Aston Blair Inc. company overview and operations

Aston-Blair Inc.

Forecasting is an important and ongoing process for a business, allowing decision-makers to foresee the needs of the company and so to control everything from raw goods to be purchased to the inventory to be maintained and the equipment and workforce needed to meet the demands of the market. A failure in forecasting could mean that the company will be unable to meet its commitments or to take advantage of opportunities as they arise, or it could mean excessive production and increased storage costs if the error is in the other direction. For the Aston-Blair Company, recent losses have spurred interest in improving the forecasting process. However, this case is about the process of solving this issue more than about the issue itself, and in addition, it involves a resistance to change and how it manifests itself in this organization.

The situation facing Aston-Blair did not develop from a failure of forecasting as such but from the convergence of external economic changes in the early 1990s as the country experienced an economic slowdown that affected sales followed by the declining price of gold, leaving the company with large inventories of gold, silver, and platinum as the price dropped. It is noted that the reason for this was the fact that the forecasts were too optimistic, but in truth, forecasting is never an exact science and such gaps between the forecast and the reality can happen at any time when there is a change in the external environment that could not be foreseen. After all, the company had been experiencing great growth and high profitability and so had understood the market well and had also been able to forecast future business well.

The concern raised now is that the forecasting method being used are inadequate in the current economic environment. The company may have to include new dimensions and new instruments in order to see certain changes before they occur, and to this end, Aston-Blair has formed a task force to investigate the issue and to make recommendations.

Currently, the four marketing managers make the final forecasts for product demand, so that department is the subject of this investigation. Specifically, product managers will be involved in the study, leaving the marketing managers to whom they report to continue working as before. An analysis of the work of the Task Force shows that research in these areas is complicated by political concerns and employment realities so that different issues had to be addressed before the investigation began, other issues emerged during the investigation, and even more arose in terms of how to report the findings. Before beginning, discussions broke out over whether the task force should develop a forecasting model or only analyze what was being done so as to leave the creation of a model to managers and others later. During the investigation, issues of how data was collected and shared emerged. In terms of reporting, concerns were raised about subordinates criticizing their supervisors and about a concern for retaliation if they did.

At the meeting to reveal the recommendations, resistance to change was evident in the four managers, who in the main did not want to hear from their subordinates, did not want to make changes, rejected any changes out of hand, and made their displeasure known. Resistance is a natural consequence of any attempt to bring about change in an organization, tough the degree of resistance varies greatly. Resistance can be overcome in a number of ways, some less disruptive than others. Preparing for the change ahead of time is usually an important step that helps overcome resistance, and a proper foundation was not made for this particular set of recommendations so that the managers viewed this meeting as something of an ambush. They may have known that an investigation was being made, but the way the investigation was conducted actually set it up for resistance, since the subordinates of each manager made the survey, giving the manager a clear reason for rejecting what they recommended.

The fact that this process is beginning after a long period of success for the company may make these managers feel that they are being criticized for a failure, when in fact the company is only seeking the best way to perform the task of forecasting in order to avoid future problems. If this had been an ongoing process, as it should have been, then the process would not be seen as such a surprise or as an attempt to find scapegoats. Goodstein and Butz (1998) note the importance of the manager as change agent, meaning that the manager should maintain an ongoing process of change and so should be preparing the organization for change through a process of unlearning as a matter of course. The authors refer to organizational inertia and resistance to change, suggesting the barriers faced by the manager trying to develop change. The authors make numerous recommendations regarding three primary change technologies -- information technology (IT), quality function deployment, and organizational development. They place a premium on customer value and so on all the strategic planning methods which can help develop the organization around this issue, including business system redesign. They have different specific recommendations for each of the primary change technologies, but all are intended to enhance customer value and to make the organization more efficient at the same time. In particular, the authors make recommendations concerning the implementation of IT in the organization, noting the importance of achieving the integration needed and that this is best accomplished with a new role for IT by getting rid of the old and reshaping the organization completely (pp. 21-33). What they say about overcoming resistance, however, applies to any sort of change in the organization.

Lei, Slocum, and Pitts (1999) agree in the main, finding that designing the organization for competitive advantage requires close analysis of the existing structure and careful development of a replacement (pp. 24-38). In discussing the nature of change, Lewin (1946) notes the prevalence of resistance to change and some of the reasons for this resistance as well as some of the means for overcoming it. Change is a natural and inevitable process, and it is thus something with which we all must cope each day. Sudden and rapid change, however, produces anxiety and resistance. Lewin refers to the process of getting people to accept change as re-education -- it is an educational process, a means of encouraging learning and bringing about change through a shift from one educational level to another. One of the means cited by Lewin for bringing about acceptance in re-education is the establishment of an "in-group," or a group in which the members feel belongingness. Lewin says that under these circumstances, the individual accepts the new system of values and beliefs by accepting belongingness to a group:

The chances for re-education seem to be increased whenever a strong we-feeling is created. The establishment of this feeling that everybody is in the same boat, has gone through the same difficulties, and speaks the same language is stressed as one of the main conditions facilitating the re-education of the alcoholic and the delinquent (Lewin, 1946, p. 67).

In the contemporary business organization, the manager holds a particular position which he or she may feel is threatened by a given change. The problem for the employer forced to make changes is to have those changes accepted, and the first tier that has to accept the change is that of the managers. Making the managers feel part of an in-group is an important first step. They have to be informed of the change, made to understand the need for the change, and feel incorporated in the process of change, even in the development of the change program. They will then be able to impart their new-found enthusiasm and participation to their subordinates.

This is really a caution to employers not simply to impose change from above without proper preparation. The development of an in-group can help to overcome the tendency in managers to have a loyalty to the old and so a hostility to new ideas. Lewin (1946) states that re-education influences conduct only when the new system of values and beliefs dominates the perception of the individual, and the creation of an in-group is a step toward bringing this about because it reduces the reasons for resistance, places the individual in a group all members of which are facing the same change and having the same concerns, and thus creates a team atmosphere where seeking change is a group movement to which the individual willingly belongs. Once the managers are committed to this change, they can enlist the support and assistance of their subordinates in much the same manner, creating a sense of belongingness in the process of change itself.