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    MGT8033 Leading Organisational Change Help

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    MGT8033 Leading Organisational Change Help


    MGT8033 Leading Organisational Change Help

    Task 1.

    Realistic assumption, problems and issues

    A number of issues have been identified in WMC in various business aspect. Accordingly, following assumption have been made in relation to business activities of WMC,

    The time Sofea was suffering ill -health and handing over her responsibilities to her daughter Hana ,there was a substantial reduction in workforce at WMC which was about 40%.During this time , significant number of cotton and wool fabric manufacturing suppliers entered in to the market with low cost and poor quality. This situation challenged sustainability of WMC and required a significant change in management systems .

    During Sofea's time quality raw materials were imported from Australia and maintained an effective manufacturing process in relation to high quality cotton and wool fabric. After Hana taking over responsibilities of the business there were considerable challenges in relation to perception of quality, manufacturing processes, environmental conditions and operational procedures of WMC .

    Significant change in manufacturing and operational aspects of the business did happen after Hana's children stated assisting the business. They changed the traditional aspect of the business and considered a most environmental friendly approach .

    It also assumed that new management have brought changes to the HR, financial, manufacturing and IT systems. These systems are expected to improve productivity of the company by bringing good level of standards and quality.(Paton and macCalman 2000 ) It is also assumed that current manufacturing and operational technology they have, behind industry standard and not meeting expected requirements to compete with national and international competitors to survive in the market. It appears that customers of WMC have gone though a significant change in terms of perception quality, and their demand . Accordingly, customers demand for high quality cotton and wool fabric are assumed to be growing.(Hiatt and Creasey 2003 )

    Safety issues in manufacturing process had been identified. Therefore WMC now forces on enhancement of visibility .

    General comments:

    Some assumptions that you could include are: a) the organisational structure might not be flexible and thus, not meet the needs of the present or future, b) outdated operating equipment and procedures requiring an update, new implementation and new training is required, c) outdated information systems and hence a new IT system with staff training will be necessary, d) reluctance from Board members and suppliers to introduce environmentally sustainable outcomes as this will induce costs in the short/medium term and e) it can not be confirmed who is leading WMC at this time and as such, this is causing uncertainty. As we know, WMC needs to change but they have time to do this - at this stage.

    Task 2.

    Need for change in WMC

    WMC had three generations of taking responsibilities and assisting the business. Sofea started the business early 1960,Hana took over the responsibilities of the business from her mother in 2000 and finally Ryan and Mira joined the business to assist their mother Hana .Accordingly, management process has changed substantially with the advancement of time .

    Organizational Change and sustainability

    Researchers have identified different methods to operationalize sustainability within an organization (Linnenluecke and Griffiths 2010).There are three methods namely ,the catalytic approach, the top down approach and fragmentation approach. In catalytic approach sole responsibilities are carried out by middle managers within different functional areas or subcultures (Mirvis and Manga 2010) .They develop their own values and beliefs towards sustainability based on their education and enculturation. (Linnenluecke and Griffiths 2010).In WMC, presence of middle management are not identified as all the operational functions are being conducted by Mira and Ryan who are in top management. Business decisions at WMC are being taken by them and similar sustainability opportunities are established in each department.

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    Top down approach creates a long term approach that is created by the leaders in relation to the values of the organizational sustainability. This is consistently communicated and reinforced throughout the organization and represent an integration perspective of culture(Martin 1992).In WMC, management focus on centralized and integrated cultural perspective that assist company in prolonging sustainability in terms of internal and external market environment .

    The third approach of fragmentation identifies organizations are involved with multiple views and there is little to no consensus of individual values and beliefs (Stoughton & Ludema 2012 p.515) .Accordingly no individual values are entertained. In WMC, though there are presence of multiple views, constant sustainability procedures related to company are decided by the management only.

    Accordingly, at WMC top down approach is the best approach and used in prolonging organizational sustainability .This involves three organizational aspects where change is mandatory. These are discussed as follows,

    Change in management

    During Sofia's time she paid her staff above the local wage rate and also implemented sick leave ,holiday pay and other benefits in order to retain her employees. However there was a significant reduction in workforces after Sofea handed over her responsibilities to Hana. Company need to adopt a new business strategies such as introduce salaries and wages system based on KPIs, performance based bonus etc to increase the productivity with existing employees with no extra cost. By doing that, Ryan and Mira will be able to enhance the productivity, profitability and reaching out to a wide range of export customers in China, Japan and Indonesia. Also company need to look at the product cost structure and reduce the prices for low budget customers who are not able to afford high prices on environmental align clothing .

