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Managing change is a critical step for a company development, whereas it is not an easy task. This may bring a lot of planning and systematically actions to the company. It is not only change inside the organization but it may change externally too. For example, the company has to change their product design to attract more consumers with the other competitor who having the similar products (www.management-hub.com, n.d.).
Many people will have a negative perception when they heard the word "change management", they may perceive that this is the ominous for the organization come to a bottleneck. Hence, part of the managing change is to determine which employees are suitable for the particular jobs, understand what their attitude is, a suitable employee should not embrace the negative thinking, or else it is unqualified for the management changing job, it is because person who lack of courage may become an obstacle for company to success (Wallace, S., 2007).
During the innovation steps, leaders should embrace the right changing style toward success. When implementing the changes of management, the target employee voice out their opinion is inevitable, therefore, management should take consideration to their point of view, they should not be neglected, because this action may lead them feel lack of motivation. An effective changing style which stated by Wallace, 2007 are:-
Collaborative - Keep on up date issue to the target employees so that they can have the promptly reaction.
Consultative - Target employees have to be informed about the changes that management takes.
Directive - Informed employees that the importance of changes.
Coercive - The employees have required obeying the instructions given.
Due to these variety of distress factors, effective as well as strength leaders are the significant crucial for the entire management for change and innovation. This is because during the acuity moment of changing management, employees will perceive leaders as the core of the company; they will take action regarding the leaders' directives. Any planning or decisions making by the leaders are seems correct by them, thus advisable, effective as well as confident decision making made by leaders are very important (Bacal, R., n.d.).
In our assignment, we have chosen DiGi Telecommunication as our topic. DiGi Telecommunication has established in 1995, it is part of the global telecommunications provider and is listed in Bursa Malaysia. They are the first telecommunication company which provide fully digital mobile network in Malaysia. DiGi concentrate their business in DiGi Prepaid, DiGi Postpaid and DiGi Business which offering the simple, innovative as well as best value for their customers. Besides, internet is dispensable in this electronic world nowadays, therefore DiGi Telecommunication has launched their business to provide their customers broadband empiric. DiGi is promise to all their stakeholders to evolve their business which is fiscally and ecologically responsible through corporate initiative, Deep Green (www.sugarcrm.com, 2009).
Definition of managing change and innovation
Anon, (2011) defined that managing change is coordinating a number of activities and inter-relationship so that the organization can survive, and benefit from, the process of change. A major challenge is to achieve the right balance between the short-term pressure for change and long-term corporate goals.
Schumpeter c.s. (1930) seems to have stated that innovation changes the values onto which the system is based. So when people change their value (system) the old (economic) system will tumble over to make room for the new one.
In our opinion, managing change and innovation is the changing structure in whole organization and try to make something new to organization. Other than that, it also mean make different to organization before and after.
What is change and how do manager deal with it?
According to Robbins, DeCenzo and Coulter (2011), changing structure includes any alteration in authority relationships, coordination mechanisms, degree of centralization, job design, or similar organization structure variable. For example, DiGi Telecommunication Company has design prefect management team to manage their company. DiGi have separated its management team into several departments such as strategy and business transformation department, technology department, corporate affairs department, marketing department, corporate administration department, finance department and human resource development department. The management of DiGi is very successful as the structural or administrative changes include shifting to a team-base structure. The marketing department has a good understanding of the customer's need and want.
Factor that organizations need to change
Robbins, DeCenzo and Coulter (2011) mentioned that, both of external and internal forces constrain mangers.
External forces create a need to change
The external forces that create the need for organizational change come from various sources, that is marketplace, technology, government laws and regulations, economy and labor markets.
Technologies play an important role to create an organization to change. Daft, (2010) state that, introducing new products and technologies is a vital area for innovation. A product change is a change in the organization's product or service output. Product and service innovation is the primary way in which organizations adapt to change in market, technology, and competition. Besides that, the recent technological development is aware by the technical specialists. They are make effective use of the new technology. The members from specific departments such as research, manufactory, and marketing are cooperate in the development of the new products or services. The technology changes have contributed to succeed of DiGi. As customers want speed, convenience, quality and good service, DiGi saw a need for organization to change. Therefore, DiGi created a new and effective while run their business. Bateman and Snell, (2004) comment that, signals of a new technology's impact are visible well in advance, leaving time for companies and people to responds. Thus, DiGi understand the potential value of cellular technology and adopt at the first time. Although, it seen very risky but as a first mover, DiGi has gain advantages and rise reputation for innovation. For example, DiGi expand their market to the youth segment by introduced web and mobile music service called DiGi Music Unlimited. DiGi's customers can download their favorite songs with only RM5 per month.
