Managing Organisational Change - of Virgins Blue Company - Case Study Example

Running Header: Managing Organization Change Student’s Name: Instructor’s Name: Course Code: Date of Submission: Executive Summary Management of the change in an organization means planning, implementing and also involving the people who are to be affected by change. Change in an organization is a must and should be anticipated in all the levels of growth of an organization due to competition in the market, new innovations and change of taste of consumers. Without change, profits in an organization will decline and the organization will no longer be stable. The management of the organization is responsible for change to occur. The reasons that would make an organization to change are market pressures products reaching the end of their lifecycle, social changes and strategic refocus. John Kotter’s change model highlights the steps to follow when instituting change in an organization. Creating urgency, forming a powerful coalition, creating a vision for change, Vision communication, doing away with obstacles, creating short-term goals, Incorporate changes in the organization culture and Incorporate changes in the organization culture. In management of change in an organization, the management should anticipate for challenges that would come on their way for change. This report analyzes the case study of Virgin’s Blue Company in relation to various theories. Table of Contents Executive Summary 2 Table of Contents 3 Introduction 4 Reasons for changes in an organization 5 1. Market behavior 5 2. Social changes 5 3. The end of a product life cycle 5 4. Strategic refocus 6 Change Model 6 Creating Urgency 6 Forming a powerful coalition 7 Creating a vision for change 7 Vision communication 8 Doing away with obstacles 8 Creating short-term goals 8 Continue Building on the change 9 Incorporate changes in the organization culture 9 Organization changes Challenges 9 Backsliding into old ways of working 10 Inability to prioritize organization resources and projects 10 Failure to manage the enthusiasm of the staff in the journey of change 10 Resistance to change 11 Conclusion 12 Introduction Management of Organization Change entails planning, implementation and involvement with consultation of the employees affected by changes. (Wellington 2006, p.23) states that an organizational change occurs when there is a perceived need to transit from a current state to a desired future state. In order to remain competitive in today’s business environment there’s a great need for the organization to undergo constant change. Virgin’s Blue Company wants a change. They want to accommodate the business class travels because the leisure travels can no longer sustain this business. To measure the success they have set market targets. Scheineder (2006) states that the responsibility of managing change lies largely on the management of the organization rather than the employees. Patrick & Linda (2003) states that change can never be imposed on people hence people should be involved in the change in an organization. The three basic stages on how Virgin Blues Company will manage changes are; a) The company has realized the fact that the current strategy is not fit for company’s situation since it is not able to sustain the business. b) Outlining the vision which is to do business with corporate travelers for the success of the company. c) Implementation change by building extra lounges, there are new products, new partnerships being formed with other companies, new uniform for workers, replacement of aircrafts and also they have announced travelling of new routes. Reasons for changes in an organization These are the driving forces that may either be internal factors to include organizations management policies and styles, systems and procedures. External procedures may include technological, political, social or economical stimuli (Alan, 2005). Virgin Blue Company needs to change her organization and give it a new look to be able to attract more customers especially the corporate travelers. The following are possible reasons for change. 1. Market behavior There is increased competition in the market due to emergence of new innovations; taste of customers has been changing now and again. In her organization, Virgin Blue Company hopes that more changes to include new market campaign in order to attract more customers, there will also be introduction n of new product and also a new program. 2. Social changes Within the Virgin Blue Company, there has risen a need to accommodate a new business class of people “superior economy class”. The Organization has to change and undergo several transformation to include new lounges, new routes for airbus between Sydney and Perth and new uniforms for the staff will give the organization a new look in order to attract and retain the customers if it wants is to sustain itself in the competitive market. 3. The end of a product life cycle As a product reaches its maximum growth rate, the profits starts to decline. The reason behind a product reaching its maximum growth is because there’s a new product in the market hence customers opt for it or customers change their behavior in the way they purchase products and services (Alan, 2005). Virgin Blue Company in the recent past, there has been weak consumer sentiment and uncertainty. The organization feels the need to change and reposition itself in order to attract more customers and especially the corporate flyers. Leisure travelers are no longer sustaining the organization any further due to the unpredictable economy hence the need to look for another source which is the corporate travels that is not affected by unpredictable economy. 