USMCA Impacts on Dairy Industry in Canada

USMCA Impacts on Dairy Industry and Management Changes to be Applied

Executive Summary

This report entails an analysis of the management issues that arise during creating an organizational culture among dairy companies amid the passing of the United States, Mexico, and Canada Agreement (USMCA). It is important to note that the USMCA changes granted the United States an increase in the market share of dairy products in Canada. Therefore, there are both benefits and costs associated with the USMCA changes. Besides, the dairy farmers and other participants in the dairy sector in Canada have over time received the protection that insulates them against price fluctuations and global shake-ups. The analysis includes determining whether the alternative ideas offered in solving the management problem are effective. Moreover, the report examines whether the options at hand are feasible. In particular, the report discusses the need to acknowledge the biases that exist in the organizational culture when integrating diversity and adopting a formal project plan for all the participants in the dairy industry in Canada. The resulting problems that arise from the acknowledgment of biases and adopting a formal project plan include misinterpretation and conflicts among the participants respectively. Assessing which of the two alternative ideas is the most effective in solving the problem shows that acknowledging the biases in the organizational culture will come in handy when leveraging diversity. The primary reason for this is because acknowledging the biases will promote joint operations among the different participants in the dairy industry in Canada. Further, there will be increased profitability and thereby translating to higher revenues compared to those of the national dairy industry average. Therefore, there is the need to collect information regarding the different stakeholders in the dairy industry in Canada in a move to ascertain their overall objectives and the unconscious biases. The report finds out that turning the alternative idea of acknowledging the biases in the organizational culture requires a step by step approach. The first step is to conduct an audit of the job descriptions in the dairy processor companies and further creating the commitment of integrating diversity in the organization. The next step entails initiating programs that will promote the growth of the dairy industry in Canada. Hence, there will be a structured process of ensuring diversity is part and parcel of the organizational culture. Concerning the time frame of bringing into reality the alternative ideas, there are steps that will require both short and long durations depending on the accounting responsibility. The recommendations outlined include the improvement of communication in a move to avoid misinterpretation among the different employees who are part of the diverse workforce. The second recommendation entails the subdivision of the dairy market in Canada into different segments in a move to allow the diverse stakeholders to take advantage of the opportunities that are available. The third recommendation requires that the local dairy processors in Canada should offer a good reception to their counterparts from the United States in a bid to leverage diversity in the organizational culture.

