The leak lasted from April to August 2010. “The US government stepped in and estimated to be nearly five million barrels of oil leaking daily” (Arnald, 2010, para. 1 ), which makes this the largest accidental oil spill in history. By mid-July, BP's costs of responding to the “spill had reached nearly $4 billion; BP agreed it would pay all costs associated with the oil spill. United States President, President Obama made BP put $20 billion down payment into an escrow account to help pay for the cleanup and damages”(2010, para. 3). Regardless of the out-of-pocket costs, the long-term damage to the company's reputation is tarnished and possibly, any future prospect for drilling in the Gulf of Mexico is likely to be far higher, according to industry analysts.
In the months following the Deepwater Horizon oilrig explosion, BP failed to communicate. Communication is essential to gaining all the support in order to recover from crises like this. Stakeholders and the public felt betrayed, because BP tried to smooth over how serious the oil spill was. BP underestimated the volume of the spill while overestimating the capability of the company to plug the hole. After a while, BP finally released accurate information regarding the spill. BP management created an image of incompetence. In order for BP to recover and make a comeback they have to do some serious management and leadership changes. BP also, has to come up with a whole new marketing concept and image makeover.
GMC
The General Motors Corporation (GMC) is involved with many sectors in the automobile industry. Its primary function is manufacturing automobiles and trucks. General Motors is headquartered in the industrial city of Detroit, Michigan. In 2010 GMC fell into financial hardship. The financial hardship became serious enough that GMC had to ask the United States government to bail the company out in order for GMC to continue to operate.
The Government was hesitant to bail out GMC, but they realized that was the best thing to do in the current economic recession (King, 2009). The difficult decision saved as many as 3.3 million jobs when the unemployment rate is hovering around 10 percent, according to the Economic Policy Institute.
General Motors worked fast and hard; GMC knew that they need to make changes starting at the top. After receiving the bailout money, “GMC paid its $5.8 billion dollar bailout loan back to the U.S. Treasury and Export Development Canada within one year” (Whitacre, 2010, para. 1).
Following the initial crisis, the bankruptcy, and bailout, GMC has emerged as a better and stronger company. According to the Wall Street Journal, GMC released a statement saying, “We have eight new members on our 13-member board of directors. Twelve of the top 13 senior leaders are new to GMC (from places outside the industry such as Microsoft and AT&T) or in new jobs at the company. You can feel a renewed energy and commitment at GMC. Our new vehicles are generating sales, and these sales are allowing us to make investments and create jobs.”
Delta
The airline industry is highly competitive. Delta faces significant competition with respect to routes, services, and fares. From regional jet operators, Delta is dealing with competition in smaller to medium-sized markets. Low cost carriers, including Southwest, AirTran and Jetblue, in the United States have exerted significant competitive pressure on the company and other network carriers in the domestic market.
Delta identified its weakness and focused on a strategic merger to expand its business. In October 2008, the company completed its merger with Northwest Airlines. The merger allows Delta to improve services for customers and achieve its strategic objectives. The increase in revenues will be because of the inclusion of Northwest's operations, fare increase, pricing, and scheduling initiative and increased service to international 378 destinations in 66 countries (Datamonitor, 2010).
Delta’s weakness is an overdependence on the North American market. The political situation of the country is that the company derives about 66.4% of its revenue from North American market. A higher dependence on the weak North American market will hinder Delta's efforts to boost its top line. Therefore, with the merger, Delta is well position to capitalize on the growing the United States regional airline industry.
Delta Air Lines Inc. chose to invest in a multibillion-dollar customer service system that addresses the flight delay problems experienced by 20% of its passengers. Although some companies may think the move was excessive considering 80% of customers have no problems, Delta believed customer service was an important area for increasing market share and that competitors could pose a threat if Delta didn't address the problem. Delta has chosen a planning tool to view the internal factors as strengths or weaknesses.
Sears Holding Company
Kmart and Sears merged in March 2005. The new company name after this merger was Sears Holding Company (SHC). Kmart and Sears both suffered from brand identity and declining profits. The internal growth from both companies was weak as well. The merger was an effort to reposition them in the highly competitive market (). The new organization would have long road ahead of them with three separate concerns: competition, synergy and culture. Much like the simulated company Crys Tel in the class, SHC had to uncover their opportunities so that they could effectively address them to move forward. Twelve separate merger teams were created to assist with this process.
