Question:
Discuss about the Research in Business for Organizational Change in Multinational Corporations.
Automobile Industry is considered to be the technical marvel and the fastest growing sectors when concerned with changing consumer demands for styling, safety and comfort. The automobile industry has been facing its cross roads not only because of labour relations but also because of manufacturing efficiency (Mitchell, 2010). However, to analyse the change management in the automobile industry it is best suited that it can be analysed through the organizational performance and the challenges that the organizations faces while entering Asian market in comparison to a developed country like European market.
The organizational change is often considered to be ambiguous whether changes are made externally or internally. However, this means there is a shift that managers need to adapt and to be sensitive to organizational performance. The influence of organizational change can be in form of structures as well as systems that are deeply embedded in the organization. However, any change manifested is trickier and needs a planned strategy to reinforce the desired culture especially in a multinational organization (Bolo, 2014).
On the other hand, for a successful change to take place there should be a need of sense of urgency that is incorporated on the build vision through effective communication that removes obstacles and builds on the momentum.
Problem Statement
The extent to which the organizational change has affected the multinational corporations is been dependent on various factors that can be dealt on an overall basis. To begin with internal factor like dispositional distinctiveness and employee empowerment are the key contributions that can affect the organizational change behaviourally. However, the interaction of the environment resists changing irrespective of change content, individual differences or change process. On the other hand, when we talk about the change in the automobile industry pertaining to organizations like Toyota and Volkswagen which come under the category of the multinationals, it is often reviewed that there are certain effects that are taken into consideration. For example, the internal factors like tastes as well as income preferences can even impact the decision followed by the external factors like government regulations can even influence the purchase decision. However, as analysed from the given facts that external changes are driven by PESTEL (political, social-cultural, legal, economic, technology and environmental) trends (Rop, 2013). Moreover for an organization to respond to change is based on its core competence irrespective of any market it choose whether it is Asian or European. The challenges that are often possessed internally are based on structures, systems and processes that altogether guarantee the existence and the survival of the organizations in the changing dynamics. Nevertheless gap keeps on widening when the pace and direction of the globalisation changes the concepts that are globally developed and are implemented and the change management processes forms a shape (Bolo, 2014).
Research Objectives
The overall aim of the project is to investigate pertaining to factors that can make successful organizations in the automobile industry can lead to the certain problems while entering any other country. However, the study elaborates the impact of the change management and the effects that it may cause to the multinationals in the automobile industry.
To elaborate more specifically, the research study following research questions.
What are the key factors that influence organizational change in the automobile multinationals like Toyota and Volkswagen?
What are the changes that can be determined when influenced by the expansion of multinationals in the Asian market as compared to European market?
How the pace and direction of globalisation can affect the change management in MNCs and how the key personnel is affected during the process internally?
Justification of the Project
The valuation of the project can be based on the multinational corporations that depend on the development and implementation of the production concepts which can be seen in the organization taking few steps towards crucial changes in professionalism or organization structure or professionalism. The essence of the study lies in the changes that have been effectively engaged in the transition process. Moreover, the study has been subjected to automobile industry like Toyota and Volkswagen that will provide an insight on the global business environment and the way the changes have been adopted in the different markets.
On the other hand, organization internally poses a challenge as it may lead to large superficial compliance due to the coercive pressure that has been decided by the values held within the organization. Moreover, the organizational changes can be beneficial if the leaders of the management conduit to an effective change (Fullan, 2014). In today’s associations, the rate of progress has never been faster or steadier; subsequently, this study seen profoundly helped in the vitality of good change management preparing for supporting managers, in viably driving change all through their associations. As a result, this could be provided as a guide to the multinational corporations in the automobile industry (Bolo, 2014).
Expected Research Output/ Outcome
The expected research outcome of the project lies that change management impacts positively as well as negatively on the organizational performance especially in the automobile industry where the tastes and preferences of the customer keeps on changing. Moreover different styles exists in different organizations such that global flexibility in the system is more in the Asian market as compared to the European market because of the cross cultural training provided to the managers as well as the employees internally and the changing needs (Sun, Mellahi & Thun, 2010). As the organization like Toyota and Volkswagen will continue to grow in the markets, they will continue experiencing the factors. As a result, the organization faces a lot of crunches in the Asian market due to the production costs s well as the total manufacturing output developed based on the sponsored initiative. Conversely, the strategic partnerships in European market has achieved a sophisticated as well as global network which not only includes joint ventures but also possesses the production as well as assembly sites that lets the organization suffer many drastic change whether it is pertaining to production or technology (Waldchen, 2012). However, Volkswagen is produced in Europe but its market in Asia as to be fully based on value as well as engineering services based on the demand of the product.
