Australian Business Organisations - Case Study Example

Fairfax Media Name Institution Course Tutor Date Table of Contents Executive Summary…………………………………………………………03 Introduction………………………………………………………………….04 Fairfax Organisational Environment Framework….…………………….04 Drivers of Change……………………………………………………….......05 Change Interventions………………………………………………………..06 Conclusion …………………………………………………………………...09 Recommendations …………………………………………………………...13 References……………………………………………………………………15 Executive Summary Today, change is constant in all organisations. Recently, Fairfax had proposed a reduction in the number of its employees as some of its businesses have been not performing very well. This kind of change will lead to several changes to the organisational setup. Different change interventions such as strategic and human process are therefore needed to deal with this organisational change. Fairfax media is among the major diversified media companies in Australia and New Zealand. Its operations include marketing, entertainment and property management. The business divisions of the company include Fairfax New Zealand, Australian Publishing Media, Digital Ventures, Domain Group and Life Media and Events. As a publishing media house, the company publishes community, agricultural, metropolitan and regional newspapers. Fairfax Media publishes two of Australia’s most successful broadsheets- The Sydney Morning Herald (SMH) and The Age. Fairfax Media has since grown to occupy a significant position in the Australian Media industry. This significant position is under threat depending on how it handles the proposed organisational changes and the changes that will be implemented throughout the organisational life. Background All organisations operate within a certain environment(s). There are two main parts of environments that affect and influence a company- internal and external environment. The types of environment include task, general and enacted environments (Cummings, & Worley 2014, p. 96). Task environment is made up of specific aspects of the company’s surrounding that are more likely to have organisational influence. It includes customers, employees, competitors and suppliers (Cummings & Worley 2014, p.96). In media industry, environment influences organisations to a large extent. The media companies respond to the environmental factors that may affect their operations. Fairfax media occupies an important position in the Australian media industry. Recently, it announced plans to retrench some of its employees due to decrease of profits in some of its business. This report discusses the proposed change at Fairfax media. Introduction Fairfax has been occupying a significant position in the media industry. This is because of its status as the main competitor to the Murdoch-owned News Corporation papers (Araya, Breindl & Houghton, p. 84). The significant position that Fairfax occupies in the Australian media industry enables it to be ranked highly among the top 2000 companies in Australia. Indeed, Fairfax Media Limited is ranked at number 206 (IBISWorld 2014). The majority of the income for the company is generated from the publishing business. However, its revenue also comes from internet and music publishing business. The organisation of Fairfax Media Limited is in form of five business units. The first one is Australian Publishing Media. The group publishes various print media that includes The Age and The Sydney Morning Herald. The next business unit is Domain that includes online and print Domain products. Moreover, the publishing venture they have signed with Metro falls into this unit. The company carries out various digital ventures. TenderLink, RSVP and WeatherZone are its online operations. The operations of the company in New Zealand are conducted through Fairfax New Zealand- the fourth business unit. The New Zealand publications are the Waikato times, the Dominion Post and Christchurch Press (IBISWorld 2014). NZ House and Cuisine are the two magazines published by Fairfax New Zealand. Fairfax Radio is the last business unit of the organisation. Fairfax has radio licences in Perth, Melbourne, Sydney and Brisbane. Fairfax Organisational Environment Framework Managers need to understand their organisational environment framework in order to manage it effectively. Forces in the environment have different effects on different organisations. Fairfax operates in a media industry which is affected by the changes in the environment. As such, the management should always be aware of the happenings in its external environment. Indeed, environmental characteristics and uncertainty have been important factors that explain organisational structure, strategy and performance (Griffin & Moorhead, p. 472). For example, the environmental characteristics affect how managers perceive the environment. In turn, it affects how they adapt the organisational structure to meet the demands of the environment. The environment has been demanding for quality journalism and content for the past few years. Fairfax media need to respond to this by organising its structure in such a way that quality work is always produced. The environmental framework of Fairfax is also affected by the media policy. Indeed, Australian media and the working environment of journalists have been shaped by the media policy (Young 2011, p. 114). The law on media ownership has been changing since 1986 which triggered a period of multiple ownership changes as well as poor management. This changed in 1992 when Broadcasting Services Act was adopted to allow greater industry self-regulation. It also focused on efficiency and economic viability. Fairfax media has been responding to various environmental changes. For instance, it merged with the Rural Press in 2007 as a way of consolidating