The Problem of Change Management in D2 - Essay Example

? Analysis OF D2 Definition In this tumultuous business environment, the significance of change management in organizations has been a widely investigated area. Change management in organizations has been able to gain plenty of attention from the researchers around the world. Harigopal (2006) emphasizes that organizational change is an indispensable process for the expansion and growth of a business. It is often regarded to be a complex process, as a particular change which may have worked in an origination may not provide the same results when implemented in another organization. Therefore, it is necessary that the change to be implemented must be congruent with the complexity, dynamism and uniqueness of the organization. The rapidity of change which is taking place in economic, social and political environments is having a strong impact on the individuals as well as the organizations. Although change is s constant process, the velocity and promptness have always differed. As a result of the changes in the external environments, organizations are forced to make various changes in their system of operation. Thus, we find a number of companies undergoing strategic changes in order to cope with the prevailing challenges. A strategic change is defined as change process where a company restructures its marketing or business plan on a broader context. The principal intention for making strategic changes is to satisfy organizational goals and harmonize the organizational activities with the external business environment. However, strategic change does not always mean alteration in the entire business plans; sometime it also refers to small scale changes. According to Chen et al. (2013) organizational change management is a crucial activity of the organizations. Jones (2004) stated that organization mainly changes for two reasons. One of reason can be the response to the changing external environment and another reason can be the reaction of the company to a particular crisis situation. Haveman, Russo & Meyer (2001) states that organizational change also becomes evident when companies undergone a shift or change in executive power. According to several studies, there are numerous causes for an organization to embrace change within the internal environment. One of the major causes is the implementation of new technology. In this fast moving and cut throat competitive environment, organizations have no options, but to remain at par with the competitors. In order to achieve it, companies often make technological developments improve organization’s capabilities and enhance the efficiency of operation. Some of the other common reasons for embracing change are satisfying the dynamic needs of the consumers, to support the economy and also to grab growth opportunities (Corneliusassoc, n.d.). According to Anderson (2012), organizations undergo different type of changes and the most common ones are development change, transitional change and transformational change. However, it depends on the situation and need of the organization. Although change is a necessary process for the purpose of growth and development, but companies often face difficulties in implementing those intended changes. One of the biggest obstacles to the implementation of change within organization is the resistance of employees. Employees have a belief that with new system, their existing state may get disrupted and can destabilize their position in the organization. Moreover, if also leads to dissatisfaction of the employees and can seriously impede organization’s growth. Figure 1 The present study seeks to investigate the problem of change management in D2, the auto-components manufacturer. The case sheds light on the fact that the company is currently facing a large number of issues pertaining to the cost of operation. The economic downturn further worsened the scenario and the company struggled to survive in the market place. The company therefore focused on the formulation of new strategies which is to achieve economies of scale. However, the new strategy is yet to be communicated to the employees and only handful senior managers are aware of the strategy (Suran, 2002). The company is now aiming to enhance and expand the production at the Blois factory situated in France. According to the views of the company, the principal reason behind considering Blois factory for expanding the operation is that this factory has the most updated and advanced technology. Furthermore, the company deems that expanding the production in this will lead significantly lead to the reduction in the overall cost. Since the company is also aiming to achieve economies of scale, it has decided to discontinue the operation of the UK plant. This will lead to a large number of job redundancies. As a result of that, employees at the Didcot (UK) site will be highly disappointed with this decision and can acts as a potential resistance to the intended change of the company. The scenario clearly relates to the organizational change management. Therefore, from the study it is evident that the biggest challenge for D2 is to effectively manage and implement their intended change. Discovery As mentioned earlier, the principal issue of the company is related with the management of change. Moreover, the workers have also expected that the company will make large investments in the UK plant and will improve the manufacturing facilities of the organization. The employee also had a feeling that new investments in the plant will bring new opportunities for the employees. However, the scenario identified is other way round. Rather than making investments, the company is planning to close the operation at the UK plant. The case also pointed out that the company will try to keep the product engineers as product development is one of the key aspects of the company’s success. This decision can also create biasness among the employees and they can strictly impede the change implementation. In addition to biasness issue, the main challenge for the company is to successfully