Planning and Strategic Management at Billabong - Case Study Example

Name Class Unit Introduction Billabong had once been a very successful organisation which had been able to perform well for, more than four decades. From the humble beginnings, the company have been able to overcome difficulties in the market. This made the company to expand in several countries and also make acquisitions. This made Billabong a global brand. However, the company have been facing a management issue which have made their business to decline. The company was almost collapsing in 2012 due to debt, unfavourable currency due to gaining Australian dollar and economic decline in some of its key markets (Schermerhorn et al., 2014). The management problem faced by Billabong is organisation change. It is clear that Billabong requires making changes in its operations in order to recapture the market. This report will critically analyse and discuss the need for Billabong to carry out change so that it can be able to recapture the market and become profitable again. Issue identification Organisation change is very vital in organisations. This is due to ever-changing business environment, response to crisis or change in leadership. Organisation change is not only about making adjustments but also managing it successfully. Changing business environment faced by Billabong requires the organisation to make changes that will enable them to survive. Failure to carry out organisation change will make the company to continue losing their market share and plunging deep into losses. Billabong has lagged behind in the market due to fact that they have not been keen on market changes. They still operate in the manner they operated when they were started four decades ago. Evidently, this makes the organisation to lose relevancy due to changes in business trends (Diefenbach, 2007). It is evident that Billabong has to make changes in their operations in order to remain relevant. Organisation change will enable the firm to cope with the changes in their business environment (Kerber & Buono, 2005). Billabong has to utilise its workers to make changes since they are central to it. This implies that the organisation is supposed to make their workers ready for change to minimise resistance, show the need for changes and analyse the impacts. The company have to implement strategies that will make changes possible. The old organisation culture has to change and a new one instilled. This is due to fact that failure to make the changes will render the business obsolete. The environment is nit same as when the business was started four decades ago. The changes in the environment will always eliminate businesses which are not capable of coping (Diefenbach, 2007). Critical Discussion Organisation change originates from both internal and external environments. Internal environment includes people, processes, structures, strategy and changes in the lifestyles. External environment is based on all aspects that are outside the organisation boundary. In most cases, forces of internal environment are the main causes of change. It is also important to note that foreseeing the changes in environment is difficult (Graetz, Rimmer, Lawrence & Smith, 2006). The industry in which Billabong are operating in have been undergoing changes at a fast rate. There have been changes in economic conditions, rise of fast fashion and online retailers among other changes. To sum up business which fails to adapt to changes becomes doomed to failure as shown in the case. The organisation can adopt “Lewin force change theory” to make the changes. The three step process is very vital to ensure that the organisation change is carried out effectively. The steps are; unfreezing, moving and freezing (Burnes, 2004). The first step starts by ensuring that the workers are able to understand change process and the reason behind it. Billabong will start by indicating that the current status of organisation is not ideal. The organisation using this process must ensure that members are given the important goals for the organisation. The moving process contains the actions that are aimed at transforming the organisation. At this stage, Lewin claimed that there must be goal setting, support, finding resources and executing change. The last stage is freezing where the moving stage is stabilised. This ensures that the changes that are achieved are not rolled back to the status quo (Burnes, 2004). The last stage of lewin change model has been under a lot of criticism. This is due to the fast pace of organisation change that is evidenced in modern organisations. Most of the emergent approach to change claims that change is not a series of liner events but a continuous open ended process. The third step is thus viewed to be out of date. Most of the managers do not see the need to freeze in their organisations. The critics argue that change should not freeze but it must be an open and continuous process. Those opposed to the model also claims that it is only applicable to small scale transition. The model is also criticised for assuming that the organisation works in stable conditions and are ready to shift from one stable condition to another. This shows that the model overlooks events such as crisis. The model also seems to suggest that there will be a common agreement by all stakeholders to implement change. To sum up all criticism, Lewin model have been proved to work despite the associated drawbacks (Burnes, 2004). It is evident