The purpose of this analysis is to gain knowledge about key concepts reviewed in the MBA 520 coursework coupled with recognizing application of these concepts in several industries. This paper has three purposes: (1) identify an issue in the simulation that the companies also face, (2) how the company responded to the issue, and (3) outcomes of the company’s response to the situation.
Change is the only dependable constant in life as well as in business. Especially in a free market economy, change is inevitable. This being the case, the manner in which change is administered or managed can play a detrimental part in the success or failure of an organization. Change management is defining and implementing procedures and/or technologies to deal with changes in the business environment and to profit from changing opportunities (Technocrat, 2007-08). ” The organization’s leadership must identify the challenges associated with implementing the changes and facilitate a smooth transition.
The following paragraphs examine some of the challenges faced by major organizations and detail their responses. Several key concepts are identified in the following organizations as multiple variations of change were implemented. Often change is met with resistance due to lack of prior analysis, poor planning, human nature not wanting disruption, lack of communication, or a combination of all the above. Many theories about the best practice to initiate change exist however, none are foolproof; but with an analysis, a plan, commitment and a transformational deader in the organization, change can be implemented much more smoothly.
Resistance to Change Resistance to change is an early warning sign of organizational decline (Grittier and Kicking, 2004). Many of the companies described below had employees and even leadership team members putting up walls, similar to that of both Intersect and Crystal, which makes the process of implementing an organizational change even more difficult. Resistance to change is an emotional/behavior response to real or imagined threats to an established work routine (Grittier and Kicking, 2004).
Resistance to change is caused by fear of the unknown, lack of trust, loss of job security, potential of failure, pressure from coworkers, cultural conflict, personality conflicts, poor timing and no rewards (Grittier and Kicking, 2004). To overcome resistance to change thorough analysis and planning prior to implementing the change is a priority. Additionally, communication with all parties involved makes everyone less “on edge” and more susceptible to a positive change within the organization.
Hershey Foods Corporation (Hershey) consolidated software around the holiday of Halloween resulting in increased tress coupled with revenue loss. Hershey did not properly plan for the change nor did they have any strategies in place to overcome lack of resistance. Hershey learned from the experience that prior analysis and strategic planning may decrease resistance of new projects and products. Analyzing, planning, and communication will be included in any future changes in Heresy’s future. Smart being one of the nation’s oldest retailers is feeling the need for change as competition increases.
Smart is seeking measurable methods to reevaluate and rebuild products, services, and pricing. While Smart has made a drastic hangs in merging with Sears, it may be a little too late for Smart to recapture the market share as proven in the declining 2008 net profit of 44. 6%. Stevens Hospital identified several areas of needed to change to meet the needs of the community and to increase the hospital’s profitability. Stevens Hospital spent the upfront planning and analysis, unlike Hershey, to prioritize carefully the change and needed influences to support the change.
The amount of change and resistance to change has required significant strategic planning to begin implementation of the changes. Ongoing analysis and the measurement of eye indicators are in place to determine if the change is successful and if any variations to the strategic plan are needed. Cutbacks employees are feeling resistance to change as stores close and many staged organizational restructures occur as competition increases in the coffee industry. To decrease resistance Cutbacks has been communicating to employees and stakeholders through press conferences, emails, and additional training.
Cutbacks has had to evaluate other environmental influences and their impact on their growth and the security of the employees. On-going analysis is leading Cutbacks though added change to remain competitive and profitable. Honda understands the need for flexibility and change due to outside influences and social responsibility regarding resources surrounding fuel. In an attempt to remain competitive, Honda created a fairly unsuccessful hybrid model. The need for change may be obvious however, competition and resistance remain in the equation.
Honda has had to readjust that approach and is spending time and money in the research and development of fuel-cell powered vehicles. Conflict Management Methods Conflict management is an important competency to have when an organization s experiencing reorganization or any other type of change. Conflict management is essential for change implementation. According to Toadstool’s cooperative conflict model three successful outcomes of conflict exist: agreement among the employees, stronger relationships and learning by experiencing firsthand (Grittier and Kicking, 2004).
