How Concern for the Environment Has Changed the Cars' Design - Coursework Example

Managing Complex Change Projects Order No.169352 May 2007 The car industry has become a symbol of consumer capitalism. Every one needs a car today as it gives people the freedom to go anywhere they want to. Congestion and rising fuels have affected the car industry but people still continue to buy cars. Consumers today want a wide range of cars to choose from. Design of the car and branding too has become crucial. Rising gasoline prices have made car manufacturers make hybrid cars that run both on gasoline and electricity. A change in the product means a change in the way it is made. So we find companies going in for changes due to increasing competition, demanding and knowledgeable customers and advances in technology. An effective and efficient change management is therefore extremely important. In any business environment or organization, changes take place continuously not just in technology but also in the organization structures, systems, market place, consumer preferences etc. In fact, the only permanent thing now is “change” itself. Management style in an organization should be able to adapt itself to these changing conditions and environments and make the full use of it. It is usually seen that people resist change of any kind. This resistance has to be managed skilfully. There are many methods and models for change management and an organisation should choose the method or model most suitable for its operations. Introduction Change management can be very beneficial to any organization as it improves the existing system of management practices to satisfy the changing needs of the customer. At the same time it can cause problems too. One-way of managing change is to introduce new methods, new systems into an existing one with all the changes made and controlled by the organization. Or an outside agency, which has the expertise to manage change, can be employed. Change management consists of using various models, methods and techniques, tools, skills that can be used for effecting the change. The principles of change management are drawn from sociology, psychology, economics, engineering, business administration and human behaviour. The methods and models of change management vary according to the type of industry or organization they are being applied to. No two businesses are alike. The values, the cultures, the languages and even the problems differ from organisation to organisation. Change Models Change models are of three types namely top-down; transformational leadership; and strategic approaches. Top-down models In this model the emphasis is on leadership. The CEO is the man who facilitates change through communicating and involving his employees in giving shape to the vision he has. He is the one who sets goals, gives rewards, monitors the outcome, and also takes action when goals are not met Transformational leadership: This model advocates that change comes from the grass roots. It is the people who know what needs to be done. Here the people think for themselves collectively and individually and take initiatives themselves. The management creates an appropriate climate for the change to come and flow from the grass roots level. In Transformational Leadership leaders provide encouragement, support, coach and inspire their followers. Strategic approaches Professor John Kotter (1990) has formulated an eight-step strategy for managing change: Establish a sense of urgency. Create the guiding coalition. Develop a vision and strategy. Communicate the change vision. Empower employees for broad-based action Generate short-term wins. Consolidate gains and produce more change. Anchor new approaches in the culture. There are some more models like the Bridges Transition Model which says that transition consists of letting go, Lewins Three-step model of change, The Action Research Model, a time-tested and widely accepted process for developing and implementing a change strategy. Umstat (1996) describes "action research as the process of gathering data, feeding data back to the client, problem solving or dealing with issues that arise from the data, developing action plans to resolve problems, and following up to see if the action has worked as planned" ( Understanding Organizational Behavior ,pg 461) As seen there are a number of models to carry out and implement changes in any organization. But there is no single model or approach that will fit all organizations. An organisation should evaluate the various models and then devise its own model of change keeping in mind its needs. Each organization is different, which necessitates a different approach to change initiatives depending on the organizational environment and culture. These tools act as guidelines but are not substitutes for strategic thinking and problem solving required in each unique situation. Managing Complex Change Projects As William Bridges (1991) in Managing Transitions- Making the Most of Change, said, "It isnt the changes that do you in, its the transitions. Change is not the same as transition. Change is situational: the new site, the new boss, the new team roles, the new policy. Transition is the psychological process people go through to come to terms with the new situation. Change is external, transition is internal." Successful change projects involve both changes in the manufacturing processes as well as the human side of it. While managing a complex change project the first step is to let go certain things. If you want to learn to do things in a new way you have to let go the old way of doing it. Next identify the change you need to make. You have to reason and explain why the change is necessary. Identify the issues and symptoms that make you feel change is necessary. Then set up a team and a support mechanism to communicate and implement. Define and clarify the roles of the team, or the change agent that has been appointed. While making complex changes one needs to have vision of the changes to be made and also the end result of the changes. The team appointed should have the necessary skills to implement the change. When skills are lacking the team members experience a lot of anxiety and stress and may not be successful in their endeavours. People always work hard and strive to attain their objectives if they know that they are going to be rewarded. The companys resources like human capital, equipments, funding, space, training