Issues Facing The Industry And Competitive Pressures At CIDesign

Reasons For Resistance To Change In Cidesign

Produce a report for HFL analysing the Issues facing the Industry and an evaluation of the Competitive pressures facing the Company.

In the recent years, due to financial hit, many companies had collapsed and overtaken by bigger companies due to which employees have to face issues affected by changes. When a company fails to undertake the responsibility for change, it causes resistance to change among employees. According to Lawrence, resistance to change is the act which is made by a group or any individual when any observance is made regarding any change in the organisation or a workplace which may result as a threat to them.(Lawrence, 1969) Although changes are necessary in any company, sometimes it is not accepted and resisted by the employees as a result it makes them leave the company.  In organisational theory many scholars had suggested that the concept of resistance should be reconsidered and taken as a key element in understanding the employees reactions towards changes made in an organisation for further amendments. The symptom of resistance is visible and clear which are shown among the behaviour of the employees like denial in work, shock, irritation, and resentment. But sometimes the resistance proves to be intense enough resulting in employee’s resignations also.(Bringselius, 2010)

This report throws light on one such company named CIDesign that was under taken by Germany based company DDesign which caused resistance among employees due to change in ownership. The following figure shows some factors which brings resistance to change in organisations.

Figure: Reasons for resisting change (Anon., 2012)

In order to identify the reason behind employee’s resistance to change, it is important to study the root cause and requires a process considering job, personal, and social factors.(Rick, 2011) The employees of CIDesign lacked information about the cause of change in management and thus had to face rapid changes in the process of management. This made them threatened as they were not sure of their position in the company and feared of job loss. Since DDesign is a bigger company which owned 10% of UK creative design business and was more focussed on profit making, it adapted many cost saving measures which was resisted by present employees. Also, the comparison of their work with other sub levelled company based in India and China made their personal morale down. The change in style and culture of the company by making it a new entity i.e. DDesign, and the shifting of its headquarters to a newer place, generated discontent among employees as they were proud of the present entrepreneurial culture and supple work engagements. Thus they had strong reasons for their resistance which led some of them resign their job.

Change Management Process Undertaken At Cidesign

Since CIDesign was prone to loss making, certain changes were important to be made and the same was done after its acquisition. The change management process undertaken by DDesign over the last year was due to ineffective management in the organisation of CIDesign which resulted in the company’s financial hit. Although change is inherently disturbing for the present environment, still it was essential in CIDesign so as to outcome the reasons behind financial crisis. According to Kotter and Cohen, a successful change will always have a proper solution to a problem and engage people and management for a better outcome. It clearly shows that DDesign followed a change process which involved steps like setting of goal, internal and external analysis, strategy formulation and its implementation. Since the company had issues regarding finance, DDesign’s vision was to make it a profitable organization and rebranding works of CIdesign under its name.(John P. Kotter, 2002) Proper analysis is the most important part in a change process as it deals with the collection of data and information which gives shape to the next two steps.(Thomas G. Cummings, 2008) Under this step, DDesign collected important information and identified initiatives that were required to help the business grow. For this internal and external analysis were made that could affect the process in meeting the desired goal. In CIDesign, it is stated that the company had a reputation for its quality work and flexible management. But that was not sufficient in monetary terms and hence required to be altered. After analyzing the process, the company introduced various cost effective methods both internally and externally. In order to reduce the cost, the company outsourced design work to India and China and thus was able to expand its business. The change in the employee’s income was not done adequately which again reduced the cost. The same was resisted by the employees which resulted in loss of its major creative designers which proved to be a threat in the company and made it important to conduct internal analysis. While implementation, DDesign showed its interest in moving its headquarters to Berlin in order to operate both the companies jointly and under the same brand. Since DDesign is efficient in its management processes, it undertook the change management process in CIDesign to make it profitable.(Cummings, 2008)

Kurt Lewin’s three stage model demonstrates how to change an organisation from one position to another by creating persuasive ways for a change. The steps involved comprise of unfreezing the problem, and then it requires to be implemented with suitable changes and at last stabilize the manoeuvre with better proposed performance and freeze the same. In DDesign, Kurt Lewin three step change theory can provide an effective summary that will help to envisage, plan and administer the organisational strategy which can prevent further loss of employees.(Kritsonis, 2005)

Kurt Lewin Three Stage Model, 1940

Figure: Kurt Lewin Three Step Mode (Schottle, 2016)

During the unfreezing stage the company needs to give time and provide discussions with the employees to eliminate their worries by applying restraining force. In this stage the staff resistance cause like threat of job, comparing their work with sub standards, unsure about their new owner, and other factor like little change in their income etc needs to be considered. After consideration, driving force has to be applied in which the management can provide the employees with satisfactory raise in income, support from superior level management, and job assurance. This method will not only engage all the employees to work together towards positive driving direction but also diminish the restraining force. For applying the same model, DDesign needs to make arrangements for a cross table meetings with the existing employees so as to understand their personal views and problems.