Conceptual Framework ad Research Outcomes
The chapter focuses on the international business as well as the globalization firms in the automobile industry that seeks to identify the effect of change on the multinationals operations and the way they effect the change in different markets.
Resource Dependence Theory
Resource Dependence theory is based to form an alliance with the other organization to enhance the organizational autonomy as well as legitimacy. This theory mainly studies the external and environmental factors that not only affect the behaviour of the organization but also impact the change that needs to be manifested in the organization (Liu & Ko, 2011). The environment to a significant degree contains different associations in the organization such that the need of resources in one organization is different from other. However, independent organizations chiefly can take help from other organizations in terms of resources.
The theory highlights the other optimal divisions of the organizations through the basis of divisional structure that not only links the production strategies but also highlights the external organizational links with the multidimensional resources like raw material, labour or capital that comes to taking initiative from these resources. Nonetheless, the organizations moves forward with the principle of scarcity as well as criticality. Invariably when the shocks are introduced due to the new market then more strategies are applied whether it is through the association of the suppliers whether to integrate vertically or horizontally (Blair & Kaserman, 2014). According to the firms environment, resource dependence concerns more with the organizations tat are externally applicable such that the non executive decisions have not only greater impact but also tied to the demand of the consumer on which the companies depend whether it is a locally formed organization or is a multinational corporation (Hillman, Withers & Collins, 2009).
International Business in Multinational Corporations
International business in a form of business organization adds to the dependency on the foreign trade depending on underling the factors to carry forward in a business. According to Cantwell, Dunning & Lundan (2010), international business is dynamic and integrated and outlines the basic four elements like the globalisations process, international organizational change as well as business environment. Out of the for elements, the main focus relies on the globalization process, as the outlook of the organization needs to be changed in accordance with different cultures as well as communities such that the monopolists promote the globalisation. The challenges in the global environment can be well explained by the diagrams below.
Figure: Global Business Environment
Source: (Wild, 2010)
The organizations have been extracting, processing as well as transporting the key requirements that not only fulfils the requirements in the home countries but also facilitates the business interests in the manufacturing countries. Multinational corporations have led to the development on international business market as well as international capital market that have led to transformations (Dunning, 2013). The organizational change and business environments have constantly been evolving and can be evident from the long term trend towards the national borders. However, organizations needs to follow rules in whichever country they operate based on the markets conditioning.
Organizational Change: Management and Effect
The theory of change management is based on the linkages that initiates a logical pathway for the change to occur depending on the nature of the change whether it short term, intermediate or long-term (Sharma, 2015). The concept includes many perspectives that accompany solutions from the bottom level of management to the top level of management. According to Weiss (2014), theory of change is indeterminate and is based on the assumption that takes short steps for the long term goal, while making connections between activities as well as outcomes that will help in fulfilling the change in the long-term. These changes effect the organizational change as well through the globalization of technology in the business environment or the idea of a revolutionized business. Conversely, a change can be differentiated depending on the nature of change whether it is negative or positive (Stone 2010).
While keeping the nature of change; management decides the change to be implemented internally or externally starting with managing people through the training and learning of skills within the organization. On the contrary, the external effect is accounted by the availability and the knowledge accountability in the expansion of technology that builds a pressure on the management from the scrutiny from media as well as the stockholders (Heifetz, Grashow & Linsky, 2009).
However, major and fast authoritative change is significantly troublesome on the grounds that the structure, society, and schedules of associations regularly mirror a tenacious and hard to-evacuate “engraving” of past periods, which are impervious to radical change even as the present environment of the association changes quickly (Clark & Taplin, 2012). The two models that briefly describe the change are Kotter’s 8-Step Change Model as well as Kubler’s Change model that are adapted in the organization. The brief explanation is given in the diagrams below.
