Organisational Change Management - Essay Example

Organizational Change Management Definition The economy of Europe has faced significant problems and faced a great depression over the past. ("Eurozone crisis | Business | The Guardian", n.d., 2013). This has severely affected parts of Europe with the main part affected being the Central Europe. The results have been high unemployment rates and increment of tariffs and import quotas ("BBC News - Timeline: The unfolding Eurozone crisis", n.d., 2013). This has affected various companies operating in the region as so is D2. D2, being a multinational company that deals with car manufacturing has faced great problems from the surging crisis. There has been a significant fall in demand and prices which has been induced by the crisis. This has also affected the banking system making it difficult for D2 to fully perform its business operations. The Eurozone crisis covers major contributors to the Europe economy and has led to the reduction of the overall credit score throughout Europe (BBC, 2013). The crisis has limited the functionality of D2 and forced it to adopt new approach to its entire management. In order to adapt to the pressure caused by the dwindling economy, D2 need urgent but effective change of its entire organizational management system. This requires them to design new methods of operation and new strategies of manufacturing so as to avoid succumbing to the falling economy. Therefore, D2 needs a redefinition of their complete system for the purposes of survival and sustenance. This has forced the board of directors to direct for immediate actions to be taken towards maintaining profitability. There are several actions that the board has decided to take: the first is to close their UK factory so as to enable them centralize their resources and gain economies of scale, this is a decision which has been arrived at following the low contributions of the branch. D2 also aims at reducing their operational costs and maximizing on their highly profitable areas. The rapid adjustments that D2 wants to put into practice require the cooperation of employees. The employees need to be assured that their security with the company is guaranteed and this way motivates them to work towards the goals of D2. This majorly applies to the employees who will not be directly affected by the changes and closure of the UK company branch. There need to be a way to maintain their attachment to the company and interest in the success of the company (DiPlacido, 1976). D2 is bound to receive several challenges during the execution of the proposed changes. These challenges will particularly emerge from the employees who will need to shift locations and apply their expertise in another D2 branch. This will be done in that the services of product development team in Didcot will be imported to France. This will help boost the production in France and make the company profitable. Though crucial to the success of the company, likelihood of facing resistance from employees who will have to undergo both personal and geographic change is eminent. This will trigger feelings of victimization and negative attitude towards the company (Wiltshire, 1995). Despite all the challenges, the bard of D2 has decided to practice the following strategic changes as immediate actions in their organizational change management: a) Operational Change: According to Truscott, centralizing the available resources to a specific production line gives the company a chance to improve its internal operational competency (2003). This D2 will achieve by stopping part of their production and opting for service outsourcing if need be. This will also enable them to get a specialized service attention. b) Strategic Change: Inefficient strategy normally neutralizes the efforts of the employees (Gutek, 2000). For this reason, D2 aims at adapting a strategy that focuses on reducing both their production and operational costs. Unlike before when they mainly focused on widespread investment, D2 will not ensure operation and production at minimal costs possible. c) Transformational Changes: With the harsh economy, D2 needs to change its entire system of operation so as to survive the crisis. It needs to transform from its conventional mode of operation to the new designed cost-focused operation that will help it transform to a highly profitable car manufacturing company. An example of the transformational change in D2 is seen in the shutting down of the UK Didcot site. This is guaranteed to shift D2’s overall operation as it adapt to the new changes. Discovery D2 is looking forward to making significant operational changes that will also affect its employees. First, D2 is aiming at shutting down their UK site at Didcot in a bid to enable them centralize their management and resources to the highly profitable branches and maximize on economies of scale. This will greatly affect the employees who were working at the site. D2 is also looking forward to relocating its employees at Didcot and settling them in France so that they can help improve their product design and make the company branch in France more profitable. The changes that the company will undergo while performing all these requires expertise and careful handling as it concerns employees who will have to shift their physical location. Relocating employees from one physical location to the other usually have various effects on the employees. While some might welcome it as a way of exploring new locations, many will always find it