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Module Code: Module Title: Module Leader: Total Words: CM703
Managing Change in Organisations Behaviour
E.N. Wanki 3162
Prepared By: Student Name: Mahdi. M. Abd. Bakhiet Student ID NO: 130478MMAB Student Name : Muhammad Ahsan Riaz Student ID No : 130479MAR Student Name : Shahbaz Muhammad Student ID No : 061064SM
Q1) In evaluating organization culture, how would you describe the cultural philosophy of the organization, its implication on the workforce and the organization performances? According to Barney (1986) three conditions have to meet the organization’s culture in order to achieve competitive advantage. First the culture has to be valuable in improving organization’s profitability. Secondly it has to be scarce so as to differentiate the company from other companies. Thirdly, the culture must be imperfectly imitable. In other words, rare and valuable become impossible to imitate by potential organizations. According to Deal and Kennedy (1982), culture is a very important factor in the success of the organization. However, they consider four keys to dimension the culture. • • • • Value – the beliefs circulated at the heart of organization culture. Heroes – the man force who embody values. Rites and rituals – practice of communications that have strong symbolic qualities. The culture network – communication system in the organization.
Improvement in Corus focuses on products. However, Corus adopt innovation as essential concepts towards progression. This strategy gave the company high competitive advantage in the market. Innovation is the best method to differentiate your business especially in the time of competency. However, the market in the twenty first century is becoming highly competitive. For example, Apple adopts innovation as an essential tool to take up new markets. As a result of innovation and continuous improvement, Corus supports its new product development (NPD), and thus getting closer to customers by meeting their expectations and needs. Culture & competitive advantage According to Krefting and Frost (1985), the organizational culture may create competitive advantage if the boundaries of the organization are designed in a way that facilitates individual interactions and if the scope of information processes is limited to the appropriate levels. Attitude to work
Continuous improvement has a big impact on all facets of the business. That impact affects the employees, so that they become closer to the organization strategy. They need to own and adopt the concepts of continuous improvement ‘CI’. The adoption starts at the senior managers’ level by ensuring their commitment. Belief about work All employees of Corus can share ideas for humanizing their working practices. Each employee knows how to contribute to the improvement of the overall business whether his role is in designing department, or development research department or management. Employees are directed by the goals of the company. Norms about work Corus carries out regular presentations to staff on how CI is improving their business. It also uses written forms of communication with articles in team briefings and newsletters. Everyone has a part to play in continuous improvement. Values of work Theorists argue that the values that are widely shared and strongly held enable managers to predict employee’s reactions to certain strategic options and, as a result, minimizing the scope for undesired consequences (Ogbonna and Harris, 2000).However, the empowerment of employees and managers in Corus helps them to feel valued and gives them job satisfaction. Communication with Stakeholders supporting development Corus’s continuous improvement program is underpinning the idea of knowledge and experience. However, apparently bringing those two concepts to reality involves a lot of effort and money being spent. Corus invested more than 8 million dollars in the development process. In other words, Corus strategy is to win through the improvement and enhancement of its products. That really happened when Corus started its program to meet high standard contracts, like Royal Navy contract. Moreover, the flexibility in change has been clear when Royal Navy’s engineers’ changed their standard requirements. Culture philosophy and impact on Profit and Brand
The environment needs to be assessed in terms of complexity in order to know the degree of heterogeneity and concentration among the environmental elements (Robbins et al, 2009).Behavior is a spirit of culture. However, in Corus human resources are the heart of the company. Highly skilled workers, committed managers and creative engineers are considered as elements of successful change. However, change has been reflected on growth and profit. In conclusion, Corus has become a highly standard brand in steel manufacturing. Its products are now in use in building ships, planes, rockets and buildings.
Q2) Explain how this company (Corus) has managed its change process and argue whether or not it has benefited the company? "It is not the strongest of the species that survive, nor the most intelligent, but the one most responsive to change." -Author unknown, commonly misattributed to Charles Darwin. Change is the secret behind the success of most companies. Change is described as either radical or incremental. Radical change results in a major makeover the company and its component systems. While incremental change is about frequently and less dramatically change as part of the company’s natural evolution (Wood et al, 2009 P. 524).In most situations, the change management process goes through three faces in which many processes are grouped. The processes start in preparation, managing change and reinforcing the change. Preparation for change After Corus lost the bid to win the contract of The Royal Navy, Corus revaluated its capability to meet the standard requirements. Corus started to prepare a management team in engineering and development research department. Immediately Corus started its development plan by investing money in developing its machinery technology and research department. Develop and take action In most situations, change management is considered the best way to improve the organization’s performance. However, total quality management is a concept through which Corus in one hand has carefully designed its product. On the other hand Corus ensures that the company system consistently produces the design (Chase et al, 2004 p.274) Restructuring and continuous process improvement Corus tailored its policies and plans for using the resources to support its long competitive strategy. Corus mission involves long term process and long term objectives to fill the gap in the market by producing high quality products. From that point of view Corus started
investing in machinery, research and training. As a result, Corus won the contract and built a unique brand quality (Chase et al, 2004 p. 24) Corus continuous improvement via Lean production program and JIT concepts. Lean is about using fewer resources more efficiently, and JIT is based on the logic that nothing will be produced until it is need. Many companies improve their quality and productivity via JIT concepts. Great examples for that include Toyota, GM and Arvin North America (Chase et al, 2004 p. 424-435). Reinforcing change Communication
Although continuous improvement is going on as strategic innovation creativity is the secret word behind success. However, communication plays an essential role in the change process. Linking staff and sharing information have a big impact on reinforcing the change process.
