Rebirth of Anchor Foods - an Australian Food Processing Company - Case Study Example

Executive summary In this case, we witness the rebirth of Anchor Foods an Australian food processing company. The company was losing market share before its takeover in 2002 by David Clapin which saw significant changes in corporate structure, management team and core business categories resulting in a steady profit growth. Still, the company encountered major problems that call for Anchor Foods’ immediate intervention. It is concluded that the organisation should provide intrinsic incentives to the employees to promote constructive organisational culture and employee training on changes processes to promote positive change. Problem Identification and Analysis Based on the facts presented by the case study, a review of Anchor Foods’ behaviour before and after the takeover shows that the company encountered at least four major organisational behaviour problems based on: a) Resistance to change Anchor Foods encountered resistance to change after the takeover. The employees became worried and uncertain about their future. High turnover was also noted among the old manager. Additionally, the employees resisted increased working hours from thirty-eight to forty each week to promote higher productivity. These reflect Al Jerjawi (2011) findings that one of the unfavourable effects of mergers and takeovers on employee behaviours is that it potentially leads to uncertainty and insecurity among the employees. This perspective is based on Kurt Lewin’s Life Space theory, which states that individuals are normally in a constant state with their environment and any change in the balance leads to resistance to change (Napier 2009). According to Ahmad et al. (2011), post-takeovers or –acquisitions bring organisational culture change that can cause traumatic experience for the organisational members, which generate resistance. Saunders et al (2009) suggests that extreme organisational change such as turnovers or mergers can threaten some employees leading to high turnovers, poor performance and absenteeism to demonstrate resistance to change. b) Attachment to old Organisational culture The employees at Anchor Foods seem to be tied to the old organisational cultures. For instance, they appear determined to hold onto information as they used to do rather than share information as promoted in the new culture. They also seem determined to operate strictly within their roles as they used to. These old culture prevents effective communication, creativity and innovation. Ahmad et al (2011) argues that since each organisation has own established cultures, members of the organisation may find it difficult to adjust to the new culture. The problems are seen through the lens of Organisational Culture Theory, which proposes that organisational problems can be understood based on the values, attitudes and beliefs of the organisational members. Essentially, culture provides a lens for interpreting how employees make sense of the change. Generation and Evaluation of Alternative Solutions From the above discussion, it is perceived that problems in organisational culture and resistance to change are the two critical issues that need Anchor Foods’ intervention. Solutions to problem of organisation culture Effective communication between management and employees Ford and Ford (2010) opine that during the change process, it is critical that the top management maintains open communication with the employees. This can be explained by classical theory of organizational communication, which suggests that organisation communications is analogous to having a machine that can only produce a productive and effective organisation; depending with the level at which it is managed. According to Carter et al. (2012) better communication has the advantage of shaping an organisation’s culture as when better communication is appropriately applied, the goals and objectives of organization become attainable. However, communicating to a large group of employee may be time consuming. Provide intrinsic incentives to employees The management should provide intrinsic incentives to the employees. Intrinsic rewards are those employees experience internally on their day-to-day working. For examples the management integrating organisation’s values and goals with that of the employees based on ethics and integrity (Ahmad et al, 2011). Indeed, Uddin et al (2013) argues that instead of imposing new organisational culture to the old employees after the takeover, the executive management should strive to integrate common corporate culture that the new and the old employees can identify with.A prerequisite to effective transition includes minimising events of cultural conflict by aligning employees’ interest to that of the organisation, based on Expectancy Theory. Providing incentives has the advantages of increasing and sustaining the employee’s motivation. Additionally, they have the potential to encourage employee’s effective performance. However, since employees are motivated by various things, determining what really will motivate the employees can be difficult. Solutions to problem of resistance to change Employee involvement Research evidence shows that when employees are involved in change processes and understand the rationale for it they begin to support the entire idea of change process (Uddin, 2013).Giving the employees the opportunity to be responsible and accountable for specific processes of a change programme grants them a sense of ownership which will make them even stronger advocates for the change. These assumptions are supported by McGregor’s Theory X, which hypothesises