inconveniencing considering their attachment to the location they were in. for this reason, there are several effects to the overall operation and functionality of D2 that will result from the shutdown of the Didcot site and the transfer of the employees from Didcot to France. According to Waterhouse and Brown, there are several factors and constraints that are normally associated with employee relocation (2001) that must be considered to provide for a smooth transformation of the company. These include the following: Relocated employees always have attitudes that range from the resentment of leaving their areas and connections with family and friends to willingness to move as a way of exploring different worlds. Relocation causes significant impact to the employees including their family members. To the family members, relocation mostly has great impact to the young ones who will be forced to adapt to new environments and join new schools. ("Staff increasingly likely to resist relocation by companies because of family ties | Joseph Rowntree Foundation", 2012) Some employees consider relocation as a career development stage. This group of employees will always be more motivated to move and work in new environments and thus have no problems relocating. D2 will therefore face a shift of attitude from a section of employees from Didcot. These employees will feel unappreciated and develop negative attitude towards the company, something which is not good for the success of D2. The employees to be relocated will most likely develop negative emotions in three different types: these are emotional, physical and cognitive. The employees are most likely to develop a physical dislike of the relocation while getting emotional with the whole process. The most evident negative emotion that will be evident is the cognitive emotions in which the employees to be relocated will feel as if they have been victimized in the relocation to France. These emotions may create a negative rebellious attitude among the employees thus acting as resistive forces to the move. D2 therefore needs to handle the relocation process of the Didcot’s product development team with utmost care and concern. This will require better employee management and motivation. This move also requires efficient leadership and management (Zimbardo, Leippe, 1991). The change problems that D2 is faced with can be completely addressed and taken care of through higher engagement levels with employees, a positive base ground for change and an adoption of a strategic leadership and management. The D2 manager needs to be equipped with relevant and correct leadership and managerial skills so as to coordinate different employees’ tasks and motivational procedures. Positive and practical visions and mission should also be shared among all the employees and forums organized to orient the employees. In order to provide for a smooth relocation, D2 needs to coordinate the relocation of its employees and provide them with means and cover the costs that include them and their families. Such kind of benefits will help keep the employees motivated and give them a sense of being appreciated by D2. Employees’ security should also be guaranteed and employees made aware of the situation. This will keep them on track and help them adapt to both the transformational and operational changes that D2 is to undergo. Dream The strategic, transformational and operational changes that D2 is bound to undergo will disorient the normal functionality of the company. These will surely alter the structure and normal operations of D2 and may result into a different order of operation that is not aligned to the goals of D2. Whenever a company undergoes a significant transformation that involves change in the way it operates or relocation of its employees, internal chaos might result (Parker and Stacey, 1994). This might be caused by the difference in strategies and policies used by the employees. This may result in the complete dissemblance of the full structure of D2. According to the Lorentz’s chaos theory, organizational changes in a company can cause disorder and eventually chaos (1996). Bishop and Robert also imply that even the smallest change in the operation of a system can result into chaos (2009). Because of these, there is need for drastic measures that will maintain order during the change phases of D2. D2 has also made a step further into improving their product quality and reliability. This they have done by improving their production tem and relocating the product development team from Didcot to France. This will provide the company with more skilled personnel and better production. However, the handling of the relocated employees can be used as a tool to create an internal culture development as an element of D2. The relocation process can be used as a referral point and this way used to set an ideal example to the entire employees. D2 therefore will have to provide relocation solutions that are favorable and portrays good image of the company. With this satisfied, the negative organizational trends within the company will be eliminated and a better working platform created. While generalization of employees’ problems can be a good way to handle their mass problems, it is also imported for the management of D2 to focus on individual attitude and influences. This is important since it is the collective efforts from individual employees that at long rand drive the company towards financial success. Individual employee assessment should be carried out as an