MANAGING CHANGE for CAR Company

MANAGING CHANGE for CAR Company

Identification of the management problems

From the case study, it can be seen that the CAR Company has a history of management problems. Before Megan has taken over the leadership of this company, briefing shows that even previous managers found it difficult to impart desirable or positive change. There is also a typical example of a CEO known as Bob, who was succeeded by Megan, highlighting that, imposing change was a challenging aspect in CAR Company. The reason for this situation was brought about the issue of costs and profits. The environment, which surrounded CAR, became very unpleasant over the last couple of years. This rough environment resulted in various challenges as it is discussed below.

Rising of new competitors

Over the years, CAR Company has been supplying technical parts to more than four car brands in the United States. Since CAR company relied much on innovations and technologies, most clients found it a favorite supplier. Due to this aspect, they made some significant profits over the past years, a scenario that attracted other players to enter the industry. New competitors, especially from China, came in and started offering similar products at a friendly price. It is a situation, which put CAR Company in a confused state trying to figure out how they manage to do so. Even though new competitors have low labor costs, CAR’S products were not labor-intensive since its value was not more than 10.0% of input costs.

The entrance of new competitors came with another pack of challenges to CAR Company. First of all, if a new dealer venture into the market, the percentage shares of the same market decreases, which in turn reduce profitability (Andreu and Quer, 2017). There is also a probability of lowering the level of production, which, in a way, affects profitability (Grøgaard, Rygh and Benito, 2019). This means that the level of innovation of the company needs to be raised for them to maintain their loyal customers as well as attracting new customers. Since the company has already had cost-profit challenges, it found it very difficult for it to survive in the modern world. It reached to extreme points even their loyal (long term) clients were not able to cope up with the current situation. They expected that after the entrance of new competitors, the prices of the products from CAR would be reduced. However, the case was different since there was no reaction, and their expectations of rapid changes and adjustments on prices were not met. It is a situation, which put Megan into a big dilemma with various questions. Such question included what should be done? The options were either shifting to be a mass producer of cheaper parts or come up with innovations of developing high – technological products. Either of the two options was to use finances and company’s returns were not favorable.

Lack of moral support from employees

One of the crucial aspects of the success of an organization is strong organizational culture through moral support, unity and support for each other. An organization, which works as a unit, has the possibility of growing and expanding (Renko, Tarabishy, Carsrud and Brännback, 2015). This is because ideas are discussed together, and the point where consensus is reached. In addition to that, when a company is working as a unit, a common goal is achieved.  In such a scenario, the company can deal with its challenges, both internal and external, and solutions are found. On the other hand, a conflict can heavily be affected by the organization, if a unifying culture is lacking, and makes it a challenge for the organization to integrate everyone in pursuit of a common goal.

For the case of CAR organization, it can be seen that the challenge of lack of moral support has manifested itself. First of all, Megan is a female CEO, and most of the senior executive in this organization were males. The issue of gender-sensitive ventures in, since most males in this company do not want to swallow bitter truth that their boss is a female. It reaches a point of Megan being confused because she cannot consult male colleagues. It is a situation, which has adverse effects on the whole organization since these male executives are crucial part of the decision to be taken to ensure that the organization is progressing on well. Due to their male chauvinism, they are not ready to offer support to the CEO, and they seem to enjoy the downfall of the organization. This leaves Megan with no choice but to consult her close female friends and colleagues who their support is of significance help.

Turnover of employees

There are many scenarios which lead to a Turnover of staffs and among them includes new offers from new emerging competitors (Wu and Parker, 2017). Also, it can result from the poor performance of an organization.  If a company is making continuous losses, employees will look for other companies to boost their incomes (Azanza et al., 2015). It is a significant challenge, which affects CAR Company since it is not able to retain its employees. From the case study, it is pointed out that the Turnover of employees has increased with 30.0% in the past three years. A quite recommendable number of young and talented engineers have shifted from CAR Company to their competitors in search of extra income. In addition to that, the company stands a chance of not absorbing new talents from fresh graduates. It is a scenario, which comes after the reputation of the company, was ruined by the challenge of cost profits. The situation has gone to the extent of even lacking well wishers or even outside investors who can become business partners. It is a serious problem facing this company since it means the company is at higher risk of being declared obsolete.

Discussion of potential solutions to the problem

As a manager, one of the responsibilities is to come up with strategies to solve the already identified problems. First of all, there is a problem or challenge of very stiff competition from new companies entering the market. These companies have interfered with the smooth running of activities by affecting profitability. Since the company relies a lot on innovations to provide quality products, there is a need for them to research on those innovations. Having quality products with longer life span can trigger customers to purchase them to obtain those services. The company must assess its strength and focus on it to be competitive. Through coming up with various ways of ensuring that their products are of high quality, the challenge of new competition is solved.  The new companies will find it difficult for them to compete with already established company, due to loyalty maintained.

The problem of moral support, unity and cohesion can only be solved through having an effective change in organizational culture. In the case study, it is highlighted that Megan is afraid of some of her staff. As a manager, such a scenario is not supposed to happen since a manager has full authority of a company. A manager should be firm enough to face all employees and senior executives and be free to talk to them anytime. It is also important to note that respect for managers is mandatory. They are not supposed to feel less important to the employees (Lacerenza, Marlow, Tannenbaum and Salas, 2018). If such a scenario happens, managers are not able to deliver at their best, which in one way or the other affects the overall performance of a company. The male chauvinists at the top of the organization must accept that Megan is the new CEO of the company, and they must work together with her to change the problems, which the company currently faces. At this point, Megan is supposed to have lengthy and periodic consultation meetings with the senior executive and employees. In this meeting, they need to discuss all matters, which are affecting the company. She is also supposed to ask for the suggestions on how to improve the conditions of the company. Through having such a strong organizational culture, employees will feel that they are involved which can influence and motivate them towards improving the performance of the company, with a sense of shared purpose to achieve a common goal.

