Change Management Report
Transcript of Change Management Report
CHANGE
MANAGEMENT
REPORT
TABLE OF CONTENTS
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1. INTRODUCTION..............................................................................................3
2. LITERATURE REVIEW..................................................................................4
2.1 Drivers of Change............................................................................................4
2.2 Meta Change Model........................................................................................5
2.3 Total Quality Management Principles.............................................................6
3. CASE ANALYSIS..............................................................................................7
3.1 Analysis of Approaches To Change And Difficulties.................................7-8
3.2 Change Tool – Total Quality Management (TQM)...................................9-10
4. RECOMMENDATION...............................................................................11-12
5. CONCLUSION..................................................................................................13
6. REFERENCE LIST.....................................................................................14-15
1. INTRODUCTION
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Every business in the world is continuously changing to survive in the
competitive environment. All companies need to be prepared anytime
for receiving the challenges or pressures that change presents and
trying to overcome these in order to gain benefits. The pressures or
forces to change in a business may arise internally, from
management or organisational team, or from external likes change in
economic development.
As a business consultant for the company, my responsibility is to
provide a report to the Interlock’s Executive Chairman, Mr. Stuart
Young with an analysis of the appropriateness of the approaches to
change and potential difficulties (Q2), and a focus on the Total Quality
Management (TQM) system (Q5).
According to the case, there are several forces currently influencing the organisation to
change, including innovation pipeline, TQM system, quality control, organisational
structures, leadership status, and HR administration and entering then new market -
Japan.
In the second section, a list of drivers of change and continuous transformation model
will be outlined firstly. Next, the principles of the selected changing tool – TQM will be
explained in detail. In the case analysis section, the main focus will be divided into two
parts which are TQM and approaches to change and potential difficulties. In the final
section, a series of recommendations will be provided.
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2. LITERATURE REVIEW
2.1 DRIVERS OF CHANGE
In an international customer-driven environment, competitive advantage depends on an
organisation’s ability to concentrate on its unique skills and capabilities, and build on
and exploit these in a framework and culture of continuous improvement and
innovation. (Graetz, Rimmer, Lawrence & Smith 2002, P16)
I. Opportunity
The major force to change is that Mr. Stuart recognised the new market opportunity for
expansion and increase company revenues by selling the product around the world. For
instance, Mr. Stuart Young decided to target a new market – Japan as the new exporting
market because Japan has economic growth and political stability. Through operating in
the global marketplace, Interlock can obtain more profits and benefits such as the
company products can often fetch prices higher than in other export markets.
II. Innovation
The second force to change is innovation occupies a higher rank than quality in the
mind of customers especially in the Japanese market. To illustrate, Mr. Stuart is
emphatic that it is innovation, not quality that has made Interlock industries so
successful in Japan and thus, Japan Interlock manufacturer are highly desperate in
innovation. This phenomenon was caused by the daily change in fashion so customers
want the new and fashion products more than the best quality products. So, Mr. Stuart
realized that it is an excellent example to make change.
III. Quality
Another influencing force to change is the level of quality. For example, Mr. Stuart
recognized the major drains on business is the cost of poor quality and it has driven
Interlock to adopt a policy of eliminating if faults in the company’s system. Therefore,
Mr. Stuart believed Interlock could learn the advantages of Japan’s best system –
achieve a zero defect rate.
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2.2 META CHANGE MODEL
Sustainable change is reliant on a company’s the ability to appreciate its strategies and
the factors in different situations. (Burnes 2000, P251) Therefore, every company
requires a framework or model to make change. Looking at the case, Interlock was
using the continuous transformation model for staying ahead of its rivals.
In the strategic planning process, the major thing is to scan the competitors, economy,
and technology in the relevant environment. For example, Interlock realised the some
factors such as customer requirements changing due to product customisation,
minimisation of product defects and so on.
After environmental scanning, companies can move into the stage of developing new or
innovative products. Similarly, Interlock was encouraged to focus on R&D area and
innovation pipeline after recognising the importance of the innovative design on product
range.
