Strategic
Change Management: Motorola
?
Introduction
??????????????? Currently, the world of
business is facing different
changes, which continuously challenging different companies in different
countries in order to maintain their competitive advantage and their share in
the market. ?The impact of
globalization and the
Internet, together with the different technologies ? and now, the problem of
global economic crisis ? are continuously changing the different macro- and
micro-environmental factors which affect the
business environment and the industry which individual companies are
operating. As a result, many companies, particularly those multinational
companies are focusing on implementing different
strategic movements such as
acquisitions, mergers, application of
advance technologies, restructuring and
downsizing, in order to maintain competitive advantage, which in return add
up to the
growing climate of uncertainty.
??????????????? As a result, change is considered as constant in the world of
business. As have said by Drucker (2007), change is normal and healthy for
business, because it helps companies to be aware of simultaneous transformations
and shifts about the entire structure and
system of an organization, together with its
culture, behavior and competency (Tushman and O?Reilly, 1997).
Change helps organization to be consistent by considering the different
development in the
external and internal environment in the
decision-making process, therefore, the actions or strategies to be
implemented will help in order to use the company?s strengths, improve its
weaknesses, to take advantage of the different
opportunities and prevent or
counterattack the
risks related to threats in the environment. However, in spite of its
importance, it is still considered as one of the most taken for granted
processes (Balogun, Hailey and Johnson, 2008).?
??????????????? This paper will discuss and evaluate how
Marks & Spencer approaches
strategic change management by using different change models.
Background of the Company: Marks and Spencer
??????????????? Marks & Spencer is the largest retailer in the UK, become a
limited company in 1903, with a total of 300 M&S company-owned stores, which
sell clothing, footwear, gifts, home furnishing and food. Most of the products
are sold under the private label of M&S ? St. Michael. M&S owns a total of 100
M&S stores in other parts of the world, such as
Europe, Hong Kong and
Canada. A total of 85 franchise stores are established in Europe,
Australia, Bermuda, the Bahamas, the Far East and the Middle East (Funding
Universe, n.d.). Currently, the company has a total of 68,000 employees and 286
stores and factors in
Britain. It is serving more than 13 million shoppers and customers with its
lines of products. During 2000, the company reported that a total of 85 million
of sandwiches had been sold weekly (Berend, 2006).
??????????????? M&S started that Michael Marks opened his first M. Marks Penny
Bazaar, which later one grew to 12 market stalls in Lancashire and Yorkshire.
Later on, he decided to expand his business by partnership with Tom Spencer, to
gain more capital of ?300. The first Marks and Spencer Bazaar store was opened
in Manchester and by 1903, the company becomes public with 36 market bazaars and
shops, which include 3 in London. Later on upon the retirement of Spencer and
death of Mark, Simon Marks entered the family business with Israel Sieff, which
resulted for the company to established 135 stores with 10,000 employees in 1927
and additional lines of products (Berend, 2006, 249).
Drivers
Affecting Change in Marks and Spencer
??????????????? For a long time, Marks & Spencer is considered as one of the
most popular and most successful businesses in the world. It had been able to
show improvements and growth in terms of its sales and profits, together with
its success in ensuring innovative growth and the market by jumping the
bandwagon of globalization. However, for the past few years, Marks & Spencer is
experiencing decline in growth. In 2001, it has been reported that the sales of
clothing, footwear and gifts ? which are considered as the key to the recovery
of the company had slumped 9.1 pc. or ?85m. In addition, the clothing market of
the company has decreased from 1.9pc to 11.7pc in the past 6 months ? lesser
than any of its competitors (Jackson-Proes, 2001).
??????????????? According to analysts, the said decline is due to the different
changes in the environment. First, is the changing economic condition of the
world, particularly Europe, which is considered as the largest market or the
mother country of the company. There are many direct and indirect competitors
who have already successfully entered the industry, particularly Next and Asda ?
the company?s major competitors in clothing sales and Tesco ? company?s major
competitor in the food products. These companies, unlike Marks & Spencer enable
to foresee the growing appeal of cheaper products with high quality. For
example, in terms of clothing, particularly jeans, premium brands, such as M&S
are facing problems because, due to the economic crisis, customers tend to avail
cheaper products with high quality (Wood and Finch, 2009).