The second stage in the change model deals with the actual change that includes both planning and implementation in the organisation. In this stage the employees are educated about their changed organisational culture and leadership. Along with making them comfortable with new ideas and guidelines, it is monitored and overseen by a team leader who will provide the employees with essential information. This model requires time and patience as it focuses on the personnel transition issues regarding change of work environment. Since the takeover of the company had left the employees resistant to work DDesign have to anticipate and handle the situation critically. The employees need time to recognize the benefits of change along with proper bonding with the changed management.(Morrison, 2014)

In the final stage of Lewin’s theory i.e. the refreezing stage occurs when the changed practice is deemed completed and fulfilled. Like in DDesign, once the two stages are performed successfully and the employees have become comfortable with the new environment and new policies, an evaluation has to made regarding problems encountered, success recognized, and challenges met throughout the process for future reference. Thus with the help of Lewin’s theory we can eliminate the resistance of employees and the fear of change management through proper planning and active participation of employees in the change process.(Levasseur, 2001)

The strategy required in acquisition demands critical steps after understanding the purpose for change without hampering present assets. Proper communication is required with the employees to set a specific goal and discuss reasons for change. After inquiries have been made it needs to be implemented in such a way that does not harm the sentiments of employees.(John Jones, 2004) Since DDesign outsourced some of the design from cheaper quality sources, it made the employees a feel of dishonour and resulted in resentment among them. Management can go slow on the outsourcing policy at least for the design part to help the existing employees gain a sense of belonging in the newly merged entity. Also, to help eliminate the apprehension of the existing staff about their future, DDesign can make sure the remaining staffs connect with the rest of the organization, by arranging for cross visits between the other work places, and creating a positive rapport with their peers. While shifting of its hub, which again was a calculated decision, DDesign can make presentations and cite examples of other companies to justify the reason .They can also enrol some of the existing employees to its Berlin branch, so that they can retain top talent and ensure that the people at former CIDesign have a connection with the organization as a whole.(Morgan, 2015) The intent of rebranding of the CIDesign product has been a key issue with the old employees who left the organization. The Management has to tread cautiously on this front because for a brand to succeed, its core team must be on board with the management on its decision. They have to convince the remaining employees that their original brand will receive a fresh makeover under DDesign. One of the advantages Ddesign can bring in is from its IT division at Berlin, which can work better by coming up with analytical data about UK’s Creative design business, thereby providing a boost to its Cidesign division. Since the employees can get more focussed on a particular trend/ demand currently in their region, Cidesign’s product may reach new heights of acceptability.

Thus with a planned change management process the strength of the organization can receive a long lasting achievement without any further loss of its employees.(Mehmedovic, 2016

References:

Anon., 2012. Kalpan Financial Knowledge Bank. [Online] Available at: https://kfknowledgebank.kaplan.co.uk/KFKB/Wiki%20Pages/Managing%20strategic%20change.aspx [Accessed 7 August 2017].

Bringselius, L.D., 2010. Resistance to change. [Online] Available at: https://www.lri.lu.se/media/lri/workingpapers/2010-1-resistance-to-change-louise-d.-bringselius.pdf [Accessed 21 July 2017].

Cummings, J., 2008. How to Lead Change Management. [Online] Available at: https://businessfinancemag.com/hr/how-lead-change-management [Accessed 21 July 2017].

John Jones, D.A.C., 2004. 10 Principles of Change Management. [Online] Available at: https://www.strategy-business.com/article/rr00006?gko=643d0 [Accessed 22 July 2017].

John P. Kotter, D.S.C., 2002. The Heart of Change: Real-life Stories of how People Change Their Organizations. [Online] Available at: https://books.google.co.in/books?hl=en&lr=&id=xxjuXbzQKv0C&oi=fnd&pg=PR11&dq=kotter+and+cohen%27s+model+of+change&ots=VEhGC9mRyK&si [Accessed 21 July 2017].

Kritsonis, A., 2005. Comparison of Change Theories. [Online] Available at: https://qiroadmap.org/download/Phase%201%20Resources/Kritsonis,%20Alicia%20Comparison%20of%20Change%20Theories.pdf [Accessed 22 July 2017].

Lawrence, P.R., 1969. How to Deal With Resistance to Change. [Online] Available at: https://hbr.org/1969/01/how-to-deal-with-resistance-to-change [Accessed 21 July 2017].

Levasseur, R.E., 2001. People Skills: Change Management Tools—. [Online] Available at: https://mindfirepress.com/uploads/Lewin_s_change_model_INTERFACES_2001.pdf [Accessed 22 July 2017].

Mehmedovic, M.G.a.J., 2016. 5 Strategies for Leading Change. [Online] Available at: https://www.academicimpressions.com/news/5-strategies-leading-change [Accessed 22 July 2017].

Morgan, E., 2015. 5 Tips for Effectively Managing Change. [Online] Available at: https://www.inc.com/eric-morgan/5-tips-for-effectively-managing-change.html [Accessed 22 July 2017].

Morrison, M., 2014. Kurt Lewin change theory three step model – unfreeze, change, freeze. [Online] Available at: https://rapidbi.com/kurt-lewin-three-step-change-theory/ [Accessed 22 July 2017].

Rick, T., 2011. TOP 12 REASONS WHY PEOPLE RESIST CHANGE. [Online] Available at: https://www.torbenrick.eu/blog/change-management/12-reasons-why-people-resist-change/ [Accessed 21 July 2017].

Schottle, A., 2016. Using Lewin’s Change Model to Understand Continuous Improvement. [Online] Available at: https://leanconstructionblog.com/Using-Lewin-Change-Model-To-Understand-Continuous-Improvement.html [Accessed 7 August 2017].

Thomas G. Cummings, C.G.W., 2008. Organization Development & Change,9th edition. [Online] (9) Available at: https://otgo.tehran.ir/Portals/0/pdf/organization%20development%20and%20change.pdf [Accessed 21 July 2017].