Crave Outsourcing: Company Going through a Change Process - Literature review Example

?Company going through a change process (Crave Outsourcing) - Apply change theory Table of Contents Company going through a change process (Crave Outsourcing) - Apply change theory 1 1 Table of Contents 2 Introduction 3 Objectives 3 Company Snapshot 4 Literature Review 5 The Creative Problem Cycle 8 Mass Findings 9 Factual Findings 9 Problem Identification 9 Idea Generation 10 Solution Finding 10 Action Plan 10 The Six Thinking Hats 11 Change Management 12 Recommendations 12 Conclusions 13 References 15 Bibliography 17 Introduction Business organizations are essentially operating in a highly fluctuating and turbulent business environment. The market is characterised by the presence of a large number of players which has largely increased the aspect of inter firm competition. In order to maintain profitability and sustainability it is essential to ensure efficiency (Punch, 1996, p.5). Change management is one strategy that is largely undertaken by business organizations to generate sustainability. The present study would try to analyse the change management process of Crave Outsourcing with regards to its change in service delivery from IT, recruitment and accountancy to project management. The study would largely include the objectives of the firm that would help in initiating the change process. Apart from this the study would also include an analysis of the existing literature towards analysis the theoretical framework of change management. In addition to the literature review the problem solving techniques would be focussed upon which would include the six thinking hats strategy. Finally a set of plausible recommendations would be framed that would enable Crave Outsourcing to generate sustainable competitive advantage in the business environment. Objectives The main objectives of the change management process of Crave Outsourcing would largely include the following aspects. Change in the service delivery portfolio from IT, recruitment and accountancy solutions to project management modules Reduction in the total number of staff members Increased focus on use of outside consultants to manage and provide business solutions Change in organization structure to adapt to the above stated objectives Introduction of feedback and monitoring systems to bring greater accountability and maintaining sustainability The objectives stated above would largely help in ensuring better sustainability and would also help the firm to diversify its service offering that would help the firm to venture into business segments that can generate greater profitability for the firm in the long run. The fulfilment of the objectives would also enable the firm to move into ventures that are more profitable which would help in ensuring better prospects for the organization in the future. Company Snapshot Crave Outsourcing operates from its head office based in London top generate a plethora of consulting services pertaining to the domain of technology, human resources functions like recruiting the right individual and other financial and accounting functions. The consulting and outsourcing firm operating from United Kingdom gains wide amount of recognition by opening up a number of branches in several regions around the world. In respect to client servicing the company aims to render services of better quality by making maximum optimisation of the existing resources. The company through its operation in various other regions strategizes to gain the view of local markets and customer base by recruiting local people. These local set of employees help the company management to gain a wider understanding of the local environments to be able to deliver enhanced services and thereby augmenting the goodwill. Then client base of the company is mainly constituted by small and medium sized enterprises located mainly in regions like United Kingdom, Nigeria and other global regions (Crave Outsourcing, 2009; Crave Outsourcing-c 2009). Literature Review Change management is something that tests every manager’s mettle. When an enterprise decides to venture in a new operation, a series of changes are required to prepare the company. The company has to incorporate a lot of changes to be competent in the new field (Nilakant & Ramnarayan, 2006, p.15). The scale of operation going in that company also becomes a huge factor. A company that is operating in a large scale will find it difficult to incorporate changes in the operations. However for a small firm the task becomes a bit easier because of the size of the operations. For a small firm it is easy to change certain aspects and then enter a new market. Thus change management is much easier in small firms compare to big organisations (Beerel, 2009, p.234). Another factor that affects change management is the time period of the operations. If the company which is going through change has been functioning in a certain sector for too long than implementing change can be a huge task. On the other hand a company that is relatively new in old operation and then decides to diversify has comparatively easier task (Anderson & Anderson, 2010, p.25). The ultimate fate of implementing the change management in a firm depends on the manager of the firm. The manager has to consider five principles to implement change management in the cooperation. The manager must take the following into consideration: -Different employees behave differently towards change. - Every employee has a set of elementary needs that needs to be met. -Change often triggers a sense of insecurity amongst employee. -Expectations must be dealt with realistic approach. -Fears of employees must be dealt with. Most firms make the mistake of keeping their plans to change the set up a secret from the employees. This increases the insecurity amongst the employees. An environment of insecurity builds up in the office. Instability in the office leads to irritability and emotional outbursts in employees. It is essential for the manager to keep the employees in the loop. Divulging all the facts is not required but to keep the employees informed regarding information that are relevant to the employees is essential (Pugh, 2007, p.48). Employees that will be retained must have a clear idea about their future and employees who will be relived from duty should also be made aware. Being open about future plans requires a balance the manager must not be too much over optimistic. Giving a realistic view to the employees regarding the changes that the company wants to incorporate leads to less cluttered change management. During implementation of change in the firm, the manager must be approachable to all the employees. Giving employees a platform to come and address their grievances and doubts helps in implementing change in the firm. Being open to feedback from the employees also helps the