About Turnover of employees, the manager or CEO got a very tough task of convincing employees to stay. It is one of the characteristics of managers to use the skill of persuasion and give the employee the rationale to stay (Lacerenza, Marlow, Tannenbaum and Salas, 2018). However, it is not an easy task to make employees stay bearing in mind that there are other alternatives (opportunities) rising. The manager has to clearly show that efforts are being put to transforming the industry and regain its competitiveness. At this point, a manager needs to explain and highlight various methods to be used to re-gather the capital of rejuvenating the company. The strategies of obtaining finances to regain the original form of the company should exhibit the probability of improvement. Some of the strategies, which might be used to persuade employees to stay in a company, are through looking for funds from external investors. It can be achieved by using the past performance of the company to convince them. In solving the issue of employees’ turnover; therefore, the manager must ensure that the future of the staff is guaranteed.

Implementation Plan for the chosen solution

Bob, the former CEO, tried to bring changes to the organization but found it hard to have them implemented because of resistance from the employees and senior executives. Megan can use the Kurt Lewin change model, which is most suitable in ensuring that the company regains its form. Lewin (1951, as cited in Clegg et al) formulated the change model, where he identified the three-step process, ‘unfreeze, change, and re-freeze’ involved in changing organizations.

Unfreezing is the first stage and the starting point for Megan. First of all, CAR Company needs to accept that change is needed. It is the stage where she needs to emphasize the importance of the changes that needed to be made to the employees and senior executives, and the company must be prepared to deal with resistance for adequate change to take place. At this stage, effective communication can play a critical role for Megan, and create a basis for change within the campany. A way Megan can go about it is by delivering a powerful message that points out why problems such as high turnover of staff, lack of motivation, new competitors gaining competitive edge and lack of innovation cannot continue within the CAR Company. For Megan, overcoming resistance in the organizational change, the employee involvement is an effective strategy in formulating the planning and implemention of change, which will lead to high quality change for the company (Hussain et al, 2018).

The next step is the change process. After preparing the company for change, it is now time for change to take place, and the company is expected to implement the change process. Megan needs to put forward the state in which she wants the company to head. The best way to implement change in the organization is through the ability to learn. With the dynamic business environment, it is important for the company to engage in learning for continous improvement. When knowledge is openly shared, CAR Company will gain a more competitive edge in the dynamic business environment. As changes are becoming rampant and businesses have to adopt new trends like the rapid change in technology to compete successfully, Megan’s ability to learn faster than the competitor is what will make her stand out (Arie de Geus, 1988, as cited in Clegg et al, 2016). Employees of CAR Company needed to learn new skills, processes, ways of thinking, and opportunities that will help increase performance. The more prepared they are at this stage, the easier for the company to implement change. If Megan fails to impose change within the company, she will find it hard to persist in the market and compete with the Chinese competitors. She will face the same problems the past CEOs encountered, if this stage is not implemented accordingly.

Kurt Lewin’s final stage of the change model is referred to as refreezing. It embodies the act of solidifying and stabilizing the new change process implemented by CAR Company. At this stage, there is a possibilty of employees to revert to old ways of doing things, and CAR Company would be expected to evaluate, monitor and make adjustments where necessary, to ensure the proposed changes are carried out as planned. Megan needs to ensure that change is imposed and bonded into the organization’s culture, and also accepted by the employees and the senior executives as the suitable way of moving the company forward.

Justification of this choice

The choice chosen offers a solution to most of the problems that are experienced by CAR Company. Within any business, employees must provide maximum support to the manager for its growth. In a company whereby staff provides support to leadership, production activities run on smoothly. First of all, there is the creation of that bond whereby every member feels to be part of the company (Higgs and Dulewicz, 2016). It is through this bond that Megan can observe the talents of the individual an aspect that promotes division of labor and specialization. Also, it is through this bond that the Megan can know which departments within the company are having challenges (Lisak and Erez, 2015). Through being aware of those challenges on time, they are entirely addressed, and company moves on well. When there is mutual support between employees and the manager, communication, and passing of ideas of how an organization can be improved become easy (Renko, Tarabishy, Carsrud and Brännback, 2015). Therefore, solving the internal issue of conflict between Megan, employees and the senior executives becomes a suitable method of overall problems facing CAR Company.

Conclusion

When a company is facing challenges and its downfall starts, in most cases, the manager is the one, which is looked upon. Therefore it becomes necessary for the CEO to know the source of the problem (identification of the challenges). After identifying the factors, which are contributing to those failures, a need arises to suggest the potential solution. For example, in the case study under study, some of the identified challenges are the entrance of new competitors in the market, lack of teamwork and cost profits challenges, which leads to employees’ turnover. The potential solutions identified include the creation of cohesion between the manager and employees, the development of innovations, and finally persuading employees to stay in the organization. Assessment of those solutions is done, and one is selected, and the rationale for selection is given. For this case, cohesion and unity between the manager, employees and senior executives is selected as a strategy of reforming performance of the CAR Company.

References

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