The fact that we could have picked half a dozen other issues for discussion indicates the imperative for change in organizations. What is important, however, is recognition that change occurs continuously, has numerous causes, & needs to be addressed all the time. Lawler (1986) sums this up quite effectively by noting that:
“Overall, planned change is not impossible, but it is often difficult. The key point is that change is an ongoing process, & it is incorrect to think that a visionary end state can be reached in a highly programmed way”.
The difficulty is that most organizations view the concept of change as a highly programmed process which takes it as starting point the problem that needs to be rectified, breaks it down into constituent parts, analysis possible alternatives, selects the preferred solution, & applies this relentlessly – problem recognition, diagnosis & resolution. Simple, straightforward & relatively painless. But what if the change problem is part of a bigger picture? For example: How do recognition diagnosis & resolution address the problem of global warming? ‘It’s not our problem, we will leave it to for politicians to sort out’’: a simple & effective response, until the point in time when the political solution begins to have an organizational impact.
I am not suggesting here that all organizations need to come up an answer that solves the problem of ozone depletion. This is a problem that nations have difficulties trying to address. However, what I am trying to point out is that, as an issue, it creates an imperative for change in organizations. There are two ways of responding to that imperative. The individual organization can wait for legislation to hit the statue book & react to the legislation, or it can anticipate & institute proactive change, most organizations don’t. That’s because they are geared & managed to run on traditional, analytical lines of decision making – if it isn’t broke, why fix it? What I would like to suggest here is that before it even gets to the point where a slight stress fracture appears, organizations should be addressing the potential implications of change scenarios, & dealing with them accordingly.
(Robert A. Paton & James McCalman, Change Management – A guide to effective Implementation, 2000)
c) What OD interventions did McDonald’s consider while implementing its change process?
Reply:
Organizational Development (OD):-
Beckhard defined OD as: “An effort, planned organization wide & managed from top, to increase organization effectiveness & health through planned interventions in the organization’s processes, using behavioral-science knowledge”.
In essence, OD is a planned system of change. OD strategy is a plan for integrating different activities to accomplish objectives.
OD traditionally associated with behavioral strategies. These strategies emphasize better utilization of human resources by improving: Morale, Motivation & Commitment of members.
Defining Organizational Development (OD):-
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Planned: OD takes a long-range approach to improving organizational performance & efficiency. It avoids the usual “quick fix”.
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Organization-Wide: OD focuses on total system.
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Managed from Top: To be effective, OD must have the support of top management. They have to model it, not just espouse it. The OD process also needs the buy-in & ownership of workers through out the organization.
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Increase Organization Effectiveness & Health: OD is tied to bottom line. Its goal is to improve the organization, to make it more efficient & more competitive by aligning the organization’s system with its people.
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Planned Interventions: After proper preparation, OD uses activities called interventions to make system wide, permanent changes in the organization.
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Using Behavioral Science Knowledge: OD is discipline that combines research & experience to understanding people, business systems & their interactions.
OD Interventions used by McDonald’s:-
The following OD Interventions were considered by McDonald’s while implementing its change process:
1. In-Visioning:
This is actually a set of interventions that leaders plan with OD’s help in order to “acculturate” everyone in the organization into an agreed upon vision, mission, purpose & values. The interventions used by McDonald’s included training, goal setting, organizational survey feed back, communications planning etc.
2. Team Building:
This intervention can take many forms. The interventions in this regard used by McDonald’s were interviews & other pre-work, followed by a one-to-three day offsite session. During that meeting, the group diagnoses its functions as a unit & plans improvements in its operation procedures.
3. Survey Feedback:
This technology used by McDonald’s is probably the most powerful way that OD professionals involve very large number of people in diagnosing situations that need attention within the organization & to plan & implement improvements. The general method adapted by McDonald’s in this regard required developing reliable, valid questionnaires, collecting data from all personnel, analyzing it for trends, and feeding the results back to everyone for appropriate action planning.
4. Intergroup Problem Solving:
This intervention used by McDonald’s usually involved working with two groups separately before bringing them together. By using this technique, company was able to establish common goals & negotiated the changes in how the group interfaced.
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Walk – The – Talk Assessment:
Most organizations have at least some leaders who “say one thing and do another”. This intervention, though considers being very threatening, however, used by McDonald’s as it concentrated on measuring the extent to which people within the organization like McDonald’s are behaving with integrity.
6. Identifying Key Communicators:
This intervention was used by the company to carefully determine who seemed to be “in the know” within the organization. These people often do not know that they are, in fact, key communicators. The individuals collected by McDonald’s by using this technique was then feed honest information during critical times, one-on-one & confidentially. For Example:
Defining the process of organizational communication policy by McDonald’s such as:
- Introducing Top-Down & Bottom – Up communication approach.
- Introducing Employee Forums & Suggestion Box options to employee interaction.
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Identifying the critical employees in the organization & making them the brand ambassadors of the company. In McDonald’s those employees are known as Award Winners.
7. Identifying Fire able Offenses:
This intervention deepens the understanding of & commitment to the stated value of the organization. This intervention used by the company facilitated the work of the top management to answer the critical question, “If we are serious about these values, then what might an employee do that would be so affrontive to them that he/she would be fired”? For example:
- Publishing & instilling values & beliefs among all employees
- Introducing policies like Whistle Blowing, Sexual Harassment etc.
