Analysis of Organizational Change - Term Paper Example

Analysis of Organizational Change TABLE OF CONTENTS TABLE OF CONTENTS 1 Introduction 2 Change Management 2 Theoretical aspects of Change and Change Management 2 Product Development as a strategic change management approach 4 Change Management in Ford Motor Company 5 Company Overview 5 Product Development of Ford 6 Ford’s change management process 7 The impacts of the Change 8 Changes that still need to be implemented 9 Evaluative Conclusion 9 References 10 Introduction The pace, unpredictability, magnitude and the impact of change in the business environment and in the society at large are greater than ever before. Today’s business contexts are tremendously changing due to the economic and business factors such as globalization, technology advancement, rigorous competition, need to control costs and increase efficiency and therefore ‘change’ has become an extremely critical management strategy. Change is, therefore, often considered as a reaction to external threats in volatile environments or as proactive attempt to grab wider opportunities (Thompson, 1993, p. 697). This piece of research paper presents brief review of the theoretical underpinning of the change and change management in relation to the product development and change experiences in Ford Motor Company. This paper described product development as a strategic change model and explains how Ford has successfully implemented the change process. Change Management Theoretical aspects of Change and Change Management According to the management perspectives, change is a process. For a business that proposes to introduce and implement a change, it is an opportunity as well as a challenge, because the management may have to face varieties of obstacles like resistance to change but the outcome will be more or less profitable to the company. Change is a powerful tool and strategy that can be used as a managerial technique to achieve organizational goals in more effective ways. Change management is a systematic process that encompasses and incorporates different managerial functions such as planning, direction, coordination, supervising, organizing and controlling. As Palmer, Dunford and Akin, (2009, p. 24) argued, change doesn’t occur as an automatic process, but rather it involves strategic activities, people, process, techniques and many other managerial functions too. Strategic change has been defined as an informed and participative process that results in newer ways of doing business that leading the organization to its main goal, ultimate success (Jacobs, 1997, p. 22). Strategic change is a managerial process in which the present state of strategic approach gets altered to another state in order to make the organization able to compete with rivals and their differentiated functions. This would enable the organization obtain greater adaptability and viability in the organizational environments. Strategic change may be of different kinds such as down-sizing, reengineering, outsourcing, redesigning and realigning the product, product differentiation, product development etc. As Dobson et al (2004, p. 122) denoted, an organization can be said to be excellent if it is able to change through continuous innovating, gearing quick actions and conducting regular experimentations. Change management is simply the process of helping a person, group or organization change. As it is a management process, it comprises of various managerial functions like planning the change, coordinating among the change activities, directing, supervising and controlling them as well. Change management is an ongoing process of aligning an organization with its marketplace and doing it more responsively and with greater effectiveness than how competitors do (Rothwell, Sullivan and McLean, 2005, p. 17). The change management process thus includes a set of concepts, principles, techniques, strategies and tools that are applied to human aspects in order to executing change within the organizational setting. Change management has also been viewed as a multi-disciplinary activity that the people or team responsible for executing the change are expected of possessing certain skills, supports, experiences and knowledge. For example, in order the change to be effectively executed, the manager in responsible for it is expected to posses; Communication skills, that are essential within and outside the organization so that change can be communicated to the people in right time and in right manner, Maintaining motivation and administering group and team works. Employing both strategic planning and controlling functions, Knowledge of, or facilitating the rationale for change (Paton, Paton and McCalman, 2008, p. 40) Product Development as a strategic change management approach Many business organizations are continuously striving on innovation and product development, because customers in the market always expect better products than that are already available in the market. In order to maintain good customer relation, obtain brand loyalty, achieve sustainable competitive advantage and adapt to the changes that occur around the organization, the business requires updating of the product by redesigning, realigning and developing the product itself or altering it by adding newer utilities. Product development is simply one of the most effective and widely used business strategies that can help an organization stay long in the market. As Mital, Desai and Subramanian (2007, p. 17) described, product development is an overall process of conceptualizing a product and designing, producing and selling it through the comprehensive process. Successful companies are constantly operating with innovation, product differentiation and product development by frequently introducing new products or modifying and improving the existing products that are required by the customers at different times. Information regarding what people exactly require, what features of the product are required and are considered essential, what price they would be willing to pay for the utility they perceive in the product, what specific features are desirable and can be sacrificed for a lower price and the whereabouts of the products that competitors are marketing are highly vital to product development. Many studies and literatures including Smith (2007, p. 2) have proved that innovation and product development are found to connect strongly with long-term corporate success. Corporate leaders regularly list out innovation as a top critical factor for organizational success. Both innovation and product development have been ranked as the top strategic priority for around 40 percent of senior executives. These have also been accounted as one among the top three strategic priorities for 72 % of the same executives. Product development is one of the very common changes that happen in most organizations and management often face series of obstacles or difficulties in successfully implementing it. Change Management in Ford Motor Company Company