Case study – Leading and Managing Change

Case study – Leading and Managing Change

Executive Summary

Organizational management is a dynamic process that requires the integration of management theories, models and personal experiences to foster the management process. Additionally, it becomes necessary for managers to appreciate that leadership driven by the need to enforce organizational vision and nurturing of new leaders into delivering standards. One instance of transformational leadership is that experienced at the Heinz organization which decided to expand its operations into a multi-national business venture. It attempts to penetrate and enter the Australia market was rather more problematic than it was identified during a market survey. After several bids of mergers and acquisitions the traditional corporate culture was diluted by the merged companies. Furthermore, continued expansion of the market to include New Zealand, Japan and Korea. Because of the dynamics of operating in foreign countries with a complete different business environment as compared to the parent corporation, Heinz became a victim of a mismatch in cultural changes which triggered a change in management hierarchy, structure and organizational strategies. In order to relate the performance experienced by Heinz organization under the leadership of Widdow who is the senior manager for the subsidiary plant based in Australian, it is prudent to integrate an analysis of the organizational culture, structure and strategies into the cultural web.

 

 

Aims and scope for this report

The aim of this paper is to create awareness regarding the transformational leadership theories and philosophies that are paramount to driving organizational change. For instance, the case of internationalization strategies applied at Heinz Australia gives an insight into organizational change, culture, the cultural web, relevant analysis and dynamic management theories that are essential for instigating change.

The scope

The scope of this paper is limited to the reforms that were initiated by Willows who reforms the management theories, framework and models which imply that management designs could influence a company’s efforts towards increased productivity.

Conceptual framework

1. The cultural web presents an interconnected list of six elements that are collectively referred to as a paradigm or a pattern representing a model of a real work environment (Grant & Marshak 2011). An analysis of the six factors relating them to Heinz organization will be helpful in creating a bigger picture of the corporate culture which must have been used by Widdow during the transformation period. Looking at the element on stories, the company has a successful past in the United States. Furthermore the boards of directors located in the parent company have a dislike for failing or underperforming subsidiaries. As a result of the high expectations downed upon the manager before Widdow was appointed to head the Australian subsidiary, the management diverted its attention from rewarding employees for success but specialized in punishing employees. Consequently internal stories told by the employees became a sad story that demoralized employees by diverting their attention from focusing on the benefits of a creative workforce. With the new culture, the immortalization of Widdow’s as an industrious, caring and accommodative manager was of great deal in reverting the right attitude among employees.

Rituals and routines as an element inclusive in the cultural web played the role of intimidating employees in the previous regime whereby the management was so afraid of taking risks that the company’s culture turned into punitive. Because of fear of victimization, employees developed a negative attitude towards the company which subsequently promoted absenteeism and high staff turnover which became the routine among employees before Widdows was appointed as the new Chief Executive Officer. The symbols used by an organization represents dress code and code of conduct among employees/ apparently Widdows introduced new slogans that encouraged solidarity among employees thus reforming the culture of the organization. The advancement of the organizational structure initiated the need for reforms in the management structure to match the new organizational culture (Dibella 2007). The control systems were previously not clearly defined as all the powers were centralized in the CEO who was the sole decision maker. Widdow encouraged a decentralized system of control which made the employees to feel appreciated.

The power structure previously used by Heinz Australia was bureaucratic whereby the top management was to get orders from the parent organization in the United States. The bureaucratic power structure was slow especially when urgency was required in decision making. Additionally the management had lacked backing from the employees who had a resentful attitude which made them shun away from expressing their ideas to the management. With Widdow, the leadership haze was broken as decision making was decentralized making it an inclusive process that encouraged the employees into being active participants in reforming leadership. Reflecting on the transformational changes initiated by Widdows, it is advisable that the manager instigates two philosophies of management (Sirkin, Keenan & Jackson 2005). The reason behind the selection of two theories of management is the need to incorporate efficiency in the management process while at the same time making the employees to have a feeling of satisfaction and self-worth.