??????????????? In addition, Marks & Spencer also failed on its innovation
process, it mainly focuses on targeting its older customers. As a result, it had
failed to capture the interests and attention of that younger group of possible
customers who are holding strong influence towards the market. In connection,
its competitors had already stolen its core business, particularly in the
clothing sector, because of outdated fashion that it is offering. As a result,
the overall brand image of M&S had become out of date and not in fashion. In
addition, the company has also faced problems related to its overall image,
because of the fact that in the past M&S implemented massive close of its
stores, which resulted to huge job losses, thus the trust, anxiety as well as
commitment of the employees and the possible employees had been affected. This
is an important factor to be considered because human resource is a vital aspect
in ensuring high quality of products and services being offered towards its end
customers.
??????????????? As a result, for the last years, the company had experienced a
succession of different changes in management as well as corporate structure,
due to the massive decline in sales. Therefore, that company that is used to be
a leading brand in terms of high quality food and clothing products had become
an out-of-date and uncompetitive blur in the stock market of the UK.
Strategic
Change Management in M&S
??????????????? There are different theories related to change management. These
theories enable to show the different procedures and processes that are involved
in managing change inside the organization (Cameron and Green, 2004). This
theory pertains to change as planned change which was implemented by the upper
level management. M&S used planned change in order to improve its performance,
reframed shared perceptions, influence the future changes, at the same time, and
adapt with the different changes in the external environment (Cummings and
Worley, 2008).
Change
Models
Lewin?s
Planned Change Model
??????????????? The strategic change management in M&S can be explained with the
use of Lewin?s Planned Change model, which is considered as the most popular
change model. Lewin conceive change as a modification of different forces by
keeping the behavior of the entire system in stable manner (Cummings and Worley,
2008). The model see behavior as a dynamic balance of different forces that are
working in opposing directions by driving forces which facilitate change because
they push employees in the desired direction. Restraining forces delay change
due to the fact that they push the employees in the opposite direction. As a
result, all of these forces must be analyzed, thus the model help to shift the
balance in the direction of the planned change (Kritsonis, 2004 ? 2005). There
are three steps involved in change process, which include: unfreezing, moving
and refreezing.
??????????????? In the first stage of change management, the company mainly
focuses on the different external factors in the environment which directly and
indirectly influence the company. This includes those that have been tackled in
the first part of the paper. The upper management started to realize the
different challenges and risks that are related to the company. In this stage,
status quo was maintained, the different processes, procedures and standards
being implemented inside the company have been maintained in order to ensure,
and ready the employees, from the upper level, regarding what to do in the
future. The upper level management, which include the CEO, board members,
department heads and other authorizes in upper level of the organization, M&S
focus on motivating them to participate in the future changes, establish trust
in order for them to recognize the need for change as well as their active
participation in knowing what the problems are and brainstorm solutions in the
group.
??????????????? Upon establishing continuous connection and relationship with
the employees regarding the decline in the performance of the company,
particularly in terms of sales and profits, in the end, M&S came to realize that
maintaining the status quo is not advantageous for the company, thus it is
important for each and everyone in the upper level management to apply changes,
in order to improve the current situation of the company.? After the changes
have been implemented, and the desired outcome had been achieved, the company
proceeds to the next step, which focuses on sustaining over time, which pertains
on the actual integration of the new values within the values and tradition of
the company. The actions included in this stage are the reinforcement of new
patterns, and institutionalizing them via different formal and informal
mechanisms, particularly new policies and procedures inside the company
(Kritsonis, 2004 ? 2005).
Lippit?s
Phases of Change
??????????????? Another popular change theory was recommended by Lippit, Watson
and Westley (1958) which further improved or extend the theory of Lewin. This
model include 7-steps which mainly focus on the roles and responsibilities of
the change agent, than the evolution of the change itself, at the same time,
information is being exchanged in the entire procedure.
