Resistance to change at Ajax Minerals: knowledge and exclusion

Human Resource Management

Comparing and Contracting Two Change Case Studies; Ajax Minerals and Perrier

Identify two (2) sources of resistance to change in the Ajax Minerals exercise and describe how the organization dealt with each type of resistance.

In any organizational change there is the potential for resistance; many models of change emphasize the need to overcome resistance for most changes to be implemented successfully. In the case of Ajax Minerals there is an example of the way in which management looked at the situation in order to identify potential sources of resistance, and then implemented strategies to overcome them. Ajax Minerals faced several potential sources of resistance which may interfere with any changes that they needed to implement to increase their efficiency and competitiveness (Palmer et al., 2009). One potential source of resistance was a lack of knowledge on the part of the employees; their knowledge was limited as they could see the company was successful, evidenced by the level of overtime they were undertaking, they were not aware of the increased level of competition the company was going to face and what it would mean the company as well as their own jobs. Poor employment relationships with past previous management also meant there were trust issues. The current management believed employees would not necessarily accept there were potential problems ahead, perceiving any changes as an excuse on the part of management to undertake a cost-cutting exercise.

The second type of resistance which may have manifested was resistance due to a feeling of exclusion on the part of the employees. The case of Ajax Minerals states that in the past, when changes will be implemented, management would examine the situation and determine what needed to be done before the employees were even aware of the need to change (Palmer et al., 2009). When planning is undertaken and presented to employees as a decision which has already been made, the employees are often left feeling powerless, which may also stimulated feelings of fear and resentment. Senge (et al., 2005) argues that people are programmed to resist change.

Ajax Minerals management decided to adopt a more proactive approach, and overcome resistance before it was able to manifest and create barriers for the change (Palmer et al., 2009). The approach was an integrated process, which dealt with both potential sources of resistance at the same time. The first part of the strategy was to overcome the resistance which was due to lack of information or knowledge on the part of the employees, and this was undertaken utilizing a strategy that would prevent employees feeling excluded from the change process. The utilization of interactive sessions started a communication process, and during those sessions the employees were given relevant information so they could understand the position of the company, and the impact that the forthcoming competition would have on the company. The use of case studies of real previous companies could face similar challenges, and fell to adapt in time, help the employees place and knowledge in a meaningful context. This process was important, as it helped to win over the employees that there was a need of change; a state which is important in most models of change, including Lewin and Kotter (Cameron and Green, 2012). However, the interaction between employer and employees did not stop there, by involving the employees at an early stage, before any decisions were made regarding the changes which were implemented, the employees themselves were involved in that change, understanding what was going on and why and without being excluded from the change. The open book policy which was adopted, facilitated the employees access to a large amount of information, including financials and general business performance, played a role in increasing trust, but also increased knowledge and demonstrated trust. Instead of opposing the change, when the employees understood how and why it needed to take place, management and employees themselves working on the same side in cooperation. Not only did this allow employees to understand how and why the organization needed to change, and involve employees in the change, it was undertaken in a manner which also helped to support trust.

2. Identify two (2) sources of resistance to change in the Perrier case study and describe how the organization dealt with each type of resistance.

In the Problems at Perrier case study there was also resistance to change. One may argue that there was a lack of knowledge on the part of the employees of the need to change; they were working in the same way they had worked in the past, but they were not receiving the same benefits. As the attempts at change were also accompanied by a new owner, it may have been assumed that the changes were due to the new owner wanting to enforce their ideas and standards on the firm, with the employees paying the price. There was also a dislike for what they change would bring; with the need for job losses. The union leader made a statement made that Nestle could not do anything they liked and that the water belonged to the whole region (Palmer et al., 2009). This statement may indicate that there was a clash of ethics, this may also have been an argument used to justify the reissuance as the change was not liked.

The way management dealt with the changes was on a unilateral basis. It appears that at first, there was an attempt to force change with the loss of the 15% of the workers, while the case does not explicitly state this, the reaction of the union leaders indicates it was likely to have been a management decision with no employee consultation. The second action was the stocking of the competitor product in the canteen (Palmer et al., 2009). Management saw this as a way for forcing the employees to realize that their firm was facing stiff competition (Palmer et al., 2009). The employees saw it in a different way, believing it to be provocation, which went to increase the animosity between the employees and the employer, and would lead to more resistance; as seen with the dumping of the bottles outside the factory directors' door.

