Fairfax Media and Its Operations at The Age and Sydney Morning Heralds - Case Study Example

Running Head: ORGANISATIONAL CHANGE Organizational change Name Institution Date Introduction Organizational change is definitely an aspect that is inventible in the life cycle of any particular organization. As argued by Jaap (2004) organizations need to adopt change due to the dynamic contemporary business environment. This is because organizations that are resistance or reluctant to change are prone to failure. On the other hand organizations that have a culture of adopting to change are bound to survive and thrive. Fairfax media group as one of the biggest and diversified Australian media companies is planning a major change in its operations at The Age and Sydney Morning Heralds. This particular paper seeks to evaluate the various causes of change in the organization in relations to the field theory. In addition the paper will analyze the consequences of change and how the change can be managed. Causes for the Change in the Organization Wrangles between the management and shareholders According to Kart Lewin’s force field theory, two forces are usually in opposition in a scenario whereby change is needed in an organization (Lewin, (2008) (1946). Fairfax media has been experiencing disagreements between the management and the major shareholders of the company. The shareholders have made calls concerning splitting the business and then selling off sections of the operations. The shareholders have given a warning of making the sale if the management is not willing to do so (Knight ,2012).The management of the of organization on the other hand is having an opposing view that changes can be made which can facilitate good performance of the Age and Sydney Morning Heralds. The managing Director and the Chief executive of the company Greg Hywood highlights that without a doubt the company is currently operating within a challenging environment, however he believes that if adequate measures are adopted the company will be able to revive itself. Greg Hywood further states that indeed various individuals have varied views concerning how the company can best be run, including the option of totally breaking up the operation of Fairfax Media or possibly closing down the operations of The Age and Sydney Morning Heralds. However the management does not agree with this perspective due to the fact that what is required is just to adopt sweeping changes which can transform the organization. In addition the management has actually been working on changes for a long a certain period of time (Knight , 2012). One of the major consequences of adopting the proposed changes by the management is that resistance to change is bound to occur, essentially from the shareholders who are basically the principle owners of the business. Therefore, as proposed by force field theory, in order for change to occur, an equilibrium or a status quo has be created either through the reduction of resistance or through the addition of aspects that are relevant to the change (Van de & Poole, 2005). In order to manage organizational change in the Age and Sydney Morning Heralds, there is need to ensure that the driving forces of the change are much stronger than the forces that restrain the change. Consequently the management of Fairfax Media should ascertain that the restraining forces who are the major shareholders are directed towards the desired change through unfreezing the prevailing equilibrium. Managing change in the organization therefore requires the integration of the force field theory and the three stage theory of change as propagated by Lewin as follows; The Unfreeze Stage In the context of the organizational, the unfreezing stage entails preparing the Fairfax Media shareholders to acknowledge that change is necessary or essential. This entails breaking down the status quo that exists before trying to devise a new approach of operation. The key strategy here is to create a compelling message explaining the reasons why the existing manner of doing things can no longer continue. It also involves creation of discomfort or guilt in order to motivate change and also developing a form of psychological safety which will lessen the various barriers to change and the threats posed by past failures. Some of the reasons that can be created include stakeholder dissatisfaction, poor performance or poor financial outcomes. Such issues give an indication that it is vital for things to change (Balogun& Hailey, 2004). In order to successfully prepare the organization for change, the managers of Fairfax Media need to change the stakeholders attitudes in this context the shareholders, values, beliefs and behaviors, thus it is essential to make them aware of the initial stage of the process of change. This assists in creating balance or an equilibrium in everything (Balogun & Hailey, 2004). Change The change level entails resolving uncertainty whereby the management begins to evaluate new ways of doing things. These results to the development of a sense of belief that makes people to act in a manner that can support the new change. Harigopal, (2006) highlights that the shift from the unfreeze stage to the change stage does not occur easily. People have to take time to adapt to the new guidelines and proactively participate in order to facilitate change. According to Lewin communication and time are two vital aspects