Change Process in NUMMI - Case Study Example

Running Header: Change Process Student’s Name: Instructor’s Name: Course Code & Name: Date of Submission: Change Process Introduction Change in workplace is evident at all levels from senior manager, executive to a frontline supervisor. Researchers argue that the inertia for change are varied and many (Blackard 2008 p. 11). Change process has two major dimensions with first being the extent to which managed change is unilaterally developed by organization management or is initiated by joint management. Secondly, there is extent to which the path of change conforms to a total package or is characterized by several discrete initiatives. There are five models under which workplace changes can be explained and these models are; top-down, piecemeal, bargaining for change, systematic-jointism and mixed model. Top-down systematic change involves thorough realignment of programmes such as the shift to HRM and strategic business units packages which involve a lot of interplay between their component parts. Bargaining for change is the approach that agrees on practices of work to be secured from various groups in trade for compensatory payments. Systematic jointism is type of process of change that is regarded in the environments where a total package is placed together in a manner of negotiation. This paper is going to evaluate a change in culture in New United Motor Manufacturing Inc. (NUMMI). NUMMI is the well known joint venture experiment by General Motors Co. and Toyota Motor Corp. that pulled curtains in spring 2010. Toyota and GM initiated their joint venture when work force at GM was at its worse shape. The workplace changes of NUMMI have been explained under top-down systematic change model and evaluated using SWOT analysis. Change Process in NUMMI GM was eager to enter in joint venture since it has less tangible objectives of business that it thought NUMMI could solve (Shook 2010, p. 63). It had not laid out plans on how to make a small car profitably. It was eager to put employees back on work and put an idle plant back of line. It also had been granted a chance to know how Toyota production system works, hence NUMMI would offer the chance to learn. On the side of Toyota, it was confronted with a severe pressure to produce cars in United States. It was lagging behind from Nissan Motors Co. and Honda Motor Co. Ltd, which were already producing vehicles in Tennessee and Ohio respectively. Additionally, objective of Toyota was also to learn and learn rapidly. The major restructuring programmes involving considerable interplay between HRM packages and Strategic business units components are evident in this Joint venture. This is what characterizes top down systematic change. Toyota put in place HRM package that was aimed at teaching the leaders who were to oversee this joint venture. In 1983, Toyota placed some of its managers to work at headquarters and at the Takaoka Plant which is mother plant of NUMMI that manufactured the corolla (Shook 2010, p. 63). The training package of the managers was designed such that they were introduced to every major car assembly processes. After the managers had gained experience with colleagues from Japan, they aided in developing a training strategy to usher in the Toyota system to the American employees at NUMMI. The working force in old GM Fremont at that time was perceived to be extremely bad picture. Majority viewed it to be General Motor’s worst. The workforce at that time had dented reputation, sabotaging quality, filing grievances after grievances, frequent plans of strikes and wildcat strikes. The dented reputation was vividly put into picture by the rate of absenteeism that hit highs of above 20. Adding on that, the GM plant had seen the production of the worst quality in the system of GM. All these events were experienced in the early 1980s. It was obvious that to be worst in system of GM, meant being extremely bad. The bad reputation is the one of the work change concern that faced Toyota. Toyota had several concerns regarding transplanting maybe the most vital aspect of it system of production. Some of these concerns were means of how to cultivate employee involvement into a workplace as bad as GM Fremont. Toyota could not help itself from imagining on how employees with such a bad reputation could help it in developing quality (Adler 2007, p. 13). Also, there were question on how the GM workers could support the concept and practice teamwork. These questions and doubts that arouse were handled through a top-down systematic change. Hence, as it turned out, the group of workforce was not the main problem. Several issues arouse but they were actually dealt with and solved. They major problem that was to be dealt with was culture change and NUMMI employed top-down approach. Change of culture was successful due to use of strategy of Toyota production system and the change of management systems or managers. However, the full strategy package that was successful in change culture of NUMMI was not attempting to directly change the culture. The means of changing culture is to change cultural artifacts such as the observable data of the firm that include what individuals do and how they behave. When the management wants to alter a culture is needed to define the behaviors and actions it desire, then develop the processes of work that are important to support those behaviors. The strategy to change culture of employees from GM was to begin by changing how individuals behave (what they do) but no to start by first changing how individuals think. When the management is put efforts to changing culture of the organization, it is required to define the things they want to do, the ways they want to behave and want everyone to behave, to offer training and then to do what is appropriate to support those behaviors. The management at NUMMI changed culture via andon or stop-the-line system on the line of assembly. Every NUMMI and GM individuals who went through training in Japan had experience of working and learning with the stop-the-line system. A major decision to put into place the stop-the-line system was given to Toyota since it has been its system. The andon system symbolizes believe of Toyota commitment to and in developing the strategies to enable workers to perform in way that builds in quality. Therefore, the management of Toyota principle is respect for individuals, the conviction that all workers have the right to succeed every time they do their job. One aspect of performing job is searching for a hiccups and improve on them. There if the management wants individuals to succeed, to search mistakes and improve, it must offer the way to do so. At the initial formation of NUMMI, management from GM was in doubt in the utilization of andon system. According to Shook, (2010, p. 65), Toyota explained that it did not intend to give workers the right to pause the line but instead it was giving the workers the obligation to pause it when they detect a problem. Every worker on Toyota assembly line has a clear understanding of what her/his task is. She/he is offered the skills and knowledge to understand when she/he has faced a difficulty (an eventuality that hinders him/her from accomplishing his job successfully), how to react when such a problem is discovered, and what will happen when the leader is informed about the hiccup. The leader of team will come to offer aid within his cycle of job, or the period available to finish his assigned tasks. It is important to take note that the line will not basically pause instantly. It stops only after getting to a specific juncture referred to as fixed position. This position is reached by the leader of team. The top-down approach is highly revealed since there exists a promise from management to the employees. When the worker is faced with an obstacle to finishing standardized job, the team leader should come to an employee’s aid. This is how the NUMMI managed to change culture. Presented with a challenge and opportunity of building in quality, the new-old NUMMI employees would not have been more eager about the chance to show that it could give quality like any other employees in the globe. The culture change strategy encompassed ownership, support and quality aspects that were incorporated in the design of every job. This strategy gave the workers the means by which they can perform jobs successfully hence facilitation on change of culture. Apart from top-down systematic change exhibited in the NUMMI, bargaining for change approach is also evident. The bargaining change approach was part of NUMMI, since from the start the plant system depended on a unique relationship between management and the union. UAW Local 2244 backed the production system of NUMMI which included the no-fault attendance policy, the team concept, the unique work rules, 3 job classifications, and non-confrontational tackling of the problem (Ohno 2009, p. 69). Leadership of union practiced and preached management-union cooperation. The union was highly included in the process of selecting new workers and leaders of team. In return of this cooperation, management accepted to be absolutely open with union and to work with them to make sure a mutual and harmonious productive environment in workplace. There were almost 20 personnel on full-time basis and also more that 100 UAW coordinators. The relationship depended on the informal dispute resolution and put efforts not to waste money and time on formal grievance procedures. SWOT ANALYSIS Strengths The obvious strength in the top-down systematic change is that it is easier to follow project-planning rules (DiBella 2007, p.164). The vision can be established, the differences between the now and the then can be identified which means that personal action and departmental plans can be established. This is the reason why in NUMMI, people were viewed as the base for the plant production system, with the organization only as good as its employees- collectively and individually. The strategy planning rules allowed the plant objective where the primary function of staff and management was to support the people in production. Based on these abiding principles, the NUMMI team was able to develop it HR philosophy to guide them develop total human potential to allow the build the highest quality vehicles at the lowest cost ever. This allowed employees to feel that their worth and dignity is recognized. Team performance and individual performance were developed. This can help to measure progress of strategy against the milestones. Another strength on this approach was that the plant did not intend to give workers the right to pause the line but instead it was giving the workers the obligation to pause it when they detect a problem. Hence, they felt they were obliged to maintain quality of products along the line of production. Therefore, Presented with a challenge and opportunity of building in quality, the new-old NUMMI employees captured the chance to show that they could give