(Main Theme from Course Notes & Discussion Held with Mr. Ryth Jones (McDonald’s Restaurant Manager), Queens Street Branch – Cardiff, Wales – UK)
d) Identify the benefits & limitations of change management process at McDonald’s (In relation to its structural policies & processes)
Reply:-
Benefits of Change Management Process at McDonald’s in UK:-
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As a result of change management process, a remarkable improvement in profitability of the company has been observed. Since 2006, profit ratio has been continuously increasing & year 2008 has been declared as record tumbling as far as the company product sales are concerned. For example: total sales in McDonald’s UK restaurants in 2007 were in excess of smashing figures of £ 1.6 billion. Comparable sales in UK increased by up to 7.8% in November 2008.
- Food quality & nutritional contents have been very well improved. This improvement came as a result of strong blame on company’s products being unhealthy & greasy with lots of fat contents. Highest standard of quality & hygiene are being now provided to the customers with less salt in all the food products.
- Millions of pounds have been injected by McDonald’s during last few years for the betterment of its employment practices & policies across all of its UK restaurants. These efforts resulted to obtain better employees, better training & career opportunities & above all improvement in the morale of employees.
- Costs of company’s products have been regularly checked & reduced wherever possible. Reduced prices attract a lot of customers & thus resulting in increase in sales & consumption of company products.
- Change process also focused on training the employees in order to improve customer services. Improved customer services can now easily be observed by employees when serving the customers at checkouts.
- Changes have also been introduced by McDonald’s in its marketing strategies towards improved brand sense for its customers. As a result, more & more customers have got better brand sense of company products. Individuals & families are now more comfortable to enjoy their food at McDonald’s due to better product awareness schemes by the company.
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Training & Development is the foundation of McDonald’s success & a vital means of improving the business. McDonald’s in UK was accredited with the prestigious Investor in People (IiP) award in December 1998 & has maintained “Investor in People” status to date. During the change process, McDonald’s specifically remained focus on its training & development program. This confirms McDonald’s position as one of the UK’s leading companies for training & development.
- From April 2007, McDonald’s introduced online job application & recruitment program & with immediate effect stopped paper application process in UK. This change now enables the company to recruit better quality of employees & more number of applications can be scrutinized through online recruitment system.
Limitations of Change Management Process at McDonald’s in UK:-
- Due to presence of large number of ethnicity & diversity among the employees of McDonald’s in UK, company faced reasonable resistance about its change process. The resistance still remains in a patch which is a natural phenomenon.
- Elimination of paper application system by the company is not acceptable at all levels in the community. As all the people do not have access to the internet at all times, thus it is highly recommended that paper application system should also remain alive along with online recruitment system.
- Technological reforms have also been made under change process at McDonald’s in UK. However, certain important activities are still to be entered by managers manually in the computer systems. Due to certain complexity, some times managers make errors during manual handling of the systems.
Approach of McDonald’s Towards Change Process:-
As far as McDonald’s change process is concerned, it can be clearly stated that it is more or less proactive or organic towards change. Since the start of company’s business in UK, it has been able to develop organic structure & proactive behavior internally & externally. It has got fluid structures that are obviously more responsive to change. Company is used to operate in more turbulent / constantly changing environment. Tasks of the company have to be changed with the business & marketplace activities. Surely, McDonald’s have got an environment where knowledge is spread through out organization. Its bureaucratic approach can only be strongly sensed with its policies, rules & regulations. Everyone has to follow laid down policies & procedures well defined by the company.
Conclusion:-
Inspite of all the benefits & limitations of change management process at McDonald’s in UK, still, company feels a lot of challenges a head in the year 2009 & many years a head. I have obtained a New Year message of Mr. Steve Easter Brook (President & CEO of McDonald’s UK) to all stores McDonald’s UK from Mr. Ryth Jones (Manager of McDonald’s Restaurant) at Queens Street Branch, Cardiff – UK, the message very well explained the management planning for year 2009. Mr. Steve Easter Brook wrote:
“I hope that you had an enjoyable Christmas & I would like to thank all of you for your hard work across the last few weeks that made December such a strong finish to a superb year for McDonald’s UK. Throughout 2008 records tumbled. You pulled together to set new record hours, days, weeks & months & deliver the most successful year in our 34-year UK history. All aspects of our business plan performed well in 2008, from our focus on the fundamentals of QS&C, our commitment to an exciting re-imaging program & aggressive extending opening hours, to the execution of our energetic promotional calendar. Quite simply we have created a better McDonald’s.
The year also saw us take important strides towards our vision of becoming a progressive burger company. Our modernizing agenda spread from our restaurants & menu to our people programs & supply chain, with big moves such as awarding qualifications through our training programs to the culmination of over ten years work in supply chain to using only free range eggs across every part of our menu, from McMuffins, to sauces & even coating on our Chicken McNuggets.
Our commitment to franchising also continued. We are now a majority franchised market with close to 60% of UK restaurants operated by our franchises, many of whom have successfully grown the size of their own McDonald’s organization over the last couple of years.
So what of 2009? Forecasts from government, business organizations & companies are consistently negative, ranging from uncertainty to trepidation. There’s no doubt it will be a tough year for our economy & for our customers. When people have less money in their pockets they are even more careful about how they spend it, their expectations become higher & they will reward us for giving them excellent quality at a good price – that is what our 2009 plan is set-up to do.
We have entered this economic downturn in better shape than many businesses & what we have learned together over the last few years as we have turned our business & brand around will stand us in good stead.
Our relative strength means that we can continue to implement our strategy. We will carry on investing in re-imaging our restaurants, developing our people & delivering exciting promotions to improve the McDonald’s experience. We have just launched Little Tasters & our re-branded saver menu & later this week we will announce the national roll out of our Apprenticeships program.
However, we must also recognize that the economic situation will get worse before it gets better. More people will lose their jobs & retailers will not keep offering the levels of discounting that did so much to bring shoppers out to the retail parks & High Streets over the Christmas period.