Home Depot is managing conflict by creating an excitement within the culture and having the employees embrace the change. By putting programs in place to create excitement and recognizing the employees, they are building stronger relationships among the employees and creating unity. Furthermore, having a leader who is open to change and rethinking their own goals because they may have not fit into the company’s is a key point. One of the most inspirational lessons that can be learned from transformational leaders regarding their conflict management style is that they are not afraid to admit when their ideas didn’t work.
Instead they take steps to change directions to align the company morale, all the while never giving up any momentum. Stevens Hospital is in the process of changing the culture with the help of an outside consulting group. A portion of this change in culture is to provide traders tools and resources to manage and resolve conflict in the workplace. The intention of conflict management is for leaders to have needed critical conversations with employees. Additionally, these skills will be used to coach employees in appropriate communication techniques for conflict resolution in the workplace.
Catalyst for Change Several methods for implementing change have taken place by many of the organizations researched below. Analyzing the need for change, measures of success and aligning goals throughout the organizations have taken place during each phase within the change process. Many theories regarding motivation and change have been developed; each organization must seek the best method for its needs. General Electric (GE) is known as a leader of change because of the culture that exists within the company.
Communication is a key ingredient in the culture which decreases the fear of the unknown, trust issues or lack of security. Through their open lines of communications, change comes as no surprise and is highly supported by the employees. Similar to the Situational Leadership Model, Gee’s Jack Welch, molded his “change conversations” with employees depending n where they were in the process, with whom he was discussing issues, and finally how ready the employees were to change (Grittier and Kicking, 2004). Chrysler has also used theory to implement a successful transformation.
Modeling their vehicle for modification after Kurt Linen’s three-step model for planned change, Chrysler leadership also had to exhibit some sort of trait theory dealing with a company of such a colossal size. In reality not every employee at Chrysler would react in a positive way to every leadership trait exhibited by their management, but in order to exercise such a huge change initiative one would have to hypothesize that most of Chrysler employees would align positive leader behavioral traits with that of Chrysler executives.
Another company that has successfully used concepts related to this course of study was AT& T. Equity theories of motivation were applied to inspire AT&T’s employees after numerous years of disorder and chaos within the company, during which more than one massive organizational change was executed. As the senior management team and Coo’s must have realized morale was shaky at best, thus motivation and reassurance of their employees was a very important factor in asking succession and change as fluid as possible.
Hershey is one of the companies that became victim to a major catastrophe when implementing a change, but so forth learned from their mistakes, so as not to replicate the same disastrous outcome. The executives at Hershey decided to roll out a new software systems at the most undesirable time for their company, thinking it would initially give more incentive to their employees. However, it was probably one of the worse collective decisions made in the history of the company. After pulling themselves up from the ground, they vowed to never initiate such a huge undertaking without first performing benchmark research.
Their catalyst for change came through a negative learning experience in making hasty, thoughtless and injudicious decisions without proper and thorough investigations before implementation. Leadership Styles on performance Leaders are influences for any change; a leader can influence the follower or increase their readiness and motivation. Charismatic leaders, such as Jack Welch, are able to influence and increase performance due to their ability to engage their followers. Welch, as an inspirational leader, was able to touch Gee’s culture ring the course of his reign as one of the most influential and transformational leaders of his time.
In the synopsis below regarding his tenure at GE and in Grittier and Snick’s text, Jack Welch not only displayed effective leadership traits such as his ability to execute, energize others, and make tough decisions all while having a high energy quotient; he also can recognize those types of behavioral traits in other notable leaders, and so forth surrounds himself with a team of executives that have similar outlooks (2004). Both Cutbacks and Stevens have changed organizational structure, including adhering, to facilitate change within both organizations.
The Coo’s of these organizations are clearly visionary and motivational in their leadership styles to steer these companies through the necessary changes. Stevens has seen positive changes since changes in leadership while Cutbacks continues to see slow steady change. The long-term outcome for both of these organizations is yet to be determined. Sprint/Nester’s CEO, Gary Foresee is a leader who is destined for even greater successes than that of his merger between two of the most widely known wireless companies.