Commitment based and control based theories of management can be contrasted so as to select the best. Evidently the previous manager of Heinz Australia applied control based which made the employees to feel pressured to achieve targets. With the shift of the management theory from control based to commitment based, Widdows seems to have won the trust of the employees. This is implied by the ease with which the workers have made new designs and product lines, reduced staff turnover by 83% and absenteeism was significantly reduced. Basically the commitment based theory helped the manager in restructuring the environment insuch a way that the employees are made to take advantage of opportunities arising within the workforce. With such opportunities the employees have to practice creativity, innovativeness and above all practice self-discipline. This is because the commitment based design of management molds employees into becoming innovative which is a big stride towards invention of great ideas that will increase productivity of the organization (Sturdy & Grey 2003).

Apparently the commitment based philosophies of management are supported by the McGregor’s management theories which are identified as theory X and theory Y. (Senior & Swailes 2010). The commitment based model is an equivalent of theory Y because it encourages the manager to foster participation and openness among employees. Additionally the theory nurtures employees into becoming self-disciplined, self-motivated and innovative just like with the commitment based philosophies. On the other hand, theory C which equates to the control based management philosophies has been known to breed lazy employees who cannot take initiative or develop new ideas to promote productivity or cost saving strategies. This is because the manager fails to appreciate employees but instead punishes them for their failures thus creating fear of the unknown which is unnecessary for an organization like Heinz Australia which strives to get the best results out of each and every employee.

As illustrated in the preceding question, a cultural web audit exemplified that previous and current state of Heinz’s corporate structure was shaped by management philosophies relating to the treatment of employees. In this question, John Kotter’s change models will be illustrated in relation to the cultural web model. Kotter suggested the following eight steps of leading change; first stage involves convincing the employees to necessitate change. A manager needs to induce the employees into swift action that is aimed at achieving organizational change. From the case study, Widdow’s initiated slogans to motivate employees into necessitating change. This strategy of managers necessitating change relates to the element of rituals and routines which was handled by change of employee behavior and attitude to institutionalize the right attitude. As a manager, Widdows demonstrated this by behaving with respect and showing willingness to listen to the teams. The second stage entails creation of a clear guideline to lead the change process. This is possible by allocating the employees into groups headed by a team leader. Responsibilities are then issued basing on the level of specialty identified among the group members. Widows managed this by trimming down the organizational structure where 25% of inefficient employees were laid off from work.

Kotter’s change model suggests the third step as being the development of a vision to guide change. A vision enables employees and stakeholders to focus their efforts on achieving organizational goals and objectives stated in the guideline created to facilitate change. Apparently this is an element of control system as illustrated in the cultural web. By developing a vision and mission statement which aimed at improving the health of the employees and initiating a novel and flexible working week schedule was a visionary move aimed at making the employees more responsible as supported by the commitment based management philosophies. The fourth step involves communicating the vision made in the third step (Hardy & Phillips 2004). Widdows used negotiation skills to convince the work groups into operationalizing the vision and change strategies which were institutionalized into slogans and organizational logos aimed at making Heinz a great place to work. Fifth, Kotter suggested the need for broad based action in empowering the employees. In order to achieve this Widdows had to scan the internal business environment and restructure the firm as well as the systems to facilitate the achievement of set objectives. The empowerment process was further supposed by empowering employees and motivating them into developing risk evasiveness attitudes which helped in fostering success among employees and other key stakeholders.

Step six involves generation of short term goals. These are specific plans to help in the achievement of the long term goals. Widdows made sure that the goals increased chances of success of the new product lines as well as in determining suitable reward schemes for employees who came up with the ideas. Step seven of the Kotter’s change model entails never letting up on the vision (Hardy, Lawrence & Grant 2005). Given the fact that Widdows had managed to change the firm’s structure, policies and system into fitting the corporate culture at Heinz, the whole organizational structure was now better than it was previously. New employees were hired, appraised, promoted and trained to improve efficiency of the firm and by so doing the change process was boosted by virtue of the organization attracting and recruiting people suitable to the job descriptions. The final step stated by Kotter involves institutionalizing change into the organizational culture. At this point the leadership structure for Heinz Australia was totally reformed which made it more autocratic as compared to the bureaucratic corporate structure that had been used by the previous manager (Meaney & Pung 2008).

2. The new organizational culture institutionalized by Widdows was supported by the need for employee motivation. Motivated employees have been associated with cost saving and high productivity. With the biting economic crisis, employee motivation at Heinz Corporation was on the downslope because of frequent layoffs and pay cuts which are demotivating to the employees (Ka¨rreman & Alvesson 2009). The fear of failure and the punishment that came with it further made the employees to be withdrawn from the organization making the performance to decrease drastically. Widdows six years of experience as the managing director at Heinz Australia helped him realized that organizational performances are strengthened by rewards and motivation. Motivation can be achieved through developing reward strategies to cover for challenging work procedures. Usually, the design of the performance management process is fostered to assist employees in learning essential skills and information expected to bring constant growth to the company. The human resource department holds the key to success of any given organization but success is not whole dependent on the quality of human resource rather on the organizational strategies and its corporate culture. In relation to this apprehension, Widdows uses several leadership theories to enhance the possibility of success of the newly instigated corporate culture (Homan 2010).

Likewise the decision by the directors at Heinz U.S to appoint Widdows as the CEO for Heinz Australia is supported by trait theory which classifies and identifies leaders according to personality traits. Gone are the days when people believed that leaders are born and cannot be developed through experience, today leaders can be identified depending on their characteristics such as empathy, decision making skills, negotiation skills, motivation, likability, assertiveness and integrity. Secondly there is the behavioral theory which focuses on classifying leaders according to behavior into autocratic, democratic and laissez-faire leaders (Ford, Ford & D’Amelio 2008). This theory was developed by Kurt Lewis who specified that behavior affects a leader’s performance. Thirdly there is the contingency theory which states that good leadership is dependent on situation or circumstance. The fourth theory is power and influence theory which emphasizes that the way a leader uses power determines the success of an organization.

3. Based on the improved performance indices exhibited by Heinz Corporation, it becomes acknowledgeable to apply relevant management and organizational theories with the hope of maintaining its current organizational practices. A contingency theory deal with the shaping of employee behavior thus it is classified as a behavioral theory. The theory is relevant in appreciating that there is no single defined management model that guarantees 100% success thus each and every organization ought to devise its own corporate culture suited to the business environment in which it operates. This implies that the parent plant needs to give autocratic powers to Heinz Australia as one way of eliminating bureaucracy which might force the company to revert to the undesirable bureaucratic culture. This means that Heinz United States could consider funding training programs for its employees, board of directors and even the CEO.

Secondly the contingency theory further supports that it would be profitable for Heinz Company to institutionalize a scientific approach to management (Ford & Ford 2010).  The theory is strict on emphasizing the need for specialization of labor, employee motivation and training. It further emphasizes the need for seasoned management policies that complement the organizational structure. Combatively, the contingency theory is relevant in solving organizational issues relating to human resource department as well as management issues. The human resource management can be maintained by breaking down the hierarchy structures that previously existed in Heinz Australia. The essence of such an action will be to ensure that the communication channel is streamlined to encourage employees to air their ideas that could be helpful in promoting the growth of the company in its foreign markets (Jos, Marjolein & Thijs 2012).

The mechanistic management models of management also have to be transformed in favor of organic models of management. The use of organic designs have been applauded by economists because it plays the role of incorporating multiple work groups into a seamless group that works in unison towards bettering the organization and enhancing its chances of reaching its financial projections. Likewise the organic design of management encourages vertical dissemination of ideas and information. The reason behind such a management design is supported by the need to create a suitable atmosphere for learning within the Heinz Company. This objective can further be achieved by decentralizing the process of decision making to incorporate a system of reward whereby employees whose ideas become successful upon implementation are rewarded with promotions or financial incentives. This strategy is further supported by the commitment based theories of management which has been known to advocate for a highly motivated group of employees (Di Virgilio & Ludema 2009). By so doing the organization will also enjoy reduced costs on monitoring compliance among employees.

Conclusion

This paper compiles management theories and models such as commitment based management philosophies which illustrate the need for Heinz Australia to motivate employees by rewards and autonomy. The need for a commitment based theory is cemented by the need for the application of Douglas McGregor’s theory X and Y which elucidate the need for committed employees rather than workers who wholly depend on the managers. Likewise the paper illustrates the integration of the cultural web into the John Kotter’s change model which is defined by the eight stages of change. Contingency theories of management support the course of the company and it could be essential in managing the change process.

 

 

References

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