Organisational Development and Change - Term Paper Example

?Radical Change in Associated Dairies & Farm Stores Limited Introduction Owing to contemporary consistent global financial crises and global market complication, several global multinational organisations have in the last few decades experienced a slump in their productivity and profitability. In the extreme cases, some transnational organisations have as well suffered from bankruptcy and other severe financial difficulties which have threatened their existence in global market (Romanelli and Tushman 1994, p.1141). The Associated Dairies & Farm Stores Limited is a good example of an organisation which has experienced financial snag in the recent past. On the other hand, in the development process, a large organisation may come face-to-face with momentous need for radical and fundamental change. In most instances, changes in a large organisation may be triggered by several circumstances that include: emerging threat from a competitor, decision to expand the company’s market, unexpected reduction in the company’s production and profitability, change in customers’ needs and demands as well as sharp slide in the company’s production (Pardo Del Val and Fuentes 2003, p.149). Therefore, to ensure the success of any radical change in an organisation, leader and managers ought to come up with a promising and an effective mechanism to facilitate effective implementation of the required change. Additionally, the adoption of a strategy that would incorporate ideas and views from all stakeholders is also essential and critical for the company’s development (Thornhill, Lewis, Millmore, and Saunders 2000, p.11). The essay below will as a result identify and expound on the most effective means of addressing the financial crises in Associated Dairies & Farm Stores Limited Introduction to change As defined, change in an organisation entails a structured approach that is aimed at ensuring that transformation in an organisation is successfully implemented. Changes in an organisation are strategies that are intended at facilitating maximum productivity. However, contemporary constant, innovation, and globalisation have severely complicated radical transformation in multinational and local organisations. Recent inventions such as the introduction of social media and mobile phones have as well called for immediate adoption of effective strategies and mechanisms to businesses to facilitate prosperity in global markets (Weick and Quinn 1999, p.381). Moreover, due to emergence of technological growth, most changes in modern organisations are to a great extent motivated by exterior innovation as opposed to interior moves. On the other hand, renovation of employees’ attitude, administrative changes, improvement of the quality of services and products as well as adoption of emerging technology and innovation are some of the main changes that take place in many organisations. By referring to the available literatures, any change in an organisation has a considerable impact to the operations of entire organisation. However, despite the outstanding and inspiring impacts of modern development and changes to industrial profitability, many organisations have continued to experience endless resistance from employees and other stakeholders. Moreover, changes in an organisation alter the conventional politics, culture process, and design. Brief background of Associated Dairies & Farm Stores Limited Associated Dairies & Farm Stores Limited commonly known as ASDA was initiated by a group of farmers in 1920. The business was designed to sell milk products. Due to its effective management, the company expanded to include retail sale of other products such as meat products, non-food business, and bakeries. Associated Dairies & Farm Stores Limited is current a universally known United Kingdom supermarket chain. The supermarket sells retails food products, toys, and general merchandise. Apart from relying on the general goods, the Associated Dairies & Farm Stores Limited is also known for its excellent financial services delivery (Associated Dairies & Farm Stores Limited Web, 2012, par. 3). The organisation’s head office is situated at Leeds, West Yorkshire. In 1999, the company became a subsidiary of American retail giant Wal-Mart. The business philosophy is to be the lowest selling business with customers needs always in mind. In it expansion process, the business has over years capitalised on opening new stores in out-of-town corners. The business also targets value-conscious customers. On the other hand, due contemporary technological development, multifaceted customers’ demands and needs, in 1991, the business introduced an increasing profit strategy which entailed offering higher-priced value-added products to its customers at a reduced price. However, despite of it success implementation, the strategy failed to succeed and as a result, the business lost price-leadership position in local and eventually lost most of its customers (Associated Dairies & Farm Stores Limited Web, 2012, par. 3). To counter the massive damage which was brought about by the plan, the company was forced to introduce a series of changes which included replacing its management team. Apart from improving its customer’s services and refurbishing its programs, the business was as well compelled to diversify and acquire other businesses which included: Maples, a chain of furniture and carpet retailers, Allied Retailers, and Gateway stores Crisis situation Despite of its radical transformation and intensive promotion mechanisms, the business had encountered a financial crisis. The ?4.5 billion chain supermarket has ?1billion debt. The business stock price has as well encountered a crash of over 100 pence to below 30. Moreover, the business has turned out to be more hierarchical and bureaucratic. Apart from the identified blander, the company has other several shortfalls which have threatened its survival in local and global market (Associated Dairies & Farm Stores Limited Web, 2012, par. 