The External and Internal Causes and Effects of the Change - Ledge Company - Case Study Example

Management of Change Name Institution Course Date Management of Change Table of Contents Table of Contents 2 Introduction 3 The External and Internal Causes and Effects of the Change 4 External Cause of the Change 4 High Competition in the Existing Market 4 Changes in Customers’ Preferences 4 Internal Cause of the Change 5 Change in Company Objective 5 Desire for Growth 5 Internal Effect of the Change 6 External effect of the change 6 Organisation, Team and Individual Responses to that Change 6 The Manner in which Stakeholders were Identified and Engaged in the Change 8 The Decision and Change Implementation Processes and Outcomes 11 Areas of Effectiveness and Ineffectiveness 13 Conclusion 14 References 16 Introduction During the simulation exercise, I worked as a manufacturing manager in Ledge, a digital entertainment company. My responsibility of this job is to manage operation staff and ensure order fulfilment. Informally, I helped assemble with my manufacturing staff when we were meeting the delivery due date and I brainstormed for a new product design before the start of the simulation day 3. Thus, the duties changed informally. Our company went through some main systemic changes and it is as follows: Systemic changes Ledge experienced Planned / unplanned Reason why it is planned/unplanned 1 Stopping the sales and production of the old products Unplanned did not expect we were not managed to produce both new and old products 2 Allocated staff from other departments to the manufacturing department for helping assembly Unplanned Did not expect we were running out of time for meeting the due delivery date 3 Developing new products and entering a new market Planned We were told to implement new product ideas before the simulation day began Figure 1: Three main planned or unplanned systemic changes Ledge experienced Figure 1 listed the main systemic changes we experienced over the simulation days whether it is planned or unplanned with reasons why it is planned or not. As a manufacturing manager, three of the changes that I mentioned are profound because the operation of the manufacturing department is all impacted by these changes. In this paper, I will pick the change involving developing new products and entering a new market as shown in the table for in-depth analysis. The External and Internal Causes and Effects of the Change External Cause of the Change High Competition in the Existing Market Developing product is not a systemic change, but we develop a new product targeting a totally different market is a systemic change as the whole company face and work for a totally different idea (Johansen and Heide, 2008). Ledge is in a highly competitive market, a digital entertainment market and it is saturated. And the competitiveness of our products was getting less due to producing deficient products and overdue of the delivery time. So we not just tried to develop new product in the same market, we tried to target a different market with a new product despite the success of simulation day 2. After the simulation day 2, we continued to assemble old product and at the same time we started working on the new construction device called ‘AR Total Station’, which targeted military and construction industries. Changes in Customers’ Preferences Due to globalization and technological advancement, the tastes and preferences of customers have changed considerably (Cummings, Thomas and Worley, 2005). The rapid change is consumer preferences and taste has led to the need for Ledge to introduce new products in the market. In the personal digital entertainment market, customers prefer products with high flexibility and large storage capacity. They also prefer products that are compatible to other digital devices like T.Vs and PCs. Due to this, Ledge is furthering its miniaturisation by introducing new products that can be appreciated by the current customer’s generation. The new products called AR Total Station would open door for large market share by targeting new market. Internal Cause of the Change Change in Company Objective After the success of simulation day 2 meeting the targets of the day which was to make 1 million worth of profits, the board set an ambitious target for us to meet which was to make 5 million and produce and make sales of 3 new products. We had to think big at that point, trying to come up with ideas to meet the targets. After simulation day 2, we brainstormed ideas such as the target markets, the use of a new technology, the function of the products etc. The idea of producing new product was driven by the changes in the company’s goals. The company wanted to ensure it earns 5 million worth of revenue which was an increment from the previous target. Desire for Growth According to Nah and Delgado (2006), organisations that have the desire to attain growth often make organisational changes in their operations. For instance, at Ledge, we had the desire to grow and meet the competitors. We wanted to expand our market share and grow from being a small business to flourishing company. And therefore, to do this, we needed to brainstorm ways to achieve this. One way to flourish and grow is to introduce new products and target new market. This was possible through the implementation of new product ideas before the simulation day began. This had a profound effect of the operation of the company. Internal Effect of the Change We successfully produced and made sales of the new product, AR Station at the end of the simulation day 3, making 200,000 pounds revenue. However, we spent too much time on implementing