January 10th, 2018
Analysis of the Change from the Parent Entity’s Perspective and Its Global and Sustainability Implications
The change in Stanley’s Australia operations had various implications with respect to organisational components of people, process, structure and technology. These are reviewed in this section.
Stanley’s change and its implications with respect to people
The focus on Stanley’s change on the effects of its workforce is evident from the entity’s careful implementation of the change process to avoid employee discontent. Such focus on people as a critical tool ensuring the success of the change process arises from the realization of the importance of soft elements in the change process. Following such realization, models such as the McKinsey 7-s model have arisen to help businesses achieve the optimal organizational design for sustainable development. Also arising from such realization, and advanced by the concept of the resource based perspective, has been the advancement that developing human resources is among the core methods for organizations to create inimitable competitive advantage, which ensures their survival in an increasingly competitive environment (Kim & Gray 2005). For instance, Court (2011) argues that effective management of an entity’s human resources is a critical aspect determining an entity capacity to change. It is out of such advancements that a consideration of Stanley’s change process with respect to its impact on people is critical.
A factor that is evident in the entity’s change process is the effective balancing of the need to lay occupants of redundant position, and the need to maintain core talent within the organisation. With the merger and dropping of most manufacturing processes, a significant number of the entity’s staff were to be laid off. The efficacy of this process was demonstrated by the entity’s clear communication and explanation of the need for change to the affected individuals, which lowered the resistance to the change process and created transformation readiness throughout the organization (Armenakis & Harris 2002; By 2005). Such communication is critical to ensuring the effectiveness of organisational change.
Successful implementation of the change process with respect to people was also ensured by appointment of a leader with necessary background to lead the transformation to a sales oriented change process. Identifying the importance of such leadership congruence, Pretorius (2009) notes that liability of lack of prior knowledge (e.g. industry knowledge) is among the core aspects for failure of new leaders to transform organisations upon assuming office. Another core attribute for ensuring the success of the change process is thus identifying a leader with relevant industry knowledge to facilitate change.
In the 21st century, it has become critical for entities to maintain ethical practices in their business activities to ensure success. For instance, Heineman (2007) argues that entities that fail to maintain ethical business practices risk failure due to an irreparable damage to their reputations. An example of such a case has been the failure of traditionally too-large-to-fail entities during the recent financial case. In the Stanley’s case, ethical practices were evident in the way the entity embarked on its layoff process, for instance, providing counselling and financial planning training for the workers who were affected. In such a case, the entity avoided ethical dilemmas where it would seem to only be concerned with restructuring without the concern for the welfare of its employees who have remained loyal.
Change with respect to process
The change from manufacturing to sales orientation also bore various implications with respect to the entity’s processes. For instance, change to importing most products from plants located in other countries (Waddell, Cummings & Worley 2011), bore implications with respect to product delivery to the customer and storage-space requirements. Such change for instance implied that the entity could not pursue just-in-time processing approaches in Australia. Accordingly, the entity was necessitated to reorganize the systems it used to coordinate the supply chain to ensure it met the market demands. Such was for instance noted in the emphasis of developing its IT systems to meet the increased demand for coordination.
Change with respect to structure
Changes on the structure of the entity concerned organizational governance and outsourcing of human resources. Concerning governance, a divisional organization chart was retained, albeit with the abolishment of the Stanley Bostitch CEO position (Waddell, Cummings & Worley 2011). Retaining such an organizational structure implies limited implementation of empowered teams that is enabled by other organizational approaches such as the matrix layout (Daft, Murphy & Willmott 2010, p. 116). Such may explain the incomplete development of empowered teams as documented in the case study.
With respect to outsourcing of HR roles, various implications for the firm may arise. On the positive end, such outsourcing could present the in-house HR professionals with the change to engage in more strategic roles thus enhancing the entity’s preparedness for future change processes (Fisher, Dowling & Garnham 1999, Lawler 1995). On the contrary, such outsourcing, could alienate the entity from addressing the concerns of its employees, the role of the HR as a champion of employees’ cause, thus presenting communication challenges for the entity (Fisher, Dowling & Garnham 1999, Lawler 1995).
Change with respect to technology
Various aspects of change in technology are evident in Stanley’s transformation. One of these, imposed by the conversion into an importer rather than a manufacturer of the products, is the need for effective IT systems to enhance communication between manufacturing plants and the Australian operations. Such a transformation may for instance affect the ability of the entity to integrate customer feedback on future product development. The ability to integrate customer feedback in making innovations for future products is a core feature of effective supply chain management systems (Sridharan, Caines & Patterson 2005). Immediate effect of such a change is evident with the decision to retain production activities for products that were uniquely processed for the Australian market (Waddell, Cummings & Worley 2011). Another technological impact evident in the change was the introduction of systems to support marketing activities. One of these is the call centre operations, which bore implications for the employment levels in the entity (Waddell, Cummings & Worley 2011).
Globalisation and sustainability implications of Change
Stanley’s change bears various implications relevant to globalisation forces. One of these relates to the effect of globalisation in facilitating outsourcing from low-cost countries. Offshoring of production activities is argued to be a core factor that will continue influencing activities of many corporations into the future (Doh 2005). The ability of the entity to compete effectively with its Asian competitors will thus be determined by its ability to realize such opportunities for cost reduction. However, such offshoring will be dependent on the entity’s ability to maintain standards of its product to levels that meet its customers’ expectations. Meeting such expectations will be through continued commitment to ethical business practices, where the search for cost reduction does not become the sole focus of the entity’s strategy.
A second implication of globalisation with respect to Stanley’s change process concerns its human resource practices. Globalisation has facilitated the occurrence of cultural diversity among enterprises necessitating the development of appropriate strategies to realize benefits of such diversity (Seymen 2006). With increasing labour mobility being a constant feature of globalisation, the change resulting into the laying off workers necessitates the entity to reassure the remaining employees of its commitment to enhancing their outcomes to retain such employees. Stanley can effect such a commitment by developing talent management systems that enable the employees to progress in their careers within the entity.
Sustainability implications of change at Stanley mainly concern its people management approaches and ability to create the right organizational culture for renewed employee commitment. For instance, with a need to develop a team-based organization, the entity will need to create conditions necessary to spur entrepreneurial leadership throughout the organization. According to Cohen (2004), such conditions include rewarding innovation, establishing self-managing teams and increasing employee engagement in the entity’s decision-making processes. Stanley would thus need to address challenges such as organisational structures and employees’ skill mix that impede the establishment of empowered teams.
Additionally, the entity will need to create a culture of innovation within the entity to prevent resistance to change from entrenched values developed on the basis of past success (Amason & Mooney 2008). Such a culture can for instance be established via the principles of organizational learning, where the entity utilizes information from past experiences, external environment analysis and observation of competitors to develop proactive change strategies (Huber 1991). Such learning should be aimed at achieving model II learning that is receptive to feedback and encourages collaborative work environment (Waddell, Cummings & Worley 2011). This model is likely to result from double loop learning approaches (re-examining ways of doing things) and entrenched by triple loop learning approaches (learning how learning processes occur), which challenges the maintenance of status quo, thus avoiding complacency resulting from previous successes (Waddell, Cummings & Worley 2011; Amason & Mooney 2008). Go to the conclusion here.