Report On Organizational Change For Corporate Sustainability Production Process To China

Driving factors for transformational change

Discuss about the Report on Organizational change for corporate sustainability production process to China?

Off-shoring is kind of business process where organizations relocate its business process from one country to other country. Organization mainly off-shores typical operational processes like manufacturing process and other supporting process like accounting (Eckel & Irlacher, 2015).  The activities of offshore are primarily associated with outsourcing of administrative and technical services that are supported by global operation from outside the home country. Littlefuse deals with production of switches and electrical equipments (Littelfuse.com, 2016). Littelfuse, Inc wanted to offshore some of their activities to other country like china. The existing employees of Littelfuse, Inc were negatively affected by these activities of the company. The company needed huge amount of money in order to open branch in other country. Therefore the company started to lay-off their long term employees (Ebenstein et al. 2014). The employees were afraid of losing their jobs. Local suppliers were unhappy because they were not getting scope for providing material like circuit boards, wires, and carbon bled. Local shareholders were not satisfies with their return. The customers were happy as they were getting more advanced product produced in new branch of the company. The company had faced a tough competition from their competitors like Analogic corporation and Amphenol Corporation.

The competitor companies were producing advanced and diversified products with better design and new features. Therefore, Littelfuse were lagging behind in such competition. In order to survive with the competition, the company needed to expand their market and increase the production volume. Thus the company took decision to offshore some of its activities to other country for increasing production volume. The activities of offshore have been well accepted by the management of the company because these activities were providing positive result with regard to better product.

The study analyses the driving factors of transformational change of Littelfuse Inc. Some theories of changes management have been discussed here. The communication and implementation plan of this change management has also been analyzed in this study.

Consideration of Transformational change

Transformational change involves a radical change in the business model of an organization. Transformational changes require changes in the organizational structure, culture and management. Companies may undertake transformational changes in reaction to crisis and repositioning themselves in the market. Littelfuse, Inc was facing a tough completion from its competitors company. In order to survive in tough competition the company needed to diversify their product and increase the production volume with lowering the operational expenses (Millar et al. 2012). Since it is a change in the process of management it can be regarded as transformational change. In order to reduce the operational expenses the company stated to lay-off their long term employees who were under-performing. Since it is a change in the structure of the organization it can be regarded as transformational change.

Justification of doing transformational change

In order to remain competitive in the market Littelfuse, Inc needed to diversify their product, but the company was lacking that much talented employee who could produce the diversified product. Majority of existing employees were aware of outdated technology. They did not have knowledge about new technological features. It was hindering the company to produce advance electronic switches and automotive sensors (Wiek et al. 2012). This limitation had made the company to undertake the lay-off strategy in their organization. The operational expenses were also increasing as the profit of the company was lowering. In this case also the company undertook lay-off strategy. The company was not producing that much as per the requirement of the customer. Therefore the company needed to produce large volume of product, but it had not that much of branch so that it could produce more in Chicago (Springer et al. 2012). This circumstance had made Littelfuse, Inc to offshore their activities to other country, so that large volume of product could be produced.

The CEO of the company should pose the strength of commitment and leadership skill in the change management process. If sustainability of change management leads to success of the company, The CEO must believe that they are doing right thing towards the change. The moral conviction of the CEO must be enough to encourage other in following the change management. The board of directors is to take strategic decision for the organization (Vaccaro et al. 2012). The board of directors must have to recognize the importance of Laying off existing employee and shifting the activities of business to other country. Senior leaders must be committed and proactive that will be needed to make change happen. They have to convince the employees in relocating their jobs.

There are easier alternatives for accomplishing the goal of remaining competitive in the market. The company might get easier alternative by joint alliance with similar types of company. If the company did this alliance it would have produced more products by sharing its resources. The company could have also used the employees of other company to which it would have alliance with (Michael et al. 2012). The company could have got more new ideas in producing new type of product. Other alternative that can be identified is increasing the manufacturing belt. The production units could have increased by this alternative and the company could have accomplished the goal for remaining competitive in the market.

Management Role’s in transformational change

theories of change management

Kotter’s Theory

According to Kotter’s change management theory employees buy into change when leaders become able to convince them of the urgent needs of the change. In the 1^st step leaders creates a sense of urgency of the change in organization. In 2^nd step leaders build a dedicated team towards the changes. In the 3^rd step leaders creates vision for change. 4^th step is related to the communication of change (Hayes, 2014). In the 5^th step staffs are empowered with capacity to change. 6^th step is related with creating short-term goal. In the 7^th step staff remain persistent with the goal of the organization. In the last step ultimate change happens.

