Models of Change - Blackwater and BHP - Case Study Example

Running head: Models of Change Models of Change [Name of Students] [Course] [Tutor] [Date of Submission] Models of Change Introduction Changes in organisations continually occur and whether they like or not, they need to adopt and find ways to cope with these changes. Some changes brought about by meeting the need for operational efficiencies, new market opportunities, or newer technologies perceived beneficial to the organisation are planned while some, such as unexpected loss of a market or loss of key personnel are usually unplanned and involuntary (Kuriger 2004, p.1). Workplace changes thus require careful consideration and to help organisations understand these changes better, models of change were developed. The most popular however is John Storey’s five models of change which will be discussed in the following sections along with an example workplace change. The first section of this essay presents some important details of the example workplace change that occurred in one of the leading export coal company based in Australia. The source of information is Bradley et al (1999) Workplace Change in Australian Open-Cut Coal Mining which was presented at the 21st Conference of the International Working Party on Labour Market Segmentation in Germany (11th September 1999). The selected example workplace change can be best described as Type 5: Mixed Model dominated by distinct management initiatives, union and management interaction, and focusing on individual workers rather than collective approaches. The details of this example workplace are in the second section followed by discussions on the relevance of the selected model in the third and details of its theoretical foundation in the fourth section. To enable systematic analysis of the example workplace change and its relevance to Type 5: Mixed Model, the fifth section presents a SWOT analysis of the most relevant model fitted against the actual example workplace change. Finally, the concluding section put forward a summary of arguments and its likely implications and limitations. Workplace Change Example BHP is a large Australian coal mining company operating three big coal mines in Central Queensland: Blackwater, Goonyella/Riverside, and Saraji. The company started introducing workplace change in mid-1992 with a new work model offering six pay levels commensurate to the number of skills attained by each worker. The highest pay level is Level Six that requires 15 skills minimum (Barry et al, 1999, p.5). Out of the three big coal mining site, the Blackwater mine is selected as a workplace change example because the new work model or “Open-Cut Work Model” was first tested here. Producing coal since 1967, Blackwater mine started with a population of 30 but 1991 this figure reach 547 due to the increasing demand for coal and growing problem associated with the removal of some 80 million tonnes of rock and soil. As part of the new work model requirement, union officials in Blackwater and the BHP management agreed on adoption and implementation of the new work model. Consequently, traditional practices were stopped and workers were no longer allocated their usual jobs or work area but rather assigned tasks corresponding to the number of accredited skills required. Moreover, even workers who undertook training to get their skills accredited noticed that they were often assigned in different jobs rather than working on their usual job or work area. As a result, along with minimal understanding of work and radical departure from their traditional practices, workers were dismayed and replaced their union officials particularly those linked with the introduction of new work model with much aggressive team (Barry et al., 1999, p.6). The new team of union officials demanded a reversion to the old working model but management refused and three separate strikes were launched in 1993. However, the industrial tribunals ruled in favour of the employer and workers can never return to traditional work practices. The formal or official implementation of the new work model created new tensions but this time, the issue is on the pay levels and job rotation of production employees which management surprisingly approved (Barry et al. 1999, p.6). In 1994, management felt the impact of their previous decision as the average labour cost significantly increased from $68, 993 in 1991 to $84, 214. Moreover, by elevating each trade person in the highest level possible, the career progression path envisioned under the work model was also destroyed. Although with multiple shortcomings, the work model achieved some of its main objectives such as eliminating the principal job concept, added training and accreditation for employees, and the quantity of overburden removed increased by 13.4 %. However, dissatisfaction over the workplace change remains and unlimited labour flexibility unrealized (Barry et al. 1999, p.8). Relevant Model It is important to note that during the introduction of the new work model and subsequent workplace change, Blackwater employees have a well-established union that willingly accept BHP’s proposal. In addition, the new work model was intended for individual workers and not by any means considering the collective well-being Blackwater employees. There is no bargaining for change, interplay between firm’s component parts, and reactive or piecemeal type approach. The new work model was actually delivered as package with consultations conducted among Blackwater union leaders who accepted the radical transition which make the workplace change Type 4: Systematic Jointism. However, the presence of performance-related pay, number of skills