3). Change and intervention model Due to the complicated nature of the company’s financial situation, the business ought to adopt a holistic and a systematic model that would adequately address the crisis. On the other hand, the model should incorporate ideas and suggestions from all players (Caldwell 2003, p.287). As defined, organisational transformation is the entire process of adjusting the organisation to the changing environment. Therefore, to ensure the survival of Maples a chain of furniture and carpet retailers which are subsidiaries of ASDA, the company ought to use the three dimension approaches of change which entail: undertaking intensive research to understand the complexity of the intended changes, understanding the depth of the intended change as well as evaluating the pervasiveness of the intended changes. On the other hand, to holistically tackle the problem, the top management should adopt changes that would transform the company’s management, facilitate the recruitment of qualified and experienced management, and ensure systematic firing of the underperforming employees and management. In addition, transforming the financial department by employing prominent professionals is as well essential for the prosperity of the company. To adopt the most effective prevention measures, the company should undertake a comprehensive analysis and evaluation to understand the main causes of the prevailing problem. To retain its previous dominance in local market, Associated Dairies & Farm Stores Limited should introduce and implement changes across all dimension including tangible elements and abstracts elements in organisation. The proposed changes should as well incorporate micro and macro changes which will involve altering the organisation context, strategic context as well as emotional context. Effective training is also very critical to the success of the organisation. The introduction of all-inclusive training program is very vital in realising the lost prosperity of the organisation Theories and Framework Theory X and theory Y Theory X emphasise on productivity. According to theory X, employees should be rewarded according to their achievement. In this theory, management assumes that, employees are lazy and can avoid work. As a result, management believes that, workers should be closely supervised by introducing a systematic control mechanism. As stated by Theory X, without an enticing incentive program, employees demonstrate very limited ambition. On the other hand, as per theory Y, management assumes that, employees are ambitious, have self control and self-motivated. The theory believes that, employees enjoy physically and mentally in their work (Gersick 1991, p.35). Although Associated Dairies & Farm Stores Limited have in the past adopted planned changes at different levels in their strategies, more that 70% of the introduced plans have failed. This is especially due to the employment of Theory X and theory Y in a different way. In this case therefore, despite working on the soft element of change in the organisation, the Associated Dairies & Farm Stores Limited hierarchal level ought to be broken down. The focus should not be entire on the employees’ performance but should as well focus on building a new organisational culture. Restructuring of the business and freezing of wages to non-performers is therefore paramount and essential. On ensuring its prosperity in global market, the company should also focus on introducing a special total-quality program to ensure quality service delivery. Through systematic innovation, the business should as well set out a culture that will adopt and encourage evolution and intensive research and experimentation. Moreover, to attract more customers in the business, the company ought to set risk-free zones stores to enable the newly recruited managers to reorganise the store structures and layouts in order to improve the store turnover. Effective restructuring of the business infrastructures as well as the improvement of the quality of workforce is a clear demonstration of how the theory X and theory Y can be effectively used together in necessitating effective coordination, creativity, and commitment in the business. Proper coordination in the business will advance the firm’s competitive advantages duties (Allen, Jimmieson, Bordia, & Irmer 2007, p.187). Top-Down Transformation’ or ‘Bottom-Up Change’ Top-Down and Bottom-Up strategies entails knowledge ordering and information processing strategies. Top-Down approach is the process of gaining insight into compositional sub-systems. Each sub-system is thereafter given its own responsibilities and duties (Allen, Jimmieson, and Bordia, & Irmer 2007, p.187). Bottom-Up approach entails bringing together different systems to come up with a grander system. The determination of the most effective mean to apply in addressing organisations issues depends on the structural nature of the organisation as well as the organisation needs and deficiency. In the case under study, the most effective means of achieving the objective of the organisation is through the introduction of the two approaches. By this, the new management should drive changes from the top rank and at the same time involve the bottom employees and storekeepers in the organisation decision making process. The management should start by addressing the business basic demands which includes developing mechanisms to lower prices in order to advance the company’s competitive advantage. All changes in the organisation should also start from the lowest store-level and proceed upwards. The powers should as well be shifted from the business head quarters to stores. This plan will aid in necessitating immediate feedback and effective communication duties (Allen, Jimmieson, and Bordia, & Irmer 2007, p.187). Change Elements Cultural Change To effectively improve the company’s performance, dialogues between customers and employees should be facilitated by creating customer and colleagues programs such as “Tell Archie”. This will give customer effective