This uncertainty will require us to be more flexible in our approach, so that we can respond to our customers as they adapt their lifestyles. But we must remain just as focused on the execution of our plan & on our key business & brand metrics such as CSO.
Downturns create winners as well as losers & downturns come to an end. Our job is to make sure that we fully leverage the winning position that we have worked ourselves into and make sure that we emerge from this downturn having further differentiate McDonald’s from ‘the rest’. That is the yardstick that I will be measuring us by over the weeks & months ahead & I am looking forward to the challenge as I have confidence in the resilience of our brand & strength of our collective team”.
(Own Analysis in Lieu of my discussion Held with Mr. Ryth Jones (McDonald’s Restaurant Manager), Queens Street Branch – Cardiff, Wales – UK)
Task 2:-
a) What systems McDonald’s had in place to implement change management process. Develop an understanding on how McDonald’s had involved its stake holders in the process of change?
Reply:
Stakeholder Engagements at McDonald’s:-
As a local business involved in communities around the world and, at the same time, a global food retailer, McDonald’s touch a wide variety of stakeholders in a wide variety of ways in the process of change management. Key stakeholder groups include McDonald’s customers, McDonald’s employees, McDonald’s owner/operators, McDonald’s suppliers and its shareholders. Company also engaged with certain non-governmental organizations (NGOs) that specialized in corporate responsibility issues, scientific researchers and practitioners in areas affected by its business, local community organizations and government policy-makers. McDonalds worked in different ways to understand the views and priorities of these constituencies and to build ways of communicating with them during its process of change.
Essentially, McDonald’s seeked to learn about stakeholders’ interests, concerns and expectations for its business, to inform them about what company had been doing and why and to gain feedback it could use as guidance for change. In some instances, company communicated to them or them to McDonald’s. Company issued a report like this. Stakeholders called or wrote to tell McDonald’s what they thought about change process. In other instances, there was direct dialogue and negotiation or collaboration on some specific issue – for example: the sitting of a new restaurant, or company sponsorship of a community program. In still other instances, McDonald’s worked with stakeholders on an ongoing basis to develop and assess priorities, policies and procedures. McDonald’s supplier councils, owner/operator leadership councils and owner/operator diversity organizations are all examples of such collaborations, as are the advisory councils discussed below.
Stakeholder Approach in Change Process:-
Customers:
- Day-to-day contacts at the restaurant level
- Opportunities to initiate contact (toll-free numbers, e-mail facilities on websites)
- Focus groups
Employees:
- Staff meetings at work unit level, e.g., restaurant, corporate department etc.
- Closed-circuit “town hall” meetings
- Intranet sites
- Employee satisfaction surveys
- Works councils and similar organizations
Owner/operators:
- Local or regional joint owner/operator and corporate cooperatives or councils
- Participation in owner/operator leadership council meetings
- Participation in meetings of owner/operator diversity organizations
- One-on-one consultations with owner/operator leadership
- Intranet sites
- Restaurant operations consultations and other one-on-one contacts
Suppliers:
- Direct contacts with supplier representatives
- Supplier council meetings
- Training workshops for suppliers
- Contacts with representatives of producer trade associations
Shareholders:
- Conference calls and webcasts
- Annual reports
- Proxy statements
- Shareholder meetings
- Corporate website
- Investor Relations Services Center
- Formal and informal meetings with investors and analysts
Local communities:
- Direct contact with community representatives
- NGOs
- Formal collaboration agreements
- One-on-one direct contacts
- Service on governing bodies and task forces
- Scientific researchers & practitioners
- Periodic advisory council meetings
- Direct contacts with advisory council members and other experts
- Participation in conferences, workshops and the like
Trade associations:
- Participation in meetings, conferences and task forces
- Service on Boards of Directors, issue working groups and the like Government policy-makers
- Issue-specific direct contacts
- Participation in government-sponsored workshops and consultations
- Participation in meetings of government advisory bodies
While McDonald’s worked to develop programs responsive to key stakeholder interests, company also seeked to exercise leadership in its industry and off course to promote changes that could not be achieved alone. Thus, an important element of engagement for McDonald’s was active involvement in company’s trade associations, voluntary self-regulatory organizations and other business and industry groups. McDonald’s also worked with producer trade associations, served on government advisory committees and participated in a variety of consultations, conferences and workshops during its change process.
For example, in the U.S., McDonald’s represented on the Boards of Directors of the National Restaurant Association, the National Council of Chain Restaurants and the Children’s Advertising Review Committee. In Europe, McDonald’s were a founding member of the European Advisory Councils.
(Own Analysis in Lieu of my discussion Held with Mr. Ryth Jones (McDonald’s Restaurant Manager), Queens Street Branch – Cardiff, Wales – UK)
b) Explain the advantages & limitations of participative methods of change management.
Reply:
Overview of the McDonald’s:-
Vision Statement:-
“McDonald’s vision is to be the best restaurant experience…. by far, to be people focused & customer driven…. passionately, & to inspire people with our can do attitude….. always!”
Mr. Steve Easter Brook (President & CEO) in its 2009 New Year Message to all McDonald’s Restaurants summarized the vision statement as “Vision of becoming a progressive burger company”.
McDonald’s has a rich history that started out in 1954. The company was put to the spotlight by Ray Kroc. Throughout the years, marketing ideas have poured through and helped the company become one of the most renowned fast food brands globally. The trademark design for the fast food was carefully studied and it came with a happy clown character known as Ronald MacDonald (McDonald Corporation Press Release 2006). The Big Mac and the Egg Muffin have been some of McDonald’s most innovative products. In terms of marketing, the happy meal approach was also a creative as it entices children to eat at MacDonald’s because of the toys they can get. Today, McDonald’s is also on the Internet bandwagon, providing information to people all over the world with a click of a mouse (McDonald’s Corporation Press Release, 2007).