Foresee recognized early that there would be a need or a diversity program with this new collaboration of these business giants. Both companies had their own way of doing things, but by working with a consultant from “the outside” he could unify the best practices of both and make the now enormous conglomerate he oversaw, benefit from the ideas of both. Foresee is unique in this instance by realizing he would need help and not being afraid to ask for it. Many leaders may look at this as a weakness, but instead his self- awareness has brought unity to a potentially disastrous circumstance. Critical Success Factors for Organizational Change
The organizations listed above have identified a need to determine measures of success to remain profitable while meeting the needs of stakeholders. Some of these factors include external, external and demographic forces, technological advancements, changes in the market, social and political pressures, and managerial behaviors and decisions. Thus, the need for analysis of the above prior, during, and after a significant change to measure successes and celebrate wins. Benchmarking and GAP analyses are continued proven measures for the continued commitment and implementation of organizational changes as well.
Above all, these analyses have proven that the triumph of any organizational change has to have a resilient transformational leader on the frontline. The Individual Companies The vision of AT&T started in 1876 when Alexander Graham Bell invented the telephone. With financial backing from two investors, T was born. AT&T became a part of the Bell System of companies that would eventually monopolize the market. From developing the first non-experimental installation of coaxial cable in 1941, to introducing 911 as a nationwide emergency number, all the way in becoming the super-power status company of today.
It has been a reverie and tumultuous ride on the transformations roller coaster for leadership within AT&T over the years. In the early sass prospects looked bleak for the telecommunications giant. Lawsuits were looming according to AT&T intellectual property, 2008 “AT and the Justice Department agree on tentative terms for settlement of anti-trust suit filed against AT in 1974. AT agrees to divest itself of its local telephone operations. ” It was evident that the corporate strategies of yesteryear were becoming increasingly problematic as the 1 sass approached.
Few synergies between the communications and manufacturing mains of AT& T remained at this point. Due to changes in the communications laws, these two facets of the company became obstacles to each other’s growth. On September 20, 1995 current CEO Robert Allen announced AT&T would be restructuring. Making the transition to a transformational style of leadership, thus making the effort to create a more fair and balanced work environment. This was a bold display of equity theories of motivation. Allen used these strategies to build trust between its divisions and to propel AT&T into success.
Over the next four years, AT&T invested over $35 billion in acquisitions and upgrades to TTS infrastructure to manage ever-increasing volumes of internet protocol and other data traffic. In October 2000, AT&T announced that it would restructure over the next two years into a family of separate publicly held companies: AT&T Wireless, AT&T Broadband and AT&T. After restructuring David W. Doorman assumed leadership of AT&T. Doorman led an aggressive strategic transformation to reshape AT&T – to evolve from a consumer-oriented voice company to an enterprise-focused networking company.
As with Crystal Communications, middle management and executives encountered similar political realities. Both companies endured the transition from transactional to transformational leadership. Regular administrative and technological changes were needed to develop a learning culture and promote innovation which can helped these organizations sustain change. “Maintaining a learning culture by identifying possible resistance, implementing behavioral action plans, and evaluating implemented behavior… ” Was essential for smooth transitions at both Crystal and AT&T (Grittier, 2004).
Chrysler A successful organizational change is highly dependent on effective leadership throughout. According to organizational change expert John Cotter, “… A successful organizational transformation is 70% to 90% leadership and to 30% management” (Mischance & Von Ogling, 2004). ” Chrysler has responded to the needs of organizational learning by working with other companies on the same practices. “Organizational learning is an organization which facilitates the learning of all its members and continuously transforms itself’ (Mischance & Von Ogling, 2004).
In 2005 Chrysler adopted the manufacturing principles of Toyota to implement SMART manufacturing to all its plants throughout the corporation. This was a tremendous undertaking which allowed them to facilitate effective training methods taken from the Toyota model. “… Smart Manufacturing workplace organizational model promotes creativity on the plant floor (Chrysler, LLC, 2008). ” This change was part of the Recovery Transformation Plan (ART) created by former CEO Tom Lassoed. Robert Inwardly, former Home Depot CEO and present CEO of Chrysler, continued with this change with a dynamic and customer focused leadership style.
