Wall Street Journal Discusses Rolls Royce Company Strategy (Essay Sample)

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Wall street journal
The Rolls Royce Company recently announced that it would be shedding two hundred more management jobs, which is one of the latest attempts to turn around the Britain-based engineering giant. It comes as a result of a series of losses that have been occurring. The main aim of cutting these jobs is to reduce the cost of running the company and revise the organizational structure, especially in the tough financial times being faced by the engineering enterprise. The lengthy restructuring of staff was announced to the members of staff last week by the chief executive officer, Warren East.
The company has cut hundreds of positions over the last two years under Mister East and John Rishton, his predecessor, in an attempt to improve the engineering firm's profit margins. In fact, these efforts have shown the early signs of paying off, with the company now reporting unexpected profit margins in the first half of the year. The chief executive, however, maintains that further savings are firmly on the agenda as Rolls aims at saving between one hundred and fifty and two hundred million pounds a year. The transformation involves the restructuring of the managerial population, which will inevitably lead to some workers leaving the business so as to reduce complexity and cost by simplifying their structure and processes. The company will reap the full benefits of the restructuring from 2018 onwards.
I agree with Mister Warren's and the company's actions because it is always necessary to reduce costs when undergoing a tough financial period. His plans are to improve competitiveness at a time when Rolls-Royce prepares for one of its most challenging times in its recent history. It has to double its yearly production of jet engines in ten years to about six hundred turbines. In addition to this, he is also trying to embed a more flexible working culture in the one hundred 110-year-old company that is just as famous for its very rigid hierarchical structures as for the technological and engineering prowess.
The urgency of the transformation plan is heightened further by the expensive transition from a highly marketable and profitable mature jet engine programs to a popular or famous but initially loss-making new generation engines. There is also increasing pressure on the power systems and marine businesses that are heavily dep...