??????????????? First, M&S focus on diagnosing the problem, which mainly focus
on its capability to handle different pressures due to the changes in the
external environment. The company focus on the regaining of its high sales and
profits and high share in the market as main motivation, while its main capacity
focus on its brand, size and human resource. The change agent is the CEO of the
company. It is important to consider that this procedure had been done by the
company for 4 times, due to the changes of CEO because of the negative
performance of the company.
??????????????? After these, action plans were developed, together with the
strategies that have been developed. Under the plan of Chairman Luc Vandevelde,
the strategies focus on:
-
Selling own brand products;
-
Focusing on ready meals and prepared food;
-
Improving quality of clothes, which include style and fit;
-
Introducing Per Una range by George Davies;
-
Developing home and health & Beauty departments;
-
Renovating more stores in faster manner for lesser cost;
-
Reallocating selling spaces inside the stores.
-
Developing store card and financial services of M&S;
-
Cataloguing direct clothing;
-
Opening continental Europe stores
-
Selling Hong Kong stores for franchise; and
-
Selling unneeded assets in order to acquire more return on equity and
assets.
On the
other hand, the strategy of Rose focuses on:
-
Selling financial services (credit cards, loan, etc.) business to HSBC;
-
Slashing strategic projects from 32 to 10;
-
Focusing on the traditional customer segment: 35 ? 55 years old by offering
high quality products at the right price;
-
Focusing on quality and innovation in the food business;
-
Establishing cozy stores in lesser cost;
-
Lessening the number of stores;
-
Launching new brands;
-
Changing the supply chain by paying the suppliers less; and
-
Cutting jobs. (Sagepub.com, n.d.)
It is
clear that the chairman play a vital role in the change management; however,
there are many experts that have been asked for opinions and advices in order to
ensure that the actions being implemented in the company is on the right track.
New technologies were implemented in order to ensure that all of the
departments, units, together with the stores in different parts of the globe are
communicating in efficient manner. Feedback is very important, because it
enables the upper management to be aware of the outcomes of the strategies being
implemented.
Kotter?s
8 Step Model
???????????
In order
to explain the strategic change management in M&S, it is important to focus on
the Kotter?s 8 step model. This model enables to address some of the power
issues in making change happen, at the same time, it helps in order to focus on
the significance of a felt that is needed for a change inside the organization
and highlight the need to communicate and maintain the level of communication in
high manner in the entire process (Nieuwenhuizen and Rossouw, 2009).
??????????????? The change effort by M&S, under the management of Rose, started
by focusing on the critical need for change, by stressing that the existing
state is weak. According to Rose, the inventory was not being managed in
effective manner, the decision making was being delegated without accountability
of sign-off from the upper level management, at the same time, and the customers
are being attracted to newer, vibrant and more innovative competitors. As a
result, he emphasized that change was critical and vital.
??????????????? After this, the chairman started the change process by
coordinating with a core team which is consists of trusted and highly talented
people that he had worked with, thus he already knew their strengths and
capabilities. He brought different people in different departments and business
units who included Executive Director of IT, Supply Chain and Property and the
Executive Director of Marketing and Store Design. According to Rose, with the
help of this team, they will be able to improve the current situation of the
company.
??????????????? Next, Rose decided that it is not necessary to call in a group
of consultant in order to analyze the current attributes of the market, which
include the demographics, segmentation of the customers, industry analysis,
competitor analysis as well as the restructuring of the organization. According
to the chairman, these activities did not help M&S to go any further, which was
evident from the prior management. These analysis and studies only added factors
in complexity of change management. Instead of these complex and hard studies,
he focused on Kawasaki?s mantra and Collin?s good to great or
hedgehog concept. The chairman offered a simple, clear and communicable
statement of the goals, aims and vision of his management. With this, it had
helped in order to disseminate information towards the receiver of information
in faster and reliable manner. In addition, the statements are easily
understood, than using numerical or statistical data. This enables to show
operational, simple, short and accessible guiding vision towards the employees
of the company.