Considering competition, this merger made SHC the third largest domestic retail giant. This alone provided a better combination of products, services and locations(Berner, 2008). With Kmart’s previous hedge in the consumables market, expanding the Sears Grand concept will come to fruition. Creating these new store formats and being selective about which brand to put on the building will help this retail giant begin to see profits and increased traffic.
The employee synergy through the process is low. Employee resistance was inevitable. This was a large task and needed multiple teams predicting behavior, communicating changes and implementing processes. Both companies have been historically accused of delivering inconsistent messages and having a lack of vision (Rahman et al. 2007). Combining these two entities with similar negative traits seems like an unsuccessful combination.
Blending the two separate corporate cultures will be another huge feat for the merger specialists to provide substantial input on. “A great deal of learning curve benefits can occur if Sears and Kmart actively learn the best practices of each other” (Rahman et al. 2007, para. 7).
Ben & Jerry’s
Since the grand opening in 1978, Ben and Jerry’s has survived many forces of change to its original model of a business created by two college dropouts with hunger for something more in a business than a profit and desk. Their first year of sales was in excess of $180,000 which was twice what they had projected. With this explosive entry into the market came its share of issues. Productivity, technology, distribution and talent management were all early and continuous matters for the two guys at the helm. Adapting Lewin’s model for change (Kreitner & Kinicki, 2003), Ben and Jerry initiated, managed and roughly stabilized the company through the growing years.
To answer the productivity concern, Ben and Jerry directed terminations for underscooping and slowscooping ("Ben and Jerry's: the inside scoop," 1994). A standard of production was set and if that could not be attained; the employee was eliminated.
For the technology and distribution concern, Ben Cohen had an answer. “That's when he came up with the idea of packaging the ice cream in pint containers to sell to supermarkets and grocery stores. It was an idea ‘that transformed the business’” ("Ben and Jerry's: the inside scoop," 1994, p.113). On the package included a blurb about how their technology made their product better. “With our specially modified equipment, we stir less air into the ice cream, creating a denser, richer, creamier product of uncompromisingly high quality” ("Ben and Jerry's: the inside scoop," 1994, p.113).
As for talent management, that was a big concern when the plant was moved to a larger facility in 1985. The new facility was located in a small rural community that different offer a variety or number of employees. They had to lure employees into the area from larger metropolitan cities using an outdoor recreation option. Bringing the entire family in for a few days to experience the outdoor activities, school system and town, was all part of ‘romancing’ the candidate (Tennesen, 1994).
Ben and Jerry’s had some “rocky roads” to pass on their journey. The success of the company that was initiated in 1978, managed through the years of ups and downs, and stabilized to the world renown brand that it is, may be found in your own freezer.
Gillette
By the beginning of 2001, Gillette had experienced several years of flat sales and declining profit margins. On Jim Kilts’s first day as CEO he exemplified leadership that communicates, leads by example and empowered teams. Kilts held a meeting with the operating committee where he laid out his expectations of clear communication, fact-based management and collaboration. He established communication channels, weekly meetings, and weekly business overviews with executives and quarterly meeting formats. Kilts used the company intranet to answer questions posted by anyone in the company. This helped him remain visible and reachable by all employees. Kilts videotaped dialogue with him and managers for distribution to international locations that he couldn’t get to himself. He was on a mission to change the company’s success track and he was beginning by transactional leading the team out of the finger-pointing, blameful and helpless culture it had become (Kantner, 2003).
“Leadership involves mentoring, coaching, inspiring and motivating. Leaders build teams, generate cohesion and resolve conflicts at the group level” (Kreitner & Kinicki, 2004, p. 595) . Kilts was moving the organization to respect one another’s abilities. “When colleagues respect one another’s abilities, they are more likely to collaborate in shaping a better future” (Kantner, 2003, p. 64). Kilts recognized the need to empower the employees. More can be done with many than can be done with one. Through the open dialogue and Kilts refusal to allow finger-pointing and not taking accountability, the team shifted into interested, motivated, and accountable units. The meetings evolved into collaborative, information sharing, beneficial assemblies. Managers answered for their inadequacies and with the team, were assisted with alternative solutions for getting the job done. Not because Kilts said it needed to be done, but because it needed to be done; Kilts had reached accountability amongst the members.
Gillette began developing winning products like toothbrushes in one division and world –class portable appliance technologies (Kantner, 2003). The organization had been transformed into a cohesive, team-oriented collection of talents. Somewhere along the way, Kilts had moved to a charismatic leader. “Charismatic leadership can produce significant organizational change and results because it ‘transforms’ employees to pursue organizational goals in lieu of self-interests” (Kreitner & Kinicki, 2004, p. 613).
