The report aims to provide an insight into organizational change that is considered as one of the important characteristics of organizational behavior. The report commences with self reflective case study of organizational change. The report also puts across two learning outcomes based on the case study that helps in further analysis of the various aspect of the case in a greater detail.
Organizational change refers to the field of the management theory focusing primarily on stages that the organization goes through during the process of evolution. The principles of the organizational change theory apply to both the short- and the long-term changes. The reasons for organization change depend on either internal or external factors (Benn, Dunphy and Griffiths 2014). In addition to determining the organizational change, these factors also generate resistance to the change process. It is to be noted that any change process first give rise to resistance that boils down to bigger issues.
The key factor that drives the change in organization depends on the organizational and environment context. The organizational change might result from the changes in the technology, newer development of products, government legislations and policies, cultural and social change of the values, change in the trade policy regulation and the changes in the global and the national economic condition (Cameron and Green 2015). Many a times, the change process might result from innovation in the manufacturing process, customer taste, introduction to the newer innovative design for products and services, newer ideas regarding the products and means adopted for the process of delivery responsible for generating customer satisfaction and value. Changes within organization might take place due to change of factory or office reallocation, change of the social trends, nature of the work and the world politics.
In this context, if I had to put in my opinion then I would feel that the process of change is crucial as it helps the organizations in developing competitive advantage. This is because an organization might experience varied benefits through undergoing adaption to such changes. I have tried to explain this fact by drawing in the example of General Motors where adoption of newer technology not only enhanced productivity but also changed the ways of communication. This change even helped in the generation of newer demands for products and services that provided new opportunities in meeting demands of the customers. Besides, the change resulted in organizational expansion along with addition of the new facilities and the staffs. Further, the changes not only benefit the employees in learning newer skills but at the same time exercise their qualities.
It has been found that the organizational change aids an organization in possessing changed perspectives while viewing the customer needs that allow them in adopting new means for customer interaction and delivery (Battilana and Casciaro 2012, pp.381-398). There exist four different approaches to the change management. This includes the Lewin’s classic three step model of change process, Kotter’s eight step change management plan, organizational development and action research. In this report, we will discuss the model described by Lewin and Kotter.
The Lewin’s model overviews organization following the three steps for a successful process of change management. This includes (Lozano 2013, pp 275-295):
Unfreezing: This refers to the status quo, undergoing change for overcoming pressure of group conformity and individual resistance.
Movement: Desire for the end state. It represents the change process that helped in transforming organization from status quo to the desired state
Refreezing: This implies adoption of the new change thereby making it permanent. It implies stabilization of the change intervention through balancing the restraining and the driving process.
General Motors (GM) that holds its establishment dated 1908 as the sole maker of Michigan had been the Buick holding company till the year 1920(reuters.com 2019). Later on, it went on to become one of the largest manufacturing companies for motors. The company reached a newer level of success at under the leadership of Alfred Salon and produced newer design and styles of car on a yearly basis. The company also comprised of other brands like Pontaic, Buick, Cadillac and Chevrolet. These were different car brands produced by the company during that time and hence the company had no other brands to compete with. The company however felt threatened with the emergence of the Toyota, the automakers of Japan. The emergence of Toyota to a larger extent created a disturbance in the profitability of General Motors particularly in the market of North America. In the year, the sales figures of General Motors showed a declining trend as Toyota captured the major portion of the market. The American government as well as the Canadian government aided the company during the period of crisis. It was during the year 2009, when the company faced bankruptcy thereby either closing several of its brands or selling them to a company based in China. To deal with this General Motors and climb up the ladder of success the company not only restructured it but also made changes within the organization (Moxen and Strachan 2017). Thus, during my tenure with General Motors I saw the company operating the business with the core brands like Cadillac, Buick and Chevrolet.
External Forces: As far as the external forces are concerned, GM was hugely impacted by Toyota, the automakers of Japan. It captured the major portion of the market in North America which represented one of the biggest market place of GM. But after running through a major loss GM had to sell close to 2.9 million of its products to the nearest competitor and various China based companies. Thus, the presence of Toyota disturbed the overall profitability of GM. The company also went through a major financial crisis that led to the collapse of the cash flow to the companies (Noble 2017)
Internal Forces: This included the higher cost of labor wages of the employees as the company paid $74 per hour in comparison to Toyota that paid only $44 on an hourly basis due to the existing agreement of GM with trade union. Besides, GM was forced to keep the plant running with a minimum of 80 percent of its capacity irrespective of the need. These things played a vital role in forcing the company to file for bankruptcy (Hashim 2017, p.685).
In regard to the discussions undertaken, GM finally decided to bring about certain changes in the areas of business. These changes included the cost change, structural change and the cultural change (Jones 2013).
Steps of the Change Management Process of General Motors
While undergoing change, GM undertook certain steps for adopting the changes. These steps include:
Undergoing Cost Cutting: The very first step that GM undertook for driving in the process of change is cost cutting. The company reduced the cost of some the brands for maintaining the profit level (Helper and Henderson 2014, pp.49-72). Besides, the company also undertook a pay cut of its employees that acted as one of the major problems. GM was able to achieve the target of cost cutting up to close to 15 million.
Ensuring Cultural Change: GM also changed the company culture by removing the automotive strategy and product board (Hrebiniak 2013). The new board comprised of eight decision making members responsible for directly reporting to the CEO. The key objective of the change lay in speeding up the process of day to day decision making. GM also ensured a change of its culture for improving the efficiency of employees thereby making them responsible and accountable.
