INTRODUCTION
Change in an organization or a business sector is a very common occurrence. Change may be described as a structured approach to transitioning people, team, and organisation from current state to a desired future state. The change is characterised by shift in behavior and attitude in people to adopt and embrace the future state. It also refers to changing the way a business is run. It involves changing to both maul and electronic system. In a business setup this may be influenced by various factors for example change in demand, supply and growth of economy.
Change is inevitable in any growing economy whether negative or positive. Planning, implementing and managing change in a fast-changing environment is increasingly the situation in which most organizations now work.
The main characteristic of the present environment is dynamism. Dynamic environments such as these require dynamic processes, people, systems and culture, especially for managing change successfully, notably effectively optimising organizational response to market opportunities and threats.
Most companies face various forms of change at various times of service. Some of these changes have there origin from the company administration, while others are instigated by the environment. The company in question in this report is faced with a challenge of management change. What follows is a series of ups and downs, which indeed worry the company into collapsing. A solution has to be arrived at urgently.
Another change that is experienced is the transition in ownership. This is seen when Lunch box Ltd purchases the firm. Employees and most clients are further shaken and all these result to a state of loss to the company. The environment of existence furthermore gets a new phase look when more buildings are built and new companies come into existence. To make the matter worse, more Hotels came into the same market. This translates into great competition against Lunchbox Ltd.
Many times these transitions come along. Any business management must actually be very ready to encounter change. These come because the market is dynamic, more firms come in, and the customer characteristics also differ. This calls for management strategies that will enable the firms to remain standing amidst these storms. Various theories have been formulated to help analyse effects of change to Organisations. Some of these will be looked at to help solve the puzzle that is experienced by Lunchbox Ltd.
This report is meant to unravel the theories pertaining change. Various theories will be explained and later used to solve the case in Galley restaurant. The main part of this report contains the literature review, outline of the changes that businesses face, how the firms respond to various changes in the market and a study of Galley investment. All these shall finally find application in Lunch box investment.
LITERATURE REVIEW
The backbone of any venture is its management crew. This composes of Chief Executive Officer (CEO), who is helped by a team of managers who head various departments. An effective firm has many departments, all which work towards the success of the company. Examples of these departments are: finance, accounts, acquisitions, information technology, administration, pensions, research and development among others.
Strategic management of a company
This is a very basic arm of business. It is the art and science of formulating, implementing and evaluating cross-functional decisions that will enable an organization to achieve its objectives. It is the process of specifying the organization objectives, developing policies and plans to achieve these objectives, and allocating resources to implement the policies and plans to achieve the organization’s objectives.
Strategic management, therefore, combines the activities of the various functional areas of a business to achieve organizational objectives. Strategic management provides overall direction to the enterprise and is closely related to the field of Organization Studies (Briggs, 1995). One key area of management is called change management. This highlights all that needs to be done in an event of change.
Change management
Change management, says Handy, 1989 is about modifying or transforming organisations in order to maintain or improve their effectiveness. This deliberate, conscious use of strategies is a characteristic of change management:
Ancient business man described a trend towards accelerating rates of change (Toffler, 1970). Toffler illustrated how social and technological norms had shorter life spans with each generation, and he questioned society’s ability to cope with the resulting turmoil and anxiety. The rate at which changes occur in this generation is so fast. This is contrary to the past.
In past generations periods of change were always punctuated with times of stability. This allowed society to assimilate the change and deal with it before the next change arrived. Technology that was invented could stay in the market for long times before any one could invent another. But these periods of stability are getting shorter and by the late 20th century had all but disappeared.
The changes that come in this generation are so sophisticated, but only last short time to leave an everlasting mark. These changes occur universally. Some occur in the market, in the management, in the inventions industry among the rest. Some changes are destructive, while others bring great opportunity. In 1989, two types of changes were identified (Handy, 1989).
Strategic drift
Is a gradual change that occurs so subtly that it is not noticed until it is too late? This includes change in attitude of workers when dispensing their duties, and deterioration of technology to the point it can not sell anymore.
Transformational change
By contrast, this form of change is sudden and radical. It is typically caused by discontinuities in the business environment. Such discontinuities include market variations, entry of new players in the market to offer competition and business transfers like mergers and acquisition. The following points must be taken into considerations before the management strategies concerning any change can be implemented (Briggs, 2004).
Everyone has fundamental needs that have to be met. These include the management, employees and the general customers as a whole.
Major changes may often involve losses, and people may also go through the “loss curve”, especially when change in management occurs.
Expectations need to be managed realistically. This will enable progress in a direction that is desirable. Fears have to be dealt with, to help retain potential clients and employees.
The following principles should be applied in order to ensure success in change management. These principles were arrived at from interviews conducted on every stake holder. Change in management brings with it results, some of which can break down the firms.
