Managing Change: Starbucks Coffee Corporation - Case Study Example

Managing Change This paper will discuss issues involved in the change implementation in organisations. It will explain what kind of problems organisations face in implementing change. The paper will be divided in sections with several sub-headlines for better understanding of the subject. The section, Change implementation needs a team, will explain the importance of a team in the successful implementation of change in an organisation. The section, Resistance to Change, will discuss behaviours of individuals towards change and how management tackles the issue. The Literature Review will look into the works of different writers on the subject. Starbucks Coffee Corporation will be taken as a case study and its success in managing change will discuss in a separate section. In the end, a Conclusion will sum up the points discussed in the paper. Introduction In almost all organisations that can successfully implement and sustain change ultimately dominate the competition. The winners in today's hostile organizational environment will be those practices that are able to make and maintain improvements constantly. In the evaluation stage, the sources of likely resistance to change are considered. Stakeholder management is an important component of the planning stage. These initial steps are essential and must be handled excellently. In urgent situations, the time spent on these steps may be shortened, but neither step should be left out. All the planning in an organisation will be ineffective if implementation fails or if the improvements from a useful implementation cannot be sustained. (Sutterfield 2006) Unluckily, in many organisations change implementers often use force. As expected, this forced implementation triggers resistance from employees and consequently this dooms the change effort to short-term success at best, and failure at worst. According to Peter Senge (1994), the goal should be commitment to the change, not simply compliance with the change. This will draw upon the trust that should have been built between managers and employees. It is very hard to implement change when there is a prevailing feeling of distrust. Creating a sense of ownership among employees is an important tool for involving individuals in the change process. It also helps team leaders to development a good understanding with their team members. (Kotter 2002) Change implementation needs a team For the implementation of change there is a need for dedicated team. Therefore, organizations should form teams whenever any substantial changes are planned and try to enrol representatives from all areas within the practice that stand to be extensively affected. The members of this change team should be taken from different organisational levels. During meetings of the team, the normal chain of command of the organisation should be suspended. The practice can help ensuring that each team member will get the opportunity to provide his/her contribution. (Dyer 1984) People oppose change mainly because of fear of loss. The loss may comprise job security or perceived competence. The resistance can sometimes be overcome by providing proper training as part of the implementation. Investment in training is normally rewarded with returns far exceeding the required outlay. (Lippitt 1985) Resistance to Change Towards change as an individual, it appears possible to notice that people are set to a routine in their day-to-day affairs. For example, the routine to travel to a college consists of the same streets and same highways in order to get to the destination, but what if maintenance is needed on one of the streets? A person will find troubles of taking alternative directions, sometimes even taking much longer to arrive at the same destination. According to Robbins et al, this difficulty is considered to be one of the many resistances to change towards an individual since it's breaking the individuals routine (Robbins et al 2004, 571). In an organisation, a lot of people will gain a resistance towards change if the change affects their comfort zone. Robbins et al say that there are five factors which may have an effect on people to be resistant towards change. These include habit, where individuals will be cautious to find alternative methods in order to complete something they already gained a habit to; security, where individuals may fear their life being in danger or their jobs at risk; economic factors, individuals may fear that change may affect their present earnings; fear of the unknown, some individuals will face a completely different system and hold dislike for uncertainty; selective information processing, are when people select what they want to do, or a hear what they want to hear. For example, workers may ignore certain a criteria which the manager has set (Robbins et al 2004, 571-72). Though change within an individual’s viewpoint maybe a difficult and ambiguous step, in relations to the forces of change, it is a requirement for ones self to continuously change and continuously learn the new changes of life in order to improve ones self to the next step. An example of a change which results in a difficult and ambiguous manner is the transference of a student from high school to university. Though it is not essential to go to university, a student whom wants to complete a university degree will have to change from a known atmosphere to a different atmosphere even if he/she feels uncomfortable. The resistance of change is what impacts upon valuable change towards people. To gain efficient change management, a manager should not only be able to effectively control individual change, but they must also be able to overcome organisational resistance. According to Robbins, there are six main factors towards organisational resistance to change. These include; structural inertia, where the people are trained to behave in certain ways, a change in the organisation will affect their arrangement thus creating a counter balance to sustain stability; Limited focus of change, in which firms have different types of working sub-systems and they depend one each other. Limited changes in sub-systems have a propensity to get annulled by the bigger system; group inertia, although some of employees might agree to certain change, it is not always the case where their group will accept it; threat to expertise, this is when specialised groups in organisations fear for their place. For instance, factory employees are threatened by advancement in technology which may take over their job; threat to establish power relationships, such factors as self managing teams can be threatening to supervisors; threat to established resource allocations, where certain groups or departments, fear change if it affects their budget towards their resources (Robbins 2004, 572-73). The resistance to change is recognized as the impact upon effective change management. In order for an organisation to change efficiently, organisations will need to implement the use of change agents. Stoner et al portrays a change agent as “the individual leading or guiding the process of change in an Organisation” (Stoner et al 1994, 284). A change agent's role is to examine the organisation itself and take the best process of change for implementation. A change agent must resolve all resistance towards change, in order to take the organisational level to a next step. For overcoming some of the resistance to change, Robbins justifies that a change agent(s) implement the six following strategies; education and communication, where individuals and groups are told about the change; participation, gathering individuals or groups to play their role in the change; facilitation and support, offer assistance for those people who need it; negotiation, where there may be a exchange of something valuable to over come the