Taxi-recapitalisation project

BEMARKINGSBESTUUR PBSB 812
n Taxi-recapitalisation project

Vanessa Olivier Studente nr: 11944609

27/02/2010

Individual Assignment Change Management. 14 August 2010

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.................. 9 The evaluation results and its interpretation ....... 5 The evaluation results and its interpretation ................................. .......... 10 Conclusions .... .................................. .................................................................... .................................. 6 Conclusions ................1 Principle 1: The purpose principle ............ ...........5..1 4.... ........................................ ...........4.. 9 4........................ .. ......................................................... ................. 6 4...........1......................... ............. ...................... .............1 4............................................................. .... 10 4.......... ........ ............2 4............................... ..................................2..5............................. 3 A short overview of the history of the project ............ Executive summary ....... 9 Evaluation methodology .......... .. 3.............................. ............................ ........................... ...................2 Principle 2: Clarify the need for change ................................. ............... 10 4........... ..... ...................... 10 I i i u ssi t h t u ust ....2......... ...................................1 4........................ ....................................................... ....................4... ..1 4.... 5 Evaluation methodology ............... ............ ........................................... .. ..................... 5 Conclusions ................ .......... .. .....3... .................. .........................................................2 4....... 10 The evaluation results and its interpretation ............................. 3 The goals of the study .3 4.................... ................................. .................... 7 4........... 3 Evaluation of the taxi recapitalisation project from a change management perspective .... 10 The evaluation results and its interpretation ......................2 4...6............................................... ..3....... 10 Conclusions ...................................... ....... 4....... ...................... 10 Evaluation methodology ..................... 10 4.............2 4............2 4......... 2...... .................................................................INHOUDSOPGAWE 1............... 6 The evaluation results and its interpretation ...................................... ...1 4........ 8 Conclusions ..................4 Principle 4: The diagnostic principle ..................................1 4..2.................. .......2 4..................... 6 Evaluation methodology .....................3 4............. ........... ...... ... 10 Conclusions ....................................................3 4...................... .................................................... .....7 Principle 7: The aligned commitment principle ...........6 Principle 6: Design a results orientated change strategy ...............................................................4...1....................................3 4.....3 4..........2 4................................6......................................... 10 Evaluation methodology .................................. 4 4.....5 Principle 5: The problem ± Polarity priciple ............ ............ 7 The evaluation results and its interpretation ......... ......3 Principle 3: Create / ensure leadership and stakeholder involvement ............. 7 Evaluation methodology .......6............. ....... ............1......................................................3.................5..........................

.8........... 13 23........... 12 4............................ .................. ...........................10 Principle 10: The managerial leadership monitoring evaluation and transformational leadership principle .........3 4...........3 4............... ...........................................1 4............................ ....................................................................................................... ....10..... ................. 11 Evaluation methodology .9 Principle 9: The learning ± or new culture creation principle .......................................................2 4................................................. .................7.8.............. 13 The evaluation results and its interpretation .. 12 Evaluation methodology . ....................................... .......9. 11 Conclusions ....... Recommendations to reach the goal of the taxi recapitalisation project as soon as possible.... .............2 4... 11 Principle 8: Diagnose and manage apathy and resistance to change proactively ......1 4..................... ........ .................................................... ................... ..................7.. .. .................................................................. .. ... 12 4............................4.. 14 I i i u ssi t h t u ust ..................1 4....7.............................................................1 4..................... ......................9.......... ...... 13 24...................................... ................................ 12 The evaluation results and its interpretation ................. Reference list ................................8 Evaluation methodology ......................................... 11 The evaluation results and its interpretation ........8..........9.............................. ........................2 4....................................... .........10....... ........ 13 Conclusions ...................3 4............................. .........................10.......................... .................2 4..... ............... .......................... ................. . 12 4.. .............. ................................................ ........................ .......... 12 Conclusions ..... 12 The evaluation results and its interpretation .... ............ 12 Conclusions ...... ..............3 Evaluation methodology ...

