The environmental dynamism for organizations takes place in the local and global markets as well. Change is constant for all organization types who are required to change their strategies continuously to adapt to the new updates. Change faces resistance from the employees and requires a great support from the top and middle management in order to succeed in achieving the desired goals (Imran et al., 2017; Khan, Nawaz, & Khan, 2016).
The following section provides an analysis of the change strategy implemented by Australia Post to modernize its business and generate profits after years of accumulated losses.
There are many approaches to change management, the two best-known are the Levin change management model and Morgan organizational metaphors. Levin’s model consists of three steps of management: unfreeze, move towards the desired goal and refreeze. In the unfreeze stage the goals of change are set, efforts are made to decrease the resistance against change and all of the capabilities are directed to change. During the second stage, proper changes are made through making the appropriate actions. The last stage requires implementing changes and creating a new reward system. The Morgan organizational metaphors assume that the organization could be considered as a machine, living organism, brain, culture, system, psychic prison and system of change and flux (Buk?aha, 2014).
Also, the Kotter (1996) change model, as cited in Rajan and Ganesan (2017), assumes that the change implementation process goes through eight steps. It starts with establishing a sense of urgency, then the organization creates a guiding coalition, then the innovative vision and innovation strategy should be developed, then they should be communicated, employees should be empowered for broad-based action, then short-term wins should be generated, producing more change and consolidating gains and finally, a new culture should take place. Readiness for change is very important, it differs from business to another and industry to another (Imran et al., 2017).
Van de Ven’s (1983), as cited in Roh, Turkulainen, Whipple, & Swink (2017), follows the metatheoretical approach that categorizes the organizational change theories into the system-structural view, natural selection view, strategic choice view and the collective action view. This classification is based on the deterministic vs voluntaristic theoretical assumptions. The deterministic approach views managers’ role as passive, while the voluntaristic emphasizes the managers’ role to be active. The second dimension is related to the analysis level that ranges from individual to the organizational levels.
Australia Post implemented its future-ready strategy in 2010, it mainly aimed to transform into more customer oriented, high performance, sustainable and profitable business. The change strategy is based on three pillars; maintaining sustainable physical and digital communication with the customers, becoming a world-class leader in parcel service and delivering its services to the customers through multiple channels of delivery. This new strategy was essential to secure the future because the organization had severe losses that worth $148 million. The monopolistic policy was not enough to maintain the business success that yields a sustainable revenue stream. Moreover, the digital service is very important because customers tend to alternatively use the email services. The Department of Finance at Australia Post initiated some activities, including charging extra costs of the business and modernizing its network to cope with the growth of the e-commerce, diversifying its revenue stream by delivering new services including, digital mail and identity verification (Parliament of Australia, 2014).
The company gained the support of the government to its reform plan to help in sustaining the letter and parcel services. Under this plan, mail continues to be delivered five days a week, the concession and Christmas stamp price is kept at 60 and 65 cents respectively and the change plan was widely communicated with the community. The government decision enabled the company to initiate new regular service of letter delivery 2 days slower than the rest of the weekdays. In order to be able to develop and modernize its services, Australia post took the decision of raising the basic stamp price to $1 that keeps it among the cheapest comparable OECD countries (Australia Post, 2015).
The change processes are fueled by many strategic considerations, for example, the need for more integrated methods of work and the necessity of improving the business performance. Considerations are likely to yield structured change programs assuming that the change management process involves a limited number of interventions. These interventions should be objective, manageable and measurable (Pieterse, Caniëls, & Homan, 2012; Feng, Huang, & Zhang, 2016).
The major changes implemented under the Future Ready strategy, according to the Parliament of Australia (2014), included the following:
Two-speed postal service: It refers to the offer of Australia Post to the government and business of delivering an extra speed service at a lower cost that represents a significant cost saving for them because 95% of letters are sent by these two major customers.
MyPost Digital Mailbox: It is a free online portal that allows customers to pay bills and store their important documents online to be accessed from anywhere.
Parcel business: The parcels business grew between 8% and 10% per year from 2011 to 2014, due to the increasing volume of domestic parcels. The revenues of the parcel services and express services increased by 29% in 2012/2013 and 20.8% in 2013/2014 to record $337.5 million. The online shopping is the main driver of the revenue increase, it accounts for 70% of the parcels handled by Australia Post.
The company is self-funded business and it is not allowed to be funded as a taxpayer. The rapid development in the digital communications resulted in a reduction in the number of letters by one third. Cumulatively, the losses in Australia Post’s letters are estimated by $1 billion in 2015. If the company did not implement a change strategy, it is expected to generate losses of $1 billion in one year and $6.5billion for over a decade (Australia Post, 2015).
In order to modernize its business, increase its revenues, sustain its business in the future and maintain profitability, Australia Post took three initiatives represented in increasing the stamp price, adjusting its current limit of commercial freedoms and expanded its services to the government. Commercial freedoms are required to substitute the loss of the letter business. Australia Post enabling legislation is capable of removing the constraints that limit its ability to grow and diversify its services. Diversification requires additional funds and requires paying attention to the environmental issues. The diversification strategy should not be at the expense of air pollution with CO2 emissions (Parliament of Australia, 2014).
The change in management is an ongoing process that should be implemented on the individual, group and organizational levels. Leadership plays different roles and do their best to make the successful implementation of change. Leaders should act as change agents, they should be ambitious, self-confident, learning, creative, fair and dedicated (Ajmal et al., 2012; Magsaysay & Hechanova, 2017).
