Managing Organizational Change

Managing Organizational Change

Identify the key elements of the resistance to change described in this situation.

For Perrier the key elements of resistance to change emanate from the once lucrative level of sales they had achieved, only to see their sales levels plummet due to benzene being found in their water. From a very lucrative business that provided the financial means to meet the unions' demands for 35-hour work weeks and average annual salaries of $32,000 a year to near-bankruptcy, the resistance to change began when Perrier senior management began tightening budgets, entertaining take-over talks with Nestle' and also looking to make symbolic statements of how drastic the economic conditions were for the company. The CGT (Confederation general du travail -- General Confederation of Labour) controls the Perrier processing plant with 93% of the plants' 1,650 workers being members. When Perrier management decided to cut 15% of its workforce, there was uproar from CGT. To make matters worse, Perrier management purchased cases of a competitor's latest beverage, Badoit Rouge, and placed it throughout the company cafeterias. Unionized workers saw this as an insult, further galvanizing them against any efforts to share in the financial burdens of Perrier's senior management. All these key elements were in retrospect were autocratic on the part of Perrier and were taken as condescending and arrogant instead of inviting ownership, which would have been a far more effective as a change management strategy (Brown, Cregan, 2008). As the senior management at Perrier continued to focus not on collaboration but more towards dominating unions into approving a 15% reduction in staff, the situation became even more tense (Passariello, 2004). The CGT union leader Jean-Paul Franc decried the lack of consideration and cooperation from Perrier and Nestle senior management, leading to an impasse in the negotiations (Passariello, 2004). Only after the French government intervened did the company and union make progress in reaching an agreement.

Construct a change management strategy for dealing with the situation. In so doing, identify what approach (es) to managing resistance you recommend and provide a clear justification for your choice.

What needs to first be improved upon is the lack of ownership on the part of the unionized workers, yet even more systemic is the challenge that Perrier management has in how workers are accustomed to prosperity in an era of economic downturn. Gaining consensus with unions during a contraction of their business cycles is going to be difficult. What needs to first happen is that the Perrier and Nestle' management teams needs to first focus on being transparent and honest about the need to change, and taking pay cuts, reductions in bonuses and in generals being the champions of the needed change first (Brown, Cregan, 2008). This will help to increase their credibility with the union workers, and also show they are willing to make sacrifices they are calling on others to do as well. Second, Perrier and Nestle' management must focus on creating measures of progress that equally spread the responsibility for changing the company between management and the employees. This is essential to appease the union, which will want an egalitarian-based solution to the problem. Third, the Perrier and Nestle' management teams must back off from the symbolic gestures of bringing in competitors' products to amplify the competitive pressures the company is under. Instead, the management teams must concentrate on creating monthly all-employee meetings to share everything going on and to induce a high level of ownership in results. The bottom line is that Perrier and Nestle' need to become must more focused on how to create an atmosphere of trust over merely attempting to dominate its employees to force results.