Perrier Company and Ajax minerals. It discusses the factors that resisted the change in these organization. It also analyzes the effectiveness of the approach adapted by Ajax minerals to manage change resistance. In addition to that, this paper proposes ways through which these organizations can manage change in an effective manner.
Ajax Minerals is a mining company in the United States of America. Even though the company is operating at its full capacity but it is not cost efficient and it is expected that within a period of three to four years the Pacific Rim Companies, which is a competitive group for Ajax Minerals, would mine and ship the same group of minerals to United States of America at a cost which would be lower than the cost incurred by Ajax minerals in the extraction of minerals from the ground.
Ajax Management had a poor history of change management and the relationship between the employees and the management was also very weak. The employees did not trust the management and its decisions regarding the change and hence resistance to change was very strong in the organization.
Factors that Resisted Change in the Ajax Minerals
The major factor that resisted change in the Ajax Minerals was the poor relationship between the employees and the management. The management and the employees did not support each other in an appropriate manner. The employees, therefore, were not ready to support the strategies and initiatives of the management in relation to the change. (Lunenburg, 2010)
Another factor that contributed towards the resistance of change was the low level of trust that prevailed among the employees and the management. The management of Ajax Minerals had a very poor history of change management and hence the employees did not find the initiatives of management, in relation to change, reliable. Trust is an important element of change management and it has been suggested by a number of studies that when change is introduced in an environment where the level of trust is low or inappropriate then the first and the natural reaction of the employees is to resist it. (Lunenburg, 2010)
In addition to that, the perception of the employees that taking steps for a change would be a mistake and the change would not prove out to be productive for the organization also contributed towards the resistance to change. This was because of the fact that most of the steps taken by the management in relation to change proved out to be a failure. (Yuh-Shy, 2010)
Apart from that, the management did not communicate its plans in an effective manner. Effective communication between the management and the employees is an important element of appropriate change management. It has been reported by a number of studies that the employees resist change if they are not appropriately informed about the rationale of the change and their responsibilities in relation to that rationale. The lack of communication, therefore, also acted as an important element that contributed towards the resistance of change. (Yuh-Shy, 2010)
Ajax's Approach for Managing Resistance to Change
The management at the Ajax Minerals never involved the employees in the process of making change management decisions. The new approach that was being adapted by Ajax for managing resistance to change was a productive one as the management tried to motivate the employees by telling them the stories regarding the pitfalls that were being confronted by the organizations that were facing the same situation but resisted change.
In addition to that the management also used the tool of transparency by giving the employees an access to the books of the organization for the first time. As transparency contributes greatly towards the development of trust and trust is an important element of the appropriate change management, therefore, by using the tool of transparency the management can reduce the levels of change resistance that prevailed among the employees.
Apart from that, the management also went for an interactive approach where it discussed the concept of change with the employees and also asked them to interact with the management regarding the important financial ratios and digits. This interactive approach would enhance the performance of the employees as they would feel more autonomous and responsible for their performance. The approach adapted by the management of Ajax minerals can contribute greatly towards reducing the levels of change resistance and it can prove out to be beneficial in the long run as well.
Approaches for Managing Resistance to Change
As a consultant I would propose the following ways to manage change effectively at Ajax Minerals;
Communicate and Consult: The organization shall effectively communicate the strategy for change and it should also involve each and every employee in the process of change management as it enhances the level of employee motivation. (Acas, 2011)
Understand the Emotional Journey of Employees; as employees fear change they go through emotional disruptions when they hear the news of change the management shall understand the story of the employees and shall help them in coming out of it. (Acas, 2011)
Demonstrate Strong Leadership: the management shall demonstrate strong leadership skills so that the employees can trust it. It should take the responsibility for change and shall create a clear vision for the future activities. In addition to that, the management shall also guide the employees in an effective and appropriate manner. (Acas, 2011)
Employee Engagement; the management shall also engage with the employees in order to enable to give their best performance and to enhance the level of organizational commitment among the employees. (Acas, 2011)
Feedback: the management shall also take regular feedback from the employees. Taking regular frequent feedbacks enables the management to better understand the needs of the employees and hence it can shape its strategies in a manner that best fits the requirements of the employees. (Acas, 2011)
2. Problems at Perrier Company
The Perrier Company was established in the year 1898 when a mineral water source was being bought by a French doctor Louis- Eugene Perrier near Vergeze, France. The company had a stable growth at the time of its inception but the demand increased heavily in the era of 1980s. This is because during this time period the company became very fashionable and attracted the attention of a number of admirers including, Wall Street yuppies.
When the company was at its peak in the year 1989 it sold 1.2 billion bottles of mineral water, capturing about half of the total consumers of the United States of America. The workers of the Perrier Company were satisfied and happy as the company's huge profits led towards good salary packages, fringe benefits and social benefits.
The golden period of the Perrier Company ended in the year 1990, when small traces of benzene were found in a bottle. This discovery damaged the sales of the organization in the U.S. And by the year 1992 the output of the organization decreased by 50%. The company was close to bankruptcy and it was bought by Nestle for 2.7 billion dollars.
The Perrier Company is situated on a two hundred and thirty four acre site at the Mediterranean coastal plain near Nimes. The workers at the Perrier Company work for a 35-hour week and the average salary of the workers of the Perrier Company is 32000 dollar which is greater than the average salary of the industry. The average worker, on the other hand, produces 600,000 bottles a year which is quite low when compared to the production of an average worker of the other international French water brands of Nestle, Vittel and Contrex, which is 1.1 million bottles.
Forces that Resisted Change at the Perrier Company
Resistance to change is an important factor that can lead towards the failure of the business. It has been indicated by a number of studies that two third of the major change initiatives of the organizations fail and resistance to change plays an important and critical role in this failure.
The major force that resisted change in the Perrier Company was the poor relations between the employees and the management. This poor relationship led towards lack of trust among the employees and management. The employees resisted change because they had fears regarding their job security as the inefficient performance and high salary would have triggered the management to lay out the employees. In addition to that, the employees also confronted the threat of lower salaries and lower benefits as the organization was going through a period of downfall and hence the output was very low and the expenses were high. (Yuh-Shy, 2010)
The other factor that resisted change in the organization was the strong and stubborn union of the Perrier Company, also called the CGT. As almost 93% of the total workers of the Perrier Company belonged to the CGT, the management had to face strong opposition in terms of the union. The union generally represented the collective point-of-view of the workers. But it might have resisted the change due to…