Virgin Blue Change Management - Case Study Example

Virgin Blue’s Change Case Study Student’s Name: Instructor’s Name: Course Code and Name: University: Date of Submission: Virgin Blue’s change Case Study Table of Content 1. Executive Summary 2. Introduction 3. The nature of the proposed change 4. Challenges 5. Change Management Five Strategies Employees’ Involvement Training and Development Effective Planning Application of Culture Reward and Recognition 6. Lewin’s Change Model 7. Conclusion Executive Summary Virgin Blue is one of leading fright companies in Australia, with large fleets and self-control airports. It is a globally operating airline with a strong brand, making it a prominent company in the industry. Like any other company, Virgin Blue has been introducing several changes over the years to improve their operations and ensure achievement of objectives. This report provides an analysis of Virgin Blue change case study, in terms of the nature, purpose, challenges, and strategies of initiating the proposed change effectively. The introduction, gives the general overview of organizational change. Challenges discussed include lack of support from employees and management team, lack of resources and poor planning. Five strategies of enhancing change include employees’ involvement, effective, training and development, application of culture and reward and recognition. Application of Lewin’s change model has been proposed in the report to booth the five strategies. Introduction The dynamic nature of the world has been challenging many organizations. Management and operational strategies should be changed to fit within the changing business environment. In most cases, there are four major drivers of change in an organization. Changing technology is one of key factors; some of operational and management functions turn obsolete, and hence there is the need to replace them. Competition and application of generic competition have increased recently as both local and international companies try to out-compete each others. Customer’s demands and level of understanding has increased, and hence, many organizations keep on changing their operations to meet these demands, at all times. The changing social economic factors in many markets influence organizations to reform their operations, products, and services, to ensure that the organization fits on both the economic and social status of the market in which it operates. Shareholders have increased their demands, and are more involved than any other time, and hence, organizations keeps on changing depending on shareholders demands as they are the key decision makers through their voting rights. Lastly, the changing nature of human resources requires some changes to ensure that they work in acceptable environment to their satisfaction, and for effective running of an organization. The nature of the proposed change There are various changes proposed in the Virgin Blue case study. The first proposed change is the introduction of new uniforms for all operators working in the airline. This makes the operators to look more appearing to customers. In addition, this may be used to symbolize better services than before. This change would affect all crews. The second proposed change is an improved business operation. This will include changes such as new marketing campaigns, new products, and increased frequency flyer program. These will assist in increasing business market from ten percent to double it over a given period. In addition, the intended changes will assist in attracting more corporate flyers. In rebranding the company for the achievement of the intended marketing strategies, there are three major changes announced by Virgin Blue management. The New Airbus A330 would operate between Sydney and Perth, as from May. This airbus targets superior economy class. Turboprop was chosen along with partnership with SkyWest for regional routes. The aircraft has a capacity of 68 seats. There are various reasons as to why Virgin Blue would introduce such changes. First, there is increased competition in the airline industry, since the number of companies operating in this industry has increased. This calls for existing companies in the industry, including Virgin Blue, to improve their operations so as to capture and increase their customer’s base. This is the reason why the airline decided to change its operation strategy and products. Secondly, the cost of operations across the world has increased over the years as a result of increasing cost of fuel. With the increased number and size of airbases, particularly the high economy class, the cost per passage is reduced as the revenue per flight increases. This assists in reducing the cost of operations and increasing revenue. The third purpose of the introduced changes is to ensure that Virgin Blue takes advantage of increasing international relations and mobility to achieve its marketing objectives (Gronroos 1994, pp. 4–32). The purpose of the proposed partnership is to reduce competition in the regional operation, where SkyWest will complement Virgin Blue in achieving regional objectives at a reduced cost. Challenges Virgin Blue is likely to face various challenges in the process of introducing and implementing change. Some of these challenges are from within and without the organization. The most prominent reason for a failed implementation of change is the lack of commitment and support from stakeholders. In this case, Virgin Blue may face resistances in the attempt to implement the changes. First, the management team, which is vital in managing the intended change, may not be willing to effectively facilitate the change (Jensen 1999, pp. 1 – 15). As a result, the intended change may not be implemented effectively. Secondly, employees may resist the intended changes as a result of the fear of unknown. They may not be aware of their fate with the introduction of the changes, and hence they may decide to turn everything down. Thirdly, shareholders may resist some changes, such partnership with SkyWest, with the fear of dilution of profits earned and identity of their company. The other challenge of implementing the intended