and negotiating the product with the potential buyers. It led to complete shutdown of the manufacturing department as they have already finished all the assembly of the product which lower the efficiency of the whole company. In addition, the change also disrupted the day-to-day operation of the employees. For the production of new products to be successful, involvement of the employees was required (Johansson and Heide, 2008). Employees from different department were required to coordinate and work together to ensure successful change process. This created panic among employees who were unfamiliar with the new structure established. External effect of the change The new product requires nuclear batteries and all the Ledge workers did not have any experience on using the nuclear batteries. It resulted in nuclear accident because of the carelessly use of nuclear batteries. Nuclear accident led to environmental pollution. Ledge’s sustainability initiative to protect the environment was compromised due to the unfamiliarity of the new products. The general public was exposed to nuclear materials which are harmful to the health. Organisation, Team and Individual Responses to that Change Organisational change is a major issue in an organisation (Lewis, 2006). Ledge Company was involved in major change initiatives. The process of organisational change put a lot of stress to employees and organisation as it challenged how things were initially done. Due to this, employees experienced uncertainty and fear of failure in handling the new situation. According to Kegan and Lahey (2009), stress due to organisational change can result to low motivation, decreased performance, poor communication, low engagement and low quality of work among others. The organisational change process was very stressful to employees and teams in the company. Some of the emotional states experienced by employees during the change processes include denial, anger, depression and re-emergence. Beliefs, perceptions as well as attitudes are very important in successful organisational change. One major response seen in many employees was anger. Before the change was implemented in the organisation, the employees were used to carry their work in a certain way. They got used to specific operations, processes and activities. However, the decision to develop new products and enter a new market through the development of AR Total Station put pressure on the employees. Most of the employees were resistant to change which made them frustrated and angry. And as a result, the anger increased their stress level leading to emotional outbursts (Oreg, 2006). For instance, employees working in the manufacturing department felt a loss of control over their work since the manufacturing processes needed to change in order to accommodate the manufacturing of the new product. They felt as if their job security was threatened which affected their day-to-day operation. One major response that was witnessed due to the decision to develop new products and enter new market is resistance. Resistance to change in organisations is seen to occur as a result of personal experiences and evaluation with regard to the reliability of others. Normally, efforts are put to alter these factors for the purpose of wining support and overcoming resistance (Lewis, 2006). As a manufacturing manager in Ledge, I came across resistance to change among different employees in the company. The resistance to change and the negative reactions from the employees can be attributed to the fact that change often brings increased pressure and uncertainty for the employees. According to Lewis (2006), there is one major reason why change initiatives fail; the resistance portrayed by the employees towards the change process. The significance of the resistance is enhanced by the high probabilities of change failure (Kegan and Lahey, 2009). For this reason, creation of positive beliefs and attitudes among the employees is very paramount for the success of change intervention. The resistance to change portrayed by the employees was due to the negative aspects of the change. For instance, development of new products required employees to change their work strategy and adapt new methods of operations. This required them to learn new manufacturing, marketing and operational methods. However, employees’ response to the change process kept on fluctuating. Initially when the change was introduced, it was faced with rejection from the employee. However, as the time went on through the process of change, employees became more accustomed to the change and accommodated it better. The Manner in which Stakeholders were Identified and Engaged in the Change I understood that in order for the change process to be successful, it was important to involve all the stakeholders and win their support. Georgiades (2015) has illustrated that in order for a change process to be successful, organisational stakeholders need to be engaged. However, the extent of involvement vary from one stakeholder to another depending on their importance, influence and the effect the change will have on them. In the development of new products, the main internal stakeholders to be involved in the change process include the employees and managers. On the other hand, the main external stakeholders include the customers, suppliers and shareholders. The identification of the stakeholders involved in the change process was determined by their influence in the change process and the extent to which the change will have on them (William, 2010). Ledge Company dealt with its main stakeholders with regard to the figure below. The stakeholders