??????????????? After this, the chairman focuses on strengthening of the
communication of message symbolically in order to support the point, at the same
time, focus on the energy around the core direction.? For example, massive
housecleaning ? due to the fact that there we no longer huge variety of
subbrands in M&S?s shops, there are lots of signage, titles, posters on
cardboard that are all cluttered in the shops. The company skipped delivered to
all the stores, thus every single one of the signage and titles in the cardboard
were tossed in the store. The result of the said activity helped in order to
create a store that is more appealing, not just towards the customers, but the
employees as fell. Thus, the message was communicated towards the customers. As
a result, food halls were currently being decked out in matte steel
refrigerators and shiny black tile floors in order to generate an ambiance which
will make people feel good about buying premium products at high price, but of
high quality.
The next
process focus on changing down the entire DNA of the organization, not just by
placing everyone in basic training, but enable them to sit on operational daily
meetings up to the level of micromanagement in order to pertains on the
conversation in more detailed on important points. Aside from this, incentive
structures were also realigned in order to reward the service performance,
instead of just focusing on the aspect of seniority, which helped in order to
redefine the career progression path. Thus, it can help in order to focus on the
importance of non-financial motivators. In addition, the entire workforce of the
company was also put to different motivational seminars and training sessions,
which mainly focus on relationship between employees and improving customer
relationship.
In
general, it shows that change model enables M&S to focus on the different
important matters in change management. First, it helped them to recognize the
importance of different external factors in their current and future
performance. In addition, the company enables to take importance of the help and
cooperation of different stakeholders, particularly all of those in the upper
management, because they are aware and well informed of the changes, challenges
and opportunities being faced by the company in their respective department.
Problems
and Risked in Change Management Effort of M&S
??????????????? There are different factors or problems that have been
encountered upon the implementation of change. One of which, is the money or the
cost that are needed in order to cover the monetary or financial needs of the
company in establishing new stores, renovating remaining stores and the
continuous training of the employees. However, this was handled by the company
by cutting jobs and selling assets ? particularly those properties that are no
longer in use by the company.
??????????????? Another issue is the human resource, which is very important.
They are greatly affected by the changes implemented by M&S because,
particularly in the issue of cost cutting and job cutting. Their experiences in
the company are very vital factor which affect their performance, which
subsequently affect that of M&S. In order to prevent problems related to
resistance to change, communications were opened by the management, which
enables the upper management to communicate with the middle level management,
then enables the second to communicate with the lower-level management. With
this, it had helped in order to explain in in-depth and clearer manner the
current condition of the company, and how change will be helpful in order to
improve the current performance of the company.
Conclusion
??????????????? Change is considered as inevitable. This is particularly
applicable in the world of business, specifically in today?s environment, where
in there are different environmental factors which directly and indirectly
influence the entire business environment and industry, which affect how a
business operates or perform. Change is important in order to come up with the
strategies and decisions that will help to maintain good relationship with the
customers and other important stakeholders of the business. As a result, it is
important to focus on the different development and transformation in both
macro- and micro-environment in order to ensure that the company?s strategies
are updated.
??????????????? Marks & Spencer is considered as one of the largest companies in
the world, with long history of changes in order to survive the ever challenging
environment. However, based on the analysis done in the case of M&S, it was
found out that its failure to implement and manage change is the root of its
current problem.
References
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I. (2006). An economic history of twentieth-century Europe. Cambridege:
Cambridge, University.
Balogun,
J., Hailey, V. H. and Johnson, G. (2008). Exploring strategic change. FT
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to the models, tools & techniques of organizational change. Kogan Page
Publishers.
Cummings,
T. and Worley, C. (2008). Organizational development & change. Cengage
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Drucker,
P. (2007). Innovation and entrepreneurship: practice and principles.
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Tushman,
M. and O?Reilly, C. (1997). Winning through innovation: a practical guide to
leading organizational change and renewal. Harvard School Press.
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and Finch, J. (2009). ?A new face, but the same old problems at Marks & Spencer?
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