action of strategic employee management as it helps determine setbacks faced by every employees and their level and efficiency of performance (Prien, Schippmann, and Prien, 2003). The rationale of this is that constraints faced by employees are different and might also affect them in different capacities. This approach will also provide a specific way of dealing with each employee emotions and providing the employees with relevant solutions. The result will be a highly motivated team of employees who performs to their level best and works towards the goals of D2. D2 management should also avoid exercising excessive attention and regulations on the employees. In fact, for a strategic management approach to succeed, there need to be efficient management of social groups within D2. According to Williams, to some extent, employees should be allowed to form their own order through the process of self-organization (1996). This will provide them with a strong base to ensure their integrity and order. For this reason, teams of employees should be allowed to set their own code of operation and organization. Focus of D2, however, should not only be on the relocated employees but also on the unaffected ones. This satisfies the complete strategic employee management criteria and is a way of keeping track of all employees. The whole process of change might have distracted them and made them deviate from the company’s focus. They may also just need to get oriented with the new company’s mode of operation. Therefore, local employee voice should be improved and also the employee involvement encouraged. These will help D2 gain more loyalty within the employee base and also make them be attached to the company (Heckscher, 1988). Such actions will motivate the employees and increase their work efficiency while eradicating the negative emotions once held. These will result in a productive team of personnel which only means the success of D2 which is the primary objective. Design The solutions to be adopted by D2 are those that will ensure productivity and loyalty of employees as well as provide them with a success reference to keep them motivated. There are various already discussed steps and actions that D2 will implement in ensuring their continuity. The success of these solutions relies on how well they are implemented and put into practice. A little mistake and the attachment of employees to the company are derailed or the cost-cutting procedures thwarted. The ability to use efficient implementation procedure is equally important to the successful adaptation of D2 to the organizational change. The procedure to be taken in the solutions implementation is the Proci’s step-by-step method of implementing change solutions and solving change management challenges. Phase 1- Preparing for change This is geared towards getting ready for the anticipated change. It directly answers the question “what degree of management do we require for this magnitude and particular change?” This creates the contextual awareness critical for effective management of the change. In the case of D2, the executive should be able to quantify and categorize the change management needed to shut down the UK plant, expand the Blois plant and relocate willing workforce. In this phase, the following should be looked into critically Outputs of phase Change Management strategy- The executive should be able to come up with a clear cut, step by step chronological plan of how the change will occur. In the context of the subject matter, it will only be rational of the change begun in the Blois and Asian plants. This should be in terms of capacity expansion, space creation for the anticipated new workforce and cost minimization. Change management team structure- The executive should be able to delegate the duties of carrying change to a particular group of personnel. They should be able to identify the individuals and their designated roles to avoid misunderstanding s and interruptions during the process and to able to meet one of the key objectives of making the process fast. Sponsor assessment, structures and roles- Give the magnitude of change anticipated; a direct involvement of change sponsors is not only necessary but also fundamental. They should be able to divide the overseeing duties effectively among themselves to ensure that those delegated duties play their roles efficiently. Phase two- Managing change This phase dwells more on the creation of plans that are integrated into the activities of the project. In this context, the created delegations should create plans that will help them move though the ADKAR model. Outputs of phase two Communication plan- It is important that all parties communicate to ensure that that the transition is smooth. Keeping in mind that there are now many players in the transition i.e. the change players, delegations and change advocates, timely and well-structured communication is very important. Sponsorship road map- The change sponsors should by now have a very clear picture of how the change will be managed and communicated and who will oversee every aspects of the required change. Coach planning- It should not be assumed that all the change targets know their precise place and their desired response to the change. Where need be the, they should be taught how to respond to it. In this context, the management of the Blois should be coached on how to handle the personnel relocating from the plant in UK. Moreover, the relocating personnel should be coached on their new expectations and roles