Other than that, DiGi also used Customer Relationship Management (CRM) software to manage the sales and customer data. With the support of the technology, DiGi can run their routine activities more efficiently. In addition, DiGi Company also provided payment kiosks at certain place for their customer who subscribe postpaid plan to pay for their bills. The benefit of payment kiosks had brought the convenient to customers. Moreover, it also helps DiGi to reduce cost on hiring employee in long run operation.
To stay ahead, DiGi must continue to innovative. DiGi management realized there is a need to change and have to suit the demand of their customers. So, DiGi launch their great idea for customers by offering free access into Facebook.
Moreover, Robbins, DeCenzo and Coulter, (2011) said that the internet has change the way we get information, how products are sold and how we get our work done. For example, DiGi had make improvement and innovations to their product. On 11 February 2009, DiGi announced its foray into the online space with the launch of mySimplifieds, a classifieds portal to cement its strategy to expand beyond telecommunications services and stay on pulse of its customers. The concept was coined to reflect DiGi's innovation and promise simplicity. Desired name, mySimplifieds, it was set up in partnership with a local content developer, Kasatria Technologies Sdn Bhd with a clear goal of creating a truly functional and easy-to-use service for Malaysian web and mobile users. It is a platform where people can meet online to buy and sell or simply browse.
Robbins, DeCenzo and Coulter, (2011) said that, economics changes affect almost all organizations. For example, prior to the mortgage market felt down, low interest rates led to significant growth in the housing market this growth meant more jobs, more employee hired and significant increases in sales in other businesses that supported the building industry. For example, to continued slowdown of the economy since 2008, coupled with intensifying competition in a market that is approaching saturation saw greater emphasis on DiGi' s operational efficiency initiatives. There was a concerted drive to improve DiGi's operating cash flow, and look at DiGi's business not only for top-line growth but also to significantly enhance the bottom-line.
There are positive signs pointing towards a faster rate of economic recovery in 2010. With improved business and consumer confidence, DiGi is confident that the upward trend in demand for both mobile voice and mobile internet will gain further momentum this year. So DiGi have started launched many new project after the economic recovery and make changing in their product.
There are a few telecommunication companies in the marketplace. Therefore, DiGi's company has faces many competitors such as Celcom, Maxis, Yes and even Telekom so DiGi have to make sure the innovative bring profit to them. DiGi need to differentiate their services by changing their current strategies to gain competitive advantages. The introduced of new technologies also is an external force that cause need for change in company. In order to stay stable and on top in market place, DiGi choose to make a change for their business.
Internal force create a need to change
Internal force can also create the need for the organizational change. These internal forces originate from the internal operations of the organizations or from the impact of the external force.
When managers redefine or modify an organization's strategy, that action often introduces a host of change. DiGi change their strategies to manage their organization. They not only provide the mobile services, they also provide internet service. On 19 March 2009 DiGi launched its broadband service with a clear promise of value and quality internet to the people to set right customer experience and expectations. The emphasis is about getting right for the customers with meaningful differences to make broadband nicer. DiGi is challenged to be the initiator of change in the broadband market the same way they did in voice. During 2009, DiGi also started to offer their network for Mobile Network Operators (MVNO) that serves specific segments. DiGi signed a deal in May 2009 with Baraka Telekom Sdn Bhd to provide their nationwide GSM network for the company mobile service. DiGi also signed an exclusive arrangement to provide domestic roaming to U Mobile Sdn Bhd.
DiGi management identifies the company problems and makes a perfect decision during a need for change within the organization. The particular department easily senses a need for change when there is a performance gap. For example, when DiGi brings new equipment, there is an internal force for change. Hence, the DiGi's employees may face job redesign. So, an intensive training is requiring and had provided for their employees to adapt new environment at working place.
Change agents are people who act as catalysts and assume the responsibility for managing the change process. Any manager can be change agent. Manager plays an important role for an organizational changing. They will make decision for company's future. For example, in DiGi's company, the manager of strategy and business transformation department will make decision to do a survey for their product and service from customer in marketplace. After they get the feedback from the survey, the manager will make a suitable decision and create a new strategy for the company. Furthermore, manager of technology department in DiGi's company decide to bring new equipment for the change in the company.