Background on Issue

The United States, Mexico, and Canada Agreement (USMCA) passed on September 30, 2018, has an impact on the dairy industry in Canada (Chepeliev, Tyner & van der Mensbrugghe, 2018). In particular, Canada has put in place efforts to ensure that its dairy industry expands in the future years. It is important to note that the implementation of the USMCA will translate to the United States gaining 3.6 percent of the dairy market in Canada (Chepeliev, Tyner, & van der Mensbrugghe, 2018). Moreover, the share the United States will access is larger compared to that allocated to the European and other Pacific countries. Therefore, the agreement will have its advantages and disadvantages that stem from the fact that Canadian dairy farmers will have to adjust to the conditions brought about by the competition from the United States.
The USMCA paves the way for the entry of more dairy products from the United States into Canada. Besides, there will be an increase in the price that ultra-filtered milk will retail across Canada. The United States will not face a competitive disadvantage when it comes to offering its dairy products in Canada. Therefore, the net effect of the agreement is that the dairy sales by the United States will increase (Hennessy & Feng, 2018). On the other hand, the consumers will carry the burden of increased price. It is important to note that the USMCA prioritizes the promoted by Canada's cultural industries such as those that fall in the dairy category. The primary reason is that these values lie at the center of the identity of Canada and its citizens. However, there will be an issue when it comes to establishing a sense of organizational culture since there will be diversity.
Planning, which is one of the management functions, entails meeting the capacity requirements in a move to ensure the employees selected are in a position to meet the underlying and unforeseen challenges. In particular, there is the need to meet the skill shortages, address workplace diversity, and come up with succession plans. The passing of the USMCA will require the relevant authorities in the dairy industry in Canada to come up with a workforce plan that will ensure the growth of the sector in the future. Moreover, the decisions made need to be consistent with the business practices in Canada. For example, the workforce ought to be skilled, sustainable, and flexible. However, the variations between the organizational cultures exhibited in the United States and Canada will result in a management challenge when addressing diversity.
Secondly, the organizing function will influence the organizational culture of the participants in the dairy sector in Canada following the passing of the USMCA. It is important to note that the organization function entails mobilizing the human, financial, and physical resources in a move to ensure anticipated results are achieved (Chepeliev, Tyner & van der Mensbrugghe, 2018). The Canadian authorities will have to identify the specific activities undertaken by the participants in the dairy sector. The activities range from regulating the dairy inventories to quality control when it comes to the dairy products that enter Canada from the United States. On the other hand, there will be the need to assemble related dairy products into the same category. The primary reason for the move is to ensure the authorities find it easier to coordinate different activities within the dairy sector and thereby the set targets are met. However, the growth in the dairy market share that the United States has access to in Canada means that there will be challenges when it comes to creating an organizational culture that integrates diversity among the participating entities.
Regarding the leading function, most organizations have shifted their priorities to the task that revolve around attaining customer satisfaction, enhancing services, and offering quality products. The USMCA will see a rise in mergers, alliances, and joint ventures among stakeholders in the dairy industry. However, the primary concern is related to the ability of the companies that produce dairy products in Canada to integrate diversity in their leadership roles. Besides, there are advantages and disadvantages that come with adopting diversity in the various management level positions. On the other hand, the increase in the market share for the United States means that diverse workforce will enter the business, which will differ in ages, nationalities, and genders. For this matter, the challenges companies will face in creating an organizational culture that will integrate diversity will affect the performance of the industry as those at the helm will not be in a position to respond in a timely manner.
Controlling entails checking whether the activities within the organization are consistent with the plans that were set earlier. The controlling function is significant as it ensures that there is the proper utilization of resources. Amid the passing of the USMCA, Canada had the intentions of expanding their dairy market. For this reason, the stakeholders in the dairy industry will have to compare the resulting performance with the standard performance. It is important to note that controlling relies heavily on performance that has been achieved in the past. Moreover, controlling requires managers to review the standard performance from time to time since planning and control are closely related (Hennessy & Feng, 2018). However, the entry of more participants in the dairy industry after increasing the market share the United States has access to will mean that there will be challenges in coordination to ensure there is an organization that integrates diversity. Hence, the management issue resulting that affects the controlling function in the dairy industry in Canada will equally affect the planning process.
It is important to note that industries that have exemplified the four management functions and how they relate with diversity have not adopted separate programs. Instead, the policies put in place view the management aspects from a diversity lens. The failure of different stakeholders overlooking their accountability role when it comes to a diverse workforce means that there will be a management vacuum. On the other hand, the passing of the USMCA will require different participants in the dairy industry in Canada to come up with measures that will meet the internal diversity requirement while at the same time fulfilling external needs (Yukins, 2018). In a move to avoid challenges associated with creating an organizational culture that integrates diversity, the individuals at the helm of the dairy industry in Canada need to consider the key areas of the management functions that affect the interaction of stakeholders. Besides, without assessing these areas, the dairy companies will not be in a position to meet the customer needs. Hence, the management challenge that stems from the ability to establish an organizational culture that includes diversity results in the cultural incompetence of the workers and thereby negatively affecting the performance of the dairy industry in Canada.

Problem Identification

After the passing of the USMCA, the dairy industry in Canada will experience price fluctuations which will affect the farmers. The primary reason is the introduction of competition from the United States (Chepeliev, Tyner & van der Mensbrugghe, 2018). It is important to note that in the past years, the organizational culture within the dairy industry ensured that dairy farmers in Canada received substantial protection owing to the stable pricing and no interruption of the Canadian dairy market whenever there are shake-ups in the global market. Therefore, increasing the market share that the United States can take advantage of in Canada affects the management functions put in place in the previous years by the Canadian stakeholders. Moreover, the inability to maintain the previous organizational culture before the entry of competitors from the United States reveals that there will be increased pressure on rural communities, the dairy industry in Canada, and other supporting industries.
The USMCA change will result in management issues if the market participants will not appropriately embrace diversity in the organizational culture. Therefore, the implications of the price floor brought about by the USMCA will lead to reduced margins for dairy farmers in Canada if corrective action is not taken. On the other hand, the pricing system proposed in the USMCA will enable the United States dairy producers to recover the sales they had lost when Canada had locked out dairy farmers from New York and Wisconsin (Hennessy & Feng, 2018). Regarding the implications on rural communities in the event, there are no changes, there will be no significant impact as the supply management system remains unaltered. For this reason, the farmers will continue to enjoy the supply stability. Hence, the disadvantages that come with the passing of the USMCA are coupled with some benefits which mean that the trade pact signed by the United States, Canada, and Mexico will only require slight adjustments.