In the process of change management, GM faced a lot of problems which are as follows:
Problems Related to Cultural Change: The plan related to the culture change depended on the top down approach that solely ignored involvement of employees compared to the other companies.
Problems Related to Cost Cutting: Although the cost cutting played a key role in the process of change management but hardly received a consent from the trade union since the company held an agreement of not lowering employee pay and maintain capacity level.
is to be noted that GM adopted change previously but recently there had been further changes adopted by company in 2009. The results of these changes include (Carnall 2018):
Results of the Cost Cutting: The results of the cost cutting had a direct impact on the employment which is visible from the figures between 1998 and 2009. The number of employees reduced from 2, 26,000 to 1, 01,000. Further, the company also reduced its sales. These aspects certainly lead to cost savings of GM
Results of the Cultural Change: The GM also acquired good results from the cultural change where the employees have become more aware about the accountability and responsibility. Besides, the company has better equipped the employees for acquiring better productivity.
As mentioned earlier, GM adopted two key strategies for change management, the first strategy has been the strategy of cost cutting for the purpose of the change management and the other represented the cultural change management strategy. These two strategies enabled the company in further acquiring the market shares of the North America. Although GM was threatened by emerging competition, it decided to incorporate the changes that put the company once again in a better position. Once again, the company was able to maintain brand of the core products. GM also achieved cost benefits through the implementation of the change strategy within the company.
Change refers to the inevitable portion of business and employees that initially might find difficulty in acceptance amongst business owners. According to case study, the key benefits of the organizational change are as follows:
Remaining Updated: The business undergoing change management might challenge its competitors by marketing and developing newer products. The company adopted ways of product development within limited cost that made it more attractive to the customers (Bryson 2018).
Newer Opportunities: The capacity of embracing change can aid the business in creating newer opportunities. It is to be noted that leadership roles also entails capability of employees in taking up
Encouragement towards Innovation: Adapting business to the change process leads to the creation of an ambience that encourage various aspects of innovation .The change brought in also motivates the employee in thinking in a creative manner when they perceive that management considers their viewpoints in ensuring additional growth.
Increase in the Efficiency: Organizational change aids in enhancing efficiency of the process of work thereby helping in satisfying customers and employees.
Improvement in Employee Attitude The organizational change process results in creating a positive influence on morale and attitudes of the employees. For instance, the change process of GM has made the employee more responsible and accountable.
Organizational change does not represent any problem. The problem lies in difficulties faced during implementation of changes. It is to be noted that organizational change is an crucial portion of the business that wants to thrive for a longer term (Bateh, Castaneda and Farah 2013, p.113). The problem arises when employers motivates and engages employees within the change process as they are neither consultative or outcome driven or.
Resistance to change process is quite often considered as the key reasons in defining the incapability of change programs in producing desired outcomes. The resistance to change is created by the people who remained unwilling to acceptchange. Understanding core of matter will enable in recognizing the facts that prevent them from creating a resistance. However, it has been discovered that fear and perception of ad adapting to the new changes that creates the resistance.
Conclusion
On a concluding note, it can be said that the two derived learning outcomes provided a different perspective of the change process. The first outcomes focus on how the organizational change aids in ensuring changed perspectives to business while the second outcome is concerned with the difficulty in the process of implementation.
References:
Bateh, J., Castaneda, M.E. and Farah, J.E., 2013. Employee resistance to organizational change. International Journal of Management & Information Systems, 17(2), p.113.
Battilana, J. and Casciaro, T., 2012. Change agents, networks, and institutions: A contingency theory of organizational change. Academy of Management Journal, 55(2), pp.381-398.
Benn, S., Dunphy, D. and Griffiths, A., 2014. Organizational change for corporate sustainability. Routledge.
Bryson, J.M., 2018. Strategic planning for public and nonprofit organizations: A guide to strengthening and sustaining organizational achievement. John Wiley & Sons.
Cameron, E. and Green, M., 2015. Making sense of change management: A complete guide to the models, tools and techniques of organizational change. Kogan Page Publishers.
Carnall, C., 2018. Managing change. Routledge.
Hashim, M., 2013. Change management. International Journal of Academic Research in Business and Social Sciences, 3(7), p.685.
Helper, S. and Henderson, R., 2014. Management practices, relational contracts, and the decline of General Motors. Journal of Economic Perspectives, 28(1), pp.49-72.
Hrebiniak, L.G., 2013. Making strategy work: Leading effective execution and change. FT Press.
Jones, G.R., 2013. Organizational theory, design, and change. Upper Saddle River, NJ: Pearson,.
Kempster, S., Higgs, M. and Wuerz, T., 2014. Pilots for change: exploring organisational change through distributed leadership. Leadership & Organization Development Journal, 35(2), pp.152-167.
Lozano, R., 2013. Are companies planning their organisational changes for corporate sustainability? An analysis of three case studies on resistance to change and their strategies to overcome it. Corporate Social Responsibility and Environmental Management, 20(5), pp.275-295.
Moxen, J. and Strachan, P., 2017. Managing green teams: environmental change in organisations and networks. Routledge.
Noble, D., 2017. Forces of production: A social history of industrial automation. Routledge.
Parker, D., Charlton, J., Ribeiro, A. and D. Pathak, R., 2013. Integration of project-based management and change management: Intervention methodology. International Journal of Productivity and Performance Management, 62(5), pp.534-544.
reuters.com 2019. Timeline: Key dates in General Motors’ history. [online] Available at: https://www.reuters.com/article/us-gm-chronology-sb/timeline-key-dates-in-general-motors-history-idUSTRE54S5ZN20090529 [Accessed 2 Feb. 2019].
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