Organization development (OD)
Daft, (2010) described that, organization development is a planned, systematic process of change that uses behavioral science knowledge and technique to improve an organization's health and effectiveness through its ability to adapt to the environment, improve internal relationship, and increase learning and problem -solving capabilities. Organization development can be used to solve the types of problem just described and many others.
To succeed in the long run, DiGi have to manage organization development. DiGi's company has to come out with a change refer as organization development to achieve the company goal. When a new plan is set by top manager, they also have to consider the acceptance of employee. Some of employee may resist the organization change because no one willing to change unless the occurrence of a problem or crisis. There are a few OD techniques to overcome this problem, for example, DiGi begin with a questionnaire distribute to employees to see their response on the new plan been made. Conflicts usually occur among the organization's members. So, DiGi have to overcome this problem in order to achieve their goals. To make sure their employees interact and have a good relationship with colleagues, a primary function of OD is to help them become a team. Trough team buildings activities, a lump sum of afford had been done by DiGi such as training course which involve communication skills, change of attitude, behavior, and perception.
Creativity and Innovation
Creativity refers ability to mix up ideas in a unique way or make the unusual associations between ideas. The outcome of the creative process need to be change into useful products or work methods, which is defined as innovation. Organizations need a creative idea to make innovative and improvement. This can be including innovation in product, promotion strategy and organization's structure. (Robbins, DeCenzo and Coulter, 2011)
For example, DiGi inspire their creative idea through promotion. DiGi re-launched its brand campaign after 18 month of absence with Yellow Coverage Fellow through television commercials. They also used 'I Will Follow You' based on 1963 Billboard Hot 100 No. 1 song 'I Will Follow You' by Peggy March. Other than that, DiGi also had used their creative idea on the suitable timing. DiGi promote their brand by introduce "Yellow Man" through various media. Besides that, during Chinese New Year, the marketing department inspires their creativity idea when advertised through TV. The humors action of yellow man and also the actors had convey the message that DiGi have good line in every corner. The advertisement was successful attract consumers view and confident their current customers.
On 21 December 2006, DiGi chartered helicopter to airlift much needed emergency supplies to flood victim in Johor. This action was very creative and innovative as DiGi workers worn their specific yellow T-shirt during the charity activity had made everyone alert their brand. DiGi also offer emergency telecommunication services to the affected area and provided a RM 3.00 talk time credit for their customer to stay in touch with their lover. This creativity effort had first been done by DiGi. Furthermore, DiGi launch their great idea for customers by offering free access into Facebook by 0.facebook.com. This kind of promotion was successful attract the youth segment.
Recently, DiGi also launched a whole new marketing strategy, named 'DiGi Campus'. It aims the student as target. It is the first package that gave lots of special benefits for student only. This is the innovation made by DiGi to their product. DiGi had applied creative and innovation concept in their telecommunication market, therefore DiGi has won numerous awards. One of the awards, namely Malaysia's Most innovative Company by Wall Street Journal Asia.
To increase creativity and productivity, DiGi has created a work environment that enables and encourages open communication between co-worker and managers. Flexible working hours, open plan offices and a strong focus on health, safety and environmental has been part and parcel of DiGi's value proposition to its employees in the last couple of years. Moreover, DiGi is the first in Malaysia to offer unlimited free calls between prepaid and postpaid under the DiGi Family Plan. The plan also includes unlimited free voice calls, SMS and MMS for everyone in the Family account.
DiGi also think the creative way to promote their several types of product line. Recently, DiGi had promoted their product through a special activity around Malaysia. One of the locations was hold in Kampar New Town. Many free gift printed logo of DiGi such as umbrella, bag, and notes pad were given to the customer who answer the correct answers that asked by DiGi workers. The grand prize also being designed which require customers to guess the password of the box. Through the various types of activities, the new customers had been attracted to join DiGi.
The successful routes (strength) of DiGi Company
In 1995, DiGi starts its operation in May. It launched fully digital communications GSM1800 services, the first digital mobile communication in Malaysia. After a few years, DiGi earn numerous of revenue. Its revenue has more than more than double, that is approximately RM 4.9 billion with subscriber base of 7.7 million. DiGi become so successful because they focus on making it easy, keeping it relevant and providing the best deals to ensure gaining excellent customer experience in mobile and internet service. DiGi enter late to the internet space this lead them to be follower in this space and cannot earn much profit as the leader .However, DiGi manage to overcome this by integrate its market. DiGi began on a strong note with the launch of DiGi Broadband Done Right that came with a clear promise of value and quality internet services with the right customer experience and expectations. They also introduced DiGi Priority service, offering personalized services and assistance for their premium value Postpaid and Prepaid customers. Moreover, they launch the DiGi's music telegram service, where customers can send full music tracks or ringtones to loved ones and friends. Finally, they launched Windows Messenger (IM) that allows their customers to chat online from their mobile phones, PCs as well as PDAs.
