Change Management and Maslows Hierarchy of Needs - Case Study Example

Introduction The case study of Human Resource Management is looked through the history of acquisition by GE Medical, North America of Companie Generale de Radiologie (CGR) Paris, France. Introduction to the case discusses the corporate culture clash between revenue focused General Electric, and the recently privatized, CGR known for its state-run, non-competitive work style (Hitt et al. 1995). The GE Medical CGR, Paris story is a model case study, in that it shows that even ‘good managers’ can create unsuccessful results in the context of globalization. The case reveals how unexamined practices within something as taken for granted as specialist knowledge in accounting or engineering, can lead to extraordinary tensions between existing employees, and new management oversight (Harris 2007). As we see upon examination, something as small and as large as language or time expectations can lead to tremendous difficulties in motivation, and ultimately market demand and revenues. A fascinating insight into the world of work and human resource management, the GE Medical CGR case serves as a foundation for further inquiry into change management and equity incentive strategies. In consideration of organizational leadership and human resource management practices, the essay also infers the importance of a rather old, yet ‘universal’ paradigm from Psychology, Maslow’s ‘Hierarchy of Needs;’ premise to fulfillment of the state of human nature as a means to consensus building and the inculcation of ‘desire’ in work. Case Study: GE Medical acquisition of CGR, Paris At the time that GE entered into the French market with its take-over acquisition of Companie Generale Radiologie (CGR), an existing high level of specialization, low change professional environment was resilient to U.S. business protocol. The business practices at the Parisian based CGR reflected France’s Sécurité Sociale system. Like other medical suppliers, most of CGR’s customer basis was drawn from a clientele state relationship that had held low competition as an expectation of a ‘civil service model.’ Indeed from everyday aspects of employee motivation and performance on the job, to standards of regulatory adherence, and attendant rules of conduct in response to those public partnerships, CGR was run on a model of low participatory, low change management model that was experienced by most employees as stasis. No change meant that little challenge to normative modes of low productivity and a national expectations of leave of absence, whether it be maternity, vacation, or merely a ‘mental health break’ all contributed to what GE found in confrontation with U.S. models of high productivity, and low absence employee relations. CGR employees were nothing short of shocked by GE’s protocols which reinforced high change, aggressive capitalist market practice. CGR employees also complained about communicative practices, arguing that the English introduction to GE’s new management oversight meant that it was not they, whom were being addressed. CGR employees were met characteristic literalism (i.e., plain talk ‘means’ what is said, not inferred) by North American managers, who were equally shocked at what they thought to be unmotivated and unproductive long-term workers whom had been working under the former system at the Paris based firm. In short, globalization of the corporation really required localization of GE in the preliminary stage, in order for the corporation to assess its human resources accurately and adequately, and to foster good faith ground in order to effectively translate the company’s corporate culture and standardized expectations in a fertile context that would be receptive towards company centered ideas such as capital growth. A ‘Hierarchy of Relations’ at GE Medical, Paris The tension between existing organizational culture and resistance to environmental change can be measured in terms of productivity. GE Medical expected higher performance when it moved into CGR. While productivity is not demand, it is obviously a critical factor in financial outcomes for any organization. How people work has much to do with their attitude toward the company they work for. Strong organizational culture will always impact behavior, and whether that is positive or negative may not always be subject to individual preference, nor stasis achieved through vertical management styles. In short, even overt dominance is not enough of an indicator in a workplace, as attitudes are affected by external cultural orientations that can shift over time. Mass layoffs were the result of poor change management at CGR. GE Medical intended to streamline the firm in order to turn its operations around resulted in personal decision to abandon the firm by essential skilled employees such as managers and engineers. Bi-lingual communications in the firm would have been an obvious measure to hedge against disloyalty, and would most likely have made the firm approach its goals more readily, as no challenge to the employees whom were French native speakers would mean clarity of communication and responsive performance. Ultimately, GE did think globally and act locally, but the company’s final goal is to both think and act globally, while meeting the market demands of the local population. Every detail of the production process within a firm must be analyzed for comprehensive understanding, and in terms of significant details that may affect revenues. Concepts as simple as ‘time’ must be approached gingerly in environments that are accustomed to a certain work rhythm. This was certainly the case at CGR, where employees were reliant upon conduct and practices that were inherently French, and not at all an American model of interaction. While GE introduced the transition to its Culture with the ‘international language’ of English, French employees were resistant to this introduction as a primary mode of communication, and as an articulated priority in the context of their national location, France. Equity Incentives as Human Incentives Equity incentive schemes and their attendant financial tools have become crucial to executive management seeking to forge efficient links between employee retention and organizational sustainability. So much so, that standardization of EVA is now promoted across the board within the rather unique transnational labour market in the EU. Managing for value has become the ideal behind new robust compensation systems; intended to better align with the interests of between employees and owners. Proponents of the EVA argue the shift from organizational strategies, where employees are mere functionaries, to a new principle of shareholder value is good governance. The EVA and attendant benefits are essentially mechanistic, and speak to top talent with incentives that attract those employees. With compensatory strategies come immediate reinforcement of organizational interests, even in contexts where acquisitions cross cut existing cultures of professional engagement with new models of administration and production. Behavior modification is more likely in situations where financial incentives increase personal wealth, as well as organizational sustainability. Equitable distribution for a ‘job well done’ translates employee benefits which are comparatively distinct from other forms of compensation. Equity incentive schemes are but one example of management strategy in a new economy that encourages participatory ‘ownership’ by employees (Schönburg, and Stern 1999). Conclusion In 1943, Abraham Maslow introduced his work in Psychology on human needs entitled A Theory of Human Motivation. Throughout the analysis of GE Medical CGR Paris, we can see the development of a series of communications management issues which ultimately led to strategic management oversight problems, and ultimately competitive performance of the entity. At each stage of the employment relationship, GE’s new employees were incompetently managed due to unrealistic expectations of a global corporation. As psychological barriers impinged application of a synthetic organizational culture, the case reveals that that Maslow’s projections were correct: human capital or equitable worth as it was recognized in France (and elsewhere) was the source of misperception and almost failure by the leadership of GE’s North American operations. References Drucker, P. F., 1995. The Information Executives Truly Need. Harvard Business Review, 1995. GE Medical Co. Story: Hitt, Black & Porter, 1995. Management. Upper Saddle River: Pearson Education, Prentice Hall. Harris, H., 2007. Globalizing Human Resource Management. Oxford: Taylor & Francis. Maslow, Abraham, 1998. Maslow on Management. New York: Wiley Press. Pettit, Justin & Ahmar Ahmad. Compensation Strategy for the New Economy Age. EVAulation. New York: Stern Steward & Co Research. May, 2000. Schönburg, J. & Stern, E., (1999). The Capitalist Manifesto: The Transformation of Employee Capitalism. EVAluation, 4 (1), June, 1999. New York: Stewart Stern & Co. Shinder, M. & McDowell, D., (1999). ABC, The Balanced Scorecard and EVA. EVAluation, 1(2) April, 1999. New York: Stewart Stern & Co. Stewart, G.B. (2002). Accounting is Broken: Here’s How to Fix it: A Radical Manifesto. EVAluation, 5(1), September, 2002. New York: Stewart Stern & Co. Read More