This theory is categorized into three parts and these are unfreeze, transition and refreeze. In unfreezing stage existing status quo of the organization are broke down for creating new way of operating the business. Some uncertainty may happen in this stage (Sutherland et al. 2012). In transition stage organization is to focus on specific issue of personal transition in change management. In refreeze stage change ultimately takes place in the organization. In this stage stable organization chart and reliable job descriptions are made.

Diagnosis is the first step in this theory, where actual problems are identified in the organization. Action planning stage is continued to constitute new alternatives for making change in the organization (Stringer, 2013). In evaluating stage the new changes are initiated in the organization. The last step is specifying learning future issue of the changes are identified.

Pros	Cons
·         Gives a clear picture for the future. ·         Communication flow of changes is very quick. ·         Create a framework for the change.	·         Embeds the mindset that changes in the organization are one time event. ·         It forces the employees to be the object of change.

Table 1: Pros and Cons of Kotter’s theory

(Source: Benn et al. 2014)

Pros	Cons
·         Create short term plan ·         Give focus on personal transition	·         Dominates the employees ·         Workplace can be discriminated

Table 2: Pros and Cons of Lewin’s theory

(Source: Jeston & Nelis, 2014)

Pros	Cons
·         Demonstrates future issues of organization ·         Evaluates the progress of change management.	·         Wrong alternative may be chosen ·         Pressure upon the employees

Table 3: Pros and cons of Action research

(Source: Jones et al. 2012)

The best way to ensure implementation of change in organization is proper communication among the stakeholders. All the stakeholders of the company must be understood the positive result of change management. The leaders of the organization should communicate the rational of the changes throughout the organization. Changes would best be implemented when it would be divided into various phases (Michael et al. 2012). Careful monitoring of the entire process is very much needed to ensure that changes are happening according to the plan.

Stakeholders	What communication	Who will send communication	Communication Medium
Investors	·         Maximum wealth return is to be communicated ·         Directorial voting right	·         Production manager ·         Chief operational manager	·         Telephonic medium ·         Personalized email ·         Internet
Suppliers	·         Pre-payment ·         Buying resources in bulk	·         Production manager ·         Operational manager	·         Email based communication
Employees	·         Layoff-of saturated employees ·         Downsizing employees who are creating high demand ·         Retaining employees who are highly matured, performance oriented and under category of self-esteem	·         Human Resource manager ·         Directorial head ·         Operational head	·         Email through individual portal ·         Communication with labor union for managing and cooperating
Consumers	·         Better product quality ·         Diversified and customized product ·         Categorized product (low cost)	·         Sales and marketing manager ·         Advertising department ·         Promotional department	·         Online medium ·         Social media platform ·         Television and mass communication medium ·         Newspaper and radio

Table 4: Communication plan

(Source: Author)

Steps

Step 1: Departmental jobs

Initially, organization has to find out the potential number of suppliers in the offshored country for enhancing its operation (Nordin et al. 2012). According to that the operation manager has to determine the number of employees that it needs to have in each departmental production. The production department has to be divided into circuit creation, switch board case production, customization and design and added features.

Easier alternatives

Step 2: Determination of employees

According to each of the department, the employees are to be divided so that unified rate of production is maintained, which will lead to decrease in lead time (Brown & Osborne, 2012). The management has to determine that which particular employees will be fit for the jobs. As the organization is thinking to lay-off employees hence most matured and performance oriented employees are to be selected.

Step 3: New policy and procedure for employee welfare

Much amount of workforce flexibility was awarded for all employees. Thus, flexibility has to be categorized into each of the departments (Cook, 2014). As most of the older employees will be laid-off, hence new recruitments will have to be done and those candidates are to be trained.

Step 4: Performance Evaluation

Earlier, the organization was too much employee centric and thus demand from employees continued to increase. Thus, performance evaluation metrics are to be set up and according to that reward and recognition will have to be provided. This will increase motivation and higher level of performance.