As mentioned, McDonald’s operates a total of 30,000 fast food restaurants around the world in 119 countries including UK. The first McDonald established in UK, opened in October, 1974.
From then on, the company has been working to integrate the employees of UK into the workforce of McDonald and became an essential part of communities in which it is located. McDonald is also known to provide UK clients with the great experience which they have come to know and love.
So Far by 2008:-
In February 2008, the company was announced by the Prime Minister of UK as one of the only three employers granting official awarding body status by the Qualifications & Curriculum Authority, meaning that the in-house qualification that restaurant managers gain at McDonald’s will count towards academic qualifications such as vocational diplomas or even degrees.
Operations;-
- By the end of 2007, 1,191 restaurants were trading in the UK.
- 606 of these are run by the franchises & 585 are company owned.
- McDonald’s serve around 2.0 million people per day in the UK.
- By the end 2007, McDonald’s employed 35,568 people: 33,500 restaurant staff, 1,592 restaurant based management & 476 office staff. Over 31,000 more were employed by McDonald’s Franchises.
- Payroll & related costs for company-operated restaurants to the end of 2007 were: restaurant staff –nearly £278 million, restaurant management - £56 million & office staff - £44 million. This represents a total payroll budget of £352 million.
- McDonald’s is an equal opportunity employer. At the end of 2007, the ratio between male & female staff was 55:45.
- The McDonald’s Management Development Curriculum takes new recruits from trainee manager to restaurant managers. This consists of on-the-job training & opens learning development modules, backed up with courses & seminars at the company’s national & regional training centres.
- Food & Beverage is provided for around 2.0 million people per day in the UK.
- The UK’s supply chain expenditure is more than £430 million.
- McDonald’s menu concentrates on five main ingredients: beef, chicken, bread, potatoes & milk.
- All McDonald’s restaurants work to standards which meet or exceed those required by legislation. The company always aims for the highest ‘best practice’ standards given in the guidelines for Building & Health & Safety regulations.
- Management training includes coping with emergency situations that could arise in a restaurant in order to minimise the risk of injury to people & damage to buildings. The company Accident Procedure Guidelines require the manager to document the incident and, where appropriate, carry out an investigation. The Hygiene & Safety Department closely monitors all such matters.
Benefits of Change Process at McDonald’s UK:-
Despite of the established brand of McDonald’s Corporation and contrary to its previous achievements; it seemed there was a need for the management to redefine its image. The current growing and bustling population is obviously different from the population of the previous decades in terms of health and nutritional attitudes and behaviours (McDonald’s 2005). Today, People are more concerned with their health and figures than ever before. Obviously, the reason for this increased awareness is because of the fact that information is everywhere and every reports and research about diet seem to link fast foods with the growing number of fatness. Furthermore, there is also a number of emerging diet programs that promote and encourage the public to be figure conscious. This would be a problem for McDonald’s because it has already gain the reputation of a fast food that continuously provides greasy unhealthy food while competitors have already made measures to reduce fats in their products. The company needed to do something about and shift its positive image back. This called for a new integrated marketing communication plan that should be appealing to current customers. The campaign in a change process made the McDonald’s brand as something that is now irresistible then followed with the information that its products are already health friendly. In this approach, positive changes were made. As the management realised these innovation or needs, McDonald decided to implement such changes the soonest possible time.
McDonald's restaurants started offering a substantially uniform menu, common in the usual fast foods. This included hamburgers, cheeseburgers, chicken sandwiches, French fries, salads, milk shakes, desserts and ice cream sundaes. The company’s top sellers, and can also be considered as innovative ones, include the Big Mac, Quarter Pounder with Cheese, the Filet-O-Fish and Chicken McNuggets. The customer target of McDonald’s is usually children or young people. In change process, McDonald’s entered the children’s wear market. The new McKids products include footwear, videos, toys and casual clothes. Along with that, company has also been introducing new products on regular basis such as Salad Plus & most recent introduction i.e. Menu Saver (99p). As a result of those changes, McDonald’s declared year 2008 “Record Tumbling Year for Sales & Customer Attraction”. Company declared year 2008 as most successful in its 34 years history of UK market.
McDonald’s change process in modernizing agenda, menu to the people programmes & supply chains, big moves towards awarding qualifications through training programmes etc, over the period of 10 years, has eventually made McDonald’s the most popular fast food brands in the world. Started out in the fifties, McDonald’s through its change process boasted its operations, franchising, and serving techniques. As a result, image & sales have been remarkably enhanced.
Another scope of change process for McDonald was the implementation of Integrated marketing Communication (IMC) as part of the marketing strategy of the company. In this innovation, the critical area that had been given attention is the advertising and promotional campaign of the company. Generally, advertising or promotional campaigns are regarded as an open sponsorship of offering products, services and any ideas through the use of any mediums of communication. In this regard, there were different kinds of media which were used for advertising and promotional campaign purposes. Basically, in this new IMC theme, the focus was heavily on advertising and sales promotion. Specifically, this change gave emphasis on the Integrated Marketing Campaign (IMC) as part of the marketing strategy of the company.
