Strategy Choices and Impact of Greenhealth and Cranberry Companies - Coursework Example

STRATEGY CHOICES AND IMPACT-GREENHEALTH-CRANBERRY UK By Introduction The aim of any company in the business world is to maximize net profits. Many more companies have their ways of reaching this based on their strategic objectives set by the management board and dictated to the management team and the employees1. This paper seeks to explore the strategy that Cranberry Company and GreenHealth took to merge as a way of reducing the costs and maximizing profits. In light of this therefore, it will apply a collection of theories and models in discussing the strategic contexts in which case there will be a case of cultural comparison and the change process. In this combination of theoretical perspectives, it will venture on the strategic change context at the point when the merger process had just started. This will be reviewed by use of a change kaleidoscope. The second section will entail a comparison pitting the comparison between the companies before and after the merger with the help of a cultural web. The next section will review the culture of GreenHealth-Cranberry, a company formed after GreenHealth and Cranberry merged. The last part of the paper develops a comprehensive evaluation of the change process by use of the change model. This is to help develop effective understanding of the entire change process. Strategic Change Context at the Start of the Merger Process The context of change as expressed by Iszatt-White, Saunders (2014:172) and supported by Balogun and Hope Hailey’s change kaleidoscope can only be assured of success if the implementation efforts fit into the organizational context. The change kaleidoscope can be used to explain the changes that are taking place between the two companies and the subsequent features that would enable it go through a comprehensive stability after the change. The change kaleidoscope model is illustrated below: Figure 1: The Change Kaleidoscope Source: Balogun and Hailey, 2009 As indicated, the kaleidoscope has got three layers. The outer part reresents the contexts in which the two companies would inculcate the wider strategic changes they intend to harmoniously put in place. The middle section includes those specific factors that must be considered when the change plan is put in place. The inner part indicates the choices a menu that provides choices for the two companies that need to merge (Nguyen, 2003, p. 451). The contextual applications of the kaleidoscope to the two companies can highly be found in the middle layer that has a collection of requirements that dictate what is required for the two companies to effectively merge. Time is an important factor in the merger process. From the case perspective, the two are in a relationship of convenience and not a crisis. Therefore, it is necessary to establish the fact that develoments have been allowed to take time and by 2012, there was still management restructuring. Therefore, it is a merger that issues will be fixed slowly for the sake of conveniency. The scope of this change was wide. Scope, according to Johnson (1992:32) entails a collection of features including the degree of change that is required in the compapy in terms of transformations and how much of the company is affected. This takes into account the feelings of the employees.employees in this case are seen to label the two companies already together as ‘them’ and ‘we’. This indicates a difference in the scope of thinking as far as the employees are concerned. Cranberry and Greenhealth therefore have to merge and all sections are affected. In this merger, the scope sees Greenbelt CEO carol Moss becoming the overrall CEO and Marcus Steele are assigned permanent basis. This change is more of a transformation than just a re-allignment. Preservation is another part of the kaleidoscope that applies to the case at hand. This refers to the extent in which it becomes necessary to maintain the culture of each of the two companies. The two companies have been able to maintain their customer base, same selling centres both in supermarkets for Cranberry and retailing for GreenHealth. Moreover, the employees who were seen as adamant to the change found that their working conditions, though improved were not changed into a different setting. In fact, the HR and Finance departments are seen not to have changed due to the need to preserve the previous cultures. In terms of diversity, so much happened and in that case there was a greater change to the whole culture (Sun, 2008, p. 139). First, there was the retention of the administrative leaders under diversified roles. New interviews were done and their job descriptions clearly spelt out. The human resource department got off to check the welfare of the employees who, previously had been heard to spend nights in the cafeteria. The senior management also had its own roles starting from a scratch since nobody had experience in the mergers. Capability at its three levels according to Nguyen and Kleiner (2003) was quite paramount in the success of this merger. At individual level, the companies had a rather conservative employee team that had been in the company all their career life and this spells experience. On the other hand, at the management level, the new overall CEO Carol Moss and the new Assistant CEO Marcus Steele had been working in their capacities for quite a long time only that they did not have experience of mergers. This was absolute experience just like the other employees. At the organizational level, there was absolute existence of parameters and resources to handle the change. The two companies had the financial ability and their base resources enabled them to find it necessary to purchase some operational buildings as well as maintaining their office branches in Reading and the operations in the USA. There was not much said about readiness of the company to execute the change as far as the employees were concerned. As stated, most of the employees had been in the company for as long as their careers had been active. There was no readiness on the side of the employees as some feared losing their jobs, the management team had to be taken through a rigorous interviewing process and many were disillusioned. However, the two companies had the power and capacity to execute the changes because they had all the resources they needed for the change. Comparison and Contrast of the Companies before and after the Merger Gerry Johnson developed a cultural web that can be used to explain the fundamental cultural settings of companies and their operations. The web has a collection of parameters that can be used to effectively measure the contents of the culture of a company and develop a view on the actual operations (Balogun & Hailey, 2004, p. 23). The web is presented in the figure below and from its contents; it can be directly