Serial Number	Implementation Steps	Success Criteria	Summary	Rollout
1.	Departmental Jobs ·         Find out the potential number of suppliers ·         According to supply, allocation of employees ·         Division of production department 1.      Circuit creation 2.      Switch board case production 3.      Customization and design 4.      Added features	1. Reasonable suppliers with low price must tally with appropriate employee talent to bring out most innovative design. 2. Response from investors about the amount of investment they are allowing.	Week 1: Supplier allocation according to present employees and consumer interest.	This is the first stage and there will be no risk.
2.	Determination of employees ·         Division of employees ·         Matured and performance oriented employees are to be retained ·         Relocation of employees from host country	1. Increase in performance 2. Production enhancement 3. Innovative design from other competitors	Week 2: Layoff of employees (who are underperforming) and recruitment of new employees	High amount of risk as existing employees will be disheartened. From management side, it may lose experienced candidates. New recruited candidate may underperform and thus training is required that will require more time and cost.
3.	New policy and procedure for employee welfare ·         Introduction of new policy and procedure ·         Creating code of conduct ·         Upgrading workforce flexibility ·         Determination of reward and recognition	1. Sense of justification among the employees will be ascertained 2. Higher employee motivation	Week 3: Concrete policy, conduct and performance will be included. Workforce flexibility will be categorized for different level of employees.	Little amount of risk is there as present employees will be negatively affected. This may create distress among employees.
4.	Performance Evaluation ·         This is the final step where new employees will be evaluated according to performance evaluation metrics. ·         Reward and recognition ·         Required training and motivation	1. Rate of increase in production 2. Employee satisfaction and feedback	Week 4-5: This step will require time to understand employees and any drastic step may lead to negative activities	Chance of risk is there as all the earlier steps will impact here and any change in earlier step will incur a huge operational loss for management.

Table 5: Implementation Plan

(Source: Author)

Conclusion

While concluding the study it can be said that Littelfuse, Inc has chosen offshore activities in their business. It has outsourced majority of their production process to China. The company has faced tough completion from their competitors like Analogic Corporation and Amphenol Corporation. The competitors company were providing better quality product. Therefore Littelfuse, Inc was lagging behind with the competition. The company was also producing less amount of product. Therefore, in order to mitigate those issues, the company took strategy for off-shoring its activities to other country for increasing the production. Various theories can be applied for suitably applying change management in the organization. A suitable communication plan can better implement the change management in the organization. Implementation plan is to be prepared beforehand for ensuring the positive impact change management.

References

Benn, S., Dunphy, D., & Griffiths, A. (2014). Organizational change for corporate sustainability. Routledge.

Brown, K., & Osborne, S. P. (2012). Managing change and innovation in public service organizations. Routledge.

Cook, A. (2014). Applying change management theories to support implementation of activity-based funding.

Ebenstein, A., Harrison, A., McMillan, M., & Phillips, S. (2014). Estimating the impact of trade and offshoring on American workers using the current population surveys. Review of Economics and Statistics, 96(4), 581-595.

Eckel, C., & Irlacher, M. (2015). DP10574 Multi-product Offshoring.

Hayes, J. (2014). The theory and practice of change management. Palgrave Macmillan.

Jeston, J., & Nelis, J. (2014). Business process management. Routledge.

Jones, H. P., Hole, D. G., & Zavaleta, E. S. (2012). Harnessing nature to help people adapt to climate change. Nature Climate Change, 2(7), 504-509.

Littelfuse.com,. (2016). Circuit Protection, Fuses, Thyristors, Automotive Circuit Protection, Protection Relays and Controls – Littelfuse. Retrieved 10 January 2016, from https://www.littelfuse.com/

Michael, B., Neubert, M. J., & Michael, R. (2012). Three Alternatives to Organizational Value Change and Formation Top-Down, Spontaneous Decentralized, and Interactive Dialogical. The Journal of Applied Behavioral Science, 48(3), 380-409.

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Nordin, N., Deros, B. M., Wahab, D. A., & Rahman, M. N. A. (2012). A framework for organisational change management in lean manufacturing implementation. International Journal of Services and Operations Management, 12(1), 101-117.

Springer, P. J., Clark, C. M., Strohfus, P., & Belcheir, M. (2012). Using transformational change to improve organizational culture and climate in a school of nursing. Journal of Nursing Education, 51(2), 81.

Stringer, E. T. (2013). Action research. Sage Publications.

Sutherland, K., MacDonald, M., Payne, S., Neumeier, M., Kaminski, J., & Bassendowski, S. (2012). Applying Lewin’s change management theory to the implementation of bar-coded medication administration. Nursing, 7(3/4).

Vaccaro, I. G., Jansen, J. J., Van Den Bosch, F. A., & Volberda, H. W. (2012). Management innovation and leadership: The moderating role of organizational size. Journal of Management Studies, 49(1), 28-51.

Wiek, A., Ness, B., Schweizer-Ries, P., Brand, F. S., & Farioli, F. (2012). From complex systems analysis to transformational change: a comparative appraisal of sustainability science projects. Sustainability science, 7(1), 5-24.