Integrated Marketing Campaign aimed to adapt a new health-conscious sub-image that would be consistent with the latest trend of health awareness and the growing concern in obesity among children and target market. In addition, its goal was to introduce the adaption of a new, separate low-fat menu for children, intended to counter the growing bad publicity being thrown at McDonald’s. The company was also aware that this kind of strategy which gave importance to the health of consumer would effectively inform both parents and children about the nutritional value of new, called’ McKids Meals, and how they are different from the traditional McDonald’s meals. In addition, the innovation of Integrated Marketing Communication that was implemented able to provide an effective advertising and public relations campaign that successfully introduced altogether the new McDonald’s to the public.
In order to execute such innovation, the company has been able to organise a team that would handle all the essential matters related to change process. Change process also introduced better recruitment & training program by the company. The entire recruitment process has now become online & through internet. More investments were made on staff & management training programmes to ensure excellent product delivery & customer service.
Further, the company also placed the nutritional content of their meals with the McDonald website. The focus of this change has been on the sale promotion and advertising, not to mention other marketing mix which has been included to make this innovation or change successful. Today, McDonald’s varieties of menu for kids had faced criticism, most especially in terms of its nutritional contents. In order to change the public image of the McDonald, the Integrated Marketing Communication has been implemented. Integrated Marketing Communication is a technique for ensuring that a company’s mission and vision is being highlighted in every advertisement or promotion that will be adapted.
View point policy was introduced by the company for entire staff members considering an important aspect of its change process. Under this policy, a staff always gives strong feed back & point of view including suggestions to company regarding all aspects. This enables the company to produce better results in all areas of its operations.
Limitations of Change Process at McDonald’s UK:-
It cannot be denied that changes attract different conflicts before, during and after its implementation. These conflicts, limitations or resistance are attributed as the main reason why changes can be successful or just a failure. These will lead into failure if the management of the organization does not employ solutions to avoid or totally prevent such conflicts and it will lead to success if such conflicts will be given enough attention and proper solution. Thus, the managers need to have the necessary abilities not only in detecting what needs to be changed but also how to introduce the change effectively.
The changes have been implemented for enhancing the promotional and advertising campaign of the company and to make the company more competitive and adjust the organization to the existing changes emerging with its internal and external environment not bring it to its downturn. With the change management process implemented by McDonald, there are certain resistance or conflicts that have been encountered.
The following are resistance faced by McDonald: Perception or reaction of McDonald’s employees and customers, McDonald’s organizational culture and absence of support.
One of the resistances that occurred was the reactions of the company’s employees and or customers. Although there were employees who were in favour of the changes for example in using Integrated Marketing Communication, some employees and managers were not in favour for such implementation. Some managers and employees resisted the changes because of the fear that it won’t help the company with the problem or it may worsen the problem. In addition, the people that implemented the Integrated Marketing Communication did not have enough knowledge to resolve the malfunctioning of said approach.
Moreover, due to the fast paced of technological advancement nowadays, specifically in the information technology, the computer units put in the offices of the company were depreciated as part of the marketing campaign technological facilities as time went on, thus added to bigger problems.
The employees were not the only one who could have negative perception for the change within the organization, the customers of the company might not have a positive reaction towards the new campaign, thus leaded to another conflict, since the clients were not quickly be able to cope with the changes and resulted of not achieving the core objective of the change for McDonald as a whole.
Another resistance was that the company had shortage in their qualified personnel that would sustain the implementation of the changes especially employees who were assigned for maintenance crew who were responsible for maintaining the capability of the marketing communication approach.
In strategic implementation of the innovation there are barriers and enablers which are attributed as the main factors for the success of the implemented changes or not. Barriers may include different resources which may not be available for the innovation process. These include the organisational or stakeholder resistance to change, shortage in financial budget, ineffective used of communication media.
One of the conflicts that rose in the implementation of change in an organisation was the absence of support in sustaining the success that could be achieved in the process.
(Own Analysis in Lieu of my Discussion held with Mr. Ryth Jones (McDonald’s Restaurant Manager), Queens Street Branch – Cardiff, Wales – UK)
ASSESSMENT SCENARIO TWO
Task 1:-
a) Prepare a report on how the organization is coping with change. Comment on the planning & implementation of TWO changes which have occurred in the organization.
Reply:-
I started my first job as Business Development Manager in the company by the name & style of Salman & Associates, Islamabad, Pakistan in year 1999 till 2003. The company was established in year 1988 as Importer, Exporter, Trader & General Order Suppliers. The company has been operating in a very sound position in its marketplace for the last 21 years now. However, it has gone through various good & bad patches during all those years. Off course, in order to survive that company had to cope with the changes during all those years of its existence.
Change is an unending & on going process. In order to survive on the long terms basis, organizations have to adapt changes as & when necessary in order to ensure their existence. Same remained the case with Salman & Associates from the time of its establishment till to-date. In order to be a strong entity along with its competitors in the market, the company adapted following two approaches to its change processes:
- Structural Approach to Change.
- Technical Approach to Change.
Structural Approach to Change:-
Structural changes are those sorts of changes that relate elements of organization to one another. These include removing or adding layers to hierarchy, Downsizing associated with restructuring. Changes also can involve decentralization & centralization.
Technical Approach to Change:-
Technical changes involve changes in machinery, methods, automation & job design. These changes help companies become more productive.
In the light of those two change approaches used by Salman & Associates, I shortlisted major changes in organization between 1999 to 2003 as follows:
- The boom of the company literally started in 1999 & it’s still in the boom stage. As a result of this progress, major change has been observed in the expansion of management of the company. In 1999, company was operating only with 05 persons. The strength has now increased up to 30 persons at different management levels. For example: I started the job as Business Development Manager, I left the company in 2003 as General Manager.
- Company remained sole proprietor till year 2001. However, with progress, company changes the status to private limited concern in 2002. At the same time, due to intense competition in market, company also made certain partnership alliances in order to remain at the top level.
