Change Management in Blue Marina Restaurant - Case Study Example

Change Management in Blue Marina Restaurant Table of Contents: Sl. No. Particulars Pg. No. Word Count 1. Introduction 3 152 2. Analysis of Change Context 3-4 203 3. Analysis of nature of change facing the Blue Marina 4-5 215 4. Critical Examination of Possible Types of Employees Reactions to the Proposed Change 6-7 514 5. Recommendations as to How Management Should Plan and Execute the Successful Implementation of the Proposed Change 8-10 700 6. Conclusion 10 152 7. References 11 8 Appendix 12-13 Introduction: Blue Marina, an Italian family-owned restaurant, is well positioned with regards to its location and also customer response. It has floated through many a number of years by simply following the generic strategy of cost leadership. It has offered no fuss menus containing delicious Italian dishes which suited the purse of many of its customers. At the same time, it always met customer expectations by swiftly relaying orders to the table within 15 minutes even during peak hours. To tackle this, it has 20 permanently employed members who are assisted by further 20 temporary staff at times of peak hours. However, of late, there are certain concerns relating to: Lack of staff co-operation, Competition from nearby restaurants and The ongoing economic crisis plunged the business into recent loss. One more area of concern is the succession plan of the current manager to involve his qualified son into the family owned business. (Word Count – WC – 152) Analysis of Change Context: There are two change contexts in this scenario: Change of strategy from cost leadership to focused differentiation techniques to deal with losses and aim at profit maximization (Gupta. V, Gollakota. K. & Srinivasan. V., 2006). Establishing a chain of restaurants and building a brand name through enhancing customer satisfaction. This is to be clubbed with managerial succession plan also. The internal drivers to above mentioned contexts are namely: 1) Lack of coordination between waiting and kitchen staff resulting in: a) Customer dissatisfaction b) Long queues leading to customer loss and missed sales targets. 2) Unstandardized employment terms which results in haphazard human resources management (Dash. S., 2008). 3) Simple menus being offered over a long period of time without any customization as per customer wishes 4) Need to shift strategy to escalate from growth stage to maturity stage. 5) Implement the pre-planned succession plan The external drivers for the change namely are: 1) Sudden tightening of competition by the entry of rivals in the nearby premises 2) The ongoing economic crisis. 3) Failure to encourage promotional sales. Absence of marketing techniques. 4) Lack of initiation of social responsibility projects which could help in strong brand positioning of the organization. (WC: 203) Analysis of the nature of change facing the Blue Marina In the context of the change drivers, the restaurant owners have proposed a strategic change plan in the following manner: 1) Refurbish the existing restaurant and establish two more new restaurants. 2) Revamp menus 3) Employ more people 4) Standardize systems of order, payment, accounting and HR 5) Enter into promotional alliances with willing partners and 6) Demonstrate social responsibility and establish brand image of the restaurant. These changes are estimated to include a capital outlay of £1.5 million. The profit margins are expected to scale up to 15% within 5 years. More importantly, business process re-engineering as it is alternatively called, would give a breather to an almost dying restaurant. (Cascio. W.F. & Nambudiri. R., 2010). The nature of change which these plans are expected to bring forth relate to: Business Processes – Strategic and Financial Management Systems – IT, HR and marketing systems Structural – Employee related while bearing emphasis on Cost Benefit Analysis. Organizational – Creating relationships, patterns, changing with ease etc. involving partners and customers. (Seel.R., 2006). Thus Blue Marina’s new strategy is very balanced from all the four perspectives of: Business Processes Financial Perspectives Customer Perspective and Employee orientation. In short, it is a brief of a balanced score card implementation in the organization. (Kaplan R.S. & Norton D.P., 1996). (WC: 215) Critical examination of possible types of employee reactions to the proposed change: Just as organizational managers tend to be concerned about the organizational change, even the employees would have their own inhibitions during such occurrence. The stages in an organization change management can be identified as: Unfreezing Change and Refreezing stages. (Lewin. K., 1950 in Ritchies. B., 2006) The employees need to unfreeze from their original state of comfort in their daily office activities. Later to that, they need to understand the dynamics of change and compile such change into their actions. Once, they have understood the processes properly, they again tend to refreeze in the new state. The possible reactions of the employees during such change are: Acceptance by will: This is a very rare occurrence that some percentages of the employees tend to simply accept all the change ideas put forth by the management. They understand the incidence of change with a desire that they may receive some rewards imperative after successful change. (See Figure 1). Forceful acceptance: Some employees may not be carried with the unknown favorable rewards which may or may not be proved in the future. They tend to rely on the current situation. However, they can be overpowered by the leaders who propose change. These people, with no other scope to resistance, tend to accept the management’s plans. Rejection: Sometimes, deliberate force by the management on the employees to accept change may also lead to rejection. The employees tend to demonstrate such rejection by their negative actions such as conducting strikes, committing of errors, not completing the given tasks on deadlines etc. Management has to ensure that such incidences do not occur as they may cripple the organizational goodwill before customers. (Prasad. L.M., 2005). Resistance: It could be the most imperative response. It can be expressed in any of the following approaches: The attitude of shifting responsibility on others: Most of the employees would like to prove that the changed job would not come under his/her circle of functions. They may also try to impose that their colleagues are fit to take up those changed missions so that they can stick to their routine. Concerns about their job longevity: If the change demands skills up gradation beyond employees’ immediate understanding, they may as well react negatively to such change. Anxiety and anger: The employees may be overcome by severe resistance. They could express the same in the form of anxiety and anger. Gossip: They may start gossiping with fellow workers and also persuade them against the change. Their mission would be to express their disinterest to perform the change related functions meticulously. New routine: Changed routines in place of already following ones may create confusion which may not foster the expected change. Many do not want to accept that this is a momentary phase which could be overcome with little more insightful planning. Some may even resign or resort to threaten the management to forsake change methodologies. They may even start searching for other employment opportunities without the manager’s knowledge. (Wallace. S., 2007) & (Stark. P.B., 2010). (See Figure 2) (WC: 514) Recommendations as to how management should plan and execute the successful implementation of the proposed change: Fortunately, Blue Marina is in the inception stage of managing change i.e. Plan for change. Situational analysis would demand development of proactivity, goal communication explicitly, simulate critical thinking and focus on quality service to institutionalize change. (Ashwathappa. K., 2007). But, these simple techniques may not be fruitful if there is incidence of resistance. As such, a more planned effort has to be initiated. At the same time, because there is an incurrence of loss for the first time in its balance sheet, even the employees would be a bit doubtful about the management’s ability to tide through difficulties in future. Care should be taken that situations never retract into resistance due to deliberate management’s inefficiency. There are some eight steps which need to be followed in this process: Creation of urgency: 1. Urgency identification: The stage of unfreezing for the change starts here. Employees need to understand that the first year of loss situation, should be curbed and not prolong further. Thus, every employee and every stake holder is urged to understand the situation and act pro-actively to implement the change successfully within the least possible time. 2. Forming of a pro-active coalition: People with positive attitude towards work would be chosen as change leaders. Even temporary workers who exhibit enthusiasm would be encouraged. These people would be designated to the three restaurants (two new and one refurbished) to lead the new recruits. 3. Vision creation: As all the change propositions indicate a nature of balanced score card, it is very important that a vision for the score card has to be created immediately. The vision statement is - “To enhance customer satisfaction and foster branding of the group”. 4. Effective communication of vision statement to the employees: This is the initiation of the change situation in the organization and thus very planned in every action. Other than communication, the existing and new staffs have to be trained on the behavioral aspects which lead to customer satisfaction. They also need to be given hands on experience on the newly established systems so that they can interact with even the online customers effectively and achieve the visionary. 5. Removal of obstacles to change: Even after earnest planning, there still would be 25% who are either not convinced or not willing to act according to the needs of change. Our job would be effective only when such resistance is identified and retraced into the normal plan procedure. For this, we need to counter balance all negative forces with positive interactions. 6. Short term goals and wins to be created: Continuous organizational change is a lengthy and untiring process. For the employees, to not to be discouraged by such arbitrariness, we need to create short term goals which will easily lead to the performance of the attributed change. Short term profit guidance, customer targets etc. which are achievable have to be set. Incentives need to be provided to those who excel in those targets. 7. Change building: We need to build upon all the short term victory and collaborate it towards the vision building. Short wins need not be comprehended as ultimate goals. We need to examine the occurrences and check whether any of those performances could be improved in the future. Thus, we need to build perfection into our changed system through successive introspection. 8. Imbibe the changes into our organizational culture: This is the step of refreezing where in the organization gets used to the changes implemented and follows them inevitably. Previous unwanted practices should be abhorred and new practices which can fulfill the vision statement have to be induced with no further deviation. (Kotter. J, 2005) & (Anon., 2012) (Explanation in Fig. 3) Thus, change should be included into the organization so that new methodologies get cultivated into our stakeholder’s perceptions all the time. We can also draw upon flow charts and plan for critical paths so that we can sequentially plan the change process. By designing critical paths, we can also determine deadlines for completion and assign responsibility to the staff. Such change would be successfully implemented bearing positive results. (Quinn. S, 2010). (WC: 700) Conclusion: Blue Marina, is planning to pull out from the loss making situation by infusing a further capital of £1.5 million to earn a 15% annual return. It is also thinking of a managerial succession plan of a family owned business. In this process, it has developed a balanced score card program and is preparing for its implementation. The company has: Developed a change strategy from cost leadership perspective to a differentiating focused strategy. Developed a mission statement of customer satisfaction enhancement. Planning for branding of the firm by opening a chain of restaurants. It is also considering promotional alliances and social advertising so that the image gets stronger over time in the minds of the customers. In this process, it is evaluating the possible situations of resistance which it could face from its stakeholders. Such orientation could help the organization to pre-plan and overcome disruptions for a smooth changeover. (WC: 152) Book References: Ashwathappa. K., 2007, Human Resource and Personnel Management – Text and Cases, Strategic Human Resource Management, Ch – 3, New Delhi, Tata Mc Graw Hill Publishing Co. Ltd. Cascio W.F. & Nambudiri. R., 2010, Managing Human Resources, Human Resources in a Globally Competitive Environment, Ch – 1, New Delhi, Tata Mc Graw Hill Publishing Co. Ltd. Dash. S., 2008, Human Resource Management, An Introduction, Unit – 1, Sikkim, Manipal Press Ltd. Gupta. V, Gollakota. K,& Srinivasan. R., 2006, Business Policy and Strategic Management, Business Strategy Formulation, Ch - 3, New Delhi, Prentice Hall of India Private Ltd. Kaplan R.S. and David N.P., 1996, Translating Strategy in Action - The Balanced Score Card, Building a Balanced Score Card, Pg. 294, U.K., Harvard Business Press, 20/3/2012, Available at: http://www.amazon.com/Balanced-Scorecard-Translating-Strategy-Action/dp/0875846513#reader_0875846513 Kotter J.P. 1996, Leading Change, The Eight Stage Process, Part – II, U.K., Harvard Business Press, 20/3/2012, Available at: http://books.google.co.in/books?id=ib9Xzb5eFGQC&printsec=frontcover#v=onepage&q&f=false Prasad. L.M, 2006, Organizational Behaviour, Organizational Change, Ch – 25, New Delhi, Sultan Chand & Sons. Quinn. S., 2010, Management Basics, Control in the Organization, Ch – 10, U.K. Ventus Publishing Aps. Internet References: Kotter’s 8-Step Change Model, 2012, Mind Tools, 20/3/2012, Available at: http://www.mindtools.com/pages/article/newPPM_82.htm Lewin.K., 1950 in Ritchies. B., 2006, Lewin’s Change Management Model, Pivotal Points, 20/3/2012, Available at: http://www.consultpivotal.com/lewin's.htm Seel. R., 2006, The Nature of Organizational Change, Nature of Change, 20/3/2012, Available at: http://www.new-paradigm.co.uk/nature_of_change.htm Stark P.B. 2010, Employees Responses to Organizational Change, Peter Barron Stark Companies, 20/3/2012, Available at: http://www.peterstark.com/employee-responses-change/ Wallace. S., 2007, Why, What, How? Organizational Change Management, 20/3/2012, Available at: http://www.epmbook.com/orgchange.htm Appendix Acceptance Curve Confident Support Support Bliss & Ignorance Connecting hope with reality Informed Doubt Implicit Checking Resist Explicit Checking Figure: 2 Resistance Curve Activeness Anger & Anguish Bargain Accept Stable Denial Test Immobility Depress Passiveness Figure 3 Unfreeze Change Refreeze Read More