Table of Contents

Introduction...................................................................................................................2
Key Problems Identified by Meg...................................................................................3
Outdated Business Model & Lack of Market Understanding....................................3
Gender Dynamics and Cultural Bias.....................................................................3
Failure to Respond to External Factors and Market Conditions...........................3
Inadequate Talent Management............................................................................3
Key Management Issues..............................................................................................4
Bureaucracy..........................................................................................................5
Potential Solutions........................................................................................................5
Transformational Leadership.................................................................................6
Organisational Change..........................................................................................7
Lewin's Change Model (1947)...............................................................................7
Kotter's 8-Step Change Model..............................................................................7
Comparison of Change Models:............................................................................8
Implementation Plan for Chosen Solution:...................................................................8
Implementing Kotter’s 8 Step Change Model.......................................................8
Justification for Choice.................................................................................................9
Positive Outcomes......................................................................................................10
Scope for Further Research....................................................................................11
Managerial:..........................................................................................................11
Knowledge:..........................................................................................................11
Competition:.........................................................................................................11
Male Female Disparity:........................................................................................12
Conclusion..................................................................................................................12
References.................................................................................................................13

Introduction

The automotive industry is known for rapid technological advancements (Klier and
Rubenstein 2008), evolving market demands, and regulatory changes, making it
crucial for car parts organisations to proactively adapt to dynamic conditions to

1
remain competitive. Consequently, managing change in a large car parts
organisation such as CAR is a complex task that requires careful planning, strategic
thinking, and effective implementation.

Within CAR, there are fundamental issues associated with management, leadership,
innovation, product development and adaptation to market demands. Furthermore,
there is a culture of bureaucracy (Weber 1947) and resistance to innovation and
change.

This report focuses on people issues, with respect to change and leadership
management within CAR. Exploring concepts and strategies for managing change
and drawing on relevant theories and models for possible solutions for Meg (CEO) to
consider, when implementing change management (Kotter 1996).

Key Problems Identified by Meg

Outdated Business Model & Lack of Market Understanding

CAR's outdated business model, (Porter 2001), hampers innovation and adaptability,
impacting their ability to meet market demands. This lack of market understanding
and failure to provide competitive products at lower prices resulted in the loss of a
key partner and a 20% decline in turnover. Customers demanded innovative, stylish,
and functional products with shorter life cycles. CAR persisted in producing
expensive, high-tech products with extended life spans, failing to align with customer
preferences.

Gender Dynamics and Cultural Bias

CAR's male-dominated organisational culture, supported by Kanter (2008) and Clegg

et al. (2022), lead to male members primarily shaping cultural norms. This gender
disparity presents obstacles for Meg, a female, as she strives to gain trust and
acceptance in a predominantly masculine leadership culture (Hofstede, 2011).
Neglecting these gender dynamics hampers diversity and inclusivity, hindering
innovation and performance improvements.

Failure to Respond to External Factors and Market Conditions

CAR's failure to adapt to external factors, like disruptive technologies, shifting

customer preferences, fierce Chinese competition, and unexpected events, stems
from groupthink, social loafing, and organisational homogeneity (Clegg et al., 2022;
Janis, 1982). These dynamics lead to ineffective leadership (Biswas and Rahman,
2017), adversely affecting CAR's performance.

Inadequate Talent Management

CAR's struggle to attract, retain, and develop top talent undermines its
competitiveness. Problems include low motivation, high turnover, inadequate
training, ineffective performance management, and a lack of succession planning,
signifying substantial talent-related shortcomings (Hassan and Siddique, 2020).

2
CAR's reputation as being outdated and uncreative obstructs its recruitment of talent
from reputable universities, eroding its knowledge base and limiting collaboration
and partnership prospects.

Key Management Issues

Using Schein’s (2020) model of organisation culture. CARs fundamental issues can
be visualised:

3
1:Artefacts are visual and tangible elements in an organisation, including
symbols, physical objects, behaviours, and language. Meg identified CAR's
outdated business model, lacking innovation and adaptation (Porter, 2001).
Potential collaborators showed disinterest due to CAR's ineffective
communication of its offerings to target audiences (Weick, 1969 in Clegg et
al., 2022: 253). Despite clients desiring innovative and stylish products, CAR
continued producing expensive, long-lasting hi-tech items, failing to meet
market demands. Their inability to identify a niche market and innovate led to
uncompetitive pricing. This lack of market awareness is evident in recent
sales figures, reminiscent of the failures of Kodak, Blockbuster, and ToysRUs,
who disregarded customer demand in their innovation and business
strategies.