related to what was happening at the three levels of operations presented; cranberry before the merger, GreenHealth before the merger and the overall operations after the merger. Culture defines the operations of any company and to a large extent determines the level of employee satisfaction at any company. Figure 2: The Cultural Web Source: Balogun and Hailey, 2009 Culture at Cranberry The culture at Cranberry as explained by use of the cultural web was rather simple and openly positive. The control systems made sure that efficiency is maintained by scouting for talents at local universities and developing them into the needed management team so desired at the company. It was the company routine to seek these people who had knowledge and skills as well as creativity to develop the company and oversee the success of this company plus over 900 employees. The organizational structure in this company was that of a divisional structure where issues were handled divisionally. The power structure in this company was decentralized and even the employees at the lowest echelons of the company had the power to air their views and concerns about how the company was supposed to be run especially on micro-economic levels. The people were not afraid to air their views and had a staff forum where there was need for people to express their concerns about the success of the company. In relation to the web, Cranberry culture can be represented as indicated in the table below: Parameter Situation at Cranberry Routines Diversified employee base with variations in chores Control Shared control where top management shared ideas with lower level management Organizational structures Was fairly divisional structure where there was allocation of work effectively Power structures Well spread business structure Symbols Rituals and myths Forums for information sharing was a ritual in the company Table 1: Cultural Web Parameters and Application to Cranberry However, there were also stories that developed and saw to it that the company had a high level of stresses at work due to overworking. Since there was a close relationship between the management and the junior staff, the company cannot be said to purely have a vertical management structure. Culture at GreenHealth For GreenHealth, it was a company that started as a family business and much had not changed. It maintained that family aspect it had at the beginning. The control systems had been developed around Marcus Steele who developed a bureaucratic system that was purely dictatorial. The routines and rituals dependent on the closeness one was close to Steele, the more the benefits that he/she had. The company had a functional structure where situations were handled as per the required function level. The table below represents culture at the company. Parameter Situation at GreenHealth Routines Same routines for a long time (45 years of routine work) Control Control was within a few people (Cronies of Steele) Organizational structures Functional structure Power structures Vertically instigated (up-down)-the upper leaders were very powerful Symbols The company had been a symbol of history to the employees and they never thought of any imminent change Rituals and myths Traditional ethos and beliefs (some people had been in the company for so long and believed ritually believed in the conservative ways) Table 2: Cultural Web Parameters and Application to GreenHealth However, there was a routine in which the people in the company had been doing the same things for over 100 years and there was direct protocol as per how things were done. As for the power structure, the power was centralized among the few people who were cronies to Steele. This centralization of power made it possible for the company to experience many worries when the merger was announced. In this case, they thought that it was actually a take-over and the new CEO would favour Cranberry than GreenHealth. The language spoken was secretive and revolved around Steele and in the long run, it can be established that most of the contents of this web were all influenced by the inefficient management. Culture of GreenHealth-Cranberry The culture after the merger was very much simplified. Kotter (2012) indicates that when two companies merge, their combined efforts are worth the strategy of taking into account the two cultures and simplifying them to one workable culture. When the merger was set in, many things changed which practically changed the story of the company. The routines and rituals were developed alongside effective communication. The employees had been said to fear about this before the merger but the Cranberry employees in particular were said to be happy when the new situation was compared to the older one. Parameter Situation at GreenHealth-Cranberry Routines Routines are carried out as per the division of labour. Purely integrated Control Able management and control with effective division of labour and specialization Organizational structures A well-structured business structure at the combined company Power structures Divisional structure and partly functional Symbols Leadership was the symbol of unity and progress in the new company Rituals and myths A new culture was harmoniously adopted with new rituals, a collection from both companies Table 2: Cultural Web and Application to GreenHealth-Cranberry The management developed a culture of socializing and getting together so that there was a general openness in their minds. The openness was also punctuated by the fact that they were to commute to work for one week and then the other would be spend away where they would take time to socialize. The power and organizational structure was well defined when the two companies came together. In fact, the top management led by CEO carol Moss was a combination of officials from the two companies. The dictatorial Steele was to retire so that there was time to change the culture of the company. This was done by an initial effort to completely restructure the top team in the company. Initially, it was also reported in the case that there were employees who spend nights at the Cranberry company cafeteria because it was too late to go home. However, a company coach was made available to take employees home and it became a welfare norm at the company. Evaluation of the Change Process The change process involved in this merger was known to be long overdue when there was immediate communication to the employees that there was an inevitable change coming. The change can be well explained by use of the Kotter’s change model and a collection of management theories that would support the process. From the troubles of the two companies, it was openly credible to assert that change was the only constant. The change model is illustrated in the figure below: Figure 3: The Change Model Source: Paton and McCalman, 2000 In the first section where there