    Technological Advancements

    When Sofea initiated the business, technology was at the verge of advancement. Technological practices were not happening much at that time. Embracing technological modification in business activities of retail sector is primarily done using promotion, advertising, online selling where a large customer base can be captured.(Zhao 2016).Accordingly it is required to implement and bring technological adoptions with in WMC in order to enhance sales, image and create a strong customer base for the company.

    Change Process

    Change process is much essential in a business, since transitioning of individuals allow redirection in resource utility, budget allocations, promotional activities, and business processes that are applicable in the contemporary time of the business (Cawsey 2016).Drastic modifications are portrayed in the change process of business activities of WMC. Therefore significant changes in transitioning process of the responsible person for the management of WMC has resulted different views among employees in different times .

    General comments:

    The main point however is that managers at WMC are using different typologies probably without knowing it. They might be currently using some fine-tuning and adaptation because changes will have been made to enhancing existing processes but now they are advocating changing the existing systems in WMC by exploring new market and new products (e.g. forward integration) and incorporating environmentally sound business practices. As Stoughton and Ludema (2012 p503) note, organisations shifting to incorporate ‘sustainability’ processes will undergo significant and cultural transformation. So WMC are moving to reorientation, which requires a more strategic emphasis on how they go about this. It would probably be a stretch to say that WMC is using recreation as this means effectively closing down one business and starting another. They are not seeking to do this but rather reorient themselves onto a different trajectory. WMC are too familiar with the past to change it so that unless they embrace change by being more proactive (reorientation and transformation) they will simply continue to be more reactive and incremental. It is interesting because the company has a history of being proactive by implementing employment rewards that were ahead of their time. Mira and Ryan are being proactive now and they need to define what it means to be an environmentally sustainable firm and to build momentum for change! The typology is a useful way for managers to determine what they are trying to do.

    Task 3.

    Effectiveness of WMC

    Mira and Ryan have brought the idea of direct supply of designer garments to retail firms. Developing a new manufacturing stage and indulging in new business relationship increases the reach of an organization to a large number of customers and enhancing credibility (Cummings & Worley 2015,p.74 ).As per customer perception, a crucial indicator of effectiveness, WMC is competently contributing to the enhancement of customer retention by increasing their expectation from this company on availing designer products. Thus, effective customer perception is prolonged in the change management .

    Employee behavior is another indicator of effectiveness that is useful in measuring internal consistency at workplace . It has been observed that embracement of new business ideas and implementation of business to business relationship with designers and other suppliers have given a rise to a disagreement between employees and Mira and Ryan. Most of the employees including the Board of members refused to agree with the modern business approach adopted, citing that differs completely from the traditional business activities. Mira and Ryan therefore stand alone without any support from employees and board of directors . Even board of directors and senior management do not share their vision in relation to this change .As a result, new strategies in change management have not been effective .

    Mira and Ryan incorporated subsequent environmental analysis that has helped in increasing the production, subsequently enhancing profits of the company. Analysing the external and internal environmental factors, large scale production can be obtained restructuring streamlined cost effectiveness and establishing long term relationships with suppliers that ultimately result in business expansion (Malhotra & Hinings 2015, p.20). Accordingly following strategies should be adopted in increasing effectiveness of operations at WMC.

    Strategies in technological advancement

    After taking over responsibilities from their mother, Mira and Ryan identified requirement of advanced technology in business. According to Bertram 2015, technology helps in reaching out to a large number of customers via online media. Extensive customer base was expected to be created by adapting these technological methods and indicators of effectiveness are showing a positive outcome from the view of customers. Also technological adaptation always have a significant contribution in reducing energy, cost and, work pressure of an organization, which leads to success in business.(Day D.V 2014). Principle objective of WMC is to increase productivity and enhance profit. This is successfully conducted by Mira and Ryan on using recycled products, online selling and reducing labor energy .

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    However, employees of WMC have negative and also outdated attitude regarding the adoption of technology in business activities. In one way, employees are benefitted on using modern approaches of technology in manufacturing processes that are cost and time constraint. On the other hand, they are not agreeing to the fact that technology can impose any contribution to business. They also stated that technological advancements that are adapted and incorporated in management strategies are not methodical and the company will be unable to cope up with it. Therefore, in the view of employee behavior, Mira and Ryan have to follow a very careful approach in making this strategy effective.

