Question

Q1.Discuss Lewins model and Kotters model for change with reference to GE Motors.-7 marks

Q2.What are the two strategies adopted by GE Motors in order to bring change and gain market share.-8 marks.

Abstract— The main purpose of this article was to elaborate and bring to light the core concept of the organization change, how it works, diverse factors which moves organization to change, steps for change, resistance for change, change forces, change management approaches and last an example of General Motor (GM) has given that how change was taken place in the organization and what was the strategies for change management. Recommendations and conclusion form the last part of the paper. Keywords - Organization change, Factors, Resistance, GM.

ORGANIZATIONAL CHANGE: A BRIEF INTRODUCTION The business world to day is going very fast and new technology new methods of production and new taste of customers and new market trends as well as new strategies for best control of the organizations and motivation of employees are emerging and taking place from old to new methods, because the customers are the emperor of market and most of the company now spending billions of amount on research and development in the organization, by keeping in view all these things the managers and experts of the today businesses now compel to decide about the change management in the organizations, because business activities now are globalize, and every organization strive to sustained the loyal customers, trained the employees, introduce and adopt new methods of production and best control the activities of the organization, so from here the concept of change management or organization change starts. When the company feel that the activities which they are doing, the management, the way of administration, the use of technology, the human resource policies, the culture of the organization, the liking and disliking the contents and context of the organization by the employees, organization structure, group concept ,the product quality are continuously destroying the image and reputation of the organization the question arises that how will change the organization in present scenario, so when the expert specialist decides about all the situation and preparing for changing the organization it leads to the concept of organizational change or change management[1] . In the word of coetsee he said that it is the ability of the management that how they can get maximum benefits and support form change which reduces resistant from the side of employees and encourage appreciate acceptance and support. The process of changing the activities of the organization as well as the implementation of the procedures and technologies to achieve the desire objective of the organization, in simple words to change the environment of the business organization and to achieve a high profit from that change, usually change management includes different aspects such as control change, adaptation change and effecting change. The final goal of the change management is the long term sustainability of the organization. organizational change simply means to change the activities of the organization concern it may includes to change the culture of the organization, technology, business process, change of employees, rules and procedures, recruitment and selection, design of jobs, method of appraisal, and human resource techniques, physical environment of the organization, methods of training and development, job skill and knowledge etc. when the change of the concern organization is fundamental it is called organization transformations. Change management means when all the needed actions are taken to improve the present situation for future to implement the change strategies to get the maximum advantages and also see that the objectives of the organization is achieving or not.

Factors Behind The Organization Change As we have mentioned before that organization change occurs due to some factors that may be external or internal, such factors may also bring change in the activities of he organization and may also create problems to harder the change process, as every know that change creates resistance, and this resistance may creates huge problems, resistance to change is also from the old employees or middle level managers or people as they always appose to the change strategies due to their own way of thinking and perception regarding the change concept, this may be due to lake of knowledge about the situation or due to the self interest of thold employees but what ever may be the reasons but it is fact that change always bring resistance, now it is up to mangers that how they reduce the intensity of the resistance and implement the whole change strategic business model in the organization.

Change Forces The following are the main forces which bring change in the organization. These are as under but it may depend on the organization environment and the context of the organization. Change in new government policies and legislation, Change and development in new materials, Social and culture value change, Change in national and global economic condition and trade policies and regulation, Technology development, Change in customer taste and requirements, Development and innovation in manufacturing process, New products and services design innovation, New ideas about the products that how to deliver customers value and satisfaction, Office and factory relocation closer to customers, suppliers, and market, nature of the workforce, technology , economic shocks, completion, social trends, and world politics.

Resistance to Change Change creates resistance to change in every organization; it is the react response from the side of the old employees. When change strategies have implemented in the organization the employees quickly respond by voicing complaints, engaging in work slowdown, threatening to go on strike, etc. but care should be taken by the change management expert to overcome the resistance

Major force for resistance to change: resistance to change forces categorize into two main heading, 1) individual sources and 2) organizational sources

1). Individual Source Resistance To Change Includes The Following. Habit, security, selective information processing, economic factors, fear of the unknown.

2). Organizational Sources for Resistance to Change Include the Following. Limited focus on change, organization structural inertia, threat to expertise, threat to established power relationship, group inertia, threat to established resource allocation.

3). Overcoming to Resistance to Change. Overcoming to resistance to change means to use the tactics to reduce the intensity of the resistance to change, the change agents have the ability to use these tactics. are as under. a) Implementing change fairly. b) Selection people who accept change

c) Education and communication

d)Participation

e) Building support and commitment

f) Manipulation and cooptation

.Organizational Change Managing Approaches

When change management taken place in the organization, now the question is how best one can manage change. There are four approaches to change management. Lewins classic three step model of change process, kotters eight step plan, action research, and organizational development. According to the lewins model the organization must follow three steps for successful change management, which are. Unfreezing: the status quo, changing to overcome the pressure of both individual resistance and group conformity. Movement; desire end state, a change process that transforms the organization from the status quo to a desired end state. And refreezing the new change to make it permanent, stabilizing a change intervention by balancing driving and restraining forces. [4]

.Kotters Eight Step Plan. To more elaborate the lewins model kotters have develop eight steps which can be adopted to implement change.

These are 1) Establish a sense of urgency that why a change is needed. 2) Form enough power to lead the change 3) Create a new vision to direct the change and strategies for achieving the vision 4) Vision communication in organization 5) Empower others to act on vision by removing barriers 6) Plan for, create short term reward to move the organization toward the new vision 7) Continues improvement and make necessary adjustment in new programs. 8) Reinforce the change by demonstrating the relationship between new behaviors. (Source Stephen, 2005)

Organizational Development Techniques The change agent considers the following technique to bring organizational development. Sensitivity training, team building, process consultation, survey feed back, appreciative inquiry and inter group development. These are the important technique which should adopt by change specialist to bring effective development in the organization, because organizational development is vital for organizational change.

Change Management at General Motor

General motor established in 1908. that time the company was the sole carmaker dealer in the region, e.g. Michigan, first it was a holding Buick company, till 1920 it was becoming the world largest motor manufacturing company, the company got a tremendous success in time of Alfred salon, due to his leadership the company was producing new style and design car every year, and he had given such concept to the company. The other brand of the company is Chevrolet, Pontiac, Buick, and Cadillac. These were the different brand cars which were producing by company that time, and this way there were no other competitors to compete in the company different cars. But with emerging of the japans automakers the company felt threatened, specially the emerging of Toyota Japan, who with great extent disturbed the profitability of the GM, especially in the North American market. In 2001 the sale graph of the GM was in declined trend, because the Toyota had captured the market, this way the GM received loan form American government and Canadian government to support the company in that crises period. During 2009 the company had faced a bankruptcy and had closed several brand and sold out to china based company. Now the company again got his position in market by restructuring and making change in the company. Now the company is again operating business in the core brands in America such as Chevrolet, GMC, Buick, and Cadillac.

In this section we will highlight the reason and forces behind the change in general motor

External Forces

In external forces the GM which was greatly affected by the japans based company Toyota was the emerged competitors in that time, the north America is still the biggest market place for GM where the company sold out in recent year round about 2.9 million and the nearest competitor is Toyota and china based companies, these competitors with great extent disturbed the total profitability of the general motor, and the second external forces which the company faced a huge problem was financial crises which with great extent collapsed the cash flows of the company

Internal Forces.

The another force for change to GM was the high wages cost to employees as the company was paying $74 per hour as compared to Toyota $44 per hour, because GM was an agreement with trade union. And the GM was compelled to run the plant with minimum 80% capacity whether it was needed or not, these things play an important role in the bankruptcy of the company.

Types of Changes

By keeping in view the above discussion the company ultimate decided to bring or make change in the company, so the company decided to bring changes on some areas of the business, these were included, structural change, cost change, process change and cultural change.

Steps in the Change Management Process of General Motor.

While going on change management the GM, the company took some steps to adopt change these are the most recent change which the company had taken.

Cost Cutting.

The first steps which was taken by the GM is about cost cutting, the company has reduced its cost of some brands to maintain the profit level, such as the Saturn and hammer, by keeping the other company cost. