Managing Organizational Change - Essay Example

Managing Organizational Change ……………………………………………………………………….. Submitted in partial fulfillment of the requirement of the ............................course. Student number ………………………………………………….. The date ………………………………………………………. Executive Summary Change is part of our everyday lives. This paper was dedicated to identifying changes that are needed and necessary for rapid growth of the organization. It was established that these changes must affect all aspects of the organization and thus three major change models were established. The change models that were identified were customer value creation, revenue creation and business expansion. Under each model, specific strategies were outlined. For instance under the customer value creation model, customer relationship management and eternal peer review mechanisms were seen as the two major strategies to create value for customers of the organization. The benefits that the company was tagged to get from its customer value creation program were the fact that customers would have the opportunity to see the company deliver on their needs and so have an established morale to continue doing business with the company. The challenge with this model was found to be the need to upgrade the company’s human resource base to welcome the change at hand since the customer relationship management was going to be technology driven and all stakeholders needed to match up to this. On revenue creation, revenue management was identified as the most ideal strategy. This was found beneficial because it could help in raising immediate capital for the company especially during holiday season when tourism activities were higher. Revenue management was to involve the hiking of prices for specific services delivered to specific people within a specific timeframe. The challenge associated with this has to be the inconvenience of existing customers to adjust to this new management culture. Lastly, the company was admonished to go into merger as a long term strategy for its expansion model. By merger, a company in the tourism industry was to be identified and joined with the existing coaches company. Table of Content 1.0 Nature and Need for Change 4 2.1 Implementation of change 5 2.2 Customer Value Creation 6 2.2.1 Customer relationship management 6 2.2.2 Peer Review Quality Assurance System 7 2.3 Revenue Management 8 2.4 Merger 9 3.0 Expected Benefits 10 4.0 The challenges the managers might face when initiating the change 11 5.0 Managing Procedure for the Organizational Change Process 11 5.1 Short Term 12 5.2 Medium Term 12 5.3 Long Term 13 Reference List 14 2.0 Nature and Need for Change Change is an integral part of our daily lives. In fact, it is will difficult to imagine life without change. Such need for change is professed in all human institutions and organizations. Once there is change in the systems and structures of running an organization, we say organizational change has taken place (McCarthy, 2001). But the fact that change is inevitable and necessary does not mean that change should just happen. Experts advise that organizational change “should be seen as a discrete and specialized work stream” (Wallace, 2007). This means that organizational change is not as crucial as the management of it – thus organizational change management. Chapman “Change management entails thoughtful planning and sensitive implementation, and above all, consultation with, and involvement of, the people affected by the changes.” Based on this explanation, there are three major changes suggested for management by the organization. The nature of these changes could be described as customer orientation revenue generation and business expansion changes. The need for these changes lie in the facts that the services and products given by any organization should have customers as its focus because customers act as the final consumers of the services and products and it should be their interests that should be satisfied. This not withstanding, no major organizational change or strategy can be successful in the absence of enough funds and revenue. It is for these reasons that the nature of change needs to be centered on both customers and revenue generation. 2.5 Implementation of change The changes suggested for the company shall be based on two major models, which are customer value creation, revenue creation and business expansion models. The execution or implementation of these changes shall be effected in a manner that is described in the diagram below. From the diagram, it can be deduced that under the customer value creation model, there will be two major strategies which are customer relationship management and quality assurance. Under the revenue creation model, the strategy to be used will be revenue management. Finally under the business expansion model, the organization will adopt merger as an expansion strategy. Below, the models and accompanying strategies are discussed in detail. 2.6 Customer Value Creation Value creation may be described in several contests as far as organizational change is concerned. However, in the context of the customer, value creation “entails making products and providing services that customers find consistently useful” (OMalley, 1998). This means that customer value creation changes in the organization should be focused on giving the customer maximum satisfaction with products and services. This is because when the customer is satisfied, he will continue to do business with the company and the company will grow. To this effect, two major strategies have been suggested to help create value for the customer. These are customer relationship management and per review quality assurance system. 