Possible Alternatives to Solve the Problem

Acknowledging Biases

Description
One of the ways to solve the management issue that stems from the inability to create an organizational culture that integrates diversity is through acknowledging the biases. In particular, there is a need for different stakeholders in the dairy industry in Canada to assess their biases in a move to adopt measures on how to get rid of them. It is important to note that the various participants in the market can adopt a holistic approach and thereby shift the organizational behavior in a move to deliver improved performance (Chepeliev, Tyner & van der Mensbrugghe, 2018). A diverse workforce plays a significant role in ensuring organizations remain competitive in a global environment. For this reason, acknowledging the differences will pave way for managers in the dairy industry in Canada to not only focus on meeting the customer demands but also ensuring the diverse workforce is in a position to come up with better ideas, have enhanced problem-solving skills, and can provide the market with better products.
The increase in the dairy market share that the United States can take advantage of in Canada means that there is a need for quality control and inventory management. In particular, the limits set by the Canadian authorities on dairy processors from the United States reveal that there is bias. According to the organizational culture theory by Nick O'Donnell-Trujil and Michael Pacanowsky, it is evident that organizations have complex systems and more so those that have a diverse workforce (Hennessy & Feng, 2018). Therefore, acknowledging the bias that exists will require managers to closely examine the actions of employees and their backgrounds. For this reason, understanding the stakeholders in the dairy industry in Canada will pave the way for managers to take advantage of the available resources and opportunities to pursue the strategic goals set out during planning. Therefore, the USMCA changes reveal that the dairy market in Canada is quickly getting diverse with time. The change in organizational cultural values and demographics given the entry of dairy processors into Canada from the United States should mean that relevant authorities should gather adequate information about the stakeholders and develop ways of expanding the dairy industry.
Pros and cons
One of the advantages of acknowledging biases that exist in the dairy industry in Canada when it comes to integration of diversity into the organizational culture is that the stakeholders will become more profitable. Upon acquiring relevant information of the stakeholders in the dairy industry in Canada, having a diverse workforce will act as a stepping stone for expanding into new markets. Secondly, there will be quality marketing of dairy products in Canada when organizational leaders acknowledge the existing biases (Jones, 2018). The primary reason is that there is a cultural sensitivity that helps the managers to draw appropriate insights that will foster the growth of the dairy industry. On the other hand, the cons that present themselves when solving management issues that stem from integrating diversity in the organizational culture by acknowledging biases include negative stereotyping and misinterpretation. In particular, misinterpretation will arise if there is no effective communication.
Analysis
The acknowledgment of biases will assist in solving the management challenge that arises when it comes to the integration of diversity into the organizational culture of companies involved in the dairy industry in Canada. It is important to note that the advantage of this alternative is that improved profitability will be generated by increased competition. Moreover, a diverse workforce in the dairy industry will have a positive impact on the overall business of the dairy processors in Canada (Yukins, 2018). The primary reason is that the companies will manage to earn financial returns that are higher than the national industry average. Concerning the quality marketing advantage, the stakeholder in the dairy industry will take a market-specific approach and thereby expanding the dairy industry. However, the negative stereotyping that arises from acknowledging biases in the dairy industry will create a new problem whereby the rural communities may over time become invaluable when it comes to supplying milk to dairy processors.

