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Perhaps, every organisation wants to initiate a management system and strategy that could maintain the organisation's capability, strength and competitiveness. It is important that the management team and the organisation per se should always open their mind for changes that they might encounter in order to cope and adapt to the latest development that are happening within and outside their environment. Thus, this paper will discuss and evaluate a large-planned organisational change that would help Lakeland Wonders to achieve its mission and to survive with the stiff competition. Specifically, this paper will study the organisational change that would be imposed in Lakeland Wonders. As stated, this paper had selected Lakeland Wonders based in Minnesota. This company had recently adopted a particular change management brought by their new CEO, Cheryl Hailstrom. This new CEO has come aboard with full of fire and enthusiasm to change things quickly with the objective of making dramatic improvements in the ways work is done. However, issues like pace of change, method of implementation, resistance to change, organisational culture, accepted norms and practices, acceptance of new leadership, human dignity and other problems at work were perhaps not carefully considered and tactfully handled.
The company Lakeland Wonders produces high-quality wooden toys. It has three plants in Minnesota with almost 5,000 employees. The company has applied a certain change management focused on offshore manufacturing. Before planning for this particular project, the company had made an extensive evaluation of its facilities, manufacturing capabilities and labour management.
The outstanding profitability performance of a growing number of firms is not accidental-these firms profit because they have built world-class management systems. This does not mean that there is anything mechanical or bureaucratic in the way they operate. Quite the opposite; these firms shape their processes and methods so that they work together for high performance. These firms perform well because they are designed to grow in profit, size and management capability. Their CEOs/managers focus on the behaviours, strategies, processes and measures that must work together as a system to find and satisfy customers.
There are many factors that can be considered to increase organisational performance in achieving organisation goals, and some experts are considering the concept of performance management. Hence, the principal purpose of this paper is to analyse whether the management approach of the CEO adheres to the achievement of organisational goals.
The CEO, Cheryl Hailstrom
In trying to change the culture of Lakeland Wonders, where did the CEO, Cheryl Hailstrom, go wrong?
It cannot be denied that the only constant in this world is change, many people especially those in the business arena find themselves normally adapting. In this manner, the Lakeland Wonders is never an exception. This is because change can bring about so much improvement in certain aspects. In many ways, change can make work easier, pave the way for future innovations or generally improve people's lives. Similarly, change has been adopted by various work organisations for varied reasons. Known as change management, companies and businesses are integrating change into their work strategies so as to be competitive and more efficient.
Due to the problems and the target growth that have been distinguished by this company, the CEO, Cheryl Hailstrom has decided to create a plan in relation to change of management. As mentioned earlier, Cheryl Hailstrom wanted to employ change management for facilities, maintenance unit, manufacturing process and human resource management. Primarily, her major objective is to utilise change management process in order to enhance their target market by venturing to offshore manufacturing and to satisfy their clients.
However, Cheryl Hailstrom as new CEO should be aware of the culture of the company. She should have respect to the Lakeland Wonders history. Actually, she uses too autocratic, threatening, coercive leadership since she wanted her people to follow her way without getting people involved. She certainly needs to get the cooperation of the people involved in order to have successful changes in management.
With regards to ethical issues, Cheryl Hailstrom should be able to take considerations of what would be the reaction of their employees to the changes that would be imposed. Furthermore, she should have seen to it that her employees have undergone critical explanations about the reasons why the change of management system and strategy is needed for a certain aspects within the company. Cheryl Hailstrom should also give the employees enough time to master the skills and proficiency of their employees from maintenance, communication services and human resource management in utilising the changes made by the organisation. This is done by providing them enough trainings and orientation to explain the changes made.
Actually, the leadership skills of Cheryl Hailstrom are important for the company. The title of being chief executive officer can be utilised by any individual however possessing the title does not automatically makes a person a leader in a true sense. According to Haddock and Manning (1995) being a true leader must be obtained through inspiring and motivating people to give their best and a successful leader commits herself to her organisation or group and nurtures the same kind of commitment to its members. In addition, according to Haddock and Manning, a successful leader has the following traits:
Knows her job and her field thoroughly.
Stays on top of current development, trends, and theories.
Knows her people, including their strengths, weaknesses, hopes, and goals.
Shares a vision of service, excellence, ethics, and achievement with others.
Demonstrates by her words and actions strengths of character and integrity.
From these traits presented by Haddock and Manning (1995), Cheryl Hailstrom should carefully evaluate herself and made the possible changes to become a successful CEO in Lakeland Wonders.