Pitney Bowes Inc. - Pitney Bowes Management Services
Pitney Bowes Management Services (PBMS) is a division of Pitney Bowes Inc. PBMS provides outsourced documents management, e-discovery, facilities management, reprographics and mailroom services. Its customers include financial services firms, government organizations and corporate clients. In 2007 PBI decided to pursue strategic alternatives for its Pitney Bowes Management Services (PBMS) division. As a result of net losses, Pitney Bowes Inc was determining the best course of action for its management division. The three options were to sell to an investment firm, a competitor or remain with PBMS. At the conclusion of the review of strategic alternatives, it was announced that PBMS would continue to be a vital and growing part of Pitney Bowes Inc.
In December 2008 PBI disclosed a new organizational structure featuring two customer facing businesses, Global Mailstream Solutions and Enterprise Solutions. The new configuration is the next phase in Pitney Bowes growth plan, according to Michael J. Critelli, Chairman and Chief Executive Officer, “We previously identified $250 billion in opportunities to engineer the flow of communication within the global marketplace. Over the last few years we have been systematically transforming our business to take advantage of these opportunities and deliver enhanced customer and shareholder value” (Pitney Bowes Inc. 2008). PBMS is currently undergoing a strategic transformation that is another word for reinvention. “A transformation acknowledges the events that triggered it: the company must take drastic action because its financial position is weak, competition has gained power, or technology has revolutionized the industry”(Day. 2000). In the past PBMS has done a good job of reducing cost. The strategic transformation is about reinventing the way PB conducts business. PBMS desire is to innovate and executive more quickly, empowering creativity and ideas from employees, enabling customer interaction to enhance their capacity to invest in growth opportunities. Like CrysTel, PBMS has been successful because of to its agility in offering new technological solutions for document management. Like CrysTel, PBMS had reached out to its employee during the different phases of the transformation in quarterly pulse surveys. To keep in touch with its employees views and experience during the transformation employees were invited to participate in one survey throughout the calendar year. The survey emphasized the importance for management to hear the feedback from the most important source and to keep a pulse on critical measures of employee engagement.
The result of the pulse surveys that have been in place since January 2010 have been beneficial for PBMS as certain forums have been created based on feedback from employees. PBMS has introduced IdeaNet which gives employees the opportunity to provide ideas on current topics. IdeaNet is an internal website where employees can post ideas and collaborate – it is not a suggestion box! IdeaNet is part of the Employee Innovation Program, which is designed to enable employees across all positions and geographies to influence and shape ideas to drive organic growth for Pitney Bowes. Business leaders benefit from the input of a large variety of participants, while employees benefit from IdeaNet’s ability to connect to colleagues across the organization.
W.W. Grainger.
W.W. Grainger wholesales commercial and industrial supplies and assists consumers in saving time and money by giving them the right products in a timely manner to keep their facilities operational. Grainger has approximately 2 million customers globally. Although every customer possesses a distinctive competence to operate and different dilemmas to resolve, their clients all have a similar condition: when placing order through Grainger, they often require it immediately.
Like CrysTel, Grainger’s has undergone constant change since its formation and with great success and much like CrysTel, Grainger has begun initiating a more extensive product platform to diversify its business and continue to help them better serve their existing and new customers.
Grainger and CrysTel share the same concern and former chairman and CEO Richard L. Keyser described the dilemma, “turning around a company is no easy task — particularly when the company is already successful” (Nank. 2007). That’s probably one of the hardest things to do, turning around a successful company. The story of change is usually brought about through a weak financial position, competitive creep or changes in the industry and when a company’s in a crisis it’s less complicated to encourage change, however when business is good its much more complex to obtain the attention of the company.
Leading Grainger through the transformation required engagement surrounding the strategy because no matter how sound the competence of the communications or comfort in consumer relationship management, like CrysTel, Grainger knew that no plan would come to fruition without an employee base that is both conscious of and supports the direction of the company. In Grainger’s case communicating the visions and strategy and creating alignment were important to the business. Grainger used its existing organizational structure to communicate and also used many different communication vehicles to communicate directly via diverse types of mediums to increase engagement and keep people tuned in as they progressed. A useful mechanism for Keyser in maintaining compromise surrounding Grainger’s market development approach has been recognizing important executive levels within the business and persuading them to support the cause and using them as change agents. Because Grainger’s growth strategy is based on modifying the corporation’s existence in diverse markets in all its operating regions, its central collection of individuals consist of local level management, that were authorized to help expand, the repositioning stratagem contained in their marketplace. Consequently, local level administration is dedicated to and responsible for building the plan and making it a reality. To keep a pulse of the organization and stay on target with the company approach, Grainger facilitates meetings with approximately 4,000 of its staff annually, during which customer tutorials are presented with genuine customer videos detailing the positive Grainger customer experience and also commenting on what they could improve on.
