Diagnosis from a Multi Frame Perspective - Case Study Example

Diagnosis from a Multi Frame Perspective 1. Introduction The idea of a simple people centric approach to business long gave way to huge and complex multinational corporations, which emerged during the last century, and which has been so far, dominating the social and economic landscape, until recently. Today, the task of managing business is becoming more and more complicated, and the challenge of sustaining one's competitive positioning within the industry is, to say the least, overwhelming. This changing landscape and has brought along with it, novel ways of managing organizations and hence, the forms of organizational management and leadership which were effective once, are almost obsolete. Such massive transformation in the ways of managing organizations in this time and age, referred to as the "organizational big bang" by Serieyx (1993), has also highlighted the urgent need for management to reconsider their age old strategies and develop new ones to adapt to the rapidly changing external environment. According to Serieyx (1993): “"The information revolution, the globalization of economies, the proliferation of events that undermine all our uncertainties, the collapse of the grand ideologies, the arrival of the CNN society which transforms us into an immense, planetary village - al these shocks have overturned the rules of the game and suddenly turned yesterday's organizations into antiques" (Pp.5) This is where the concept of Change Management comes in handy. Change Management is increasingly becoming one of the most widely applied strategies by the managers since the past several decades. Factors such as enduring natural calamities, startling statistics concerning employment and labor situations, product line expansion or the adoption and implementation of new technologies, have all been dominant factors influencing the management’s decision to adapt to the changing external environment in order to be able to stay afloat in the intensifying competitive environment in the market. Furthermore, efforts targeted at solely pursuing profit motives are relatively of lesser significance than retaining one’s competitive position in the industry and this requires implementing change from time to time. Initiating change is no longer restricted to the issuance of strict guidelines by the managers which are passed on to the employees, but it now includes accountability on the part of the leaders as well, who are not only responsible to ensure that the changes intended are implemented in a satisfactory manner, but take responsibility for motivating its staff to adjust to the changing external pressures and customer demands. Pursuing the sole objective of profit, by various means, does not ensure long term success. An organization, in order to be successful and ensure its long term development, needs to adapt to the changing external landscape by bringing about constant change within its internal organizational environment through successful implementation of change management strategies. This paper seeks to study, analyze and evaluate the various aspects of such a strategy through the case study of General Motors – one of the leading auto makers in U.S. 2. Case Study: General Motors 2.1. Brief Background The General Motors Company, popularly known as GM, is a U.S. based auto maker headquartered in Detroit, Michigan. Founded in 1908, the company is among the largest automakers in the world, manufacturing cars and trucks in as many as 34 countries and selling its wide range of products include automobile accessories in about 140 countries across the globe. Its vision is "to be the world leader in transportation products and related services" and it aims to achieve the 'continued enthusiasm of its customers through continuous improvement driven by integrity, teamwork and innovation" (General Motors, 2009). 2.2. Problems Faced by GM The major problems faced by GM include: threat from low priced products from China and India increased reliance on imports high labor costs, rise in fuel prices trade liberalization norms facilitating an easy entry of firms into the industry Unionized workforce Declining customer base Economic Recession Explanation: Owing to increased trade liberalization and the entrance of new firms into the market, industries worldwide and the American auto industry in particular, is facing immense competition from foreign imports. Imports from emerging Asian giants, China and India, who have virtually flooded the markets with low priced goods, have caused serious setbacks to the multinational corporations (Held, 1999). These imports are often available at subsidized rates and the use of technology has made access to information all the more faster thereby making it easier for such foreign imports to make a foray into international markets and eat away the market share of the local companies. According to the U.S. – China Business Council there is a marked increase in imports by U.S. from China over the past several years (see Appendix 1). The imports from such countries and the heavy reliance on low priced goods have pushed several major American corporations (from various industries) towards bankruptcy, including GM, which was almost on the verge of going bankrupt. Furthermore, the recent economic downturn in the U. S. has greatly added to the pressure on the auto industry and particularly on GM (MSNBC, 2009). According to recent statistics, countries such as Germany, France, Spain etc have increased their exports substantially while American companies are battling for survival. This indicates that, the rising external pressure coupled with the competitive forces within its national boundaries has led to the collapse of the auto giant