its operations and position in the Australian media industry. They have made enormous strides in maintaining reasonable online presence which has proved to be successful. All this have been carried out in a bid to provide alternative forms of accessing information to its consumers that its rivals have been unable to do for many years. Indeed, due to environmental pressures, Fairfax is now occupying an important place in both the Australian media and democratic landscape. Drivers of Change in an Organisation Since 2007 when it merged with Rural Press, Fairfax Media has repositioned itself as an ‘integrated media company’ in Australia. Its presence is spread across the country. The financial difficulties threatened the growth of the company in 2008. However, the company managed to maintain its business profits. However, some of the regional newspapers and websites have been performing poorly in the recent past. For example, Australian Community Media had been severely affected as its revenues decreased by 7.4 per cent in its 2015 interim result (Dunn 2015). Therefore, Fairfax media need change. There are several internal and external factors that drive the need for basic systemic and organisational changes. Competitive advantage is one of the internal drivers of the need for basic change in an organisation (West & Cianfrani 2014, p. 156). All organisations seek to achieve competitive advantage. In this case, the top management may initiate some organisational changes that they consider paramount in achievement of this objective. A better, faster, and smarter management system may be introduced by an organisation as it may result in attraction of more customers due to its efficiency. Fairfax management considers laying down some employees as a strategic choice to turn around its fortunes and remain competitive. Indeed, the internal forces that drive change are strategic choices. The reduction of workforce at Fairfax is a strategic choice to increase the revenues and remain competitive. The impetus for change in an organisation is as a result of the internal and external factors. Internal drivers for change include forces such as the emergence of new needs, inner conflicts, the need for growth, strategic choices and human creativity and innovation. On the other hand, external factors include market, cultural and policy changes (Ackerman-Anderson & Anderson 2010, p. 33). Moreover, it also includes changes in the economic situation. Fairfax Media announced in March 2015 that it intended to reduce its working staff including sixty-two journalists from its regional and online publications (Dunn 2015). This was arrived due to major redundancies that Fairfax had been experiencing in the recent years. The proposed changes are not new phenomenon in the organisational environment framework. From time to time, organisations carry out changes in the wake of new realities facing the organisation. Indeed, Waddell et al., 2014, p. 02 asserted that change is among the few constants and more significant and demanding issues that face managers today. The environment is increasingly becoming unpredictable and complex and organisations must adapt as the environment changes so that they can become successful (Waddell et al., 2014, p. 02). Fairfax intends to cut jobs as one way of realigning its business in time of dwindling business profits. The organisational environment is increasingly becoming competitive and organisations must adapt quickly to ensure their survival. Change has become a necessity. However, to lead change competently, internal drivers and human drivers must be attended to (Ackerman-Anderson & Anderson 2010, p. 08). Organisational transformation requires conscious attention to internal and external drivers of change in regard to both content and people. The type of change that is needed should be known in order to build the right kind of change strategy. Fairfax media proposed change is more transformational because the remaining journalists are required to write and sub-edit their work after full-time jobs cuts is done. Internal business drivers are generated by business decisions (Barksdale & Lund 2001, p. 08). Shareholder or financial drivers including demand for higher profits is an internal driver that organisation must respond to. Shareholders expect profits from their investments and organisation must do what is necessary to achieve this objective. On other hand, lowering costs may be demanded by shareholders. Fairfax Media management view the job cutting as a way to lower its costs and raise revenues which subsequently push up profits and the company’s competitiveness. In some cases, forces outside an organisation control compel it to change. These are external drivers of change. The change process is complex but it is foreseeable. There is an agreement among scholars and practitioners that change processes are still complex and challenging for organisations that engaged in it (Whelan-Berry & Somerville, p. 176) like Fairfax Media Limited. Environmental factors are major external drivers of change. There are many dynamics that occurs within which organisations operate. Social, technological, and business and economic are among these environmental forces (Ackerman-Anderson & Anderson 2010, p. 32). A major shift in any of these areas can result in some new marketplace requirements that organisations must adopt for it to succeed. Business imperative(s) is another external factor that drives change in an organisation. It entails the steps or actions the company must strategically take given the new marketplace requirements. The change of organisational mission, gaols, strategy, business model and products and services are some of the new business imperatives (Ackerman-Anderson & Anderson 2010, p. 32). In essence, business