Managing Change in Organisations

CONTENTS PAGE: 1. (a)Significant organisational change. (2-3) (b) Drivers for change. (3-5) 2. (a) Process of change. (6) (b) SWOT Analysis of change. (7-9) (c) Seven Ss. (9-10) (d) Kotters steps for transforming organisational change. (10-11) 3. (a) Implementation of the change process. (13-15)
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(b) Managing resistance to change (15-18). 4. Assessment of the extent of change (19-20) 5. Bibliography. (21)

QUESTION 1. I work for one of the most reputable airlines in Nigeria. Since inception, the airline has been known for its excellent customer service delivery and its high standard for safety. The airline was partly owned by a foreign investor who had the majority share of the airline and the rest of the shares were held by indigenous business men. The airline observes and maintains the global aviation safety requirements and it operated domestic, regional and long haul flights to Johannesburg and London. Its was the first airline in Nigeria to become 100% E-Ticket compliant. It was also the first choice to travel for majority of air travellers and the
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corporate world. The airline carried out its operations from the International wing of the airport in Lagos. This made it easy for transfer of passengers who had connecting flights outside Nigeria. This was also an advantage for the airline as passengers with connecting international and regional flights on other made airlines made us their first choice because of the ease and convenience it gave them. In 2009, a directive came from the Ministry of transport for the airline to relocate its domestic operations to the new Terminal 2 (the newly built domestic airport). The airline refused citing that the Memorandum of Understanding signed before operations commenced gave them the permission to operate from the International wing and they went to the court. While the case was still pending, the business class lounge of the used for the domestic flights was demolished by the airport authority. The airline was forced to move its domestic operations to the new Terminal 2. This caused untold hardship for the connecting customers as the ease and convenience they enjoyed wasnt forthcoming anymore. Transfer of these passengers became hectic because of the distance between the two airports. On the 19th of May 2008, the foreign investor announced the sale of their shares stating the dispute between the airline and the Ministry of transport as their grounds for sale. The employees thought that the drama era of the airline was over little did they know that more was coming. When the sale of the shares was announced, the auditors went through the books and it was discovered that the books of the airline was in huge deficit. The management had been borrowing from the banks to run its operations and pay salaries. This huge deficit and debt can be said to have been caused by bad decisions made by the management and misplaced priority. The first
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signs were the inability of the airline to keep to its schedules and this caused a lot of delays and cancellations. Some of the aircrafts had to be returned because the lease for the aircrafts couldnt be renewed. The airline couldnt maintain its schedule and this also caused a lot of dissatisfaction to the customers. There was a drop in the passenger load because of the re-occurring delays and cancelations. Listed below are a few drivers that led to the initiation of the change process in the organisation. INTERNAL DRIVERS THAT LED TO THE CHANGE PROCESS: 1-MACHINES AND EQUIPMENTS: The number of aircrafts the airline had was not enough for it to operate to its optimum. Secondly, the schedules these aircrafts had to operate were so much, and in most cases the aircrafts will have technical issues and will be unable to operate. This usually led to serious delays and cancellations. The computers and work systems were either obsolete or working below minimum capacity. 2-FINANCIAL MANAGEMENT: The organisation was not making enough money to manage its operations and also pay its employees. The shareholders were also not happy with the way the organisation was running. Thus there was the need to make the organisation profitable.

EXTERNAL DRIVERS THAT LED TO THE CHANGE PROCESS.

1-COMPETITION: The aviation industry is a highly competitive industry and the inability of an airline to fulfil its obligation means that business moves to its competitors. 2-CUSTOMER SERVICE ISSUES: Due to the fact that the airline could not fulfil its obligations to its customers because of its incessant delays and cancellations, there were a whole lot of customer service issues and loss of customers to other airlines. The focus of management changed to repositioning and restructuring the finance and profitability of the airline and also finding a buyer for the shares that were up for sale. On the 9th of January 2009, the airline suspended its long haul flights to London and Johannesburg to be effective from the 29th of January 2009. This was the first step in the restructuring and repositioning process by management. Staff strength and flight schedule was reduced by 30%. On the 2nd of June 2010, the airline was acquired by a debt-buy-over deal by the current chairman of the airline.

QUESTION 2. The change in ownership of the airline led to a change in management. The new management with the middle level managers came together in a brainstorming and strategy session to analyse and strategize on how restructure and re-organise the airline. At the brainstorming session, the following was discovered: That the airline was barely making enough money to manage its operations.
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 The airline had just a few aircrafts for the domestic routes but had so much flights on their flight schedule Flights had to be cancelled, merged or delayed due to limited aircrafts. Due to these flight disruptions, there was a huge decline in customers. The airline was heavily indebted to the banks and suppliers such as the fuel suppliers. The employees salaries were always paid late. This was one of the major reasons for the indebtedness because money had to be borrowed to pay salaries.