Reactions to Changes
What were the reactions to the ways she implemented the changes? How did these reactions impede her plans?
"Workers are assets" has become the dominant symbol of late twentieth-century management. In some ways, it represents a worthy elevation of employees to the status they deserve. People are, after all, the chief engine of prosperity for most organisations. Executives and management gurus alike sing the praises of worker assets with a variety of vaulting phrases. But why spend time contemplating this common managerial expression? The reason, simply put, is that language matters. Indeed, some sociologists believe that the essence of management is skilful use of language to create meaning (Pfeffer, 1994). Confucius, when asked what he would do if he ruled a country, said that his first act would be to fix the language (Pfeffer, 1994). To leaders, they represent a tool not merely to describe reality, but also to create it. To observers, they provide a window onto the managerial landscape. Things turned around over the years, and we entered the Age of the Employee Asset. "Employees are our most important assets" became the expression of choice for annual reports and press releases. But the phrase often had a hollow ring. When asked to rank strategic business priorities, respondents placed investing in people behind customer satisfaction, financial performance, competitiveness, and quality of products and services. Thus, if Cheryl Hailstrom truly treated people as valuable strategic assets, she would see that a competent, dedicated workforce is a prerequisite for success in any of these other areas. Investing in people would surely take on a higher priority. This CEO should understand that outsourcing in Lakeland Wonders could mean lost of jobs. She should forecast that the company's image might suffer if it was outsourced. She should also carefully evaluated and have a feasibility analysis that in establishing an offshore base for Lakeland Wonders is not as easy as blink of an eye. She needs to articulate strategy, vision, mission, short term & long term objectives and goals of the company in order to lessen distrust, poor communication, unpleasant surprises, lack of openness and fear of unknowns between her and stakeholders (e.g. employees, directors).
In what ways could she garner the undivided support of her management team for her plans and presentation at the Board meeting?
In setting up an offshore manufacturing plant, different aspects of management must be considered and given importance to be able for the company to come up with good plans for implementation. Because Lakeland Wonders needs to be as productive as possible to reach the growth expected by the board of directors, to utilise their precious resources, to meet their customer needs, and to stay competitive with similar organisations, they must adopt and implement a good deal of management. Management is the principal factor determining the productivity of labour, thus, the compulsion for higher productivity in Lakeland Wonders demands high-level manpower resources. Therefore, through operations management concepts, Lakeland Wonders will be able to effectively implement management strategies that would be relevant to their plans of putting an offshore manufacturing branch.
Primarily, operating plans involve planning, with a given emphasis on allotting a specific period or time for a specific task. In setting up an offshore business, thorough and careful planning must be made to identify the different several risks that must be given consideration for a more effective operation. Theoretically, operational planning deals in aggregated or average values of variables in the system, such as product demands, equipment capacity, standard costs, and inventory levels (Davenport, TO 1999). Secondly, organising is another important aspect to take note of, and involves the approach of total quality management or TQM. With TQM, the whole organisation can manage change and set their own agendas with the plethora of new external pressures. This is another relevant approach for setting up an offshore business, for it aims to create a quality culture, which has a goal of delighting their customers (Davenport, TO 1999).
A third aspect to point out is the importance of resource allocation, which dictates or restrains the choice of goals and strategy (Hopkins, 1994). Resource allocation and budget is an important aspect to take note because in putting up a offshore manufacturing, management of resources would determine the extent of technology and workforce that the offshore manufacturing may have, thus, money and budget determines the capability of Lakeland Wonders to provide extensive services and features to its consumers. Next aspect that must be given importance is monitoring and evaluating, which includes knowledge of how to improve performance given institutional considerations and constraints (Hopkins, 1994). Monitoring and evaluating must be developed prior to setting up an offshore manufacturing, to ensure the smooth and flawless operations of the outsourced department. Lastly, controlling must also be considered, for this involves the adjusting of plans to predetermined objectives as they are executed, and involves distinct activities to measure actual performance, compare performance with standards, and take action to correct deviations when required (Hopkins, 1994). With the effective process of controlling, the supposed offshore manufacturing would have an effective operations that would enable Lakeland Wonders attain its desired implications. Therefore, the role and use of such management issues and aspects would enable the whole organisation, to efficiently and effectively plan its actions in setting up an offshore manufacturing.
