Reliability and customer care as seen the company develop into Nottingham’s largest and newest fleet using the most advanced booking and dispatch technology. The company strategy is to continue investment in training, technology, expansion(through acquisition of more businesses) and more importantly service to valued customers.
Source: company website:
THEORY
No doubt change is an inevitable in life-cycle of everything on this planet (Earth),whether it is a human ,a system, a product or an organization. It is one of the complex issues, a hot topic of today’s turbulent world .if we look around our world we see that changes are happening every where at a very fast speed (19970, Alvin Toffler ), whether it is a product, an organization, a society, a country (like Greece and Cyprus ) which are going through a very high turbulent economical and financial situations, The leadership of these countries are trying to adopt strategies which would align their countries to these emerging changes.
At business level this not only involves the top level management to make strategies and put them into action but also the whole organization resources to be put in such an alignment so that the desired objectives to be achieved or the effects of the changes be minimized to a favorable level.
Change is all about the organization /business survival, it deals with modifying or transforming an organization in order to align its resources for effective and improved performance to have a competitive advantages in the market. it is continuous process and a key source of organization success.
A BRIEF LOOK ON THE HISTORY
In, 1969 Peter Drucker’s “The Age of Discontinuity“, a guidelines to Our Changing Society, describes the ways of destruction in our routine life.
In 19970, Alvin Toffler described the Future Shock by explaining the future speed of change and shorter social and technological norms with each generation.
1978 Derek Abell gave the concept of Strategic Windows and stressed on the importance of entry and exit point at a given situation.
In 1990 Richard Pascale stressed on the business for a continuous innovation to align themselves to the changes.
1996, claimed on recognising the pattern behind value migration is essential if we want to understand the chaotic change and develop a sense of strategic anticipation. (1996 . Value Migration: How to Think Several Moves Ahead of the Competition. )
1997 Clayton M. Christensen pointed that some outstanding businesses /Organizations loose their position when confronted a disruptive technologies .There are lot of other modern times writer like Senior, Burnes, Boeker , Michael E. Porter ,, who have given the models, theories and practices to combat the changes and how to take strategic action for the success of the organization .This lead to a strategic management of these changes.
THE CONCEPT OF STRATEGIC MANAGEMENT
Strategic management is a process through which organizations formulate and implement strategies for goal achievement in a given available environmental and internal conditions. It determines the long-run performance of an organization.
THE PURPOSES OF STRATEGIC MANAGEMENT
1. To develop and implement strategies to optimize shareholder value
2. Another reason based on the studies of the effectiveness of strategic management have found that, in general, companies with formal strategic management systems had higher profit returns than those companies with no such systems The expansion of DG have given it an opportunity to have bigger customer bank which in turn will bring more return in the form of profit.
3. Strategic management is not only important for-profit organizations but is equally important for non profit organizations because it:
a. Helps organizations identify and develop a competitive advantage, a significant lead over the competition in dealing with competitive forces .the biggest competition which DG was facing were its rival small firm which were taking its customers, so DG’s one of the growth strategies was, to kill these small competitors by buying these small competitor firms and making DG as a single largest taxi operator and provider of taxi services in the local market .
b. It provides a sense of direction so that organization members know where to expend their efforts.
Environment
Organizations need to consider the changes in the environment and how to be proactive to these changes and this creates a need for the determining and implementing a strategy.
Environment has strong effect on the successful growth of any organization. An organization has little or no control over its environment.
The environment is defined as institutions and forces outside the organization that potentially affect an organization’s performance.
Types of Environment:
1) External Environment
2) Internal Environment
External environment : the forces outside the organization with potential to influence significantly an organization is called its external environment. Two major divisions have been made in the external environment.
1) The Mega Environment
2) The Task Environment
The mega Environment: The mega-environment, or general environment as it is sometimes called, is that segment of the external environment that reflects the broad conditions and trends in the societies within which an organization operates. It elements are:
Technology
Economic elements
Legal and political
Socio-culture
Demographic trends
The task environment is made up of specific outside elements (usually organizations) with which an organization interfaces in the course of conducting its business. It elements are:
Customers and clients
Competitors
Local government agencies
On of major threats DG have to face from external environment is from the local council, which have major plan to spend £570m on extension of the Nottingham Express Transit (NET) a local tram network, for which work has already started and will be completed until end of 2014, which will connect the city to three major counties areas where local private hire company are operating for transportation of passengers. This will effect DG business to great extend and other small firms in the region, as local population will have an alternative, a cheaper way of commuting to city.
