Managing Organisational Change at Danone Group - Essay Example

Organizational Change s Introduction The occurrence of change in section of the organization influences the whole organization. Change may be proactive or reactive. Change management is described by Phillips (1999:183) as an approach to transitioning people, organizations and teams to a desired future state. The process of effectively and successfully managing and implementing organizational changes is quite far from being a straightforward endeavour. Carefully developed plans can disintegrate during the process of implementation disrupting the outcome and the lives of the individuals who work in organizations. Recent advancements in technology and globalization have rendered the business environment full of changes. For instance, the emergence of mobile adaptability and social media has resulted in an increase in the need for change. Paying attention to detail has raised the stakes for failed business efforts pilling pressure on the struggling executives. With this so much change going on in the business environment, firm need to learn how to adapt to these changes. Organizational changes ensure that changes are smoothly and successfully implemented in order to attain long-lasting benefits. Change occurs due to the pressure of both external and internal forces in the firm. The paper will discuss technology advancements and change of managerial personnel as external and internal forces of change in an organization respectively. The paper will go ahead and relate how these pressures have impacted on Group Danone. Technological advancements have a secondary influence of increasing the availability and accountability of change. Therefore, to remain and survive in the business environment, the management needs to be alert to any changing forces and make a response by initiating changes within the organization. Discussion Palmer, Dunford and Akin, (2009:358) argue that the images for managing change include the director, navigator, caretaker, coach, interpreter, and nurturer. For instance, during the course of change, the director is tasked with the responsibility of designing the process of change and directing people to adhere in that the change is attained as planned. The navigator designs the change process in order to best fit the conditions experienced. The caretaker role is attained are attained due to environmental factors. The coach is tasked assisting the members of the organization to develop within themselves the abilities prerequisite for success. For a change to be effective, the organizations need to ensure that the employees are in support of change since they are valuable commodities in the firm. Effective management of change comprises of a process with four steps: being aware of the changes in the wider business environment, coming up with required company’s needs, training the staff on the suitable changes, lastly, winning the employee’s support with the persuasiveness of the correct adjustments (Phillips, 1999). External pressure: Technology advancements Change is real, and firms need to cope up with it in order to survive. The pressures for change are generated both outside and inside the firm (Burke & Litwin, 1992:223). However, organizations are obliged to move ahead on these forces to survive. The numerous external changes have bombarded most organizations to make change inevitable. The external macro-environment and industry environment has been reported as the significant drivers for change. Technology is considered as the major external pressure for change. It is the most significant pressure for change that firms reckon with. According to Harvey (2010), the rates of technological changes are viewed as responsible for the changing nature of jobs done at all levels in the firm. The recent explosion of knowledge especially in the use of computers, smartphones and internet has revolutionised the way people do business. As a result, it has had a remarkable effect on organizational functioning. The advent of computers and internet has made most firms embrace online marketing and selling. Out-dated technologies are no longer in the scene today. This is because technology involves the utilisation of techniques, methods and knowledge to convert inputs into output in one organization. Changes in technology have been compared with the progress in the society. The current technology outstrips the imaginations of the scientific fiction writers of a generation ago. For example, freight trains are despatched and rail car inventories are handled by computer banks, with instant credit checks running in less that twenty seconds. The increasing diversity and complexity of technological advancements is making executives to be more concerned with the adequacy and organizational structure in order to meet and match the organizational needs. Here, the manager addresses the problem of technological alternatives. Every technological alternative leads to a different organizational requirement. Rao and Rao ( 1999) assert that more organizational diversity ought to be formulated in order to accommodate the firm’s rapid change in technology and requirement to address the great uncertainty and ambiguity. Since technological advances may result to incremental changes in the mode in which services and products are designed, produced, and