Scale and Scope of Change in BHP Billiton - Case Study Example

Organizational Change Management Name: Tutor: Course: Date: Introduction The aim of this essay is to examine the scale and scope of change in BHP Billiton with regard to styles of change management and appropriateness of the leadership style in the case. Over the last decade, organizations have undergone process enhancements, restructurings, lay-offs, mergers or joint ventures and acquisitions with a strong desire to attain revenue growth and high profitability. The external business environment is very regulated and competitive and affects the delivery of services and goods (Lewis 2011). The internal environment unless able to meet the demands of the marketplace inhibit the organization from delivering products. Major organizational changes are internal meaning that it is strategic as if affects normal business operations to change the firms’ strategy in achieving its objectives. In the case of BHP Billiton creating an equally shared joint venture with Rio Tinto, the company adjusts its approach of doing business such as markets, products, orientation, global activity levels and joint business arrangements. In this case, the structural changes will influence hierarchy, goals, management systems and administrative procedures (Knights & Wilmott 2007). For structural changes to take place, then the CEO Marius Kloppers should recognize the need for change in leadership style and the level of transformation required in the new organization. The discussion change strategy points to the scale of change and the leadership style required to drive the changes. Scale and scope of organizational change Cultures and structures are needed to create conducive environment for continuous change. These are necessitated by issues related to changing people’s behavior, restructuring the organization or undertaking major company repositioning by way of strategic change initiative. Marvin Weisbord (2011) argues that concepts of continuous change have failed because technological and rate of market change is not in quasi-stationary equilibrium and not in the state of continuous transition. However, Dunphy and Stace (2001) assert that the increasing incidence of revolutionary change is achieved more effectively by coercion and not collaborative top-down change strategies. They suggest that each strategy has a place and that its selection ought to take into consideration the dominant contingencies and that no one way can fit all the occasions. The authors developed a model that highlights the key contingencies; scale of change and style of leadership (Dunphy & Stace 2001). The scale of change is a continuum from ‘Fine-tuning, Incremental adjustment, Modular transformation and corporate transformation’. The first two are small scale changes entailing clarification and refining of current procedures by real adjustment of organizational structures. The latter two are large-scale involving revolutionary to restructuring changes of the entire organization (Smillie & Hailey 2001). The leadership style ranges from participative to autocratic. In the case of BHP Billiton, the previous CEO Chip Goodyear invested in incremental change which centered on task-focused transformations. Marius is mentioned as aggressive and courageous personality with a heart and brain of negotiations. He is the man to undertake charismatic transformations in BHP Billiton if it is to achieve the synergy required with Rio Tinto. To achieve this, the leader will not play on the smaller ground of fine-tuning and incremental changes. The joint venture requires a large-scale discontinuous change only obtained through collaboration which is charismatic transformation (Knights & Wilmott 2007). However, the personality of the CEO is authoritative, volatile, aggressive and intimidating though intertwined with rational thinking and operational skills. In structural changes within the organization, dictatorial transformation is required for critical coercive change programmes. Dunphy and Stace (2003) argue that the suggested models for planned challenges the manager’s personal value preferences. They propose that the suitable change strategies are not determined by organizational needs but by the change agent. Knights and Wilmott (2007) indicates that contingency theorists assume that managers can impose a correct design for the organization and places the social scientists on top of organizational participants. The Chairman of BHP knew that hiring Marius would be the best gamble since he has the willingness and determination to go hostile. The argument here shows that corporate transformation requires coercive and authoritarian leaders who go overboard in driving employees to achieve their targets (Kanter 2003). The CEO has a combination of qualities needed in modular and corporate transformation. He is a rational thinker to obtain the best deal, replete with operational skills to guide incremental changes and the authoritarian persona to keep the company moving and employees on toes. Mason & Mitroff (2001) suggest that change management strategies ought to be based on magnitude of change needed to introduce the organization into agreement with external conditions and the leadership needed to attain the depth of change. Marius certainly possesses the right qualities to drive both modular and corporate transformation. The dictatorial transformation is needed at the moment of joint venture while corporate transformation is needed for business operations to reach maturity stage (Dunphy & Stace 2001). Many theorists prefer that small incremental changes are preferable to large-scale changes. However, large-scale changes apply to situations faced by organizations occasioned by out-of-date systems and rapidly changing environment (Kanter 2003). The mining industry is dynamic and unstable owing to global recession, environmental concerns and the desire to use modern technology in its business operations. Many mining and manufacturing