XYZ Construction Case Study
The organization was transformed when improved performance was achieved through the leadership from the new Managing Director. The operation, culture and structure of the organization were transformed to achieve the goals of the new Managing Director. The construction industry within which EX. Construction operates in, is highly competitive, aggressive and at times, hostile. Conflict between contractors and subcontractors occurs frequently, often requiring litigation to resolve the disputes. The hostile environment was mirrored by the relationships within the organization under the former Managing Director.
There are four sections in the report; the first section will address the extent to which EX. Construction adopted the culture-excellence approach during their transformation process. This is following by the evaluation of the resistance experienced during the transformation and the use of a new management style by the incoming Managing Director. The last section presents examples of transformation in a South African context. 1 Extent to which EX. adopted the Culture – Excellence approach The approach to change management is identifying and managing processes developed to make organizations more competitive and improve performance.
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Change Management processes are focused on internal processes within an organization, and they provide solutions to assist management achieve their commitment to change and improve productivity with the least resistance (Strop, 2005). There are many approaches to change management developed however the report will utilize the three approaches described by Burners, 2009. 1. 1 The three change approaches There are three approaches that have dominated the Western managerial thinking since the asses namely; the Culture – Excellence approach, the Japanese
Management approach and the Organizational Learning approach (Burners, 2009, p. 99). The approaches are briefly described below: Culture – Excellence Approach There is a vast amount of literature presented on this approach however; the key contributors to the culture-excellence approach are Peters and Waterman, Canter and Handy. The crucial components from each contributor are briefly highlighted. Peters and Waterman They developed eight significant attributes that organizations need to demonstrate if they are to achieve excellence, namely (Burners, 2009, p. 102): A bias for action Closeness to the customer
Autonomy and entrepreneurship Productivity through people Hands-on, value driven Stick to the knitting Simple form, lean staff Simultaneous loose-tight approach Canter Rosetta Moss Canter developed the post-entrepreneurial model, which highlights how organizations in future, should operate. Her model describes three strategies that post-entrepreneurial organizations must pursue: Restructuring to find synergies Opening boundaries to form strategic alliance Creating ventures from within: encouraging innovation and entrepreneurship Handy Handy is a British theorist who contributed to the emergence of new organizational arms.
Handy identified three generic types of organizations. He argued the following organizational forms will dominate in future: Shamrock Federal Triple I (Intelligence, Information and Ideas = Added Value) Japanese Management Approach The Japanese management approach was captured by Ouch’, McKenna, Pang and Oliver and many other contributors. The contributions made by the above theorists are briefly described below. Couch William Couch believes that organizational success stems from the following (burns, IPPP): The involvement and commitment of the entire workforce.
A set of internally consistent norms, practices and behaviors based on trust and strong personal ties between the individual and the organization, particularly their immediate work group. Practices such as lifetime employment, slow evaluation and promotion and collective decision-making. The belief that workers want to build cooperative and close working relationships. 5 McKenna McKenna believes that the central elements to organizational success are (Burners, 2009, p. 135): Lifetime employment, The seniority principle with regard to pay and promotion, Enterprise unionism Pang and Oliver
Pang and Oliver agreed with McKenna however believe that the additional elements to organizational success are (Burners, 2009, p. 135) : Training and education. Company-based welfare schemes. Quality Circles. Manufacturing methods such as Just-in-Time production. Organizational Learning Approach Organizational learning “describes attempts by organizations to become learning organizations by promoting learning in a conscious, systematic and synergistic fashion that involves everyone in the organization” (Burners, 2009, p. 146).
Sense developed 5 interrelated disciplines that organizations require to encourage and template learning and success. The 5 disciplines are listed below (Burners, 2009, p. 148): Personal mastery – individual growth and learning. Mental models – deeply ingrained assumptions that affect the way individuals think about people, situations and organizations. Shared visions – the development of a common view of the organization’s future. Team learning – the shift from individual learning to collective learning. Systems thinking – the ‘Fifth Discipline’ that links the others together and which, he argues is missing in most organizations. Cummins and Worldly in 2001, identified three levels of learning, designed to assist organization to move from an adaptive to transformation learning level. The identified three levels are listed below (Burners, 2009, p. 149): Level I Level II – Single loop learning – Double loop learning Level Ill – Triple loop learning 1. 2 Adoption of the Culture – Excellence Approach The following section evaluates the extent to which EX. Construction has adopted the culture-excellence approach in its organizational transformation process.
The impact of each initiative has been discussed separately as these are significant events within the process. Customer care programmer The new Managing Director identified an opportunity to improve the organization’s performance by improving services delivered to customers. The construction industry is hostile and aggressive, however through a customer case programmer, the Managing Director believed that positive relationships can be built which would benefit both the organization and customers.
Based on the attributes developed by Peters and Waterman listed above, the organization’s customer care programmer will allow them to be closer to the customer. The programmer was initiated with a few key managers and a few key customers. The programmer is a critical part of the transformation of EX. Construction’s culture and the way they do business. The programmer meant that the initiating key managers had to develop and display skills of effective communication and build relationships with key customers.