Adopting Formal Project Plans

Description
In a move to create an organizational culture that integrates diversity in the dairy industry in Canada, there is a need for adopting a formal project plan that cuts across all the participating companies. The primary reason for this is to ensure the plan used by the stakeholders has been tested and proven. It is important to note that there the duration of the project plan comes in handy when it comes to cultivating a diverse organizational culture (Yukins, 2018). Besides, the variations that arise whenever the managers take personal points of view when developing plans makes it difficult to foster diversity among the stakeholders. For this reason, adopting a formal project plan for the dairy processors in Canada will ensure the decisions made rely on objective information. Therefore, the high level of agreement and conformity will ensure the dairy industry grows in the future as the fewer difference serves as a potential asset for expansion.
The adoption of a formal project plan will ensure the diverse workforce perceive the procedures outlined in the USMCA changes in a similar manner. For this reason, the stakeholders will manage to identify the resources needed to increase their profitability. According to the Scientific Management theory by Frederick Winslow, coming up with the appropriate way of completing tasks paves the way for efficiency (Hennessy & Feng, 2018). Besides, adopting a formal problem-solving approach will come a long way in harnessing the divergent views. Therefore, the stakeholders in the dairy industry in Canada will manage to improve their overall productivity.
Pros and cons. The advantages of adopting a formal project plan when it comes to integrating diversity in the organizational culture of participating companies in the dairy industry in Canada is the increase in productivity and improved performance. In particular, the diverse workforce will have a common goal that will steer them towards attaining the set targets (Jones, 2018). On the other hand, coming up with a formal project plan may result in conflicts whereby the different stakeholders prefer their unique working style. For this reason, the failure to recognize the approaches of some stakeholders will have an adverse effect on productivity.
Analysis. The adoption of a formal project plan plays a significant role when it comes to integrating diversity in the organization culture. In particular, the diverse workforce includes individuals with different levels of expertise and skill. Therefore, with a formal plan, the problem-solving process will be relatively easier. Besides, higher performance of dairy processors in Canada will accelerate the competition and thereby expanding the dairy industry (Jones, 2018). However, a problem arises as the collaboration of stakeholders from diverse backgrounds differs widely and thereby setting a formal plan will make operations of some stakeholders inflexible. Hence, the adoption of a formal project plan is the most effective way of solving the challenges of integrating diversity in the organizational culture.

Recommendations

Assessing the acknowledgment of biases that exist and the adoption of a formal project plan reveals that the first option is the best when it comes to solving the problem of integrating diversity in the organizational culture. It is important to note that acknowledging the biases that exist in the organizational culture helps in making the communication process effective. Besides, identifying the biases will ensure that communication across different businesses, levels, and functions is consistent with the information gathered from the stakeholders in the dairy industry in Canada. On the other hand, acknowledging the biases that exist will pave the way for stakeholders to pursue opportunities in diversity. In particular, the market is subdivided into segments which the diverse stakeholders can easily tap the available opportunities. Acquiring relevant information about certain dimensions of diversity gives the participating entity an upper hand when it comes to emerging trends (Chepeliev, Tyner & van der Mensbrugghe, 2018). For this reason, better services will be offered to customers while dairy processors adopt an appropriate method of approaching the market. Apart from creating an organizational culture that integrates diversity, the dairy industry participants will manage to expand their businesses.
Secondly, acknowledging the biases that exist when it comes to the organizational culture serves as a way of leveraging diversity and therefore bettering the reception from the local dairy processors in Canada. It is important to note that the traditional organizations adopted the hierarchy of authority that ad a rigid structure. For this matter, there were regulations on who could have access to a specific set of information. However, acknowledging the biases means that there are no limits when it comes to the collection of information. Therefore, the stakeholders in the dairy industry will not overlook the specific set of skills possessed by the dairy processors from the United States (Hennessy & Feng, 2018). In a move to retain a significant market share, the United States will need to evaluate the demand speeds in Canada from time to time. On the other hand, the local dairy processors acknowledging the abilities of their counterparts will ensure they compete in an environment with no specific boundaries. Moreover, the stakeholders in the dairy industry in Canada will be able to carry out their operations across different functions and levels. Hence, acknowledgment of biases in the dairy industry with regard to integrating diversity in the organizational culture will pave the way for joint operations and thereby expanding the dairy sector in Canada.
Taking a forecasting look, it is evident that acknowledging biases in the organizational culture will help the dairy industry in Canada in the future. In particular, the alternative to acknowledging biases challenges the norm that has prevailed in the dairy sector for a long period. The process of gathering information from the stakeholders in the dairy sector in Canada entails questioning the status quo which comes a long way in identifying the standard practices. It is important to note that management issues surrounding quality control of dairy products rely heavily on the independent operations of stakeholders when it comes to the roles, norms, practices, and policies that were intended when passing the USMCA (Yukins, 2018). Therefore, acknowledging the bias in organizational culture in the dairy industry will bring about flexibility and hence solving inappropriate behaviors within a short duration. Subsequently, there will be the implementation of decisions by managers of dairy processors that will see the growth and expansion of the dairy industry in Canada. Hence, the organizational culture of the dairy companies in Canada will have taken into account the need for diversity.