Overview Ford, perhaps one of the most successful motor brands and largest auto-manufacturer in the world, has been incorporated in 1919 and has long been in the market for cars and trucks. Ford operates in two segments, automotive and financial services. The company designs,, manufacturers and markets cars, truck and auto-parts through various brands such as Ford, Mercury, Volvo and Lincoln (Reuters, 2011). Though the company has around 90 large plants around the world, its major market is from North America and this has been accounted as half of the total sales. In 2010, the company was able to sell more than 5,524,000 vehicles around the world, and marketed auto-parts through third party distributors and dealers. But, as Lavrinc (2008) reported, ford’s future in the RWD vehicles is quite uncertain due to a number of economic factors like financial turmoil and increasing fuel price. Product Development of Ford Customers are becoming highly concerned about quality product, lower costs and increased efficiency and this influences almost all the companies worldwide as they want to focus customers to meet their specific requirements. Most of the large companies are attempting to maintain long-term better relationship with customers and thus to evaluate the very specific customer requirements through frequent feedback and customer-response strategies. When it comes to Ford, the company has found it extremely important and critical to surviving in today’s market conditions to accelerate the creation of those vehicles that customers really want by reducing costs, enhancing increased quality, improving the efficiency and so on (Ford, 2011). As part of the product development and change process, the company was reorganizing senior leaders in the product development task and for purchasing the services of professional organizations for assigning global responsibility for vehicle segments and for critical purchasing functions. In order to effectively coordinate the realignment and redesigning of the global product development strategy, the company has assigned a special team for the leadership and managerial activities to take initiatives for the change to be implemented. Sustainability Report (2011) described how effectively the company has structured product redesigning and development processes. Ford motor company has realigned its capabilities in order to ensure better product utility and with maximum efficiency and faster than ever before. In order to increase the efficiency in the product development and make rather positive change to its product development strategy, the company has invested in flexible manufacturing, reprogrammable tooling in the body shop, common build sequence in the final assembly stage and in using of multiple models. Ford’s change management process Daft (2009, p. 433) emphasized that leaders are to take employees through three significant stages while implementing the change successfully. The first one is preparation, in which employees hear about the change by memos, meetings, speeches or formal contacts and they become aware that the change will directly affect them. The second stage is acceptance in which leaders helps employees create and develop an understanding of the impact of change and positive impacts of the same on them. The third stage is commitment in which installation and the institutionalization of the change will occur. When it comes to Ford’s example of change management through the product development, the website and other communication portal have clearly conveyed the messages of redesigning and realigning of its products to its people. The process has been carried out through the above mentioned three steps, preparation, acceptance and commitment. The company has approached product development as a strategic step forward and taken strategic measures to implementing the change successfully. In the flexible manufacturing system, the company has implemented unique tolling and standardized physical tolling changeover. Programmable tooling technology that the company has launched was of greater benefit to the company in relation to eliminating the need to replace model specific retooling (Sustainability Report, 2011). Standardized equipments for painting, quality research system and other techniques for efficient utilization of the people and resources were also part of the product development performed in Ford Motor Company. The impacts of the Change The product development, one of the main changes held in Ford, has brought major advantages to the company. The company has redesigned and redeveloped the product using latest technology and by bringing flexible manufacturing, and these have helped the company in several ways. The main advantage was that the company could start virtual manufacturing by which it became capable of quickly launching products (Sustainability Report, 2011) through its flexible manufacturing systems. When it comes to the long term benefits, the company has also become able to increase the profitability, the productivity of the technology it used, the competitive advantage as compared to the main market players within the industry. Changes that still need to be implemented In today’s highly dynamic workplace environment, some of the companies have introduced flexible communication systems with the help of LAN, internet and other communication channels. People in any organization are the powerful assets and their knowledge, skills, expertise and experience are critical to success. In order to motivate people learn from others, create an organizational learning environment and implement better knowledge management strategy, it has been found to be essential that the company should create an online system for its people so that they will share documents, communicate each others, and create learning environment as well. This paper suggest that Ford Motor Company should create a domain through which its people around the world would be able to contact each others, communicate and share their knowledge and help all of them learn some thing new from the experience and knowledge of the others. Though the launching of such a change may create resistance issue, the management should be able to manage it well and create an organizational learning atmosphere among its people throughout its companies around the world. Evaluative Conclusion This piece of research paper has explained what change and change management mean. Change is both a challenge as well as an opportunity and change management is a managerial approach that can help management know and learn how effectively a change can be implemented. This paper has addressed the product development as a change issue and detailed how Ford Motor Company has successfully implemented product development as a change to its manufacturing system. A change doesn’t occur simply, but rather, lots of management efforts play vital role in bringing the change successful, especially by managing the resistance and other obstacles. 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