Giving people information – be open and honest about the facts, but don’t give over optimistic speculation. This is very important since it meets their openness needs, but in a way that does not set unrealistic expectations. For large groups, produce a communication strategy that ensures information is disseminated efficiently and comprehensively to everyone. Never tell everyone at the same time.
However, follow this up with individual interviews to produce a personal strategy for dealing with the change. This helps to recognise and deal appropriately with the individual reaction to change. Give people choices to make, and be honest about the possible consequences of those choices. This implies meeting their control and inclusion needs. Give people time, to express their views, and support their decision making, providing coaching, counseling or information as appropriate, to help them through the loss curve.
Where the change involves a loss, try and identify what will or might replace that loss. This is because a loss is easier to cope with if there is something to replace it. This will help assuage potential fears. Keep observing good management practice, such as making time for informal discussion and feedback. Such a practice is very important during difficult changes, but the pressure might seem so big to the point of assuming this key trait.
THE ORIES THAT EXPLAIN CHANGE
Various theories have been formulated to explain the dynamics in the business world. These came up in the events of planning for big changes in management. It is of paramount importance that such big changes be implemented, with seriousness, just as a project. Some theories that were formulated to help solve problems related to change are as follows:
ADKAR THEORY
This is a goal-oriented change management model that allows change management teams to focus their activities on specific business results. This is very useful particularly in strategic planning. The results that are normally aimed at could include: expansion of market, introduction of superior technology like software and purchase of new business.
The goals or outcomes defined by ADKAR are sequential and cumulative. An individual must obtain each element in sequence in order for a change to be implemented and sustained (change management learning centre, 2007).
As a manager, one should do proper ground work before any change venture can be pursued. A success oriented manager should always use models to identify gaps in any change management process and to provide effective coaching for your employees. Various models have their key areas of application.
The ADKAR model can be used to:
- Give assistance to employees during the change so that they can understand the transition positively.
- create a successful action plan for personal and professional advancement during change
- This model has paramount importance of providing a change management plan that is of great importance to the employees.
- predict the resistance to change by some employees.
The ADKAR model has the ability to identify why changes are not working and help you take the necessary steps to make the change successful. You will be able to break down the change into parts, understand where the change is failing and address that impact point. This theory has two dimensions that are considered. These are: business dimension and people dimension. All these vary and in turn affect the results to be realized.
For effective management of people dimension of change, it is important to take heed of the following goals that form the basis of the ADKAR model (change management learning centre, 2007):
- Awareness of the need to change
- Desire to participate and support the change
- Knowledge of how to change (and what the change looks like)
- Ability to implement the change on a day-to-day basis
- Reinforcement to keep the change in place
The ADKAR MODEL
This illustrates how the theory can be implemented. ADKAR theory is an all inclusive theory since it combines both the employees and the management of the company. If you are an employee in an organization undergoing change, your reaction to the change and how you are viewed by the organization will be directly affected by each of the five elements in the ADKAR model.
Take for example the implementation of a new technological tool. If the change is implemented and one believes that it was not needed, one will oppose the move right from the initial stages. One may fail to see the importance of the technology. Our natural reaction to change, even in the best circumstances, is to resist. Awareness of the business need to change is a critical ingredient of any change and must come first.
If someone had taken the time to explain that the old technology would no longer be supported by the vendor, and that new one was very necessary to meet the needs of customers, then one’s reaction (based on this awareness) would likely be very different (Burnes, 2004). For example, one can ask very positive questions like:
- “How soon will this happen?”
- “How will this impact me?”
- “Will I receive new training?”
Awareness and desire are two critical components of the change model. They help to induce a thirst and readiness to change to both the employees and the clients.
FACTORS THAT STIMULATE CHANGE
- Increase in competition in the market place will provoke a firm into running for a change. These will be geared towards cubing the strength of the rival companies.
- Introduction of a new technology. This comes with better performance. A new software for example would provide a faster speed and this can influence more buyers to acquire the same.
- Growth in the company can create a necessity to expand. This will automatically result into transfers, and employment of new employees.
- Reduction of market returns can result into some employees being given early retirements so as to reduce the work force and remain effective.
- Business processes like mergers, acquisitions and franchising can promote change to be implemented in the various firms.
CHANGE MANAGEMENT IN GALLEY CAFETERIA
Galley cafeteria is a canteen style restaurant which majors in the sale of foodstuffs. The capacity of this facility is one fifty since it has 150 seats. This can serve a good number of people, and never can a client lack a seat. The restaurant majors in the sale of snacks. This is very strategic because majority of them who pass by like light meals, especially after eating some heavy food in the day.