- Due to globalization, Salman & Associate stepped into international market in 2002. Company started its operations in Doha, Qatar in 2002 & subsequently operations were also resumed in Europe by opening branch in England in 2003 which was later shifted to Spain in 2004. This important change & its implementation allowed company to trade & do business in international markets & thus resulted in high sales & profits.
- Several new employment practices, policies & employee welfare schemes were introduced by the company such as code of conducts, pensions, provident funds etc.
- Human Resource department was established in 2002. As a result new job designs were introduced in the company. Online recruitment system was also functionalized in 2003 for selection of better employees for the company.
- Technological advancement also forced changes in organization. E-Commerce facility enabled the company to trade online both on national & international sectors. Company constructed dynamic website in 2003 which enabled company to communicate not only with customers but also used it as an important tool of information sharing.
- Operations of the organization have become centralized in 2003. Since then all of its nationwide & worldwide offices are operating as one unit. As a result, efficiency of the entity has been increased remarkably well.
- Due to company’s good reputation about its products & services among the customers, it is always now focused towards excellent customer services strategies in order to attain highest level of customer satisfaction.
Structure of Salman & Associates:-
The structure of the company was organic in nature. Company was always responsive to change for progression. Company’s tasks had been kept changing on regular basis as per market trends & demands. Being a trading concern in technical nature, all staff members were immensely knowledgeable & hence knowledge was spread through out the organization.
(Own Analysis & Guidance from Course Notes)
b) How did they develop & adapt various models of change? Are they appropriate? Comment on two situations under consideration.
Reply:
There are various models of change are established over the period of time. Every organization can develop & adapt any of those models in change process according to the individual circumstances. Few important models of change which can be used during change management are as follows:
- Organizational Development (OD)
- Business Process Re-engineering (BPR)
- Total Quality Management (TQ)
- Delayering & Right-Sizing
I have shortlisted two organizations for the said topic in order to expedite a brief report about adaptation of different models of change as and when required by them.
The first organization was Top Trade Limited, Lahore, Pakistan. I worked as Manager Administration with this company for two years from November 2006 to October 2008. When I joined the organization, it was in a recession phase due to certain circumstances. In those situations, management of the company including me decided to develop & adapt the Business Process Re-engineering (BPR) model of change. The main characteristics were as follows:
Business Process Re-engineering (BPR):-
BPR has four basic key components: Business Processes, Management & Measurements, Jobs & Structures, and Values & Beliefs. BPR is considered to be a much more ‘top-down’ managed form of change. BPR is best defined as:
“The fundamental rethinking & radical redesign of business processes to achieve dramatic improvements in critical, contemporary measures of performance”.
For clarity, it is appropriate also to define what BPR is not. BPR is not automation, restructuring or reorganisation, or delayering although these may be consequences of a BPR exercise. It is also helpful to consider why Top Trade Limited contemplated BPR given its radical nature. There were three probable reasons:
- The business was failing & there was no option but to invoke radical change.
- Business difficulties were foreseen & pre-emptive measures were deemed necessary to avoid business failure.
- The organization, rather than ‘resting on its laurels’ wished to build on its success & invoked radical change to widen its lead over the competition.
There were also a number of significant supporting factors & explanations:
- Other initiatives such as streamlining, automation, the resolution of identified existing problems or the continuous minor improvements had not delivered adequate business advantage.
- End-to-End delivery became too complex & too time consuming with too many people involved (& therefore no-one considered to be accountable), too many hand-offs, & too great a need for bureaucratic control.
- Classical business structures that specialised work & fragment processes were self-perpetuating because they stifled innovation & creativity in the organization. They also demanded the excessive layers of managerial hierarchy in order to draw together fragmented work. These rendered it difficult to introduce new work practices.
- The business world has been rapidly changing, highly competitive & customer-driven & current methods were introspective rather than customer facing.
The Four Cornices of BPR Considered by Top Trade Limited:-
1. Business Processes:
The essence of BPR for Top Trade Limited lied in the adaption of a ‘process orientation’. The characteristics of such an orientation were:
Cradle to Grave: Whether the organization was concerned with products or services or both, process orientation demanded that the delivery process negates organizational boundaries. Thus, the vertical functions of design, manufacture, distribution & sales required to be replaced by the single, comprehensive & cross-functional process of ‘delivering the product’.
Multidimensional: Cross-functional working in organization required combining many tasks into one job or process, & in so doing, eliminated hand-offs, reduced administrative overheads associated with controlling the previous fragmented steps & provided a single point of contact for process-related queries.
Multi-Variant: As required, multi variants of single process should have existed rather than a single standard & potentially unduly complex approach. Variants are needed to be tuned to customer needs.
IT-Enabled: IT represented a solution looking for a problem in that there was a great encouragement of the examination of new technologies & subsequent identification of problems they might address.
Continuous Improvement: BPR recognized continuous improvement in the form of process maintenance & continual re-examination & redesign of processes which, with time, once more became fragmented.
2. Management & Measurements:-
The achievement of a process orientation demanded:
Process Mapping: Existing processes were process-mapped to establish what currently happens & why, that was, to develop an understanding of current process.
Prioritisation: Those processes which represented the fundamental core of the business were identified & prioritised for re-engineering based upon which were obviously broken i.e. exhibited symptoms of failure or gross inefficiency, which were of the greatest importance to the customers, and which were the most feasible to re-engineer i.e. offered the greatest profitability of success.
Benchmarking: World-wide cross-industry process comparisons were then be used to establish ‘best practice’ & provided a possible basis for process re-design.
