Term Paper on "Leading Organizational Change"

Term Paper 9 pages (3339 words) Sources: 2 Style: Harvard

[EXCERPT] . . . .

Leading Organisational Change

Changes at Little-bit

At a time when competition has dramatically increased in every aspect of the market and businesses are searching for more and more opportunities from where they could obtain gain and achieve greater profits, a company with experience, tradition and a lot of years on the market, like Little-bit, has to find the forces to adapt to the new and find the resources to change if it wants to maintain its position and its market share in the business world and further expand them.

The company has functioned very well for a very long period of time. In fact Little-bit as part of the Big-bit Group has been for the whole 40 years of existence the most profitable company. It has been the cow to milk for the other, less successful, companies of the group. For years on, a great deal of the profit achieved by Little- bit has gone towards supporting financially companies from the Big-bit Group which otherwise would not have been able to function properly.

At this particularly point in time Little-bit finds itself at the dawn of change. The problems of the organization have been diagnosed by its former leader, Beno-leada, and the future change in the structure of the organization has been thought of and prepared by her. She created the background for the implementation of a second organization structure, developed its support and took care of all the details for it to be able to be put in practice. At the present time, the new leader, Icandobeta, just has to comply with the strategy outlined and prepared by Beno-leada in terms of the implementation of the new organization structure. He has no actual say in it. It will be implemented.

The new leader can only work around the new structure hoping that it will be a success. He will have to implement changes in other areas of the organization that are now lacking while taking care that his subordinates follow the implementation plan for the second organization structure outlined by Beno-leada to the letter. He is now like a doctor that has to apply the treatment prescribed by another doctor.

2. Identifying the problems of Little-bit is a very difficult task since there are issues that have developed in time, starting many years ago and the organization has grown around them. In order for a change program to be properly implemented within Little-bit these problems have to be discovered and eliminated together with the newer, more obvious problems.

The main fundamental problem that Little-bit has been and is facing is the money transfer from the company to the other companies within the group. Instead of putting this money to god use into the proper development of the organization, they are all made unavailable. In a way Little-bit is functioning for the sole purpose of keeping other companies alive.

Furthermore, there are communication problems at the level of the whole Big-bit Group with regard to some decisions concerning Little-bit that have supposedly been taken without their approval. Consequently senior managers from the Big-bit Group disregarded the role played by Little-bit with regard to financing and turned publicly against the company. Thus, Little-bit has become the black sheep of the group, but a money bringing black sheep.

The problem with the stewardship of the Big-bit Group goes even deeper than this since the management of the companies comprising the groups has often been influenced by external factors other than the ones normally present on the market, i.e. The political agendas and aspirations of divisional leaders that have often been conflicting. This problem seems to be temporarily fixed, but there is no knowledge of what the future will bring.

After the retirement and transfers of a lot of experienced personnel from Little-bit, although the organization continued to prosper, its vision was lost and it continued operating out of momentum. The company had been quality oriented, but nowadays this attribute has been lost with all the new employees and the faulty management. This is not a good way for a business to operate since at the first change in the environment there will be nobody there to handle the change in goals and vision, thus the company will be greatly affected.

The competitive strength of Little-bit has been analyzed with Porter's Five Forces model. This provides a simple perspective for assessing and analyzing the competitive strength of a company, where it finds itself in the competitive environment and what are its strengths and weaknesses in the field of competition.

This model focuses on five forces that shape competition within an industry: the risk of new entry by potential competitors, the degree of rivalry among established companies within an industry, the bargaining power of buyers, the bargaining power of suppliers an the threat of substitute products.

Potential competitors for Little-bit have been constantly entering the market and will continue to enter. They pose a great threat to the company since their prices are much lower. Little-bit has therefore been loosing market share quite fast. Therefore Little-bit has to reconsider its pricing strategy and develop ways to cut down on costs and become more competitive while it maintains its quality standards.

With regard to the degree of rivalry among established companies within an industry all the companies are using all the resources available to them in order to be more and more competitive. This includes marketing strategies, advertising and a pricing policy fitted to increase customer loyalty. Furthermore, since recently the reputation of Little-bit has been affected by the public statements made by senior managers from the Big-bit Group, the competitors acting on the same market are taking advantage of this.

With regard to the bargaining power of buyers, it seems that the demand for the products of Little-bit has been and is still strong. In terms of suppliers as mentioned before, they are mostly from within the Big-bit Group.

Change in organizations and especially quick crucial change is always difficult to successfully achieve. It is a "dog eat dog" business world out there and the ones who do not cope and hang are rendered useless and sold for petty cash. Unfortunately, many organizations, implementing change leave out a very important factor in the process, i.e. human resources. In reality, human resources are not only something that adapts by itself to change. They are the very factors implementing and using the new processes.

A great problem nowadays is that with the highly competitive, rapidly changing market, many companies are trying to quickly adapt and change, thus forgetting significant components. Human resources departments are usually introduced in the process only at a later stage. Even worse it falls upon them to implement the change program even though they have not been involved and considered in the drawing of the plan. The result is that the later in time the change program is addressed by the human resources the more difficult it is for it to be implemented and be successful. This has been the case of Little-bit which has been affected in time by the lacking, non-participative decision making processes.

Little-bit has been found to have a problem in the field of human resources. Since the employees have changed so much in the last few years and the organization has not concentrated on providing motivation and support to the new personnel so that they may achieve a greater performance, develop new skills and learn to work as a team. The organization is loosing fast ground. It desperately needs to regroup and change in order to become once again competitive on its respective market.

Part B

The first issue that needs to be addressed concerning the management of Little-bit is the implementation of a change at the level of the whole Big-bit Group, i.e. The development of independent self-financing companies that do not depend on each other to exist and produce. This change would benefit a great deal Little-bit since all its profits could be reinvested in its development in order to create a strong flexible organization that can keep its competitive character. Unfortunately, this does not enter in the competence of Icandobeta. All he can do with regard to this issue is lobby with the senior management of Big-bit Group. If the latter brings no outcomes, the senior management of Little-bit should then seriously consider a break from the Big-bit Group. It is true that various Big-bit Group divisions combine with Little-bit's contributions to create the finished products, but it is also true that many products of Little-bit require limited interventions or additions from the abovementioned divisions. Therefore, in the future, with a development of a new production and supply chain, the company could stand alone.

Icandobeta as the new leader of Little-bit has to implement the abovementioned new structure, but also offer support for it and for the development of the company by making it more competitive. The new strategy that will be implemented in Little-bit will have the following main values as goals: the… READ MORE

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