The continuing conflict and constant threat of violence in the industry attests to the failure to create effective mechanisms and structures to control and regulate itself to resolve conflict and contain violence. In 1992 the National Taxi Task Team (NTTT) was set up to investigate the causes and ways of ending the conflicts. Today the taxi industry provides transport for 5 to 10 million people every day and has a daily turnover of R15 million (Weekly Mail & Guardian. Some of the task team¶s recommendations were that the minister of Transport should regulate and formalise the industry and work towards economic empowerment. Unfortuanately. 1999). a high incidence of conflict and violence and an appalling road safety record. 1999). 2001:1). The NTTT reported that the minibus taxi industry is not regonised by government and also lacks economic empowerment. Executive summary 2. a formal structure and effective control of its operations (Memorandum. Accoording to a memorandum of understanding entered into by the Minister of Transport with the Ministerial Conference of Minister of Transport and the South I i i u ssi t h t u ust 3 . These recommendations led to negotiations between government and the taxi organisations. The goals of the study The aim of the research is to 3. which ultimately saw all taxi organisations agreeing to work together. together with the phenomena l growth came over-traded routes. which have engulfed the ind ustry since its inception. The minibus -taxi industry grew from a neglible informal operation to the dominant polyer in the public transport industry accounting for an estimated 65% of passenger journeys (Oosthuizen and Mhlambi. A short overview of the history of the project The minibus-taxi industry in South Africa has grown at a phenomenal rate since the early 1980¶s to 1995.1.

2000. (Fourie 2 -3 2003) 4. (Pe . commercial and fiscal incorporation of all relevant business entities involved. Afinal implication of this formalisation of the taxi industry will be the legal. the final steps of the Government¶s Transformation and Recapitalisation of the South African Taxi Fleet Project.African Taxi Council on January 20. 2000:06) ¡   A new plan has been designed to deal with the problems that hav e rendered South Afric¶s taxi industry uncontrollable. as with all new developments in this volatile sector. Minerals and Energy and Finance. However. Negotiation between government and South African National Taxi Council (SANTACO) has been progressing slowly and has reached deadlock on occasion. The slowdown is obvious from the intended announcement of t he final contract winners in July 2000 and the fact that the new vehicles were suppose to appear on the roads by January 2001. Under a recapitalisation project. Noannouncement has been made yet and on 24 November 2003 Transport Minister Dullah Omar extended the deadline for replacement of old vehicles to 2010. Trade and Industry. jointly developed by the Department of Transport. will see the entri 120 000 national mini -bus taxi fleet replace by a new 18. The plan includes taking the country¶s present fleet of 120 000 minibus taxis off the road and replacing them with larger. the recapitalisation project carries the risk of upsetting established power relations and generating conflict. the government will subsidise existing taxi owners to help them buy the new 18 to 35 seat taxis.and 35seater diesel-engine public transport vehicles. stronger safer vehicles equipped with smart cards to ensure they stick to registerded routes. wit ha major source of revenue for the SA Revenue Service becoming part of tax net. Evaluation of the taxi recapitalisation project from a change management perspective Whe do some hing change? ¢ I i i u ssi £ t h t u ust . These and other factors have delayed the government¶s plans to formalise the industry and provide assistance through the recapitalisation project.

It is also important to determine if a real need for the ch ange exists.first proposed in 1999 .1. I i i u ssi t h t u ust 5 . 4. estimated at 97 000 vehicles. The TRP is an intervention by Government to bring about safe. can result in the inability to convert plans into action. 4. affordable and accessible taxi operations by introducing New Taxi Vehicles (NTVs) designed to undertake public transport functions in the taxi industry. The tendency to focus on the objectives instead of understanding the why behind the needed change.2 The evaluation results and its interpretation Government e ists and through the policy-making process.When is the e a need to change? When will the change management effort be successful? ¤ 4.1 Principle 1: The purpose principle Determining the reasons for change Establishing the desired end -result of the project The programme .1 Evaluation methodology The lack of understanding of what the purpose of the change is. effective. The focus should be on the outcomes of the plan and not on processes. The expected end results also serve as criteria to evaluate the eventual success of the project. Such is the premise of government intervetion in developing the Taxi Recapitalisation Policy. reliable. to regulate affairs of constituents for porpose of promoting human welfare.1.would replace the country's ageing taxi fleet. ¥ The apparent chaos in organisation of the taxi industry had become dysfunctional to human welfare that it required Government intervention. Understanding the purpose of a plan gives us an understanding of the reasons for change.