Internal environment is composed of the elements within the organization, including current employees, management, and especially corporate culture, which defines employee behaviour. It includes the values and expectations of the firm’s stakeholders; its mission, goals and objectives; and its resources.
THE STRATEGIC MANAGEMENT PROCESS
The strategic management process is an eight-step process that includes strategic planning, implementation, and evaluation.
The first step is identifying the organization’s current mission, objectives and strategies.
Step 2 is analyzing the external environment. it defines strategic options.
Step3 is identifying opportunities and threats. Organization need to assess what opportunities to benefit and what threats to avoid. In case of DG Hire, it has clear vision of opportunities in the market through expansion, being recognized as a single large company in the local and regional level, give him a big competitive advantages to sell its services, as it has excellent advertisement campaign in local and regional electronic media of providing services fast and on the time at the same fares/rate as other small firms charge with professional staffs and saving the customers time and money. Providing services in a very clean vehicle with protected security of having CCTV in every vehicle which non of small firms have, an effect of which is that,it creates a sense of reliability and protection.
Step 4 is analyzing the organization’s resources. In this internal analysis, organizations are looking at its specific assets, skills, and work activities and core competencies. This step forces organization to realize that every organization, no matter how large it is, is confined in some way by its resources and skills.
Step 5 is identifying strengths and weaknesses. The analysis in step 4 should lead to a clear assessment of the organization’s internal resources. To this DG have well developed technology, professional staffs, 24 hours customer services and a network of vehicles available in less than 10 minutes after booking.
Strengths are those activities the firm does well or the unique resources it possess. Weaknesses are those activities the firm doesn’t do well or the resources it needs but doesn’t possess.
One area that’s often overlooked in this step is an analysis of the organization’s culture and its strengths and weaknesses. Culture is the organization’s personality. The strength of the culture is a result of how much employees understand and support the shared/common values.
However, the strong culture some time is more difficult to change, if needed, taking the case of DG Cars when it was announced that Trent Cars will be taken over by DG Cars the two big rivals in the region, a great resistance have been shown by long employed staffs at Trent Cars. Drivers, Managers and operating staffs working for the Trent Cars have developed a particulars culture of behaviors and habits toward the work and goals of the organization and they have the knowledge of culture maintained at DG cars, so many of the operational staffs, managers and drivers resign and prefer to leave the Trent Cars and join another rival instead of DG Cars, after Trent Cars been taken over by DG Cars. Although DG Cars management announced that they will not change culture of the Trent Cars just to bring the resistant at its lower level.
The merging of steps 3 and 5 results in a SWOT analysis. It brings together the internal and external analyses in order to identify a strategic niche the organization might benefit.
Step 6 is formulating strategies. Strategies need to be established for the corporate, business, and functional level of the organization.
The next step is implementing strategies
The strategies must now be put into action. Strategies are only as good as their
implementation.
The eighth (and final) step in the strategic management process is evaluating results. organization must evaluate the results to determine how effective are strategies and what modifications or transformations are necessary.
Before an effective strategy to gain a competitive advantage can be formulated, the organization’s competitive situation needs to be carefully analyzed (1985 Porter, Michael E ), for this a SWOT ANALYSIS is carried out. It involves assessing organization strengths (S) and weaknesses (W), as well as environmental opportunities (O) and threats (T). Strengths and weaknesses apply to internal characteristics.
STRATEGY IMPLEMENTATIUON
Strategy implementation includes the various management activities that are necessary to put the strategy in motion, institute strategic controls that monitor progress, and ultimately achieve organizational goals.
1. Technology is the knowledge, tool, equipment, and work technique used by an organization in delivering its product or service.
2. Human resources are the individuals who are members of the organization.
3. Reward systems include bonuses, awards, or promotions provided by others, as well as rewards related to internal experiences, such as feeling of achievement and challenge.
4. Decision processes include the means of resolving questions and problems that occur in organizations.
5. Organization structure is the formal pattern of interactions and coordination designed by management to link the tasks of individuals and groups in achieving organizational goals.
Managers need to be able to monitor progress through strategic control. Strategic control involves monitoring critical environmental factors that could affect the viability of strategic plans, assessing the effects of organizational strategic actions, and ensuring that strategic plans are implemented as intended. Strategic control systems include information systems that provide feedback on the implementation and effectiveness of strategic plans.
