Introduction To Leadership and Change Management Model
Galaxy, a German company manufacturing a wide range of air conditioners; heating equipments; refrigerators, etc, management of which has decided to close down its several plants in European nations. Due to this reason, many of the employees would lose their jobs. The present research will discuss about different internal and external challenges being faced by the company, like increasing costs of manpower, increasing competition in European countries, etc. Leadership is such an activity that has to be carried out in business organizations, as leading a group of people is one of the most effective ways through which the employees can be made to work in an efficient and effective way. This report would also shed light on various leadership & change management models as well as theories, along with recommending some of them to the top management of the company.
INTERNAL AND EXTERNAL CHALLENGES
Galaxy, one of the leading companies in manufacturing of household appliances, is losing its ground in many European nations due to a wide variety of reasons. Although, through the years, company has been able to maintain a competitive position in the market, but has not been very effective in coping with that of the various firms with substantially low manufacturing costs.
There are a lot of internal areas that the organization is lacking in and that too by a considerable margin. In this regard, it may not be wrong to say that weaknesses of Galaxy are plenty. Some of them are as follows:
Communicating with stakeholders:
This is one of the most difficult challenges that management of the firm would have to face if they decide to bring about change in the company. If they take the decision and implement defined change in the organization, then there are chances that stakeholders may get dissatisfied and also lose their interest in the firm. It is in this context that authorities would have to communicate with variety of stakeholders. But since there are numerous forms of communication, selecting any one of them would be a very difficult decision for the authorities. In this context it can be said that selecting the most appropriate communication channel would be a very difficult task for the management.
Resistance to change:
It is a well known fact that humans tend to resist to any kind of change at first. When authorities in the organization would try to bring about and implement change in the organization, then the very first problem that they would have to face is resistance from the workforce. Staff members will not accept the modification that authorities might want to bring at workplace, for which they may resist to it. This would create a lot of troubles for the company, as after it authorities would have to interact with staff members, try to convince them and then gain their support for change. But this task in itself is very difficult to be accomplished.
In addition to the numerous internal challenges being faced by the company, there are various uncontrollable or external factors as well which yield their impact on the firm. Through the analysis, some of the external challenges to the company are as follows:
Increasing competition from low cost manufacturers:
Today, there are a lot of companies operating within the geographical boundaries of European Union, plenty of which are the low cost manufacturers. Due to this reason, it has become very tough for Galaxy to effectively function in the present market conditions. Since cost of production of many companies is low, their profit margin is high, because of reason that they sell the products at cheap prices which in turn help in attracting large number of customers. Furthermore, since both productivity and quality of goods offered by company are declining at
rapid pace, successfully operating in the industry has become a very tough task.
Government norms and regulations:
In the past some years, there has been a substantial change in the legislations that govern the operations of companies producing household goods. Due to this, surviving and carrying out different processes has become very tedious and difficult for Galaxy. Therefore, it can also be said that this is one of the main reasons for decline in performance of the company. Such changes in the industry have to be complied with by the organizations, which, if not done, would lead to serious repercussions and could be drastic for the company. It is because of this very reason, the firm might face some or the other kind of trouble, when they would enter the two markets – India and China.
CHANGE MANAGEMENT AND LEADERSHIP MODELS AND THEORIES
Leadership is one of the important facets of business organizations that have to be nurtured and paid attention to by the company. It has a significant impact on the working of the company and productivity of the employees. Introducing and managing change at workplace is another vital activity to be performed by the management. It basically is a technique through which changes and developments can be implemented in the company. But for the management, it is imperative that it be developed and carried out in such a manner that it is well accepted by the employees and does not de-motivate them. Over the years, authors and experts have developed various models of change management and leadership which can be considered by the management at Galaxy.