Blue-Sky Thinking: The results of benchmarking were integrated with blue-sky thinking. This was the reinvention of the total process & deliberately disregarded current practice & norms.
Process Ownership: Each new process was implemented & a ‘process owner’ was appointed. This individual, who was generally of senior status within the company, took responsibility for the process & its ongoing maintenance.
In the process re-engineered environment there was:
Workforce Empowerment: Employees were empowered within a framework of performance measurement. Process-team working enabled members of the workforce to make managerial decisions & within the process & the combination of autonomy with measured performance provided accountability.
A Managerial Coaching Role: The consequence of such managerial empowerment by the company was that management adapted a new leadership role – that of coach. Their concentration was upon the issues of motivation, which was fuelled by the employee’s knowledge of performance measures against which they were assessed & of reward through revised compensation systems.
Jobs and Structures:-
The results of BPR in this regard were typically the following:
Flat Structure: Flat structure was adapted, a process rather than functional orientation, which together with process-teams performed managerial functions, reduced bureaucracy & the requirement for complex, multi layer managerial hierarchies.
Whole-Process Teams: Traditional departments in the organization were replaced by groups of individual who had the wherewithal to compete a whole process. Typically, this demanded greater multi-skilling of individuals & consequently improved the aspect of job satisfaction in the company.
Virtual Teams: Effectively, the individual’s time was divided (in respect of areas of work involvement) rather than the component parts of the process.
Lateral Career Movement: Though flat structure implied less vertical opportunity for career development. However, as a result, individual jobs were of increased dimensions & thus more fulfilling in the company. Mastery necessarily took longer to achieve & lateral moves were likely as individual’s seeked to broaden their areas of process expertise.
Job Specification: Job descriptions became comprehensive & included details of required level of key competencies such that increased objectivity & accuracy could be applied to selection & appointment processes.
Performance Measures: Job descriptions also detailed the performance measures against which jobholder would be appraised.
Education: Knowing ‘how to’ (Skills training), while important was placed along side ‘knowing why’ in the process-orientation by the organization.
Elimination of Checking: Checking & auditing elements of the jobs were largely eliminated. BPR recognised that costs of ‘policing’ can quickly become disproportionate to the cost of producing the product or delivering the service itself. The need for checking and reconciliation was also minimized by the company by reducing the number of hand-off points.
Values & Beliefs:-
Creating & sustaining a process orientation in the Top Trade Limited demanded:
Living the Values: Senior management lead by example in Top Trade Limited in this regard. For example: by demonstrating the notion of being customer-facing by spending appropriate amounts of time with customers providing, & receiving, feedback on service.
Employee Beliefs: Genuine belief throughout the workforce was developed that every individual’s job is vital & the team working was the only sensible approach to value-adding operation.
Remuneration Expectations: An explicit, and thus culture-shaping, relationship between customer service & remuneration directly linking the extent to which one maximizes the satisfaction of customers to salary & bonuses. In BPR process, Top Trade Limited typically operated flat salary structures since jobs were graded in accordance with competency demands & earnings fluctuations resulted only bonuses paid for exceptional performance at managerial discretion.
Conclusion:-
I think BPR model was most appropriate for Top Trade Limited. In BPR, almost majority of the change process decisions are made by Top Management of the organization. Thus, they are also liable for any success or failure. As this company is governed mostly by people at top management, thus they adapted BPR to make the decisions at their own & in the best interest of the company. BPR implementation not only increased the efficiency of an organization but also enhanced the position of enterprise in the marketplace.
Total Quality (TQ):-
This model of change was developed & adapted by the organization operating by the name of Integrated Business Services (IBS), Karachi, Pakistan. In said company I was worked as Manager Sales & Marketing from June 2003 to August 2004. The company is the top rated production & manufacturer house of various technical products including aerospace materials. TQ change model was used by the company in January 2004. The Brief description of the model is as follows:
TQ comprises change invoked through four key components: Systems, Processes, People & Management.
TQ is best defined as ‘meeting customer requirements’ in a context in which every individual in the organization is a customer of the process preceding their own, & a supplier to the process succeeding their own. Thus customers are internal to the organization as well as external.
Additionally ‘TQ is a competitive concept because it is concerned with being the “best”, where “best” is defined by the market place rather than by the product or service provider & the best companies will achieve the level of superiority that is usually high’. Customer focus is the essence of TQ.
The Four Pillars of TQ Adapted by IBS:-
TQ is often perceived as being a very soft or informal method of introducing change in an organization. In reality, TQ is a very rational technique which is driven by hard statistical evidence of the need for change & for systems & processes to support both the change & the ensuing operations. These four pillars were utilized by IBS in TQ process as follows:
Systems:-
The need for change was identified in IBS in a number of ways, most notably:
Statistical Process Control: This process was utilized by the company as this is related to the accurate &continuous measurement of quality & is typified by the measurement of frequency of failure – how often & where concentrated & the analysis of cause & effect.
Benchmarking: TQ demands the identification of best practice (for each process on an industry & preferably worldwide basis) recognising that best practice is only best until someone else begins to do it better. Thus content monitoring & awareness of best practice was demanded in IBS TQ process.
After the change was taken place in this regard in IBS, the quality operations were supported by:
Quality Control (QC): While often confused with post-production inspection, QC is, in fact, the generic term for ongoing statistical measurement of quality. It thus implied to IBS: the application of preventive controls intended to pre-empt defects & failures by trend monitoring.
Quality Assurance (QA): is preventive. QA entailed the provision of documented procedures to IBS ensuring design, development, & operations resulted in products & services which met customer contracted requirements of the company.