that employees will become more satisfied with their work when the management views them as self-motivated, responsible, and creative. Employee involvement is advantageous since once the employees understand their roles in change management, they are likely to be satisfied with the new situations (Ciric&Rakovic, 2010). However, it may also result in conflicts or agent problems when individuals’ interests are not consistent with the company. Learning and training employees Providing training to the employees to adapt change initiative can effectively thwart resistance to change. According to Dartey-Baah (2011), managing employees through change requires training them to understand the need for change, how to positively respond to change as well as how to work together with the management in planning and making changes. Change management through learning and training is anchored in cognitive theory, which argues that individuals are always aware of past actions and the results of such actions and their willingness to use the model to modify the actions (Dartey-Baah, 2011). However, training may not be effective for short-term goals and may imply an extra cost to the company (Dartey-Baah et al., 2011). Recommendations In managing resistance to change and organizational culture concepts, Ciric and Rakovic (2010) recommends the use of a forced model called down-command strategy, which proposes the use of incentives and rewards, communication, rationalization, shared decision-making, and empowered approach. Ciric and Rakovic (2010) advise that in using the down-command strategy, the management should use an expert, continually communicate the need for change, as well as, inspire feedback from employees. Based on these we recommend. Both effective communication and provision of intrinsic incentives need to be applied for attachment to old organisation culture problem. The management should provide intrinsic incentives to employees by demonstrating they honestly care about the welfare. For instance, the management can emphasise career planning for the employees to ensure employee development.On the other hand effective communication has the potential to increase the employee’s drive and motivation. Communication can help breach the gap between the employee’s personal interests and that of the organisation during the takeover process. Both employee involvement and training should also be applied for resistance to change problem. Providing employee training especially in stress management will eliminate the fears and worries caused by uncertainty about future but also bring some other bonuses like reduction of potential conflicts between colleagues as well as maintenance of employees’ positive attitudes about work. In regards to employee involvement, the managers can inquire from the employees for inputs on making the tasks more interesting. Implementation Training in change management: The management should explain to the employees why change is critical, as well as, create readiness for change through training. This implementation strategy should be consistent with the Causal Model of Organizational Performance and Change, which suggests four social accounts to changing perceptions of change and organizational culture (Patel et al, 2011). Based on the model, Anchor Foods’ management should use causal account to show the old employees that change is crucial. Next, it should provide a training that reinforced an ideological account outlining the goal the company hopes to attain. This should be followed by a referential account that shows how conditions would improve once the change happens. Lastly, the management should provide a penitential account to acknowledge that in spite of the hardships resulting from the change initiative, the hardships will eventually disappear (Carter et al., 2012). Provide intrinsic incentives to the employees: A prerequisite to effective transition includes minimising events of cultural conflict by aligning employees’ interest to that of the organisation, based on Expectancy Theory. To ensure this, the management should strive to alleviate stresses by conducting stress audit in order to establish the employees’ collective concerns. Later, it can implement programs, including career development opportunities or individual counselling and coaching, to alleviate the stresses by aiming to fulfil employee expectations. Another solution includes initiating voluntary stress management training on a group basis to create an atmosphere where the employees can share their concerns. Table 1: Implementation Action plan for Resistance to Change Anchor Foods Implementation Action Plan for Resistance to Change Trainers Participants Time frame Cost Specific Actions - All departmental heads - External stress management consultants - Executive management - All employees (new and old) - Weekly 1-hour training program (Each Tuesday) - Weekly 1-hour after training review discussion (Each Thursday) - AUS$1500 for hiring external stress management trainers - Training kit AUS$2000 - Run training for 6 weeks - Hire 1 stress manager Table 2: Implementation of Recommendation Strategy organizational culture Anchor Foods Implementation Action Plan for Organisational Culture Implementers Participants Time frame Cost Specific Actions Executive management Departmental heads All employees (old and new) - 3 hour negotiation and communication program (bi-weekly) - AUS$1500 for program equipment (projectors, recording devices) - Employee survey (one week) - Executive management clarify organisational objectives (2-hour) - Departmental heads carry out weekly meetings to clarify and address issues of concern Read More