change is the lack of sufficient resources. In this case, Virgin Blue may lack both financial and human resources to push for the intended changes. Huge amount of finances are required in changing its marketing strategies and purchasing the intended airbuses to spread its operations. In addition, it is expensive to acquire external funds, due to increasing rate of interest in almost all economies in the world. This may reduce the chances of Virgin Blue to acquire all the required finances at the right time to fund the changes. Human resource is a key to the achievement of intended changes (Moncrieff 1999, pp. 273–276). The required expertise and skills to derive the changes may not exist from within the organization. Acquiring such experts is not an easy task; it requires time and utilization of resources. Consequently, the new employees may be expensive to compensate as they are usually of the head hunted type. In addition, there may be lack of compatibility between the existing employees and the newcomers. This may result into lack of unity and cohesiveness among them. The other challenge of the implementation of the change is governments’ regulations on cross border operations. Virgin Blue is a global company, and hence, there are chances that it may be affected by cross border regulations, which may restrict the frequency of movement among people. The company’s change intended for the expansion of international market may, therefore, be non effective. Lack of proper planning for the intended change is another great challenge likely to face Virgin Blue in the implementation of its change. Planning as a process assists stakeholders to have an overview and a sense of direction in the implementation of the intended change. Change Management Five Strategies There are five strategies, which can be used to enhance achievement of intended change objectives to Virgin Blue. These strategies include communication, employees’ involvement, training, and development, application of culture and reward and recognition. Communication is an essential process through which people exchange or pass information to and from each other. In an organization, managing change is a complex process that requires proper exchange of information between all stakeholders. In addition, planners and managers are required to inform their subordinates about the finer details of the intended change. In this case, employees are informed of the reasons for the intended change, along with the entire possible outcomes. At this point, employees’ fear and worries are addressed effectively. They are given the opportunity to ask questions relating to the intended changes and hear they may be relieved from the fear of unknown (Kotter & Dan, 2002, pp. 25- 76). The management communicates of what is expected in terms of time limits, responsibilities and means to resolve any crisis in the process of implementing change. It is required for all stakeholders to have effective communication skills for an effective change management. The change leaders will be in a position to give orders, provide guidelines, and direct employees towards the intended goal. On the other hand, employees will be in a position to give their feedback and communicate on progress, as well as giving their expectations. Participative Strategy The other strategy of managing change is the application of participative strategy. In this case, employees are given an opportunity to participate in decision making and idea generation in the process of planning and implementing change. Virgin Blue should understand that change cannot be brought about by the management on its own. It is evident that, even employees at the operational level, have immensely significant ideas, which may positively influence organizational performance. Virgin Blue should, therefore, involve employees in the generation of change ideas, planning, and implementation. In this case, employees will be immensely willing to support the intended change because is their own suggestions. Virgin Blue should involve its employees, particularly on changes affecting them directly. For example, changing uniforms affect employees directly, since they are the one to put them on. It is recommended in this case that, employees should be given an opportunity to make suggestions on which color and design will be the best appropriate (Fullan 2011, pp. 56-78). This reduces resistance, as employees will be satisfied when their suggestions are approved. In addition, involving employees implies that Virgin Blue values them, and hence, they are likely to develop organizational citizenship. Training And Development Training and development is another key strategy through which Virgin Blue can apply in the attempt to introduce and implement the changes. In many occasions, employees are unable to implement the intended changes as a result of lack of knowledge and skills required in the process. For example, if Virgin Blue is introducing new equipments and airbuses, it is not easy for many, or for all employees required to operate them (Fullan 2011, pp. 56-78). In this case, the employees may reject the changes, or may not be in a position to run them. Training and development are the only strategies Virgin Blue can employ to successfully implement the intended changes. Employees will feel comfortable to implement changes they are well trained in. There are two types of training and development which Virgin Blue can apply, including in job training and outside the job training. In job training takes place in the working situation. The trainer and the trainee in most cases use real working conditions to learn on how the changes are expected to be. This method is highly recommended as the employee is in a position to learn effectively and practice what they learn immediately (Kotter 1996, pp. 12- 56). In addition, it is a recommended method as employees work as they are trained, and hence their productivity remains. Outside the job training, is a training strategy where employees are trained outside the working situation, and away from their normal working environment. These employees may take a training leave or are required to train for