Page 195 - Managing Change in Organizations

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Chapter 11 ■ Strategies for change
CASE
STUDY ABF Ltd

ABF Ltd designs, manufactures and markets hydraulic filters. It comprises two product
groups (industrial and process control). It is a relatively autonomous subsidiary of a larger
group. The company employs 350 people. Its turnover in 1994 was £22 million, with a
profit of 8 per cent of turnover. The managing director of ABF Ltd reports to the group
board and is held accountable against a set of targets of profit sales volume, capital spend,
market share and growth. In the late 1980s profit had been slowly declining, both
absolutely and as a proportion of turnover (since 1984), and this despite reasonable
growth in turnover.
At the time of the study the current managing director had worked with the com-
pany for 21 years, 10 as managing director. All his senior colleagues were long-service
employees. During late 1985 the group chief executive had begun to devote increasing
attention to ABF, visiting on several occasions and asking for more detailed performance
figures. Following discussions between the group chief executive and the managing
director it was decided to bring in a team of management consultants to review proce-
dures throughout the company. There was growing concern about both direct and indi-
rect costs. The consultants were asked to look at the following five areas:
1 Planned maintenance policies.
2 Quality levels and quality assurance.
3 Utilization of machine setters and technicians.
4 Information and control systems.
5 Manufacturing organization.
As this review proceeded a number of significant changes were introduced, particularly
to tighten up quality control procedures and to provide improved information. The
finance director (who was also responsible for personnel and administration) was the
prime mover behind many of these changes.
The management team also experienced a range of what we often refer to as ‘human
relations problems’. Confrontation between managers was a regular occurrence. Often,
managers would adopt an aggressive approach in discussions, taking entrenched and

always ‘departmental’ positions. Conflict between the production director and staff in
the sales department was particularly prevalent. On the face of it there was little under-
standing (or attempt to understand) by each department of the objectives and problems
of the other.
Communication was also very poor. Rarely were the production departments notified
of priority orders in good time. Little attempt was made to coordinate sales plans with
production plans. There had been several instances of large orders agreed, with short
delivery schedules, without any consultation between the two departments. This often led
to disrupted schedules within production departments. Machine utilization was poor,
ranging from as low as 11 per cent to rarely more than 45 per cent.
Managers tended to treat subordinates autocratically, issuing orders but allowing no
discussion. Ideas were either suppressed or ignored, particularly if they came from
younger employees. People were expected to conform to ‘the way we have always done
things around here’. Managers appeared to feel that change was both a threat and an
implied criticism of their own personal performance.

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