2:Espoused Values

Espoused values encompass an organisation's beliefs, ideals, and principles

expressed through mission statements, corporate policies, and public
statements. Diversity and inclusion are crucial in global organisations
(Goodman, 2013). CAR, a male-dominated organisation within a masculine
industry (Clegg et al., 2022: 84), exhibits a "values-practice gap" (Brennan,
2020). Meg must address the "gang-like" culture (Stein and Pinto, 2011:
Clegg et al., 2022) before fostering a diverse and inclusive organisational
culture. In-group bias among other CEOs (Katz and Kahn, 1978) and out-
group bias against Meg (Tajfel, 1996) hinder her acceptance as a leader by
other executives.

3:Basic Assumptions

Belief that CAR is a well-managed organisation is deeply ingrained, leading to

a lack of action for change. This perception extends to the rest of the
organisation and previous CEOs, resulting in minimal motivation to drive
change. Consequently, employees refrain from questioning the organisation's
state, displaying social loafing tendencies (Harkins and Szymanski, 1989 in
Clegg et al., 2022). High CEO pay implies organisational profitability and
competitiveness, but younger, more innovative workers are leaving for
competitors. CAR struggles to attract top talent from universities. The failure
to leverage both tacit and explicit knowledge (Nonaka, 1991; Clegg et al.,
2022) can be attributed to groupthink, social loafing, and homogeneity (Janis,
1982 in Clegg et al., 2022). CAR's emphasis on efficiency over collaboration
leads to deteriorating relationships with long-term partners, with decisions
often based on seniority rather than merit among CEOs like Meg, who are
granted "creative freedom" to manage a large company.

4
Bureaucracy

Bureaucracy organises activities through rules and authority (Weber, 1947) allowing
for clear division of labour (Judge et al., 2001), enhancing efficiency and productivity.
It offers, consistency and accountability. Conversely, drawbacks such as rigid rules
and red tape can hinder innovation and creativity. Apple, Amazon, and Google are
successful examples of bureaucratic organisations that employ bureaucracy and
systematic operations (Taylor, 1910). In comparison, Zara (Taplin 2014) fast fashion
organisation adopts multiple approaches at local and national levels (Cameron and
Quinn, 2011). CAR, however, lacks balance between flexibility and bureaucratic
control (Weber, 1947) demonstrating lack of adaptability to external impacts of
competition and consumer demands.
As bureaucracy and organisational growth are linked, the more the organisation
grows, the more bureaucratic it becomes (Weber, 1947; Fayol, 1949; Drucker, 1998).
With 3500 members, bureaucracy is necessary for CAR. However, excessive
bureaucracy has resulted in decreased creativity and employee disengagement
(Amabile et al., 2017) hindering its ability to innovate and respond to market trends.
Subsequently leading to high staff turnover and lack of motivation identified by
internal investigations.
CAR's profitability relies heavily on product innovation. But, lack of motivation and
creativity, has led to few new ideas from R&D. Retaining tacit and explicit knowledge
is also failing as talented young engineers join competitors and older staff retire
(Alvesson, 2004). Such lack of agility hampers CAR's competitiveness in fast-paced
industries that require adaptability (Eisenhardt, 2000).
Communication and transparency issues arise from differing perspectives between
senior and lower levels of the organisation. Without critical examination, bounded
rationality and a lack of diverse thought emerge (Fleming and Spicer, 2008; Clegg et
al., 2022). Consequently, CAR remains unaware of current realities and best
practices. CAR holds the belief that their quality goods are in demand, resisting
innovation to compete with China's cheaper, shorter life-cycle parts. Further
demonstrating group-indued conformity (Asch 1955; Clegg et al.,2022).

Potential Solutions

While leadership is a complex and multifaceted, transformational leadership may

encompass many of the critical traits needed to bring change. It can be difficult to
implement without employee’s support, such as Birmingham City Council (2008) who
experienced high turnover of staff due to mismanagement of change and
communications.

Consequently, a blend of leadership styles and approaches would be recommended

to tackle failures as listed above. To tackle the shift from an integrated culture of
community to one that has become differentiated due to top-management change
(Gouldner 1954) Meg must move swiftly.

