Resistance to Change Exercise 6.5,

Resistance to Change

Exercise 6.5, Ajax Minerals

Comment on the Ajax managers' approach to the situation that they faced. Do you think that it will work long-term? Provide supporting arguments for your view.

The Ajax managers have a long road back to being trusted by their employees, and with the pressure of peer groups in the unions, management has an even bigger hill to climb in regaining trust. They certainly have exhausted their credibility in the past, as can be seen by the employees' reaction to their initial claims of needing to reduce costs and redefine core processes to be more competitive and survive. This lack of trust from the past can be attributed to a transactional leadership style which focused on short-term results, as inferred by the comments in the case study.

This approach of the Ajax managers will work only if they can shift their leadership from transactional and transformational (Whitford, Moss, 2009) and concentrate on being more authentic, transparent and worthy of trust (Neves, Caetano, 2009). The approach of creating trust is going to have been backed up with a change to the organizational structure of who can view the financial and production performance data, when they view it and what they are authorized to share internally. All of these factors must be taken into the transformational leadership strategy of invoking employees' trust if it is to be considered credible. When organizational structures (Smollan, Sayers, 2009) reflect shifts in leadership from transactional to transformational (Whitford, Moss, 2009) trust is created and resistance to change lessens over time. Associates are more likely to be able to identify the necessary changes that will help an entire organization survive when transformational leaders provided them with a clear vision of how critical their contribution is. For the managers at Ajax, they have admittedly failed at this aspect of leadership often in the past on this point -- possibly this could be a reason why the company is unionized.

Despite the lack of trust and unsuccessful track record of change to this point, the direction of being more open with the financial performance of the company, the urgency that Ajax needs to convey about changing to be more competitive relative to their Pacific Rim competitors, and the breaking down of barriers with employees organizationally (Smollan, Sayers, 2009) must be done. The initial steps in this strategy is a great start yet for the change to be made lasting Ajax management will have to make sure their leadership becomes more transformational instead of transactional (Whitford, Moss, 2009).

2. If you were dealing with the situation that the Ajax managers faced, what approach would you have taken? Provide supporting arguments for your approach.

I'd have taken this initial approach yet I would have taken it a step further and explained how dire the situation is when a Pacific Rim competitor can extract, process and sell minerals at a lower cost than it costs Ajax to operate. This is a potentially lethal competitive weakness and it is going to take nothing less than total focus and a re-definition of the organizations' structure (Whitford, Moss, 2009) if Ajax is going to survive. In other words I would not sugar-coat it or just show the financial statements on performance, I would show a revised organizational structure that put my commitments where my organizational chart was, so to speak. I'd put transformational leadership in action and actually get the roles of each and every person defined for the maximum level of competitive strength relative to our Pacific Rim competitors. My mission and vision for Ajax would be to cause those competitors as much pain and loss of profit as possible, I would unite the company on a mission to mess with our competitors and make their strategies and goals exceptionally challenging and difficult. In other words I would direct the company, down to each person, that Ajax has left the agenda behind of being all about protecting our jobs or the union. Our mission was to cause our competitors to fail by outworking them, by out-selling them, and by being more focused on how to defeat them with service. In other words I'd take the transformational leadership framework (Whitford, Moss, 2009) and use it for showing every employee how the company's future was entirely dependent on their contributions daily. Finally I'd also re-define the organizational structure to ensure that employees would have autonomy, mastery and purpose in their daily work and jobs (Byrd, 2009). After all this I'd make the commitment and keep it when it came time to show the results of efforts. The data from wins and losses and most importantly, beating out our Pacific Rim competitors, would be posted on company bulletin boards, distributed on the company Intranet sites, and made part of the culture. All of these activities would be unified under an entirely new approach to also showing how the company was doing financially at the end of every month as well. The culture of the company would be transformed through honesty and a unified fight against a potentially lethal global competitor.