that can assist in facilitating effective change. Refreeze The refreeze level entails helping people to internalize and institutionalize the changes developed. This implies that the managers have to ascertain that changes are utilized at all times and incorporated in daily operations. By developing a new sense of stability, the organizations stakeholder will have a feeling of confidence in the new strategy of working. Various strategies can be used which include reinforcing the change process, reward and regulation schemes and maximizing the required behaviors (Balogun& Hailey, 2004). Poor performance According to the field theory, in order for change to occur, the total situation has to be put into consideration or accounted for. In the event that only a section of the situation is put into consideration, then there is a likelihood of misinterpretation of the situation. (Lewin, (2008) (1946). Consequently one of predominant causes for change in the Fairfax media group that has to be considered in totality is the issue of poor performance by the two segments of the news papers. The Ethical martini, (2012) reveals that Age and Sydney Morning Heralds have been experiencing a reduction in terms of revenue. The decline in revenue has progressively resulted to a steady decline the organization’s share prices within the previous three years. Currently the share prices are below 60 cents; however three months ago the share prices were above 70 cents. In addition, the last time the share prices were above $1.00 was in 2011 June, where it dropped from $2.00 in 2008 November and $5.00 in 2006 December, respectively (Ethical martini, 2012). Due to the poor record performance of the organization, there is need for change in the operations of the Age and Sydney Morning Herald newspaper organizations. The change is vital in order to boost the revenue brought by the two news papers. The consequence of the change is that the company has to revolutionize its operations in a manner that can facilitate improved earnings from the two news papers segments. A good business is usually developed around the willingness and the quest to challenge the status quo. As a result based on the fact that the two organizations are experiencing a decline in the revenue, there is need for the organization to consider new operational changes such as becoming a newspaper editorial company and then outsourcing all other productions. This will enable the separation of publishing and printing operations. Instead of closing the printing facilities as the company has intends to do in Tullamarine and NSW ( Zappone, 2012).Outsourcing is basically a better option. In addition another solution can be to enlarge the production capabilities of the two organizations while venturing into commercial printing market. These options will to a great level improve the performance of the news papers within the market (Engum, (2009). Another consequence of change that will be encountered by the organizations is resistance to change. As argued by Kart Lewin in the force field theory, during the process of change, opposing forces usually arise. Those that have the objective of promoting the change who are know as the driving forces, and those who have the objective of maintaining the status quo who are known as the restraining forces.(Lewin, (2008) (1946). The new operational changes that are to be implemented should be approved by the company’s board. However resistance to change can be encountered in the event that some of the board members refuse to adopt the proposed option. As earlier highlighted, Fairfax media group has been experiencing wrangles among the top management of the organization essentially the major share owner Gina Rinehart who owns 20% of the shares of the company. In addition the company intends to downsize its employees by laying off over 1,900 employees in a span on three years. Such changes are bound to face resistance from both the employees and other organizations such as labor unions. In order to effectively manage the proposed changes on the operations of the company it is essential for the management of the organization to put into consideration the overall attitude and perception of every stakeholder towards the change process. As argued by Lewin in the field theory, in order to predict and understand behaviour there is need to put into consideration the aspect of the person and also his environment (Neill, 2004). Thus, the concept of the field signifies all aspects of a person in relations to their environment. Lewin view therefore provides an indication that the individual is a significant element in the process of change. As a result the perspective that an organization can just suddenly change may actually lead to resistance of the workforce towards the intended plan. In order for change to be effectively accepted in the organization every stakeholder should be well informed and their viewpoints on the intended changes be integrated (Shanker, 2010). An additional approach of managing change is advocacy. This means offering the employees a chance to put across their opinions with regards to the designed changes. This implies that the employees and other stakeholders should be made aware of the designed plans and then permitted to give feedback pertaining to their issues. The managers ought not to be inflexible in their plans. They are required to embrace other individual’s opinions