2.6.1 Customer relationship management Customer relationship management is an important component of customer value creation. This is because customer relationship management focuses on the needs of the customer in such a direct way that, through customer relationship management, the customer is allowed to bring on board his views, ideas and aspirations for the company. It is in the light of this that Raab et al (2009) state that “in today’s global economy the successful corporation will be the one that formulates a management structure conducive to timely feedback as it regards the wants and desires of the customers.” Indeed in today’s fast moving technological pace, the kind of customer relationship management suggested for the organization is technology based customer relationship management where greater focus shall be given to new media. By new media, reference is being made to the system of technology that “makes it possible for anyone to create, modify, and share content and share it with others, using relatively simple tools that are often free or inexpensive” AIDS.Org (2011). This means that new media focuses on the use of computers and particularly the internet. To this effect, the company should embrace social media to enhance its customer relationship management process. With social media, it will be possible for customers to interact with the company by sharing their view, suggestions, opinions and complains through the ever growing phenomenon of social networks. 2.6.2 Peer Review Quality Assurance System Another important aspect of customer value creation is to ensure quality of service and product. As customer relationship management gives customers the opportunity to bring on board their suggestions and ideas, there should be another mechanism that ensures that customers do not just get what they want but that they get what they want with high quality. This is where quality assurance comes in as Kietzman (2011) explains that “quality assurance is the process of verifying or determining whether products or services meet or exceed customer expectations.” With reference to Charlie’s company, the pivotal concern shall be with the verification process where an external peer review mechanism shall be adopted as a strategy. By external peer review, it means that independent assessors and auditors shall be hired from outside the company to critically assess the performance and delivery of the company based on specific factors. It is important to make the assessors external assessors because their exclusion from the company is sure to allow for unbiased reportage, fairness and openness. Based on feedback received from the external assessors, shall influence decision making in the company at all levels of operation. This is in line with what The Quality Assurance Service (2011) states that quality assurance “plays a vital role throughout the phases of designing, development, manufacture, installation and servicing.” 2.7 Revenue Management Revenue management shall be the major strategic component under the revenue generation model. Revenue management is a strategic way of amassing revenue for a company – especially companies in the tourism industry. Considering the fact that the coaches business is closely related to car hiring by tourists, the idea of revenue management can also be adapted by Charlie to help his company to grow. One other important reason why revenue management is hoped to work best for Charlie’s coaches business is that his business is located at the beach – a place where a lot of tourists visit in a year for tourism purposes. Giving another name for revenue management as yield management, Decision Craft Inc. (2010) states that revenue management “is a process for capacity-constrained industries to maximize profitability by allocating the right inventory to the right customers at the right price.” With reference to the coaches, revenue management shall be used in such as a way that during peak seasons of tourist activities such as in summer, the prices of coaching services shall be raised for tourists who would want reservation for advanced services. There shall also be raised prices for customers who request for special types of coaches. This means that there shall be the introduction of a new line of coaches. Ideally, these coaches shall be referred to as VIP Coaches. They shall be made of newer businesses and vans that have improved services. The basis of the revenue management strategy shall be based on the fact that during summer there is pressure on the coaches industry for the sake of tourism. It shall also be based on the improved services for the proposed VIP coaches. 2.8 Merger Merger shall be adapted for expansion purposes. This means that in the event of business expansion, merger shall be opted as the preferred strategy. Merger is suggested for the company because some of the advantages it has in relation to the current strength of Charlie’s company, merger will be the most appropriate compared to other expansion options such as acquisition and initial public offer. As explained by Investopedia (2011), “a merger involves the mutual decision of two companies to combine and become one entity; it can be seen as a decision made by two "equals".” To this effect, the company will not have to invest any major capital in getting the merger underway. The merger shall also ensure that there is an outright growth in the size of the company by the size of the merging company. As much as possible, there will not be the need to undertake any major recruitment or placement or undertake major infrastructural changes. Above all, all expenditure shall be shared by the two parties involved in the merger. It is for these reasons that the merger is seen as very appropriate for the company. In selecting a company for the merger, it would be most ideal for the company that is a tourist site. This is because the revenue management strategy centers on tourism. When the company merges with a tourist site, it would benefit from all the advantages of the tourist market. 3.0 Expected Benefits The management changes that have been presented above come with a lot of benefits for the company to enjoy if duly implemented. In the first place, the company can be assured that patronage of their products and services is going to surge if the customer value creation is carried out expeditiously. This is because customers are going to feel more belonging to the company – a factor that ensures that customers always stay with a particular company. Because the delivery of products and services are going to be based on the perspective of customers, there is every indication that customers are going to have value for their monies and this is going to keep them with the company. The second benefit will have to do with the fact that with the quality assurance system to be designed, the overall improvement of quality in the organization is going to create a very huge competitive advantage for the company against its co-competitors in the industry. This competitive advantage is assured especially against the backdrop that the quality assurance system is going to be based on an external peer review mechanism. Indeed the fairness in assessment will put the company’s quality standard at a world class level, that will be admired by all and sundry. Finally, the merger strategy shall ensure be very beneficial to the company in the sense that the basic set up of the company is sure to change at a very rapid pace. Because the merging company is in a rather different business venture than coaches, there are going to be new groups of customers coming onboard the company. It is hopeful that as the customer base of the company increases, the revenue of the company would also increase greatly. 