Ajax Minerals and Perrier - Sources of Resistance to Change and Ways of Management Change - Case Study Example

Ajax Minerals and Perrier Affiliation Identify two (2) sources of resistance to change in the Ajax Minerals exercise anddescribe how the organization dealt with each type of resistance.  In the Ajax Minerals’ case, the sources of resistance to change were the workers and supervisors. These employees would not be willing to follow any directions given by the management regarding the impending change. According to the case, supervisors and hourly workers were satisfied that work was continually available and they were earning significant amount of money in overtime pay. The organization dealt with the resistance from the workers by opening up to them and involving them in seeking solutions on adapting to the change. The management did this by holding interactive meetings with the workers. For example, the management shared with the employees some case studies showing how other companies handled similar situations. This marked a critical turn in the organizational culture. According to the case, the managers in the firm had always left out supervisors and workers from decision-making. As a result, any unfavorable decision made by the managers was seen by the junior workers as an attempt to undermine their welfare. However, the management realized the need to involve employees in the wake of the impending big change in the organization. A lot of transparency is involved in process. For instance, the employees are shown the financial records of the company to increase their trust in the good intentions of the management. Overall, the quest to find a suitable solution to the change is participatory and the parties involved exercise a high level of mutual trust. Identify two (2) sources of resistance to change in the Perrier case study and describe how the organization dealt with each type of resistance. In the Perrier case, the sources of resistance are the employees and the trade union (CGT) which they belong to. The workers union is keen on ensuring that the remunerations of the employees are maintained, something which is against the firms desire to reduce the pay. The employees resist the change on the same grounds. However, the management in Perrier did not take steps to reach out to the workers in order to improve their organizational performance. On the contrary, the management got involved in bitter wrangles with representatives of the workers union and individual workers in general. Compare and contrast how management diagnosed and approached change at the two (2) companies and indicate which company dealt with resistance to change in a more effective manner. Justify the reasoning. The management teams in the two companies diagnosed and approached the whole issue of change in very different ways. Ajax managers learned that they would be out-competed by Pacific Rim companies, which obviously have a cost advantage, in a period of three years. The management’s approach to the change was influenced by the history of poor management-labor relations. The workers always suspected that the changes that were unilaterally introduced by the management would only undermine their welfare, while advancing the cause of the organization. The Ajax Minerals’ management knew very well that the workers barely complied with decisions handed down to them, therefore compromising the objective of the management. Given the dire need to adapt to change in order to survive as a company, the management approached the issue soberly, marshalling all the support that is necessary from the employees. Notably, the understanding and support from the employees would probably determine if the company continued operating profitably or not. The approach is suitable given that the impending change will affect the employees in a very profound manner. For instance, there could be loss of jobs in the Ajax Company or lower remunerations as the company adjusts to the competition. It would be therefore necessary to have the employees aware. In the case of Perrier, the Nestle management identified change in the company when they began noting a pattern of annual losses. The parent company’s approach to the change was a proposal of cost cutting measures that involves the retrenchment of 15% of the Perrier workforce. In its approach, the management perpetuates the bad relationship it has with its members by practicing high handedness. The communication is highly strained due to the tensions between the managers and the workers. For instance, the management had to bring in bottles of mineral water from competitors just to pass a message that they were facing competition. This prompted the workers to retaliate by dumping the bottles at the door of the director’s office. Comparing the two scenarios, the Ajax Minerals’ management approach is good while that regarding the Perrier Company are simply bad. Due to its reaction, Ajax is on a path of probably averting a crisis with its employees and in its productivity, while the Nestle management is essentially inviting consequences, such as loss of the Perrier Company. The employees in Ajax are likely to support the efforts that are put in place eventually since they are part of the decision making body. They would be aware of any consequences arising from the decisions reached and thus adjust appropriately. On the