Also a SWOT analysis was carried out by the managers. The essence of the SWOT analysis was for managers to list out the following: 1. The strength of the airline and focus on it. 2. The threats that the airline was facing and to determine ways to minimise this threats. 3. The opportunities available to the airline and take the greatest possible advantage of the opportunities. 4. The threats facing the airline and how to address and eliminate these threats. The outcome of the analysis is listed below: STRENGTH Employees WEAKNESS Excess burden Customer service
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OPPRTUNITIES THREATS High cost of

debt Large market

aviation fuel Goodwill from Insufficient

Misplaced priority

on corporate clients aircrafts

spending by the management The Nigerian only Misappropriation airline of funds. Unimaginable flight disruptions

that has passed the IOSA audit. Technology Poor understanding of the market Brand Limited to funds Its consciousness for safety access

However, the major crisis the airline seemed to have been facing was facing was the lack of funds to run the day to day operations of the airline. With the SWOT analysis, the managers were faced with the challenge of developing strategies and tactics best suitable for the airlines operation. They also had to come up with a new focus, vision and mission statement for the airline. The new focus of the airline became to dominate the domestic and regional markets. The new vision became being the leading African airline with exceptional experience. Also the new mission of the airline became constant delivery of quality service that exceeds customers expectation and providing employees the proper work environment build careers that they enjoy and achieve excellence.
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There was also a need to restructure certain arrears of business. The major area that faced restructuring was the finance department. The finance department was split into 2 (the finance department and the treasury department). Certain departments were merged for seamless operations. Role profiles and core-competencies were redefined for every employee.

The final step was re-assessing the operations of the airline and how to restructure it to deliver quality service to customers. The first step was to increase the airlines fleet of aircrafts thereby increasing frequency of flights to various destinations. There was also an increase in the domestic and regional routes. The airlines website was redesigned for easy access with required information concerning traveling.

The SWOT analysis is one of the models of change an organisation can use when it going through a change process whether the change is planned and intentional or unplanned and unintentional. It can be said to be a systems theory for planning change. Systems theory is concerned with understanding relationship, structure and interdependencies. It looks beyond the organisation, as a closed internally focused system. It examines organisational interactions with other systems in the environment and how this affects the way it works and performs. An organisation is affected by social, economic, political and other changes (RDI 2011a).

The SWOT analysis despite its being flexible and simple has its own limitations. The analysis is vague as it does not give an idea of answers
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the managers should look out for despite the fact that it provides the kind of answers to be asked while strategizing. The managers may have difficulty in identifying the elements of the analysis (an example being customer service as a strength which might in truth be a weakness for the airline). Managers have to understand the environment in which it operates to enable it function effectively and be competitive in the market that it is in. Change is a process that cannot be avoided if it plans to match the environment it operates. However there are other models of change that can be used in strategizing for change. The Seven Ss Model (RDI 2011b) describes the role played by systems within an organisation. This model describes an organisation as an interconnected series of elements; each element starts with the letter S. The model emphasises that the Ss are mutually interdependent, alerting the change strategist to the need to co-ordinate the whole organisation in change initiatives. The seven Ss are as follows. 1. Superordinate goals: This is the aspirations of the organisation, its beliefs, principles and aims that will help it work towards achieving its success. 2. Strategy: The plan set in place to help it achieve its intention and how it plans to deal with the external factors such as its competitors and the market. 3. Structure: The way the organisation is built, how it operates, its planning process and decision making process. 4. Systems: The internal process the organisation uses to carry out its activities. 5. Style: The culture of the organisation and a reflection of the people within the organisation.
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6. Staff: The workforce of the organisation. It deals with the Human Resources of the organisation, its abilities, competencies and policies. 7. Skills: Describes what the organisation is good at as an entity. John P. Kotter (2006) identifies eight steps to transforming an organisation. They are: 1- Establishing a sense of urgency Examining market and competitive realities. Identifying and discussing crises, potential crises or major 2- Forming a Powerful guiding coalition Assembling a group with enough power to lead the change effort. Encouraging the group to work together as a team. 3- Creating a vision A vision to help direct change effort. .Developing strategies for achieving the vision. 4- Communicating the vision Using every vehicle possible to communicate the new vision and strategies. Teaching new behaviours by the example of the guiding coalition 5- Empowering others to act on the vision Getting rid of the obstacle to change. Encouraging risk taking and non-traditional ideas, activities and actions. Changing systems or structures that seriously undermine the vision
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6- Planning and creating short-term wins. Planning for visible performance improvements. Creating these improvements. Recognising and rewarding employees involved in the improvements. 7- Consolidating improvements and producing still more change. Using increased credibility to change systems, structures that dont fit the vision. Hiring, promoting and developing employees who can implement the vision. Reinvigorating the process with new projects, themes and change agents. 8- Institutionalising new approaches. Articulating the connections between the new behaviours and corporate success. Developing the means to ensure leadership development and succession. The change process in the organisation is still on-going and as new situations arise, new strategies are put in place to handle these situations.