as well as putting them into consideration. More over they are supposed to put into consideration efficient communication. Information should also be effectively conveyed and the CEO; Greg Hywood ought to take an initiative to ensure the employees are clearly informed about the anticipated change rather than g them acquiring information from in the form of rumors or from the media (Van de & Poole 2005). A Shift of readers to free digital news on the Internet The radical shift to digital news has been a sweeping change for many readers around the world. This change has greatly affected the traditional business model that has been adopted by many organizations in the media industry, Fairfax Media Company being one of the hard hit businesses. The digital revolution has therefore resulted in a reduction of earning for both the Age and Sydney Morning Heralds. As a result of this there is indeed need for the company to undertake adequate measures in order to deal with this particular changes. Lowe, (2012) reveals that Fairfax Media has been working towards dealing with the changes in the preferences of the readers. Fairfax has in the recent months been keen on the introduction of digital subscriptions within its newly developed website. In addition in June 18th the company announced that it intends to introduce a new model for reading The Age through the internet. The model is similar to the one used by the New York Times. The unveiled model is known as the metered model which involves the creation of a single website for the age (theage.com.au). The site would provide readers with an opportunity to have a free access of the paper before any charges are made (Lowe, 2012). The consequence of the change is that the move to online digital subscriptions may actually result to more job losses or job cuts for many employees of Fairfax Media. As reported in the recent months the company intends to downsize a considerable number of employees. As a result continuous integration of digital access by the readers will definitely render many employees jobless. As highlighted by the force field theory change is in most cases affected by resistance ( Neill, 2004). In this scenario therefore in the long run, the company is bound to face opposition both from the employees, union official’s and even the government. In order to manage change influenced by the need for free digital news, it is essential for the management of the company to adopt various significant strategies. One of the significant strategies is the diversifying the services it offers to online readers. These include the provision of varied services such as creation of an interactive forum, online transactions, video presentations and searchable news achieves. Kranenburg, (2004) highlights that; such diversifications will enable the company to develop a competitive advantage over other firms. Another strategy that the management can adopt is the use of cost leadership. The company can undertake a low cost approach for the two paper segments; the Age and Sydney Morning Heralds. This can be doe through being a low cost producer of communication products and information in the industry. The adoption of cost leadership will therefore enable Fairfax Media. to service a wider market and thus creating a competitive advantage over other company’s in the industry. Conclusion From the above discussion what is evident is that change is an essential aspect principally in the changing business environment. Fairfax media is one of the many companies that require organizational change in order to survive. The paper has highlighted the various causes of change in the organization which include; wrangle between the management of the organization and the shareholders, poor performance of the Age and the Sydney Morning Heralds and a Shift of readers to free digital news on the Internet. The paper has also outlined the various approaches that can be used in managing the change and the consequences of the change. In conclusion no matter what approach the organization chooses to adopt, as highlighted by the force field theory, resistant to change has to effectively be dealt with. References Balogun, J and Hailey. J.(2004). ‘Exploring Strategic change’. London, Prentice Hall.   Engum, M.(2009). Implementing Lean Manufacturing into Newspaper Production Operations. School of Print Media. Retrieved Ethical martini, 2012, The future of newspapers: Anybody’s guess at this stage Retrieved Harigopal, K.( 2006). Managing organisational change. New Delhi. Jaap J. (2004). Dynamics of organizational change and learning. John Wiley and Sons. Knight , E.(2012). Fairfax shakes up operations as sweeping changes unveiled. Brisbanetimes. Retrieved Kranenburg, H. (2004). Strategic options for the Newspaper publishing companies. Maastricht; University of Maastricht. Lowe, A .(2012 ). Fairfax joins the shift to charging for online news. Retrieved From Lewin, K. (2008) [1946]. Resolving social conflicts & Field theory in social science. Washington, D.C.: American Psychological Association. Neill, J. (2004). Field Theory - Kurt Lewin. Retrieved Shanker, A.( 2010). Change Management: What Organizations Need to Survive, Retrieved on September 18 from Van de, H and Poole, M.( 2005). Explaining development and change in organizations. Acad Manage. Zappone, C.(2012). Fairfax to shed 1900 staff, erect paywalls. The Sunday Morning Gerald . Retrieved Read More