Organizational change at Fairfax Media Group: causes and consequences

Organizational Change

Change anywhere is never easy, in fact most people in an organization usually have a difficult adjustment when it comes to that. However, it is a process that cannot be avoided, it must happen. An organization may have no other choice but to change. When this occurs, it is important to make sure that the employees are all on the same page and that this change is good and scary at the same time. There are so many various reasons for an organization to change, for instance a sudden change of the financial climate or the arising threat of competition. Through getting a good understanding of the procedure and theory of organizational change, an organization such as the Fairfax Media Group can manage change in the best conceivable way.

In Jennifer M. George's and Gareth R. Jones book, Contemporary Management, organizational change is well-defined as "the crusade of an association away from its present state and toward some anticipated future state to increase its competence and helpfulness." During organizational change, managers have to be able to balance the need to progress existing procedures with the need to answer to new and random events. With that said, this essay will explore by using the field theory the causes for change, and the change and the effective management needed to control the change at the Fairfax Media Group.

Cause of Fairfax Exchange

One of the things was that they decided get rid of some people in order to keep the organization healthy. 1900 people will be leaving the business over the next three years. Regrettably, that means that they had to make a variety of positions redundant. However, a variety of positions could mean anything from 400 to 1500 fewer workers at News Ltd. -- but the manager was not really giving out numbers, he was not saying how many, and his newspapers surely were not dwelling on it. It appears from day one that there has been a huge difference in mood in the two camps. The metro mastheads in Fairfax Media -- particularly The Age and the Sydney Morning Herald -- have underwent chaos after chaos of dismissals going back to the late 1980's -- particularly in current years, as they became more prosperous over the internet. Now they are dealing with more: 70 journalists each to leave from the SMH and The Age will also follow in the next few months. Apparently, to be able to keep up with the competition, people had to be cut.

Consequences of the change

It is quite clear that the organization understands that "While it will be hard, it will change the business for the better. I urge people to think twice before challenging the changes," Hywood told staff, adding it is "the greatest chance to be a profitable or sustainable business in the future." (Crook, 2012). There are negative consequences of the change and positive consequences. The positive consequence are the fact that the changes are going to ensure they will have the business model and cost base to match and to be able ensure the total of their business is in the shape it must be. The negative over this change is the fact that some people will no longer have their jobs anymore. In the next three years that organization plans to downsize everything which also means that some people will have to be switched around the company and perform certain jobs that they may not be all that accustomed to be doing.

Effective management needed to control the change: Lewin's Force-Field Theory of Change

The Fairfax Media Group will be using the Lewin's Force-Field Theory of Change in their vital process and control the change. First just to give a little background on this theory it needs to be understood that Kurt Lewin developed this philosophy about organizational change called the force-field theory (Pearse, 2010). Jones and George define the force-field theory as the following: a "wide variety of forces that ascend from the way business functions, from its organization, culture and regulator systems that cause it to become resistant to change. Together, a widespread diversity of forces comes up from changing assignment and general surroundings that will shove establishments in the direction of change (Pearse, 2010). These important two groups of forces are continuously in resistance in an institute." For a business to accept the change, managers have the job of discovering fresh methods to boost the forces for change, lessen the resistance of change, or if possible implement them both at the same time.

Figure 1: Force Field Analysis

Stage 2: Change - or Transition

Kurt Lewin was conscious that change is not an occurrence, but somewhat a progression (Ford, 2004). Lewin noted that process as a transition. In Fairfax Media Group, they will recognize that Transition is the inner movement or journey that they will make in response to a change. This second part in the process happens as the company starts to make changes that are needed.

People in the Fairfax Media Group are typically 'unfrozen' and going towards a new method of being. With that said, this stage is frequently the toughest as individuals are hesitant or even appalling. A good example for the company is to imagine bungey jumping or maybe even something such as parachuting. Those in the organization can even convince themselves that there is an abundant advantage for them to make the jump, nonetheless now they discover themselves on the edge looking all the way down. At first it is scary, however, in the end everybody will learn a lot of new things about themselves.

This is not an easy time Fairfax Media Group as people will learn about the changes and need to be provided some time to recognize and work with them. Support is actually significant here and can be in the procedure of training, coaching, and supposing mistakes that happen along the journey. Expending role models and permitting individuals to mature their own explanations also aid to make the changes. It is likewise certainly valuable to keep communicating a perfect image of the anticipated change and the profits to individuals so they don't lose vision of where they are going.