USAA
United Services Automobile Association (USAA) is an internet banking company that started with humble beginnings in 1922 when 25 Army officers decided to ensure each other’s vehicles. This organization has grown to “serve 7.7 million members and become one of the only fully integrated financial services company in America” (USAA.com, 2010, para. ). USAA has no other branches outside of San Antonio, Texas. In order to serve military members and their families and all of the other customers across the United States and around the world, USAA had to become innovative in its approach in servicing its members.
This virtual organization has many of the same services and functions as a traditional banking institution but is using technology to deliver these services. USAA is big into technology and also has developed many new approaches to serve their members. Some of these new approaches have given its members the ability to transfer funds between different banking institutions, deposit checks from home using over-the-counter scanners, and depositing checks from a mobile device, the iPhone. The latter two are called Deposit@Home and Deposit@Mobile respectively.
Risks associated with Deposit@Home as identified by Michael Wofford, a senior consultant specializing in technology with Brintech Inc. stated he is concerned about the possibility of fraud because of the use of over-the-counter scanners and the customer not entering the correct amount on the website. Other scenarios that could lead to fraud would be “the customer's paper check is lost or stolen after it has been scanned and someone tries to cash it elsewhere, or the customer tries to cash it” (Fajt, 2007, p. 1). The use of this technology is a risk worth taking for its members spread all across the globe because USAA has a trusted customer loyalty base and Jeff Easley, the bank's deposit products manager states that “it is a trust service” (Fajt, 2007, p. 1).
This bank is a trusted institution that has won over many new customers. In the fall of 2009, USAA expanded its “eligibility to all who are serving or have honorably served our nation in the U.S. military and their families” (USAA.com, 2010). I am not a salesman, but I will taut this institution to anyone who would listen.
Boeing
Boeing has been a leader in aerospace manufacturing, but during 2008 over a stretch of 52 days lost $100 million dollars a day before its machinist union ratified an agreement. During this time Boeing lost the contract to Northrop Grumman for the 787 Dreamliner, a new refueling tanker for the military. These two events cause the stock prices for Boeing to drastically fall. Outsourcing was a major problem during the labor negotiations and the Chief of Human Resources at the center of these negotiations was Richard Stephens. He had been in charge of Human Resources for Boeing since 2005 and the company’s labor negotiations.
Richard was responsible for setting the strategic vision of Boeing through a Leadership Center in St Louis, Missouri. What is taught at this center is formal mentoring, identifying and measuring leadership attributes, active learning projects as well as growth, quality, and productivity. This is accomplished with face-to-face interactions that will help in the decision-making process of selecting potential leaders. This will ensure leaders are focused and executing well. He is constantly leading his department and Boeing by example to constantly look for talented new recruits. As a human resources professional, Stephens has to run the business of the human resources department within Boeing that has an impact on many employees through his commitment to ensure a healthy workforce.
Stephens is leading his department and Boeing by example with many initiatives he has implemented such as labor negotiations, recruitment, leadership development, employee relations, and diversity. He has decided to change the culture of wellness at Boeing that fosters a healthy lifestyle. If this is done, Boeing will have healthier employees who will eventually become more productive. After the wellness initiative was instituted many employees have said to him that they have lost weight and their cholesterol lowered. The example Stephens has displayed translates into loyalty for Boeing. He has made sacrifices as he has moved about the country from such places as Atlanta, Washington DC, Houston, and Seattle to ensure Boeing stays at the top in the aerospace industry. He is committed and leads Boeing and other HR departments by example with his commitment.
Conclusion
In today’s knowledge information age change is constant and an organization is either transforming its business, or the elements around them, like the competition and industry, are changing. A failure to change and adapt to the market conditions could result in a loss of business. The companies in this paper made transformations in response to changes in their marketplace. The need for innovation and continuous improvement created a desire to change the nature by which it operates. Success and failure starts at the top and a constant of success with these companies can be rooted in the investment of leadership in the frontline. In the way that people evolve through the life cycle, organizations evolve through various change phases and models and each stage occurs when the organization works to make the genuine shift from the existing to the future state. Whatever model is chosen in guiding organizational change the model should include creating a vision, increasing support, transition management and supporting momentum.
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