businesses in Australia resort to incremental changes in relation to technology since it does not require big changes to be made. Since BHP Billiton is currently engaging in strategic decisions affecting the long-term plans of the company, large-scale change is a necessity. The generic change programs associated with the transformation required are turnarounds and charismatic transformations (Dunphy & Stace 2003). Charismatic transformation is the inspirational change attained by way of consultation while turnarounds refers to the dictatorial transformation which is also a coercive program represented by an overlap in the modular directive type. The CEO of BHP needs to consider the situation and context in which a given form of change is appropriate. The early phases of negotiation with Rio Tinto require reorganization of processes, methods, employees and systems through frame breaking change (turnarounds). Employees will be required to redefine their roles, re-evaluate the vision and re-position the company. Dunford (2009) notes that managers are seen as neutral conduits that place aside their own interests to make rational decisions that will encourage organizational survival and effectiveness. He reiterates that the organization imposes its will and shapes the perceptions on organizational decision making. The new Marius having been mentored by the Chairman Don Argus has come to recognize the need to be tolerant and inclusive in running the affairs of the organization. Under charismatic transformation, Marius found that people determine the future of the organization. He observes that his role should inspire them through teamwork, planning, determination, and performance (Dunford 2009). Inspiration change as a result of modular transformation is seen in the way the CEO attempts to build trust, break down barriers, engaging staff and reducing communication barriers and bureaucracies. The leader notes that the company can grow only when situational leadership is practiced, a bit of bureaucracy and more on democratic style of leadership. Finally, the point at which the manager recognizes the tasks to be accomplished, the energy and resources to be deployed maximizes the best of incremental and modular transformation. To improve systems and operations within the company, incremental change is required which is evidenced by constant change of both development and task-focused transitions. The workers in BHP Billiton will have to adjust to a mix of participative and forced evolution by way of directive and collaborative change to achieve organizational goals (Knights & Wilmott 2007). Change Management and Leadership Many organizations encourage innovation and active responses to problematic circumstances. They also aspire to develop closer relationships with customers, foster entrepreneurial spirit and autonomy among staff, limit diversification, high level supervision and cohesive organizational culture. Peters and Waterman (2002) note that autonomy is a product of discipline that provides the framework and confidence to perform. The authors show that building on high-trust cultures enhances closer relationships with customers, productivity through people and increased competitive advantage. The four styles of change management ranges from ‘coercive, directive, consultative to collaborative’. Just like forms of change, these styles have a specific relationship. For instance, the CEO of BHP Billiton was known to be authoritative, aggressive and intimidating which was a function of dictatorial transformation (Weisbord 2011). Leaders in this case are after results and do not take interest in the outcome of employee relationship and work. The leader shows little concern to mentorship and training given that weak or underperforming employees can adjust and get along easily. However, to achieve organizational objectives, the leader must adjust to the leadership style favorable to shareholders and employees. Balogun and Johnson (2004) opine that change recipients should help in shaping the change outcomes since there is need to adapt to change strategies through time. It points out to some pertinent issues that may arise at the point of unpredictable and dynamic process of large-scale changes at the workplace. These points out to the fact that authoritarian or coercive leadership may only be required when certain goals needs to be achieved but not all the time. The BHP Billiton case depicts a situation in which the CEO is coercive and task oriented. This shows that the management style is largely coercive and directive. It reign within the task-focused transitions evidenced by constant change and the turnarounds characterized by frame breaking change (Dunphy 2001). However, to sustain productivity and cohesiveness among employees, the CEO realizes that he has to adopt other forms of leadership; consultation and collaboration. These two latter qualities stretch beyond Taylorism or the aspect of avoiding change to charismatic transformations. The leader realizes that constant changes can happen through development transitions by way of incremental change and modular transformations. Skinner (2000) asserts that a wise leader is governed by above all the dictates of necessity. The choice is in pull or push mechanisms of the collaboration spectrum. He notes that the leaders can resort to pull mechanisms like collaborative and consultative or push; directive and coercive. In this case, Marius uses the pull mechanism of wooing employees or investors to buy his ‘story’. His style of consultation and collaboration is working since he wins trust, delegate power and listens to employee concerns (Dunphy & Stace 2001). The company is on track when the CEO realizes that he needs to be focused and simplistic. But what is unique about consultative and collaborative leadership? Democratic leadership is the current paradigm in modern workplace since employees know what is required of them and are not commanded to do so. Collaborative approaches