Sunflower Incorporated, Mistakes Made by Albanese - Case Study Example

Sunflower Incorporated Introduction A change can be conceived as a modification of factors that determine the stability of a system or an organization. A Planned change is defined as those initiatives that are driven from the top of the organization, that is, the management, moving down (Bamford & Forrester, 2003). The purpose of committing to a planned change is to increase the effectiveness of an organization. It is important that when the management decide on a planned change, they need to define the objectives of the change and then they come up with a step by step approach to attain the objectives. There are several models involved in coming up and implementing a planned change process. They include the Lewin’s change model, the action research model, and contemporary action research model. There are several steps involved in the planned change process but they all fall under categories of the activities involved. The activities are: entering and contracting, diagnosis, planning and implementing and evaluating and institutionalizing change. After the management recognizes a need for the change, they come together and develop the goals and objectives and the goal. Then they decide on the person who will be the change agent, that is, the person who will lead the change. Economists agree that the role of leading a change is very daunting. This is because the process of a planned change involves many risks as well as opportunities. This paper critically analyses the role of change agent in a planned change. The paper aims at critiquing a planned change process and understanding the value of diagnosis prior to action. It employs the case analysis of Sunflower Incorporated; a distributor of snack food and liquor. Specifically, it focuses on the activities of Agnes Albanese, in her action of leading change in Sunflower Incorporated. The Case Study Sunflower Incorporated is a distribution company involved with the distribution of snack food and liquor. It has over 5000 employees and over turns in over $700 Million in gross sales. It has over 22 regions spread over United States and Canada. Each region has its own sales people, finance department, central warehouse and a purchasing department. The head office has allowed the regions to operate in autonomy in order to respond to local tastes and practices. In the late nineties the company started using a financial reporting system that would give a comparison of sales, costs and profits for all the regions. This lead the management to learn that there was a wide variation in profits in the regions. Some regions which had high profitability were using lower quality items while others faced great price competition. Therefore the management decided to use standardization to solve the problems. Sunflower Incorporated’s president, Mr. Steelman created a new position to monitor pricing and purchasing practices. He hired Agnes Albenese to fill in this position. Her major responsibility involved monitoring and administration of purchasing and pricing decisions across Sunflower regional offices. She reported to the company’s vice-president Mr. Mobley. She was given the freedom to organize her job and establish necessary rules and procedures that were necessary. The regions were notifies of her appointment through an official memo sent to all the regional managers and the announcement of her appointment was also made in Sunflower’s newspaper. Early in her job (after 3 weeks), she decided to standardize pricing and purchasing procedures in a bid to control cost. The first step she took was to require that all financial executives in each region to notify her of changes in local process that are more than 3%. Secondly, she decided that her office should clear all local purchases that are more than $5,000. Her plan was approved by the management. She decided to implement the new procedure immediately even though the company was moving in a peak holiday. She sent an email to all the purchasing executives to notify them of the new procedures which would be in effect in four months. However, eight weeks later, she had not received any notices from the regions about changes in local prices or purchases. This is in spite of confirmations that the regions were busy as usual. They were following usual procedures that are followed that time of the year. Mistakes made by Albanese Change in an organization is not easily welcomed by the members of the organization. Due to the nature of a planned change; it is driven from “top – down”, the change faces resistance and it is the role of the change leader to anticipate the resistance and come up with ways of handling those resistances. The mistakes that Albanese did include the following: 1. She did not anticipate resistance and devise ways of handling it Using the open-system’s view, organizations are live living creatures. They work continuously to remain in a steady state. This explains why change is resisted regardless of whether it is necessary or not. This means that when an organization decides to come up with a planned change, it should anticipate the resistance the change will face and come up with change strategies and techniques to combat the resistance. Albanese did not take time to study the change she proposed in order to identify the resistance the change would face. Consequently, there was no strategy or technique for the change. 2. Poor diagnosis prior to action Before taking any action for the change, it is important for the change agent to gather data on the organization’s climate in order to help employees brace up for the change. This includes creating the urgency for change by letting the employees understand what is wrong with the current situation and comparing that with what the change would bring in the future. Lacey (1995) says that, to get credible and actionable information during the process of diagnosing, the change leader should meet the organization leaders and build trust with them. This allows them to share the data required. Albanese did thought it was time consuming and cost ineffective to visit the regional managers and executives. 3. Lack proper communication Stephanie (2004) says that “Organizational change is disruptive; it takes people out of their comfort zones, away from what they are familiar with, and into uncharted territories” (p.15). Even in situations where change is necessary, change creates ambiguity and uncertainty among the employees in an organization. The change leader is supposed to make it make the employees feel more connected with the change through communication and the relationship he/she established with them. Agnes failed in her communication tactic; she sent emails to regional managers who had not even met her. In addition the information she gave was minimal and she did not seek to find out what the managers thought about the change. 