ADVANTAGES
Less competition in the local market for the organization (DG Car)
- Popularity of DG brand name
- Greater market share and substantial gains in profit
- Less running cost as whole business is operated from a single building DG House
- Greater chances of winning local government and Councils bids
- More customer’s base
- Size of the company and the financial strength create reliability
Advantages of acquisition or transformation vary according to the type and size of the company
DISADVATAGES
Some of the disadvantages are
- More opportunities for new entrant in the market.
- Redundancy which cost the acquiring company.
- Local government policies to expand tram network across Nottingham and surrounding area which will decrease the local population dependency on using taxi services for commuting to town and back home.
- Decrease competition and creates monopoly.
- Leads to unemployment as right sizing the organization.
- damages the morale and productivity of the organization.
Manager’s role in changing organization culture
Changing organizational culture is a very difficult goal to achieve, .but once it has been determined that culture change is a desired objective of an organization ,it can engage in a set of steps that will put culture change process in motion, a process for moving an organization’s culture from the current state to the preferred future state for achieving the objectives. These steps are based on the work of several authors who have described successful change process depends on how organization culture change aligns to these changes.(e.g. Denison, 1989 ,Trice & Beyer 1993, Kotter, 1995,,)
One of the biggest issues in the merging of two organizations is organizational culture, because each organization has its own unique culture , so when two organizations brought together, these cultures clash. Employees point to issues such as identity, communication problems, human resources problems, ego clashes, and inter-group conflicts, which all fall under the category of “cultural differences”.
Create value and belief statements: use employee focus groups, by department, to put the mission, vision, and values into words that state their impact on each employee’s job.
Practice effective communication: keeping all employees informed about the organizational culture change process ensures commitment and success. Telling employees what is expected of them is critical for effective organizational culture change.
Review organizational structure: changing the physical structure of the company to align it with the desired organizational culture may be necessary. As an example, in a small company, four distinct business units competing for product, customers, and internal support resources, may not support the creation of an effective organizational culture. These units are unlikely to align to support the overall success of the business.
Redesign approach to rewards and recognition: change the reward system to encourage the behaviours vital to the desired organizational culture.
Review all work systems such as , , , and to make sure they are aligned with the desired culture. As an example, you cannot just reward individual performance if the requirements of your organizational culture specify team work. Managers can change organizational culture to support the achievements of business goals. Changing the organizational culture requires time, commitment, planning and proper execution - but it can be done.
Conclusion
From the above discussion it could be concluded that change is a continues process. Any organisation small or large can never be successful organisation if it does not adapt to continuous process of formulating strategies to deal with internal environment of the organization as well as external enviroment.The top management and the managers should pay particular attention to resistant element of the organization culture. Communication of change process within the organization brings some time innovative ideas which could be adapted into strategies for the achievement of the goals.
REFRENCES
- Course strategic change module chapters 1,2,3,4,and 6
-
Organisational Change , 3rd edition ,by Senior .B. (2006) Chapter 1,2,4 and 6
-
In Marvin D. Dunnette and Leaette M Hough(Eds),Hand Book Of Organisational psychology 2nd ed. Vol 3 :1992
- Shields, J. (1999), Transforming Organizations, Methods for Accelerating Culture Change Processes?, Information Knowledge Systems Management, Vol.1, No.2, (Apr.), pp.105-115.
- Paper on “Mergers and Acquisitions as a Growth Strategy “presented on
International Conference on Business, Economics, and Behavioural Sciences ,(ICBEBS'2012) April 13-15, 2012 Pattay by Ibrahim AKGOBEK . Selcuk University Kadinhani Meslek Yuksek Okulu Kadinani/ Konya- Turkey .
- Delhi Business Review X Vol. 9, No. 1 (January - June 2008), “ Change Management challenges Facing the |Change Management theory and Research
- Creating successful organizational change, Goodstein, L and Burke, W Organisational Dynamics No 4, Vol 19 ; (1991).
- Porter, M. E. 1996. What is strategy? Harvard Business Review,74(6):61–78.
Abbreviation:
DG mean DG Private Hire
Trent Car was the biggest rival of DG before it was taken over by DG in 12/20012
[1] By Mr M A Raja
by
rajauk12gmailcom (student)
