Assignment Solution for Change Management
Organization Background
Change management is the most crucial component of effective organizational management. Change helps employees and manager to transition from an existing state to a better and improved state in response to diverse external and internal factors. Sadly, many companies disappear through dissolution, mergers, or downsizing due to lack of change management and implementation in a strategic manner. Organizations must possess an ability to adapt to change and quickly understand the complexities of business environment in order to survive for a long time, which is why, the skills of managers and team leaders for promoting and implementing change are vital for avoiding failure of an organization. Change is important for mangers because the rapid advent of technology and knowledge is impacting the way businesses work in the digital era, therefore, without creative ideas and technologies, change cannot come to drive the organizations towards prosperity and profitability (Cornelissen, 2018).
Managing the human elements of organizational change is crucial for managers to become better leaders and help the organization grow. General Motors is a globally renowned organization known for its paramount success and strategic management; in the automotive industry, the company is fully independent of the government’s assistance and successfully implements change management strategies for its restructuring. The CEO Rick Wagoner revealed in the Fortune Magazine that the company has had severe problems and was at the verge of bankruptcy due to high steel prices and teamwork issues. Therefore, the purpose of implementing change in the organization was to avoid the worst damages to the company and its employees in terms of job losses. The global growth of General Motors denotes a great managerial challenge to implement organization-wide change to minimize the effects of global financial crisis and adjusting their policies and structure for upheaval in the economy.
General Motors is US-based automotive manufacturing and distributing organization with headquarter in Detroit; the company was established in 1908 which became the America’s largest automobile organization and is ranked on the 10th spot in the Fortune Magazine in terms of highest revenues. The company sells and manufactures automobiles and vehicles in more than 40 countries with world renowned brands such as GMC, Chevrolet, and Cadillac. In 2016, the company achieved a significant milestone of selling ten million vehicles in a year. The company operates with 396 facilities in six continents of the world; in 2018, the company’s revenue reached almost $148 billion due to brilliant efforts of the CEO Mary Bara and the president Mark Reuses. For 77 consecutive years, General Motors achieved a sales figure larger than any global company from 1931 to 2007. In 2009, the company introduced several new innovative motor vehicle designs such as Hummer, Pontiac, and Saturn; the company also produced 8.5 million units globally of vehicles and captured 12% of the global market share of the automotive industry.
Role of a Change Agent in General Motors
As a change ambassador for General Motors, my individual role includes demonstrating outstanding skill and versatility to propel the organization towards a path of unstoppable success (DeMarco, n.d). An effective change leader or an agent possesses a myriad of skills; implementing change is complex in the global technological sphere, dealing with many employees and analyzing their behaviors is vital for a change agent to look for solutions that enable better change implementation processes, the first duty of a change agent is to investigate the behaviors of employees and managers in the chosen organization and identify what is preventing the organization from successfully implementing the change. Therefore, my role is crucial in General Motors to act as a change agent who is both observant and analytical.
Resistance to change is common in organizations because most employees are unable to accept change easily, which is why, change agent needs to speak up in favor of change and present it to the employees in a suitable manner to help them understand the benefits of the required change. Change can significantly impact the lives of people in the firm, which is why my role as a change advocates suggests that engaging people in the process of change and gaining their support can help to implement the change successfully. Change can happens successfully when the employees and managers change their behaviors and activities to collaborate more positively and understand the company’s situation for an inevitable change. People can experience and feel various emotions in response to a major organizational change, therefore, coming out of comfort zone and taking some pain or risk is difficult for many employees. My duty as a change implementer is to help employees feel better about the desired change in the organization and listen to and encourage them (Gough, 2017).
Another key role f a change agent is to find better methods to help people change their ways and adopt to change quickly without resistance or change avoidance. My role as a change facilitator denotes that I should clarify people how to embrace change and help the company design tools, systems, and strategies to help people to succeed in their jobs an contribute to the mission of the organization. Mediating is a vital element of a change agent’s role in the organization; change agent has to manage various conflicts and plays a vital role in hearing the viewpoints of different groups to reduce friction between them and help them collaborate (Grace, 2018).
