Jan Ommens, a Dutchman, became fascinated with business at a young age and was determined to become a successful entrepreneur. After finishing his secondary education Jan joined a wholesaler of technical textile-related products in a company focused on the home market. After 1 year, at the age of 23 years, Jan decided to start his own company, with his elder brother Henk. The company focused on car interiors; seatbelts, safety equipment and accessories. This grew quickly and built a substantial equity base.
Seven years later, in 1988, Jan met Thomas van Diemen, a friend of his father and founder of Diemen Car Seat Covers (DSCS). DSCS was owned and had always been managed by the van Diemen family and one of the central elements of the company culture was freedom. As one employee noted, it was “an old building, walls full of papers….that really were ….kind of romantic times also.” Thomas van Diemen, however, was looking for a new challenge, and trusting in Jan, he decided to sell his company to Jan and his brother Henk, who used their own finances to purchase it. While a family company, Jan established a policy that only his daughters or their spouse (not both parties) could work within the company. One daughter, Annelies, gained a degree in textiles and started working at the company. One of Jan’s nephews also started working in the finance department.
On purchasing Diemen Seat Covers Jan soon noticed that “with all due to respect to the Diemen family, things would have to change to maintain continuity.” He began to develop plans and initiatives to help Diemen grow and prosper, and this included reshaping the culture more in line with his own values.
From the beginning, Jan had a strong vision based on values inherited from his father, including “integrity, correctness, work ethic and enthusiasm.” The Ommens family values were also related to their religious background and the working culture of their community in the eastern part of the Netherlands, where it was common to follow and act upon Christian
principles. The theory of stewardship was the foundation of every choice they made, both on a personal and professional level (Appendix A provides a summary of Dutch culture).
Jan believed that Diemen Car Interiors should be guided by and managed according to the family values of integrity, respect and trust. These informed his leadership style and development of the organization’s culture. Jan was highly people-oriented and concentrated on serving and convincing people through personal communication. He was emotionally connected to his employees and clients, and built relationships based on trust and mutual respect. Accessibility and ensuring that people felt comfortable in his presence were important elements of his leadership style.
In 1991, following another acquisition in the UK, the company name was changed to Diemen Car Interiors Contour. Six years after the purchase, in 1994, Jan and Henk Ommens decided it was to time to go their separate ways. The company was divided into two, with Jan becoming sole owner of Diemen Car Interiors, which focused on car seat covers, and Henk owing a second company specialising in care interior accessories.
Jan’s strategic goal was to become a market leader, and so the company actively entered new markets, such as the Original Equipment Suppliers (OES) market, which focused on selling seat covers to car dealers, and the OEM market, which focused on directly suppling automotive manufacturers (figure 9.1 in Appendix B presents Diemen Car Interior’s financials, in summary form). By the time Jan started to hand over day-to-day responsibilities to a non-family management team in 1995 Diemen Car Interiors had become a global company servicing Europe, the US, South America, Asia and New Zealand. Its main production plants were in Poland and Asia.
1.2 From 1995 to 2007
In 1995, the management team of Diemen Car Interiors consisted of Jan Ommens and two non-family members, and Jan didn’t think of Diemen Car Interiors as a family firm. At this stage Jan was involved with all the day-to ay managerial issues. The company though was expanding under his leadership and alongside this the organizational structure began to change, moving from being highly informal and centralized towards being more formal and decentralized. Consequently, Jan started to delegate some of his tasks and responsibilities with regards to strategy, structure and business control (day-to-day managerial tasks). Based on his assumption that people are trustworthy he began granting freedom to a number of people in key management positions, in the ‘nonfamily’ team. They were empowered to manage the company according to their own principles, while Jan, who loved the pioneering, risk taking aspects associated with new ventures, started to focus his efforts on starting new ventures within the group.
The leadership style of this non-family management team however differed greatly from Jan’s
own style. As the HR Manager noted:
“Actually, the road to Jan was not open for everybody anymore…I think the average worker started to notice that there was no family involvement at that time. Rather, they saw daily management by non-family members. You could not be here at a time when they were not here, even if you worked at night”
This bureaucratization trend was strengthened when the company decided to focus on the OEM market and sought to obtain ISO/TS certificates, which would ensure that they met the highest product quality standards typical of this market segment. In order to do so, a professional quality management system, including detailed descriptions of practices and protocols, was developed. As a result, the company become what an employee referred to as a ’town hall’, referring to a more bureaucratic, administrative culture. Employees had significantly less autonomy in this changed environment. One employee summed it up as ‘What happened? The company became too rigid” referring to a significant decrease in intrapreneurship and strategic flexibility.