In the third stage, Interlock could refer to refitting the innovation pipeline strategy,
TQM system, and operations process. Also, Interlock introduced workforce training to
their employees in order to reach a high level of skill and knowledge. After series
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A B
Processes for fine tuning
Multi-skillingProduct
development
Strategic planning process
Refitting
changes and test in the market, it should enter the process of removing the unfavourable
items.
2.3 TOTAL QUALITY MANAGEMENT (TQM) PRINCIPLES
TQM refers to systematic policies, methods, and procedures used to ensure that goods
and services are produced with appropriate levels of quality to meet the needs of
customers. (Collier & Evans 2010, P279)
TQM model is related to the system of lean production which was developed in Japan
and it is based on Quality Statistical Process Control. Typically, TQM is led from the
top of any organization and it is therefore very important to avoid the situation where it
simply stays at the top. (Kanji, Gopal, Barker & Raymond, 1990)
TQM is about continuous performance improvement. To improve
performance, people need to know what to do and how to do it, to
have the right tools to do it, to be able to measure performance and
to receive feedback on current levels of achievement. TQM provides
this (Kanji & Asher, 1993) by adhering to a set of general governing
principles. They are:
Delight the customer
Management by fact
People-based management
Continuous improvement
Each of the principles can be used to drive the improvement process.
To achieve, this each principle is translated into practice using core
concepts, which show how to make the principle happen. These
concepts are:
customer satisfaction
internal customers are real
all work is a process
measurement
teamwork
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3. CASE ANALYSIS
3.1 ANALYSIS OF APPROACHES TO CHANGE AND DIFFICULTIES
I. CHANGING MANAGEMENT STYLE
In this case, Interlock redefined its management structure and the relationship with
employees by introducing the Just-In-Time (JIT) system. Although there is a resistance
to change from a certain group of people, Mr. Stuart still insisted to execute the JIT
system by locating the right people in the right positions. For instance, Interlock
implemented the flat management structure where redesign the responsibilities of senior
management and delegate authorities to the team leaders in a team-based work group.
A new form of organisational structure in Interlock which specialised in HR Quality
programme has strengthened the organisational skills and capabilities whilst becoming
increasing competitive in the marketplace. For example, the factory manager has a
meeting with all team leaders in every morning and then later all team leaders have
meetings with their team members. It has enhanced the efficiencies of information
delivery and communication system between upper management and executed labours.
However, there are some resistances to change new system because most workers do
not adopt the specific cultural changes. For example, most people were saying JIT
system might work in Japan but will not in New Zealand. There are several issues lead
to these resistances, including educational levels, behaviour patents, personal traits,
attitudes, social values and different expectation in job security or potential career
development and benefits. (Vikas, 2010
II. CHANGING INNOVATION SYSTE
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The function of changing in innovation generates a strongly competitive advantage for
Interlock. For example, Mr. Stuart has developed the concept of innovation pipeline and
decided to spend 10% of sales in R&D which directly contributed to the company.
Moreover, the use of patents has also helped Interlock to occupy a predominant position
in the market. Therefore, innovative products and patents has become a sustainable
competitive advantage of Interlock.
Although new innovative strategy has shaped Interlock into a flexible company, it also
created an enormous cost for the company. Because of improving customisation
is very often regarded as an activity which is going to increase cost.
(Kanji & Searstone, 1990) The major difficulty comes from the costs of
constantly expenditures in R&D and some unavoidable payments in renewing patents or
protecting patent.
III. CHANGING LEADERSHIP
Mr. Stuart plays an important leadership role in changing the organisation. For example,
he tried to looking for future development of company by seeking new market
opportunity in foreign countries. Furthermore, he has significantly international working
experience and it might be an advantage to help him improve in his leadership
management.
Consequently, Mr. Stuart has achieved a superior triumph for Interlock by using a series
change which based on his belief and experience. For instance, he realises the change
situations quickly and identifies the new goals and system immediately. He chooses the
people who believe in his approach to change and allocate the right people into the right
positions. Also, he involves himself in each process especially his new concept of
innovation pipeline. Furthermore, he went to Japan almost 26 times for building a
strong business relationship with Mr. Shibutani. What he all over did was establishing
clear directions, aligning people and motivating or rather inspiriting them. (Dunphy,
Griffiths & Benn 2003, P263)
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Nevertheless, his strong leadership also produced a weakness for Interlock which is too
much dependent on Mr. Stuart. There should be a large shift in the overall management
after his retirement.
