Organisational Change Management - D2 Car Manufacturing Company - Case Study Example

Organizational Change Management: A Case Study of D2 Car Manufacturing Company of Contents Organizational Change Management: A Case Study of D2 Car Manufacturing Company 3 Introduction 3 Definition 3 Discovery 4 Dream 5 Design 6 Destiny 12 References 19 Organizational Change Management: A Case Study of D2 Car Manufacturing Company Introduction Organizational Change management is defined as the process of renewing continuously an organization’s structure, direction and capabilities/capacities to provide for the changing needs and demands of all sorts of customers’ (Moran and Brightman, 2001: 111). Operational change is closer to the people as this is on critical matters such as change in technology, systems upgrades, and work procedures. These form of changes could affect working arrangements, the staffing levels , training needs , might bring about sensitive matters like redundancy thus should be handled with caution and most importantly the employees should be made part of the change initiation (Paton, R. A. and McCalman, J. 2000). Definition Organizations operate in environment where change is inevitable for their attainment of goals and objectives. Change management is the process of continually reinventing the organization structurally, its capabilities, their strategic intent in the environment that is so dynamic due to customer needs and expectations. Change should be considered in the business environment be it strategically or in its operations. The organizations should therefore be in a position to look further in the future and plan on how to modify its current status in order to successfully make it to the desired standards. Change however requires some form of management. Research indicates that poor results in the change process are attributed to lack of a framework that spells out how the changes need to be implemented and managed. Change is often reactive to an emerging issue thus success in managing it is the key to determining whether the business will be able to survive the concern that it brings about (Michael , A 2009) In order to be able to manage change it is critical to understand the types of change, organizational structure, environmental effects, leadership management and the reasons why people resist the idea of change. Strategic change looks at the organizations bigger picture as to where it intends to be by a certain period (Smith, M.2002). It encompassed the mission, intent, the organizational philosophy such as on growth, innovation, customer service, its employees, quality of products and technological change. D2 is a French car manufacturing company is the case study for this paper. D2’s goals are to always make excellent returns and develop their shareholder market value. This company has prioritized on innovation of new products. It invests it time and money on new technology and builds the capability/ capacity of its employees. It has several plants all over the world in more than one hundred and eighteen countries. Some are in Spain and the United Kingdom. Discovery The company has opted to change strategy in order to produce more in its main factory that is situated in Blois, France. These changes are bound to result in some conflicts or disagreement even major changes within the company’s organization. However, in order to ensure proper transition into new developments, the company should strategize tactfully so that the new developments do not fail miserably. In order to benefit wholly from the economies of scale, the company has decided to cut down its costs thoroughly. It ensures that certain components are scrapped off production and others be inputted in order to maintain this. The company over the recent years has been battling to survive in this every growing competitive market. The need has been realized by the executive board and they have tactfully planned to announce the changes to the staff in the company. The plant that is based in the United Kingdom is up for closure and there are new opportunities for staff to be deployed in Spain and France. The plant in the United Kingdom has outdated technology that has been faced out. Those are some of the components that have to be scrapped off to cut the cost of production in the company and maximize the profits for the company. There are various concepts that have to be considered to make a good transition for a company’s change in organizational management. There are various theories that have been put in place to ensure this too. The concepts vary from environmental pressures, types of change organisational structure, leadership/ management styles, resistance to change and many others. Dream As Burnes (2004) puts it, change is an always present feature in the life of organization, both at a strategic and an operational angle. Therefore, with regards to the importance of change to any company/organization there should be no worries and doubts of its ability to identify where the company’s / organization needs will be in the near future, and how best to control the necessary changes that are required to getting there. Consequently, these organizational changes cannot be set apart from the strategy of the organization, or even vice versa (Burnes, 2004; Rieley and Clarkson, 2001). The importance of these changes in an organization is becoming highly recommended managerial skill (Senior, 2002). Graetz (2000: 550) goes a long way into suggesting an increase in globalization. Design Globalization is a trend whereby individual countries lose their influence in reference to cross-national bodies. Decision makers are based in a different location all together from the people who are affected by the decisions that are made. Fear is an inevitable concern as these people‘s needs are likely not to be put in keen consideration as it is difficult to consider all the