During this period, it became the norm for employees to not take responsibility, due to fear of marking a mistake. One employee described the culture:
“One of the non-family members was always working, even at night. People didn’t know how to live up to the expectations anymore, the bar was set too high. For example, if you had an approach to an organizational problem and you presented this to the manager he had several reasons why this would not be a success. In other words, analyse your ideas to death, and in the end, not select it for implementation. At the end of the conversation, he would always think of something else you could perform for him. What he meant was, you were essentially wasting company time thinking of poor alternatives to solve problems.
If you made a mistake, the whole company would know about it within just a few hours. It was not that management was deliberately being disrespectful but unconsciously what happened.”
By 2007, Jan was not convinced that these changes in the company’s culture equipped the company to serve their main customer base, OES/OEM channels (see section 2 below). He felt that the company needed to get back to its original entrepreneurial and collegial culture that existed when it was a more family run firm.
The big question was, how this might be achieved and how the company might develop to deal with the existing challenges and ensure continuation? The company was still owned by Jan and maintained some family (second generation) involvement, plus one son-in-law who had studied civil engineering and had an MBA was keen to be involved in a managerial capacity. The third generation of family members were, however, still too young to get involved.
- The External Context
As a manufacturer of care seat covers Diemen Car Interiors was highly dependent on the automotive industry. Over the course of the latter part of the 20th century and early 21st century, the industry had become more international, and by 2007 had a global focus.
Competition was high in the industry, due to excess capacity and a continuous search for improvements. The 5 largest manufacturers produced nearly 50% of automobiles sold worldwide (International Organization of Motor Manufacturers, figures from 2014). The long- term forecasts predicted that growth would come mainly from emerging markets, particularly China, and that others – the American, European, Japanese and South Korean markets – would stagnate (McKinsey and Co, 2014). To survive, it was therefore imperative to reduce costs.
The automotive industry had implemented a high degree of homogenization and standardization to improve efficiency overall. In the 1990s the big 3 – Ford, General Motors and Chrysler – developed international quality standards to reduce administrative weight and improve reliability and quality. This quality standard became the measure for all OEMs. Moreover, a company had to be innovative to satisfy customer demands and adjust to increased regulations with respect to environmental and safety standards. Priority areas were ‘lightweight’ and ‘minimization of volatile organic compounds.” Interest increased in bio-based, sustainable and recyclable components. Consequently, suppliers to car manufacturers had to anticipate and adjust to the demands of leading manufacturers in the market.
Technical Textiles: These are products manufactured for non-aesthetic purposes, where function is the primary criterion. This began to be a large and growing sector and supported a vast array of other industries. Global demand for such textiles was predicted to reach 162.3 billion US dollars by 2016. Diemen Car Interiors was part of the category Mobiltech, which manufactured textiles for automotive applications, since the company’s main activity was finishing textile. Technical textile was processed in many different parts of a car, e.g. door plates, seat belts, floor covering. Technological development was crucial for the Mobiltech sector, resulting in strong improvement of construction, production, colour, finishing and laminating processes. Competition in this sector was increasing rapidly, primarily because of competition from other technical textile sectors. A number of companies were trying to diversify and enter the Mobiltech market. The continuously higher quality standards in the industry were resulting in stronger relationships between supplier and manufacturer.
The automotive industry had two different types of distribution channel, OEM/OES and the retail channel. In the OEM channel, individual parts for new car were manufactured, while the OES channel produced pars for existing cars. The retail channel focused on manufacturing nonoriginal parts and accessories to dealers, independent body shops, wholesalers and other independent distributors. While in 1995, the retail channel accounted for 53% of Diemen Car Interiors sales, by 2007 the OEM/OES channel was more important than the retail channel, it accounted for 82% of the company’s revenues. While this was good in terms of sales stability, it meant that Diemen had started to deal with far more demanding automotive customers who require suppliers to be efficient, flexible and adaptable. Suppliers therefore need to have very entrepreneurial cultures to deal with this.
The largest car manufacturers were global players in a highly competitive market, and they demanded the same effort from their suppliers. Every product group had a few leading companies supplying the car manufacturers with technical textiles. Global presence and strategic relationships were essential to survive in the industry. As a specialist in seat covers, Diemen Car Interiors had made strategic choices regarding efficiency and partnerships, focusing on operational excellence.
The high-quality standards had an impact on the innovation process. A request for approval of a new product could take several months or even years because these new products needed new product specifications, and the standard procedures and quality documents had to be adjusted first.
In 2007, the automotive industry’s focus was on improving fuel efficiency while reducing the overall weight of vehicles. Environmental sustainability of textiles was not yet their main focus. However, this was a big opportunity, especially as it linked to another development, namely the interior of the car rising in importance. Car manufacturers were starting to attach more and more importance to this, since they considered this a crucial way to distinguish themselves from their competitors.
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