implement the newly intended strategies and achieve economies of scale. Now, it is important for the company to discover the alternate courses of action by which they can effectively deal and resolve the issue. One of the most viable and possible ways of dealing with the aforementioned issue is related to leadership. A change in the leadership style can be highly effective in this context and has the ability to address the change. Leadership plays a crucial role in effectively managing and implementing a change within the organization. According to several authors, leading or initiating a change is considered as the most difficult task that a leader has to accomplish. However, the role of a leader in implementing the change also differs according to the nature of change. In general there are two types of changes namely a planned change and an emergent change. A planned change refers to the initiative of the company which is driven ‘top down’. On the other hand, “emergent” change refers to the change which can instigate at any level of the organization. Studies reveal that the role of a leader is equally important in both the cases. In case of a planned change implementation, the leader needs to have an apparent idea about the vision and objective of the change. It is also necessary that leaders must also have a plan that considers both people in the change and make sure that there is enough support and infrastructure to implement and sustain the change. In case of an emergent change, the leader should create and encourage a culture which supports and encourages a culture that fosters a change which initiate from ‘within’ the organization. Figure 2 (Source: Fourie, 2010) According to experts of the industry, larders have two critical responsibilities which are underlined below: - Leaders are responsible for communicating the vision for the change to the subordinates. In addition, the leaders are also responsible to communicate the positive aspects of implementing the change within the organization. Another important function of leaders is to establish the necessary elements which are required to implement the changes successfully. The support elements comprises of a realistic project plan, a proper organization structure for administering the change implementation, internal change agents, a formal communication plan, a formal training plan, removal of any possible barriers, a management group which is aligned as well supportive and a system of feedback and periodic audits. Resistance to Change The role of leadership also becomes evident when there is resistance to the change from the employees. It is the leader who only has the power and ability to influence people and successfully implement the change. Although, leading a change is a risky venture, but when the leaders portray a positive vision about the change, the possibility of the change process to experience resistance reduces to a great extent. Therefore from the above discussion of the theories and models of leadership it is evident that with appropriate leadership styles the change within D2 can be easily implemented. The company is trying to achieve economies of scale and for the same the company can do the following: - The first step in the implementation process of a change is to clearly define and communicate the strategies to the stakeholders. In addition, the upper management of the company should also communicate about the reason behind their decision to close down the UK plant. If the company succeeds to remain transparent, the chances of resistance from the workers will be reduced. The senior executives of the company can visit the UK plant and can notify them about the grounds on the basis of which the company forced to take this decision. The executives should infuse hope among the workers about their future. One of the most unfortunate factors is that the company will not be able to reallocate those workers and hence D2 should also support the workers morally as well as financially. This will greatly reduce the chances of resistance from the staff members of UK. The leaders should also inculcate a culture which foster change for the betterment. In this process, employees can also acts as a change agent of the organization. Dream This is the third phase of the 5D Approach. In this phase, the participants of the change management process are said to think or imagine about the most suitable solution which will help the organization to address the problems in a successful way. The participants think about the positive aspects identified in the discovery phase. In addition, it should to reinforce those positive aspects in order to fabricate real strength. In case of D2, the company is suggested to make use of charts, graphs, visual presentation of the intentions and aspirations of the firm and the situation which is causing them to bring changes. In addition, vision and mission statements can also be an effective tool. The management should think of a strategy which is cost effective and at the same time can bring about a change in the current scenario. Design In this phase, the change agents start to look after the different type of processes, systems and strategies which will enable them to realize and fulfil the dreams (Mohr et al, 2003). The main objective of the change management process is to increase the product expansion and ultimately decrease the cost of manufacturing. The management should focus on increasing the production. The company should focus on keeping the marginal cost below the actual price of the products in order to bring the company to a profitable situation. The production cost of a company does not remain the same. It is due to this reason that the marginal cost of the company should be analysed frequently and based on that the price per unit of the products should be fixed so that some amount of profit is maintained by the company. If the production cost rises to such an extent that it starts affecting the profitability of the company, then the company should take an overall measure to decrease the cost of production. In order to reduce the cost