stakeholder’s expectations. With Globalization it becomes challenging to be able to synchronize quality across the boards and be able to maintain the same reputation in all the continents D2 has presence. There is need to embrace diversity but to also develop talent so as to be able to retain staff, provide desirable services to customers and to also be able to compete with other financial service providers. D2 therefore has the task of changing the way employees handle their work and also grow talent and capabilities. Leadership development is vital in the reputational development of an organization in a competitive environment. Productivity in the organizations rapidly improves and this will also meet the needs of the organization in the present and in the future. There is a less drain in the organizations strategies since this is meant to retain staff. The development of staff is geared to address future skill needs such as retirements, organizational structure changes, size and economic changes. The organizations structure is a reason for concern due to its complexity. It is not easy to encourage cross functional functioning as it would appear that those people outside the head office tend to feel like they are not involved in any decision making but only forced to adopt what has been deliberated at higher levels mostly considered to be environmentally and socially different from the unique experiences of their locations . Environmental pressures would include the competitors in the car manufacturing companying sector, the specific country’s regulations, changing technologies, social factors, economic factors and political influences. Developing a cut across outfit on the approaches of handling competitors possess a challenge in the essence that each county has their own culture and therefore varying ways of handling the staff from diverse backgrounds (Luecke, R. 2003). People however have different orientation in embracing change this influences their readiness for change. Change can be floated for the benefit of the employee and the company but employees might view if pessimistically. The car manufacturing company intention was to acquire, develop and maintain talent in their organization. This is critical in the managing of succession planning, having a workforce that is able to deliver and being able to retain the employees. Contrary to the change expectations the lack of clarity brought about high turnover cases as staff would be developed but financial compensation would not be commensurate of the skills they have developed. The lack of involvement of employees in the coming up of this decision makes it hard to maintain staff who eventually feel like their views are not considered and they therefore seek to be attached to an organization that appreciates their views and concerns Luecke, R. (2003). When familiar patterns of behavior are altered employees feel insecure. They may feel suspicious of the goal of the employer and might not embrace the change. This will eventually displace the objective of the change. The staff in this case of D2 will feel like they are being prepared to be overburdened by bigger tasks and not compensated for it. Employees as stakeholders in the company should be communicated to and be involved in the change process to feel part and eventually embrace the intended outcomes. Once the employees are allowed to float their ideas and constructive feedback is received from management they are likely to appreciate the changes, own the process and even participate to their full implementation (Drucker, Peter 1995). Every individual in employment hopes to gain stability, satisfaction and monetary gains. Once the change is floated people are fearful that they could lose their jobs due to the probability of redundancy. In the D2 case staff especially long serving staff felt that they could be forced to early retirement since they had already reached a plateau in their careers. The leadership development strategy was meant to capture the young people who had just completed their education and grow to be leaders in the organization. When the change is introduced the job routine is altered and much more time is allocated for the change process. This is inconveniencing to employees who are used to a specific routine. There are different types of change; change that is characterized by the rate at which it occurs. For example there is discontinuous, incremental, bumpy incremental, continuous, continuous incremental, punctuated equilibrium change. The type of change that is most prominent in the case of D2 is continuous change. That comes about due to various developments in technology that are in cooperated in the production of the B2 product. There are three models that are commonly adopted in cases of organizational change management and they include Kanter et al.’s Ten Commandments for Executing Change (1992), Kotter’s Eight-Stage Process for successful organizational transformation (1998) and Luecke’s Seven Steps (2003). The mentioned models all have different characteristics but they all narrow down to the same things. These include; having a clear direction and vision for the organization when executing change. Creating a sense of urgency in order to ensure quick execution of change and avoid procrastination. Identifying appropriate leadership and ensuring continuous communication between staff and management. Institutionalizing change and reinforcing it to the staff members. The model that is most appropriate for D2 is Luecke’s Seven Steps that focuses mostly on the results not the activities that are involved in the change. Considering that the company needs the change why worry about what measures that has undertaken. It is profit maximization that will save this particular company. The changes floated can affect the interpersonal relationships of colleagues and most likely with management. The management