13. Affordable operations. Introduction of safety requirements for passengers in the NTVs. VII. Monitor route operation. Improve the safety of travellers.4. and also that members of the public can easily identify a taxi vehicle. as well as ensure its formalisation and effective regulation. TRP is about extending subsidized contract by exploring mechanisms on how the industry can benefit from the subsidy system. The impact of this situation on the country s public transport system is significant. money and other resources expenditure. Branding and colour coding of taxi vehicles so that legal taxis could be identified and differentiated from illegal ones. tax evation and unbecomming driver conduct. usage and revenue. Most of these vehicles are largely in excess of nine years old. ‡ Promotion of accessibility on the size and number of seats in the NTV. 9. 10. The overall goal of the TRP initiated by Government in 1999 is the replacement of the current ageing fleet that constitute the bulk of the taxi industry with new vehicles that are safe and reliable. III. Will the result be worth the effort. 20.2. ‡ Comfort for passengers by insisting on the size and number of seats in the NTV. 14. IV. Migrate from a cash-based fare payment system to a cashless fare payment system. accidents. 15. 18. There are presently approximately 120 000 minibus taxi vehicles on our roads.2. (Mabasa. 4. 4. The programme also sought to ensure the sustainability of the industry as a business. 17. I i i u ssi t h t u ust 6 . Monitor critical parameters in the vehicle and report deviations.1. II. 12. 7. 1999). deaths. 21.2 The evaluation results and its interpretation The taxi industry in South Africa has had a chequered history by being informally organised and with activities fraught with problems of violence. since 65% of all commuter trips nationally are undertaken by means of the minibus taxis.1 Evaluation methodology The necessity principle Determine the specific need for change Is the change neccesary Will the result of the change be an asset which do not yet exist. 6. 16.3 Conclusions 4. Improve the quality of service of the taxis. V. 11. Improve the convenience to travellers. 22. 8. unroadworthy vehicles. 19. VI.2 Principle 2: Clarify the need for change 5.

Leadership involvement = how effective leaders use embedding mechanisms and the aligned commitment equation tog et proposed plans implemented.3 Principle 3: Create / ensure leadership and stakeholder involvement Change must be both led and managed.4.2. Currently the taxi industry has an official representation through the South African National Taxi council (SATACO). which is a federal structure indentified in a list agreed upon during the taxi plenary held on 18th July 1998 (Moyle. particularly the National Taxi Drivers Organisation (NADTO) and other organisations provoked by the issue concerning the I i i u ssi t h t u ust 7 . 1999) This announcement resulted in outcries from association members. Involvement of all stakeholders 4.3 Conclusions 4. Involvement=KnowledgexInformationxRewards and recognition x empowerment. 1990:73).3.1 Evaluation methodology The process of regulation was a function of interaction of official and unofficial participants namely: The Department of Transport Commision of Inquiries. South African Transport and allied Workers Union (SATAWU) as one of the giant influencial structure reinterates its support for the recapitalisation project Taxi owners Taxi associations (as interes tand pressure groups) During the late 1970s the South African black Taxi Association (SABTA) served as the umbrella which embraced some 400 affiliated local associations (McCaul.

2 The evaluation results and its interpretation Radebe said at the time that the previous programme was neither ³affordable to the national fiscus nor profitable 4. VIII. VII.rcapitalisation policy. hence more strikes were encountered. II. VI. Taxi Operator ± This class includes all persons who own taxis. NADTO argued that the recapitalisation of the taxi industry would result in over 41 000 job losses when the current strong taxi fleet is replaced with the new 18 to 35 seater diesel powerd taxis. III. (Pela. either as an employee of an owner. 2000:6) Commuters According to a report in a newspaper. Traveller ± This class of user includes all persons who utilize the taxi as a form of transport. which would subsequently have filtered down to commuters by means of rising taxi fares. South African Reserve Bank ± This is the regulatory authority for money transactions. etc. I i i u ssi t h t u ust 8 . roads were blocked and there was the random shooting of those who refused to be in support of the strike. MS Karin Pearce (Project Head) stressed that the replacement of the fleet will have wide ranging economic and social benefit for the country (Monare. Taxi Driver ± This class include all persons who drive taxis. IV. Financiers ± This class includes all the persons / institutions that will provide f unding to finance the purchase of the minibus taxis. NDoT. V.3 to the operators´. the law enforcement agencies. Insurers ± This class includes all persons / institutions that will provide insurance services for the new v ehicles.2000:03) Banks Insurance companies The replacement of minibuses implies that even manufacturers are going to be affected. either as a fleet owner or as a Driver / Owner.3. 2000:06) Taxi drivers The restructuring of the taxi industry is seen by most taxi owners and drivers as an infringement of their rights unlawful interference and unilateral decision to scrap the taxi fleet (Mashabela. Vehicle Manufacturers ± Parties responsible for supply and maintenance of the minibus taxis. 4. Regulatory Authorities ± This class includes users such as the DTI. or as a Driver / Owner.