imperative pertain to strategy of the organisation that leads it to succeed in the market. Organisational imperatives relates to changes that must occur in the organisational structure, processes, resources and skill base. Moreover, it also entails staffing to implement and achieve a strategic business imperative. Organisational imperative for Fairfax is change to human resources that is intended to achieve its business imperative of being the leader in the Australian media industry. In general, organisation changes due to internal and external forces affecting the organisation and its business. Change Interventions In times of change, there are several organisational development interventions that an organisation can adopt. They are human process interventions, human resource management interventions, technostructural interventions, and strategic change interventions (Cummings & Worley 2014, p. 157). Human process interventions focus on the people within the company and the process through which they accomplish the goals of the organisation. In general, organisations that apply these interventions value human fulfilment (Cummings & Worley 2014, p. 158). Technostructural interventions are OD interventions that focus on the technology of the organisation. Examples are task methods, job design and structure such as hierarchy and division of labour. Human resource management interventions pertain to interventions used in selecting, rewarding, developing and supporting people in the organisations. The core of these interventions lies in the labour relations as well as in practices relating to performance appraisal, employee selection and placement. Strategic change interventions are important when an organization is facing external pressures to change and adapt (Werner & DeSimone 2012, p. 503). The sources of external pressures vary from social, economic, political and legal arenas. The major role of strategic change interventions in organisational development is to gain alignment between the organisational strategic mission and its ability to fulfil its mission (Yaeger & Sorensen 2009, p. 04). Change is constant in an organisation. It is therefore not surprising to have many organisational change methods that are used in organisational development. A change intervention can be thought as planned actions that follow each other design to assist an organisation to increase its performance and effectiveness. Organisational interventions are recommended when organisations want improvement in their employees psychological health and well-being (Nielsen & Abildgaard 2013, p. 278). The media industry can be demanding and requires full concentration and dedication. However, in times of change like at Fairfax, concentration may be low as employees are adjusting to the current organisational circumstances. Human process interventions are therefore important. Indeed, human process interventions focus on people within an organisation and the processes through which they accomplish organisational goals (Cummings & Worley 2014, p. 157). This type of intervention is being implemented at Fairfax Media. It involves processes that include problem-solving, leadership, communication and group decision-making. Human process intervention is mainly derived from the psychology and social psychology disciplines as well as human relations. Fairfax Media chose to implement this kind of change intervention as it is most appropriate. Organisations applying this intervention value human fulfilment. Moreover, it expects that improved functioning of people is a prerequisite to organisational effectiveness. Since employees that are left at Fairfax Media will face some sort of distress from the change, the management saw the need to introduce human process intervention as a way of coping with the situation. Additionally, human process interventions will help them deliver their increased responsibilities and ensure no change in their quality of work. Organizational development (OD) interventions are designed for organisations that have recently undergone some form of change. Borkowski (2011, p. 270) defined organisational development as a ‘systematic process of addressing organisational issues or implementing change strategies. OD is applicable to the entire organisation and not the individual entities in it. In the change process, OD impacts behaviour. During the process of OD change interventions, culture, group processes and group dynamics are analysed. Before these interventions can be implemented, the need for change must be understood first. The current realities should then be analysed and decision taken on what needs to change. Subsequently, ideas on how to change organisational processes should be generated. The top management should ensure that these ideas are implemented and offer their full support if they are to work. On the other hand, for an organisation to effectively intervene with OD during time of change, there are three criteria that ought to be followed. First, the extent to which a given intervention fits the organisation should be considered; the degree to which the intervention is based upon the intended outcomes knowledge; and lastly, the degree to which competency for maintenance of change among organisational members is transferred by the intervention. There are four categories of OD change interventions that can be adopted by an organisation during times of change. They are human process interventions, strategic interventions, technostructural interventions and human resource management interventions. These interventions, strategies and change processes are being adopted at Fairfax Media. Human resource interventions are intended to deal with issues to do with human resources affecting an organisation (Borkowski 2011, p. 271). Workforce