manager to implement change in the firm (Hiatt &Creasey, 2003, p.2-20). John P Kotter in his book, The Heart of Change (2002) described a model to understand the hidden and relevant factors that influence the change management. In his model he has explained each step and stage that describes the reaction and the response of people towards change management. The eight steps explained by Kotter are as following - To enhance urgency: urging and aspiring people to make clear objectives -Forming the right team: to obtain right people with the required skills and emotional balance. - Having a clear vision: establish a simple and realistic vision. Inspire people to use their potential. - Having clear and crisp communication: Communicate as much as possible to include all the people. Make use of technology to have de-cluttered communication. -Incorporate empowerment of key employees: Encourage employees to give regular feedback. Recognise key employees and reward them - Setting short term goals: setting goals that are short term and easily achievable by the employee. Always finish old tasks before embarking a new task. -Keep inspiring: Recognise persistence and encourage it (Kotter, 1995). - Be stringent on the changes implemented: the changes which are implemented must not be bent by any employee. New recruits and promotion must be done to give the firm the resource and start up required (Green & Cameron, 2004, p.5-10). ADKAR model for Change management created by J. Hiatt shows the importance of five basic factors governing the change management. ADKAR is a model that emphasises on the steps taken by the team to achieve certain business results. The model was made to ascertain the impact of training and communication in attaining the desired result. ADKAR model sates that awareness of the business gives the employee the information regarding the need for change. Desire to encourage people to participate in the change by being productive should be the goal of the managers. Knowledge regarding the change desired should be the main goal of training and development. The realistic ability of the mangers to implement changes also effects change management. Change implemented must be stringently followed. The reinforcing ability of the manger also effects the change management (Hiatt, 2006, p.5-16). The McKinsey 7-S framework is based on Value based management. The shared value is the central core of the organisation defining the beliefs that the organisation stands for. Strategy of the organisation regarding resource allocation and business development is one of the seven dimensions of the model. The structure of the organisation whether it is decentralized or centralized. The hierarchical pattern followed by the organisation. The process and routines followed by the organisation, the quality of staff in the organisation, the style of management and work culture and lastly the skills of the employees of the organisation form the seven factors of Mckinsey’s model (Amason, 2010, p.200). The Creative Problem Cycle The issues of change management and reorganization process of Crave outsourcing can be identified by using the Creative Problem Solving Model. This model was proposed by Alex Osborne and Sydney Parnes in the later years of 1940’s (Healthcare Information and Management Systems Society, n.d., p.1). The Creative Problem Solving model consists of six stages namely mass finding, Factual Findings, Problem identification, idea generation, solution finding and finally action plan (Rohe, n.d., p.10). Mass Findings The issues in Crave outsourcing began in 2010 during which there was large scale reduction in the sales output which squeezed the profit margins of the firm and pushed it to losses such that the firm was largely on the verge of closure. Factual Findings The critical analysis of the firm’s financials revels that average sales figure for all the three segments stared to decline abruptly. In a short span of three years the operating income from the three divisions dipped by large percentage points to close at a net loss. This triggered a huge crisis situation for the firm with regards to maintaining profitability. Problem Identification The analysis of the business processes of the firm led to identification of issues in all the departments including finance, marketing, HR as well as IT domains. The HR department was plagued with issues of improper training, incorrect recruitment policies which led to lack of motivation and poor work culture. Issues in marketing department were traced to improper means of advertising, les focus towards market research, incorrect targeting strategies. These led to issues where the firm earned a bad positioning for the brand as well as led to dissatisfaction from the customers which led to large scale business loss for the company. Issues in IT department ranged from fewer and obsolete equipments, improper power supply as well as slow internet that led to time loss and increase in decision making time. Low levels of working capital, discrepancies in accounting standards led to financial instability for the organization. Idea Generation The main idea to bring back the firm to profitability included a complete overhaul of the business of the organization. This included preparing a set of new objectives that would change the business portfolio of the organization from IT, recruitment and accounting to project management. Furthermore the company would also try to remove the earlier issues in all the departments and would reduce its headcount and rely on the services of external consultants. Solution Finding In this stage Crave Outsourcing would embark upon a strategy that would include better use of the available resources which includes budgeting, improvements in recruitment policy as well as improvements in marketing strategies that would help in maintaining better relationships with the customers. The company would also enter into a joint venture alliance that would seek to improve the business prospects of the firm. The company would also change its segmentation and targeting strategies and would also increase the focus towards market research. Finally the company would change its mission and vision strategies and would convey its changes in the business to the customers through a dedicated marketing communication mix. Action Plan The last step of the problem solving process of the organization would involve embarking upon an innovation strategy that would help in providing greater personalised service to the clients as well as using technology to ensure proper and timely delivery of services as well as an after sales support team that would not only solve customer grievances but would also help in maintaining long term customer relationships. The firm would also try to incorporate better technology in the business process that would entail sustainable competitive advantage for the firm in