3.2 CHANGE TOOL – TOTAL QUALITY MANGEMENT (TQM)
An analysis of TQM implementation in Interlock Company will be divided into five
components which as shown in Figure 1.
Figure 1 Total Quality Management (TQM) Model
From: http://www.edrawsoft.com/TQM-Diagrams.php
I. Customer focus
Interlock tried to offer the products based on customers’ requirements by designing the
updating fashion patents. For example, Interlock shows the prototype to customers for
comment first and then alter the design based what customers exactly want before
entering the final production.
II. Total participation
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Participation is a decisive role in TQM process because an effective TQM process
requires a well corporation between top management and executed workers. There is a
total participation when Mr. Stuart implemented the new innovation system. Moreover,
Mr. Stuart also involves himself in the process with his workers to manage each stage’s
development.
III. Process improvement
Interlock has been continuously changing in many ways, such as innovation pipeline
system, research and development, and workforce upgrading. For example, it spends a
strong percentage of sales to invent various patents of products. Also, Mr. Stuart highly
encouraged his workers to upgrade themselves through multiple skills training or further
educational commitment.
IV. Planning process
A well-designed planning is vital for a company to achieve its goals and objectives.
Interlock tried to set up a strategic plan which related different department of overall
operations in order to achieve the goals of zero deflects, high quality and innovative
patents,
V. Process management
In the TQM implementation process, control management will be a challenging task for
a manager because it strongly requires experience and capability. Mr. Stuart has created
a workplace culture that support TQM framework and constant innovation. (Dwyer,
2002) For example, Human Resource Quality Circle programme for the factory teams.
As a result, TQM was very successful for Interlock because it solves all of the key
concerns of its target market and also has so much in common with the management
philosophies of that market. Besides the TQM model, there is an alternative option for
Interlock which is Organisational Development (OD).
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OD focuses more on changing and improving three key aspects of organizations:
strategies, design components, and processes. (Boonstra & Thomas, 2004) Target the
effectiveness to achieve the goals as the main point for selecting the framework tool,
TQM is more suitable than OD.
4. RECOMMENDATION
The following recommendations are based the major difficulties that outlined in the
analysis section:
ISSUE 1: RESISTANCE TO CHANGE
Continuously changing in the environment by following new trends or updated
information is vital for companies for surviving. Nevertheless, there may have a group
of people refuse to change with new system and management structure in Interlock. For
example, most workers do not believe the concept of JIT system due to the different
culture and working conditions. So, the resistance from those people might become a
barrier to improve or change continuously; and thus, it might become a lost in economic
aspect.
Firstly, the top management should be honest to admit the resistance and explore the
reasons, and then later create an approach to eliminate the resistance that will be
acceptable to all parties. (Kanter, 1985) For example, apply a survey within overall
company and build personal meeting to explain the future direction, main strategy, and
forecast results.
Secondly, a successful application of changing in management system or operating
function requires high communication and effective performance between employees
and upper lever management. By addressing the resistance, building trust relationship,
provide greater control to employee, and monetary motivation will be some better
choices to get the desired outcome. (Kopelman, 1976)
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ISSUE 2: COSTS OF PROTECTING PATENTS
Interlock used patent rights to prevent competitors from copying or stealing its ideas.
Protecting the invention of a new product or improving the grade of products
relates to the use of more expensive materials or processes will raise
product costs and diminish the returns. (Kanji & Searstone, 1990)
With regards to the Interlock case, the company needs to pay a fee of
AUS $5000 per patent. By reducing product costs, economies of scale
can be an important source of solution. Economies of scale refer to
the ability of companies producing in large volumes to achieve
specialization and gain more returns from the stimulated sales.
(Charles & Gareth 2010, P109) Eventually, Interlock can maintain the
balance of profit and loss through achieving the desired economies of
scale.
ISSUE 3: LEADERSHIP
The culture of continuous improvement in an organisation, particularly on an individual
basis, is not easily achieved and therefore some effective training and leadership is
essential. (Kanji, Gopal Barker & Raymond, 1990) Another concern in
Interlock it its leadership. Mr. Stuart’s leadership style actually is a
part of the competitive advantage of Interlock mainly the business
relationship with Mr. Shibutani.