Thus, before Cheryl Hailstrom pursues her plans, she need first to won over the senior management support. She must be frank and talk to the senior management individually and make them understand survival or else acquired by others. Cheryl Hailstrom must also show concern to the union and respect their culture. She should get people involve of what she does. By appointing a team and empower them to take decision would possibly earn respect and good working habits from employees and later on start talking of the vision. As previously discussed, the leadership style of Cheryl Hailstrom should be changed to the type in which it is appropriate to the company.
In addition to this, the unforeseen problems that Lakeland Wonders might encounter are the cultural differences of its possible employees if offshore manufacturing was initiated. When assessing the interaction between culture and empowerment, the company must be able to identify and understand those subcultures that might engender a work environment more or less empowering than the larger organisational system (Wilkins & Dyer, 1988). The management should be able to develop a thriving organisational culture and a stronger organisation, providing their needs and the things that they deserve in order for them to be motivated for their sake and for the organisation's sake as well. In addition, elements such as work processes, organisation design, career path, performance management and a compensation program are part of human capital management strategy and a plan to ensure continuing success. The change management process imposed by the company must have been seen that there may also encounter problem with some of their stakeholders like employees, customers and others.
Also, in managing people, the human capital management should also incorporate a governance process to ensure equality among employees. Hence, even though managing people in organisation is the most difficult responsibility to be taken, it is also the most challenging part that if given enough attention, focus and consideration, this would enhance the employees loyalty and hard work that may not only benefit them but as well as the organisation may it be a non-profit or a profit oriented organisation. In general, people can give more than what is expected if the management were able to provide them extra hand and minds and if the management give them extra time, extra information and extra people in order to do their job properly.
This study was conducted in order to evaluate the efficacy of change management in an actual working organisation as well as to identify the various effects of change to individuals. The Lakeland Wonders might possibly implement an offshore manufacturing business. Specifically, these general objectives were integrated in the company operations through the addition of technological facilities, creation of communication centres and designation of a human resource staff.
Actually, change of management is not bad as long as the changes made can really enhance the competitiveness and strength of an organisation. It is effective, if and only if, a thorough investigation and evaluation of the company's performance has made. And if the study suggests that there is a need for change, then that is the only time, the organisation should imposed required changes to be done. Because, change of management system is very critical, one wrong move, the company, might faced its biggest downturn instead of strengthen its business portfolio and survive to the stiff competition in the business arena. It is recommended that any organisation, who will undergo some changes on their management system must see to it that the changes are well planned and implemented carefully, because this will the basis for the success and/or failure of any organisation.
What remedial steps can she take now that she is in this impasse?
Based on the situation, there are lots of things that Cheryl Hailstrom can do in order to lessen the pressure of change in Lakeland Wonders. As part of her leadership capabilities, she may ask the board to reduce the target goal, she may cite the people's concern and culture. On the hand, she may also go forward and continue her plan. However, she needs to talk to people, inspire them and get them excited to the possible growth of the company. She may use reward and recognition for good response. Apparently, team effect and inclusion of people from the union should not be neglected.
From the discussion, it can be understood that the personality of leaders and their implementation of leadership styles are determined their culture. The leadership style of the leader depends on her culture and personality, and thus, depends on the norms of the society and the culture of his or her subordinates. The personality of leaders simply shows that it serves as an informative tool that emphasises the important role culture and character play in leadership implementation. As a recommendation, it would be essential if one will be able to effectively and efficiently assess the type of leadership that must be implemented. There is no general type of leadership style that is applicable to every organisation in any culture or country. Because of this, a leader must be able to evaluate the nature, the needs, abilities, and the performance of its employees or colleagues to effectively adopt and implement a suitable type of leadership, depending on their culture, societal norms, and the individual personality and characteristics of the leader.