with high power as well as high level of interest like the employees and shareholders were closely engaged in the change initiative. Customers who have high power but less level of interest were kept satisfied by the company during the change process to avoid failure. Suppliers on the other hand have low power but high level of interest and were kept informed throughout the change process. Stakeholders like the general public and the government with low interest and low power were monitored throughout the change process with minimal effort and resources. The stakeholders with high power influence and high level of interest are engaged more in the change process through in-depth dialogue and open communication. Stakeholders’ engagement can be defined as stakeholders’ willingness to assist in achieving company’s goals and objectives by offering unrestricted effort on a sustainable basis (William, 2010). Managers need to be in the fore front to encourage engagement of stakeholders during the change process by enhancing communication. They need to dismantle all the obstacles to engagement such as structures and processes in order to create a new structure of interaction between the stakeholders. The new products require nuclear batteries and manufacturing processes and unfortunately the employees did not have any experience on using the nuclear batteries. To pass the knowledge of the new product to employees, it was important to have open communication channels through the employees and the managers. Also, it is essential to communicate to the stakeholders information about the development of new products and entering of new markets in order to influence their reactions. Through open communication, uncertainty was minimized. Although we successfully produced sales of the new product at the end of the simulation day 3, there was a lot of time spent on implementing and negotiating the product with the potential buyers. This was necessary since customers are among the main stakeholders and open communication and dialogue with them raised the new product awareness. In addition, production of new products led to complete change of the manufacturing department as they had to change their processes in order to ensure proper and high quality products. All the employees involved in the manufacturing of the products received first hand information about the change process in order to increase change efficiency (Taylor and Schermerhorn, 2006). Also, since the manufacturing of the new products required the supply of new raw materials, it was important for me and other managers to communicate to the suppliers about the change initiative. The company communicated about the raw materials to be supplied, the quantities and the duration of delivery among other delivery changes. The Decision and Change Implementation Processes and Outcomes In implementing the change approach, Ledge Company identified the roles of the stakeholders and the change management teams, and barriers of resistance. The aim of the company was to implement a change approach that will ensure there is collaboration between change team, managers and change leaders. The implementation process of the change initiative the involved the production of new products and access to new markets first involved the identification of the resistance to change. In overcoming the resistance to change, the change agents have some work to do (Lines, 2005). In the production of new products, communication between the managers and the employees was very important in reducing resistance. The drivers of the change process included the sponsors group that entails the shareholders and partners. Open dialogue with them was important as it reduced resistance and increased their involvement. They were expected to lead the implementation process by allocating resources and manpower (Harrington, James and Nelson, 2013). The advocates of the change implementation process were the managers who facilitated the entire process through support and their ability to influence others. As a manager, my work was to facilitate the implementation process and communicate any information about the change initiative to the employees. Active participators were the employees who directly influenced by the change plan. The initial implementation process also involved the appointment of the change management team who were responsible for implementing the change. However, due to time constraints, staffs from other departments were also involved in the change process. The appointment of the change management team ensured work was divided effectively and every individual was aware of his or her responsibility in the change process (Farr and Brunetto, 2007). The next step of the implementation process involved communication design and training plan. Employees and managers in the company did not have the necessary skills needed in the manufacture of the new products. The workers did not have any experience on using the nuclear batteries which led to increase nuclear accident. In order to counteract this, Ledge had to implement training program for the employees and seminars for the entire stakeholders where discussion of the change process took place. All employees needed to be trained in order to ensure that they had knowledge in the operational modification, production and handling of the new products (Zimmermann, 2011). The employees of the company needed to undergo nuclear product training before the change could be implemented which will be funded by the company. In addition, communication is important in the in the change implementation process (Dinsmore and Cooke, 2006). An important training method