The initiative develops managers by ensuring they adopt a more hands-on approach in the organization, share experiences and pass on knowledge and information. The customer case programmer is a clear indication of how EX. Construction has adopted the culture-excellence approach in its organization. Awaken Initiative The Japanese developed a business philosophy, awaken, which translates to change for the better (Investigated, 2014). This business philosophy focuses on the continuous approach involving all employees of the organization.
This initiative is based on all three of the approaches and it clearly originates from Japanese management approach. This approach and the implementation of the small-scale awaken initiative at EX. Construction will enable organization learning to take place along with a culture change of employees and managers working together. The new Managing Director communicated his commitment to the initiative, Hereford all employees are collectively working together to ensure the success of the initiative..
The culture change brought about by the initiative, develops managers’ confidence to delegate work without feeling threatened by subordinates. This leads to staff being empowered by a higher sense of responsibility while developing skills. Partner initiatives in the Industry The previously hostile construction environment is changing to the extent that contractors and subcontractors are attempting to build relationships and partnerships rather resolve disputes through litigation. The new Managing Director however, identified a shortcoming in the organization that required attention in order to build successful external relationships.
Hiss view was that relationships that needed to be built externally could not be achieved if internal relationships and communication skills were not developed. Internal relationships are required to ensure that managers and employees are striving to achieve the same goals with similar techniques. Successful relationships and strategic alliances with contractors and sub-contractors will result in increased organizational performance. This approach encourages new ventures from within the organization through an innovative working environment.
By collectively working together, new ideas and ways of improving the organization can be developed. 8 General From the above three initiatives taken by the new Managing Director, it is evident that the culture-excellence approach has been significant in the transformation of EX. Construction. The transformation includes aspects from the Japanese and Organizational Learning approaches. The new Managing Director puts a lot of emphasis on the empowerment of employees, developing new skills and training. In addition to the above, he also utilizes part of the Japanese Management’s Awaken approach I. E. Mailer incremental improvements that are made continuously. This is evidenced through the implementation of each initiative at intervals rather than all at once. The transformation of a large organization, such as EX. Construction, is a long- term project as organizational culture and operational changes often take time to change. Another example of how the new Managing Director adopted the culture-excellence approach is through the use of a simultaneous loose-tight attitude. This is where the manager allowed a “loose” working environment, however the need to achieve the performance clear was clear.
This approach allowed for positive culture and behavioral changes to take place without losing focus of the organization’s objectives. Based on the above evidence, the transformation of EX. Construction clearly adopted aspects of the culture-excellence approach to effectively achieve its objectives. 9 2 Reasoning for little opposition/resistance from staff The appointment of a new managing director who has a different leadership style ill almost always bring about change within an organization. Organizational change is not always easily accepted; some reasons for resistance to change are listed below (Yuk, 2013, up. 192): Change is not necessary Change is not feasible Change is not cost effective Change would cause personal losses Change is inconsistent with values Leaders are not trusted Resistance to organizational change is a natural reaction to those who want to protect their self-interests in the organization. However, it is clear from the case study that the employees of EX. Construction showed little resistance to the change implemented by the incoming managing director. The primary reason that change was welcomed was due to the former Managing Director’s management style which was not widely accepted in the organization.
Employees feared him and it was not acceptable to speak openly and honestly. Employees were aware that this behavior was often counterproductive, and created a negative impression with the former Managing Director. As the newly appointed Managing Director had previously worked at the organization, he was aware of certain of the issues and concerns of the employees. The experience gained from irking at other companies, and the reputation he built from his career prior to returning to EX. Construction ensured that the employees had faith in his leadership ability.
The new Managing Director’s first step in developing relationships with managers and employees was to incorporate key employees into Senior Management Team activities. His actions made it clear that he was willing to retain the current workforce and promote from within the organization. This created a positive environment which encouraged employees to work harder and produce results Employees and managers id not fear loss of employment with the new Managing Director, but rather felt included in the decision making process.
The new Managing Director’s attitude and actions were clear and concise which addressed the problems within the organization. His actions were collectively moving in the same direction, to achieve a clear goal of improving internal and external relations and improving the organizations performance. He correctly identified problem areas such as relationships, communication and the structure of the organization. An incorrect diagnosis of the problems within an organization may exult in incorrect changes being implemented, which can lead the organization into complete disarray.
The new Managing Director identified two crucial activities to be performed in conjunction with each other to enable the transformation of the organization. The two activities identified were: To introduce new practices and techniques to improve service to customers and thus improve the organization’s performance. To change the attitudes and behavior of employees By identifying the two activities above, the new Managing Director identified crucial steps to improve its performance. Only through improving services to customers can the overall organization’s performance improve.
A satisfied customer is likely to return and recommend the organization to others. This is directly linked to the growth of the organization. The new Managing Director is aware that to provide better service to customers, the employees will have to develop and learn new practices and techniques to ensure superior service quality is provided to customers. The implementation of the second activity is critical to the success of the overall goal of improved customer relationships. The employees and managers attitudes and behaviors are to be transformed to ensure the best results are achieved.
Employees and managers who were unhappy under the former Managing Director are more willing to adhere to the recommended changes. The willingness to adhere also stems from the approaches presented being feasible and there is no fear for loss of employment. The changes bring new opportunities for employees and managers to develop in their current roles and possibly grow into new roles. The potential positive outcomes as a result of these changes are a contributing factor in the lack of resistance experienced by the Managing Director.