become a threat, some issues that become a weakness is the design phase taking too long, and the pressure created by the media and opposing governments. More clearly, while both sides of government support the build of the submarines, it doesn’t mean that come election time the opposition, which ever party it may be at the time, won’t blame the current party for wasting time and money. Despite the infighting, getting each phase of the project correct is crucial to a successful outcome, and it all starts with the planning, managing and training of staff, as this venture will only become greater over the next 20 years. As listed above, once the first of the submarines has gone in to service, it immediately starts on a service rotation, and with that, more staff will be required at a suitable location with Naval Group Australia accreditation to perform works on the submarines and any required updates.
Management. Ethics, decision making & culture
A little more than a week ago, I was talking to a fellow student about the ethics of choosing conventional power over nuclear, even though nuclear as some supreme operational benefits in comparison. After doing some research, I was surprised not to be able to find any thermal images of nuclear submarines, after all, the core of the reactor when working normally is about 300 degrees Celsius. One could come to the conclusion that having such a heat source in what is a fairly standardised body of water would be easy to spot electronically (thermal).
After venturing to the Sanctuary Cove International Boat Show over the weekend, and speaking with leaders in the underwater imaging profession, including Garmin, Simrad, and a Chinese company who specialises in Forward Looking Infra-Red, underwater thermal imaging is not yet possible. It has however become a surprise to me that current Russian submarines can track other nuclear submarines based on the radioactivity of the waste water emitted from the submarine. Depending on your knowledge of the movie “Hunt for the Red October (McTiernan, 1990)” some “Crazy Ivan’s” may be the order of the day to create unusual patterns.
Planning inside the Naval Group of Australia is allowed the capacity for range, as we know for sure this project will continue for many years to come, and management should also be planning for a lot of early education and strategic programs internally. I would expect that as part of the design of the shipyard, a series of classrooms should be built, including a library of relevant texts, and supporting information technology resources. I believe it’s important to look beyond the task of creating world class submarines. What you really have to do is create a space for an interested and motivated group of people to engage with each other, a collaboration of thoughts, with a common goal, investing in and renewing human resources, and for each of those human components to feel safe and secure, to feel safe I their ability to express their opinion. If not, it could be an issue where a staff member has made a mistake, which might later become mission critical, it might be something simple like leaving a spanner in a confined space, but if left unrectified could be dangerous.
This project being such a technical task, I would suggest starting with a top down organisation technique until internal systems have matured, but I would suggest that their will come a time that this should adjust to a point where management and staff meet somewhere in the middle, with daily or twice weekly meetings. I believe it’s important for managers to realise that they are not in charge, but responsible for people in their charge. Myself, as a 24-year tradesperson, my boss will ever be as good as what I do as I am, I don’t care for his opinion, even though it’s expected that I do as I am asked. All I need him to do is give me what I require to complete the task, and pay me to do it.
I guess this is why sometimes I’m difficult to manage, and a particular management style is required, and I have seen this before with others. It happens when there is a clash, one person has authority and instructions, while the other has vast experience, is cocky, youthful, has great honour or pride, has a particular expectation put on them or the person is German (said with great respect). Maybe you would know the tale of a great force and an immovable object. I once myself had an almighty argument with an engineer, the problem was we were both right, we were both among the best at what we did, but we couldn’t manage to communicate properly. Later I coined this as the “Two magnets problem”, see the all magnets are made on the same principle, and like poles repel.
Controlling these issues is where floor or workshop managers or leading hands come in to play. Its these middle management staff that oversee the performance, control spot fires in human resources, escalate issues to upper management, and help the general flow of the working environment. Successful people I these positions will also identify key performance staff, promote performers, recommend staff for training, identify bottlenecks in production and keep an eye on quality control.
Concluding paragraph.
Naval Group Australia are going to have to balance on a fine line, to manage the design stage as efficiently as they can on budget and timeliness, but also to create the best product that is possible. One of the main advantages of time is that once the first of the submarines goes to sea, feedback on performance will start coming in, and any fine tuning that is required, including redesign can be implemented with the earlier released models being updated during service intervals, to increase compliance. I believe Prime Minister Turnbull was correct in saying that this deal is a seminal decision in the creation of maritime shipbuilding covering the next 50 years, and certainly will be a great economical boost for not only Adelaide, but many other parts of Australia as well.
It’s this extended commitment that will allow for the acquisition of new staff, training programs to be formed, new cultures to be developed, to create a more linier process that boosts confidence in the workforce and allow knowledge to be passed down through generations of staff. It’s this knowledge gained that will give Australia and the Naval Group the ability to service our vessels, and our allies vessels for decades to come.
