Case Study – Managing Change

  Case Study – Managing Change

Identification of Management Problems

Most of the management problems CAR faces emerge as a result of the short-sightedness of the management in decision making. A second contributing factor is the organization’s lack of strategies tailored to help restore its lost glory. This situation continues to lead the company to display a high turnover among its managerial staff, which hinders the development of a work environment that nurtures organizational growth. The first noticeable problem in CAR involves stagnation in terms of expansion and vision. For the past few years, the brand continued to display an interest in maintaining its existing clientele. This situation dissuaded them from searching for newer markets to help expand the business. This lack of an articulated vision denoted flaws in the firm’s leadership

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Similarly, the inclination by the company to focus mainly on promoting transactional leadership led employees to become unwilling to push for the growth of the enterprise. It mostly dissuaded them from embracing innovation to aimed at advancing the business. Mainly, the staff, primarily those in the research and development department, exuded immense levels of demotivation. This situation saw them display stagnation in their endeavor to develop new and innovative product designs. In the modern world, with the threat of new entrants in almost every industry, the only way businesses can remain competitive is through constant innovation. Unfortunately, CAR was mostly struggling to maintain the status quo, which led them to fail to recognize the transformations in their external business environment.

The lack of new, fashionable, high-tech car parts also guaranteed CAR’s falling stock values and their subsequent failure to meet target profits and revenues. This situation led clients to no longer see the value of their money in purchasing CAR’s old fashioned and cheap parts. It, therefore, made the business less appealing even among consumers who first felt attracted to the vision of the company. This downward spiral further compounded through the inability of the brand to attract and retain the talent it needed to turn its fortunes. This unfortunate scenario created an unnecessary workload for the existing staff, especially in the wake of the high employee turnover, which stood at 30%.

The cultural web approach embraced by the firm also revealed that most members of the organization believed in position power instead of referent power. This situation profoundly explained their lack of respect for Meg, given her gender. It also inclined the junior staff to embrace similar conduct hence fostering the lack of collaboration among them and the senior employees. In this manner, CEOs faced a hard time implementing long-term solutions and establishing lasting relationships with other workers. This almost-hostile working environment also contributed to the high-turnover while decreasing the ability of the organization to attract more professionals to the company. Another management problem that contributed to CAR’s unattractiveness was their lack of a proper reward and compensation strategy. Also, the company’s old fashioned business model left no room for innovation, such as social media platforms. These mediums would have played a critical in enabling the brand appeal to millennials or top university graduates to help it expand its knowledge base.

Critical Literature Review

Extensive research suggests that mission and vision statements have a significant impact on overall business strategies and the organization’s performance. In light of this, a poorly developed vision may fail to nurture the sense of a shared purpose within a company (Darbi, 2012). This situation may lead to misalignment of missions and objectives, inevitable confusion, and, mostly, internal conflicts. However, having a mission and vision statement can only foster business efficacy if the company aligns its strategies to reflect these values. A clearly articulated mission creates awareness about desirable attitudes, work ethic, and principles that may improve the interaction between colleagues and, in turn, improve performance.

Also, although short-term survival priorities and long-term goals were equally essential, there was a need for business leaders to aim to balance these two. For instance, CAR’s previous CEOS were keen to develop goals beneficial in the short run. However, they failed to tailor them to accommodate their changing external environment. This situation mainly set the stage for their inevitable fall.

Organizational learning refers to the continuous process of creating new knowledge within an organization, retaining it, and ensuring that workers can quickly transfer it among themselves (Imran et al., 2016). In the ever-changing world, the key to success in business lies in its adaptability to constant change. Thus, an organization has to continually review its organizational process, and use its experience over the years to ensure the company achieves its set goals. Here, the company can change leadership styles and adopt more appropriate strategies that may enable it to attract better clients or employees. Also, the company can revise levels of bureaucracy given time wastage, or barriers to the adequate flow of information. It is also noteworthy to mention that organizational learning can influence establishments embracing dependable business models and practical strategies (). Mainly, such endeavors should aim to foster their adaptability to their ever-changing external environment (Saadat & Saadat, 2016).