4. Strategic refocus This occurs when a business organization changes its focus from what it has been focusing to a completely new focus due to a rising demand (Bateman & Carl, 2002). This is why Virgin’s Blue Company is starting to focus on the new business class cabin and a superior economy class. They are intending to have new uniforms for the staff, they are to build more lounges, new products are coming up, there are plans to travel to other routes and they are replacing the aircrafts with wide body aircrafts that are more economical. Change Model This is an eight step model of organization change by John Kotter who is a professor at Harvard Business School and a renowned change expert in the world. The steps follow each other. Creating Urgency Change happens in an organization simply because the whole of the organization wants change. A sense of urgency makes the motivation to spark within the organization. For change to happen, the management should be honest and be able to convince the people in the organization of what is happening (Bateman & Carl, 2002). Virgin’s Company has performed a market analyses and seen the need to reduce on leisure travel and maximize on corporate travels. The organization feels that business travels are less likely to be affected by economic slowdown as opposed to leisure travels. The organization has focused on staff’s new uniform. Forming a powerful coalition Change will occur better when one is able to convince people that there is dire need for change so that they incorporate themselves in the change. Henderson &Jane (2002) states that the management needs very strong team from different departments and also from different levels to influence other people to work as a team and lead on the route to follow for change to occur. The team chosen should posses a sense of influence and should be able to commit themselves emotionally (Bharti, 2008). Virgin Blue Company has involved ‘The Project Runway’ winner Juli Grbac in order to design the new uniforms. The team will add a new look to the staff with new classic uniform .They have also revealed the choice of turboprop aircraft for the partnership with SkyWest to fly to regional routes. This coalition with this organization will help Virginia to improve her organization Creating a vision for change A vision is an anticipation of what you would want to happen in the future of your company. Virgin’s company vision is to incorporate the business class in to the airline. The great ideas and the solutions should be put together and in simple and clear terms communicated to the team members (Bateman & Carl, 2002). The management should ensure that the employees to implement change process are able to memorize this vision within 5 minutes .The management should also remember to practice on talking of the vision more often. In line with this vision, the company is expanding the lounges and improving them to hold more people and targets a 30% market shares if the vision is to become successful. With this vision and the changes in place, Virgin’s Blue Company have to take over Qantas. Vision communication For effectiveness of this vision to make Virgin’s Blue Company the best corporate travels airline, the management ought to communicate this vision powerfully and more often. The management should be open and honest to address employees fears and anxieties. All the operations in the organization should be tied to the vision and the goals should be directed towards the reaching of the vision. Doing away with obstacles It is wise to consider looking for leaders to deliver the anticipated change. The company wants to go into partnership with SkyWest to be able to fly to regional routes. All the barriers towards change should be done away with because they will delay change and consequently make change not to happen at all (Bateman & Carl, 2002). Virgin’s company is doing away with some of its aircrafts and be replaced with others that are more economical. They have also replaced the narrow body aircrafts with wide body. Creating short-term goals It is wise to consider setting a short time frame for the results to be seen. This is because success motivates the staff (Alan, 2005). Mr. Baghoretti confirmed that the first Virgin Blue’s wide body Airbus A330 aircraft would be between Sydney and Perth .This change has been shown as a success and will motivate the employees to view the change as a reality. For each long term goal, the company should ensure that there are smaller goals that are achievable .Once achieved this further builds more motivation to the staff. Continue Building on the change Kotter suggests that a project of change can fail simply because the success has been announced very early. He continues to suggest that Real change is one that runs deep. Once a small target is achieved, there should be analysis and progressive improvements on the targets made. The company has achieved a target of 10% now the company is building on this change in order to hit a target of doubling that share in to reduce the reliance of the leisure travels. Incorporate changes in the organization culture Change incorporated in the culture of the organization will make it stick and become a part and parcel of the organization (Bateman & Carl, 2002). The new changes of Virgin’s company are all directed to accommodate the business class of people. Once there is need to hire more staff in the organization, the staff should be well orientated with this change, values and ideas. There is need to talk about the progress of change anytime a chance crops up .Chief executive John Borghetti says that there has been a solid progress that was being made to build Virgin Blue's share. Organization changes Challenges In the Change management in an organization, many failures rather than successes have been witnessed so often because most organization reacts to fads in market place rather than establishing a culture monitoring and that, which responds to change, involves the team affected by change and which is in line with the vision and the strategy of the organization. Virgin Blue’s Company is not an exception and may find itself being held back by the challenges if not addressed and corrected in time (Alan, 2005). For effective change to occur the management should understand what challenges to expect and any opportunities that may come with it and the strategy laid should be implemented. The following are the challenges to expect while Virgin’s Company is putting up this change. Backsliding into old ways of working Since change comes with its disadvantages, the employees in the organization may tend to go back and stay in a comfort zone or the status quo (Prabhakar, 2005). The organization and its staff should be flexible and be able to accommodate change since without it progress in the organization will definitely cease due to the competition in the market today. There’s need to commit and pursue change wholeheartedly. Inability to prioritize organization resources and projects While change is within, many projects come up but this does not mean that there are more resources coming in (Prabhakar, 2005). In fact the