a chance to directly voice their concerns to the organisation’s management. Shopping should also be presumed to be a fun process which entails adequate incorporation of employees and customers. On the other hand, the business should as well institute customers care desk in all its outlets to necessitate immediate feedback from the customers. Policy and Store Changes The business should also introduce a renewal program that would target low-performing stores and stores that are head by average competent managers (Mintzberg, Lampel, Quinn, and Ghoshal 2002, p. 23). On the other hand, the program should also focus on competitive locations. The top management should as well work closely with store managers to necessitate effective breakdown of discouraging chain taboos. A policy to guide all employees in the business on the most effective means of adapting to the proposed changes is also inevitable and essential. Additionally, to minimise repetition of the current financial crisis in the business, the company ought to introduce a three years plan to revitalise and develop all aspects in the organisation including altering some of its main objectives. The three years objective should be designed to necessitate the development of a broader objective that will facilitate financial stability, develop mechanism of clearing debt, create profitable businesses and alter its programs to set and improve a new workable culture duty (Allen, Jimmieson, Bordia, & Irmer 2007, p.187). Mission change Apart from laying down an effective recovery plan and change objective, the new team should set out new mission statement. The mission statement should be focused on incorporating the ideas and opinions of all players in the transaction process. The identification of a new mission statement will be very essential in setting new goals and means of achieving them. The company should as well expand its target population by incorporating middle class people and low class section of the population. Leadership Style Associated Dairies & Farm Stores Limited requires a leader who will exercise power energetically with passion and wisdom (Zaleznik 1992, p. 11). The leadership in the business should as well encourage people participation in the projected changes. The new company’s leader should also have the capability of implementing the proposed changes on the organisation structures, systems, power relations, and culture. The new leadership must as well be an enabling, energizing, and envisioning leader. Moreover, the new leader ought to have the capability and experience of overturning the potentially bankrupt business into profit generating organisation and with highly motivated staffs. The new leader should as well display the characteristics of an effective manager, an active team member, and demonstrate commitment towards the company radical changes. To succeed in improving the current status of Associated Dairies & Farm Stores Limited the new leaders in the organisation should holistically incorporate the ideas and decisions of all players in their decisions. Effective communication between the company’s leadership and the employees should as well be the main pillar of the Associated Dairies & Farm Stores Limited management. Conclusion In the light of the above, analysis, it is clear that radical change is incredibly critical in modern global market. This is due to the fact that contemporary market is very complicated and technologically oriented. To effectively prosper in modern market, multinational cooperation and local businesses ought to undertake intensive researches that will lead to the identification of the most effective marketing strategy. Leadership in any organisation plays a vital role in necessitating the success of an organisation. In the case of Associated Dairies & Farm Stores Limited, it was clear that poor leadership played an exceptionally essential role in the downfall of the company. Employees and other stakeholders were not adequately incorporated in the company’s decision making process. The adoption of the most effective leadership theories and models has over the years proved to be extremely effective in necessitating efficient management of an organisation. To effectively deal with the financial crises in Associated Dairies & Farm Stores Limited, the business ought to recruit a new leader who holds all the required traits of a competent leader. All players should as well be included in the company decision making process and in the entire change process. References Allen, J. Jimmieson, N.L. Bordia, P. & Irmer, B.E., 2007, “Uncertainty during organizational change: managing perceptions through communication”, Journal of Change Management, 7(2): pp187-210 Associated Dairies & Farm Stores Limited, Web, 2012, Retrieved on 3rd Dec 2012, from: www.asda.com/ - United Kingdom Caldwell, R., 2003, “Change leaders and change managers: different or complementary?”Leadership and Organisation Development Journal, Vol. 24, No 5, pp 285-293 Gersick, C., 1991, “Revolutionary Change Theories: A Multilevel Exploration of the Punctuated Equilibrium Paradigm”, Academy of Management Review, 16 (1), pp. 10- 36 Mintzberg, H., Lampel, J., Quinn, J.B., and Ghoshal, S., 2002, “Fourth Edition the Strategic Process: Concepts, Contexts, and Cases”, United Kingdom: Pearson Education Limited. Pardo del Val, M. & Fuentes, C.M., 2003, “Resistance to change: a literature review and empirical study”, Management Decision, 41:2 pp 148-155 Romanelli, E. and Tushman, M.L., 1994, “Organisational Transformation as Punctuated Equlibrium: An Empirical Test”, Academy of Management Review, 37 (5), pp. 1141-1166 Thornville, A., Lewis, P., Millmore, M., and Saunders, M, 2000, “Human Resource Strategy Approach: Managing Change”, United Kingdom: Pearson Education Limited. Weick, K.E. and Quinn, R.E., 1999, “Organisational Development and Change”, Annual Review of Psychology, 50, pp. 361-386 Zaleznik, A1992, “Managers and Leaders: Are They Different?” Harvard Business Review On Point, Product No. 83, vol.34, p. 1-11. Read More