Leading Organisational Change

Leading Organisational Change

Changes at Little-bit

At a time when competition has dramatically increased in every aspect of the market and businesses are searching for more and more opportunities from where they could obtain gain and achieve greater profits, a company with experience, tradition and a lot of years on the market, like Little-bit, has to find the forces to adapt to the new and find the resources to change if it wants to maintain its position and its market share in the business world and further expand them.

The company has functioned very well for a very long period of time. In fact Little-bit as part of the Big-bit Group has been for the whole 40 years of existence the most profitable company. It has been the cow to milk for the other, less successful, companies of the group. For years on, a great deal of the profit achieved by Little- bit has gone towards supporting financially companies from the Big-bit Group which otherwise would not have been able to function properly.

At this particularly point in time Little-bit finds itself at the dawn of change. The problems of the organization have been diagnosed by its former leader, Beno-leada, and the future change in the structure of the organization has been thought of and prepared by her. She created the background for the implementation of a second organization structure, developed its support and took care of all the details for it to be able to be put in practice. At the present time, the new leader, Icandobeta, just has to comply with the strategy outlined and prepared by Beno-leada in terms of the implementation of the new organization structure. He has no actual say in it. It will be implemented.

The new leader can only work around the new structure hoping that it will be a success. He will have to implement changes in other areas of the organization that are now lacking while taking care that his subordinates follow the implementation plan for the second organization structure outlined by Beno-leada to the letter. He is now like a doctor that has to apply the treatment prescribed by another doctor.

2. Identifying the problems of Little-bit is a very difficult task since there are issues that have developed in time, starting many years ago and the organization has grown around them. In order for a change program to be properly implemented within Little-bit these problems have to be discovered and eliminated together with the newer, more obvious problems.

The main fundamental problem that Little-bit has been and is facing is the money transfer from the company to the other companies within the group. Instead of putting this money to god use into the proper development of the organization, they are all made unavailable. In a way Little-bit is functioning for the sole purpose of keeping other companies alive.

Furthermore, there are communication problems at the level of the whole Big-bit Group with regard to some decisions concerning Little-bit that have supposedly been taken without their approval. Consequently senior managers from the Big-bit Group disregarded the role played by Little-bit with regard to financing and turned publicly against the company. Thus, Little-bit has become the black sheep of the group, but a money bringing black sheep.

The problem with the stewardship of the Big-bit Group goes even deeper than this since the management of the companies comprising the groups has often been influenced by external factors other than the ones normally present on the market, i.e. The political agendas and aspirations of divisional leaders that have often been conflicting. This problem seems to be temporarily fixed, but there is no knowledge of what the future will bring.

After the retirement and transfers of a lot of experienced personnel from Little-bit, although the organization continued to prosper, its vision was lost and it continued operating out of momentum. The company had been quality oriented, but nowadays this attribute has been lost with all the new employees and the faulty management. This is not a good way for a business to operate since at the first change in the environment there will be nobody there to handle the change in goals and vision, thus the company will be greatly affected.

The competitive strength of Little-bit has been analyzed with Porter's Five Forces model. This provides a simple perspective for assessing and analyzing the competitive strength of a company, where it finds itself in the competitive environment and what are its strengths and weaknesses in the field of competition.

This model focuses on five forces that shape competition within an industry: the risk of new entry by potential competitors, the degree of rivalry among established companies within an industry, the bargaining power of buyers, the bargaining power of suppliers an the threat of substitute products.

Potential competitors for Little-bit have been constantly entering the market and will continue to enter. They pose a great threat to the company since their prices are much lower. Little-bit has therefore been loosing market share quite fast. Therefore Little-bit has to reconsider its pricing strategy and develop ways to cut down on costs and become more competitive while it maintains its quality standards.

With regard to the degree of rivalry among established companies within an industry all the companies are using all the resources available to them in order to be more and more competitive. This includes marketing strategies, advertising and a pricing policy fitted to increase customer loyalty. Furthermore, since recently the reputation of Little-bit has been affected by the public statements made by senior managers from the Big-bit Group, the competitors acting on the same market are taking advantage of this.

With regard to the bargaining power of buyers, it seems that the demand for the products of Little-bit has been and is still strong. In terms of suppliers as mentioned before, they are mostly from within the Big-bit Group.

Change in organizations and especially quick crucial change is always difficult to successfully achieve. It is a "dog eat dog" business world out there and the ones who do not cope and hang are rendered useless and sold for petty cash. Unfortunately, many organizations, implementing change leave out a very important factor in the process, i.e. human resources. In reality, human resources are not only something that adapts by itself to change. They are the very factors implementing and using the new processes.

A great problem nowadays is that with the highly competitive, rapidly changing market, many companies are trying to quickly adapt and change, thus forgetting significant components. Human resources departments are usually introduced in the process only at a later stage. Even worse it falls upon them to implement the change program even though they have not been involved and considered in the drawing of the plan. The result is that the later in time the change program is addressed by the human resources the more difficult it is for it to be implemented and be successful. This has been the case of Little-bit which has been affected in time by the lacking, non-participative decision making processes.

Little-bit has been found to have a problem in the field of human resources. Since the employees have changed so much in the last few years and the organization has not concentrated on providing motivation and support to the new personnel so that they may achieve a greater performance, develop new skills and learn to work as a team. The organization is loosing fast ground. It desperately needs to regroup and change in order to become once again competitive on its respective market.

