Change Management and Leadership in Dell company - Essay Example

? Change Management and Leadership - Dell Change Management and Leadership - Dell Introduction The definition of change management can be given as effective execution of the organizations policies after acquisition or merger of other firms. The focus of change management is to look after all the management process that needs to be considered when working with new team members or management. In many cases, the new management often does not adjust with the organization that has acquired the firm, thus creating problems for the management (Scheer, et al., 2003). Because of various issues, these business entities do not accept the change of management, and involves themselves in different actions that are not in favor of the organization thus, resists change. The consequences of this resistance in change is poor performance of the firm in terms of manufacturing, production and distribution and this is the reason that change management has become very essential for the firms. The operations of organizations are effectively looked-after by change management including logistics, purchases, and controlling (Scheer, et al., 2003). The organization change is not only dependent on the resources and technology of the organization, but it depends on setting mindset of the employees positively towards the organization and creating an organization culture where flexible environment is made for all employees so that the maximum output can be extracted from them (Scheer, et al., 2003). Therefore, a responsible leadership should be able to implement changes in the organization and should motivate the employees for giving their maximum energy for their organization not only for increasing the revenue, but taking competitive edge over the rivals. Dell’s Change Management: Michael Dell founded Dell in 1984 on the basis that the company will sell their computers directly to the end user. The aim of the company was to understand the needs and requirements of users and providing operating systems that will meet the needs of those users. The company is the one of the largest and most well renowned companies around the world for selling reliable IT related product. The mission of Dell is to become the most successful computer firm of the world by providing the best customer services to clients. The company has more than 40000 employees and it maintains a large corporate culture as different team members belonging to different regions works together for Dell (Hill & Gareth, 2009). The company aims for change management because of maintaining consistent growth and become the market leader in mobile computing industry. Different brands of Dell plays an important role in making the company market leader because Dell acquires products of other strong brand and then making these products merge into a large company. After acquiring these brands, Dell improves overall operations of the brand, gives comprehensive training to its employees, and introduces new technology in their systems, which help the company to introduce these brands as reliable dell products. The acquisitions of these brands results in economies of scales, which makes the distribution network of Dell stronger, and the company is able to cater many regions with the help of these brands (Hill & Gareth, 2009). The vision of Dell for making change management is to increase its business growth consistently and increasing the revenue of the company at the same time. In order to achieve this change management successfully, the company focuses on the following four elements: (i) The company focuses on taking the market share of the mobile computing industry by making efforts to improve the production of their products. (ii) Change management helps the company to improve its overall efficiency and decrease the cost of production. (iii) Dells aim to enter in new market where there is a chance of expanding and company can become the market leader in these regions. (iv) The company creates the value of shareholder by growing continuously with the help of selecting specific acquisitions (Jones & Mathew, 2008). Dell’s Leadership: Michael Dell used transformational leadership style for motivating employees to go beyond their self-interest and work collectively for the prosperity of their company (Jones & Mathew, 2008). The transformation leader is considered an attractive leader that has an ability to change optimism of the employees working in his organization, into practical achievement. The transformational leader connects strategy of the organization with emotional factors, playing an imperative role in organizational change structure (Tang, 2006). The leadership in Dell communicates vision and mission of the company to all employees in such a manner that they work for making the business operation positive and make valuable decisions for their organization. The leadership of Michael Dell helps the company to make more acquisitions as Michael Dell gives value to customers and partners that are performing businesses with Dell. The leadership style of Michael Dell is such that he has interpersonal style of communicating with customers and stakeholders, making them feel that they are part of Dell Corporation (Lakshman, 2008). In 2006, when Dell announced a target more than $60 billion, the leadership of the company has to make many changes in terms of the development and acquisition and make them as a basic priority of the company (Hill & Gareth, 2009). The leadership of company realized the fact  “Hi-Po” program of the company cannot give attention on all aspects of training therefore they make a difficult choice and selected critical competencies in their training programs. The company believes that successful team is based on individual leadership because self-awareness is considered as essential competency. For developing the competency in new business entities of Dell, the leadership chooses Interactive Associates for creating learning process (Lakshman, 2008). These actions of leadership were considered bold as compared to previous experience and tradition of the company (Lakshman, 2008). According to Tang, there are many ways that transformational leader endorse the organization in which some are contribution in the organization, increasing working capability of the personnel, vibrant, and self-achiever (Tang, 2006). If the leader is capable for making followers convinced with his goals, then it is apparent that the organization will get high recognition for achieving these goals, from every part of the society. In previous studies, it is found out by researchers that role of transformational leadership is connected with the