4. Lack of leadership credibility Establishing leader credibility is connected with communication because the way the leader communicates the goals of the organization affects the way the employees perceive him/her. This will in turn determine whether the employees will trust the leader or not. Agnes did not establish a rapport with Sunflower’s employees which could have helped her to create leader credibility. At the same time, she failed in her communication tactics which worsened the situation. 5. Inadequate analysis and resources Agnes did not take time to do the analysis of the problem before she could embark on the change process. As much as it was agreed the at standardization of pricing and purchasing, three weeks was a short time to determine how the changes were to be implemented. In order to have the capacity for change, the necessary resources must be provided. One of the major resources is time. Albanese neither gave herself time neither did she give the employees time to adopt the change. The policy was to be implemented within four months which was such a short time given that there are 22 regional offices spread across the United States and Canada. 6. The timeframe for the change was so short Four months was a short time to implement change. As studies have shown, people do not accept change immediately and that means that the whole process of change should be given adequate time. 7. Failing in establishing clarity of outcomes Agnes did clarify what the outcomes of the change would be. She requires information but did not tell her managers what would be the outcome of this information. It was not clear to the managers why standardization measures were being put in place. Without a clear indication of the outcomes, the employees do not feel obligated to provide the information or support the change. 8. Insufficient supply of information The medium for communicating the change was the internet. This meant that the financial executives or the regional manager would not have a way of clarifying some information. It was also hard to ask questions since Albanese could not visit them. Given the urgency of the change, the information supplied was not sufficient enough to convince the employees to comply. 9. Initiating change in a peak season The regional offices had had autonomy to operate in order to match their customer needs. The decision by Albanese to clear all local purchases above $5,000 through her office was a mistake. It would take more time thereby reducing efficiency and this would affect the customers resulting in reduced business. Reasons why Albanese got no notices The Gleicher’s formula could help a change agent to determine the level of resistance he would encounter. The formula shows that the probability for change success is high if the combination of; the dissatisfaction with the current state, the clarity of the vision the change is perceived to bring and clarity of the first steps, are greater than the level of resistance for change. The opposite is true (Eaton, 2010). Therefore, since the managers and financial executives were not dissatisfied with the current state, there was no clarity of vision of the expected outcomes and there was no clarity of the first step, then the resistance was high. What Agnes experienced was resistance. That is why she is getting no notices. Lack of leader credibility is another reason why Albanese is not receiving notices. Although her hiring was announced through a memo and in the company’s newspaper, the mangers have not met her. Even before they can decide whether they like her, she requires information from them. She did not create rapport with the people so that they could trust her with the information. They did not know what she would do with the information they provided. Communication was a major problem in planning this change. Albanese’s boss, Mr. Mobley expressed concerns that although the internet was a good idea, it was not sufficient. There is no good way of getting feedback or clarifying issues. Mr. Mobley advised Albanese to visit the regions and discuss the new policies with the executives which she declined. Lack of adequate information and using inadequate communication handle is a major hurdle in information hiring. The fact that planned change is implemented from “top-down”, makes it reliant on the type of relationship that exist between the managers and the employees The managers do not seem ready for the change and the reason why Albanese is receiving no notices is because the employees are resisting the change. Studies show that the way an organization functions depends on the member’s actions (Goodman & Dean, 1982). Therefore, the organization changes if the behaviors of its members change. According to De Ridder (2003), organizational communication does not only have a goal of informing employees about important information regarding their work, it also has a goal of creating a community within the company. “One of the main purposed of change communication should be to inform the organizational members about the change and how their work is altered because of the change; this informative function of communication has an effect on the employee readiness for change” (Elving, 2005. p. 132). Albanese threatened the level of autonomy that the regional offices enjoyed. References De Ridder, J. 2003. Organizational Communication and Supportive Employees, Human Resource Management Journal, Vol. 13 No. 4. Eaton, M. 2010. Why change programs fail. Human Resource Management International Digest, Vol. 18, Iss: 2 pp. 37 – 42 Goodman, P.S. & Dean, J.W. 1982, Creating Long-term Organizational change, in Goodman, (Ed.), Change in Communication, Jossey-Bass, San Francisco, CA, pp. 226-79. Stephanie, G. 2004. Communicating planned Change: A case Study of Leadership Credibility, Thesis: Drexel University. Available at: http://dspace.library.drexel.edu/bitstream/1860/324/8/gradwell_thesis.pdf Lacey, M. 1995, Internal consulting: perspectives on the process of planned change. Journal of Organizational Change Management, Vol. 8 Iss: 3 pp. 75 – 84 Bamford, D. R. & Forrester, P. L. 2003. Managing planned and emergent change within an operations management environment, International Journal of Operations & Production Management, Vol. 23 Iss: 5 pp. 546 – 564 Elving, W. 2005, The role of communication in organizational change. An International Journal of Corporate Communication, Vol. 10 No. 2, pp. 129-138. DOI 10.1108/13563280510596943 http://brainmass.com/business/business-policy/440085 Read More