Figure 2: Kurt Lewin 3 Phases Change Management Model

Stage 3: Freezing (or Refreezing)

Kurt Lewin denotes to this phase as freezing even though a lot of individuals refer to it as 'refreezing' (Macri, Tagliaventi, & Bertolotti, 2002). As the name proposes this phase is around creating constancy once the modifications have taken place. The changes are acknowledged and turn into the new norm for Fairfax Media Group. People in the organization will form new relationships and become contented with their procedures. This does not happen overnight. It is frequently at this point that persons laugh and tell me that faithfully there is never time for this 'freezing' phase. And of course it's just this that's drawn censure to the Kurt Lewin model.

Fairfax Media Group, in today's world of change the next new change for this company could occur in weeks or less. There is just no time to relax into contented routines for the Fairfax Media Group. This inflexibility of cold does not fit with contemporary thinking about modification being an unceasing, sometimes disordered procedure in which great suppleness is required.

Reasons for the change (internal plus external factors)

The company decided that they must do what it takes to make sure that they remain in the leading independent media company and a key voice in their markets. The benefit The SMH and The Age have is that dissimilar than most of their colleagues they have interpreted a healthy print audience into a much bigger and even better digital audience. Among their mastheads every month they were attracting somewhere around 7 million high-quality unique users. That put them up to 25 per cent in 5 years. Some 65 per cent of all SMH and Age readers now have access to the journalism through things such as the digital means -- online, smartphone or smart TV tablet,. The company was the leaders in our digital platforms and they wanted to keep things that way. The changes today are ensuring we have the business model and cost base to match -- and to ensure the entirety of our business is in the shape it must be. Also to add, the combination of structural and recurring forces has been compressing incomes into their mastheads and as the company talked about a week ago, has produced significant deteriorations in earnings that have damaged shareholder worth and caused group EBITDA multiple compressions.

Resistance to the change

Actually, soon after Fairfax made the bug revelation, the plans to the ASX, staff in newsrooms in Sydney and Melbourne fell into complete shock at the scale of the rearrangement. Award-winning journalist Kate McClymont, from The Sydney Morning Herald, said there was basically numbness that was just pervading the SMH newsroom. Another senior reporter said that "everyone knew something was coming, but no one expected it to be this massive. All of the workers are in shell-shock." (Norrie, 2008).

It appears that the shock of the sudden change has caused the employees to have a pessimistic attitude. Most are complaining that the new transition will not work especially since many will be out of a job. The atmosphere in the workplace has not been a happy one. Most of the resistance is coming from those who know that their jobs could possibly be on the line. The shock has really caused many of the employees to not put much effort into their jobs (Norrie, 2008).

The employees are not taking the change well and many of the supervisors are concerned. It is obvious that they are aware that the sudden announcement may not have been the best idea. Some of the supervisors believe that the new should have been eased to them over time and not just thrown on them.

How they handle this resistance to the change

Everyone understands that these decisions that are underpinning these changes are very difficult, but as Greg has outlined to everyone, there is really no way that they can just simply shy away from them. They believe that if they just keep motivating the employees over time and continue to basically give them pats on the back, then everything will be okay, Basically the company plans on using positive thinking techniques in order to get the employees on board in the change process. There goal is to focus on the benefits of the change to keep employees happy.

Not only are these changes a response to significant revenue pressures that have been brought about by the broader financial environment, but also sweeping organizational changes that challenge the finances of their -- and almost all other -- customary publishing industries. In handling the change process the company is trying to get its employees to understand that is important to reiterate that the challenges we face are not unique to Fairfax. In order to make sure that the change goes smoothly, the supervisor plans on having a meeting that will break everything down and also set up an agenda that will outline the changes that will take place in the days to come.

The supervisors plan on explaining to the customers what needs to be done in order to make sure that everything goes smoothly by letting them know that The Sydney Morning Herald and The Age are going to move to a compact format, which is similar to the AFR, from March 2013 (Norrie, 2008). To keep the employees at ease, they plan to display to them how vital this change is and how it will benefit them in the long run. They are letting them know while this change is going to be able to save the company $44 million in printing costs each year, and at the same time supervisors claim that they are determined that it will make no difference to the quality of our independent journalism or to our editorial standards. They believe by telling them positive things that will keep morale up and production going on strong.

While we have previously announced a range of strategic initiatives to achieve efficiencies and develop new revenue streams, we need to do more to respond to the pace of structural change and the depth of the current cyclical slump in advertising revenue.

In conclusion, Fairfax Media Group should be able to come to the point of understanding change and eventually, accepting it. Though the process of change can be a hard pill to swallow, if they are open to seeing the big picture then the transition will progress much more smoothly. The challenge of course is making sure that everyone is on board and on the same page. As the theory made the point, making sure that everybody stays in the optimistic mode is actually key. As mentioned earlier, change is not easier but with the vision in focus, the company can get through it.