accredited against pay, individual rather than collective contracts, and management’s strict implementation of rules seems suggestive of another model somewhere between type 1, 2, and 4. Note that the Open Cut Work Model was designed to eliminate traditional work practices by introducing a new pay scheme for individual workers. This work model entirely changed employees’ way of life affecting their financial, cultural, and social well-being. For instance, workers previously enjoying higher pay can no longer get that much as the new work model dictates that each worker’s pay should be equal to the number of accredited skills. Although they can grab the opportunity to be trained and accredited, the chances of a worker acquiring minimum of 15 skills is very slim. This is actually the issue leading to the eviction from office of union officials who took part in the transition and to the coal mine workers’ strikes in 1993. There is thus some characteristics related to Type 1 (management strict compliance to rules), Type 2 (flexibility in terms of workers choice in the number of skills they can acquired to improve their life), Type 4 (a package offered in negotiated manner through union leaders), and Type 5 as it changed some structural and cultural elements of employees’ working life. More importantly, the workplace change did create some sort of individual contracts among workers and small strategic units in separating employees at each level. It thus appears that BHP implemented a Type 5 change model at Blackwater, a model between traditional negotiated change and radical change completely different from workers traditional practices. The Theoretical Foundation of Type 5: Mixed Model of Change The Type 5 change model according to John Storey (1992) is an approach that is not openly negotiated but thus exists along this line. It is not a “pure type” (p.142) and the change is signalled by structural and cultural changes. It is a shift to a more delegated form of management where strategic business units are created (p.142). However, the most identifiable characteristic of the Blackwater workplace change is the method associated with Type 5 model which is the strict guidelines released by BHP limiting the way people should work (Storey 1992, p.142). In fact, BHP management released a statement clarifying their position on this issue which in part says “the company has the ability to access the skills of its employees on any occasion and for any reason......there is no longer a principal job, original job, or original work area” (Barry et al, 1999, p.6). According to Jones & Beyerlein (1999), John Storey’s conceptualization of change management approaches is suggestive of systematic jointism where consultation and negotiation results to complete reform strategy while others see the path to transformation differently and can be enhanced by additional piecemeal type negotiations, transformed work structures, and stakeholders participation (p.123). Mixed model thus exist and it usually a combination of above characteristics. In the case of BHP management, the work of Barry et al. (1999) suggests that they indeed intend to introduce systematic jointism along with additional reform strategies in the form of work and pay structure change. Moreover, their refusal to pay attention to the workers call and impervious attitude toward the impact of the change was the result of their strong commitment to the negotiated transformation (no bargaining to change or concessions to working practices) which they value more. In Ford’s IE eight-point implementation plan in 1985 for example was centred on working differently from previous practices but with emphasis to teamwork and decision-making processes that will listen and improve workers’ everyday life (Storey 1992, p.141). The case of BHP’s change strategy in Blackwater was different as although it looks like done in a systematic join the transformation was actually a one way ticket where workers, whatever the impact is, can never return. In other words, there is no organisational democracy allowing employees to have some control over their working lives (Butler 2009, p.198). John Storey’s “Birds Eye Wall” example of workplace change clearly demonstrate the different characteristics of this change model where management introduced a ‘Workstyle’ concept or ‘Multi-skilling’ similar to BHP’s Open Cut Work Model. The transformation was worked out through the negotiation machinery including job descriptions of each team but there was no indication that they consider the impact of such change (John Storey 1992, p.148). The conception of Type 5 change model seems rooted on actual occurrences where management diverted from standard models and adopted a mixed approach. Typically, referring to John Storey’s examples, these actions were brought about by different needs. Ford pushed for a blend of union negotiation and individual employee’s participation in its Britain’s plant because of pressures coming from the blue-collar union asking for different treatment (John Storey 1992, p.140). Similarly, the process of change at Birds Eye Wall as a combination of negotiated and discrete initiatives brought about by the need for multi-skilled workers and flexibility in the workplace (John Storey 1992, p.148). Type 5: Mixed Model and Blackwater Mine SWOT Analysis Strength Good for realizing management targets and promoting efficiency As mentioned in the previous section, adoption of this model usually depends on the immediate needs of the organisation such as the need for flexibility, meeting targets, and so on. Similarly, BHP was in need of removing millions of tonnes of rock and soil at the site and process five million tonnes of coal