CHANGE MANAGEMENT

GROUP 5

STARTING THE CHANGE- ASSIGNMENT

Student Name

STEPHY MUTTATHU GIGI-200494742

KARTHIKA AJAYAN- 200531945

MEGHA SOOD- 200508269

RAMANDEEP SINGH- 200506412

 Hertz Global Holdings Inc

The well-known rental vehicle company, Hertz Global Holdings Inc., had a spectacular
metamorphosis after declaring bankruptcy. Under the direction of CEO Stephen Scherr, Hertz
recovered from insolvency in the second quarter of 2021 by utilising the booming used car
market and putting in place a thorough reorganisation strategy. Hertz adopted a futuristic growth
plan that prioritized electric cars (EVs) and artificial intelligence (AI) in addition to financial
reform. The business made large expenditures, which included buying 100,000 electric vehicles
from Tesla, incorporating AI technologies for operational optimisation, and working with local
governments to build charging stations for electric cars. Hertz's reinvention shows its resiliency,
inventiveness, and dedication to satisfying shifting client needs in the constantly shifting
transportation industry amid a mixed reaction from the market.

Hertz Global Holding used forced transformation change strategy. The management of
Hertz Global Holdings was forced to change. To triumph over its economic struggles and
preserve its continued existence, the corporation had to undertake considerable adjustments or
risk insolvency. The desire to pay off debt and create revenue, for example, were outside factors
that sparked the shift. Hertz took advantage of the chance given by the expanding used car
industry to jumpstart its recovery. An intentional shift in strategy and a forward-thinking reaction
to the changing market trends may be seen in the choice of accepting AI and electric automobiles
as growth directions. The necessity to handle the economic downturn and set up the business for
long-term profitability is perhaps what motivated the shift.

Organizations can adopt a collaborative transformational change strategy if change recipients

recognize and accept the need. Charismatic transformation can win support for the change if
leaders communicate a compelling vision and trust them to deliver the promised outcome.
Forced transformation can be successful if key stakeholders recognize and respect the leaders'
authority. Dictatorial transformation can be successful if stakeholders anticipate few benefits or
fear harmful outcomes.

1. Collaborative transformation: To accomplish a common objective, collaborative

transformation entails combining resources, knowledge, and ideas.
 2. Charismatic transformation: By combining different perspectives, collaboration fosters
innovation and creativity.
3. Forced transformation: To guarantee a successful change, leaders must pay attention to
their teams and engage them in the decision-making process.
4. Dictatorial transformation: When implementing reforms, leaders should use an
integrative and inclusive strategy to ensure success.

To paraphrase its 1960s advertising campaign, a revived Hertz is prepared to put investors
"in the driver's seat." But this Hertz is not the one from the past. Prior to 2020—and its filing for
bankruptcy—the corporation was well-known in the sector as the bad actor for periodically
starting price battles that exacerbated the boom-and-bust character of the industry. Three
financially responsible businesses now control 90% of the U.S. market for automobile rentals:
Hertz Global Holdings (ticker: HTZ), Avis Budget Group (automobile), and the privately held
Enterprise Rent-a-automobile. This has led to a more stable and effectively managed sector than
ever before.

Hertz seems to be the most impressive of the group. It has repurchased over 30% of its
stock since coming out of bankruptcy in mid-2021 and continues to be very profitable. It also
leads peers in expanding its fleet of electric vehicles. Hertz is currently trading at a recent price
of $19, which values the company at eight times its estimated $2.32 per share earnings for 2023.

REFERENCE

Bary, A. (2023, February 10). Buy Hertz stock. it’s cheap, well-run, and renting Teslas.
Barron’s. https://www.barrons.com/articles/buy-hertz-stock-price-pick-renting-teslas-
2fabe456

Hayes, J. (2014). THE theory and practice of change management (4th ed.)

https://www.forbes.com/sites/gurufocus/2023/01/27/hertz-is-this-promising-turnaround-moving-
too-fast/?sh=60468bc62a69