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QUESTION 3. Putting the change process into action is the next step after planning and strategizing for changes. The management in implementing change made the following decisions. 1-Efforts will be made towards enhancing the further knowledge and skills of employees. 2- It also initiated was the purchase partnership negotiation with fuel marketers to mitigate flight disruptions. The outcome of these

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discussions will be a further boost schedule integrity and improve on time performance. 3-the airline will continue to employ global best practices in its day-today flight operations, maintenance and management of its fleet with its pool of well trained and qualified engineers and professional manpower supported by expertise from technical partners who provide the technical support that ensures that safety is not compromised. Also employees were enjoined to participate in the on-going change process for a successful implementation of the change strategy. Part of the strategy implementation led to the suspension of vacation leave of employees. There was also zero tolerance for employees not committed to the change. Employees were expected to act as the owners of the company by controlling any wastages & miss-use of company properties. They also asked to grow the culture of high quality service delivery to its customers. Emphasis was laid on bringing back customer service satisfaction to the customer. Fuel cost has to be controlled and any loop hole for abuse has to be identified and fixed. Finally, salaries of staff will be paid on time. Implementing change on paper and implementing change in actual fact are two different scenarios. For the airline, the actual implementation of all the plans seems to be moving slowly. The major achievement since the takeover is the acquiring of more aircrafts, increase in flight schedules, the opening of new domestic and regional routes. Managing these new routes became problems and was flights to those routes were stopped. In aviation, flight operation is the key to the survival of the business.
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This is where funds are generated for the airline. It is

expected that the airline will give its customers quality service. Quality is inextricably linked with customer satisfaction today. Strategies such as the learning organisation, knowledge management and business process transformation are all based on the principle of continuous improvement. The mark of a 'quality' company is viewed by customers as one that is continuously improving. The Kaizen method of continuous incremental improvements is originally a Japanese management concept for incremental (i.e. gradual and continuous) change (i.e. improvement). Kaizen is actually a way of life philosophy, assuming that every aspect of our life deserves to be constantly improved. The kaizen philosophy lies behind many Japanese management concepts, such as Total Quality Control, Quality Circles, small group activities and labour relations. Key elements of Kaizen are quality, efforts, and involvement with all the employees, willingness to change, and communication (RDI 2011c.) Quality in service will mean flights will minimal or no disruptions but this has not been so as the process of controlling fuel costs and fixing loopholes had become so technical. The suppliers of aviation fuel now supply fuel on a cash and carry basis however the process for the release of funds for the fuel is tedious as it has to go through the finance department and treasury department before approval.

Due to these incessant delays, there has been a drastic drop of passengers and revenue for the airline has dropped. Instead of the management reviewing the issues and look for a better way render quality service to the customers by reducing or eliminating these delays, fares were increased and this also led to a further drop of passengers.

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There has been little or no training for the employees. Only in-house training are organised for the employees and this is even minimal. Training of employees on how to render quality service is very essential in a service delivery organisation. With the new management, it was hoped that the problems that the airlines had previously encountered will be over as money will be injected to help with the operations of the airline. This has not been the case as things have returned back to status quo and if the necessary steps are not taken, the airline will go back to the way things were before the takeover.

MANAGING

THE

RESISTANCE

TO

THE

CHANGE

IN

THE

ORGANSATION Managing change is fundamentally a people issue. In every organisation there is usually a resistance to a new change. According to Katherine Kane (2005) Managing change is about motivation and influencing behaviour, about breaking old habits and attitudes, and about creating an environment thats conducive to embracing the new. It is human nature to resist change and one of the biggest causes to resistance to change is behaviour and attitude of those introducing the change and the managers seeking to implement the change. Managers need to avoid making the common mistake of assuming that because they have told people what they want to happen, that it will happen. There is also the need to understand why employees resist change and address such resistance as it will be helpful in improving the performance of the change strategy.