The company’s focus was now shifting to customer dealerships. Inwardly was an observant leader who wanted to be n top of faltering areas in his corporation. He noticed that marketing was an area of serious weakness for the Detroit automaker and in 2007 Inwardly hired Jim Press from the Sales and Marketing Department of Toyota. From that point Inwardly put forth his transformation plan to input change in this area. During J. Presses Toyota tenure he had much success and soon assumed responsibility for North American Sales, International Sales, Global Marketing, Product Strategy, and Service and Parts for Chrysler.
Organizational Behavior according to Grittier and Kicking (2004) discusses Kurt Linen’s three-stage model of planned change, which explains how to initiate, manage and stabilize the change process. The three stages of planned change are unfreezing, changing, and refreezing. Unfreezing focuses on creating the motivation to change, changing focuses on providing employees with new information, behavioral models and new ways of looking at things. Refreezing is the final stage used to help employees integrate the changed behavior into the every day process of doing business. Once employees are provided the opportunity to exhibit the new behavior, positive reinforcement is needed to reinforce the desire change (Grittier & Kicking, 004). ” Both Chrysler and Crystal companies strives to reinforce the desired changes through its “values” statements which support the desired cultural environment. Chrysler goal, as written in their mission statement, is clear and focused on customer satisfaction: “Chrysler primary goal is to achieve consumer satisfaction. We do it through engineering excellence, innovative products, high quality and superior service. And we do it as a team (Chrysler, 2008). Chrysler vision statement, in cadence with the ART echoes the commitment of the future and the desired results. However, Critter’s core values statement of “Integrity, community development, and provide shareholder value” does not go far enough in providing a true reinforcement of long-term change (University of Phoenix, 2007). ” Home Depot In 2000 Robert Inwardly moved from GE to Home Depot and became the CEO of a wildly successful organization aimed at changing the decentralized management structure to a more hierarchical one to meet the company’s financial and operational needs (Strategic Direction, 2006).
Similar to Janet Angelo in the Intersect scenario, Robert Inwardly was brought in to initiate an enormous culture hangs initiative too rather skeptical middle management staff. One of the change implementations revolved around the very same issue the Intersect Scenario was trying to initiate, customer intimacy. Advocating “complementarily” Inwardly found that following models that were consistent with learning logic with respect to innovation, efficiency, and customer intimacy, internally as well as externally has led to the most effective patterns for change (Strategic Direction, 2006).
This approach builds on an existing model of success, and keeps the three vital points in the forefront – too often change has failed because focus on the innovation internally, say, has meant that the intimacy with the customer has been forgotten (Strategic Direction, 2006). Home Depot’s employees responded with resistance at first but after initiating some theoretical suggestions taken from benchmarking other company’s such as IBM, Monika and Ericson to managers who are sensing change fatigue among employees (Strategic Direction, 2006). According to research, these plans help keep initiatives on track: 1 .
Rethink change goals and expectations (Strategic Direction, 2006). Marinade’s plan to increase the number of part-time staff in stores to save money and introduce flexibility was a disaster. Customers complained that service standards had slipped, and Inwardly showed an appreciated willingness to correct a mistake. 2. Change speeds (Strategic Direction, 2006). Change at Home Depot was fast. Moving quickly keeps energy and momentum up. 3. Change the mix of people. In one day, “Super Saturday”‘ 60 top executives were brought in to restructure the whole purchasing side of the business (Strategic Direction, 2006).
It was a bold move, but it was done quickly and collectively, helping it stick. 4. Add excitement (Strategic Direction, 2006). Introducing fun and incentives help to win employees. Home Depot recognized this with collaborative days such as Super Sunday, including bonus plans, a breathless pace and official measures of accountability. Marinade’s change initiatives at Home Depot were successful because they considered and added all the vital ingredients: hard data, speed, communication, enthusiasm and above all, a brave determination to see his vision through (Strategic Direction, 2006).