is viewed as the major cause of comfort ability that had been enjoyed by the employees. The D2 employees viewed management as not having their interests at hand and therefore could not relate well. The nature of change seemed to favor young people therefore it created a different clique of long serving employees versus another of the young stars. The status of each individual at the time before change is already established. The long serving individuals due to experience are most likely to be at a level of management. If new talented leaders are horned the is fear that the structures might change and the big losers will be the managers who are unable to keep up with the fast changing environment as they are unlikely to benefit from the change. More autonomy was given to employees who were being trained for leadership roles and therefore the managers lost some of their decision making responsibilities. New leaders were expected to be able to make decisions and be able to see them to their fruition. The employees are put in a position that they are not sure if they will meet the demands of the new focus of the company. There is fear of the likely consequence of not being able to meet the company’s expectations. D2car manufacturing company is in the service industry and often need to ensure that their performance is at a high level in order to thrive in the competitive environment. Their employees are expected to be the cream of the society so as to be able to sustain change and focus on the deliverables of the company. Failure to move with change has no place in the fast world (Ancona, A., Kochan, T.A., Scully, M., Van Maanen, J., & Westney, D. E. 2005). It was however in the company’s plan to cut down costs as employees feared but all the same employees were expected to be able to meet the required skill development. The world class product engineers were to meet their goals be it in France or Spain even if they were originally in the United Kingdom. Resistance to change must be addressed in order to overcome the concerns. It is vital that the organization analyses the likely impact of the change in relation to people in delivering on their roles and responsibilities. It is important to be able to dissect the anticipated reactions to the change. The reasons for resisting the change should be listed and also the hostile reactions that might go in line with this forms of resistance. Once the likely feelings of those affected are identified, it is important to address them so that the change objective is as clear and objective. Employees concerns are addressed so they are able to look at the change as important and necessary, develop a positive attitude towards it making it easier to implement. D2 car manufacturing company had an approach whereby each line manager was given a target of molding at least two employees yearly within their small units to enable the car manufacturing company prepare staff for greater responsibilities. It was not therefore in the organization’s interest to interrupt all the employees’ positions and roles in the organization but target on mentoring more leaders for positions. With the clarification fears of job loss and uncertainty were addressed. They deployed more staff to the new plants in Spain and Blois, France to develop the B2 product There is also need to involve people in the change process so that they can also raise their concerns, provide possible solutions in the challenges and even come up with better ways of implementing the change. People in this way are able to own the change and feel part of it. They are therefore able to identify with the organizations goals and translate them to their role in enabling these goals to be met. D2 case was a unique one and it continues to affect them to date. The company embarked on leadership development strategy so that they are able to acquire and maintain high quality staff. The company has a rather complex structure that doesn’t focus on the employees’ participation in the change. The change was cascaded down the structure and despite the larger task was on the employees; their opinions were not put in considerations as it was already drafted how the change should take place. Currently the employees take advantage of the change but eventually move out of the organization to seek employment in places their opinions can matter. Destiny The progress of change should be communicated to staff at all levels. Constant communication is critical to avoid speculations on what could be possibly in the pipeline as the change is being implemented. The line managers should be able to brief their teams on the developments, the changes in implementation or any relevant information. All channel of communication should be considered to avoid rumors that could be detrimental to the change process and staff morale (Dunphy, D. and Stace, D. 1993). The managers should lead the way to the change destinations since they are the leaders of their teams. If managers are not positive about the change the employees will follow through and the changes might be unsuccessful. Managers in the case of D2were in most cases long serving staff and found it hard to embrace change that is most likely to affect their positions and its relevance. They were given the freedom to identify, coach and with the input of the HR units organize for trainings. At the beginning the process was slow and choices biased but with time leadership development has been an impressive strategy that has since uplifted the image of the organization in developing their staff to the outer world. Collaborative leadership is important for sustainable development. When a period strikes that requires quick resolution leaders should be able to make fast and critical decisions to salvage the organization from possible losses. This however should be adopted only for the short term and not to be adopted in all the