in their destined new work environment. The management in Blois should also be coached on how to create opportunities for new workforce in tandem with the new expansions. Resistance management plan- Not all change targets are change advocates. There are those workers who are important in the new product line who will opt not to relocate but instead look for a new job. In this context this is more prone to happen since the previous company in Didcot is located in an international center for auto product development hence there are many companies located nearby which has led to the development of a world class pool of product engineering talent in the area. This means that there are chances of the engineers previously working for the company opting to look for jobs in these surrounding places. Measures are put in place to mitigate such resistance Phase 3- Reinforcing change This is to ensure that the tempo for the transitions is maintained to the very end. The delegations develop measures and mechanisms to ensure that the anticipated change has taken hold. Outputs of Phase 3 Compliance audit reports- The way the transition is carried out should be scored against the set plans. This begins with the change sponsors through to the change targets and change advocates. This should be done impartially and in a timely manner. Corrective action plans- In the event that there are unwarranted deviations from the set plans it is advisable that corrective actions are executed without delay to bring the dispensation of actions back to track and ensure that the change goes as planned. Corrective actions should be provided for initially in the planning stage. Individual and group recognition approaches- Within an organization, not all personnel exhibit similar working spirit. Some stand out by showing spectacular skills. As an incentive, such personnel should be acknowledged. Similarly in this transition, any show of spectacular skills should be lauded so that the delegations feel they are appreciated and feel obliged to give in their best effort. Therefore, to hasten the transitions, recognition of individuals and groups comes in handy. After action review- When executing the plans, mistakes could be made. Some mistakes are worth learning from some also permanently altering the end result such that the organization has to create room resulting from this mistake. Some alterations could have been made along the way requiring their accommodation in the resulting layout of operations .After action review therefore comes in handy in doing so. Some have argued that this marks the most important part of any change management process. I may not agree with that entirely but I agree with the magnitude the statement is meant to carry. After the exercise, tall the involved players should be able to review the process, analyze the result and come up with ways to mitigate any resulting deficiencies. This plan strategy does not guarantee 100% success. It serves in providing tools to provide the road map that acknowledges the company’s challenges and objectives of the closure of plant, relocation of willing workforce and expansion of Blois plant. The charts below depicts relationship between management tools and ADKAR phases of change Destiny Integration of 5D and Prosci’s approach is most appropriate for the task at hand .The task demands an intermarriage of individual change management and organizational change management to ensure that the set objectives are achieved while overcoming the anticipated challenges. If the phases reviewed are followed keenly and the outcome of each phase given keen attention, then there are high chances of success in the transition. However, that is not to say that this strategy offers an up to book accuracy on tackling each challenge and meeting each objective. There could be other ways of doing it. In my opinion though, since there is involvement of individuals and organizations, a methodology involving both entities in planning is of great importance. D2, in consideration to all the processes and theories, uses a process of assessing different functional problems and availing solutions to each of them regardless of whether they are transformational, operational or strategic. These methods accesses group employee and allow them organize their own order as a way of improving integrity and loyalty. The organizational management approach also provides a platform for individual assessment and evaluation so as to correct individual problems and increase the overall employees’ productivity. To further emphasize on this, the management provides favorable methods of ensuring employees motivation and makes use of efficient and strategic management. This management report will help D2 undertake all its changes smoothly and effectively without hindering its productivity. Thus the 5D approach to organizational change management is effective for better change integration. References BBC News - Timeline: The unfolding Eurozone crisis. (n.d.). Retrieved from http://www.bbc.co.uk/news/business-13856580 Bishop, Robert, "Chaos", The Stanford Encyclopedia of Philosophy (Fall 2009 Edition), Edward N. Zalta (ed.), URL = . CNN Video - Breaking News Videos from CNN.com. (n.d.). Retrieved from http://edition.cnn.com/video/#/video/business/2013/01/02/qmb-intv-euro-economist-on-euro-outlook-2013.cnn DiPlacido, P. (1976). Employee motivation. Columbus: Ohio Distributive Education Materials Lab. Eurozone crisis | Business | The Guardian . (n.d.). 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