programs, etc are very critical to any organisation, which is going in for a complex change project. The right allocation of a companys resources goes a long way in helping to initiate a new project. A change in the way business is done is complex because three factors depend on each other. The organisation, the people and environment and the new technologies that have to be incorporated are all interdependent. A change in any one of the factors will affect one or both the other factors. For example when implementing changes in Information Technology change in technology may cause some anxiety or a feeling of inadequacy in the employees. Here therefore emphasis should be placed on changing behaviour and training. The technology to be introduced must form only a small part of the change. Changes that have taken place in car manufacturing companies The pace of economy today demands that businesses either change or perish. Globalisation has led to significant changes in the automotive sector. Car manufacturers especially have operations all over the world. This has resulted in joint ventures, collaborations, mergers, acquisitions, etc. which in turn calls for changes in management styles. The number of new models of cars is increasing day by day and branding has become an important exercise. Car manufacturers know that brands have to be constantly upgraded. Also there is constant need to improve the quality of the cars and also productivity levels. The intense competition that is prevalent in the industry makes it necessary for them to shorten the time that is required to introduce a new product as also to downscale their operations. In this industry the emphasis is always on quality and volume. To cut down costs one has to produce more cars at the same plant with the same workers or with a limited increase in the work force. Between 2001 and 2004 Volvo introduced two new models in their Ghent Plant. To carry this out huge expansion took place, production doubled and about 1400 new employees were hired. This required complex change management. Volvo decided to go in for self-managing teams to face the new challenges. They followed the consensus model. The union and the management worked together. The members were informed and given an honest picture of the situation. There was effective communication between the two and workers were taken into confidence. During any crisis or even during expansion of production capacity a dialogue always helps in creating a positive atmosphere. The labour force became proactive and took part in developing and carrying forward the new vision of the company. The team leader was more of a coach than a leader. The needs of the workers were satisfied first for Volvo knew that to practise any change management the needs of the employees must be met first and that the basic conditions must be set right before embarking on change. Volvo saw to it that there was enough communication between the employees, the management and the union. Ford focuses more on Total Quality Management tools and methods rather than on teams unlike GM and Chrysler that depend a lot o human resource practices. Today the market share of Ford has dropped , is in the process of shedding workers, and closing a few plants. To compete with the numerous car manufacturers Ford has to realign its product portfolio. It has to innovate and manufacture hybrid cars. Mark Fields, Ford Motor Company Executive Vice President and President of The Americas in his Way Forward Plan says that the first step is to improve the quality of the products. The company he says will assign all its 1150, 6-Sigma"black belt" force the task of improving quality in both manufacturing and product development. The decision-making powers will be given to the most qualified people to take actions and that they would be accountable for their actions. The teams will be given the tools for quick resolution of problems. He also said that they would link compensation to quality improvement. As mentioned earlier Ford lays emphasis on Total Quality Management tools. The challenges of reducing workforce or operations would be met by collaborating with the unions. He explained that some sacrifice was required from the workers to carry the company forward. Conclusion High gasoline prices and concern for the environment have changed the way cars are made. Many other factors have led to increased competition among carmakers. There is a race on for making the most fuel-efficient "green car". This has led to changes in many automobile designs. Intense competition has led to companies striving to improve all their processes and practices. Some manufacturers are turning to making smaller cars or hybrid cars. All said and done the car market in the U.S is not expected to grow much but there will be far more companies trying to get a portion of the market share. So the bigger players have to change their strategy to stay on top. For this they have go in for complex change projects. But it should be remembered that this cannot be done overnight. It has to be done diligently and managing the human side is very crucial. One should aim at building a new organisation slowly and the transition should be gradual. The impact of the changes to be made should be communicated to the people affected. People who are going to be affected should be involved in the planning as well as the implementation. Ford and Volvo have done just that. Bill Ford asked his employees to put forth ideas for innovation he was flooded with ideas. And when the North American team was asked for suggestions for the Way Forward Plan more than 4000 ideas were received. Change is not only changing design or increasing capacity or downscaling. It is about changing culture. Intense competition has led to companies striving to improve all their processes and practices. But the pressures of business and competition continuously increase increasing along with it the pressure to change. The problem arises when only few people in the company support change. It is absolutely necessary that all employees are actively involved in the change process. References 1. Bridges William, 1991, Managing Transitions- Making the Most of Change.  Perseus Books. 2. Kotter J.P., 1990, A Force for Change: How Leadership Differs from Management, Free Press, New York 3. Umstat, D. D. (Ed.). (1984). Understanding Organizational Behavior. (2nd ed.). St. Paul, MN: West Publishing Company, pg 461 Read More