Organizational Change

Case Company: Lufthansa

Prepared By Student Name

Table of Contents
About Company Change in the Organization Process Model of Change The Change Equation Cultural Web Analysis Five Forces Model Connors Matrix Creativity & Improvement EFQM Model Impact of Change on People Transition Curve Evaluating Strategic Changes Initiatives Reference 2 3 3 4 4 5 6 6 7 10 11 13 15

About Company
Lufthansa Airlines The company was found in January 1926 in Berlin, currently the largest airline service of Germany and world 5th largest airline service. The company is providing the service to more than 183 destination of world. The group is currently operating with more than 500 aircrafts all over the world.

Lufthansa Group Lufthansa (Deutsche AG) is a global aviation group. The Group operates in 5 business segments; each segment is dedicated to high quality standards. Foremost at Lufthansa are such attributes as quality and innovation, safety and reliability. The company is well positioned strategically, operationally and financially to negotiate ups-and-downs in the economy. The corporate strategy is geared to sustainable value creation and is expressed in our commitment to shareholder value. The Lufthansa Group employed some 118,000 personnel at the end of 2009, and achieved total operating revenue of EUR 22.3 billion for the year.

Change in the Organizations

Most of the companies in todays world are now focusing on provision of best customer service to their customers to have large number of loyal customers in their list. Most of the organizations are rapidly changing their management and having new fresh people on board to bring change in the company through their new and creative ideas. Change can be best carried out when it bring through combine efforts of all member of teams. Changes should be communicated frequently as it happened to all members of teams. The change should be start from top management, by modifying the mission and vision of the organization; this will help to bring the change at border level and will last for longer tenure.

Whenever any organization thinks about change they always face the fear of resistance from employees and other stakeholders of the company. The deal with this resistance the management has to run this project of change in a way that they can overcome this resistance in a positive way. One of the best way of dealing with problem, if the management frequently communicate about the change to their team managers, and also explain them the reasons to change in details, there are chances that they can effectively handle the resistance of their team members.

Process Model of Change

The model of Kurt Lewin of Unfreezing is helpful for many organizations for smooth execution of change process in organization as well as the process is proved to be basis for many other change process theories. The process is based on three stages of unfreezing, transition and refreezing (Kurt, 1947). The model is also provides the guidelines for step by step implementation of change process in any organization.

The first stage is about the behavior of employees towards the change process. Normally the first challenge that comes in front of management regarding change process is the resistance from their employees. Because of fear in minds of employees that may be they are not skill enough to operate the new process or technology, and if they fail to deliver the desired results they may lose their position in organization. This challenge can be overcome by conducting the development programs to enhance and update the skills of employees, by recruiting specialists

for this process. To ensure that all employees are ready to adopt the change as well as skilled enough to drive the changed process effectively.

The second stage is about transition, the stage for development and implementation of change in organization. Once human resource and other resources are ready to adopt and drive the change the change strategies are planned and develop to achieve the desired objectives. The management has to ensure that they purpose of change should be at broader level only they the changed process can give them desired output for longer time period, and all employees and other stakeholders are up to date with processes and procedures.

The last stage is about refreezing all resources for permanent change in organization. All new process and strategies are adopted and permanently are becoming the part of culture of organization.

The case company has to develop their human resource to think at broader level of organizations success. They have to develop the skills to operate the internal market at equal standers.

The Change Equation

The change equation is one of the most concise ways to develop and implement change process in organization. The change equation (D x V x S x B >> R) is based on five factors, level of dissatisfaction, vision, steps to achieve vision, believe in positive out and resistance against change. Where A, B and D are must be outweigh, which perceive the costs for change (Beckhard & Harris, 1987). The case company has history to adopt the change very flexibly, and employees are very motivated and open for change.

Cultural Web Analysis

The concept of cultural web analysis is technique used to identify the culture of any organization. The case company has the history of provision of best customer service, through periodic evaluation of their employees, and development of the members through different customer

service techniques. There is large number of employees working in organization and they have rich culture of quality, safety, innovation and reliability.

Five Force Model

The five forces model (Porter, 1980) is about the relationship of potential new entrants, supplier, substitutes, buyer and competitors. Every organization have these five factors associated, and successful mixture of these five factors can be used to identify the potential business improvements in almost all areas of business. This can also useful for identify the strengths and weaknesses of business.

In planning phase the management can use this model, to make strategies to overcome the threat of new entrant in the market, similarly to develop and maintain the competitive edge on existing compactors in market (Thurlby, 1998). Development of product differentiation can also help, through introduction of new and improved product and services in market to cater the fear of substitute. Exploration of new suppliers channel can be developed for better quality product at low prices, through effective utilization of bargaining power. On the other hand, the price 5

planning can changed to cater the bargaining power of both existing customers and potential customer.

The case organization has to expand their operations to the countries, where other competitors are not offering any services. All service should be available for customers are on one click bases. The staff should be trained to serve the customers at their best capacity level and employees should be appreciated on extra efforts put by them. New and improve customer service techniques should be adopted to serve the customer more effectively.