5
Transformational Leadership

In the 1990s, IBM CEO Lou Gerstner and former Southwest Airlines CEO Herb
Kelleher employed transformational leadership for organisational change and
employee engagement. Apple and Google also embrace transformational
leadership, fostering innovation, empowerment, and collaboration. Therefore, it is
advisable for Meg to adopt a transformational leadership approach at CAR
considering her vision for global expansion. Although there are many aspects to
transformational leadership, there can also be some drawbacks. Meg must
implement continuous reflection to keep track of her management skills.

A compelling vision can boost employee engagement and commitment (Bass, 2006),
leading to improved performance and productivity. However, transformational
leaders focusing on the bigger picture risk overlooking important organisational
operations, resulting in inefficiencies and substandard outcomes (Northouse, 2018).
She must set the scene with a better vision yet keep a close eye on the daily
processes (Bauman 1989).

Transformational leadership is dependent on leader-follower relationships, which can

lead to followers becoming overly dependent on the leader's influence and charisma
(Northouse, 2020). This dependency can hinder followers' ability to be self-reliant,
make independent decisions, and maintain high levels of motivation and
performance. Further highlighting the need for continuous appraisals and ongoing
support.

Transformational leadership can bring about change, but it can also be susceptible
to manipulation and abuse of power (Bass & Riggio, 2006). For instance, Trump
inciting his followers at the US Capitol in 2021 highlights the potential for shared
emotionality rather than shared rationality (Bauman, 2017 in Clegg et al., 2022). To
address the lack of trust, it is advisable to combine transformational leadership with
authentic leadership, emphasising honesty and transparency.

Meg must create a compelling vision (Fairhurst, 1993: Clegg et al., 2022) and exhibit
emotional intelligence (Goleman, 2017). Aligning market trends and global changes
with organisational goals will enable CAR to adapt and succeed globally. Meg should

6
promote collaboration, team building, and innovation through empowerment, while
leading by example as an ethical role model.

Organisational Change

Various change management models can maximise CAR's ROI for business process
changes.

Lewin's Change Model (1947)

This emphasises unfreezing the current state, transitioning to a new state, and
refreezing for lasting change. As used by General Electrics during merger and
acquisitions. However, whilst supporting change on an organisational level it lacks
employee support and can be confrontational, similar to the current processes at
CAR. Its incremental nature can also be time-consuming, which is unfavourable for
CAR in a fast-paced industry.

Kotter's 8-Step Change Model

This model follows a systematic approach to drive and manage change effectively by
creating urgency, building a coalition, and anchoring change in the organisational
culture.

7
Comparison of Change Models:

Implementation Plan for Chosen Solution:

Meg envisioned CAR's future to regaining leadership in know-how while venturing

into the global market. Zara's organisational culture can provide inspiration, granting
managers autonomy in decision-making and stock management. Given CAR's
reliance on product innovation for profitability, Meg needs to invest in learning,
training, and development. This would enable managers to align decisions with
organisational goals.

CAR managers require training in Meg's vision and stategy, adapting different
innovation structures and management styles to each department.

8
Implementing Kotter’s 8 Step Change Model

 CAR faces urgency with declining sales, share value, partner departures,
competition, high turnover, and difficulty attracting young talent. Meg must
explain these issues to stakeholders and justify the need for change. Without
change, the organisation's survival is unlikely due to already declining market
share. She must emphasise the positive outcomes: profitability, innovation,
increased market share.

 Meg must secure leadership support from senior executives and assemble a
diverse team with varied expertise and positions within the organisation.
According to the Harvard Business Review, diverse teams outperform
homogenous teams in decision-making 87% of the time (Janis, 1982 in Clegg et
al., 2022).

 Develop a strategic plan that outlines the necessary steps for change and sets a
vision for a better future. Define clear roles and responsibilities (Weber 1947).

 Use various communication channels and methods, such as stories and leaflets,
to ensure widespread awareness of the plans and their rationale. Foster open
dialogue, address concerns, and create opportunities for employees to ask
questions.

 Remove obstacles to progress. Empower employees to make decisions and

provide resources. Involve them in the change process. Communication is key.
Meg should address resistance and concerns with empathy, using different
management styles and emotional intelligence (Goleman 1995) in a complex
organisation.

 Set achievable short-term targets to boost morale. Recognise and reward staff for
their accomplishments to build momentum and motivation. She can consider
some aspects of path-goal theory to make employees understand that their
needs and expectations will be met through better job performance.

 Embed change within the organisation’s ethos by integrating it into the culture,
systems, and processes. Similar to Capgemini, Meg can foster open
communications and seek new opportunities for improvement and initiate further
changes to expand on the current plan.

Justification for Choice

To drive change in a male-dominated bureaucratic organisation, Meg must adopt a

strategic and systematic approach, recognising the significance of innovation and
innovation management (Chen et al., 2019; Addin, 2020). It is crucial for her to
understand the value of change management (Cameron and Green, 2015), prioritise
communication and stakeholder engagement, exhibit strong leadership, and invest in
training and development (Brown et al.,2008).

9
Women tend to exhibit a transformational leadership style, prioritising individual
growth and well-being (Powell et al., 2002), while men often adopt a transactional
approach, emphasising rewards, punishments, resource exchange, and direct
management control (Clegg et al., 2022). These leadership styles significantly
impact the acceptance and effectiveness of organisational change (Rashid et al.,
2004), potentially explaining the failure of Bob's change implementation.

Kotter’s model allows systematic and incremental improvements, to implement

changes necessary to bring about a positive outcome for CAR. Manufacturing car
parts in a volatile industry is challenging. CAR must adapt to changing customer
preferences, innovate faster, and continuously improve operations to remain
competitive. Responding swiftly to market changes and aligning production with
demand and innovation are essential for global competitiveness. Successful
implementation of Kotter’s change model will be reflected in organisational success
both financially and organisationally.

Positive Outcomes

 With available resources and technology, Meg can support employees/followers

while setting higher expectations (Bass & Riggio, 2006) and enhance individual
and team performance, leading to improved productivity within CAR.

 Enhanced adaptability and better response rates to market dynamics and

evolving customer needs. Stay ahead of the competition, explore new
opportunities, and adjust their strategies and operations accordingly. Listening to
partners and collaborators will give them insight into what products they need to
manufacture resulting in better customer relations and profitability. In the
competitive market, consumer demands play a crucial role (Horibe, 2006).

 There should be less staff turnover. Increased employee engagement will lead to
less resistance to change and better performance overall. Further leading to
higher employee morale, satisfaction, and retention.

 CAR will improve profitability and market share. Recognising the significant
changes due to rapid technological advancements, including autonomous driving,
electric vehicles, and connected car technologies (Kahl, 2014).

 Investing in R&D and adapting its product range considering consumer needs
(Horibe, 2016). Giving autonomy to creative individuals will improve morale lead
to new product innovation giving then an advantage in market share.

10
Scope for Further Research

This report was based on many assumptions due to lack of information on CAR.
Further investigation into the following would be needed.

Managerial:

High employee turnover and prior CEOs' departures raise concerns about
accountability and corruption at the CEO level. Inadequate monitoring and
accountability can lead to corruption at both the organisational and individual level
(Pinto et al., 2008). This suggests potential corruption among senior management
due to poor monitoring and accountability.

Enron Corporation filed for bankruptcy in 2001 when CEOs manipulated financial
statements to inflate profits and conceal debt. Similarly, Volkswagen Group installed
software in their diesel vehicles in 2015 to manipulate emission tests. These cases
demonstrate the risk of corruption despite initial beliefs.

Clegg et al. (2022) provide more examples, including the #MeToo movement and
Steve Brooks' inappropriate relations with McDonald's employees.

Furthermore, the delayed detection of issues within CAR reflects on Meg's

management capabilities. A two-month delay raises questions about her ability to
lead as a transformational leader, possibly indicating a laissez-faire approach.

Financial:

Pressure to meet financial targets can lead to unethical practices, such as

misrepresenting performance and fraudulent activities. The CEO of Tyco
International in 2002 was convicted of looting bonuses.

11
CAR's inadequate financial management, evident from declining stock values,
reflects the lack of financial control, mismanagement, and poor budgeting.

Knowledge:

The loss of the long-term partner demonstrates the loss of organisational knowledge
management (Nonaka and Takeuchi 1995).

Competition:

Researching competition to gain a competitive advantage, since they have fallen

behind. Prioritising short-term gains over ethical conduct, these leaders demonstrate
a lack of integrity that fosters and tolerates corruption.

Male Female Disparity:

Few women in CAR raise questions about the company's equity, diversity, and
inclusion policy. Subcultures gain legitimacy when they represent cohesive groups
that defend plausible ideas (Clegg et al., 2022).

Conclusion

Managing change is not easy. There are many factors that can hinder and effect
effective leadership and change. CAR must become learning organisations that
embrace knowledge and innovation for success in a changing economy. Processes
and leadership must be ever changing to remain competitive. Although Kotter’s
model provides a good starting point, Meg must continuously assess the
organisation and its people and change direction accordingly.

12
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