3. Compare and contrast how management diagnosed and approached change at the two (2) companies and indicate which company dealt with resistance to change in a more effective manner. Justify the reasoning.

The cases of Ajax Minerals and Perrier have some similarities; in both cases the organizations needed to change in order to survive, and in both cases change was being driven by a need to respond to competition. However, there are also some significant differences, including the way in which the problems were diagnosed and the way in which management dealt with the change.

At Ajax there was a forward looking approach, the management may be argued as having an advantage when compared to the Perrier management, as they were acting before the competition was having an impact, and although the change was needed, they had foreseen the need for change by examining the environment. At Perrier, the original management did not see any need for change, where firms do not look at the external environment and prepare for problem or crisis; they are more likely to suffer when the need to rapid change occurs (Pauchant et al., 1988). At Perrier sales had been doing well, the initial need for change was not due competition but by an unexpected event; the finding of traces of benzene in the water. Perrier faced a crisis for which they were not prepared. The failure to recover from this left the firm in a loss making position which they survived through their acquisition by Nestle.

When the Nestle management came in, there was already the problem inherited from the former management, which was then exacerbated by competition. Nestle appear to have diagnosed the problems by benching marking Perrier's performance against their water division; Perrier is noted as having a significantly lower profit margin and productivity per employee (Palmer et al., 2009). The later diagnosis of Perrier increased the pressure for change, and under pressure there is also a greater likelihood that issues such as human responses may not have been fully considered when designing the change.

The management of the two firms responded differently. Ajax Minerals took a proactive approach and started to include the employees, giving them information they needed to understand the problem, educating them and sharing information. This was a response that demonstrated trust in the employees, which would also increase support changes implemented (Cameron and Green, 2012).

By comparison the management at Perrier took a more autocratic approach, they determined what should be done and then implemented it. The decision to reduce the workforce faced opposition. The approach to change at Perrier does not appear to follow the usual steps advocated in change management; there was no preparation for change and there were no attempts to win over the employees. Instead, management sought to implement changes with no consideration of the potential reactions of the employees. This lead to a position where management and employees were estranged; in that type of situation there is likely to be a lack of empathy and a potential for disagreement to escalate, which will increase costs and hinder the change process (Cameron and Green, 2012). This escalation is seen when the management place the competing bottled water in the Perrier canteen, the management may have thought this would demonstrate the need to compete, but instead in increased the feelings of hostility.

Of the two firms, Ajax Minerals dealt with the resistance in a more effective way. Ajax took a proactive approach considering the perspective of the employees and why there may be resistance. It was effective as they prevented the emergence of active resistance and any feeling of hostility by giving the employees the knowledge and allowing them to feel that they are a part of the change, as they were not presented with a fete accompli. The management gave the employees at Ajax a reason to trust them and to support the change; this did not occur at Perrier.

4. Consider a situation as a consultant with Ajax Management. Propose two (2) adjustments that should be made to improve its change strategy and provide a justification as to why those adjustments would improve the effectiveness of the strategy.

While the situation was Ajax appears to be positive, with the employees won over of the need for change and providing cooperation, there are still improvements which may be made, adopting a pluralistic approach (Pardo-del-Val et al., 2012). While the existing strategy with the open sessions and allowed for he employees to be educated, there is also the potential to undertake a more participative approach. In any organization the employees may also be a viable source of information and knowledge; they may have ideas on potential sources of efficiency, gaining knowledge from experience (Pardo-del-Val et al., 2012). Instead of simply winning over the employees, they may be seen as a resource and able to make a positive contribution, with the employer asking them for any suggestion which may be added to the knowledge and ideas that are being assessed (Pardo-del-Val et al., 2012).

A second strategy which may be used is that of consultation with employee representative to assess potential changes that are being considered and to design the change process. This will increase the role of the employees and their ability to influence change, but it does not transfer power to them, it allows the firm to have a greater level of information to be used in the decision making process for both determining and then implementing the change (Pardo-del-Val et al., 2012).