resources may be diminishing due to increased projects. Virgin’s company wants to build extra lounges, some new uniforms for the staff, new business product is coming up and also replacement of narrow body aircrafts with wide body aircraft. Failure to manage the enthusiasm of the staff in the journey of change When there is change within an organization, the staff may be feeling a state of demoralization, uncertainty of what the organization hold for them in the future and hence become reluctant in taking up the new change (Prabhakar, 2005). Virgin’s employees may be in a state of confusion since it may not be clear to them whether with the coming of another class of people to travel, they will continue working or they may be replaced with more qualified people. They may also wonder whether there will be added workload without rewards. The employees generally have feelings of anxieties and fear. Ineffective Leadership Effective change management requires a strong leader (Prabhakar, 2005 p.45). The CEO of the Virgin’s company ought offer a very strong leadership that is not wavering by being firm on the decisions he will make but also flexible. Whatever he addresses the employees should also be reflected on his actions. When there is a mismatch between what the leader is saying and the actions he/she is doing the employees will recognize this and will never change (Kotter, 2007, p.3) .This is so because the leader plays a very important role in the change process. The leader leads while the rest follow. Resistance to change When there are new changes to take place in an organization, employees and the people involved in the change itself may result into resistance simply because it may alter their human behavior (Strebel 2008, p.83). Virgin’s management ought to prepare to deal with this resistance and address fears and anxieties .They are various reasons as to why people may resist change a) If the employees are not involved in the process of change. Informed workers are more motivated as opposed to uninformed employees. b) If the reasons for the organization to make changes are not clear, this triggers negative effects. c) If the way the people in the organization relate to each other is interfered with, they will tend to resist the change. The employees from Virgin’s organization may think that with the expansion of the organization there would be deployment to new areas, reshuffles etc which would alter their relationship. d) If the rewards does not match the difficulties that one is expected to undergo in the course of change transformation, people will tend to resist it. The Virgin’s organization is going to be expanded, there will be more work needed to put the organization in the proposed position. Will there be added incentives? e) If the change is not well communicated with time line, the personnel to be involved and the money to be used, then people will not dedicate themselves to the change. There should be a time limit on when the change should have been implemented (Patrick & Linda, 2003). Conclusion In conclusion, change in today’s business is inevitable if it has to remain viable and able to sustain itself. Thomas & Carl (2002) states that sometimes changes in organizations will not just take place because there is a problem that need to be addressed but also because there’s an opportunity. Virgin Blue’s Company change may be due to; the change of market behavior, the products and services of the organization may be undergoing the end of their life cycle, a strategic refocus and social change. To go about change in Virgin Blue’s Company, they have to follow the eight steps; Creation of urgency and form a team of people to implement the change. They should ensure that there is a vision that is to be achieved and then communicate the vision to their employees. All obstacles that may hinder them from reaching the vision are either removed or addressed (Patrick & Linda, 2003). Create short-term goals that are achievable then continue building on the change while improving the previous successes and lastly ensure that the changes are incorporated into the organization culture. The challenges that the company should be prepared to face while implementing the changes are; Resistance from the employees, backsliding into older ways of doing things, the inability to prioritize on projects and resources, Ineffective leadership and failure to address people’s fears and anxieties. Recommendation Bharti (2008) states that everyone knows about the change in an organization but managing the change needs different abilities from those of operational leadership. Virgin Blue’s Company ought to know the challenges that might come together with these changes and be able to address them. The management needs to: Prioritize on the high-value projects that will help the organization in realizing its goals A very strong leadership that is not wavering Employees ought to know the change expected, its goal and how to go about it. Inform the employees in simple terms and clearly the changes to take place to avoid ambiguity. There should be a time limit on when the change is to be implemented. Offer an opportunity where their fears and anxieties are addressed. Offer rewards for a change that is made. References Alan, C 2005, Change management, Viewed 26th April 2012 http://www.businessballs.com/changemanagement.htm Bateman, T & Carl P. 2002, Management: Function and Strategy. Homewood, IL: Irwin, Bharti, V 2008, Managing Change - Challenges, Processes and Strategies, Viewed 26 April 2012 http://ezinearticles.com/?Managing-Change---Challenges,-Processes-and-Strategies&id=1260498 David, E 2000, How to manage organization change , London, Road Pentoville Henderson, L & Jane, H 2002, Tuckman and Tears: Developing Teams During Profound http://ezinearticles.com/?Managing-Change---Challenges,-Processes-and-Strategies Kotter, J 2007, Leading Change – Why Transformation Efforts Fail, Harvard Business Review, Vol.1, no. 1, pp. 34-65. Patrick, E & Linda, k 2003, Managing organizational change, London, praeger publishers. Prabhakar, G 2005, Switch Leadership in Projects: An Empirical Study Reflecting The Importance of Transformational Leadership on Project Success in Twenty-Eight Nations, London, Macmillan.  Schneider, D 2006, It's a Leader's Duty to Manage Change, New York, Springer. Strebel, P 2008, Why Do Employees Resist Change?, Harvard Business Review, vol. 74, pp. 86 - 92. Read More