the business market. The Six Thinking Hats Implementation of the business changes in Crave Outsourcing considers acting on some salient points. Firstly the company thrives to understand the nature of business problem which is emerging owing to the company’s policies focusing on changing over to rendering consulting in regards to business projects. This change is considered a major shift from consulting services rendered in finance and technology areas. (Crave Outsourcing-a, 2009). Another problem area cited is focusing on reduction of cost by reducing the manpower strength. To find solutions to the above problems the company endeavours to employ the right set of employees which would help in achieving the business vision. The company acts on some innovative aspects to render high amount of flexibility in the operation through incorporation of advanced technologies and thereby training the staffs to gain the maximum advantage of such. Henceforth the implementation plan in regards to the above facts consists of making adequate business plans to gain the competitive advantage in respect to external competitors. The strategic planning activities would consist of making optimal utilisation of the existing resources to achieve both cost and technological advantage. Further the company is also required to render analysis based on the returns emanating from the investments made in regards to conducting sophisticated training and incorporation of advanced technologies to judge the efficacy of such actions. (Crave Outsourcing-b, 2009). Change Management The change management functions of the company involve certain strategic set of activities like setting up of organisational mission and vision for the concern. However before the mission and vision is framed the organisational managers must make an adequate survey of the market structures and other competitive forces acting in it. The business company can also endeavour make considerable partnerships with potential business companies to gain a strong competitive position. Now that the vision and mission has been developed considerable action should be taken by the business leaders to render potential training to the people in the organisation so as to make them ready for changes implemented. The business managers in course to the above business functions can go for designing some short term business objectives and act on taking some strategic business actions like recruiting skilled labour and designing some specific business projects. Integration of the resources gained must be strategically made to generate maximum utilisation of the same to achieve business objectives (Kotter, 2007, p.99). Recommendations The analysis of the business processes in Crave Outsourcing reveals a case where lack of proper vision and proper business processes led to a virtual downfall of the company. The sales figures of the company got reduced by large percentage owning to use of improper and inefficient business practices. In order to bring back the firm towards profitability it is largely essential to include a process of change management within the organization. Certain critical points with regards to these changes include a complete change in the service portfolio of the organization from IT, accounting and recruitment to project management. In order to successfully bring about this change it is very essential to include a complete overhaul of the existing business strategies that would include all the departments of the organization. The main focus of these strategies would be to deliver greater value to the customers. The objectives of the firm would focus on creating better customer relationship through provision of highly customised services. A comprehensive change management process would be adopted that would also include reduction of staff members and involving greater emphasis on use of external consultants so as to reduce costs. The company would also undertake a strategy towards introducing innovations in the organization that would mainly focus upon use of technology to improve the business process of the firm. In addition to formulation of business strategies it is also essential to include a system for feedback and evaluation of the strategies that have been adopted for initiating the change management process. As a part of the feedback and monitoring mechanism Crave Outsourcing would also introduce the balanced scorecard system that would serve as a measure of feedback for the organization. The use of a balanced scorecard system would enable the firm to monitor the financial as well as non financial aspects so as to generate suitable feedbacks that would enable a continuous improvement in the business process of the organization (Balanced Scorecard Institute, 2011). Conclusions The analysis of the crisis situation of Crave Outsourcing reveals a case where a firm that had good business prospects was largely unable to maintain its sustainability in the business due to its inefficient business process. The company adopted outdated business practices and used little efforts for maintaining customer satisfaction. The motivation levels of the employees of the firm to low levels and there was mass scale movement of employees towards other organizations. This prompted the necessity of introducing a change management system in the organization. The change management process would involve a complete change in the business process of the organization that would include all the departments including change in mission vision as well as objectives of the company. The change management process would essentially include a change in the service delivery methods including a change in the service portfolio from IT, accounting and recruitment based business solutions to project management solutions. Crave Outsourcing would also use the six hat framework to identify the crisis areas as well as find alternative strategies for improvement of the business processes. The firm would also frame a set of objectives that would serve as a guiding template for the organization with regards to the change management process. The essence of these strategies would be implement a business process that seeks to continuously provide value to the customers by maintaining better relationships and providing excellent levels of service as per the customised needs of the clients. Adoption of these strategies would lease a new life to the organization that would help generate long term sustainable competitive advantage in the business market. References Amason, A.C. (2010). Strategic Management: From Theory to Practice. Taylor & Francis. Anderson, D & Anderson, L.A. (2010). Beyond Change Management: How to Achieve Breakthrough Results Through Conscious Change Leadership. John Wiley and Sons. Balanced Scorecard Institute. (2011). Balanced Scorecard Basics. [Online]. 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