for the market. These needs lead to the idea of cross-stream skills where traditional production workers can perform basic engineering duties while engineering workers can do production work like fork-lift or crane operation (Barry et al. 1999, p.8). BHP Management believed that cross-streaming skills can save time while increasing efficiency of all sort of workers and it did worked. For instance, the numbers of workers needed for Blackwater decreased from 547 in 1991 to 514 in 1994 while overburden removal (rock and soil) increased by 13.5% from 1991 to 1992 and 1993 to 1994. More importantly, raw coal mined increased by 6.1% with the new work model in placed (Barry et al, 1999, p.8). Weaknesses Insensitivity to workers needs Study of mobilization and willingness of union members to take industrial action suggest that individual workers’ interest and sense of injustice are critical factors that must be considered as inequities in the workplace often lead to poor performance and withdrawal of loyalty from the organization (Buttigieg et al. 2008, p.249). Limited flexibility Taking into account the impact of such model in Blackwater, the expected benefits of flexibility was never realized because it turned out that experienced employees are more effective in their principal jobs than those arranged for them by the new work model. Similarly, rather than give new employees opportunities to train and gather experience, the management focus on immediate production targets results to more losses due to resistance (Barry et al. 1999, p.7). In management’s relationship with their employees, BHP tend to control every inch of the workplace as evidenced by employee’s lack of choice or say about their work. As Barry et al. (1999), noted, management will only hear workers sentiment when they were pressured by larger groups such as the FEDFA and the Miners Federation. Moreover, the flexibility management being offered to workers that are interested in making more through assessment and skill accreditation was a disaster because the opportunity to progress turned into an uncontrolled ‘dash for cash’ rather than added commitment to their jobs (Barry et al. 1999, p.7). Opportunities More financial benefits to employees and management There is no doubt that a multi-skilled organisation can deliver as the high level of efficiency can do wonders as what it did with Blackwater in a very short period. Although they may not be as happy as they used to, employees benefit more in the long run because the number of their accredited skills will increase as well as the corresponding pay level. The type of workplace change BHP had implemented may be restrictive of traditional working practices which they termed as similar to operating in rigid and narrow confines, but there seem some opportunities if one would view it on its brighter side. For instance, the opportunity to choose which skill one worker wish to acquire is an opportunity for his development which he can either use in Blackwater or in other organisation. Threats Large-scale resistance Although management is benefiting under the workplace change model they adopted in 1991, it cannot be denied that the work reorganisation is not yet over since many of those who work in production are still resisting the workplace change (Barry et al, 1999, p.8). Moreover, BHP’s management style ignoring worker resistance can make unlimited labour flexibility a nightmare as it can backfire in the form of poor performance, wasteful production, and needless costs. According to Jones (2006), resistance is an essential factor in change since it can destroy an otherwise worthy idea. It is often the reason why change fails in many organisations thus BHP should reconsider their position on this workplace matter (p.121). They can start with being supportive or empathic about employees concerns while gradually reinforcing the benefits and logic of change (Lubkin & Larsen 2006, p.325). End of career progression The on-going uneven wage outcomes and resistance due to the revolutionary work model requiring employees to have a number of skills before they can get a higher pay will ultimately result to this scenario. First, as there are open opportunity for workers to reach the highest pay level, most of them will aim and work hard for it. Consequently, in a very short time, management will find a great number of ordinary tradesperson occupying the highest possible level leaving no room for career progression. This is because according to Barry et al. (1999), majority of employees at Blackwater achieved 96% pass rate in their tutorial classes while two production workers reached Level 6 without training in new skills (p.8). Conclusion Relevance of Type 5: Mixed Model to the workplace change example or Blackwater Mines is justified by two important arguments. First, there was a negotiated transition between management and Blackwater union leaders and the change was delivered as a package but with discrete initiatives. Second, there was an attempt to change the structural and cultural elements of the workplace particularly the adverse shift on working practices and introduction of new pay level scheme. Although these arguments came from careful analysis it is still possible that they have some implications on John Storey’s five models and to the essay question as well. This is because the understanding and interpretations presented here may in some parts different from the original concept. In the same way, the details of the example workplace change may be viewed differently resulting to misapprehension of BHP management’s intent as well as the strategy used in pursuing the workplace change. 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