An organizational learning culture has a considerable effect on career development and career competencies. Continuously training employees through coaching as an element of transformative leadership results in a well-qualified workforce and a warm working atmosphere (Imran et al., 2016). Constant pressure, increased workloads, and no sense of performance improvement strategy may increase employee turnover. Hence, a company keen on retaining and expanding its knowledge also has to ensure that there is reasonable compensation, regular promotion, and proper reward systems. In this manner, employees will always engage in a healthy competition that may cultivate a culture of ingenuity and creativity, but through borderless collaboration. This cooperativeness within an organization has several effects on its culture. Firstly, all members begin to consider the vitality of referent power as opposed to position power. Here, employees would respect an individual because of their contribution to the betterment of the establishment rather than the position they hold. This situation creates an environment of equality where men have equal respect for women at the helm of administration. It also ensures that there is equal access to deserved promotions and indiscriminate sharing of information.

Discussion of Potential Solutions for the Problems

It is impossible to foster innovation within an organization plagued by demotivated employees and an unhealthy working environment. Therefore, it would first be essential that CAR figures out a way to reduce internal conflicts. Meg worked with Anne for years, and their friendship has been the same regardless of their different positions at work. It, thus, means that she can effectively adopt the transformative leadership style that will function to influence and inspire employees to move in the same direction. Choosing this style, as opposed to being a strict manager, will guarantee a high-performance team that considers versatility but focuses on team effort (Imran et al., 2016). This move, given that it emphasizes on positive communication, coaching and rewarding employees, and friendly competition, will help establish a healthy working environment.

Another possible solution would be drafting mission and vision statements that are keen on survival priorities, but also consider the external environment as regards the future. For the longest time, CAR’s administrations have only worked to put out internal fires without examining what other competitors have been doing. In light of this, Meg’s term as CEO witnessed the loss of some of the most loyal and significant clients. The company lags in innovation, and clients cannot seem to enjoy their products and designs anymore. Hence, re-strategizing will see CAR formulate new goals. This situation will lead it to address its dwindling knowledge base due to high turnover, failing stock values, and the inability to attract top talent.

Bonding and capacity building activities may help the organization bridge generation gaps, foster interaction between junior and senior employees, and to foster collaboration. Theory Y of management does not insist on control, reward, or punishment (Lawter, 2015). Instead, Meg would focus on identifying and removing any barriers that may reduce employee productivity and providing autonomy with an expectation of excellent performance. This kind of environment will ensure that every worker follows the leader, Meg, and change management becomes more natural and result-oriented. There also seems to be an apparent concern in brand management. Inconsistency in this front means that consumers do not trust the company, and knowledge workers may avoid it in search of greener pastures. Thus, CAR should consider abandoning its old fashioned business model and revamping its technological capabilities. Employing tools like social media will make the company more appealing to top young talents and may also translate to more new clients.

However, the competitor problem facing CAR may as well be a strategic enabler for an opportunity previously unseen or out of sight. The company has been comfortable within the markets already conquered and, thus, has not recorded any new clients. Therefore, perhaps it is time the organization considers a global strategy that will ensure it can still sell its current products, given that the development of newer designs may take time. In this manner, the company may be able to stay afloat, in terms of revenue, as Meg tries to solve most of the internal issues.

Implementation Plan

Current trends in revenues, profits, and the falling stock values mean that CAR urgently needs a strategy that will increase its consumer reach with minimal additional costs. In light of this, Meg should exploit the global market and not concentrate too much on domestic consumers like her predecessors. However, it would be challenging to venture into product specialization, given the lack of adequate human resources and the organization’s shallow pockets. In this manner, the organization will first assign several sales analysts and accountants the task of researching into these markets and identifying regions more receptive to their current product portfolio (Frynas & Mellahi, 2015).

The standardization plan, also known as the global strategy assumes that a single product, and its design, can serve the needs of people from all walks of life (Bhandari & Verma, 2013). Therefore, Meg would use the available car parts and target consumers in as far as Africa, Asia, or South America, as long as the company makes a profit. Thus, the research stage would be critical since the organization has fewer funds in its coffers. The second stage in the implementation plan would be extensive advertising. Entry into a market with the right marketing strategy ensures that within a short period, the articles of trade become visible. Therefore, adopting social media as a marketing tool will first save on advertising expenses and, secondly, reduce labor costs if coupled up e-commerce.

