This is a family owned business that has thrived on the quality that they provide, the bond with the employees and the reliable culture that they have developed with the suppliers over a long period of time. There are, however some factors that have come in place hence influencing the need for change in the mode of operations within the business and these will form the basis of this paper as depicted in the case study.
SWOT and PEST analysis
The SWOT analysis will help understand better the internal factors affecting the business and the PEST analysis highlights the external factors that shape the direction of the business.
Strengths- QLG has the advantage of many years of experience in the industry, the good name of being a producer of quality goods as well as having a good rapport with the employees so far.
Weaknesses- QLG has a poor control over the supplies despite the good rapport between them. The business has also suffered some bad publicity in the recent past as well as having the old and out of date machinery for production as compared to their competition the market.
Opportunities -- having a rich history in the home goods industry, QLG can take advantage of the internet and expand beyond the initially set boundary. They can also venture into other regions and markets that have not experienced their product and make more variety of furniture.
Threats -- the need to make their presence more pronounced in the market is a real threat to the finances of the company. The fierce competition is a thing to think about for QLG and also the cost of acquiring new machinery to remain competitive can bring the business under.
Political -- since QLG intends to change their way of operation, there are several measures they have to put in place in order to remain compliant to the various legislations like the building safety, the fire safety, the quality standards and even the employee compensation for those who will suffer the layoff.
Economic -- the domestic economic levels are expected to continue rising since the recession is long gone and there is stability in the overall economy hence QLG should move on with confidence that the returns for their new items will be assured.
Social -- since the construction companies are even considering making the outdoor unit part of the initial building plan, it shows how influential these outdoor rooms have become and people influence their neighbors hence leading to higher demand.
Technological -- the competitors have already embraced the latest technology in production and QLG needs to do the same and take advantage of the available technology in the current business world that can ease the production as well as the logistics to the consumer.
When developing and implementing the strategic changes, there is need to know the current status and the desired end hence the deep understanding of the environment, both political and economic is important since the better one understands the business and the surrounding, the easier it would be to implement the changes.
b). Being a family business, the decision making had been centralized so much such that there was no room for external advice and suggestions. This was one of the challenges that landed the business where it is and there needs to be decentralization of decision making process.
c/d). The strategic changes that will be required in order of priority are:
Decentralization of decision making so that others within and even from outside the organization can make contributions.
There is need to get the latest production lines that would make work more efficient and profitable.
There is need to downsize so that the right number that will operate the new machines is the only number retained.
Outsource more suppliers and have clear criteria of rating them so that quality is at an all time high.
e). Internal consultation
Since the restructuring will affect the production mostly, there will need to be serious consultation with the manager in charge of production. It is from him that the proprietors will know what exactly needs to be changed, the number of people that will be needed and the kind of machinery that will be necessary.
f). External consultants since the changes that will take place will involve the production, environmental, employee and marketing fronts, there will be need to have various consultants.
i. For ensuring safety within the business during the change: The Safety Company. http://www.thesafetycompany.com.au/
ii. For safe environmental change: CQG Consulting. http://www.cqgroup.com.au/
iii. To ensure rigorous marketing: Insight Plus. 67, Latrobe Street, East Brisbane, Brisbane, Queensland, Australia 4169. ephone [HIDDEN]
2. Change Management strategy
The two areas that need to be tackled first are the change in the management structure from the highly centralized system to a devolved approach.
The second thing is to change the production process to use the current technology.
The timeline for the changes will be pegged at 8 weeks for the change in the number of employees. This will allow different departments to consult, the necessary remunerations and compensations given and the downsizing done. The implementation of the new machinery and production line will be done over a period of 5 months since some of the machinery and installation expertise will require importation. These change initiatives will however need to be approved by the owner of the business.
Resistance to change that may e experienced in QLG
Resistance is a response that is inevitable in cases of the occurrence of major change. There are many causes that may lead to resistance to change from the QLG employees such as poor communication. The decision makers within QLG must be sure to give the employees all the details they require to know regarding the change (Miranda B., 2013).
Self-interest by some employees interferes with their ability to take in the proposed organizational changes. Some of the employees within the QLG business may want to maintain their status quo so that they can use their positions to advance their own personal interest.
Lack of Skills is a common cause of resistance to change. This is particularly when the change involves new technology being applied within the organization as will be the case with QLG.
Competence is yet another possible reason that may make employees resist change. With ten arrival of the new machines, there could be fear that one would not be able to use them as effectively as the previous machines.
Employees may also resist change if they happen to view it as more work being given to them which may be a very likely scenario in QLG since there will be change of technology alongside laying off.
These above changes will therefore require an implementation method that will most likely succeed and the best in the case of QLG is the Kotter method of change implementation which is in 8 steps as discussed below by Kotter International (2012):
Step 1-Create urgency; this is based on the principle that change can only be possible if the entire organization badly needs the change. Within QLG, this can be done through the management facilitating an open and honest discussion with the employees as to the contemporary production technology and the need to adopt such a change.
Step 2- Form a powerful coalition; this step is tricky and usually needs a lot of leadership skill and outright support from the top management within an organization. Change cannot be experienced unless it is led as well hence it is necessary to convince people within the organization to embrace the change.
Step 3 - create a vision for change; everyone should be made to understand why they are being asked to participate in the change process, when the employee will see for…