Cornnors Matrix Inject Element of Pain

According to Corrnor for effective change process the management or change initiators and leader should act initially as sales person. By, either convincing people to adopt change or force employees to adopt the change according to their plans. The organizations management has to implement some new customer service techniques for their contact centers as well as the web application should be updated according to the standards of other top airlines.

Creativity & Improvements

Creativity & Innovation Creativity and innovation have now become the major issue for any organization from many years, especially after globalization, where most of the big organizations want to operate globally to have large numbers of customer all over the world. The case company is also one of the players who are operating globally. When an organization is operating globally, the most important factor is the cultural factor of any country. The requirements and expectations and need of customers are different in different areas of world. They have to offer the products diversified products and service to customer according to their needs and requirements. The process and products of originations has to flexible enough to change according to geographical needs. Through creativity and innovation the organization can develop products or services which are widely acceptable everywhere or they can develop the products or services to attract the customers from all parts of the world. 6

It is also important for management to tap into own creativity and the creativity of the employees, because employees are more closer to the operations of organization and to the customers, so that can give better ideas to increase the productivity of organization and how the customer can better satisfied.

The reflection of increased global competition has pushed all global operators to promote creativity and innovation in their product or services through availability of new and advanced technologies. The higher money of people in most of the developed countries is changing social pattern and style of living of people. And successful organizations are cashing this element by offering different products to different class of people, and this can only be done by developing innovative products and services.

EFQM Model
The EFQM (European Foundation of Quality Management) excellent model a framework develop to identify and monitor the core strength of any organization and to identify the weak areas including team, department, staff, processes or systems and technologies which need some improvement for better productivity of the organization. The model provide the guidelines for organizations did in past, what an organization is doing, and what an organization can do for improvement in future for better provision quality product or services to customers. The model is very flexible that every organization can use this model according to their requirement for development of internal and external quality control measures at different level of organization. It allows management to develop a formula that is useful for provision of best quality product and services for market, on the other hand, if management promotes self-assessment for quality control in organization the strengths and opportunities can be easily convert into the provision of best quality product and service.

If the EFQM model is applied through the technique of self-assessment of quality control, this can be more efficient tool for management to promote continuous improvement. By focusing on relationship and coordination between employees, the strengths and opportunities can also be easily converted. 7

The model is based on nine criteria which supports the effectiveness of quality control measures;

Leadership Employees Management Policies & Strategies Resources Processes Employees Satisfaction Customers Satisfaction Impact on Society Performance Results

Leadership The role of management is to provide clear cut vision to employees regarding the implementation of quality control measure and tool, what would be the expected benefits the company is going to drive from the implementation of these measures and tools in organization. 8

Secondly if managements personally involve in the process that ensure the process is working as planned and giving the desire results. The strategies are delivered in effective way and implemented as planned. And they are successful to develop the culture provision of quality products and services are norms.

Employee Management The managers are trained and effectively positioned to take the desired results from their teams, where all members of teams are equally delivering to maintain the quality within organization. Managers are also ensuring that human resources are planned and position in such a way that there putting all the efforts and using their all skills to drive the organization to success. Employees competencies are fully polished and recognized where required.

Policies and Strategies All strategies develop to promote and implement quality in organization must be supported by relevant polices. Polices should be made for present and future requirements of organization to maintain quality, and should be communicate to all levels of company, so that all levels should clear about what they have to do for quality implementation.

Resources The effective management of all external and internal resources is also required to maintain the quality control in organization. All resources should be participating equally for provision of quality products and services.

Processes All processes are systematically designed, update, managed and linked with the quality controls of the organization. And should be periodically reviewed and improved according to the requirements of organization, and to meet the expectations of customers.

Employee Satisfaction

The contribution of employees should be appreciated, to keep the motivated and on track of quality provision. Employees should be rewarded for their efforts and their ideas and options should be considered for improvement of process or services.

Customer Satisfaction The management has to ensure that customers feedback is consider to maintain and improve the quality of product and services, and to meet the requirements and expectation of customer regarding the quality of services and products.

Impact on Society It is also important that, they also take a look on what their product or services putting impact on local or international society.

Performance Results The continuous improvement should be monitor through different performance management techniques and policies, procedure and practices should be revised if required to improve the performance of employees, departments and organization.

The case organization has to motivate the employees to suggest and take an active part in development of quality service to customers. Also management has to re-evaluate their policies, strategies and practices for provision of more quality services. Internal driving forces should be developed to promote the self-assessment of quality measure for better organizational results. The culture of continuous improvement and quality services should be practiced.

