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Read our case studies, including Virgin and Royal and Sun Alliance to see examples of managing change in practice.
Corus, who are the leading steel manufacturers in the UK, identified several problems with their business. Internally they were inefficient and customer service was poor. Externally, they faced cheaper foreign competition, changing customer requirements and new technology. Its culture was traditional and there was resistance to change, partly due to job insecurity. Corus worked hard to involve the workforce in acknowledging and accepting the problems with the business. It did this with regular communication and workshops. Encouraging upward feedback was seen as being very important. The workforce became far more involved in the decision making procedure.
Richard Branson has launched, closed and sold off many companies. He stresses that it is important not to be nostalgic about parts of the business if they are no longer meeting their purpose. He also believes that small is beautiful and if a company in the Virgin group gets too large, he breaks it up into separate companies. When he launched Virgin media by acquiring other media companies he was stuck with a large company with a poor reputation for customer service. He analysed why this was and saw that call centre employees were working from a script. He encouraged all employees to see themselves as entrepreneurs and to try to deal with any queries in the one call. This sometimes meant that staff were over generous but he was prepared to tolerate this as good learning for them. He also set about restructuring the company in such a way that staff had to take on more responsibility.
Royal and Sun Alliance
I worked for a number of years for Sun Alliance Insurance Company. It was a very traditional company with a very bureaucratic culture. One morning it was announced that we were merging with the Royal Insurance Company who had been one of our competitors. It is hard to imagine how the change that resulted from merging these two companies could have been dealt with less effectively. Each of the two chief executives was given a top job but we had no idea who was responsible for what. Merging involved establishing one set of polices to sell to the customers, one computer system to use for the business, deciding on the offices and employees and forming a new culture. It soon became clear that rather than being a merger, there was a huge fight going on between both companies over which should be the dominant company. This lead to confusion and uncertainty with little effort made to reassure staff their jobs were safe. It became difficult to sell insurance. The result was that the resulting company became less than the sum of the parts that made it and the loss of shareholder value. The change was not handled well.