The change agent also requires skills to advise and manage people and his own team. My expertise can help me to build an authority in the organization by sharing my knowledge and steer people in the right direction. Knowledge transfer occurs directly with the help of trainings and guidance employees require at crucial times, therefore constant conversations and meetings can help me to become more confident about producing better change management results. Moreover, as a change advocate or agent, my job is to ensure that the organization can meet its goals and targets smoothly. Change management process can help people stay on track with a positive attitude and also hold them accountable for good or negative results. Since my job is to implement the change successfully, paying attention to different roles of employees can help me to become more effective (Harrington,, n.d).
Diagnostic Model for Change Evaluation
A diagnostic model is used in General Motors to identify the required change in order to help the company boost its profits and achieve a target of greater revenues and sales throughout the year in the international marketplace. An evaluation of change needs to collect a wide range of information in order to make better judgments and suggest the organization an appropriate area to implement change. Organizational analysis can become a difficult and complex goal for a change advocate or manager; which is why, a diagnostic model is vital to suggest the management of General Motors standard of performance which ensures high-quality operations of the organization (Kreutzer,, n.d). The model can also explain how the company can integrate its important processes and tasks and suggest the type of information is needed to compare the current performance of the company with a required standard of performance achieved after successfully implementing the change.
The suggested change management plan and evaluation model for the company is Benchmarking Model which uses standard measurements for comparing the organization with other automotive companies in the world to gain a better perspective on organizational performance. For example, there are some benchmarks or standards or best practices for the vehicle manufacturing companies to ensure comprehensive processes for improving their structure and performance. Benchmarking model allows the managers and owners to measure the quality of its operations by comparing it to other successful competitors or industry giants in the automotive market (Lindberg, 2013).
There are always a few factors behind every change organizations plan for the betterment of its future and operations. Change often brings resistance, however, it is the dot of the managers to decrease the intensity of resistance and successfully implement the change management model holistically. By keeping in view the above discussion and model, the organization decided to implement change and bring changes in areas such as major restructuring and changing culture of the organization to achieve a sustainable competitive advantage. Therefore, as a change agent or manager, I am able to better suggest the General Motors about taking steps to plan and implement change to improve the company’s structure and culture to achieve profitable results.
Internal and External Factors Driving Change
There are a number of forces which bring change in the organization. The forces related significantly to the organizational environment and its external context. The change in automotive industry trends, automotive parts prices, and the global economic conditions force General Motors to make crucial cultural and structural changes. Change in national as well as international economic and trade conditions also impact the company’s decisions to introduce change in manufacturing and culture (Lindberg, 2013). Therefore, organizational change is a result of myriad internal and external factors to help the company boost its performance in the competitive marketplace and achieve sustainable results.
In change management process, organizational analysis reveals that General Motors requires change for better team building, inter-organizational harmony, and sustainable growth. During 2009, the company faced serious threat of bankruptcy despite its progress in the previous years and the management was forced to close several vehicle brands by selling them to China. However, after the need for change is inevitable in the company to achieve its declining position in the automotive market globally. The company will be able to open businesses in more countries and improve its brands such as Chevrolet and GMC.
The external forces affecting the GM to enforce change in its structure and company culture include the emergence of competitors such as Japan’s Toyota Motors, the biggest competitor of General Motors in the world. General Motors still may capture the most important and largest market share of the American automotive industry, however, in the recent years; its most important rival Toyota Motors has been able to give company a difficult time in the international competitive which has affected the profitability of General Motors significantly. Moreover, the company’s culture has been disturbed by the progress of Toyota Motors, which is why the managers are facing huge problems with the cash flows and managing the company’s brand’s reputation in the global market (O’Brien, 2018).
As far as internal factors are concerned, another major force for change in General Motors includes high costs of salaries and wages of employees and executives. Since GM is forced to run an expensive manufacturing plant with at least 80% capacity, much of its capacity is under-utilized which played a crucial role in the bankruptcy of the organization. Therefore, the above discussion suggests that the company needs reduction in costs which calls for structural changes. The company has been able to reduce the costs of a few brands lately; however, cutting the pay of employees can bring their morale down to work with their fullest potentials (Rosenbaum, 2019).