situations. In the achievement of long term sustainable changes leaders should be able to adopt a style that is inclusive of employee’s participation and engagement. Directive leadership style is unlikely to bear fruit in critical change situations as is likely to face resistance and sabotage from the employees who are required to participate fully in the change process Rieley, J. B. and Clarkson, I. (2001). Change doesn’t proceed in a given pattern and therefore models of change are but a guide on how change can occur and give different ways of how change should be approached. These changes are different due to demographics, activity involved and the industry it is happening. The models therefore can be adopted in relation to the nature of change whether caused by internal factors or external factors will be more suited to different models. Lewin (1951) came up with a model of change that involved unfreezing, changing and refreezing. There is the current status of the stability in the organization in regard to structure, attitudes and behaviors. The people need to be encouraged to be flexible and accept the change. Of great importance is to change the way we work so as to realize new goals and destinations. Fears should be fully addressed and every one brought on board. Once this is done new responses are introduced and eventually refreeze by introduction of new responses to those affected. It was necessary that the attitudes and status initially held by the employees of D2be changed, embrace of new leadership development be adopted and eventually the desired goal maintained and constantly be reviewed and improved. According to Bandura’s model of change, people have an internal conscience in their behavior choices. They are however influenced by the environment in their choices. People are likely to make choices in consideration to what they are likely to gain from it and their likelihood of being able to behave in the desired ways. The end result is also critical in the change that is being adopted. It applies in the case of D2 the people should be made to appreciate the returns of developing their talents as it will ensure that the progress in their careers and development of their competences in an ever changing business environment. This will better their lives as the returns will be more attractive (Dunphy, D. and Stace, D. 1993). The D2Car manufacturing company puts great attention to the strengths of their employees since best performance is directly connected to the individual’s passions and competencies. The employees were prepared to take up leadership roles in areas of competence. The approach by the car manufacturing company is intended to place employees in areas where their full potential can be realized translating to good performance of the car manufacturing company and staff satisfaction. The introduction of the appraisal process was therefore adopted in order to identify talents and also to assist the management in appraising performance and identifying employees that can be developed for future leadership positions. This was a move from the traditional approach of end of year reviews to continuous improvement of employees as the year progresses. This assist in training needs identification and trainings implementations. The appraisal conversations are standardized across the group and thus helps reduce bias and maintain a level of transparency and reliability. The data for each individual can be analyzed and understood by any manager viewing it as is as clear. These appraisals also create an opportunity for managers to engage individually with their staff and here ideas are shared , problems are aired out and both the manager and the employee seek to find solutions together. It becomes effective since the employee feel that their opinions matter and that their growth is also considered by the organization (Szamosi, L., & Duxbury, L. 2002). The critical stage of change implementing requires a strong commitment and leadership that is visionary. The ultimate goal of the change should have been foreseen by the leaders and this considers the long term gains. The leaders should be ready to introduce and see to it that the desired outcome is not missed out. They have the responsibility of encouraging staff, leading the process and ensuring that the changes are monitored and all structures are in place in the improvement of these changes. D2 involved all levels of management by ensuring that they are all responsible for change implementation and sustainability. There exists performance appraisals that follows through that leadership development is an ongoing process. The global dimension of D2 involves the inclusion of so many cultures that are required to adopt the same change of leadership development that is rolled through the group. In this case diversity and inclusion was embraced and the change was custom made to appreciate the difference in cultural orientation for employees in the different parts of the world where the organization has its presence. The environment under which these changes are introduced should be conducive for change. The trainings should be custom made and structured to address the desired changes. If there is an underlying issue that might affect the implementation of change it should be addressed cautiously so as not to reverse the gains that the change would have brought. Working hours is a factor that needed attention so as to strike a work life balance (Bennet R. (1994). Due to the dynamism of the car manufacturing companying sector the leadership development was introduced at a time when there were technological changes of the car manufacturing company’s systems. Employees work life balances were not met due to the higher expectations of the deliverables making it necessary to address the issues first as leadership development would also call for sacrifices and thus the environment was