performance, job satisfaction and increased output from the employees (Tang, 2006). The transformational leader respects people working for his organization therefore, the performance and job satisfaction of these people will be lifted by the leader, because when activities and participation is promoted, the recognition of the organization is also increased. This way, the transformational leadership can increase efficiency of the personnel and they will make an extra effort according to the set organizational targets. The transformation leader has the talent to follow organizational strategy, because employees are the followers of the leader, and they will give extra efforts to wok according to the strategy made by the organizational leaders (Tang, 2006). Dell’s Leadership influencing Change Management The Change of Employees: The employees are known as the people who work for business of other people and getting incentives in terms of salary, wages, etc. The legal definition of employee is person hired for giving services to the organization and getting compensation in return for these services. The employees are termed as foremost component of the organizations as they are providers of the products and services making business entities as corporate, government bodies and organizations. Without employees, owners cannot run the business function of the organization effectively and organization cannot increase the scale of production without employees. After understanding the importance of the employees, the leadership of Dell motivated their employees for making them work more properly in order to manage the change (Lakshman, 2008). A leader should be persuasive or influential in order to battle with the organizational change and should compel employees that change will be useful and valuable for them. The tempting capability of the leader allows him to support alteration of change for his employees and for himself. The leadership of Dell builds positive communication with employees consistently so that company’s objective is properly meet by the employees (Lakshman, 2008). Communication plays an extremely fundamental and significant task in the development of change. If there is a communication breach among the manager and workers, then the organization cannot compete with the changes. Anticipated thinking and follow-ups are obligatory for the leader to communicate before, during and after the change process in order to get the positive outcomes from the employees and the organization (Dreschsler, 2011). The Change of Organization’s Structure: Michael Dell as a leader understood the importance of cutting cost therefore, company decreased its management expenses and direct coordination made with customers in order to eliminate the role of distributors. This was the time when Dell’s leadership decided that customer service should be given prime importance in order to retain their market share and profits. For initiating this change, leadership decided to hire top consultants for the company so they can collect relevant information on the customer attitude and staff of Dell (Lakshman, 2008). After observing report of consultants, Dell’s leadership realized that there was a big gap between consumers’ expectation and the employees therefore; an initiative was taken by Michael Dell in which organizational culture of Dell was being enforced to change as customer oriented instead of staff oriented (Lakshman, 2008). The leadership of the organization serves as a catalyst in the process of change and it is the leadership who make possible that organizational environment in the change process remains positive and expected outcome can be attained in the given period. Also the leadership is considered as a sole entity in the organization which can build a culture of organization more strong by regularly evaluating and exploring the environment of organization (Luscher & Lewis, 2008). When the leader discovers a certain area that needs to be developed and changed, he makes the decision which kind of change is required in that area and whether change will be beneficial for the company or not. Leader has potential to forecast possible issues of the company and their assessment. For managing this pressure is considered basic spirit of a successful leadership approach. Leader and organization’s work force make positive relationship with the culture of organization, traditions, and with work symbols that supports them to determine working environment (Luscher & Lewis, 2008). The Change of Organization’s Strategy: The leadership of the company made a strategy in which direct coordination made with employees and customers, indicating slim organizational structure of the company (Nigel, 2012). The five components of the company made responsible for directly coordinating with Michael Dell which means that leader wanted to make improve communication and integration of staff within the company. The leadership of Dell introduced a performance appraisal system in which employees were encourage to provide better services to the customer and in return receiving increase salary and other benefits from the company. For implementing this change process successfully, Michael Dell made more investment by improving facilities inside the operations area and tried to improve IT network that can improved the services provided to the customers (Nigel, 2012). The encouragement of the personnel is necessary, as they are uncertain in the change process because of losing their position in the organization. Motivation is vital in the change designed by the organization because the workforce may not agree with management’s decision of changing the organizational structure therefore they can damage the reputation of the organization by making others feel that the organization is not going toward the right direction (Dreschsler, 2011). Therefore, motivation is considered as neutralizer that results catering the clientele with enthusiasm required to handle business operations in the right manner. Rewarding and acknowledging the workers is the best motivational technique to make the employees relaxed and contented in the change process (Dreschsler, 2011). Actions taken by Dell’s Leadership for Management Change Product Penetration: In order to decrease the cost of new product, Michael Dell used online store to sell different products of the company. This is made possible with the help of internet marketing and other packages in which company was successful for making customer aware of various products of Dell (Sharan, 2008). The leadership of the company encouraged employees to perform different marketing campaigns that include public relation, mass marketing via