Change management models
Numerous change management models have been developed since a very long time. Some of them are as follows:
Lewin’s Force Field Analysis
This model of change management was developed and propagated by Kurt Lewin in 1940s and since then it has been one of the major tools when it comes to introducing and implementing a change at the workplace (Burnes and Cooke, 2013). Though this model was initially developed for the purpose of aiding social scientists in understanding the behavior of people, but nowadays is used as a tool by business managers to bring about a change in the company. According to Bozak (2003) it basically consists of two factors or forces which describe as to whether the change would be accepted (helping forces) or rejected (hindering forces) by the staff members. The main concept or philosophy that goes behind the model is that according to Lewin, decision making and accepting a fact or process for an individual depend on internal and external stimuli’s. He believed that to make a person accept change, there must be continuous interaction and exposure between internal and external stimuli, as it is one of the most effective ways through which such an act can be done (Kruglanski, 2012).
The model prepared by Lewin states that there are two forces involved in the change management process – Driving and Restraining forces (Cameron and Green, 2012). Driving forces are the ones that support the change to be implemented at workplace; while restraining are the negative sides of a change, as described by Baulcomb (2003). Considering the fact that management at Galaxy is facing a troublesome time in the industry, there would be many factors which might prove to be an obstacle to bring about change in the organization. One of them would be that of reduction in the number of jobs. As many people would be laid off and many may be transferred to other locations apart from the European Nations. As per the case study, some staff members would be retained for a time period of two years so that the production does not stop completely while it is being relocated to some other country, their pay would also be reduced by a great margin, so as to reduce the expenses of the company. This way, already disturbed motivation levels of the employees would further go down (Schein, 1995). On the other hand, some factors that may work in favor of the change are the ones that the employees who would be transferred and relocated can see a hike in their salaries, position in company along with various other benefits.
Kotter’s 8 Step Change Management Model
This is another model which was proposed and developed by Dr. John Kotter which states eight different steps and stages which if followed would help the management of a company to bring about change (successfully) at the workplace (Quinn and Blackmore, 2012). Following are those steps:
Creating a sense of urgency: This is the first stage of this model. It describes that the management and authorities must create a sense of urgency at the workplace so as to make the employees understand its need in a much effective manner. In view of Mento, Jones and Dirndorfer (2002) it should be done as if it is extremely essential for the organization and in its absence, survival can be very difficult. This would help the authorities to motivate the staff members, to effectively and easily accept the change in their daily routine (Appelbaum and et. al, 2012). Herein, opportunities would have to be identified along with threats and developing such situations at workplace which would support implementation of the change.
Forming a powerful coalition: In this step, the management would be tasked with building strong relations and associations with employees and different stakeholders. Here, authorities would have to convince the staff and other parties who can get affected by the decision (Guzmán and et. al, 2011). Finding and developing strong leadership can be the key to it. Change agents and change leaders, should be recognized, who would lead and bring about development and modification at the workplace, as found by Todnem (2005).
Creating a vision for change: In the next step, a vision for change should be developed. This means that the top management would have to link together different ideas and concepts behind the change, so as to justify it and make it easily acceptable by different parties (Smith, 2011).
Communicating the vision: It entails that vision related to the change would have to be informed to the various parties who may be interested in and get affected by it. Meetings and conferences can be conducted as well as organized for the same purpose.
Removing various obstacles: After vision related to the change is communicated to the parties who may be interested in it, management at Galaxy may come face to face with different kinds of challenges and obstacles. This may be related to reluctance and rigidity of employees and other such parties associated with the change in some or the other way (Cohen, 2013). In this regard Armenakis and Bedeian (2009) have rightly said that for the same purpose, leaders and different individuals would have to be hired who can remove all such roadblocks and clear the path for implementation of change.
Creating short term wins: It entails that short term goals and objectives should be prepared in relation to the change. Main concept behind it is that if such short targets are achieved, then bringing about change would become a lot simpler process.
Building on the change: Next key to bringing about an effective change is being patient and not declaring too early that the change has successfully been brought about at the workplace (Farkas, 2013). After each short goal is attained, evaluating and analyzing it can prove to be very useful to the company. This would provide useful information related to what all areas further need to be improved and the likes of details.
Anchor the change in corporate culture: Here, change leader and change agent would be required to embed the change into corporate culture. To be able to do so, modifications would have to be made in policies, rules and regulations of th