Managing the Process of Organizational Change - Case Study Example

Providers of social Housing are subject to ever increasing government statutes and initiatives, or internal factors. With the increase in population growth every year, this calls for an increase in the housing facilities to accommodate these growing numbers. More housing companies are set up every day to meet the increasing demand. This increase causes competition among the industry players. Each company is trying to have a niche of the market. Whenever there are many players in any industry, they tend to break set rules and regulations. They take short cuts by building substandard houses, which can easily, be swept away if there is a storm, while others build congested houses, which do not, meet housing standards. Thus the government has stepped in to bring order. Circle 33 is an example of a housing trust which operates in London after its incorporation as a housing association in 1968. During that time; housing companies were not so popular because people used to build their own houses. Over the years, it expanded to become one of the largest in the industry. In 2005, it merged with another company by the name Anglia. In the subsequent years up to 2011 it has merged with several other companies like, Ilnvicta Telecare, Russet Homes and Merican Housing association. In addition, last year, circle Anglia rebranded itself to become circle while Epic trust, which is a, part of the circle, became circle support. Focusing on the Circle Company from the period it was incorporated; it has made several changes, from changing of names to merging with other companies1. Merging is the process where one company joins another company to become its subsidiary2. This is the case for the circle company. It started as circle, and it merged with other companies to become circle Anglia. Several reasons have compelled the circle company to merge with other companies. These reasons include the following: to improve their efficiency in service delivery. Over the years, the circle company has gained popularity and its customer base has increased. Merging with other companies has brought the services closer to the customer. This means the small subsidiary companies are able to interact with customers on a personal basis3. Mergers also increase the company’s market share. When two companies merge, they become bigger in size. Customers in most cases want to be related with companies which have a significant market share. They feel they are with the best companies. Circle Anglia merged to meet the ever growing demand from customers4. Companies merge to eliminate competition in the market. Companies do not have equal resources or the same resources. Thus, if they combine, they will be able to provide value added services to their customers. When circle merged with Anglia, both companies stopped being competitors trying to outdo each other but rather joined to become a stronger company5. Circle Joined with Anglia in order to grow. It may have taken both companies a long time to grow into the big company they are. Growth as a single company may be extremely difficult and challenging in terms of costs and the time required to expand its operations. After merging the company currently owns over fifteen thousand homes in forty seven local authority areas around London6. Circle merged in order to increase its asset base. This is advantageous because it makes it possible to make borrowing from a financial institution. The more assets it has, the more security it can provide for borrowing large amounts of cash. It uses this money to expand its operations7. It merged to survive and build an empire. In most cases, empires consist of many small companies. If a company is big, it can be able to survive the test of time and with stand stiff competition8. Although there are many reasons to merge, this does not come without both regulatory and accountability constraints on the organization. These include the following: in most countries, the government requires that no company may own more than 25% of the market share9. Circle merging with other companies may be restricted due to this constraint. Diseconomies of scale are also a constraint on the Circle Company. With the tremendous growth of the circle 33, the production of the goods which in this case are houses may decrease. This happens because there is a poor communication channel within the company. The channel of command becomes longer which makes it easy for information to be distorted before it reaches the recipients. The mangers also have a wide span of controls which makes it difficult for them to keep track of everything that happens. This also reduces the face to face interactions by the manager and employees resulting in to use of memos and news letters leading to reduced feedback10. As the company grows, there is less attention on individual workers, which makes them, feel less appreciated. This may result into reduced loyalty and motivation to the organization. As this reduces, so does the quality and quantity of output, increasing the costs of labor per unit11. Companies do not usually just merge. They go through a process where they implement and promote the change. There are several steps involved in the merging process. This includes planning of the whole process before it begins. At this stage analysis and negotiations between the two companies are done. Letters of intent signed. Advisors of the whole process are appointed. Their role is to point out the advantages, disadvantages and threats involved in the merger. A time table is made showing when all events that will take place at the date when the new company will be formed12. The second step is where the management approves of the merger after which they table it before the shareholders. This is done during board of directors meeting and extraordinary shareholders meeting. The creditors are also given a chance to give their opinion on the matter. If these stakeholders agree, the merger is taken to the proper government authorities for approval. After its approval, the new company is formed13. The final step is the implementations of the merger. It Involve several areas; First is in the management structure. Before the two companies merged, they both had had individual managements structure, but after they merge, they become one14. Focusing on Governance and leadership of the circle 33 companies, there is a group board which overseas the whole company’s financial targets, risk review, business planning as well as its performance. The group board has a sub committee of resident and service panel users. It consists of twenty resident and service users whereas each of the subsidiary companies has two representatives15. Their role is to act as a voice of both the resident and service users. It also scrutinizes assessments impacts in the whole group. In addition to this, circle 33 has another board consisting of twelve members from tenants’ joint commission. Their role is to ensure the company is in line with the set out vision, ensure the quality of services provided is the best, makes key