media, promotional offers and sales promotions. The company regularly performed market research in which feedback was taken from customers and corporate clients. After taking feedback from the clients, leadership of Dell made sure that customer’s feedback was properly utilized for the improvement of products or customer services. The leadership introduced new strategies where innovation was brought in their operations helping Dell to increase its sales volume and customer’s satisfaction (Sharan, 2008). Improvement in Technology: After understanding the fact that most vital source for taking competitive advantage in this business is technology, the leadership of Dell implemented new technology in their system. The involvement of leadership in making innovation became so high that it is considered as the main advantage of Dell for having better access to technology comparing to other companies (Luscher & Lewis, 2008). The leadership of Dell in collaboration with other partners introduced new technology in their systems very fast and their indirect distribution system helps the company to sell this new technology with more profits (Hill & Gareth, 2009). Improving Efficiency of Operations: The direct selling model implemented by Michael Dell helped the company to reduce its marketing and sales expense, as there were no intermediaries involved between the company and customers (Nigel, 2012). By selling them directly, the part of the retailer was eliminated which help to increase the overall revenue. The main advantage that the company received from Michael Dell’s model was the direct coordination with the customer helping the company to understand their demands and requirement from their feedback. This model also helped Dell to learn unmet demand of customers by reviewing their sales trends directly gathered and observed by the leadership of Dell (Scheer, et al., 2003). Transformational Leadership Theory For extracting maximum output from the employees, it is important for the leader to motivate and inspire team members involved in the company to go beyond their basic task for achieving organizational goals. For this purpose, the “Transformational leadership” is the most considerable leadership style that can be found at every organizational level. The transformational leaders are creative thinkers having appeal to motivate staff for performing different activities (ManagementStudyGuide, 2012). Transformational Leadership Model Source: (ManagementStudyGuide, 2012) The transformational leader has vision and values and they know how to inspire people for the betterment of their organization. The transformational leader is enthusiastic leader who believes in teamwork and taking other people along with him (ManagementStudyGuide, 2012). These leaders motivate their subordinate to take creative and useful decisions, and they are not hesitant in bring other people upfront. The transformational leader believes that people are only motivated when leader himself practices what he taught to the followers. These types of leader give first priority to the followers and sacrifice their own advantages for them (ManagementStudyGuide, 2012). While acting as a mentor for the followers, the transformational leader gives rewards and benefits for accomplishment of his followers and support is provided to transformational leader to make decisions (ManagementStudyGuide, 2012). In change management, Michael Dell acted as a transformational leader because he led his company from the front and make difficult decisions for his company. He made direct coordination with lower staff and the customers, which motivated employees of Dell to give their best for the company and followed Michael Dell as an inspirational leader. Summary The change management of Dell was necessary as the competition in the industry was getting tougher and the new companies that Dell was acquiring should understand the environment and culture of Dell. The process of change management in Dell was not easy task, and it took time for the company to adapt all these changes that was brought by the leadership. Michael Dell acted as a transformational leader for the company, because he motivated his employees to work for the betterment of Dell and bring innovative ideas for the company (Scheer, et al., 2003). For preventing resistance of change in the company, Michael Dell introduced new incentive and salary packages based on their performance, which motivated them to work for improving operations of their company. The leadership of Dell influenced change of employees, change of the organizational structure and strategy in change management process (Luscher & Lewis, 2008). They made positive communication with the employees in order to retain them and increased their output. In order to decrease expenses and improve efficiency towards the change, Michael Dell directly coordinated with his lower management that motivated them to increase their output for Dell. As a transformational leader, Michael Dell applied different strategies to increase sales of Dell in which the most important strategies were product penetration and bringing innovation (Sharan, 2008). After reviewing Dell’s case, it can be said that success of the company is dependent on its leadership and if leadership is transformational, then there are chances that the company will succeed in the industry. List of References Dreschsler, A., 2011. Employee Resistance: Identification of Recommendations on how to manage the Discrepancy between Employees’s Needs and the Requirements Organizational Change Makes on Employees. Norderstedt: GRIN Verlag. Hill, C. & Gareth, J., 2009. Strategic Management Theory: An Integrated Approach. Mason: Cengage Learning. Jones, G. & Mathew, M., 2008. Organizational Theory, Design, and Change, 5/E. New Delhi: Pearson Education India. Lakshman, C., 2008. Knowledge Leadership: Tools for Executive Leaders. London: SAGE Publications Ltd. Luscher, L. & Lewis, M. W., 2008. Organizational Change and Managerial Sensemaking Working through Paradox. Academy of Management Journal, 51(2), pp. 221-40. ManagementStudyGuide, 2012. Transformational Leadership Theory. [Online] Available at: [Accessed 12 August 2012]. Nigel, P., 2012. Market-Led Strategic Change. Oxford: Butterworth Heinemann Publications. Scheer, A. W., Abolhassan, F., Jost, W. & Kirchmer, M., 2003. Business Process Change Management: ARIS in Practice. Saarbrucken: Springer. Sharan, V., 2008. International Business 2/e, Concepts, Environment and Strategy. New Delhi: Pearson Education India. Tang, Y. T., 2006. Transformational leadership, job motivation, and employees' innovational behavior. Journal of Human Resource Management, 6(4), pp. 46-66. Read More