Change
1. Introduction The level of competition in the global marketplace has become highly intensive and this fact is resulting in mergers and acquisitions between companies across countries and continents. There is no dispute that “mergers and acquisitions are a vital part of any healthy economy and importantly, the primary way that companies are able to provide returns to owners and investors” (Sherman and Hart, 2006, p. 1). However, in reality a range of issues may arise in mergers caused by cross-cultural differences, differences in management style, clash of personalities within senior level management and other reasons. This report attempts to analyse issues associated with Alcatel-Lucent merger failure. The report contains analysis of factors that enabled the merger to take place and the analysis of performance of company in present. Moreover, discussions are provided about cross-cultural issues at Alcatel-Lucent and new challenges for the company in an international area are described. 2. Factors that Allowed Merger in 2006 There were previous negotiation talks between Alcatel and Lucent in 2001 regarding the merger of the two companies. However, negotiations had failed due to suspicions of Lucent management that Alcatel was approaching the proposal like a takeover of Lucent, rather than ‘merger of equals’. The concept of “merger of equals” has been described as “a merger framework usually applied whenever the merger participants are comparable in size, competitive position, profitability, and market capitalisation” (DePamphilis, 2009, p.18). However, some circumstances have changed by 2006 that resulted in renewed merger talks between Alcatel and Lucent. First, the level of competition in mobile telecommunication and internet industry has intensified and the two companies needed to merge in order to be able to compete with Chinese manufacturers and other industry leaders. Second, as a result of numerous negotiations between the two companies on top level Lucent senior…
Literature review has identified a set of factors that are able to trigger cultural changes. These factors causing cultural change have been found as leadership change, technological developments, mergers and acquisitions and others. Discussions of each of these factors in greater details are provided below. 1. Leadership Change Authors such as Beer (2012), Christopher (2012) and Morgan (2012) agree that changes in top level management can result in changes in organisational culture. According to Beer (2012), initially, organisational culture is set by the founder of the organisation, but the initial culture set by founders might be subjected to changes due to the impact of a wide range of factors. At the same time, Beer (2012) acknowledges that this argument relates to private sector organisations at a greater extent compared to public sector organisations. Nevertheless, Beer (2012) and Christopher (2012) argue that change at organisational leadership causes changes to organisational culture to a certain extent. Christopher (2012) further reasons that the extent to which organisational culture is subjected to change to due to change in leadership depends on a set of factors such as the difference between the new and old strategy to achieve organisational objectives, personal traits and characteristics of a new leader etc. 2. Technological Developments The extent of technological developments that have especially accelerated during the last two decades have been found as a major factor causing cultural changes by Maude (2011) and Davel et al. (2013). Maude (2011) mentions the instances of using mobile phones in public to illustrate the impact of this factor. Specifically, according to Maude (2011) while it was perceived to be a rather rude behaviour to engage in lengthy conversations in mobile phones in public places such as public transport only twenty years ago, nowadays such behaviour is generally perceived…
By John Dudovskiy
Category: Change
Introducing change and improvements regularly in various business processes has become one of the basic conditions of survival in a competitive global marketplace of today. However, even when the importance and necessity of change is understood by many its implementation in practice is associated with a set of substantial challenges caused by a range of reasons such as loss of power, fear of unknown, job security, economic factors etc. (Zimmerman, 2011). This article analyses and evaluates diversification strategies implemented in Ford Motor Company by its President and Chief Executive Officer (CEO) Alan Mulally. Ford Motor Company is global auto manufacturer that employs about 164,000 members of workforce in about 70 plants worldwide (Annual Report, 2011). The article covers three main themes: main drivers of change in Ford, key changes introduced by Alan Mulally, and an analysis of change management style of Alan Mulally. Main Drivers of Change in Ford Motor Company By 2006 when Alan Mulally was appointed Ford President and CEO there were a set of stark drivers of change. Specifically, at the time among other issues “Fords major problems was consensus management in the process of designing automobiles” (Herbold, 2011). For example, Ford Fusion sedan introduced in the same year was not equipped with navigation and side air bags, despite the fact that most of the competitor cars of the same class were equipped with such accessories. Analysis conducted by Mulally has identified that the main reason behind such a practice was high level of involvement of finance department over the design and functionality of cars (Fuller, 2011). In other words, in order to bring down the costs of manufacturing, finance department have been asking engineers and designers to be engaging in excessive cost saving when designing cars and equipping them with technological gadgets and functionalities.…