    Strategies in Change Process

    It has been observed that with the change processes of management, WMC is being able to connect with more customers and suppliers, therefore developing their perception about the company. Hayes (2014, p.23) said that a cordial relationship with suppliers and designers can impart a good image of company along with subsequent reliability . This can cause an effective customer relationship and positive indicator of effectiveness is been identified. Employee behavior regarding strategy adaptation in change process is not showing a positive indicator of effectiveness. Modernized approach is not embraced by the Board of Committee, which has caused a conflict between management.

    However, with this overall change process in management, they tried to enhance their business activities using modern tools to sustain in market. Relation with other suppliers, direct supply of designer garments to retail companies, participation in Malaysian fashion week have provided much exposure to WMC and their business have flourished. Thus, indicator of effectiveness is imposing a positive outcome in perspective of business output .

    General comments:

    As we can see from the case, WMC has always been motivated by more than profit. This is shown by treating their employees like ‘family’ paying them above the award wages and conditions. It is no surprise that they are considering their environmental footprint and wanting to implement operational processes to minimise their pollution and reduce their energy costs. From a stakeholder perspective, WMC would be wise to consider their various stakeholder perspectives – especially the Board – at this time. Structural alignment will facilitate the change process and lead to more effective change outcomes. Consideration of how information is shared and communicated to promote organisational objectives is essential. As WMC will be investing in new technology (plant and equipment) and processes (energy efficiencies) and training of staff – profitability might be seen in the medium or longer term. However, some efficiencies might be gained in the short term – due to more efficient procedures, reduced costs to do with energy, water and waste reduction and recycling might prove beneficial. Constraints that may inhibit WMC are – increased costs of implementing new technology, suppliers might not want to implement environmentally sustainable processes, lack of a change management plan and so on. Enabling factors might be that reduced pollution, increased customer awareness and satisfaction, and the idea of being an industry leader – might boost performance relative to other organisations. It is easy to see why Board members might not be impressed with Mira and Ryan’s ideas about this new direction – as shareholder returns (including theirs) might be reduced in the short and medium term – as well!

    Task 4

    Support of Key Stakeholders

    Both external and internal stakeholders of an organization are equally important in contributing capital to the business and share profits of companies (Battilana 2014). WMC has focused on identifying the importance of their key stakeholders, issues in each category of stakeholders and probable recommendations needed to overcome those issues are evaluated as follows,

    Customers

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    An important component of external stakeholders is customers and customer satisfaction, which are primarily needed to be considered by WMC. Retail firms and designers are the specific customers of WMC who are associated in buying cotton garments as well as wool and cotton fabric from this company . There was a problem regarding the import of low quality wool from both external and internal stakeholders of an organization are equally important in contributing capital to the business and share profits of companies. Other countries and large scale garments were produced by rival companies that were sold to retail firms. WMC was restricted in selling their products to a broader spectrum of customers and only focusing on premium group of customers as they used high quality wool and fabric to manufacture their clothes at a much higher price than its rivals.

    Suppliers

    WMC has focused on developing a cordial and long term relationship with their suppliers in order to prolong reliability and obtain large volume of resources. As stated by Carter et al. (2013, p.942), enabling a loyal relationship with suppliers help a company in framing the strategies, objectives and vision that is needed for business growth in future. However, emergence of a large number of suppliers in the market with low quality resources have imposed a threat to the company in terms of providing low quality wool and cotton that result in production of substandard garments .

    Employees

    Employees are internal stakeholders of company; profitability and bottom line of the company depends on and varies to a large extent. Employees of WMC impose a great effect on the internal work environment of the company since productivity of the company solely depends on them. However, there is a conflict between the employees and company authority regarding work process and this may result in decrease in product output .

    Creditors

    Creditors of WMC are engaged in investments and supply of money to the company in developing their business. WMC needs to maintain a reliable relationship with their creditors since, the rivals of this company are engaged in import of a large amount of resources at low cost and subsequent large scale production is executed by them. By et al. (2013, p.11) said that cordial and reliable relationship between company and creditors help in gaining more investments and rising the standards of production. Identifying the above issues, possible recommendations are provided to WMC in order to resolve the issues and sustain their business:

    ● The company needs to focus on large scale production that involves low cost resources in order to reach out to a broader spectrum of customers and not restrict to a premium category. They can consider online medium for selling their products offering attractive discounts that can attract retail firms to avail their products.

    ● WMC required communicating to suppliers of other countries and importing resources from them at a much lower cost and developing large scale garment production that can be sold at a reasonable price. Effective communication and business relationship are to be maintained by the company.