of manufacturing, there are two possible ways. One is the decrease in the number of labour and the other is the increase in the speed of the production by implementing new production techniques. Reduction in the number of labours will result in the unemployment of a large number of employees. So D2 should take into consideration the other technique to reduce the overall cost of manufacturing by increasing the speed of production by means of implementation of different production techniques. The company should try to identify the factors responsible for the present scenario and adopt strategies for achieving the economies of scale, increasing the flexibility within the organization in order to implement latest technologies for speeding up the production and finally develop a system which can address to the challenges. The top level management of the company should also focus on the fact that the latest technologies that have been implemented should be well known by the workers of D2. It is here that the leadership style will play an important role. Implementation of a change within the organization has to be effectively managed by the leadership skills of the top level management (Kotter, 1990, Erkutlu and Chafra, 2006). This will improve the relationship between the management and the employees resulting in the improvement in the performance of the employees (Yukl, 2002, Gerstner and Day, 1997). The top level management should have an idea about the objective of the change management process and the leadership skills that must be adapted to implement the changes. D2 should take important measures to plan for a proper training program for the workers by taking the help of the human resource department. It will help the workers to adapt quickly to the changes in the technology. The workers might not have an idea about the reasons for the changes within the organization. So, there should be training sessions provided to these workers in order to generate awareness among them about the positive aspects of the changes. Moreover, they should be encouraged to coordinate with each other and work as a team so that the objective of the change process can be fulfilled as soon as possible. D2 should follow a step by step process. It should first take an initiative to bring about the changes within the organization. The company then requires adopting strategies to manage the changes that have been implemented. Finally the process ends by training up all the employees so that they become aware of the changes and get accustomed to them. Discovery/Destiny The fifth phase of the Appreciative Inquiry model was first named as the delivery process, but afterwards it was changed and given the name of destiny. There can be a many flaws in the changes that have been implemented. There can be various flaws in the project plan which was made for bringing about changes in the company. The main objective of the company was to decrease the cost of manufacturing and increase the production. If there is any fault in the latest technology implemented which is resulting in the wastage of raw materials, then it will lead to the increased raw material consumption and finally an increase in the overall cost of manufacturing. Thus the company will fail to achieve its objective of minimization of the manufacturing costs. Moreover, the company has promised that it will re-deploy the engineers of the UK plant Didcot to Blois. In such case, there is also the fear that the engineers might fail to adapt to the changes in the technologies because of the lack of the training. This might have a negative impact on the overall performance of the company. There might be many other flaws which will arise afterwards. However, the company needs to take preventive measures from the beginning in order to avoid such flaws in future. D2 should try to measure the performances on a regular basis. The performance measurement will help to communicate and assess the progress which is related to the achievement of the strategic objective. It will also help to measure the performance of the employees on a daily basis. One of the best methods of measuring the performance of a company is the use of the balance score card (Stewart and Hubin, 2001, Kaplan and Norton, 1992). It will help to evaluate the financial as well as the non financial factors related to the performance of D2 (Kaplan, 2001). It will help the company to decode the strategic objectives to the operational efficiency, thereby increasing the efficiency of D2. It will help to analyse the performance gap (if any) related to the customer satisfaction level, customer retention rate etc. This will help to measure the performance of the company after implementing the changes and the reaction of the customers to those changes. Moreover, the financial factors like the revenue growth, return on investment etc. after the implementation of the changes will be identified. This regular analysis of the overall performance of D2 will help to detect the flaws, as soon as it arises and take important measures to remove them. The company should also conduct market research within fixed intervals of time in order to find out the changes in the customer’s preferences and demands. The customer demand is an important factor to determine the effect of the implementation of the changes. If the demand of the customers shows an increasing trend, then it means that the effect of the changes is positive. But on the other hand, if the demand of the customers is still low, then the strategies are required to be modified in order to increase the customer demand. Conclusion The company should also look upon certain other factors along with the implementation of the change management process and the review of the performances of the company after implementing such changes. There are various factors which might be a reason for concern in the future. The employees of Spain and France believe that this is the first change. They have the fear of being unemployed in future after witnessing the closure of the UK factory. 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