Case study: Managing change at Perfect Components Perfect Components as it will be referred to here, is an Australian car components manufacturing company with two plants in Australia and additional plants in, New Zealand and India. The company has always focused on making a good return on investments and growing shareholder value and has pursued this goal by giving priority to product innovation, investment in new technology and developing the capability of its staff. Over recent years Perfect Components has managed to maintain the competitive position of its four manufacturing facilities in the face of growing competition from companies manufacturing in low-cost countries. However, the recent economic downturn has had a big impact on demand and the company is struggling to survive. The executive board has recognized the need for urgent change. It has formulated a new strategy that focuses on cutting costs as quickly as possible and to this end it has decided to stop producing some components and to concentrate the production of other components at fewer sites in order to benefit from economies of scale. This decision is still to be announced. Only a few very senior managers are aware of the new strategy. The new strategy will involve expanding production at the company's main site at Blois in Australia. Production is to be expanded here because Blois has the most advanced manufacturing technology and the site is not yet working to capacity. It is anticipated that increasing production at Blois will lead to economies of scale and a significant reduction in costs. India plant has been selected for closure because it is has the most outdated manufacturing technology. Workers at the Mumbai (India) site will be shocked when this decision is announced because they have been led to expect a massive new investment in their manufacturing facilities. The closure will lead to large scale redundancies and there will be few opportunities for staff to be redeployed to other plants in Australia and New Zealand. The one exception is the team of product development engineers based at Mumbai. The executive board recognizes that this team is a valuable asset because the pace and quality of product development has been an important factor contributing to the company's pre-recession success. Product development has been concentrated at Mumbai because the area is an international centre for auto product development. Many other companies (including many Formula One racing teams) are located nearby and this has led to the development of a world-class pool of product engineering talent in the area. It is possible that many of the product development engineers based at Mumbai will be reluctant to relocate. However, at least in the short term, alternative employment opportunities in the Mumbai area will be in short supply. Employees at the other two sites in New Zealand and Australia are likely to be worried that this may only be the first of many changes and that it will not be long before they will be affected. 1 Rapid Supply Electronics Components Case Study In March 2013, Rapid Supply Electronics Components Ltd (RSEC) acquired ElectronicBitsFast (EBF). Both companies operate across Australia, supplying electronic components to a wide range of customers. A number of factors had motivated the acquisition including EBF's integrated approach to managing sales, logistics and customer service and the brand values and customer service principles that had contributed to its rapid growth over the previous three years. RSEC is a decentralized organization with a small corporate head office located in Brisbane and a regional structure that includes six business units serving different parts of Australia. Each of these business units has considerable autonomy including full responsibility for its own sales force, distribution operation and customer service department. EBF, on the other hand, has a centralized structure and most functions, including sales, logistics and customer service, are located at its head office in Sydney. Eleven months after the acquisition, the RSEC Board announced its intention to integrate all sales, logistics and customer service functions across the merged company and to manage these functions from what had been EBF's head office in Sydney. The Board had decided to make this change early in 2013, before the acquisition had been finalized. Integrating all sales, logistics and customer service functions had been identified as one of the ways of creating and capturing value from the merger. However, the plan had not been implemented immediately but had been put on hold until after new financial controls had been introduced. The Board, with the help of the business systems manager from the original RSEC organization, developed a change plan. This focused on designing and implementing a new organization structure for sales, logistics and customer service and project managing the physical move, introducing RSEC staff to the EBF SAP system, creating new phone and IT networks, and constructing a new customer service facility to accommodate the enlarged customer service centre in Sydney. The business systems manager was appointed as the change manager because he was seen to have the technical expertise required to lead the change. He created a small project team to elaborate and implement the Board's plan. Board members put considerable pressure on the project team to complete the restructuring as quickly as possible because they felt a need to demonstrate to shareholders that the acquisition of EBF had been a good investment. This