Benefits of change Reducing Cost: Lean program and JIT concepts reduce the cost Economies of scale: Corus reached the economic scale by reducing the cost via producing large quantities. Increasing market share: through product line, Corus produce steel to many manufacturing needs, from constructing steel up to vessel and ships. Enhancing work environment: Corus enhanced its environment by implementing TQM program adding to organization culture and marketing strategy, showing harmony through the excellent communication between staff internally and externally with rest of the stakeholders. In giving an example of that, LG electronics built relationships between employees, workers and management. LG promoted work environment base on quality trust and respect and that is how LG established a world-class corporate culture (Wood et al 2010 p. 529) Business development: through research and development the business component has developed especially in human resource skills and machinery technology used in manufacturing steel. Using technology in the manufacturing process also has impact on the business development. However, technology is a key force of change (Wood et al, 2009 p. 529). Overall satisfaction: Increasing market share, high return on investment, employees satisfaction, meeting customer expectations all these results prove the satisfaction of
stakeholders by meeting their requirements and realizing their ambitions.
Q3) How would you describe the issue of motivation in this organization and its impact on individual and organization performances? (20 marks)
Dickson conducted a study to find reasons of employee motivation and found that employees motivation is not only dependent on money infect their behaviour is dependent on their attitude as well (Dickson, 1973). Kreitner defined motivation as a psychological method that provides reason and course of action (Kreitner, 1995); motivation is an internal urge to gratify an unsatisfied need (Higgins, 1994); and the determination to accomplish (Bedeian, 1993).So motivation can also be defined as the internal urge that forces individuals to achieve their own individual goals and that of an organisation. Moslow categorized employee needs in to five levels (Maslow, 1943): physiological, safety, social, ego, and self- actualizing. According to Moslow low level needs must be accomplished and satisfied before moving on to the next level. Hertzberg has categorized motivation in to two categories: motivators and hygiene’s (Herzberg, Mausner, & Snyderman, 1959). Motivator which is also called intrinsic factors, such as accomplishment and acknowledgement, helps create job satisfaction. Hygiene which are also called extrinsic factors, such as job security and pay, they cause job dissatisfaction. Vroom, Adams & Skinner also contributed in this field and put forward their own theories. In our case, Corus which is part of Tata steel, worlds sixth largest steel producer and second largest steel producer in the Europe lost its contract several years ago to supply high quality steel for Royal Navy T45 destroyer vessels. That was the biggest contract until that time, Corus was not considered capable of supplying high quality steel required for that contract. Losing the contract made Corus management realize that they need to invest heavily in to its R & D department in order to win these kinds of contracts in the future. Corus steel adopted Continues improvement strategy to upgrade its system. In order to get maximum benefits all the employees need to consider themselves part of the CI, accept and adopt it.Taking top to bottom approach, starting from strategical level senior management, covering tactical level and going all the way to the operational level. Strong communication is very dynamic in achieving employee commitment. Corus gives lots of stress on this and regularly gives updates to its employees by providing them with regular presentations. All employees are encouraged to contribute through CI groups. This has helped employees and managers to feel that they are given importance and significance and provides them with job satisfaction. Corus has benefited by reduced costs, be in a position to win high value orders and maximizing its outputs. Its R & D has benefited by increased quality of its products and this has given them competitive advantage over its rivals. It has also benefited its external stakeholders like Govt and other customers by supplying them high quality products meeting their strict criteria. This CI program has helped Corus to develop high quality new steel products and win a bid for the supply of steel for Royal Navy contract. Corus has won this contract through its R & D program based on Continues Improvement process. During the bidding process, Corus has worked closely with the Aircraft Carrier Design Team which is known as ‘early vendor involvement’. Corus has done this to make sure that it understands the requirements and can meet the
required specifications. This was a very risky strategy as Corus had to invest money, time and efforts and was not sure that it will finally win the contract or not.
Q4) Critically examine and evaluate the environment that led to the change management currently going on in the company and explain why the change process is important. (20 marks) Corus Steel is a subsidiary of Tata Steel Group and sixth in the world in terms of market share. In Europe, it is second largest steel producer and its annual sales are about £12 billion. It is current annual production is about 20 million tons and its production facilities are based in UK Scotland and France. It currently has 42000 employees in its worldwide sales department. It is one of the leading brand names in steel production and produces different kinds of steel products like steel plate, steel rails and wire rods. Its main markets are construction, engineering and machinery, mining and earthmoving equipment, ship building, fastening and rail. Its main production site is Scunthrope which is spread over 2000 acres and has 4000 employees.6.5 million tons of iron ore and 2 million tons of coal is every year used to produce 4.3 million steel products. This case studies are basically focused on policy of Continues improvement deployed by Corus steel its knowledge and experience and how it has used all these to win new businesses and market share. An organization can achieve a competitive advantage over its competitor’s through implementation of Continues Improvement throughout its processes. The implementation of Continues improvement strategy has helped Corus to overcome the problems it was facing in its steel manufacturing in the past. In the past Corus’s bid for a contract for Royal Navy T45 destroyer vessel was unsuccessful. That was the largest contract in the world up to that time. Its bid was unsuccessful because it was not considered possible for Corus to be able to produce that high quality and specific steel plates required by the Royal Navy. When Corus lost this contract it realized that it needs to invest in latest machinery and it needs to improve its production process. In response to that Corus invested £8 million at its Scunthorpe plate mill so that it could be in a position to win these kind of sophisticated and complicated contracts in future. This along with the implementation of Continuous improvement strategy has helped Corus to win contract to supply steel for two new Royal Navy aircrafts. If everything goes according to the plans then these HMS Queen Elizabeth and HMS Prince of Wales, costing £3.8 billion will be ready by 2014 and 2016 respectively. In the manufacturing of these two giant planes 8000 tons of structural steel will be used which will be supplied by Corous.These will be the largest and the most dominant surface warships built in the history for Royal Navy. If we want to bring a change in the system or processes that we already do, it’s not an easy task. Change management plays a significant part in the success of new process and development of the company. Often changes are brought in to the system and process in order to fill the gap between what market demands or expects from us and what level of services or products we are actually providing. With reference to Corus, as it lost its biggest tender for Royal Navy, it felt that it needs to invest heavily in order to remain in the business. Corus did so and constantly kept its employees informed about the changes being brought out. Why we need those changes and what benefits we will enjoy if this change will be successful.
It has communicated effectively with its employees; mostly the change process is failed due to lack of communication between employees and the management. This new process proved a great success and as a result of implementing such strategies Corus was able to win the contract for providing steel for the manufacture of two Navy aircrafts. Large numbers of manufacturing and production techniques based on quality improvement have been established since 1950.Continues improvement or “Kaizen” is one of these.it put emphasis on improving small processes step by step and in this way bring improvement in function, process and whole systems. For example reducing waste which could be very costly for a steel production organization like Corus. Apart from that Corus has adopted “Lean production process”, which has helped Corus to • Minimize Waste •Smooth Work flow •More customer focused business.
Q 5) How effective do you think the company’s approach to people management will be in ensuring improved results and enhancing the change management process? (20 marks) By Effective peoples management we mean that to get maximum out of your workforce, i.e. your employees and to help them perform up to best of their abilities individually, collectively and as a team. In order to make this happen an organisation must ensure that 1) Its people management policies are linked to the main business strategy of the organisation. 2) Its employees are working together to achieve these business objectives and aims. The Continues Improvement plan that Corus has adopted covers whole business, and all business areas. To work effectively and participate fully all employees must feel the ownership and must embrace CI strategy, starting from the top, i.e., the top management & if they are working together on CI and providing their full support they will be in a better position to implement CI in the whole organization. This will help motivate the employees and feel them empowered. Proper & strong communication is vital for the success of every change and for the implementation of new strategies. For this purpose, Corus regularly gives presentations to its employees to make them realize how CI is proving beneficial for Corus and its success. It uses written forms of communication with providing articles in team briefs and newsletters. Every single employee and worker has to play its part for CI.Corus employees can share their ideas and views through different CI groups. Often a person who is doing the job knows better than anybody else how much improvement is needed how can we bring a change for the better and which strategies we can adopt to make it happen. If the employees will be given that importance they will consider that their efforts are being appreciated and privileged. This will enhance their job satisfaction and they will be motivated to achieve company goals. As a result Corus has benefited by reduced costs, securing high value contracts and maximizing its outputs. Corus R & D department has benefited by increased expertise and knowledge which will give it a competitive advantage in the long term over its competitors. By adopting CI not only Corus has benefited a lot but its external stakeholders have benefited as well. Govt will benefit by the high quality steel production which will be in line with Govt long term strategic goal on defence policy, this steel will be a good value for money and CI will help to ensure that vessels are ready & operational by the deadline according to the exact specifications. Lloyds Register of Shipping provides assurance of quality of Corus manufactured steel. There were some specific requirements for the current project in terms of high quality and the material used should be able to withstand the extreme temperature or high seas. This specific order required Corus to produce steel which is of higher quality, strength and toughness. This has given Corus an opportunity to upgrade its production facilities which will bring competitive advantage in long terms. The empowerment of managers and employees have helped them feel that they are being valued and have given them motivation and job satisfaction.
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