In consequents, they introduced the best data plan in the market for BlackBerryÂ® smartphones to their corporate customers through their Think Practical campaign. Next, they expanded their insurance offerings, by giving customers the option to purchase higher value coverage via easy SMS activation. Keeping their momentum with the youth of Malaysia, they organized several exclusive DiGi Showcases featuring American Idol heartthrob David Archuletta, followed by top Taiwanese act, Fahrenheit, Korean famous singer and so on.
In addition, they strengthen mass market by offerings with specific plans that were more focused and relevant to the lifestyles of our customers, with greater value through their simplified DiGi Prepaidâ„¢ plans and Familyâ„¢ package that offers a combination of prepaid and postpaid supplementary lines. Furthermore, they launched DiGi Music Unlimited to expand their presence in the youth segment. The first web and mobile music service of its kind, this service enables legal unlimited music downloads from two of the largest music labels in the world - Sony Music and Universal Music. In conjunction with Malaysia's National Day celebrations, DiGi launched a highly lucrative contest in Malaysia offering prizes worth approximately RM1.75 million called Seribu Sejam. As part of their commitment to promote and drive sustainability and climate change in their community, DiGi launched its Deep Green: Challenge for Change competition. 15 student teams from eight local universities were given the challenge to seek new renewable energy solutions for rural underserved communities and increase efficiency in existing micro-hydro projects in the country.
In line with their expansion plan to rollout their 3G network nationwide, they launched their 3G/Mobile Broadband service in Penang and Sabah. This was followed by the launch the Turbo 3Gâ„¢ for mobile phones in the Klang Valley to cover 59% of population ahead of the targeted 44% planned in the next coming years, thus cementing their strength in the internet space. Then they made waves in the market by introducing the most affordable all-in-one DiGi Smart Plan for BlackBerryÂ® Smartphone, extending unlimited data usage to the mass market at only RM58 per month. In show of concern and aid of the environment, they announced another Deep Green initiative that engaged their customers to help reforest up to 120,000 square metres of forest in Sabah. For every DiGi customer who opted for electronic billing during the promotional period, DiGi donated RM3 to WWF-Malaysia in support of the Kinabatangan Corridor of Life reforestation project. Deep Green is also the key efficiency initiates that involving DiGi network, information technology (IT) systems, building and facilities, fleet and initiatives with employees, customers, partners, and the community .This strategy embed sustainable development across every expect of their organization.
Throughout the year, they continued their operational efficiency program as one of their key initiatives to remain competitive. They relooked at all their business processes and activities and found big and small ways to make them more efficient. They also leveraged on Telenor Group Procurement in various key spend areas and continued to explore new technologies including Green ones. Last but not least, they took a leading role to ensure greater infrastructure sharing among the mobile operators and will continue leading it.
The weakness (risk) face by DiGi Company:
In the normal course of conducting its business activities, the Group is exposed to a variety of financial risks, which include credit, currency, liquidity and interest rate risk. Therefore, they seek to minimize potential adverse effects of these risks.
(a) Credit risk
The Group's credit risk arises in the normal course of business primarily with respect to trade and other receivables and cash and cash equivalents. Credit risk is managed through formalized policies on credit assessment and approvals, credit limits and monitoring procedures. Short-term investments, money on call and deposits are placed only with licensed banks and unit trust fund.
(b) Foreign currency risk
The Group is exposed to foreign currency risk as a result of transactions denominated in currencies other than its functional currency, arising from the normal business activities. The currencies giving rise to this risk are primarily the United States Dollar and Special Drawing Rights. Exposure to foreign currency risk is monitored on an ongoing basis and when considered necessary, the Group will consider using effective financial instruments to hedge its foreign currency risk, in accordance with its foreign currency hedging policy. As at 31 December 2009, the Group's outstanding foreign currency forward contracts for the purpose of hedging certain trade payables, totaled USD10.3 million (Notional amount: RM35.5 million). Changes in the fair values of these derivatives affect the financial instruments.