contrary, the disorderly handling of the change in the Perrier case is likely to fuel further divide between the employees and their employer. Since the employees perceive the employer as an enemy, they are going to continue advocating for their high pay even at the expense of the organization. Clearly, the management should reconsider its approach. Consider a situation as a consultant with Ajax Management. Propose two (2) adjustments that should be made to improve its change strategy and provide a justification as to why those adjustments would improve the effectiveness of the strategy. Though the change strategy used by Ajax is good, there are adjustments that can be made to improve it. As the strategy stands, the management-labor relations have improved to a level where there is hope to agree on a solution. However, there is still need to factor in threat appraisal and positive psychological image creation. Threat appraisals helps to capture the individuals perception of what is at stake in a given circumstances. The appraisals allow the researcher to predict subsequent reactions to the changes from the employees and understand the variability of the reactions from different employees (Fugate, Prussia & Kinicki, 2012). Performing the threat appraisal among the employees would enable the managers of change in the organization to deliberately intervene to influence the employees’ reactions. It is anticipated that the employees at Ajax will normally feel threatened by the upcoming competition and express intentions of quitting to join more promising companies. By knowing the reactions, the change managers at Ajax can influence the employee but also get a chance to effectively manage any expected eventualities. The need for the company to portray itself positively to its workers is critical, especially given the past problems between the management and the workers. According to Martin, Jones and Callan (2005), employees who perceive their organization and its environment as positive are more likely to appraise change favorably and adjust better in job satisfaction, organizational commitment, and turnover intentions. These adjustments would boost the chances of the company retaining its employees even as it deliberates on how to overcome the threat of competition. Consider a situation as a consultant with Perrier. Propose at least two (2) adjustments that should be made to improve its change strategy and provide a justification as to why those adjustments would increase the effectiveness of the strategy. There is virtually no useful change that has happened in the Perrier case. The management is steeped towards making the employees concede to a paternalistic decision to cut the costs. The adjustments that I would propose for the Perrier case are primarily intended at reversing the losses that are being made, without harming the welfare of the employees. The first adjustment is to institute a high-involvement work system (HIWS) in the workplace. This is a strategy that is very applicable in the context given that the company is located in a high-wage country. According to Boxall & Macky (2009, high-involvement is the approach best suited for the implementation of critical workplace changes in high-wage countries and is useful in influencing high performance. Apparently, HIWS fosters a feeling of trust and commitment among the employees. At the heart of the problem facing the Perrier managers is the low performance of the workers in relation to the pay they receive and the workers lack any incentive to support the employers. This could be solved through high-involvement culture, where the employees are involved in the decision-making process. High-involvement frameworks are known to result in win-win situations for the companies and workers if the inherent tensions between the parties are managed well (Boxall & Macky, 2009). Another adjustment that I would propose is lean process management. This is an adjustment that would allow Nestle to achieve its goal of making profits and succeeding in its operations of the subsidiary company. The lean process management would enable the employees to focus on the mission, vision, core values, strategies, strategic initiatives and personal objectives, thereby allowing the company and the employees to pursue a common goal (Puvanasvaran et al., 2010). The performance of the employees is eventually optimized as their personal goals are satisfied alongside the objectives of the organizations. The two adjustments are very justifiable since they enable the management work towards gaining profits.   References Fugate, M. , Prussia, G. & Kinicki, A. (2012). Managing employee withdrawal during organizational change: the role of threat appraisal. Journal of Management, 38(3), 890- 914. Martin, A. J., Jones, E. S. & Callan, V. J. (2005). The role of psychological climate in facilitating employee adjustment during organizational change. European Journal of Work and Organizational Psychology, 14 (3), 263–289. Boxall,P & Macky, K. (2009).Research and theory on high-performance work systems: progressing the highinvolvement stream. Human Resource Management Journal, 19( )1, 3–23. Puvanasvaran, P., Megat, H., Hong, T., Razali, M.M. & Magid, A. (2010). Lean process management implementation through enhanced problem solving capabilities. Journal of Industrial Engineering and Management, 3(3):447-493 Read More