is the need to increase urgency, the companies’ management staff showed the need for this to the effect that it needed to reduce costs and develop a possible positive motivation in the profits realized. The identified potential threats were the low costs that would continue dropping in the cause of the stiff competition in the market. The management staff, having notified the employees about the imminent merger went ahead to develop modalities to oversee this change. Kotter had advised that for the change to be successful, and then 75% of the company staff must support the proposed change. The second aspect that can be seen was that the company formed the change coalition. In this aspect, the coalition was made up of the boards of the two companies, the management teams and information to the employees. The management staffs of Cranberry and GreenHealth were aware that none of them had experience in coalitions and so they hired a group of consultants to brief them on how to manage the coalitions. They also realized that a top manager like Steele was not supposed to be part of the coalition merger and therefore excluded him by proposing a retirement for him. The third step was creating a vision for change. In this section, the company developed strategies and then determined values that were central to implementation of the change vision that was required. After the consultants had been called to develop the way forward for the new developments, the board determined that there was need to develop shared proposals that would define the vision of the new company. This was jointly done by the new management board. The fourth step is to communicate the vision. This was highly done especially staring with the management teams of either companies communicating to each other about the visions required. The case states that, “In January 2012, Marcus Steele, the CEO of GreenHealth and Carol Moss, the CEO of Cranberry announced that the two companies would merge”. This paved way for the complaints and grievances from the two conservative staffs to the management and board of directors. Removal of obstacles was done by the company developing a plan to have Steele retire from the management. The second obstacle that was to be tackled was that of lack of knowledge on mergers. This was done by developing a method that would see the experts from outside the company come to address the management staff on coalitions. The company was also seen to create short term wins in projects and in management. The company was to choose projects that are not expensive and then develop people who were in support of the change, introducing them to the changes expected. The company maintained the HR and Finance section that would oversee the short term exercises like change of staff as well as then the top team was restructured to manage the change in the near future. The last idea was to build on the change and incorporate it into the combined culture of the two companies (Kotter, 2012, p. 33). The two companies merged on the basis of 50-50 basis and therefore were to create a shared culture. Steele had set a bad culture and was now eliminated. In this case, the company integrated sound cultures and employee welfare. A coach was provided to ferry workers home from work and there was a new change that was developed in all areas. The get-together meetings by the management teams are always made to develop the new staff so that they can get the motivation to keep pushing the strategies of the company upfront (Paton & McCalman, 2000, p. 79). The location changes and retention was also viable in redeeming the image of the companies. As stated earlier, GreenHealth had a long tradition with some of the employees, spanning back to the times when their parents used to work at the company. Therefore, to resolve locational issues, the company started operating in four divisions; the UK, USA, Europe and the New Market Development (NMD). In the UK, the employees who were willing were relocated to Reading from Cambria. The close proximity to Reading and Cambria allowed the management team to meet either in reading or Cambria. This was the importance of location. Conclusion Managing change especially in a merger is a complex issue. There are many changes especially from the conservative perspective that would make the change impossible. The theories of change management all support the idea that initiating change is not the toughest thing but the complex aspect comes to the implementation level. This paper has developed a comprehensive analysis of the case about a merger between two companies in the UK; Cranberry and GreenHealth. First, it used Balogun and Hope Hailey’s Change Kaleidoscope model to discuss he strategic change context that the two companies were in before the actual implementation. In the change kaleidoscope, it was found out that the medium aspects of the kaleidoscope highly determine the way the change takes place. Consideration of time, scope, preservation and diversity has been instrumental in making a change process successful. Moreover, capability, capacity, readiness and power are all central issues as they were directly applied to see the change possible. The second part was the use of Johnson’s Cultural Web model to develop an understanding of the comparison and contrast between the cultural settings in the two companies and after the formation of Cranberry-GreenHealth Company. It was determined that culture plays pivotal role in the development of the company and this is pivotal when two cultures are brought together and effectively merged to make sure it works well. Once the two cultures are able to cohesively work, then there will be a successful union of the two companies. The last section was the use of Kotter’s eight step model to develop an understanding and analysis of the new company’s change process and the way it took place. In this section, there are three sections that also involve a collection of other workable processes; the first one is creating an eligible climate for change, engaging the organization and the last section is that of implementing the change. References Balogun, J., & Hailey, H. V. (2009). Exploring Strategic Change (3 Edition ed.). London: Prentice Hall. Balogun, J., & Hailey, V. H. (2004). Exploring Strategic Change. London : Prentice Hall/Financial Times. Huang, C. T., & Kleiner, B. H. (2004). New developments concerning managing mergers and acquisitions. Management Research News, 27(4/5), 54-62. Iszatt-White, M., & Saunders, ‎. (2014). Leadership. London: Oxford University Press. Johnson, G. (1992). Managing strategic change— strategy, culture and action. Journal of Long Range Planning , 25(1), 28-36. Kotter, J. (. (2012). Leading Change, Harvard Business Review Press . New York: Prentice Hall. Nguyen, H. a. (2003). The effective management of mergers. 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