some days per week, or some hours per day from outside the organization. Outside the job training in most cases incorporates theoretical training. In both the in the job and outside the job training, Virgin Blue may train the employees using experts from within and without the organization. Outsourcing training services is appropriate when there are no experienced and knowledgeable individuals who can effectively train employees from within. For example, if there is a totally new technology to be incorporated and which existing employees were not trained about, it would not be possible to source training from within. Effective planning Effective planning is another change implementation strategy for Virgin Blue. Planning involves setting goals and objectives in advance, and establishing means to achieve them. It gives direction and a sense of focus to all stakeholders (Abell 1978, pp. 21–28). Proper planning involves setting of achievable and realistic objectives. In planning for the intended change, Virgin Blue should come up with a well formulated target, which covers a given period. Duties and responsibilities should be well defined during the planning stage so as to make all stakeholders aware of what is expected of them, and when. Planning will, therefore, be used to measure the achievement of goals and objectives of the intended change. In addition, planning should incorporate flexible terms to assist in resolving challenges as a result of unforeseen situations. This calls for the incorporation of contingent planning. Flexibility in the implementation of change is, therefore, enhanced. The Use of Culture The other strategy of facilitating change in an organization is through the use of culture. Culture is essential as it influences the way employees and other stakeholders undertake the intended change. Developing a culture of innovativeness and desire to learn among employees, can enhance effective change at all times. Employees working under the influence of this cultural environment will be ready to embrace change at all times. They are curious to see the intended results, and hence redirect all their energy and skills towards achieving the change (Ford 1999, pp. 12 – 34). Application of Reward and Recognitions Another influential strategy for managing change is the application of reward and recognitions for the achievement of intended goals and objectives of a given change. In this case, Virgin Blue should come up with a well-defined method of measuring achievement of objectives, and the most appropriate reward to the stakeholders involved (Nash 2000, pp. 10 -35). This will motivate employees to remain focused, work hard, and apply all the required knowledge and skills, to ensure they achieve intended goals and enjoy the rewards set a side. This reward can be in monetary terms and non-monetary terms. Monetary terms involve components such as commission, increased salary, and piece rate pay. On the other hand, non-monetary reward may involve components such as recognition, certificate of performance and promotion, among other benefits. Lewin’s change model Lastly, it is recommended that Virgin Blue should use Lewin’s change model to ensure that the intended change has been realized. This model involves three steps including unfreezing, moving, and refreezing. Unfreezing is the process of lying down an entry point to the intended change. At this point, Virgin Blue should introduce the new information without necessarily introducing the intended change. Existing values, believes and behavior, which may reduce the chance, should be killed at this stage. The management should be willing to come up with appropriate strategy at this point because it influences the effectiveness of the next two steps (Mulcaster 2009, pp.68 – 75). The next step in this change model is change, which is referred to as forward matching towards change. At this step, new values, attitude and behavior, are developed to facilitate the change. At this juncture, the intended change is introduced, and with its duties and responsibilities well defined. The real change takes place at this point. The last step in the model is refreezing. This step involves the stabilization of the introduced change. Some challenges realized in the process of implementing change are addressed. Virgin Blue should apply Contingent planning that takes place at this stage to ensure that there is flexibility in the process of implementing change. Conclusion In conclusion, Virgin Blue should move forward in implementing the intended changes. These changes will assist the airline to overcome both the internal and external pressures, such as increased competition and rising cost of fuels. However, implementing the intended change may be exigent as a result of various challenges such as resistance from stakeholders, lack of resources, and poor planning. It is, therefore, recommended that Virgin Blue should apply all the necessary strategies, including proper planning, training and development, reward, and application of models, such as Lewin’s three-step change model. List of Reference Abell, D 1978, “Strategic windows”, Journal of Marketing, Vol 42, No. 3, pp. 21–28. Ford, JD 1999, “Organizational change as shifting conversations” Journal of Organizational Change Management, Vol. 12, No. 6, pp. 12–34. Fullan, M 2011, Change leader: Learning to do what matters most, Wiley, New York, NY. Gronroos, C 1994, “From marketing mix to relationship marketing: towards a paradigm shift in marketing”, Management Decision, Vol. 32, No. 2, pp 4–32. Jensen, R 1999, “The story of the future” Across the Board, Vol. 36, No. 1, pp. 1-15. Kotter, JP 1996, Leading change, Harvard Business School Press, Cambridge, MA. Kotter, JP & Dan, SC 2002, The Heart Of Change, Harvard Business School Press, Massachusetts. Nash, LL 2000, “Intensive care for everyone's least favorite oxymoron: narrative in business ethics”, Business Ethics Quarterly, Vol. 10, No. 1, pp. 10 -35. Mulcaster, WR 2009, “Three Strategic Frameworks," Business Strategy Series, Vol. 10, No. 1, pp. 68-75. Moncrieff, J 1999, “Is strategy making a difference?” Long Range Planning Review, Vol .32, No. 2, pp. 273–276. Read More