over the years. Toyota, in the meanwhile, the biggest rival of GM, continues to hold the top spot, thereby threatening to topple the other firms within the industry, by eating away their market share. The American car manufacturing industry has been facing a serious setback since the past several years ultimately leading to a decline of the auto manufacturing industry (Reuters, 2008). GM which was once considered as the pinnacle of American business rapidly declined during the past years registering low profitability owing to loss of market share and tumbling sales (TIME magazine, 2008). A simultaneous decline was observed in its financing subsidiaries thus, ruling out the option of depending on its other ‘profitable’ business segments to sustain its existence. As profits continue to decline, the company was forced to shut down its operations at several outlets and to consider setting up its manufacturing units in labor intensive economies, to capitalize on the low labor cost advantage, offered by them. The crisis of General Motors is illustrative of the inherent weaknesses, not only in the American economy, but also within the organization itself, to sustain the external competitive threats, and adapt to the dynamic environment through implementation of continuous change management strategies. Rigid companies, who resist change, as is apparent from the case, would be shoved off the competitive landscape, as seen from the case of GM. The decline of GM is not attributable to only one dimension – that of external environment, but also requires an in depth analysis of the internal limitations of the organization which led to its steady decline. The company made headlines for several years rising speculations about its impending doom, however it officially filed for bankruptcy on Monday, June 1, 2009 (Business Week, 2009) 2.3 Diagnosis from a Multi Frame Perspective The analysis using the multi frame perspective was first developed by Lee Bolman and Terry Deal, who argued that the an organizations can and must be evaluated from various perspectives / dimensions rather than just one, since it offers the management a broader perspective in which to assess and identify the flaws and loopholes and take prompt action in overcoming such ambiguities. Multi frame analysis eliminates the risk of focusing on only one way of analyzing the scenario thus giving the managers an invaluable tool to gain a broader vision and succeed in implementing effective measures. According to Bolman and Deal (2003): "Organizations are filled with people who have their own interpretations of what is and what should be happening. Each version contains a glimmer of truth, but each is a product of the prejudices and blind spots of its maker" (Pp.17) The four frames discussed by Bolman and Deal include - the structural frame, the human resource frame, the political frame, and the symbolic frame. Bolman and Deal (2003) perceive organizations as machines, families, jungles, and theater. The representations are the outcomes of their effort to amalgamate and incorporate the key practices in organizational theory into four distinctive categories: theories concerning organizational structuring, concerns related to human resources, political dynamics, and emblematic apprehensions. Each of the four key categories which the authors refer to as frames has their own enclosed vision / outlook of the organizational setting, entrenched in diverse intellectual regulations. Each of such four frames also contains their own individual highlights, fundamental hypothesis, action judgment, course to executive efficiency, and key supporters. Each of them confines a significant segment of organizational authenticity, but often comes across as incomplete when viewed as a solitary element. Dependence on any one viewpoint can cause the management to misunderstand a part of the field for the whole. Jointly, on the other hand, the four frames control the pluralism in the organizational theory foundation, recognizing its affluence and intricacy while categorizing its fundamental constituents for effortless admission and appliance. The structural frame, views organizations as machines and perceives them as rational systems. It strengthens the significance of manipulative structural forms which support the organizational objectives, mission, know-how, and surroundings. Segregation of job functions and chores offers more lucidity of rationale and involvement, but leads to the requirement for suitable harmonization and incorporation methods. The human resource frame, views the organization as a family, and captivates the symbiotic rapport between individuals and organizations: individuals require prospects to communicate their aptitudes and proficiencies; while organizations require human resources and involvement to stimulate their endeavors. Both the organizations as well as individuals can benefit with a right combination of elements. Output can be increased when people are encouraged to put in their best efforts. The political frame views the organization as a jungle, an field of continuing disparities, inadequate resources, and the inescapability of authority and argument. Multiplicity in terms of principles, attitude, wellbeing, performances, talents, and world views are permanent and inescapable facets of organizational certainties. They are frequently lethal, although they can also be a foundation of originality, inspiration, imagination and improvement when identified and successfully administered. Lastly, the symbolic frame views organizational life as an enduring drama whereby individuals congregate to generate situation, customs, and implication as they play their designated tasks and bring creativity and eloquence into their work. A superior theater stimulates