    ● Interaction with employees is an essential requirement for the management to check low productivity. There might be differences of opinions between management and employees that are to be resolved by effectual meetings and communications and considering each opinion to be equally important while providing ideas to motivate them.

    ● WMC needs to establish a relationship with international creditors for allowing proficient investments that would assist the company in supplying large amount of resources at reasonable cost. Enter in a long term supply agreement also can be recommended in order to maintain continuity of supply .

    General comments:

    Hayes (Chapter 10) is about the importance of stakeholders, power and politics and we can see from the case that there will be challenges at WMC. For example, Mira and Ryan would be wise to listen to the advice of the Change Consultant and think about how they can influence the Board members, suppliers and new retailers – in their desire for change. Both Mira and Ryan need to identify who their stakeholders are and influence them and generate support so as to achieve their revised organisational goals. They need to balance corporate interests with stakeholder concerns – don’t they! Mira and Ryan need to be alert to the political dynamics to affect change. They need to build collaborative relationships – and they have not started this well! After all, it is not everyday that Board members will be asked to spend a lot of money /resources (resource dependence theory) on new equipment, plant and machinery realising that they will incur a reduction in dividends/profits themselves in the short or medium term. The Malhotra and Hinings article raises some useful points. For instance, in the discussion of different law firms, the article notes that the trajectory of change was similar in both firms as continuity and change but the outcomes were different in the three firms. When we apply this to WMC it is the duality represented by the competing values of continuity and change and has resolved into polarising forces, a position of disharmony and indecision with the Board requiring a significant corporate realignment with the external environment. This view is shared by local analysts who, noting leadership disharmony, have downgraded WMC’s stock value. This article is useful in highlighting how different actors respond differently to change initiatives depending on the values and beliefs they hold. Also, the way change is announced has a critical role in establishing ‘urgency’ and momentum and we can see from the case scenario at WMC that this might be problematic – for both Mira and Ryan! As the Consultant advising WMC you might suggest that awareness building form part of the continuity of change and that Mira, Ryan, the senior executive team and Board members create opportunities to confront different perspectives, discovering and enabling second-order thinking to produce innovative solutions in managing the change process (Malhortra & Hinings 2015 p19). The key point about this paper is that it is possible to have transformation even within a process of evolution. This is what makes the research so valuable.

    List of references

    Aladwani, A. M. (2001) “Change management strategies for successful ERP implementation”. Business Process Management Journal, Vol. 7 No. 3. pp. 266-275.

    Armenakis A ,Bedeian A.G (1999),Organizational Change review of theory and research in 1990s journal management

    Battilana, J., Gilmartin, M., Sengul, M., Pache, A.C. & Alexander, J.A., 2010. ‘Leadership competencies for implementing planned organizational change’. The Leadership Quarterly, vol. 21, no. 3, pp.422-438.

    Bertram, R.M., Blase, K.A. & Fixsen, D.L., 2015. ‘Improving programs and outcomes: Implementation frameworks and organization change’. Research on Social Work Practice, vol. 25, no. 4, pp.477-487.

    Cawsey, T., Deszca, G., Ingols, C., Finkelstein, S., Hambrick, C.D., Cannella Jr, A.A., Pitt, M., Koufopoulos, D.N. & Huber, G.P., 2016. ‘Organizational change’. Assessment, vol. 45, no. 1, pp.49-89.

    Cummings, T.G. & Worley, C.G., 2014. Organization development and change. 3rd edn, Cengage learning, New York.

    Day, D.V., Fleenor, J.W., Atwater, L.E., Sturm, R.E. & McKee, R.A., 2014. Advances in leader and leadership development: A review of 25years of research and theory. The Leadership Quarterly, vol. 25, no. 1, pp.63-82.

    Hayes, J., 2014. The theory and practice of change management, 2nd edn, Palgrave Macmillan, London.

    Hiatt, J and Creasey, T (2003), Change Management,

    Linnenluecke,M.K and Griffiths ,A(2010),Journal of world business :Corporate Sustainability and Organisational Culture

    Malhotra, N. & Hinings, C.B., 2015. ‘Unpacking continuity and change as a process of organizational transformation’. Long Range Planning, vol. 148, no. 3, pp.1-22.

    Mirvas,P and Manga,J 2010,''intergrating corporate citizenship: leading from middle''

    Paton,R and Mccalman J (2000) ,Change Management London: Sage publication

    Zhao H.H 2016,‘Not even the past: The joint influence of former leader and new leader during leader succession in the midst of organizational change’. Journal of Applied Psychology, vol. 101, no. 12, pp.1730-1745.

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