General Electric (G E) When Jack Welch became CEO in April, 1981 it marked a new reign in General Electrics (GE) tenure as one of the most prominent, admired and expected companies through the use of concepts such as “change conversation” and speech act theory (Palmer et. Al, 2004). The concept of change conversations was introduced by Ford and Ford (Palmer et. Al, 2004). For them, communication should be thought of not as a tool for producing intentional organizational change; rather, that change occurs so that “the management of change can be understood to be the management of conversations” (Palmer et. L, 2004). They argue that change progresses through four types of conversations that change managers have with those affected by change; namely initiative, understanding, reference, and closure (Palmer et. Al, 2004). In addition speech act theory has the underpinnings of change conversations based loosely on the assumption that “to say something is to do something” which means the action itself is embodied in speech (Palmer et. Al, 2004). Five speech acts are correlated with this theory, which are: assertive, directives, commissions, expressive, and declaratives (Palmer et. L, 2004). Like Intersect, GE was also knee-deep in a transformational change and needed to get everyone on the same page. In the same likeness of Intersect every company goes through specific stages hen implementing new changes. GE gauged these changes in broad, albeit, overlapping periods aptly named the awakening period, which established the need for change, the envisioning period, which established the vision of where GE was headed, and the reconnecting period, which involved a dismantling of old processes and practices and the establishment of new ones (Palmer et. L, 2004). In the first phase of this mufti-tiered effort, Welch focused on creating economic and shareholder value through restructuring its core business (Palmer et. Al, 2004). Additionally, in the second phase, Welch focused on the growing abilities of the organization through changing values and instituting people- oriented practices (Palmer et. Al, 2004). In conclusion, General Electrics CEO, Jack Welch, had successfully led the company through a transformational revolution that categorized their operations throughout the last two decades.
Given the thought that change conversations probably pass through different stages depending on what stage of the change is being conducted, conclusions can be made that GE, with the help of Jack Welch, must have made many differing change conversations with its shareholders over he years it took for the transformational changes Welch implemented. Stevens Hospital Stevens Hospital has struggled with leadership and financial issues. As all new leadership has formed changes need to take place balancing the needs of the community while offering profitable lines of service.
Prior to any changes at Stevens, like Crystal, they chose a company outside the organization to survey the needs of all stakeholders. The intention of these surveys was to obtain supporting data prior to implementing changes coupled readying the organization for change. Organizations encounter both external and internal ores that create the need for organizational change (Grittier and Kicking, 2004). Results of the surveys outlined areas of opportunity to strengthen prior to implementing change for both organizations.
With this additional information Stevens hired consultants to ready the organization for change in culture. As one reference states, “Specify issues that should be addressed before implementing a motivational program” (Grittier and Kicking, 2004). Stevens and Creates had many departments within the organization that operate with many inconstant leadership styles and methods of providing feedback to each other and to employees. Crystal sought strengths from individual departments to seek best practice methods within the organization of providing feedback and conflict resolution.
Experts say feedback serves two functions for those who receive it, one is instructional and the other motivational. Feedback instructs when it clarifies roles or teaches a new behavior (Grittier and Kicking, 2004). Stevens identified a need to change and hired outside assistance. The intention of the consultants is to implement a culture change, provide tools and resources in giving and receiving feedback from the top down. This training f leadership included coaching for critical conversations during times of conflict.
Aligning leadership styles and methods while keeping intradepartmental goals though out the organization, will add consistency during times of change. “Regardless of the nature of their specific achievements, successful people tend to have one thing in common. Their lives are goal oriented” (Grittier and Kicking, Crystal and Stevens continue to implement changes on continuous bases to remain competitive and profitable. However, how changes were made have some similarities and some differences.
Both organizations have made progress in hanging weaknesses into strengths for measurable short-term gains. As long and short-term goals for both organizations are in place, new plans will need to be evaluated frequently. Stevens will most likely need to examine long-term affiliations or a merger to remain a financially solid organization. One current win is both organizations have data to support needed changes and have aligned measurable goals for the organizations. Cutbacks Cutbacks began in the early 1 sass as an independent gourmet coffee company in Seattle.