In addition to cost reduction and structural changes, the company also needs to change its work culture. The change requires the company to remove the automotive product board of employees and exclude 8 men team responsible for product strategy; the major goal of such a change is to speed up the vital process of decision making in the organization; the company also needs to change the culture to enhance the effectiveness of employees and hold them responsible and accountable for any dire consequences. The cultural plan of the organization depends on a top down strategy; this culture is not suitable because it ignores the importance of many employees in decision making as compared to competitor organizations such as Toyota Motors. The company needs to change the top down approach to empower its employees rather than simply dictating them their duties and ignore the process of employee progress and career development in the organization to help them become a sustainable part of the company.
The problems with cost cuttings are also vital because the cost cutting process can play a vital role in the effectiveness of change management. The agreement of trade unions created many problems for the company in the recent years and the company is forced to reduce the wages of employees to cut costs. Therefore, the GM has adopted the change management policy suggested by the change advocate officer.
Organization’s Readiness for Change
Change is compulsory for General Motors in order to remain competitive and survive in the global marketplace. The increasingly dynamic global automotive industry’s environment reveals necessity for implementing change in the company’s culture and structure. Change can significantly improve the performance of the organization. Therefore, the readiness for change includes many factors such as perception of change initiatives, vision for change, change initiatives, and mutual trust between the management and employees (Rosenbaum, 2018).
Employee’s perception of change in GM is vital for their readiness to accept and embrace change in the company culture. Perception of employees can impact their behaviors and intentions in facing the new change. The organization is altering its policies to bring the change, which is why; employees must perceive the change as a blessing and anticipate it for achieving personal and professional growth. Employee’s readiness can be influenced by properly communicating the change plan and how the change can improve their land company’s performance in the long run.
Mutual trust and respect between employees and the management can help the organizations steer their actions into a profitable direction. Trust and mutual respect can open doors for employees to establish better relationships with the management and openly reveal their dissenting views. The employees should also be ready to compromise some of their personal interests for the betterment of the organization; mutual respect and trust can promote a better teamwork and help employees to better meet the customer needs. Therefore, more favorable employee-oriented attitude of the management is necessary to build mutual trust and strengthen employee-employer relationships. The management should build trust by offering rewards and acknowledgements for superior work quality to encourage employees. A simple pat on the back in addition to a non-official gathering can improve the relationships of employees with management (Sulkowski, n.d).
In addition to trust building and perception of change, the management must also ensure the readiness of employees to welcome change by supporting the employees who may be intimidated by the change. It may include making flexible policies for women workers and improving the logistics support to foster the level of trust. The leadership must make effective measures to by forming a special team responsible for conducting analysis of internal and external environment encompassing the employs. Employee’s participation and commitment during the change process should be rewarded by the management in terms of compensation or allowances. Moreover, management should also remove obstacles from employee’s path to embrace the change such as uneasiness and tension at the workplace. The management can reduce the uncertainty and confusion by sending emails and thank you letters to employees for helping them manage change in an appropriate way. Therefore, employees will be ready to accept the change and willing to support the managers if the change is beneficial for their families and career growth (Ten Have, 2018).
The company can use an online decision support tool to measure and improve the employee readiness for change implementation. This tool can help GM to identify several factors and assess the employee’s readiness to accept change. Employees should be asked questions about the current company culture and structure and rank the list of priorities to help promote the change for improvement.
Recommendations
Required Change Solutions
As discussed above, the company has faced the similar situation back in 2009, which is why, the managers can follow the same strategies and solutions to avoid bankruptcy problem for the company and offer change for better sustainability of the business. For example, the company’s strategy to reduce cost involves reducing the wages of employees from $50 per hour to $35 per hour. The company can also decide the number of workforce employed from 50,000 employees to 40,000 employees. Such a strategy is suitable to reduce the overall costs of the vehicle manufacturing company because the result of cost reduction will be an instant increase in the profits of the company and will lead to significant cost savings (Ten Have,2018).
Moreover, the company is offering a change or solution to change its workplace culture in order to achieve good results related to employee performance. The cultural change will help the employees becoming more aware of their responsibility and accountability and to empower the workers to produce better results. The effectiveness of cultural change will transform the overall atmosphere in which the workers perform their duties and will offer a cooperative and supportive attitude to each employee to help them boost their performance. These are the two most recent change management strategies such as cost reduction plans and cultural change that the company is adopting to achieve the greater market share outside North America. The company faces a great threat from the competitors and the change will allow managers to again achieve their top position in the automotive market (Thomas, n.d).