The concept of management of change or change management can be described as a structured approach to individual, team, organisation and society transitions that move the target from a current state to a desired state (Change Management, 2007). Change management in Lakeland Wonders or in any firm is a process for managing the people-side of change. It is the integration and adaptation of a new business model into an organisation to transform the organisational relationships with all its constituents (Change Management, 2007). It is important that the management asses the current condition of the employees in order to identify the changes that the organisation needs. It is also important to estimate the effect of management change on the employee behavior patterns, work processes, technological requirements and motivation. Management of change must be continuously monitored for effectiveness and must be implemented throughout the organisation and must be adjusted in order achieve the desired goals Nickols, F. (2006)
According to Randall, J (2004), "the Management of Change is a subject that is destined to be with us for many years to come, while people adjust to a world of work that is likely to be more fragmented than previous generations had come to expect". The claim that change at work can be managed is not a new position. The history of industrialisation offers myriad examples of organisations evolving in all sectors. New technologies have always driven the search for new applications, which in turn provide the competitive advantage to those who first implement them. Into that world of change came initiators, inventors and managers of change who offered business owners new ways of implementing such competitive advantage. Different organisations all over the world and not only Lakeland Wonders are seeking to improve production and to enhance their competitiveness in the global market. Management of change plays an important role in achieving the company's goals. There are strategies and techniques that various organisations employ in order to increase the employee's productivity and achieve growth. Objectives can be achieved through the people inside the organisation. Management change aims to improve and develop organisational performance. Management change is a process of working on the employee's interpersonal skills as well as the management and consultancy skills. According to Cox and Makin (2004), "before the start of any organisational change programme it is usually necessary to undertake some 'awareness raising' activities". The employees' input in the decision-making is important. The management should inform the employees about the change management plan that the company will implement. The management should gather feedbacks in order to asses the effectivity of the procedure. The management should always be ready to improve the method when necessary.
The Change Process
Managing change is seen as moving from a problem state to a solved state. It is a process of solving problems in the organisation. It is essential to diagnose or analyse the problem in order to create changes that will solve it effectively. The management should carefully plan the steps in management change and should endeavour to obtain support and commitment all throughout the organisation. Problems in the organisation are situations that require actions.
The Change Problem
The change problem is a matter of moving from one state to another. Moving from one state to another is a result of setting up and achieving three goal types: transform, reduce and apply. The transform goals are concerned with determining the two states' differences. Reduce goals on the other hand are concerned with solving and eliminating these problems. Apply goals are concerned with the implementation of the solution to eliminate the differences between the two states. The change problem focuses on defining the outcomes of the change effort, identification of necessary changes that will produce the desired outcome and finding and implementing ways and means of making the required changes. The approach in management change mirrors the company's mindset. The position of an employee in the organisation defines the scope of change that he will be involved in and the nature of change that he will be concerned. When management change is needed, all people inside the organisation must be concerned with the transform, reduce and apply goals to make the changes effective and successful.
There are different strategies in Change management. In Empirical-Rational strategy, change is based on the communication of information and the proffering of incentives (Nickols, F. 2006). Normative-Reeducative change (Nickols, F. 2006) is based on changing the existing norms and values and introduction of new ones. In power-coercive, change is the result of exercising power and imposing sanctions (Nickols, F. 2006). In environmental-adaptive, change is based on creating a new organisation and transferring of the people to this new organisation (Nickols, F. 2006).
From the analysis, it is important that the company, Lakeland Wonders or the CEO of Lakeland Wonders listens to the employees' opinions about change. The employees, managers, CEO and company owners should understand how each one feels about change. The management should evaluate which change is important and needed. It will be of great benefit if the management implements big simple changes that will address the issues inside the organisation. A Petrochemical company based in Bahrain said that it has implemented Dr. Spencer Johnson's' strategies in the organisation. It has proved to produce positive results not only in terms of company growth but also led a positive change in the way the employees view themselves. Dr. Spencer's "Who moved my cheese" stressed out the importance of the employees in the organisation. Abdul Rahman Jawehery, general manager of a petrochemical company based in Bahrain said that GPIC has been using Johnson's book and it's strategies for the past eight years. It is of great import that the company considers the employees and listen their feedbacks regarding change. The company should make changes that will benefit the entire organisation. The employees must be introduced to different technologies and methods that will improve their productivity and ease of work. Management of change requires a clear sense of mission and purpose. These purpose and goals will determine the changes that the company requires. It is important that the people in the organisation know their roles and understand the management change completely. Keep communication barriers low. Allow people to talk and express their feelings about change.
Perhaps the space between the new organisation design heahded by the new CEO, Cheryl Hailstrom and implementing it into actuality is the whole coverage of organisation change and development. As mentioned in the introduction, people are adaptive to change. However, certain skills must be present from the initiators of change so as to successfully implement their project. Thus, managers need to have the necessary abilities not only on detecting what needs to be changed but also how to introduce the change effectively. Thus, in this review of related literature, some of the approaches, common problems, influences, case studies and best practices in change management will be analysed in relation to the research problem.
