Managing organizational change (MBA course) - Essay Example

TABLE OF CONTENTS Page 1 Abstract 3 2 Introduction 4 3 Criteria for Change 5 3.1 Motivation 5 3.2 Creating a Vision 6 3.3 Developing Political Support 6 3.4 Managing Transition 7 3.5 Sustaining Momentum 7 4 Recommendations 8 1 Abstract Novartis Thailand is the result of a global merger of Sandoz and Ciba-Geigy to assimilate the synergies of the two multinational companies. Novartis is facing organizational challenges. Change management policies have been discussed and it is concluded that the New manager at Novartis Thailand need to adopt these policies to bring about a smooth and fruitful transition of the company to align itself with the global visions of the company. 2 Introduction Novartis Thailand (NT) is a creation that came about by the world-wide merger of Ciba-Geigy (CG) and Sandoz. This has impacted operations everywhere and the subject of this essay is their combined operation in Thailand. Sandoz was a profit making company that had transparent and defined marketing strategies with a number of products, employing fewer people (69 employees); whereas CG, a loss making company (129 employees) was a laid back attitude and heavily dependant on sale of one product Voltaren, that had generic substitutes, and the marketing was based on giving heavy discounts to achieve quarterly targets. These opposite cultures clashed with the merger. The result was that, feeling strangled, the Sandoz staff left the company through a golden handshake and the CG culture prevailed over NT. The lethargies of CG became the norm resulting in plummeting sales and mounting losses. Under Thai regulations the merger meant merger of Sandoz into CG thereby creating a new entity called NT. This led to the exodus to the Sandoz staff, and the CG culture and practices prevailed. The remaining Sandoz staff were unable to accept this practice and all but 12 left the company, after bitterly criticizing the CG ways and matters deteriorated with the new NT manager also leaving in early 1997. NT was rudderless and without objectives and goals. Fritz the new manager appointed to check and reverse the ills of NT was sent to Thailand in 1998, two years after the merger, with a mandate to raise market share and to improve management effectiveness across the organization. His clear mandate required him to turnaround the company and he handled it initially with the motive of streamlining the operations by first defining the team and team roles. He wanted to establish a hierarchy of reporting that looked like a cobweb with cross reporting resulting in loss of communications. He also found many malpractices that were either a result of corruption in the culture of the company or simply cover-ups for showing improved but false sales performances. He quickly made a situation analysis and identified five areas that he needed to work upon to bring about the desired results. They were the low morale of the people, lack of controls, weak marketing, dubious business practices, and cultural differences. Clearly, Fritz needs to adopt Change Management measures immediately to stem the rot and veer back the company to become an efficient organization, in tune with its global perspectives. This means Motivating the people, Creating a vision, Developing political support, Managing the transition and sustaining the momentum. 3 Criteria for Change A change can be meaningful only if it is planned according to the needs but is based on the following sound principles. 3.1 Motivation Topmost in handling change is to motivate the people to achieve the purpose of the change. This means highlighting the glorious future and contrasting it with the disgraceful past. However it has to be conveyed positively with rewards accompanying results. Effective communication will be required to generate support and participation at all levels. Teamwork and togetherness is the core issue here. Some amount of pressure is to be built up for this to show the benefits of change. To bring about active involvements in the procedure the employees have to be given a vision of the future. 3.2 Creating a Vision The merger of Sandoz and CG had a purpose. The idea is to create synergies for higher sales and more concentrated efforts by cutting down on unnecessary internal competition and to develop competencies. For this it requires drawing upon the strengths of the two previous companies that were decentralization of power and commitment to work for a common objective. The vision requires standing up for fair practices with genuine efforts backed by world class products and to inform the customers that they could depend upon vast pool of research based effective products that measured up to the best standards in the world. The objectives are the values the vision creates and the value features are the consistent commitment to quality and service to be provided to the customers. 3.3 Developing Political Support For the change to be effective and for the realization of the company vision it is imperative that all the stakeholders support the various steps all along the way. The attempts have to be genuine and in common interest for benefits all round. The primary requirement is to have the knowledge of all sources of power in the company and to harness them and motivate them to work for a common goal. The ideal is to get them to agree on and obtain a consensus to avoid sudden conflicts of interest midway between any initiatives. The personalities involved are diverse which means that they have to be handled individually according to the status and mental make-up of individuals, but they have to be brought around to common and mutual understanding and respect. It is often possible by straight talk and sincerity is the best method; but often the goals are to be achieved through use of social networks or by adopting certain circumventions. Whatever the methods that may be employed, this aspect needs a constant and effective open communication channel to overcome any roadblock during the transition period. 3.4 Managing Transition In continuation of the change policies the change manager needs to plan activities that will involve the stakeholders to see through the transition period. These activities have to be practical and oriented towards achieving the targets as set out in the vision statements and need to be understood with clarity by the stakeholders performing them. The must know and feel that this is their vital and positive contribution that will result in realizations of larger goals. The activities have to be planned carefully and there should be a commitment by both the planner and the stakeholder to plan and perform respectively. Planning also entails dividing the tasks to teams and individuals towards a common objective to give the exercise a momentum that increases as the change process evolves. 3.5 Sustaining Momentum In order to finally achieve the targets momentum of change efforts need to be sustained and it is the management’s job to provide the financial, human and technological supports to keep it going. These are vital inputs that enable the teams and individual to rise up to the occasion, perform and deliver. Often emotional and psychological supports are also required to maintain or increase the morale and timely appreciations or rewards go a long way to motivate people. On the way people develop new skills and reach higher competency levels and both should be recognised early and suitably compensated. This will bring a radical change in the behaviour of the people and when this happens, finally the change can be considered to have been achieved. 4 Recommendation Franz needs to set out a goal for the company by laying down targets for say three and six months. His action of declaring layoffs was hasty in view of the cultural differences and lack of discipline in Thailand. This could have been handled more carefully by first speaking to the stakeholders and outlining the features of the company vision. Then they could have been taken into confidence and consensus reached by proposing the layoffs as well as new hiring required for achieving these targets. By his early action he has alienated the already disgruntled staff. However without worrying too much about what has been done a quick repair job can be made by following the above change management pattern and laying down the procedures for changes and spelling out targets for three and six month periods. If properly followed there is every reason to believe that the changes can be smoothly brought about. Read More