that Billabong has not been responding to market changes. This is evidenced by the claim by pro surfer Rob Bain. He claims that the company have lost its “cool” and instead become “popular” (Schermerhorn et al., 2014). This is due to fact that the company have not been keeping their products up to the current trends. Changes require an organisation to adapt at a very fast rate. With the technology revolution, change should be a way of life for the organisation. Most of the fashion retailers have online platforms. This gives them a competitive advantage (Diefenbach, 2007). Based on reach, Lewin force field analysis model is very relevant despite the criticism. The theory is very applicable in the change implementation. As the organisation tries to change, there are two forces; driving and resisting forces (Kerber & Buono, 2005). The research shows that when the driving force for the change is stronger than the resisting force, change occurs. If the resisting force is stronger, change does not occur and status quo is maintained. To successfully implement changes, there is need to gain the support of the members. This leads to the need of coming up with ways for eliminating resistance. The organisation can provide assistance, coercion and negotiations in order to win members into change. Research proves that these methods are effective based on the situation (Burnes, 2004). In order to effectively carry out change, it is important to look at the recommendations that make the process easier. Recommendation The ultimate goal for organisation change is to alter how work is done and improve the organisation. When change is introduced to the organisation, it has impacts on processes, systems, structure and roles. For the organisation to successfully implement change, they must have a clear understanding of its structures, strategies and culture. This will help the organisation in responding to change in the most appropriate manner. The management must focus on the organisation as a whole entity when implementing change. This is due to fact that change in one part of the organisation will have an impact on others (Graetz et al., 2006). It is emphasized that change will always be met with some resistance. The fundamental success of organisation change is based on acceptance of change by workers (Bordia et al., 2004). There is need for appropriate change management. The employees will have to undergo the 5 stages of grief as described by Wiggins. The stages are; denial, anger, bargaining, depression and acceptance (Kerber & Buono, 2005). Once the organisation starts undertaking the change, they must engage their workers. Therefore, organisation has to ensure that they are communicating and supporting their workers until they accept change and commit into it (Todnem, 2005). The main strategy to reduce resistance to change among the employees is involving them. This is a strategy that has been supported by empirical studies. The organisation must be ready to reward innovation and show that they are ready to support the process. The importance of supportive and engaged team during the change process cannot be underestimated. To sum up, the organisation must be ready to manage resistance and sustain change (Todnem, 2005). Conclusion The analysis shows clearly that Billabong has a management issue on organisation change. The organisation has to change based on changing business environment. Billabong will have to face resistance as they implement changes. To reduce resistance, workers must be involved in the change process to manage change. To sum up, Billabong must accept need for change based on environment changes they must also be ready to manage the change process. References Bordia, P., Hobman, E., Jones, E., Gallois, C., & Callan, V. J. (2004). Uncertainty during organizational change: Types, consequences, and management strategies. Journal of Business and Psychology, 18(4), 507-532. Burnes, B. (2004). Kurt Lewin and the planned approach to change: a re‐appraisal. Journal of Management studies, 41(6), 977-1002. Diefenbach, T. (2007). The managerialistic ideology of organisational change management. Journal of Organizational Change Management, 20(1), 126-144. Graetz, F., Rimmer, M., Lawrence, A., & Smith, A. (2006). Managing organisational change. John Wiley & Sons. Kerber, K., & Buono, A. F. (2005). Rethinking organizational change: Reframing the challenge of change management. Organization Development Journal, 23(3), 23. Schermerhorn, Davidson, Poole, Woods, Simon & Mcbarron (2014). Management foundations and applications, 2nd Asia-Pacific Edition, Australia. John Wiley & Sons Australia, Ltd. Todnem By, R. (2005). Organisational change management: A critical review. Journal of Change Management, 5(4), 369-380. Appendix SWOT analysis Strengths Strong brand name Expertise in the industry Global presence Diversification Economies of scale Weakness Failure to adapt to new trends- Billabong culture is Not flexible to adapt to change Becoming “popular” instead of “cool” The company is operating at a loss- Large number of loss making stores Large products range Opportunities Use of internet for viral marketing Rise of internet provides a chance for online retailing Adopting the culture of creativity Streamlining the organisation product offers New markets Threats Economic downturn Being acquired cheaply by competitors Increasing debts Unfavourable currency movements Changing business environment Change in tastes Rising competition Read More