A number of approaches can be done in order to introduce change management in the organisation. There are approaches that are more focused on what is needed to be changed, still others emphasise on how change can be accomplished. Leavitt had defined three approaches to organisation, which includes structure, technology and people (Leavitt, 1964). New formal guidelines and procedures like organisation chart, budgeting methods, rules and regulations can also be structural approaches on inducing change. On the other hand, rearrangements in work flow through new physical layouts, work methods, job descriptions and work standards can be done as technological approaches. Some organisations stress on people approaches which includes alterations in attitudes, motivation and behavioural skills. This can be done through new training programs, selection procedures, and performance appraisal schemes. Other descriptions have focused more on the how approaches to organisation change. Based on one survey from previous studies on change management, seven approaches frequently used by managers had been identified (Greiner, 1967). These approaches had been categorised into three: the unilateral power, which focuses on changing a component of the organisation; shared power that emphasises on addressing change through group discussion and agreement; and delegated power in which certain change catalysts or agents are in charge of disseminating change.
Both Leavitt's and Greiner's concepts are both useful in relation to change management and its application. However, if one will analyse, the approaches differ in many ways. For instance, the structural approaches are rather formal and impersonal, while people-inclined approaches are more humanistic and democratic. Realising this, CEOs/managers are to consider the nature of their work environment in order to implement the most applicable approach to initiate change. In the same way, the Lakeland Wonders had made an evaluation of the company's needs and problems before implementing change. According to Barbeschi (2002), the process of making an organisation is simultaneously the growth and maintenance of relationships among individuals who are working towards a common goal and the actual accomplishment of tasks, individually and collectively. In any organisation, there exist two dimensions (Barbeschi, 2002). The technical dimension includes elements that are generally visible but hard to decipher like the control systems (recruitment mechanisms, administrative rules and procedures, etc.), structures (departments and divisions and physical facilities), and techniques and procedures (performance, working methods).
There are four change management strategies to choose from, these are the empirical-rational strategy, normative reeducative strategy, power-coercive (Bennis et al, 1969) and the environmental-adaptive strategy (Nickols, 2004). In the first strategy, individuals are rational and follow their self-interest once revealed. Herein, changes are basically based, on the communication and the tendering of rewards. For the normative-reeducative, the people are considers as social beings attached to unique cultural norms and values. Here, the changes focus on redeployment and redefining of the existing norms and values of the organisations and adapting to new development brought about by changes. On the other hand, for the power-coercive techniques, the people are the primary submissive and will probably do what they are asked or can be made to do. In this manner, the changes are based of the employment of authority and the annoyance of sanctions. And lastly for the least technique, the people are described as oppose loss and interference but these people are more likely to adapt new circumstances. This means, that the changes here are related to building of a new organisation and gradually outsourcing people from the old to new.
In accordance with the literature, as stated in the work of Leavitt (1964), and Benne et al (1969) the approach made by the Lakeland Wonders is related to the change management process of the people and the technology that it utilises which is known as the empirical-rational strategy. The project managers and the management team who initiates the change management process have been able to do its core responsibility in determining the problems encountered by the whole organisation in the implementation of the project. After such, evaluation of the problems, the team who conducted the changes that the company will be taken, the teams have also provided certain solutions to each pf the problems. Thru, thorough investigation and evaluation of the company, they have found out that the company is really in need of the change management plan. And through strategic planning which is needed in conducting any organisational changes, the company has provided enough time to investigate the current problems of the company, make a necessary change management plan that will meet the requirements for the company's demand and implement the plan, strategically in relation with the studied made by some experts. Moreover, during the application and implementation of the change management plan, the company and the project managers do not end its obligations; instead, for them it is just the beginning of more complicated problems. When, the changes were implemented like when the software program, communications services, human resource management and the maintenance unit were all being enhanced, the management team who imposed the changes of management and strategy for the company, has conducted its own evaluation in order to know the problems that the new imposed management system had encounter. And since all the employees became very vocal about it, the company had easily known the problem and immediately provide a solution for the sake of the stakeholders and the organisation/company as well.
Change management is a process wherein all sectors in the society undergo. It is a significant process because it allows the organisation to create decisions that will be beneficial to the employees and the company. Moreover, organisations that are accept changes are usually more successful compare to companies that resist it. In a globalise market, new technologies and procedure are emerging rapidly, in order to keep up with this progress a company must be willing to adapt to management changes. Lakeland Wonders needs change management particularly with its marketing, inventory, and performance of the employees in order to keep up with the competition that rapidly becomes a huge threat in the organisation. Addressing changes particularly in the human resource will directly benefit the company because the performance of the employees will either aid in the improvement or failure on the performance of the company. Investing in the human resource is important because they are the front liners of the organisation. Efficient front liners ensure the success in winning the battle of competition within the industry.