competency planning, succession planning, and performance management systems are some of the human resource management interventions. Fairfax media planned exit interviews after it announced its plans to lay off some workers. Exit interviews is a common human resource management intervention that is conducted to reveal things that dissatisfied employees in the organisation (Borkowski 2011, p. 272). This will help Fairfax improve its workplace conditions in order to improve morale and performance of the remaining employees. Performance management systems have been set up at Fairfax to deal with the change. They define employees’ expectations and assist them in management of their performance (Flynn et al., 2007). Performance management is an ongoing process that includes setting of the performance goals and monitoring progress towards goals attainment. Performance management can assist in identification of training needs and areas that need to be improved in an organisation. Fairfax Media Limited undertook a decision to lay off some workers as one of its change strategy to improve organisational processes and business. In this case, organisational development interventions are highly required. Cummings and Worley (2014, p. 157) defined organisational development intervention as a sequence of activities, events and actions that are intended to assist an organisation improve both its performance and effectiveness. The designing of change interventions are derived from a careful organisational diagnosis of its realities and needs. They are meant to solve some specific problems as well as improve particular areas of organisational functioning identified in the diagnosis (Cummings & Worley 2014, p. 157). The announcement by Fairfax management that it will lay off some of its employees ultimately causes some discomfort in the company. The remaining employees would feel insecure that the same fate may fell upon them like their colleagues. Morale and motivation will likely go down. Therefore, organisation should implement some of the available change interventions. Theoretically, there are many change interventions that organisations can implement today in times of change. Some of these interventions are being implemented at Fairfax. Human resource management interventions involve changes made to the entire organisation. These interventions affect the organisational employees. The motivation and quality of employees improves when this intervention is in place. Subsequently, organisational productivity is also improved. This intervention is mostly suited to Fairfax as motivation and quality of employees is needed to improve its dwindling performance. It is for this reason that Fairfax management introduce it as a way of ensuring that the quality of work is not affected by reduction of employees. Human process interventions is another change intervention that is being implemented at Fairfax. It deals with people’s issues in the organisation (Borkowski 2011, 275). In general, these interventions centre on interpersonal relationships building and improvement of communication. Examples are conflict resolution, team building and communication training. Team building increases both the group cohesiveness and effectiveness. On the other hand, conflict resolution and communication training are its components. In a media company such as Fairfax, conflicts are most likely to occur between employees and their supervisors or amongst themselves. Mangers therefore need to learn various conflict resolution techniques for purposes of resolving conflict in the organisation in an effective manner. Conclusion Organisational development is necessary especially in times of change. It is needed in addressing organisational issues that arise due to change. Moreover, it is required in implementation of change. The type of change intervention that an organisation chooses should be based on its needs. This is because different interventions are more suited to particular organisation than others. Additionally, each intervention has its own strengths and weaknesses. For maximisation of the chosen change interventions, they must be appropriate for the organisation. Fairfax Media have been implementing human process interventions, human resource management interventions and strategic interventions as a way of dealing with the change. Organisational development change interventions should be carefully chosen, adopted and implemented to meet the organisational needs so as to create change and improve the organisation. Recommendations The ongoing change management at Fairfax will definitely change how the organisation operates. The reduction of the workforce means that there is an increase in the amount of work that each remaining employee will be needed to perform. As such, they may face work pressure from time to time. For this reason, change management and motivational programs should be introduced to help them cope with the situation. Psychological counselling may be necessary for some employees to deal with work stress related to change. Some employees may find it difficult to deal with the fact that their colleagues and probably friends will no longer work with them. Adjusting to the current realities may be difficult and forums for management of stress related and non-related to work should be introduced. Moreover, programs for behaviour change are vital as clear communication should be present for successful change. References Ackerman-Anderson, L. S & Anderson, D 2010, The change leader's roadmap: How to navigate your organization's transformation, 2nd edn. San Francisco, CA: Pfeiffer.. Araya, D, Breindl, Y & Houghton, T. J 2011, Nexus: New intersections in Internet research, Peter Lang, New York. 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