distributed, technology inconsistent with existing culture may result to resistance to change amongst employees or managers. Internal pressure: Change in managerial personnel Rao and Rao (1999:157) argue that pressures for change that occur within the firm can be traced to the changes in managerial personnel. Knowledge explosion and reinvigoration of the employee needs dynamism in the managerial personnel. These changes include transfer and promotion of managers, retirement of the old, and replacing static and old managers by versatile and dynamic young managers. Besides, Jawahar (2006:213-15) asserts that some changes include the provision of training and development opportunities for the existing personnel in order to motivate and retain them in the firm to reduce employee turnover costs. When managers are changed, each of them usually comes with their own ideas and mode of working. Similarly, the workforce is also changing bringing in higher education skills and knowledge, and place greater emphasis on human values and question authority (Grieves, 2010). Certainly, the change in managerial personnel is a crucial pressure that cannot be underestimated. The change of executives at the top is one of the core reasons for change in any organization. Since no two managers have similar managerial philosophies, skills, or styles, managerial behaviour is always selective. The newly appointed manager may favour different organizational objectives, design, policies and procedures than the predecessor. The new manager commences by carrying out an examination of the structure below him/her to see if it relates to his/her idea. If not so, he/she may initiate changes. Therefore, filling of top positions presents an opportunity for re-examination of the whole structure and explaining the changes to the individuals affected (Lunenburg & Ornstein, 2011:204). Case example: Danone Group Danone Group is a multinational corporation that was established in 1919 by Daniel Carasso with its headquarters in Paris. The firm mainly deals in French food products. Danone Group produces fresh dairy products, baby foods, yoghurt, and bottled water, as well as cereals. It has four business subsidiaries that carry out their operations in the United Kingdom ( Danone Group, 2012). In response to external pressure of technological advancements, the firm has gone ahead and used various advanced technologies that have enabled the customers shop food products online through tablets, computers and smartphones. The use of computers and other sophisticated technologies makes it possible for high speed data processing and informational retrieval. This is because the use of online selling reaches a wider customer as compared to physical store selling that requires the consumer to physically visit the shop. Nowadays, numerous organizations use technology in order to enhance productivity and market competitiveness. In this case, Danone uses social media to market its products. As a result, the company has recorded increased profit margins as of 2009, to gain a worldwide market share of 27 percent in fresh dairy products. This accounted for almost 60 percent of the group’s total sales (Danone, 2013). In response to internal pressures, the firm made changes in the managerial personnel. The newly appointed manager made sweeping changes in the sales and marketing division personnel. The manager favoured a different organizational objectives and procedures that the procedures. As a consequence, the Danone Group attempted to expand its operations globally by having a constant consultation process of with various stakeholders at both national and international levels. The consultation initiatives comprised of the government representatives in the country of operation, manufacturers, the civil society, and the environmental bodies, particularly where the aim is to provide clear information for the consumers and responsible behaviour in the field of environment. The new manager came with the aim of internationalising the business operations (Danone, 2012: 34-35). Since filling of top positions presents an opportunity for re-examination of the whole structure and explaining the changes to the individuals affected, the newly appointed manager of Danone Group used innovation and sustainability as a tool of engaging the workforce not only with the company itself, but also with sustainability projects (Vilanova & Dettoni, 2011:16). This exhibited a genuine integration of environmental sustainability into the firm’s operations. In relation to sustainability, the firm improved its operations by creating the Danone Ecosystem Fund in 2009. This fund was aimed at supporting those projects that would create sustainable jobs in the Danone ecosystem (Danone, 2012). This comprised of all agricultural suppliers, producers and territorial regions that are around plants and facilities. The firm reacted to both the internal and external pressure through the following steps as outlined by (Kotter, 2013): creating a sense of urgency by assisting others view the requirement for change and they were convinced the importance of taking immediate action; creating a guiding coalition by assembling a group with adequate power to guide the change effort; developing a vision for change that assisted direct the effort for change; communicating the vision to