quality like any other employees in the globe. Also by incorporating bargaining approach, management accepted to be absolutely open with union and to work with them to make sure a mutual and harmonious productive environment in workplace. Weaknesses For the workers who are resistant to change would lead to easily sabotage the addon line since they have the autonomy of pausing the system. In top-down model there is little sense of ownership of ideas. The lack of participation in design of strategies may result to lack of commitment in this kind of change which would spell doom to the quality on line of production (Goold & Campbell 2010, p. 9). The strategy to change culture of employees from GM was to begin by changing how individuals behave. Changing culture of employees is hard and it requires a lot of efforts and patience, hence success is not always achieved as per expectations. In the stop-the-line system on the line of assembly, though consider that workers are given permission to stop production line, the worker doesn’t have absolute autonomy to halt the production in case of a problem. Therefore, there would be a delay of correcting the problem before the team leader reaches a decision to stop the line of production. Opportunities This type of change offered Toyota an opportunity to extend its operation overseas with an aim of tackling competition from US based vehicles manufacturers such as Nissan Motors Co. and Honda Motor Co. Ltd, which were already producing vehicles in Tennessee and Ohio respectively (Shook 2010, p. 65). Managers of Toyota were given chances to work and learn from Takaoka Plant in a way that they were introduced to every major car assembly processes. Both GM and Toyota were in a vantage point of learning from the joint venture since GM learnt the stop the line of production system while Toyota had a chance to learn how to operate in US. Since employees were given the obligation to pause line of operation when they detect a problem, they were offered a chance to prove themselves that can build on quality. Additionally, culture change strategy encompassed ownership, support and quality aspects that are necessary to developing motivated workforce. Change in culture of employees offered a chance to change the way they behave and they way they do things to the benefit of NUMMI. Informal dispute resolution offered opportunity for saving both time and money spent on formal conflict resolution. Threats The production system of NUMMI was characterized by a constant tension and quest for improvement (Adler 2007, p. 34). This implies that there was a threat of turning out to be complacent. The GM workforce at the joint venture time had dented reputation, sabotaging quality, filing grievances after grievances, frequent plans of strikes and wildcat strikes. Considering that the same workforce was passed on to the joint venture, there was a threat if the workforce didn’t change its negative culture. Lack of consistence in sticking to the system principles and maintaining a level of trust and cooperation among management and workers would result to the failure in top-down systematic change in NUMMI. The stop-the-line system was a threat to worker who are resistant to change since they can easily launch quality sabotage on line of production. Dealing with union in a more informal way to deal with workers dispute is faced with threat of being challenged by legal and form means of solving dispute. A joint venture is faced with ever eminent tussles among parties that can result to scattering of any workplace change initiative. Conclusion In conclusion, NUMMI was joint venture between GM and Toyota that closed in 2010. Both parties were faced with forces of change due to varying factors. The NUMMI change involved major restructuring programmes involving considerable interplay between HRM packages and Strategic business units components. After managers had gained experience with colleagues from Japan, they aided in developing a training strategy to usher in the Toyota system to the American employees at NUMMI. Thorough change was overdue at NUMMI since GM workforce at that time had dented reputation, sabotaging quality, filing grievances after grievances, frequent plans of strikes and wildcat strikes. Using stop-the-line system, the new-old NUMMI employees embraced challenge and opportunity of building in quality and were more eager about the chance to show that it could give quality like any other employees in the globe. In this system, employees is offered the skills and knowledge to understand when she/he has faced a difficulty, how to react when such a problem is discovered, and what will happen when the leader is informed about the hiccup. References Adler, S 2007, Stability and Change at Nummi, Cambridge Press, Massachusetts. Blackard, K 2008, Managing Change in a Unionized Workplace: Countervailing Collaboration, Greenwood Publishing Group, Inc., Minnesota, USA. DiBella, A 2007, ‘Planned change in an organized anarchy: Support for a postmodernist Perspective’ Journal of Organizational Change Management, vol. 5, no. 3, pp. 145-188. Goold, M., & Campbell, A 2010, ‘Do you have a well-designed organization?’, Harvard Business Review. Harvard School of Business Press, Boston. Ohno T. 2009, Toyota Production System: Beyond Large-Scale Production, Productivity Press, Cambridge. Shook, J. 2010, ‘How to change a culture: lessons from NUMMI’, MIT Sloan Management Review, vol. 51, no. 2, pp. 62-63. 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