However, Meg will first require to build a high-performance team through the use of the transformative style of leadership and Theory Y of management. Here, Meg would involve all stakeholders in the decision-making process and foster a culture of collaboration. In light of this, individuals will come together to suggest new ideas for innovation as a means to revamp the R and D department. Since the innovative process will supply ideas for the future of the company, the team will have to work closely to make the global strategy, the short term goal, more successful.

In light of this, Meg should approve regular bonding and capacity building activities to promote a friendly and homely working atmosphere for the workforce. These events can also provide a platform for the solving of internal conflicts, bridging generational gaps, and the transfer of organizational knowledge. Capacity-building activities are also an excellent method of organizational learning. Here, experienced professionals can pass on their wealth of expertise to junior workers, thereby improving their productivity and making them more innovative. This addition, coupled up with social media, will help CAR adopt a ‘funky’ and ‘creative’ outlook that will make it more attractive to young talents from top universities.

Justification of Solutions

CAR is doing terrible on the domestic front, and unless the organization finds other markers urgently, the company may soon close the shop. The establishment lost one of its most loyal clients to its competitors. The fact that CAR suffered a lot after this incident is because the organization had not been focusing on expanding markets and diversifying in high-tech products. In the long-term, the organization should venture into revamping the R&D department to produce trendy designs that will attract more consumers.

Unfortunately, research and development take time, and by the time the company hires top talent and develops better, high tech items, they would be out of business. For this reason, Meg should implement a global strategy immediately, to salvage the company’s financial health in the short run as they continue to improve product style and function. This plan will ensure that Meg’s stock values stabilize, and it begins to make profits like before. However, CAR should adopt the standardization strategy that treats all regions as one market and does not venture into customization. Fortunately, machine parts and equipment are usually universal, and one design may serve the needs of millions of customers. It is also worth noting that the standardization strategy is justifiable, given the shallow pockets of the organization.

Employees are essential assets of an organization. Therefore, Meg and her administration should try to foster a culture of collaboration and cooperativeness. Without a high-performance team, passionate effecting change, and producing favorable outcomes, CAR cannot survive the coming months, and Meg may also end up as her predecessors. Thus, they must employ bonding and capacity building activities to ensure that all workers align their mission objectives and build towards a shared sense of purpose (Darbi, 2012). In this manner, the vision developed by Meg’s administration will be easy to achieve, given the support from most stakeholders. Theory Y of management, as opposed to Theory X, believes that autonomy, self-drive, and self-control can translate to high productivity as employees feel prioritized and respected (Lawter, 2015). If Meg manages to lead with this ideology, her unresponsive male colleagues would have no choice but to join the team, given the support such a leadership style elicits.

Finally, the adoption of social media and E-commerce tools will be beneficial and necessary for two reasons. Firstly, the use of these modern technological applications will provide a ‘funky’ and creative outlook for the company, thereby allowing it to attract young and talented individuals from top universities. This move will be beneficial in revamping the research and development department for the long-term. In the short-term, the tools will provide a platform for the advertisement of CAR’s car parts to the rest of the world. It will be the key to the success of the global strategy that will ensure CAR’s stock values start rising again, given its increased capacity to compete.

References

Bhandari, A., & Verma, R. P. (2013). Strategic management: A conceptual framework. McGraw-Hill.

Darbi, W. P. K. (2012). Of mission and vision statements and their potential impact on employee behavior and attitudes: The case of public but profit-oriented tertiary institution. International Journal of Business and Social Science, 3(14).

Frynas, J. G., & Mellahi, K. (2015). Global strategic management. Oxford University Press, USA.

Imran, M. K., Ilyas, M., & Aslam, U. (2016). Organizational learning through transformational leadership. The learning organization, 23(4), 232-248.

Lawter, L., Kopelman, R. E., & Prottas, D. J. (2015). McGregor’s theory X/Y and job performance: A multilevel, multi-source analysis. Journal of Managerial Issues, 27(1-4), 84-101.

Saadat, V., & Saadat, Z. (2016). Organizational learning as a key role in organizational success. Procedia-Social and Behavioral Sciences, 230, 219-225.