Page 243 - Managing Change in Organizations

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Chapter 13 ■ Managing major changes
Table 13.1 Internal and external pressures in an engine manufacturer

External pressures Internal pressures
Recession Inadequate organizational structures
High interest rate
Falling orders
High energy and material costs Lack of confidence and fear of change,
including the fear of redundancy
New products/materials technology being Accustomed to slow change (or paralysis)
adopting in engine design and manufacture
Increased competition both from abroad and Limited managerial competence in managing change
because some end-users were beginning to
switch to building their own engines Lack of experience with new technology
Changes at group level as a consequence of a Low productivity and quality
change in ownership
Ageing plant with attendant maintenance problem
Low morale, high absenteeism and industrial disputes
Cash flow problems

The first and most important challenge was to develop an open attitude towards change
at all levels. The company had experienced little or no change in 30 years.
Employees were accustomed to stability and managers possessed little or no skill
in the management of change. New management at group level, recognizing this
company as declining economically, brought in a new top management team – a
managing director, engineering director and finance director. The new team
moved quickly. The strategy adopted is shown schematically in Table 13.2.

Table 13.2 A strategy for change

Testing reality New attitudes and structures Achievements
Threat of closure and New technology introduced in
redundancy manufacturing technology
and in materials
Encouraging understanding Developing new attitudes to
of the problem work and to change
Development new ideas
for the future – new products
Search for new markets Training for new technology Quality control system
and business (including and to deal with change introduced
subcontracting)
Open negotiation Reorganization and contraction New products
communication
Full involvement of Investment in new technology Labour flexibility
employees and unions

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