The Gender Action Plan at Australia Post has achieved equal pay. The employees are 34 thousand, represent 163 different nationalities and speak more than 65 languages. Australia Post helps its people to continue their career through the Post People 1st program that helped many employees transition to play other roles within the company. The most successful implementation is the company guarantee to its employees that nobody will be negatively affected by the change strategy. The internal recruitment is the priority when filling new positions (Australia Post, 2017b).
3.2 Organizational leadership and changes The transformational leadership is considered the best leadership style to lead the organizational change efforts. The transformational leaders have higher moral values, they empower their followers and create an exchange-based relationship with the followers. The employees do effort and achieve the predefined goals and the transformational leader reward them in exchange (Yahaya & Ebrahim, 2016; Amanchukwu, Stanley, & Ololube, 2015).
The leadership of Australia Post is service focused, it could exceed the change strategy goals of parcel delivery. The leadership was able to transform to digital service through its e-commerce deliveries business. Also, the safety leadership program was implemented to train more than 1000 leaders to enable them to deal with safety aspects during the peak periods (Australia Post, 2017b).
The HRD’s plays a significant role in defining the employee’s skills and leadership capabilities gap. These activities should be done by aligning their strategy with the organizational goals (Memon, 2014). The HRD should minimize conflict through the maintenance of good employee relations and cooperative relationships, involving the employees in the communication process and to develop the employees interest to achieve the organizational goals (Sarker, Rahman, & Tania, 2017; Arunprasad, 2016).
To ensure change alignment with the organizational strategy, it is important to create a cross-functional Core Team of visionary employees. This team is capable of inspiring individuals who believe that change is beneficial, that is why it should mix between the middle management and the employees who deal directly with the customers (Zarrabi, Poursadegh, & Jafarvand, 2013).
In 2018, Australia Post started to use the smart POS system in 3600 post offices. This service allows the consumers to pay with their smart devices and allows the disabled people to enjoy facilitated service (Australia Post, 2018a).
The speed service enabled the company to deliver 89.7% of the letters on time that exceeds the 94% of the Community Service Obligation. $6.8 million were invested in the community (Australia Post, 2017a).
Australia Post could reduce the CO2 emissions by 22.3% since 2010, which provides a good indicator of achieving the target of 25% reduction by 2020. The company produced more than 2,000MWh of electricity per year on the 48 sites of the solar panels. Also, it has initiated the Planet Ark’s Australian Recycling Label on its satchels to inform the consumers of what should be done with the product they do not need. In addition, 14 thousand tonnes of materials were recycled in 2016/17, which is still far from the target of 100 thousand tonnes by 2020 (Australia Post, 2017a). Australia Post implemented an environmental plan to save $10 million every year through providing sustainable service (Australia Post, 2018b).
The new implemented strategy has proved its success in the recent years, but it cannot guarantee to sustain the financial stability of the organization in the future. There are some important reasons behind this argument, the most profitable branches contribute to the cross-subsidization of the low profitable branches that will not work for a sustainable profitability in the future. Also, the letters business is decreasing.
The most successful implementation is the company guarantee to its employees that nobody will be negatively affected by the change strategy. The internal recruitment is the priority when filling new positions.
Moreover, Australia Post financial performance indicates that it could generate profits that worth $126.1 million in 2017. It could expand its customer network through the increasing number of registrations by 146% in 2016/17, this increase is a result of the flexibility in the way of receiving parcels. The retail network increased to 4,379 Post Offices that represent the largest network all over Australia. Also, it delivers to more than 190 countries (Australia Post, 2017a).
Conclusions
Australia Post implemented its future-ready strategy in 2010, it mainly aimed to transform into more customer oriented, high performance, sustainable and profitable business. The major changes implemented under the Future Ready strategy included Two-speed postal service, MyPost Digital Mailbox and parcel business. Australia Post took three initiatives to sustain its business in the future represented in increasing the stamp price, adjusting its current limit commercial freedoms and expanded its services to the government.
References
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Amanchukwu, R., Stanley, G., & Ololube, N. (2015). A review of leadership theories, principles and styles and their relevance to educational management. Management, 5(1), 6-14.
Arunprasad, P. (2016). Guiding metaphors for knowledge-intensive firms: Strategic HRM practices and knowledge strategies. International Journal of Organizational Analysis, 24(4), 743-772.
Australia Post. (2015). Fact Sheet. Australia: Australia Post. Retrieved from Australia Post: https://auspost.com.au/content/dam/auspost_corp/media/documents/Reform-Fact-Sheet.pdf
Australia Post. (2017a, Sept 15). Fast facts about Australia Post. Retrieved from Australia Post: https://auspost.com.au/about-us/news-media/fast-facts-about-australia-post
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Australia Post. (2018a, Aug. 16). Australia Post rolls out smart POS. Retrieved from Australia Post: https://auspost.newsroom.com.au/Content/Default/News-Releases/Article/Australia-Post-rolls-out-smart-POS/-3/27/6227
Australia Post. (2018b, June 5). Australia Post’s environmental plan to save $10 million. Retrieved from Australia Post: https://auspost.newsroom.com.au/Content/Default/News-Releases/Article/Australia-Post-s-environmental-plan-to-save-10-million-/-3/27/6216
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