Question 5 [15] CASE STUDY PickUP CARGO: SMALL COMPANY, BIG CHANGES For PickUP Cargo, 2017 has been a challenging year. PickUP Cargo is a small leader in the courier industry in Cape Town. Larger-scale courier companies tend to overlook small and medium-sized enterprises (SMEs), as they aim to get contracts and tenders from big companies. This gap in the market is where PickUP Cargo gained its success. Since it began in 2013 PickUP Cargo has enjoyed reasonable profits, and the majority of clients are satisfied with the services provided. While still a young small business, they set their sights on growing and expanding in terms of size and offerings while still focusing on SMEs. But in 2017 their luck turned and the year was full of unfortunate events. The year began with the first legal strike at PickUP Cargo. The three managers settled with their labour force of 57 on a 7% increase - 0.7% more than anticipated and budgeted for. Due to the strikes, PickUP Cargo had a backlog of orders. In March 2017 PickUP Cargo announced the newest addition to its management team. They believed that David Magoro, an early retiree from one of the big courier companies, could only bring positive change. However, staff members worried that David would impose a variety of changes. Some feared the possibility of being fired, some feared lay-offs and others feared additional workloads. As a result, staff morale and motivation and hence punctuality declined. In April 2017 the management team announced they are extending the company's services to include overnight services. With David's assistance they had identified a definite need among SMEs for such services. The overnight services would be effective from September 2017, and before then the policy on working conditions had to be updated. The following objectives to reach prior to implementation were communicated to staff members: Consult with labour unions on fair working conditions (completion date May 2017). Employees and managers to discuss new working conditions (completion date June 2017). Review and update the labour policies to accommodate new working conditions (completion date July 2017). Create a marketing campaign to create awareness of the latest offerings (start date August 2017). Launch new service offerings on 1 September 2017. The period after April 2017 was not easy. Staff resisted the changes in management structure and specifically the new working conditions. Lengthy discussions with labour unions and staff led to delays. The new services offering finally commenced in January 2018. David has subsequently suggested that PickUP Cargo should run surveys among employees to determine their satisfaction levels. Source: Hellriegel, D., Slocum, J., Jackson, S.E., Louw, L., Staude, G., Amos, T., Klopper, H.B., Louw, M., Oosthuizen, T., Perks, S. & Zindiye, S. 2017. Management: 5 edition. South African edition. Cape Town: Oxford University Press Southern Africa. 5.1 Identify and explain the two types of internal organisational change evident in the case study. Use examples from the case study to support your answers. (10) 5.2 Explain the sources of resistance to change and indicate two examples in the case study