Regarding to the different customs and culture of Asia countries (Fletcher & Brown
2008, P81), their loyalty is on a person rather than a company image when building a
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close business relationship. Undoubtedly, damage must occur in the business
relationship with Mr. Shibutani when Mr. Stuart retired or quitted his position.
To address this problem, Interlock could turn the focus in the business relationship from
personal loyalty to company reputation. For example, Interlock can change its
leadership characteristic from “Charismatic style” (where emphasis on personal image
is major level for change) to “Task focused style” (focus on the core business and
overcome resistance in performance). (Stace & Dunphy, 1996) So, the relationship
between Interlock and Japanese market can put more concerns on the effective
production rather than the personal ability of leaders.
5. CONCLUSION
In this modern complex business world, the traditional working approach is no longer
acceptable. In order to remain competitive in their fields, companies must be prepared
to incessantly change and improve.
Interlock Company changed in many ways, including management style, quality control
program- TQM method, production process - JIT system, innovation pipeline, patent
design, continuous transformation model, leadership, product customisation and so on.
Due to the ability of Interlock to manage various issues simultaneously and to deal with
new challenges, Interlock created more opportunities and strengths for future
development.
In conclusion, with the information gathered from the case analysis and literature
review, Interlock can become more successful by solving the potential difficulties based
on the recommendation guideline.
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6. REFERENCE LIST
Boonstra JJ. & Thomas Cummings. (2004). Dynamics of Organizational Change and
Learning. Australia: John Wiley & Sons.
Burnes B. (2000). Managing Change: A Strategic Approach to Organisational
Dynamics. Edinburgh: Prentice Hall.
Charles W L. Hill & Gareth R. Jones. (2010). Strategic Management: An Integrated
Approach. South-Western: Cengage Learning.
Collier A. David & Evans R. James. (2010). Operations Management. USA: South-
Western Cengage Learning.
Dwyer J. (2002). Communication in Business. Frenchs Forest: Prentice
Hall.
Fletcher, R. & Brown, L. (2008) International Marketing: An Asia-Pacific
perspective, 4th edition, Pearson Education Australia.
Graetz F., Rimmer M., Lawrence A., and Smith A. (2002). Managing Organisational
Change. Australia, Brisbane: John Wiley & Son.
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Hildebrandt, Steen , Kristensen, Kai , Kanji, Gopal and Dahlgaard, Jens
Jorn. (1991). Quality culture and TQM, Total Quality Management &
Business Excellence, vol. 2(1), 1-16.
Kanji, G. K. and Searstone, K.(1990). Quality Control is the Way of
Thinking of Quality Assurance, Total Quality Management & Business
Excellence, vol.1(2), 259-268.
Kanji, Gopal K.(1996). Can Total Quality Management Help Innovation,
Total Quality Management & Business Excellence, vol.7(1), 3-10.
Kanji, Gopal K.(1994). Total Quality Management and Statistical
Understanding', Total Quality Management & Business Excellence,
vol.5(3), 105-114.
Kanji, Gopal K. and Barker, Raymond L.(1990). Implementation of
Total Quality Management, Total Quality Management & Business
Excellence, vol.1(3), 375-390.
Kanter R. M. (1985). Managing Human side of Change, Journal of Management
Review,vol. 74 (1), 52-56.
Kopelman R. E. & Thompson P. H. (1976). Boundary Conditions for Eexpectancy
Theory Predicitions of Work Motivation and Job Performance, The Academy of
Management Journal, vol. 19(2), 237-258.
Leibman S. Michael. (1992). Total Quality Management and Human Resource
Improvement, HR Magazine, vol. 37(9), 34-39. (Accessed September 30, 1992 from
ProQuest)
http://proquest.umi.com.ezp01.library.qut.edu.au/pqdlink?Ver=1&Exp=10-19-
2015&FMT=7&DID=707153&RQT=309&cfc=1
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Vikas Kumar. (2010). JIT Based Quality Management: Concepts and Implications,
International Journal of Engineering Science and Technology, vol. 2(1), 40-50.
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