4.4 Principle 4: The diagnostic principl e In a change strategy attention should be given to how existing strengths are to be used to convert plans into action and to solve problems Determine the present positives (strengths) that can be capitalised upon. a group.4.4. or polarities. Is the focus of the change intervention on an individual. And determine which issues are problems. Currently there are approximately one hundred and twenty six thousand (126 000) taxi vehicles in South Africa. or transformational changes or both. conflicts.1 Evaluation methodology Positive Negative y y y y Informal unregisted Tax evation Violence High accident rate (the public and innocent road users are the most harsly affected) I i i u ssi t h t u ust 9 . unit or departmental level. Should this gap be bridged with either reformtional changes. team. The replacement value of the current fleet is roughly R15 billion. as well as what the present negatives (weaknesses) are which should be managed or eliminated. or on a system level. On average.2 Conclusions 4. total organisation A gap analises between the purpose and the need for change. they are ten (10) years old and are therefore not fit for 4. in order to achieve the purpose.3.3 public transport operation.

and dilemmas or polarities which cannot be solved.5.5.1 Evaluation methodology 4. 4. to achieve the purpose (create the new asset.3 Conclusions 4.5 Principle 5: The problem ± Polarity priciple It is necessary to distinguish between problems that can be solved.6.6.) 4.6 Principle 6: Design a results orientated change strategy The integrating principle All processes and interventions must be results directed.3 Conclusions 4.3 Conclusions 4.7 Principle 7: The aligned commitment principle I i i u ssi t h t u ust .2 The evaluation results and its interpretation 4.2 The evaluation results and its interpretation 4.6.4. The results orientated change strategy is directed at bridging the gap between what we want to achieve .1 Evaluation methodology 4.y y y y Illegal permits Overcrowding Fighting over passengers 4.5.4. where we want to be and where and what we are now Laeders baises for specific interventions should not enter decision processes regarding selection of change tools. but which must be managed.2 The evaluation results and its interpretation 4.

the kinds of resistance and managing these pro-actively and effectively. the reasons for resistance of these sources.2 The evaluation results and its interpretation 4.8 Principle 8: Diagnose and manage apathy and resistance to change proactively This includes indentifying possible sources of resistance. Determine system s readiness and susceptibility to change. (stategies include negotiation.3 Conclusions 4. Steps in the management of resistance to change: 1. develope and implement specific resistance management strategies directed at resistance of each source. by implication its activities were not recorded in official figures.destruction.killing.7. rewarding or aligned commitment equation) 6. training.ative {opposing points of view.agressive{Blocking.environment/culture) 5.Aligned commitment = Involvement x shared vision and shared value system. groups. Aligned commitment = Knowledge x information x rewards and recognition x empowerment x shared vision Being part of The implication is that all stakeholders are focused on the same end result / outcomes and are commited to it. Determine the nature of resistance (passive-{negative perceptions and atitude}. and calitions) 3. info.social system. 2.sabotage. (culture and past management) The taxi industry was not regarded as a formal business in South Africa.subversion. Identify sources of resistance (individuals.1 Evaluation methodology 4. stikes & boycotts}.terrorising) 4. Evaluate the success of the resistance management effort (manage it) I i i u ssi t h t u ust .7. Select.7. 4. co-op. Diagnose reasons for resistance (Phenomena based in individual.