4.0 The challenges the managers might face when initiating the change Not withstanding the glooming future of the company in implementing the strategic changes discussed above, the actual implementation of the changes will certainly be hampered by certain challenges. For instance the two customer value creation strategies to be implemented are very demanding on advanced technology. This means that the structures of the company must be restructured such a way that would make way for the incoming technological advancements. Personnel would have to come in to man the affairs of the new system and as much as possible, existing staff and employees must be trained to be able to work freely under the new system. This means that the company would have to be considering a new line of technical expenditure. The second challenge has to do with the fact that the revenue creation strategy, which is revenue management, is likely to cause a lot of change in the basic organizational culture of the company. This is said because most existing companies who might be very familiar with the way the affairs of the coaches system is run would have to adjust themselves – including their pockets to partake in the new revenue management program. To the extreme, this is likely to cause a lot of loyal customers to withdraw from the company if structures are not put in place to consolidate the old culture and system as the new one comes in. To this effect, it is said that the revenue management should be treated as a new system rather than a system that will replace existing organization culture. One other challenge with the revenue management would be the huge capital needed to stock the company with new line of coaches. Finally, the selection of an ideal merging partner may pose a challenge to the company. If not well scrutinized, there may be a selection that will not benefit the company. 5.0 Managing Procedure for the Organizational Change Process There is no denying the fact that the strategic organizational changes outlined above are very demanding and challenging though they come with their own benefits. To this effect, it is important that a workable managing procedure be adopted for the implementation of the change processes. To this effect, a timeline change procedure is to be used. With timeline change procedure, it is expected that the changes will be carried out in batches and according to specific timing pace as discussed below. As the changes revolve around three major models, the three models are going to be dispatched in a short term, medium term and long term manner. 5.4 Short Term The customer value creation model is to be implemented as a short term model for the company. This is because even though the customer value creation may involve some cost, the cost involved is relatively minimal and can be therefore start right away. Again, with an improved customer satisfaction system, the company is likely to begin enjoying increased revenue to cater for the other strategic changes. The short term changes should therefore involve the implementation of the social media based customer relationship management system and the deployment of external peer reviewers. This short term procedure is to last for a period of one year and continue after the one year period. 5.5 Medium Term The revenue management program is to be a medium term change to be executed by the company. This change is put at the medium term session because it would have to wait till the start of a new holiday (summer) season. Putting it at the short term would therefore mean that the company would have to wait for a while before beginning with anything at all. Again, this change is ideal for a medium term change because it involves a lot of technical expertise in the area of accounting and finance. These experts would have to have sufficient time to carry out various feasibility studies and researches where necessary to know how the right systems to follow in executing the change. This medium term change is to start after two years of the short term changes. 5.6 Long Term The long term change is going to be the merger. This is placed as a long term change because it involves a lot of feasibility and technical studies to make sure that the selection of the merging company is done in a more beneficial manner. The experts to advise the selection would need a lot of time: at least three years to assess the performance of a targeted merging company. There will also have to be a lot of legal issues selected in the merging process. Indeed, delaying the start of this major expansion change for the latter would not be a bad thing to do at all considering the fact that there are corporate records of how such major corporate decisions that were made in a rush ended some big corporations in bankruptcy and liquidation. REFERENCE LIST AIDS.Org 2011, ‘What is New Media?’ accessed September 21, 2011 Chapman A. 2010, ‘change management’, Business Balls. Accessed September 23, 2011 Decision Craft Inc. 2010, ‘Revenue Management’, accessed September 27, 2011 Investopedia (2011), ‘Merger’, Accessed September 27, 2011 Kietzman S. 2011, ‘What is Quality Assurance?’ accessed September 26, 2011 McCarthy G, 2001, ‘Organizational Change and its Challenges’. New York: New Era Publishing Limited. OMalley P, 1998, ‘Value Creation and Business Success’, Pagasus Communications Inc. The Systems Thinker, Vol. 9, No. 2 Raab et al., 2009, ‘Customer Relationship Management: A Global Perspective’ accessed September 21, 2011 Wallace S, 2007, ‘Organizational Change Management’, ePM Books. Accessed September 27, 2011 Read More