The firm is housed in a very potential ground for growth. This is because the building is large (eight story building). And has many people coming in. further more it is near a ship docking point. This restaurant is of international standards. The fact that the area of construction is to develop shows the potential of the restaurant to grow. As the area will be growing, so will the market of the hotel increase? These are some factors that were taken into consideration before settling on the venue.
Galley cafeteria has an expanded market. Another set of clients are those who attend the seminars and meetings is the building. They are always served with lunch and snacks. This reveals the kind of market that Galley canteen was enjoying. However as long as life exists in the world, changes will always occur. Some of the changes that were experienced by the firm are as below.
International competition is a major stimulant to change. This changed the environment and so lowering the sales received. Introduction of competition in the market has various implications. The negative effects of competition include loss of market to the rival company (Gerry, 2006). This also leads to low sales, loss of clients and eventually the disadvantaged firm reduces into a smaller firm. Despite all these shortcomings, business firms always aim at excellence.
There are factors that can stimulate a company into taking action (Senior, 1997). Competition is one such factor. A firm like Galley restaurant develops various strategies. One is by offering better and efficient services. This can be done by selling better snacks at a lower price and in better package. Another way to cub competition is through diversity and advertisement. This should however be done in a very excellent way because the competitors are well established firms (international chain restaurants).
Another storm that was received by Galley restaurant occurred in 2003. This was the ownership transfer to Lunchbox Ltd. This business transaction is called acquisition. Acquisitions should be planed and well organized. A successful process of transfer has many advantages. The buying company retains all the clients hence expanding its market base. Another advantage is the retention of very important employees. Despite all these advantages, acquisition is a real testing period to company management. Some employees will automatically rebel. This means that prior information should be passed, and the importance of such a venture explained to the employees; this is emphasized by the ADKAR change management theory (change management learning centre, 2007).
Proper arrangements are needed before any acquisitions are pursued. The whole process should be silent so as to help retain the clients who could walk out due to fear and uncertainty. The two firms require some good time of working together in the transition time in order to have a smooth take over. A lot of explanation is required so that both parties are convinced of the importance of the venture.
Other changes experienced were on the environment. More buildings were built and this increased market. This included the thirty offices. This meant in increase on the side of Lunchbox, so that they can be ready for more clients. This agrees with the theory of planned behaviour by Icek. The improvements include increase in advertisements, betterment of the services offered and management. Some of the potentials to exploit included the cinema market and launching of services to cater for the sports centre. What a great market to exploit?
However, entrepreneurs never sleep on both ears. The expansion of the market attracted more investors into the same place. This brought three more chain restaurants and two more pubs. What is the implication? More competition. The Lunchbox Ltd had to make better arrangement to counteract this competition.
Another change was realized when the manager had to retire. This brought serious problems. Such changes are mainly encountered in the inside structures. The company experienced problems especially because of the age difference between the manager and the rest of the employees. This is in line with planned behaviour theory by Icek. Even though this manager has more experience in the management field, she is young and this change brought serious loses to the company. The result of this is low sales, and final drop of some workers to ensure profit output. It is of paramount importance that the changes in management be organized well before any implementation can be done. This will help preserve both employees and the entrepreneur.
CONCLUSION AND RECOMMENDATION
Changes in companies should be organized and proper communication carried out. The ADKAR management theory in the Tutorial series is the best theory to apply. The theory is conclusive, and has the interests of all stakeholders taken into consideration. Strength of this theory is its focus to result acquisition. Great losses can be realized if proper measures are not taken. It takes very simple mistakes to destroy a good reputation. The management of all companies should therefore seek to be fair to all individuals. Establishing changes without emphasis on any theory is a dangerous ground to tread on.
Change in management is to be planned for and proper care taken before any pursuit is implemented. Without following the required procedures, all may go to waste, even if the course which was being pursued is a brilliant one.
REFERENCE
- Briggs M (1995). Change management. Last retrieved from the World Wide Web on 5th may 2008 from: file:///C:/Documents%20and%20Settings/Maggy/My%20Documents/Change%20Management%20Theory.html
Burnes, B. (2004) Managing Change. New York: FT/Prentice Hall & Pearson Education. - Change management learning centre (2007). Welcome to the Change Management Tutorial Series . Last retrieved from the World Wide Web on 5th may 2008 from:file:///C:/Documents%20and%20Settings/Maggy/My%20Documents/2.htm
- Gerry, R (2006). The Seven Immutable Laws of Change Management (Law Seven). Last retrieved from the World Wide Web on 5th may 2008 from: file:///C:/Documents%20and%20Settings/Maggy/My%20Documents/Amazing%20Firms,%20Amazing%20Practices_%20The%20Seven%20Immutable%20Laws%20of%20Chl.html
- Handy C (1989). The Age of Unreason. London: Hutchinson.
- Senior, B. (1997) Organisational Change.London: Pitman ‘Lg.