all people connected to the Danone; generating short-term achievements and rewarding those employees that were involved; hiring and developing employee who had the capability to implement the vision; lastly, incorporating the changes adopted by Danone into its organizational culture. Why change? The reason why change is so prevalent is that change is regarded as a risky activity, and numerous organizations fail or do not realize their intended outcomes. Change can impact either positively or negatively to a business. However, most organizations embrace changes in order to survive and gain competitive advantage in the highly competitive business environment. These pressures for change usually emanate from the external environment and internal environment. The external pressures for change include technological advancements, marketing conditions, shifting political dynamics, changes in demographics, changes in societal values, and growing international dependence, fashion, geopolitical, and market decline. The internal pressures for change include performance gaps, managerial personnel, size, employee needs and values, management structure, growth, identity, integration and collaboration, finally, power and political pressures. Rao and Rao (1999: 154) point out that change is initiated in order to enhance the means for satisfying the economic means of someone, increase profitability, promote human work for humans, and to make a contribution to individual satisfaction and social well-being. Effective and successful change management occurs when the following components are incorporated in the change process: the firm need to realize that it needs to define measurable stakeholder aims, formulating a business case for their achievement that is continuously updated, and monitoring risks and assumptions, dependencies, and cultural issues affecting the progress of the associated work; effective communication that is geared towards informing all stakeholders of the reasons for the change, the benefits of successful implementation and the details of the change; creating an effective training and development program for the employee to enhance their skills and knowledge during change; countering resistance from staff and aligning them to the overall strategic direction of the firm; offering personal counseling if required, in order to alleviate any change-related fears; and lastly, monitoring of the implementation (Anderson & Anderson, 2001). Conclusion The people in the organization are the ones who are responsible for managing change activities. They can be managers, non-managers, outside consultants, newly hired employees or current employees. The process of change needs to include creative marketing in order to make sure there is communication between the changing audiences and a deep understanding of the leadership styles and group dynamics. The major internal pressure that affects organizational change is a change in managerial personnel. It is a force that can not be neglected or underestimated since changes in managerial personnel has a direct impact on task performance in the organization. Advancement in technology is a permanent feature in the business world, and it is continuing to demand a manager’s attention as a pressure for change (Rao & Rao, 1999: 155). Each entrepreneur needs to follow technological advancements in its industrial branch and make use of the latest developments to develop their own businesses. The growth in technology has made organizational change to be greatly motivated by the exterior environment other than the internal environment factors. When this happens, firms build competitive advantage for themselves, whilst those firms that refuse to embrace change are left behind. As a result, the company may realise rapid market share losses and/or profit margins. References Anderson, D. & Anderson, L.A. (2001). Beyond Change Management: Advanced Strategies for Today’s Transformational Leaders. San Francisco: Jossey-Bass/Pfeiffer. Burke & Litwin, 1992. ‘A Causal Model of Organisation Performance and Change’, Journal of Management, Vol 18, No 3, pp 523–545. Danone Group, 2012. Annual Report 2012. Paris: Group Danone. Danone, 2013. Danone Social and Environmental Responsiblity Report. Paris: Danone Group. Grieves, J. (2010). Organizational Change: Themes and Issues. Oxford: Oxford University Press. Harvey, T. (2010). Resistance to change: A guide to harnessing its positive power. Lanham, MD: Roman & Littlefield. Jawahar, I. M, 2006. Correlates of Satisfaction with Performance Appraisal Feedback, Journal of Labor Research, 27 (2), pp.213-236. Kotter, J. (2013). Leading Change. New York: Sage. Lunenburg, F. C., & Ornstein, A. C. (2011). Educational Administration: Concepts and Practices: Concepts and Practices. Massachussets: Cengage Learning. Palmer, I., Dunford, R., & Akin, G. (2009). Images of Managing Change and Sustaining Change. New York: McGraw-Hill/Irwin. Phillips, Julien R. (1999). "Enhancing the effectiveness of organizational change management". Human Resource Management 22 (1–2): 183–199. Rao, M., & Rao, V. (1999). Organisation Design, Change And Development. New York: Discovery Publishing House. Vilanova, M., & Dettoni, P. 2011. Sustainable Innovation Strategies: Exploring the cases of Danone and Interface. Spain: ESADE Institute for Social Innovation. Read More