critical. In Africa there were introduction of resource centers where employees would plan to visit and read online material and borrow books in order to up their knowledge and skills in their areas of specialization and other spheres. This was introduced to develop a reading culture in the organization and also reduce the time spent on trainings, coaching and mentorships as these books have these guides. Proper choice of change agents is vital for the success of a change intention. People have different personalities; there are those that are quick to embrace change and those that are not receptive to change. It is important that the change agents be chosen with this consideration. The more receptive people are better placed as they will drive change to its success. They are able to influence people positively by changing their attitudes towards the change (Beckhard, R., & Harris, R. T. 1977). Leadership development initiatives if developed properly will improve employees’ morale. It is however difficult to measure the employees’ morale due to other factors as the leadership by managers and environmental issues such as the employee rewards and relations. If the team is led by an effective manager the gains can be witnessed. Loyalty by staff is likely to be achieved by this type of change if well managed. Talented people get attracted to the organization due to the good reputation on employee development. The potential candidates would be attracted to an organization keen on taking them through their career paths with to higher needed skills. When employees leave an organization the organization loses their knowledge car manufacturing company, incur costs on exiting the employee, recruiting new ones and costs of training and overtime to existing employees in the times of replacement. It is therefore critical that D2 Car manufacturing company rewards their employees as per their participation in the organization goal attainment (Hall, R. 2002). More productivity is likely to be realized once talent is created through leadership developments. Employees will be seen to be more self-driven and work well in teams as they can be able to forge a common goal in the achievement of organizational goals. The managers goes through designed training that reflect the organizations strategic intent and will appear to be having the goal of taking the organization to the next level. The leadership development was aimed at developing visionary managers. These kinds of managers are keen on bonding more and understanding the needs of their teams thus the ability to handle upcoming issues as they occur. The vision of the team will therefore be built on the optimistic point of view rather that concentrating on problems that might arise. This will bring about team achievement (Conger, J., Spreitzer, G., & Lawler, E. 1999). Effective supportive managers are horned due to this change in the D2car manufacturing company. This will bring good interpersonal and interactional environment where staff are free to share their views as they are respected and without victimization. This environment will enable the organization staff expertise and new workable ideas would help the organization more forward in the dynamic environment and also achieve inclusion of diversity. Lastly, change is an element that cannot be avoided by any organization. The organization change management is a skill that is paramount in addressing the multiple facets of change. The changes that currently occur in organization are mostly aligned to the reactive approach to change. There is a clear relationship between the culture of an organization and the organizational structure in relation to organizational change. Leadership styles, communication, poor approach and lack of involvement of employees are critical aspects that affect the way change will be embraced by people. People should also be seen to benefit from the change by way of rewards commensurate to their participation and roles. D2 car manufacturing company in their even in product and leadership development change should be able to constantly review the gains and effectiveness of the change. Align it to the changing business environment so as to be able to retain staff they have trained and not to lose them to their competitors. This can be done by always taking a stock of current trends in the sector so as not to lose their staff to better paying competitors. The appraisal system should also be constantly reviewed to suit the prevailing expectations of the company and to provide a reliable feedback of the success of the leadership development strategy. The developed scorecard of appraisal is as per global standards and is implemented as per local specifications of areas where the car manufacturing company has presence. It is therefore used as a data base to classify employee performance and plan on acquisitions, identify skill gaps and staff retention strategies. This change in the industry is more employees centered as the employees are encouraged to develop their potential as there is less fear that the development opportunities will be given to persons outside the organization. Staff loyalty is therefore enhanced (Beckhard 1977). Though strategy is introduced to the work environment it is critical to note that this might not remain constant as the environment both internal and external is ever dynamic. It is therefore important to be able to forecast, plan and be ready to embrace change at any given time of business development or personal situations. References Ancona, A., Kochan, T.A., Scully, M., Van Maanen, J., & Westney, D. E. (2005). Managing for the future: Organizational behavior & processes. (3rd ed.). Ohio: South-Western. Beckhard, R., & Harris, R. T. (1977). Organizational transitions: Managing complex change. Reading, MA: Addison-Wesley Publishing Company. Bennet R. 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