Foundations of Change Management - Case Study Example

Introduction Organizations often face the difficult tasks of managing change which, in most of the cases, is considered as one of the most challenging tasks which need to be performed. To manage change not only involve a complete change in the way business is being done but also require that fundamental changes must be made into different functional areas of the organisation such as finance, operations, HRM , Marketing etc. However, management of change has often been attributed to the change management of people because they are the most important stakeholders who often show resistance to the organisational change despite the fact that organisation may be requiring a complete revamping of the way it used to perform.(Hiat, et.al. 2003). It is argued that one of the fundamental questions which organisations often counter is the fact that how organisations shall respond to the external as well as internal challenges. The response to the changes basically distinguishes a good company from an excellent company therefore in order to strategically manage and grow a company, it is critical that firms must tailor their responses carefully to the internal and external challenges in order to effectively manage change.( Staudenmayer et. al. 2002). This report will basically attempt to present set of analysis and tools through which Les Gourmands can overcome its most emerging problems by clearly identifying key issues in different functional areas of the firm besides offering clear recommendations as to what may be done in order to identify the biggest problems which organisation may face in future. EXTERNAL ANALYSIS The external analysis of the firm will be performed by using PESTLE analysis. Political Forces United Kingdom’s political environment is a multiparty political system and is one of the oldest constitutional monarchies in the world. The political environment in the country is one of the strongest and stable political systems in the world. The legislative power is vested into the two houses of parliaments whereas executive power is being exercised by the government which is lead by Prime Minister of the country who is elected through popular vote. The recent war on terrorism however is one of the most critical factors which are considered as one of the valid threats to the political stability within the country. UK’s role in this war is very well known and the incidents like 7/7 particularly indicate the vulnerability of the country to the terrorist attacks. Economic Forces UK recorded a real GDP growth of 3.1%, however for year 2008; its real growth rate has been forecasted at only 1%, mostly due to the current financial crisis which has engulfed many developed countries. Similarly, country is also facing a relatively higher degree of inflation as for year 2008; inflation rate is expected to be touching the level of 3.8%. UK is also experiencing negative current account balance as well as budget balance however; its currency seems to be getting stronger against dollar. (Economist.com, 2008). Social Forces UK is fast becoming a multi ethnic country as there are many ethnic minorities which are increasingly migrating to the country. Country’s indigenous population is mostly Christian however different religious minorities such as Muslims, Hindus etc are also increasingly migrating to the country. This factor has given UK an entirely new look and orientation with a very balanced social environment. Due to different ethnic minorities celebrating different religious events such as Xmas, Eid, etc therefore there are strong prospects that the firm may be able to penetrate into different segments of the market by clearly changing its segmentation to suit more the multi-cultural environment of the country. Technological Forces UK is one of the earliest industrial countries in the world with one of the sound technological base. The country is not only a base of all emerging technologies but it also is a net exporter of different technologies to different parts of the world. For Chocolate manufacturing, country has one of the highly sophisticated technologies to manufacture. Legal Forces Country has one of the strongest legal systems in the world. Trade liberalization has forced country to adopt business friendly laws which account for almost all the stakeholders in the business. Legal environment within the country permit private property and there are no legal restrictions on opening any allowable trade. It is also of importance that due to its flexible governance system, there are fewer hurdles in terms of swiftly operating a business. Environmental Factors UK population is predominately becoming more environmental sensitive as there is more emphasis on producing and consuming environment friendly products. The focus is also on developing sustainable business solutions so that the limited natural resources shall be conserved for their better and more sustained use. Internal Analysis Les Gourmands is engaged into luxury chocolate manufacturing and serve the different chain stores with most of its sales made to Pomfreys. The internal analysis of the firm will be done by performing SWOT Analysis. Strengths 1) High quality chocolates 2) Consistent sales growth Weaknesses 1) In adequate machinery 2) Loose Operational Control 3) Majority of buying is done by only 1 customer. Opportunities 1) Ethnic market presents one of the best opportunities to grow into new segments of the market. 2) Luxury chocolate market for high income customers Threats 1) Competitive forces seems to be much stronger Analysis The above analysis suggests that the firm is working in a relatively stable environment with little external threats in terms political instability, technological obsolescence etc. However, there are other factors of the highest importance implications which firm needs to understand and analyse in order to overcome its current problems. These problems pertain to different functional areas of the firm. These functional areas include what marketing changes shall be brought in, how the operations shall be streamlined, how finances of the firm shall be managed and how the quality human resource base shall be maintained in order to ensure quality delivery of products produced by the firm. It is also important to understand that there is a great need for understanding the culture of the firm also so that a better understanding of the organisational environment may also be gained. Following section of the report will provide an analysis of the different functional areas of the organisation in terms of what could be done to successfully solve the current problems. Marketing From the facts provided in the case study, it seems that the firm is attracting a sort of negative feedback from its major customer. The fact that the deliveries are missed, packaging is not up to the standards suggest that the firm need to take a holistic view of its marketing communication mix. Firm needs to focus more on increasing its interaction with the customers and get a feedback on the product characteristics so that the changes may be made to the packaging, product and other related marketing attributes. It is also important that the firm must increase its advertising. Till now, most of its advertisement is done through informal channels i.e. word of mouth and there is a very little effort on the part of the owners to initiate a serious and focused advertisement campaign, though may be on a small scale, but it is necessary that the advertisement shall be increased. Human Resources Herzberg was of the view that hygiene factors in work environment are one of the most important motivational factors for employees.(netmba.com,2008). Viewing in this perspective, clearly firm is not offering proper working at environment to its employees which is not only creating a negative influence over the employees but also is resulting into employee turnover. It is therefore, critical that the firm must provide better working at conditions by re-tailoring its operational facilities and increasing the number of employees so that the work load is shared and employees get a fair chance to perform to their best potential. Finance It is evident that the firm needs to invest into capital goods i.e. it needs to purchase a machine with more capacity as the current plant and machinery is not sufficient to meet the demands. It is also important that the firm also relocate to a much bigger factory to accommodate its growth. Since most of the family assets of Simone are already dedicated to the business, it is therefore important that the firm must approach other interesting parties such as banks, lenders etc to invest into the project. Operations Firm needs to improve upon its operations by initiating a business process re-engineering because at this time it seems that the firm is not operationally efficient to meet the demand. Structure and Culture It is critical that Simone must share the responsibility with the employees also by delegating the responsibility to lower level. This will not only allow to create a more professional environment but will also give an opportunity to employees to feel themselves as part of the organisation. Conclusion The biggest problem which business is likely to face as it expands into future is that it must improve upon its efficiency otherwise competition will overtake the firm. References Jeffrey M. Hiatt, Jeff Hiatt, Timothy J. Creasey (2003). Change Management: The People Side of Change. New York: Prosci. 148. Nancy Staudenmayer, Marcie Tyre and Leslie Perlow. (2002). Time to Change: Temporal Shifts as Enablers of Organizational Change. Organization Science. 13 (5), pp. 583-597. Economist. (2008). Economic data. Available: http://www.economist.com/countries/britain/profile.cfm?folder=Profile-Economic%20Data. Last accessed 11 November 2008. NetMba. (2008). Herzbergs Motivation-Hygiene Theory. Available: http://www.netmba.com/mgmt/ob/motivation/herzberg/. Last accessed 11 November 2008. Read More