(c) Liquidity risk
The Group monitors and maintains a level of cash and cash equivalents deemed adequate by management, for working capital purposes and to mitigate the effects of fluctuations in cash flows. The Group invests only in highly liquid cash management funds. The Group has remaining commercial papers and medium-term notes facility with an aggregate nominal value of up to RM350.0 million as an alternative source of financing which can be executed when required.
(d) Interest rate risk
The Group's income and operating cash flows are substantially independent of changes in market interest rates. The Group exposed to interest rate risk primarily from the deposit placements and interest-bearing financial liabilities. The Group manages its interest rate risk for the interest-earning deposit placements by placing such balances on varying maturities and interest rate terms. The Group's policy in dealing with interest-bearing financial liabilities is to minimize the interest expense by obtaining the most favorable interest rates available
As a conclusion, after doing this assignment, we learned about the managing change and innovation of an organization. Besides, we also learn how to change and innovate an organization effectively and efficiently in the real business world. Internal and external forces play an important role in every organization.
Moreover, we had done some research on DiGi Telecommunication Company. Through this, we improved our research skill on DiGi's technology research ,promotion research, economic research ,competitors research and a lot of research which are related .The most important managing change and innovation is product of DiGi Company .In the business world today , there are a lot of competitors such as Celcom ,Maxis , U-mobile whereby it caused DiGi to keep on upgrading their product to be more success, it will help the company to gain more profit in the future and also satisfy customers needs and expectation. In the generation Y, the youngsters nowadays prefer to spend their time more on internet. So, DiGi come out with a broadband whereby the internet services with high speed that fulfilled their needs and wants.
We also study about the organization of strategies used by the organization. DiGi should always implement creative and attractive plans to increase its users. Nowadays, DiGi's company also comes out with new promotion which targeted on the youngster and students. DiGi come out with a plan which is affordable n cheap for University's students .The plan is very successful and is attain a good achievement. DiGi must make full use of the latest achievements in technology and to improve its weaknesses.
Furthermore, this widens our views and knowledge at the same time preparing us for greater challenge in the business world. We also learn about different organization strategy that can be used by a company .Not forgetting about what we learn which is the basic experience teamwork spirit. Each of us had done this assignment together as a team rather than individual. In addition, we also learned about tolerance. It is important as we give and take ideas from different individuals. Sometimes there is some opinion which clashes in between. Eventually we had sorted it out peacefully. And the most important thing we learn is we cannot do things last minute. Before we end, we have a short quote that is 'Sharing is Caring '.
David (2010) has indicated in his article that humans do not like any changes. It is because humans will feels that there are varieties of negative effects such like uncertainty, habits getting harass as well as facing personal losses. Due to these kinds of unfavorable factors that employees may face, it will lead them to become lack of job motivation. Therefore, a strength management should have some contingency methods to reducing the problems occur. Certainly, the company that we have selected which is DiGi is also recommended that to embrace these kinds of favorable methods to enhance for their effectiveness of the management. There are a few techniques that a management needs to know (Robbins, DeCenzo and Coulter, 2010; David, 2010) there are:-
Education and Communication
Education can implement through communication such like discussions, meetings, and report writing as well. It is important to let the employees wise up that what are the changes in the company. By doing this action, it can reduce the negative thinking of the employees as well as clear up the misunderstandings.
This is the step that let employees feel that they are not being neglect by the company and giving the opportunity to voice up their mind. Company should listen to those who oppose to the change, let the employees' feels that they have contributions to the company for the final decision. Employee involvement not only can reduce the obstacle but it can also help the employee increase their motivation.
Facilitation and support
Company can provide some facilitation such as provides skills training, counseling, therapy, or paid leave. It is worth to do so to let the employee feels that they are valuable in this company although this method will be expensive.
Company can attain a commitment with the powerful group of employees. It is the effective way to reduce the resistance of changing and innovating for management.
Manipulation and co-optation
Manipulation is the method that influences the employees by distorting and twisting a certain tangible matters. This may help the company detain the damaging information and lead the company's change more attractive. Co-optation is a step that makes employees feels that they are also a part to lead company towards the success. It also may help the employees to restoring back their confidence as well.
It may be a threat or force to pressing employees must work harder to maintain their job or position in the organization by using the method of terminate or suspension to their job. By using these threats, employees can force to improving their attitudes and also increase the motivation of work as well.