Impact of Change on People

Employee can reduce the effect of change on them and can reduce the factor of stress from them, if they focus on learning and develop the skills of creativity and innovation inside them. The can reduce this by keeping the mind open and take the results of change positively and keep believe that the change is helpful for them to increase their skills level. Secondly stay flexible for every possible change in company and ready to take all challenges put in front of them, by developing 10

the skill of learning new techniques and technologies, and take part in every activity conduced to bring change in organization, and try to align their personal goals with the objectives of management and company. On the other hand, it is equally important for them to reorganization the contribution made by other employees, and tries to follow them and also help them to perform the tasks assigned to them. Employees should always try to stay focus with tasks and work assigned to and try to complete the task as planned and expected by the management of organization so that managements plans should work accordingly as they planned for it, so that if the managements plans become successful, all employees should be part of that success, only then they can take the change activity in a positive way.

New creative and innovative ideas should be planned and linked with overall goals of company, and how these plans should be execute to have best desired results out of them. Also all departments are aligned with idea and objective, and the coordinate with each other for effective execution of planned idea. If management empowers employees with open hand to make decisions to improve the idea or plan, the results can even better and this will also save the time to complete the task and also the time of management. Management should also appreciate the good work or work done by employees to finish the tasks on time.

Transition curve
Transition curve has been used by many large organizations to understand the behavior of employees during change process. The will allow management to develop strategies and planning to counter the behavior of different employees during change process. According to model following can be the stages of employees behavior during change process; Shock or Surprise Denial Awareness Acceptance of change reality Experimentation 11

 Search for Meaning Integration of new skills

The first behavior comes from employees is shock from a sudden change, the felling of job insecurity comes in the minds of most employee, which initially result in absent from work, low productivity and lack of interest in job with the company. One danger for the individual, team and organization occurs when an individual persists in operating a set of practices that have been consistently shown to fail in the past and that do not help extend and elaborate their world-view (john, 2000).When employees come out of this shock they straight away refuse the proposed change in organization. Especially those employees resist against change that never experience the change in their organization, or those employees, who believe that they are not skilled enough to adopt the change and the make excuses for refusing the change in organization. Now its up the management of organization that how they deal with is resistance from employees. The effective communication plans from management to make believe in mind of employees that the change is for organization and their personal growth, may be then employees can positively take part in change process. The benefits of change are effectively communicated to all employees so that all employees should equally accept the change in positive manner. If all employees accept the change, then they will start seeking the opportunities to put their maximum efforts for the success of the change process. They will come up with new and different ideas to 12

promote and improvement of change process so that they could have maximum appreciation and reward from the management. The productivity and interest of employees will improve, which was reduced at first level of curve. The employees will start working more energetically and productively, this will ultimately in fever of organizations interest. At this level the management has to ensure that the communication flow between all employees will remain smooth and they are equally aware about the progress and results of change process, so that, if there is any change required to improve the process they can change that in initial level, on the other hand if the change process is not giving the planned and desired results, the process should be modified to for improved results. Finally the stage will come when all employees accept the change and they will start developing new skills to adopt the change and deliver the best as expected by the management and organization. And speed of organization will increased by best developed human resource in account.

The transition curve is very helpful tool, when organization is planning to bring change to improve the performance of employees, team or organization as whole. By measuring the behavior of different employees at different levels of change process, and use the alternatives to convert the behavior of employees in a direction where the management of company is planning to have.

Evaluating Strategic Changes Initiatives

During change process in every organization, there certain factors that can cause stress for employees, regarding their changed job role, and if they are unable to deliver as par managements expectations, what will be happened to them regarding there job security or future in company or outside the organization. Due to this employees normally react defensive to save their position in company, that if they did not upgrade there skills regarding new technology or system they can lose their jobs. The management of company can develop some additional strategies to ensure that employee will get motivated to adopt change and take this change in positive manner for their individual and organizational growth. The managers of teams should be trained to keep the team motivated to adopt the change and respond to the questions of employees regarding their and the companys future.

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In change process employees use to blame the management and organization for the change in different areas of organization. But actually the management reaction towards change is because of increased external competition, advanced technology and requirements of stakeholders. Employees have to understand that change is always good for survival and growth of the company in market. In current area, it is difficult for every organization to survive or grow in market without upgrading the systems and process according to technologic advancement. The efficient management always develops the skills to pass through the stage of change as possible and innovatively as possible. And for more effective and efficient change management is expected to communicate openly regarding change to all employees of the company and ask for their feedback and relevant suggestion regarding purposed changes. This will also reduce the effective of changes, like absenteeism, low productivity and resignation of skilled and experienced employees.

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References
Beckhard, R., Harris, R,. 1987 Managing Complex Change http://www.super-business.net/Knowledge-Management/852.html

Corporate website of Lufthansa, 2011 http://www.lufthansa.com/us/en/homepage

John, F., 2000, Process of Personal Change http://www.businessballs.com/personalchangeprocess.htm

Kurt, L., 1947, Frontiers in Group Dynamics http://changingminds.org/disciplines/change_management/lewin_change/lewin_change.htm

Thurlby, B., 1998 Competitive forces are also subject to change http://www.coursework4you.co.uk/essays-and-dissertations/porter-5-forces.php

Porter, M., E,, 1980 Competitive Strategy http://www.quickmba.com/strategy/porter.shtml

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