sense of urgency led to the business systems manager adopting a top-down directive approach. Consequently, little attention was given to the opinions of those who were affected by the change or to those who felt that they could offer constructive feedback on the change plan or the way it was being implemented. The first that most employees, including managers and staff in the affected departments, knew of the plan was when it was announced in an email communication to all staff. The announcement was not well received. There were several reasons for this: All employees had recently experienced a worrying upheaval (the acquisition) and, after nearly a year, they were just settling down to a new sense of normality. Staff who had worked for RSEC before the acquisition had presumed that, because RSEC had acquired EBF, their way of working was superior and would be rolled out across the new merged company. They felt let down when they realised that this was not going to happen and wondered where it would all end. Staff working in the original RSEC sales, logistics and customer service departments failed to see any need for a centralised integrated function. From their perspective their separate departments were performing well in every region. Employees in the affected departments recognized that many of them would be required to relocate. While some would not need to move (for example, most members of the sales teams and drivers responsible for making deliveries to customers), this was not made clear until some time after the initial announcement. Many of the managers working in the RSEC regional offices anticipated that they would be surplus to requirements after the reorganization. The project is still on-going and in some respects it is progressing well. The new integrated structure has been designed and roles and reporting lines specified. The new phone and IT networks are in place, a training programme has been designed for those who need to work with the EBF SAP system and the construction of the new service centre is nearly finished. The employees who were identified as surplus to requirements, including four of the six regional customer service managers, plus those who did not want to relocate to Sydney, have been released (made redundant) and those customer service staff who agreed to move (about 30%) have been relocated. The business systems manager leading the change has informed the Board that the change plan has been successfully implemented and that the project team has just about completed its work. However, from the perspective of the manager running the integrated sales, logistics and customer service function in Sydney the change is not progressing well. Because of the speed of the change and the high proportion of customer service staff who refused to relocate, she was unable to recruit sufficient permanent new staff to fill all the roles created in the enlarged customer service centre before it \"went live\". Consequently she has had to hire agency workers to bridge the gap. Unfortunately the turnover of agency staff has been much higher than anticipated. Exit interviews indicate that they dislike the work environment (a very crowded workspace because the new enlarged service centre is still not finished) and they feel that workloads are too high. A knock-on effect is that existing permanent staff working in the service centre are having to allocate more of their time to train replacement agency workers, making it difficult for them to cope with their own workloads. This has led to high levels of stress, reduced job satisfaction, higher absenteeism (which is putting additional pressure on those who turn up for work) and a growing number of avoidable mistakes. All these pressures have resulted in the cherished brand image being compromised and a slow but persistent rise in customer complaints. The HR manager has recognized, but not yet reported to the Board, that in the six original RSEC business units attitude survey results are beginning to show a decline in morale. Responses to questions about involvement, quality of communication and level of trust indicate that employees are feeling less valued than they were. There is also evidence of a growing dissatisfaction with the way the redundancies were managed. As yet, the business systems manager (change manager) is unaware of these problems and members of the RSFC Board are assuming that the change has been successfully implemented. PLEASE SELECT ANY ONE OF THE CASE TWO CASE STUDIES: MENTION THE CHANGE MANAGEMENT ISSUES APPLY CHANGE MANAGEMENT THEORIES The primary purpose of this assessment is to assist you develop skills in the use of change process and management theories and models in the analysis of a typical business situation that has organisation and structural change and development concerns. The assignment requires you to analyse the current situation, and suggest practical and probable solutions. The secondary purpose of this assignment is to give you the opportunity to apply you research, analysis, critical thinking and written communication skills, particularly the ability to write a case analysis report. Task: You case study report is 2000 words long and will include 15 academic resources. While each case is different, you will need to include 1. Report cover page 2. Executive summary 3. Table of contents 4. Case background 5. Analysis Problem identification/case issues Problem analysis and justification 6. Alternative Solutions 7. Recommendations 8. Implementation Please use the APA6 reference style In-text referencing is needed