Part B

The first issue that needs to be addressed concerning the management of Little-bit is the implementation of a change at the level of the whole Big-bit Group, i.e. The development of independent self-financing companies that do not depend on each other to exist and produce. This change would benefit a great deal Little-bit since all its profits could be reinvested in its development in order to create a strong flexible organization that can keep its competitive character. Unfortunately, this does not enter in the competence of Icandobeta. All he can do with regard to this issue is lobby with the senior management of Big-bit Group. If the latter brings no outcomes, the senior management of Little-bit should then seriously consider a break from the Big-bit Group. It is true that various Big-bit Group divisions combine with Little-bit's contributions to create the finished products, but it is also true that many products of Little-bit require limited interventions or additions from the abovementioned divisions. Therefore, in the future, with a development of a new production and supply chain, the company could stand alone.

Icandobeta as the new leader of Little-bit has to implement the abovementioned new structure, but also offer support for it and for the development of the company by making it more competitive. The new strategy that will be implemented in Little-bit will have the following main values as goals: the development of the skills and abilities of the employees; a proactive approach; the encouragement of education, with emphasis on upper education; training; personal development; innovation; research and development; a sound communication system; the lowering of the cost; paying close attention to quality and environment; diversification of the line of products and target customers; marketing; advertising; team work; flexibility and quick adaptation to the environment and the improvement customer relations and customer satisfaction. All these will lead to organizational development which has been defined by Bartol and his colleagues as "a change management tool capable of being utilized with an innovative implementation." According to professor Waddell it focuses on "building an organization's ability to assess current functioning and to achieve goals, being 'process-oriented not outcome oriented', and on improving the total system."

The first thing on Icandobeta's order of business is to gain the trust and respect of the employees of Little-bit, now that they have been disappointed by the former leader. He has to prove to them that he has been because he is indeed the best man for the job. He is better prepared, from an educational point-of-view and has more experience of this level. He has to go about doing this by being in contact with the key figures of the employees, their representatives and the ones amongst them that have the most influence over them and whose opinions they value most.

Moreover, another approach is implementing a new strategy of communication within the organization which would lead to an open working environment where everybody that has something to say is heard and the management takes account of what he is saying. Communication leads to openness and inevitably to trust, because if one knows everything there is no reason to suspect any foul play.

The strategy consists of creating information channels that are not only vertical, from the management, to the employees, or from the strategists to the ones executing, but also horizontal. Moreover, the information channels will not have only one way, communication functioning back and forth, i.e. from the management to the employees and from the employees to the management.

All the employees will participate at regular meetings with the heads of their department and, thus, be regularly informed of the changes to be implemented and the results of the implementation. They need to understand very well why these changes are necessary and what would happen if they are not implemented. The employees need to participate proactively at the change and at the implementation of the new organizational objectives and principles.

Employees need to be encouraged to express their views, offer opinions and any creative ideas they might have regarding their work and the management of the company. Training sessions will be organized and they will address the areas where change is implemented in the company. For example, if a new technology is acquired or developed and the company starts using it, the employees will benefit from extensive training in that area. Moreover, they will take part in seminars regarding the human resources policy, its implementation and communication in order to be able to use effectively the newly created information systems.

In order for the whole organization to be able to build up trust, external training sessions will be organized in the form of parties and trips with team-building activities. One or several team-building trainers will be brought in for the job. The team-building sessions will involve the top management together with employees from different levels. In this way the employees will be able to form both professional and personal bonds with the managers and grow to respect and value them and their work. This will also address the leadership perspective, because through common knowledge a better collaboration will be initiated.

A new evaluation system will be implemented in the company. This is urgently needed because of the recent changes in personnel and the budget cuts that will be implemented in order to decrease production costs. The evaluation will be made by the manager of that particular division, the direct supervisor of the person being evaluated, co-workers and, in case of the positions of responsibility, by the subordinates. This process will be a regular one regardless of whether or not the company is undergoing, at that particular point in time, a restructuring process or not.

Therefore, each employee will be evaluated as to determine his strengths, weaknesses and results in the current position. If a person has a very good background and great skills, but simply has not achieved good results in the position he or she holds, a chance in this position within the company will be contemplated. This process will lead to the proper persons in the right positions with the best results. As a matter of principle, the company should not be seeking to lay people off, just to improve their results. If the case might be that a person is completely not in accordance with the company's standards and set of values he or she will indeed be subject to the staff cut off.

Furthermore, performance will be improved by the implementation of performance related pay systems. Performance related pay refers to the pecuniary side of the motivation a certain employee gets from the company, it links the rewards of the employees and of teams within the organization to the performance they actually achieve and to the value they bring to the company. In order to receive such incentive an employee has to prove to be very good, by a certain standard, or above average when considering all the others. This is a very strong and effective way to motivate the organization's employees and to implement an overall organizational vision. "The vision is used to motivate and from this motivation a level of transformation is reached. The transformation may be a transitory step on the way to accomplishing a total vision." transparent and well chose system will encourage teamwork and fairness since the individuals will realize that they work better together than alone. This will add to the overall productivity and create an increase in profits.