“Since the environment is dynamic, it is important for the organisation to change itself to make it compatible” (Pathak, 2011, p.23).Taking into account specific organisational characteristics associated with the business and on the basis of popular strategic change management models, an affective model for change be proposed specifically for Company that consists of the following seven stages: Searching for opportunities to gain competitive advantage Developing an initial change plan Obtaining stakeholder perspective on the issue Revising the change plan according to stakeholder perspective Preparing employees for the proposed change Implementing the change initiative Ensuring the continuity of the change Implementation of Model for Change Implementation of the proposed change model for Company involves adhering to the stages of the model specified above in a consequent manner. The main advantage of the model relates to encouraging a proactive approach in relation to organisational change within Boots. In other words, instead of introducing changes as a response to changing external environment in a reactive manner, the model encourages Company management to be searching for opportunities to gain competitive advantage in a proactive manner. Importantly, the above model for Company has been proposed only as a general framework and its implementation in practice may be associated with minor alternations depending unique aspects of each individual change proposal. References Pathak, H. (2011) “Organisational Change” Pearson Education India
By John Dudovskiy
Category: Change
Organisational stakeholders of business need to be involved in planning strategic changes. The extent of involvement of each type of stakeholder in the planning of the change depends on a range of factors such as their influence, their importance, and the degree to which changes are going to affect them. The extent of involvement of each type of stakeholder in the planning of the change is best explained by referring to the following graph. Figure 1 Stages of stakeholder involvement in change processes Source: Change Management Toolbook (2010) On the basis of graph above, employees and managers as the main internal stakeholders at Company need to be involved in change planning process to the extent of ‘co-creating’. The degree of involvement of company’s main external stakeholders – customers, on the other hand has to be limited to ‘testing’, whereas the company’s suppliers and shareholders need to be involved in the planning of change to the extent of ‘selling’ Additionally, “decision – makers may commission market surveys or mandate market research institutes so as to early perceive emergent stakeholder groups and their claims” (Zimmermann, 2011, p.225) in order to reflect their viewpoints regarding the change initiatives. It is important to note that the system to involve stakeholders in the planning for change presented above is only a general framework and the extent of involvement of stakeholders may differ in each individual circumstance depending on the nature of the proposed change. Change Management Strategy with Stakeholders Business’s change management strategy with stakeholders primarily depends on the level of power of each stakeholder category, as well as, the level of their interest on the change proposal. As a general rule, Company is suggested to deal with its stakeholders on the basis of the following figure as it has been suggested…
One of the most popular theories related to the topic of change is Lewin’s Force-Field Theory of change according to which there are two forces affecting to change at the same time (Rickards, 1999). There are driving forces that positively contribute to the change to happen and there are also restraining forces that are obstructions to change. Most of the restraining forces on individual basis have been explained above. Accordingly, in order for the change plan to succeed driving forces should be strong, restraining forces should weaken, or both of these should take place at the same time. For instance, if a company has proposed a change plan that requires employees to use new software when preparing report instead of old software the workforce is used to there are driving forces, as well as restraining forces that affect the success of this change plan. The main driving force in this case would be the fact that reports prepared with the new software would result in more detailed information for decision making, and thus create competitive edge for the company. However, restraining forces are the facts that employees are used to the old software, more time needs to be spent with the new software and the new software is more complex to use. The practical implications of this theory are that senior level management of this company should strengthen the driving force for the change which can be achieved through explaining to the workforce the advantages of the new software for decision-making and how this advantage is connected to the long-term growth of the company, and ultimately how it will affect the future of each employees. At the same time company management should minimise restraining forces through organising training for employees and teach them how to use the new software.…
By John Dudovskiy
Category: Change
Implications of Individual Resistance to Change. Because of the highly competitive nature of today’s local and global business environment constant change has become an integral part of any business strategy. Companies that refuse to change constantly according to the changing market environment risk losing their market share and customer loyalty. Therefore, today most companies understand the importance of change and try to implement changes constantly in order to improve the efficiency of their business processes. However, understanding the importance of change and having a good change plan is not enough for companies to succeed, because there are many barriers to implementing change in an organisation and individual resistance to change is one of them. “Individual sources of resistance are rooted in basic human characteristics such as needs and perceptions” (Griffin and Moorhead, 2009, p. 514). The main obstructions in the way of devising an effecting change plan and implementing it include habit, security, economic factors, fear of unknown, lack of awareness, social factors and others (Dantzker, 1999). This article analyses the implications of individual resistance to change in detail. The main factors seen as barriers to chain are analysed separately in great detail and the implications of individual resistance to change are illustrated with personal and professional examples. Moreover, strategies are discussed that can help to overcome individual resistance to change as suggested by respected scholars in the field of organisational change. Habit as Resistance to Change One of the strongest reasons for individual resistance to change is considered to be habit. “Habits are hard-wired into the basal ganglia part of the brain. In this area the brain makes connections to experiences and insights and functions effectively and efficiently without using a lot of energy” (Training, online magazine, 2009). In other words, in organisational context habits are the ways of…
By John Dudovskiy
Category: Change