Figure: Kotter 8-Step Change Model
Source: (Kotter, 2012)
Figure: Kubler Ross Change Curve
Source: (Thuijsman, 2015)
Automobile Industry in Different Markets: Asian and European Market
The economics of change in the automobile industry can majorly be affected by the risks that the mature markets like Asia and Europe can face. However, today the automobile industry is facing challenges because of capacity, competitors, production and redundancy and overlap of the global price war.
In European Market
The automobile industry is far equipped and primarily represents 9% of the manufacturing sector to the economy. The industry characteristics highlights that the market is sophisticated in global network which not only includes production or cooperatives but also leads to the intense competition that can be considered to be the effect that the change management can enforce on the product from Asian market. Although, the market produces, many brands like General Motors, Volkswagen and Fiat but Volkswagen is the one that faces competition in the Asian market as the consumer demand is very peculiar and the demand for sch high priced automobiles is less. However, as a matter of fact, lastly, services are valued in Asian market based on the engineering and design of the European market (Nag, Banerjee & Chatterjee, 2007).
In Asian Market
Asian Market is well drive by the Japan as well as Thailand industries that represents 13% on the output in the manufacturing sector. Asian market is majorly driven by FDI of Japan. However, apart from theist e change has been initiated by the sponsored initiatives taken b countries like Korea, China and India where they are developing automobiles indigenous base (Horaguchi & Shimokawa, 2013). However, others are driven by multinationals as it supports to provide a broader market. However, Asian market in EU is mostly profitable. The major players in the ASEA are Toyota, Suzuki, GM and Hyundai. However, the market is slow, when it comes to adapting to organization change as countries are expected to increase the rate by 10-20% but with lack of resources and globalisation process it is still striving. Nonetheless, the adoption of AFTA is expected to lower the challenges and effects of change management in organization performance as well as it will help in providing a regional export market (Nag, Banerjee & Chatterjee, 2007).
Based on the problem statement and the research objectives, the research hypothesis tat can be developed in the study are:
Ho: Null Hypothesis: Change management does not have any impact on organizational performance for large and multinational organizations
H1: Alternate Hypothesis: Change management does creates an impact on organizational performance for large and multinational organizations
Methodology
The methodologies that can be adopted effectively to evaluate the research proposal is given as:
Literature Review – There is a need of the thorough analysis of the relevant literature taken and applied from various sources like Google Scholar, Emerald Insights as well as Peer reviewed journals by several authors. However, the thematic analysis has played a vital role in examining the study of change management on organizational performance.
Data Series and Research Methods
The research proposal has taken the thematic as well as data related content from the journals as well as educational websites to attain an idea of change management in automobile industry.
The data series and methods are analysed on two different methods broadly that is Online Survey based Questionnaire and focussed interview groups.
Survey Based Questionnaire – The survey based questionnaire will be handed to a total of 30 respondents who will be based on stratified random sampling of two organizations – Toyota and Volkswagen in the automobile industry. However, the respondents will be given the questionnaire after getting the consent signed that their personal information would remain confidential. Nonetheless, the questionnaire will be based on the 5 point Likert Scale ( where Strongly Agree = 5 to Strongly Disagree = 1) (Fan & Yan, 2010). However, the questions will be based on the effects of change management that the organization Volkswagen and Toyota face while entering in Asian and European market respectively.
Focus Interview Groups – The focus interview groups is taken evaluated on the primary data on the group of eight to ten people in a group interview (Stewart & Shamdasani, 2014). However, this data will be qualitative in nature as the knowledge of change management will be gathered based on the understanding of human interactions and perceptions regarding the subject.
Observing Key Indicators – The key indicators mentioned will be pointing out the globalization process and business environment both internally as well as externally.
Data Analysis Methods – The two methods that will be advocated in the research are qualitative and quantitative methods. Qualitative method will be advocated in the focus research interviews on the primary data whereas quantitative method will be advocated on survey questionnaire on the secondary data. The techniques that will be essentially used for the quantitative data will be based on the descriptive statistics and multiple regression model sch that effects of change management will be termed as independent variables and organizational performance will be termed as dependent variables (Hantrais & Mangen, 2013). However, the regression analysis will test the hypothesis and will consider the likelihood of Type I and Type II errors.
On the other hand, the data collected will be analysed using the statistical tool, SPSS were the compiled raw data will be transferred from Excel. Te research will be based on the Asian as well as European market of automobiles industry on deciding the strategy used in te markets for adapting the change management
However, for analysing the data, the concepts from literature will help in establishing the relationships and comparing the results of theory with the data. Lastly, the research findings will be discussed on the online questionnaire as well as focussed research interviews
Organization of the Study
The framework of the study will be followed as
Gantt chart
The following table highlights the timeline for the research proposal to be completed.
|
Task |
Start Date |
Duration |
End Date |
|
Project Proposal |
17-Sep |
15.00 |
02-Oct |
|
Literature Review |
03-Oct |
60.00 |
04-Jan |
|
Data Collection |
05-Jan |
55.00 |
29-Feb |
|
Data Analysis |
01-Mar |
30.00 |
31-Mar |
|
Final Report Submission |
01-Apr |
31.00 |
30-Apr |
Project Budget and Budget Justification
The budget for the proposed research was nearby to $4500 to complete the research in the designed framework for 1st April 2016 as mentioned in the Gantt chart above.
References
Blair, R. D., & Kaserman, D. L. (2014). Law and economics of vertical integration and control. Academic Press.
Bolo, W. A. (2014). Organizational change in multinational corporations: a case study of ecolab-nalco mergerin Kenya (Doctoral dissertation, University of Nairobi).
Cantwell, J., Dunning, J. H., & Lundan, S. M. (2010). An evolutionary approach to understanding international business activity: The co-evolution of MNEs and the institutional environment. Journal of International Business Studies, 41(4), 567-586.
Clark, H, and Taplin, D. (2012). Theory of Change Basics: A Primer on Theory of Change. New York: Acknowledge.
Dunning, J. H. (2013). Multinationals, Technology & Competitiveness (RLE International Business) (Vol. 13). Routledge.
Fan, W., & Yan, Z. (2010). Factors affecting response rates of the web survey: A systematic review. Computers in human behavior, 26(2), 132-139.
Fullan, M. (2014). Leading in a culture of change personal action guide and workbook. John Wiley & Sons.
Hantrais, L., & Mangen, S. (Eds.). (2013). Cross-national research methodology and practice. Routledge.
Heifetz, R. A., Grashow, A., & Linsky, M. (2009). The practice of adaptive leadership: Tools and tactics for changing your organization and the world. Harvard Business Press.
Hillman, A. J.,Withers, M. C. and B. J. Collins (2009). “Resource dependence theory: A review.” Journal of Management 35: 1404-1427.
Horaguchi, H., & Shimokawa, K. (Eds.). (2013). Japanese foreign direct investment and the East Asian industrial system: case studies from the automobile and electronics industries. Springer Science & Business Media.
Kotter, J. (2012). The 8-step process for leading change. Kotter International.
Liu, G., & Ko, W. W. (2011). An analysis of cause-related marketing implementation strategies through social alliance: Partnership conditions and strategic objectives. Journal of Business Ethics, 100(2), 253-281.
Mitchell, W. J. (2010). Reinventing the automobile: Personal urban mobility for the 21st century. MIT press.
Nag, B., Banerjee, S., & Chatterjee, R. (2007). Changing features of the automobile industry in Asia: comparison of production, trade and market structure in selected countries. Asia-Pacific Research and training network on Trade, Working paper series, 37.
Rop, K. (2013). A case study of firms quoted in the NSE in Kenya on strategies adopted by MNEs in response to political changes, Unpublished MBA project, University of Nairobi
Sharma, C., 2015. Change Management. In Business Process Transformation (pp. 123-146). Springer India.
Stewart, D. W., & Shamdasani, P. N. (2014). Focus groups: Theory and practice (Vol. 20). Sage Publications.
Stone, K. B. (2010). Relationships between organizational performance and change factors and manufacturing firms’ leanness. Colorado State University.
Sun, P., Mellahi, K., & Thun, E. (2010). The dynamic value of MNE political embeddedness: The case of the Chinese automobile industry. Journal of International Business Studies, 41(7), 1161-1182.
Thuijsman, T., 2015. Leadership styles and their influence on employees regarding the acceptance of organizational change.
Wäldchen, D. (2012). Catch up processes in the global automobile industry.
Weiss, J. W. (2014). Business ethics: A stakeholder and issues management approach. Berrett-Koehler Publishers.
Wild J. J. (2010). ‘International Business: The Challenges of Globalization, Fifth Edition. McGraw-Hill
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