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There were some resistance to the change in the organisation. Some of the reasons for this resistance were 1. Fear of the unknown: Employees were uncertain about the security of their jobs with the takeover by the new owner. There was the fear that there will be a fire at will policy. 2. Increasing workload: The new change was going to bring with it more work for the employees. Due to the cut down of staff strength by 30% at the initial stage of the change process, there was also the fear that the employees will be over worked. 3. Scepticism and want to be sure that the new ideas will be sound: The aviation industry is not like any other business. A simple mistake can lead to hours of delay and most of these delays are reactionary. The new ideas and process being introduced will have to address the issues of the operations of the airlines to reduce or eliminate the unnecessary and unwarranted delays. A lot of people resigned at the beginning however management stated that more staff will be recruited even though this is yet to be fully implemented. The cancelled leave for staff was re-instated for a few months and then cancelled again. The middle level managers were however mandated to deal with whatever resistance that will occur in the departments that they supervise. Those that couldnt cope with the new workload resigned and currently no one has been recruited to replace them thus further reducing the number of employees. Secondly, the depression of the economy has not helped the employees as there are no other jobs to move on to thus employees hold on to the
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jobs that they have. Welfare for the employees especially the ground service staffs in the outstations has gone to zero level. A lot of these employees have been mugged on their way to work as there are no staff buses to take them to work. Employees have been asked to act as owners of the organisation but what seems to be the case is that everyone is working for their end of the month pay. There is also no job security as any employee can be fired at will. Employees go to work hoping that they will get a better job and resign from the organisation. However, most of employees have worked together over the years and have created a bond amongst them. This has helped them manage the change in the organisations. Managing resistance to change in an organisation should be seamless as everyone is part of the change from the beginning. In most cases, the need for change is obvious and welcomed. There are different ways of dealing with resistance to change. John Kotter and Leo Schlesinger 1979) listed out six key techniques for managing change. They are Education and Communication, Participation and Involvement,

Facilitation and Support, Negotiation and Agreement, Manipulation and Co-optation, and Explicit and Implicit scenario. In managing the resistance to the change that occurred in the airline, the facilitation and support method would have been the appropriate method to have been implemented. This will involve training of employees, reinstatement of employees vacation and proper welfare management system for staff.

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QUESTION 4 The goal of the takeover was to improve the financial standing of the organisation. The main objective was to revamp the operations of the
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organisation to make profit from its operations and wipe out the indebtedness of the airline. The takeover was during the peak period and with the newly acquired aircrafts and the new domestic and regional routes there was a 100% growth in sales. Flights were always on time except in cases where bad weather was the cause of delay. After the peak period sales dropped because there was a reduction in the number of travellers. The organisation came up with promotions and discounted tickets to increase sales. This also boosted sales for a while. The life line for organisations is quality service delivery. Where an organisation is unable to deliver this quality to its customers, there will be a drop in its customers irrespective of the offers and discounts given to them. The airline has experienced a serious drop of passengers. In trying to make the airline profitable, the organisation has lost focus on preserving its customers. The greatest challenge the airline is facing in carrying out its day to day business it the ultra-autocratic and compulsive interfering of the chairman. The Chief Executive Officer of the airline has a limitation to certain decisions it can take as concerning the airline. There is a limitation to the amount of money the CEO has access to in the day to day running of the business. Where it exceeds the said amount, only the chairman can authorise the release of the funds. The major issue the airline has is in managing the delays caused by fuel. It is expected that by now, the total amount of fuel used for the day to day operation of flights should be stated. It is also expected that at every point in time, the fuel for the next days operation has been settled and all outstanding debts paid for. In maintaining profitability in an airline, all that is required is on time performance. Delays and cancellations cannot be totally

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phased out because there are usually unforeseen circumstances like weather and technical problems but they can be better managed. Also the airline only has 2(two) fuel marketers and where they are both out of stock, operation suffers. The major sufferers of this crisis are usually the passengers who are made to wait for hours for a flight that would have taken 55 minutes. In this situation, customer service recovery is made difficult as the passengers are already aggrieved. In running a business, you have to pay your creditors who will provide you with the materials you need to render quality service to the passengers. Increasing fares will not improve profitability if disruptions keep occurring. Employees should be encouraged to use their initiatives in taking decisions and should not act in fear that they might lose their job. The airline must be run like an airline rendering quality services with impeccable customer service. It shouldnt be run like a motor transportation business.

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BIBLIOGRAPHY. 1. Managing Change in Organisations, Understanding and Involving Others in Change, Systems Modelling, pg 5 of 13 RDI (2011) -. 2. John .P .Kotter - Leading Change, Why transformation efforts fail, Harvard Business Review on Leading Change pg 18 (2006). 3. Managing Change in Organisations, Understanding and Involving Others in Change, Systems Modelling, pg 6-7 of 13, RDI (2011). 4. Managing Change in Organisations, Strategies and Models for Change, Business Process Transformation and Total Quality Management pg 11 of 20, RDI (2001). 5. Katherine Kane - Creating the Climate for Change, Mobilizing the Executive Team and Your Organisation, Managing Change to reduce Resistance, The Result Driven Manager, pg21 (2005). 6. John .P. Kotter and Leonard .A. Schlesinger (March/April 1979) cited in Organisational Behaviour, Master of Business

Administration, University of Leicester, MN7203/D, pg 298-300 (2008).

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