Fool Proofing: It is a further system adapted by IBS for preventing defects & failures. Typically IT-driven, fool proofing uses computer systems to monitor processes. These were used by IBS, for example: alert machine failures, which, whilst not stopping the process, would otherwise result in substandard products.
Processes:-
TQ regards every activity of an organization as a part of a process. In so doing, it encouraged the constant review of processes of IBS in three ways:
Project by Project Improvement: Being TQ Company, IBS promoted & facilitated the concept of continuous, incremental improvement through out the organization. Indeed, in IBS, TQ implied the use of a discipline & structured approach to project by project improvement activities where the goal was to achieve a faster rate of improvement than any other competitor or rival.
Waste Elimination: The elimination of waste can only be effectively achieved if the volume of waste is known. In IBS, this was achieved by statistical process control. This was, for example, used to measure defective products written-off or customer complaints in a service environment. TQ differentiates between inspection & failure (QC) and prevention (QA). In company, it recognised that ‘it does not matter how much you inspect a bad product, it will not make it any better & all inspection does to a good product is to add to its cost. TQ defines failure in terms of rework, modification, high inventory (because of inefficient production processes), product recalls, customer complaints, etc & promotes the conversion of effort expended on inspection & dealing with failures into time spent on preventive measures.
Process Chain Re-engineering: This concept in the company revolved around the roles of individuals & groups being seen not only as that of customer & suppliers but also that of a ‘processor’ who discusses his own needs with his suppliers & is fully aware of his customer needs such that those interactions which were critical to high performances were identified by the company.
The two outcomes which IBS achieved process improvements were:
- Just in Time Production (JIT)
- Total Production Management (TPM)
People:-
IBS always valued their employees both as individuals & for their contribution to the growth of the company. The value placed on the quality of individuals was demonstrated by the company in the number of ways:
Individual Ability & Attitude:
Recruiting the Best: Where best implies the highest calibre of staff at all levels. Integrated Business Services (IBS) always strived to earn themselves a reputation which attracted the best school-leavers & graduates.
Life Long Learning: IBS always recruited a high standard of employee. Company then commended to them the concept of life long (continuous) learning. Employees were encouraged to explore various means of continuing their university education in academic, personal & job-related skill terms. Line managers were expected to coach their subordinates & to act as mentors as required.
Elimination of Specialisation: TQ processes slice horizontally through organizational structures. IBS did not favour the specialisation which tends to create vertical divisions & introduces jargons to the extent that a ‘common language’ ceases to exist within the organization. Company also believed that specialisation encourages short-termism both on the part of the individuals who would tend to seek career opportunities in their own field, & of the employer who, knowing this, is reluctant to invest in employee education & development.
Attitude Surveys: These represent a further form of statistical measurements. Attitude Surveys were used within IBS to determine, and, consequently, addressed the issues & attitudes of the workforce.
Contribution:-
Suggestion Schemes: IBS culture was very receptive to employee suggestions for improvement & always used to reward good ideas.
Quality Circles: TQ advocates the notion that management must address the major problems & strategic issues but that only the workforce as a whole can identify & address the hundreds of minor inefficiencies, problems & opportunities for improvement. It is appreciated that these minor issues probably represent 80% of all problems & that while they may only account for 20% of problem-related costs, there is a tremendous spin-off benefits in terms of employee morale & motivation achieved by facilitating their involvement. Quality Circles policies adapted by IBS, in which small groups debated ideas for improvement & progressed their implementation (once approved at higher level) provided the forum & were often regarded as the power house of company’s TQ change process.
Management:-
The TQ environment must be stimulated by the values, attitudes & actions of management at the highest levels within the organization. Line managers at Integrated Business Services (IBS) were expected to believe in & demonstrate commitment to maintaining the TQ culture of empowerment, involvement & continuous improvement.
At board level, this involved:
Vision & Mission: Setting & communicating, in terms comprehensible through out the company, a vision for the future & a series of stepping stones to that vision towards the achievement of which all were contributed.
Critical Success Factor (CSF); The ‘Mission Statement’ of IBS facilitated the establishment of CSF’s. These were goals or targets, the achievement of which indicated a step towards the achievement of the overall vision of the IBS. These goals or targets provided a frame work & direction within which continuous improvement activities were progressed.
Organization for Quality: Providing through facilitative steering groups or a Quality Council, a structure adapted by IBS which allowed Quality Circles to flourish & proposed improvement activities to be implemented in a co-ordinated manner which accords with the previously defined CSF’s.
At all Managerial Levels in IBS, Maintenance of TQ & TQ Culture involved:-
Project Identification: Taking responsibility both for identifying & for facilitating the identification by subordinates of improvement projects & being prepared to ‘own’ them.
Championing: Demonstrating commitment to the corporate vision & actively promoting improvement projects.
Empowerment: Developing power & authority to staff & providing coaching in order that, in due course, they become able to manage their own daily activities.
Recognition & Celebration: Recognising & celebrating contribution & success.
(Own Analysis & Guidance from Course Notes)
Bibliography:-
1. Courtesy to Mr. Ryth Jones (McDonald’s Restaurant Manager), Queens Street Branch – Cardiff, Wales – UK
2. McDonald’s Corporate Fact File Updated as at 31st December 2007 & March 2008
3. Robert A. Paton & James McCalman, Change Management – A Guide to Effective Implementation (SAGE Publication Limited, Second Edition, 2000) ISBN: 0 7619 6498
4. Colin Rye, Change Management – The Five Step Action Kit (Kogan Page Limited, Revised Edition, 2001) ISBN: 0 7494 3380 9
5. Jeff Davidson, Change Management (First Edition, 2002) ISBN: 0-02-864217-1
6. Own Research and Analysis
7. Course Notes