to be used by Ledge Company is Communication skills Training. Being an effective and efficient communicator takes time. Good communication need to be developed through an on-going training of employees. In order for the change process to be effective, employees and change management team needed to communicate well (Palmer and Dunford, 2008). The reporting protocol for the change project involved team leaders who were responsible of rolling out of communication to the project team. As a team leader and a manufacturing manager, I needed to assign employees to tasks ensuring that the production, assembling and delivering of the new products is effective. This required open communication with the employees. There was open communication protocol where employees could freely get access to managers including me in case of any query or information. Communication of the change process included all the stakeholders including. In addition, in order to ensure effective implementation, there were consequences put in place for those who did not support the change process. Areas of Effectiveness and Ineffectiveness Areas of effectiveness and ineffectiveness of the change system was determine through, gathering feedback from the employees, conducting compliance audits regarding the latest production, and review comparison between the prior systems and the current systems of production (Harrington, James and Nelson, 2013). In order to determine whether the change implementation process was successful, it was important to evaluate the results of the change, and enforce corrective actions. After the success of simulation day 2 due to meeting the targets of 1 million profits, there were some decisions set out to reach 5 million profits from the sale of the new products. In order for this to be possible, there was a need to come up with ideas to meet the targets. The new product wasn’t as successful as expected since it only yielded 200,000 of revenue, which was lower than expected. This was partly attributed to resistance to change from the employees. Nevertheless, the effectiveness of the change process is expected to increase with time as a result of the implementation strategies such as training and open communication system. In addition, Ledge was effective in making some manufacturing and operational adjustment in order to accommodate the production of new products and the decision to enter new market. For instance, the company had to change its manufacturing processes in order to ensure the new products met the market requirements. In addition, the marketing approach changed. It was essential for the company to implement new marketing strategies that involved negotiation about the product with the potential buyers. These adjustments affected the manufacturing department but were necessary for the success of the change process (Harrington, James and Nelson, 2013). The managers were also effective in communicating all the information about the change with all the stakeholders as a way of minimizing resistance. Open communication reduce uncertainty among the employees and created a good working relationship between the managers and the employees (Harrington, James and Nelson, 2013). One important requirement for the implementation of the change process is availability of resources. In order for Ledge to start manufacturing new products, human and financial resources are required. The company has been successful in allocating sufficient resources to the change process. In order to ensure successful introduction and manufacturing of new products, I needed to divide employees into groups which would take different responsibilities during the change process. Allocation of financial resources was also effective which minimized wastage. Conclusion As a manufacturing manager in ledge, I act as a change agent. In order to drive effective change, there are a number of skills I need to have in to be a competent change manager. One skill required for successful change process is communication skills. Being an effective and efficient communicator takes time. In order for managers to be effective in driving change, they need to communicate well. Effective communication entails overcoming differences when interacting with people who have different beliefs, values or ideologies which minimize issues such as disagreements and conflicts that can affect the performance of an organisation. Another skills needed in managing change is leadership skills. Change managers should be risk-takers and courageous. They are expected not to fear uncertainty, they should accepts and succeed in risk situations, keeping in mind that lack of structure may lead to change implementation failure. Leadership entails preparing and leading other individuals through change by motivating and desiring and setting direction for the rest to follow. Change managers should also have interpersonal skills. Assertiveness is an example of interpersonal skill that is required during a change process. Being assertive also entails defending ideas with confidence and being affirmative to what you believe in. When used during change process, it can be a manes of reducing conflict and resistance to change. References Cummings, Thomas, and Worley, Christopher 2005, Organization Development and Change, 8th Edition. Thomson South-Western, Mason, OH. Kegan, R & Lahey, L 2009, Immunity to change : how to overcome it and unlock potential in yourself and your organization. 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Journal of Management & Organization, 13(2), pp. 114-125. Zimmermann, N 2011, Dynamics of Drivers of Organisational Change, Springer Publications. Read More