the ethical thoughts and involves head and heart. Organizations which address these symbolic issues concerning their own theater of work instill daily endeavors with inspiration, vigor, and good spirit. Analysis Using Bolman and Deal’s Multi Frame Approach: GM In a nutshell, the problems faced by GM include increasing global competition, increasing fuel costs, high production costs on account of expensive labor, global recession, decline in sales on account of low purchasing power of the consumers – again brought about by the meltdown of the American economy etc. Added to it the widespread worker protests led by the GM workers union cost the company millions of dollars thereby pushing it further towards economic losses, causing a further increase in the labor costs. The costs ultimately reached unprecedented levels, thereby making it difficult for the company to compete and sustain its competitive positioning within the industry, ultimately resulting in a drop in sales. Considering the rising costs and shortage of funds at its disposal, investing in new projects is beyond limits. The political as well as economic scenario isn’t favorable either. Initiating change is inevitable, as is apparent from the above discussions. However, a mere acknowledgement of the need for implementing organization wide change can barely help the management in ensuring effective transformations and achievement of their desired objectives. For the change to actually take place, large amount of planned policies are required which takes into consideration the roles and responsibilities of not only the employees or the organizational workforce in general, but includes the managers and leaders of the firms who are held accountable for employing the planned processes successfully. These strategies and measures of implementing organization wide change which starts from the listing of duties of the leaders are discussed in the following section. 2.3. Recommendations for Implementing Change Initiating change management within an organization requires considerable planning on the part of the management. It has to take into consideration various factors, such as alignment - ensuring that all the necessary elements / resources required for implementing change are available and properly integrated within the planned process; attunement - mirroring the preferred organizational culture and ascertaining that the planned changes are in tune with the overall organizational values and goals; critical mass - developing a proper framework which includes the right mix of people who can successfully implement the desired change; building organizational capacity - ensuring that the organization has access to all the resources required to initiate the planned change; and finally, encouraging individual learning - which includes imparting proper training to the staff involved in implementing the change (Cameron, Green, 2004). In order to ensure that the desired change is successfully implemented, it is essential to ascertain that the projected policies would be well received by the employees, since it the employees who are ultimately involved in the actual process of executing the change. Hence, the desired change would have a better chance of succeeding - in terms of both acceptance and implementation, where the management involve and encourage worker participation (Evans, 2001). Most of all it requires a tremendous change in the management attitudes in terms of their roles, strategies, goals, style of work, the manner in which they project their image, as well as the key areas of the focus of attention (see Appendix 4). The management must change their roles from information seekers to information providers. They must treat their employees as colleagues and rather than continuously seek information, they must share information available to them for facilitating faster change. The leadership strategies adopted by the management is another key area which requires to be changed. For instance, the leaders must take accountability of their actions rather than shifting it to their subordinates, the leadership style must be transformed from one of control and authority to that of support and assistance. They must also change their image as dictators or regulators to educators, helpers and / or guide. This would help in fostering a better work environment and encourage better flow of communication among the leaders and their subordinates thereby speeding the process of change management. References: Business Week (2009). GM Files for Bankruptcy, Available: < http://www.businessweek.com/bwdaily/dnflash/content/may2009/db20090531_215218.htm> Last Accessed: November 22, 2009 Cameron, E., Green, M., (2004). Making Sense of Change Management: A Complete Guide to the Models, Tools, & Techniques of Organizational Change, Kogan Page Publishers, Pp. 122 – 123, 162 Evans, D., (2001). Supervisory Management: Principles and Practice, Cengage Learning, Pp. 225 - 227 General Motors. (2009). Company Profile, Available: Last Accessed: November 22, 2009 Held, D., (1999). Global Transformations: Politics, Economics, and Culture, Stanford University Press, Pp. 175 - 177 MSNBC, (2009). Big 3 Automakers See Sharp Decline in Sales, Available: Last Accessed: November 22, 2009 Reuters, (2008). Car Market Decline Spurs Fresh Big 3 Merger Talk, Available: Last Accessed: November 22, 2009 Serieyx (1993) in Bolman, L. G., Deal, T. E., (2003). Reframing Organizations: Artistry, Choice and Leadership, John Wiley & Sons Publishers, Pp. 5, 17 TIME (2008). Even with a Bailout, GM's Profit Prospects Look Bleak, Available: Last Accessed: November 22, 2009 Appendices: Appendix 1: Appendix 2: Appendix 3: Leadership Linked to Organizational Metaphors (Cameron, Green, 2004; Pp. 122 - 123) Read More