decision and ensures all stakeholders’ needs are met. The significant representation of all the stake holders ensures that they are involved in the process of making key decisions. The whole board meets six times in a year in order to scrutinize its performance16. The leadership of the company consists of a senior management team comprising of four assistant directors who report to the Group’s chief executive. They are in charge of property services, services to the neighborhood, community development as well s continuous improvement. The group provides central services monitored at the local level. In order to promote these changes circle 33 engages in a lot of advertisement to inform their customers and the general public about its changes17. In order to know if any change is a success or not, it has to be assessed using several methods. Circle 33 merged with Anglia to form circle Anglia. First is their customer satisfaction depending on several issues: satisfaction with the way their landlord dealt with last repair was targeted to be 87% in the year 2010/2011. Their actual performance was 89%, which is higher, than the target and their performance in 2009/1018. On the landlord services, the company achieved 75 %, which is below, the targeted 81% but higher than the previous year which was 73.5%. The third is the satisfaction by customers that their views are being taken into consideration. The company achieved 65%, which is more than the set target of 60% and the previous year’s performance. In all the areas, the company has shown a growth from their previous years thus an indicator of success19. Secondly is measuring standard of customer service20. The company had set 70% target in the answering of telephone calls within the first thirty seconds. Their performance was 67%, which is below, the set standards but higher than the minimum required which is 65%. In any business, there cannot lack complaints by customers. Responding to these complaints within ten working days is crucial21. The set target was 95% while the minimum requirement was 95%. The actual performance was 85%, which is below, both the target and the required. This shows that they need to improve in responding to a complaint. The company undertakes repair works. The target percentage to complete this work in one visit was set at 85%.The company beat the target to record a high of 90%. They had set a target of removal of offensive people within 24 hours after reporting at 100%, which they met. Lastly the company carries out estate inspection after six week. The target was set at 100% but recorded 88%. This may be attributed to rapid growth of the company22. The third measurement of merger success is the fact that the company caters for all kinds of people23. Statistics from their website shows that 49% of the tenants are White, and from Britain, 60% are Christians and 20% do not have any religion affiliations. It has managed to serve the disabled with 38% having some form of disability while 6% use wheelchairs. 77% of the tenants are heterosexual while 60% live with children below the age of sixteen.71% have lived in the company’s houses for over six years. This shows that their services are good otherwise they would have moved to other companies. 65% of all the tenants are female while 35% are male24. Females tend to be more sensitive to their living environments than males, with their numbers being high; it is an indicator that the environment of the houses is right. Another factor is age groups that live in the houses. The company accommodates all age groups as illustrated below. Under 25 _ 3% 25-34 13% 35-44 28% 45-54 20% 55-59 7% 60-64 9% 65-74 12% 75-84 6% 85 and over 3% The fourth indicator is it achievements over the years25. It has invested heavily in surrounding communities. It is involved in leading on youth partnership work in the town of Hackne. It has also set up projects for the young people in Waltham Forest. It has set up medical camps to address health issues of the old people in Waltham Forest. Donating money to the disabled to help ease their live is also part of their achievements26. The last success indicator is the fact that they are able to provide a diverse range of services to their customers27. Other than just providing housing, they provide repair services instead of hiring another company. This shows that they are able to meet the demand form their customers. Although these are the main indicators of circle 33, other companies use different methods to measure their performance success. Some user net profits as an indicator. This may not be the best method because immediately companies merge; their profits increase28. This may reduce over the years because of not focusing on other areas like service delivery. The high profits may be as a result of reduced inputs costs, which results to reduced quality of service provided. Customers are always looking for better services and thus will end up leaving. Some companies conduct surveys from their customers29. They may do these using the different methods of data collection. They may use questionnaires distributed to customers. Some conduct interviews of their customers. This is an accurate way of collecting data because it gives first hand feed back from the customers. Also, when conducting interview, one can tell the attitude of the customer, if he is satisfied with the service or not. In conclusion, change takes place in all sectors of business30. Some of these changes are voluntary like in the case of circle 33. It chose to merge with other companies in order to meet the growing demand. Other changes are forced by the set rules and regulations. An example is where the government requires a company to have a certain capital base, if it can not do this on its own then it looks for another company to merge. Bibliography Carlo Berti, ‘Steps in the merger Process’, http://eng.gruppohera.it/group/hera_ondemand/words_understand/page25.html, 2010, (Accessed 24 February 2012). Cebit, ‘IT Managers and the Key to Successful Mergers’, http://www.businessweek.com/adsections/cebit/cebit2k/itmanagers, 2000, (Accessed 24th February 2012). Circle Anglia, http://www.circleangliarespect.org/rinformation/100076/circle_33_housing_trust/, 2012, (Accessed 24th February 2012). Hussey E. David, How to Manage Organizational Change (New York: Kogan page Publishers, 2000). Trotta Gian, ‘Modern Methods to measure Business Success’, http://www.ebizq.net/topics/real_time_enterprise/features/2305.html, 2003, (Accessed 24 February 2012) Hicks, R. ‘Organizational Change Management’, http://www.epmbook.com/orgchange.htm, 2010, (Accessed 24th February 2012). Reasins K. John, ‘Behind mergers’, http://finance.mapsofworld.com/merger-acquisition/reasons-behind.html, 2010, (Accessed 24th Feb 2012). Perter, J. ‘Advantages and Disadvantages of Mergers and Acquisitions’, http://www.scribd.com/doc/39045349/Advantages-and-Disadvantages-of-Mergers-and-Acquisitions, 2008, (Accessed 24 February 2012). Tutor2 u, ‘Diseconomies of scale’, http://tutor2u.net/business/gcse/production_diseconomies_of_scale.htm, 2009, (Accessed 24 Feb 2012). Read More