work well in an atmosphere with high level of qualified professional employees whose talent and expertise may be essentially engaged in the process of planning and may be principally discouraged when left out (Huber & Glick 2005). In BHP Billiton, employees find a more open employment market where they can easily leave to work in other companies within Australia. Collaboration stand out as the only approach where power is distributed throughout the firm and one basically is incapable of implementing change without the full buy-in of many people. These approaches demand significant amounts of effort and time, hence limited to situations requiring foresight to change before it bursts (Muczyk & Reimann 2011). The CEO has also showed the willingness to consult and involve everyone. The people’s views are elicited which take time, but eliminated is any protracted time of debate since attaining an acceptable decision is often very time-consuming when a lot of people are involved. Consultation in this case plays a role of compromise where some professionals are involved. Mining is a highly technical area demanding a lot of knowhow. This could be an option when there is a lot to be done and talent that easily drains away if the CEO is not conversant of what he/she is doing (Harris 2005). Before mentoring, the CEO exhibited directive and coercive roles since he loathed underperformance and ensured employees drove results home. These qualities are required in the turnarounds and corporate transformation. Under directive approach, the organization exhibited higher levels of communication but unidirectional. Buchanan and Badham (2008) note that radical changes are necessary for companies to survive in a contested and politicized demand drive. From the change management strategies, BHP Billiton will do well with Type I change strategy which involves consultative and collaborative approach to leadership. The two aspect result in fine-tuning and incremental adjustment which requires participative evolution as well as charismatic transformation since the company has in the past changed through incremental changes (Buchanan & Badham 2008). Currently, there is a high degree of employee participation in the management process, and a systemized and comprehensive perspective to human resource management policy at all levels of employee management. The aspect of fine-tuning may not be much viable for the company given the current circumstance but corporate transformation requiring coercive and directive style works well after the joint venture agreements. This is because the organization would want to radically regain fit on the occasion of a changed environment. This provides a basis where Muczyk and Reimann (2011) offer insight on why participatory leadership should not be perpetually branded as the excellent or best leadership style. Consultative and directive style of corporate leadership achieves the maintenance of fit with respect to the incremental adjustment and modular transformation scales of change. However, it should be noted that identification and selection of an appropriate change strategy must match with a suitable business strategy to improve performance (Beer & Walton 2007). High and medium performers are advised not to take to radical corporate transformation since if used inappropriately may result in increased challenges than earlier anticipated. The conditions in the BHP Billiton must change dramatically to warrant such changes. Similarly, where organizational performance is low, employing fine-tuning instead of making bold changes and reaching out will potentially embed the low performance. BHP Billiton has the capability to employ consultative means to arrive at its goals since the CEO has recognized the fact that he can know the temperature of the company by simply talking to his employees. In lieu of participative and consultative methods, the company can secure implementation by developing better skills and flexibility (Anderson & Anderson 2010). The company faces a continuum of organizational situations but the strengths of leadership qualities will establish the firm at the transitional state where their strengths are required. Conclusion The essay has established that there are four forms and styles of change. The forms of change are fine-tuning, incremental adjustment, modular transformation and corporate transformation. BHP Billiton is in the path of change and requires an excellent mix of style of leadership and forms of change. The CEO Marius Kloppers has strengths in collaborative and consultative management which are required to create developmental transitions and charismatic transformations (Lewis 2011). Previously, the leader was operating the coercive and directive continuum which has been dubbed as essential for turnarounds and task-focused transitions. This implies that the CEO has a blend of the leadership qualities required to cause incremental adjustment and corporate transformation. The essay has learned that the situational model as provided by Dunphy and Stace (2001) allows corporate managers to move beyond personal value preferences as a criterion for selection in developing organizational change strategies. BHP Billiton is undergoing transformational change at the corporate level hence requiring a style like directive management in order to start the repositioning process in the organization. Reference list Anderson D & Anderson L A 2010, Beyond Change Management: How to Achieve Breakthrough Results Through Conscious Change Leadership, Journal of Human Resource Management, John Wiley & Sons, 3: 90-104. Beer M & Walton A E 2007, Organizational change and development. Ann revised psychology. 38: 339-367. Buchanan D & Badham R 2008, Power, Politics, and Organizational Change: Winning the Turf Game, Journal of Management, SAGE. 12: 122-134. Dunford T 2009, Managing Change, Creativity and Innovation, Harvard Business Review. Boston. 5(23) 345-365. 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