resistance to change, an example would be an increase in salary; manipulation and cooptation, where change agents twist facts trying to make them more attractive, which may also hold unwanted information; coercion, the last method of implementing change, but when change is required, change agents or managers could implement force or threats to gain successful change (Robbins et al 2004, 573-74). An organisation which is failing, it is very important to bring in fresh, new management ideas and a clear vision of how to appropriately manage to turn the Organisation around. One of the major changes within our 21st century is the technology that is available for all organisations. It is hard to keep up with all the developments and upgrades daily. “If it weren’t for change, a manager’s job would be relatively easy. Planning would be simple because tomorrow would be no different from today.” (Robbins 2007, 356) Literature Review Robbins and Barnwell explain change as an overworked cliché, and it seems impossible to write any management textbook without change in it (Robbins & Barnwell 2002, 346). So it comes to the question, why is it a requirement for organisations to change? And what affects upon effective change management? Robbins et al argues that change is driven by five main points. They included the nature of the workforce, technology, competition, social trends and world politics (Robbins et al 2004, 568). The nature of the employees affects change due to the diversity of organisation itself. As organisations grow in size, it is common for them to gain a wider range of diverse cultures. Kotter (1996) says competition usually gives a positives change to the organisation. It is significant that organisations keep close relations with their competition, in order to constantly maintain a competitive advantage. (Fred 2002, 1-2) Von Stamm says that all organisations should adapt innovative creativity within their organisations in remaining at the front position of business development (Stamm 2003). The competition in the pizza industry provides us an example of this situation. The leading competitors within today's pizza industry are Pizza Hut, Pizza Haven and Domino's. All these pizza makers serve the same menu but categorised their products differently upon their name of the food. When Pizza Hut introduced the new 'cheesy crust' pizzas, it wasn't long after that the other competitors benchmarked their idea to stay in the competition. Therefore, through this example, it is vital to gain a broad knowledge of competitors. Cooper and Hill (2004, 1) also says that business's are commercial, and not social or political institutions and the central focus of any company is on building shareholder wealth. Durie (2004, 401), however, is of the view that managers who work with this one-dimensional view of the corporation will not be successful in today's changing environment. Durie (2004, 402) takes on the socio-economic view that “managements social responsibility goes well beyond the making of profits to include protecting and improving society's welfare” (Robbins, Stagg, Coulter, 2003, p137). Mendes (2003:33) says that current business theory holds that companies have operated and continue to operate over five different generations. This theory is that as the world becomes more aware of business practices, there is more of a need for organisation to operate in a socially responsible manner. Mendes (2003, 32) declare that first generation managers believe, like Friedman, that their only obligation is to themselves and shareholders. “Social obligation is the obligation of a business to meet its economic and legal responsibilities, the organisation does the minimum required by law” (Robbins, Stagg, Coulter, 2003, 138) Eisele (2003, 543) says that first generation or classical style management existed in the American Gilded Age (1875 - 1900) where the labour received low salary and worked in average conditions. “Strikes were often ended with violence, almost always instigated from the wealthy business managers” (Eisele, 2003, p544). Though most companies do not adopt the classicist approach today, Eisele (2003:545) says that there are still those in the global business who operate successfully under first generation issues. Durie (2004, 405) says that “a major issue that exists in the business world is the exploitation of cheap, foreign labour, and the use of domestic and foreign sweatshops”. Case Study — Starbucks Coffee Corporation Why have organisations such as Starbucks been able to stay on top for so long? In a world filled with our needs and wants changing all of the time, Starbucks has been able to effectively crack the code in organisational change. (Canak 2006) The capability to be able to foresee their change and develop new ideas and implement them has contributed to the success of their organisation. Being able to defeat resistance to the ever-changing process will set them apart from the successful organisations and the companies that are struggling. Organisations can no longer rely on the success they were able to achieve in the past. All businesses should be prepared when their customers have new expectations; and in the process call for change. As for some companies, there are a lot that are on their way down. Management within organisations are asking themselves what they can to do make their business survive and grow. Starbucks has eliminated this process and is continuing to offer not only gourmet coffee to consumers all over the world, but is institutionalising a new way of business as a transformed organisation that will be around for years to come. They have also continued to offer a constant quality of excellent service to customers internationally and have implemented changes within their organisation in a successful way. Conclusion Modern theories of management recognise the need to empower employees and the empowerment is especially important when attempting to implement change. (Scott 1995) Asking for a change generally creates a difficult enough situation for staff. Organisations should give power and authority to employees which are required to overcome the barriers to progress that inevitably arise. In a number of cases, the most significant barriers are internal to the organisation. People within the practice that impede others from achieving positive change should be dealt with, but fairly. Organisation must celebrate intermediate accomplishments, whenever possible because human nature is such that small successes along the way make it easier for people to carry through to the finish line. Opportunities to recognise the victories should be actively sought, lest chances to boost morale be lost. Organisations should introduce different types of attractions for employees. In this connection, it is good policy to revise appraisal and reward systems to accommodate changed employee requirements. Behaviour that is rewarded tends to be repeated. This repetitive behaviour ultimately becomes enmeshed in the formal requirements of the organisation. It is very important for organisations to introduce new activities after successful implementation of change which will help in sustaining the change. Organisations should openly acknowledge how the change is consistent with its vision and use data when possible to show how the new behaviour has led to improved performance. These measures will serve in entrenching the improvement, and establishing a precedent for future change initiatives. Resistance to change holds an enormous impact towards effective change management. The five forces of change drive organisations to manage change effectively. For an organisation to gain effective change management and to overcome the complication and ambiguity towards change management, an excellent strategy is with the use of change agents. 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