During this time competition for coffee houses was believed to be animal as founder and CEO Howard Schultz maintained the passion and vision to grow his company. Cutbacks maintained staged growth for each decade beginning in Washington State, nationally, and on to a global empire. In late 2007 and early 2008 sales began to decline and Cutbacks stock plummeted to the lowest in five years. Clearly change needed to take place. Schultz maintaining ownership once again took over as the CEO and began to collect data and taking action.
As Schultz introduced a Transformation Agenda communicated to the organization and to the press the following: As I have mentioned in previous communications, in order to reinvigorate our company we must continually analyze and review every part of our company operations. This rigorous look at our business will ensure that we are managing and optimizing our resources as effectively as we can in order to improve the Cutbacks Experience (Schultz, 2008). During the same email Schultz reinforced that competition has dramatically increased described, “operating in an intensely challenging environment” (Schultz, 2008).
Cutbacks and Crystal both carefully analyzed their current situations prior to implementing change. Cutbacks like Creates identified strengths and weaknesses within the organization. Schultz and team made structural modifications within the organization with the intentions ‘to designed to strengthen our focus on the customer in our U . S. Field operations, and centralize and/or consolidate many of our support functions to drive functional excellence and reduce redundancies” (Schultz, 2008).
Cutbacks decline in stock and profit remains low although the decline is less severe than earlier in the year, results of the changes did not have the impact Schultz had hoped for. July 29, 2008 another email from Schultz titled, “A message room Howard—Building a stronger company for the future” (Schultz, 2008) more changes needed to take place to “put us in a position to win” (Schultz, 2008). The most recent decisions included more restructuring resulting in eliminating positions, freezing of executive salaries, and store closures.
The long-term outcome of Cutbacks is yet to be determined. Sprint/Next With the recent merger of Sprint and Next, this organization has been undergoing a multitude of changes over the past few years. Not only are these the result of the merging of two companies, but they are also due to he ongoing technological advancements of the competitors in the field of wireless communications. That being said, changes have been occurring both internally and externally; and they have been met with much resistance, both within the organization and from others in the industry.
Gary Foresee, the CEO of Sprint/Next, emphasizes the need to understand the importance of diversity within the organization to be able to counter the resistance to change that is often prevalent. Foresee implemented an intensive diversity program into the leadership conference with the help of a consultant, Janet Reid. The advantage of having outside consultants work with a company is the best-practices knowledge they bring, which can help shorten the learning curve, Reid says.
But there also needs to be a strong partnership with someone in the corporation for a clear understanding of the corporate culture, she says (Editors of Diversity, 2006). ” This effort of recognizing the importance of diversity is crucial for merged companies to be successful in their endeavors. It helps them to be a single unit, focusing on their strengths rather than the differences that may maintain their separation. In doing so, the resistance to change can be understood, managed, and referred so that they can move forward.
Foresees commitment to the success of the organization and his impeccable transformational leadership skills have allowed for the transition of the merger to be smooth as he predicted possible problems and planned for handling them in the regular meetings and conferences within the organization. This method of anticipating possible situations and handling them before they grew into huge problems helped Foresee maintain control over the changes that were inevitable in the company. Hershey Food Corporation
As new technologies and procedures are adopted and implemented by a company, the possibility for resistance from the employees increases. Hershey Food Corporation is not immune to that. A few years ago when they planned to implement a computer software system that would consolidate their computer systems onto a single platform, they experienced much resistance. Although several years were spent on this project, there was a significant amount of resistance to the change. This resistance can be attributed to several factors in the equation, but a huge problem was the timing of the implementation.
Rather than making the drastic change during a slow time for their organization, Heresy’s decided to initiate the change during the Halloween season, which had several drawbacks including huge revenue losses (Coastland 2000). Another significant factor in the situation was the size of the change. When these types of changes are to occur, a smoother transition will result by taking small steps. However, Heresy’s leaped into the new system, incorporating multiple software programs at once.