Implementation Ideas

Translating the alternative idea of acknowledging the biases in the organization culture to reality requires a step by step procedure. Therefore, the participants in the dairy industry need to harness the necessary resources that include personnel and financial resources. The first step entails conducting an audit that seeks to determine the job descriptions that are available in the organizational structures of all the participating entities. The next step entails showing the commitment to integrate diversity in the organizational culture of companies operating in the dairy industry in Canada. The results obtained from the job descriptions gathered will come in handy in determining the objectives of companies within stipulated periods that may be monthly, half annually, or annually. The third step will require initiating an inclusion program whose primary aim is to foster the growth of the dairy industry. In a move to determine the unconscious biases in the organizational culture, there is the need to carry out blind screenings that gather information regarding the backgrounds of dairy farmers and other participants in the dairy industry. Creating an organizational culture that integrates diversity needs the stakeholders in the dairy industry to request a wide range of referrals (Chepeliev, Tyner & van der Mensbrugghe, 2018). For this reason, the dairy companies will be in a position to source a diverse workforce that possesses the necessary expertise mandatory for the growth of the dairy industry in Canada. Lastly, adopting a structured training and interviewing process will ensure the companies carrying out operations in the dairy industry integrate diversity in their organizational culture.
The time frame of implementing the alternative ideas will vary depending on the step of turning the idea into reality. For example, obtaining the results from the job descriptions will occur in the short-term. In particular, the period may be approximately six months into the job. Equally, the audit of the job descriptions will take place in a predetermined short-term duration. On the other hand, adoption of an inclusion program will be long-term as this is a perpetual process. The same case applies when it comes to requesting referrals in a move to source a diverse workforce. Regarding the diversity program, the process will require a long duration owing to the ever-changing business needs in the dairy industry in Canada (Hennessy & Feng, 2018). Besides, the business needs are significant when it comes to the expansion of the dairy industry. Hence, the steps that require a short duration entails relatively fewer responsibilities when it comes to integrating diversity compared to the long-term processes. Concerning the potential costs involved when converting the alternative idea of acknowledging the bias in the organizational culture, there is the need to determine the value of supply-managed dairy products in Canada. The OECD data reveals that the cost of the dairy products averages $2.9 billion annually (Yukins, 2018). Therefore, the value translates to a relatively bigger number of stakeholders in the dairy industry in Canada. The potential cost associated with implementing the alternative idea of acknowledging the biases in the organizational culture show that it is around 6 percent of the value of dairy products demanded. Hence, the potential costs amount to approximately $174 million annually.

References
Chepeliev, M., Tyner, W. E., & van der Mensbrugghe, D. (2018). How US Agriculture Will Fare Under the USMCA and Retaliatory Tariffs (No. 84). GTAP Working Paper.
Hennessy, D. A., & Feng, H. (2018). America’s Dairy Industry Facing Difficulties from Long-Running Structural Changes. Choices: The Magazine of Food, Farm, and Resource Issues, 33(4).
Jones, K. (2018). Environmental Concerns and Willingness to Pay for Genomic Technologies in the Canadian Dairy Industry (Doctoral dissertation). The University of Guelph. Ontario, Canada.
Yukins, C. R. (2018). The US-Mexico-Canada Agreement (USMCA): Some Surprising Outcomes in Procurement. GWU Law School Public Law Research Paper, (2018-45), 60.