there have been demonstrations.9. Learning culture 4.10 Principle 10: The managerial leadership monitoring evaluation and transformational leadership principle ³to make your team succesful´ Monitoring and the evaluation of progress are instrumental. and commuters) within the industry since in was published in 1999.1 Evaluation methodology 4. drivers.9. I i i u ssi t h t u ust . Amongst other reactions.4. not only to convert the existing plan into action but also to support future planning-to-action conversions.3 Conclusions 4. The culture should change to support the new behaviour learned.3 Conclusions 4. Change in the existing value system Create a change conducive culture.8.8. 4.9 Principle 9: The learning ± or new culture creation principle Change adeptness is a prerequisite for future survival and growth. has culminated in mixed feelings among stakeholders (taxi owners.1 Evaluation methodology Government s stabilising solution. and marches as negative feedback from taxi industry due to the restructuring policy proposed by the Department of Transport.2 The evaluation results and its interpretation 4.9.8.2 The evaluation results and its interpretation 4.

1 Evaluation methodology 4.Transformational leadership.3 Conclusions A model for converting plans into action The evaluation test for the successful convertion of plans into action: Is the purpose realized? Is an asset created? The extend of stakeholder ownership of the end result? Sustaining Momentum ‡ Provide Resources for Change ‡ Build a Support System for Change Agents ‡ Develop New Competencies and Skills ‡ Reinforce New Behaviors ‡ Stay the Course 23.2 The evaluation results and its interpretation 4.10. The ability tou se feddback as a change tool Begining of a new cycle 4. Recommendations to reach the goal of the taxi recapitalisation project as soon as possible.10.10. I i i u ssi t h t u ust 3 .

The brand loyalty life cycle: Implications for marketers. Jun2001. Journal of Strategic Marketing. p111 -128. Vol. 9 Issue 2. Antecedents of true brand loyalty. Journal of Strategic Marketing.. D. BENNETT. A. Journal of Brand Management. Vol. J. Dec2003. E. I i i u ssi t h t u ust . However. 12 Issue 4. p99 -117. Journal of Advertising. S. p271 -286. Vol. Vol. MORRIS. 37 Issue 2. Available at SSRN: http://ssrn. S. D. 11 Issue 4. Summer2008. Consumers' true brand loyalty: the central role of commitment. J. Reference list AMINE.The Department¶s Taxi Recapitalisation project is at an advanced stage. brand loyalty and their relationship in grocery markets. KNOX. Journal of Strategic Marketing. R. D. The Effect of the Relationship of Brand Trust and Brand Affect on Brand Performance: An Analysis from Brand Loyalty Perspective (A Case of Instant Coffee Product in Indonesia) (2006). Vol. R. KNOX. The main objective of this project is to gradually replace obsolete vehicles with new vehicles. Dec98. & WALKER. J.com/abstract=925169 KIM. 24. & WALKER. S. HALIM. & SWAIT. & RUNDLE-THIELE. p250 -263. Measuring and managing brand loyalty. Empirical developments in the measurement of involvement. p305 -319. The NTTT (National Taxi Task Team established in 1995 to investigate problems and development issues facing the minibus taxi industry) (Moyle. 6 Issue 4. Apr2005. 1999) Their recommendations included a move to larger 18 to 35 -seater vehicles. there are several transport multi-modal questions that must be answered by the proposed NATMAP if this Project is to become the success story of our transformation in the transport sector .

13th Edition. 15 Issue 4. P1 -30. M. Journal of Small Business Strategy. 37 Issue 4. 73 Issue 8. Tata. March 2002. http://wikipedia.com Datum van gebruik: 19 Feb. G. & RAJ. Aug2003. 2010. p222 -233. PRASANNA MOHAN. An empirical model for brand loyalty measurement. Journal of Targeting. 2010. Prentice Hall MONTOYA. Vol. http://Tata.KOTLER. & ARMSTRONG. An application of the American customer satisfaction index (ACSI) in the South African motor vehicle industry. PUNNIYAMOORTHY. C. Vol. CPA Journal. South African Journal Management. of Business WIKIPEDIA. Vol. 2010. N. P. TATA.com Datum van gebruik: 19 Feb 2010. Jul2007. M. P. I i i u ssi t h t u ust 5 . Brand Loyalty Measurement Made Easy: A Preference-Behavior Model.S. Aug2006. 2010. OBERMILLER. Measurement & Analysis for Ma rketing. Building brand loyalty. TERBLANCHE. p29 -38. p11 -11. Principles of Marketing.

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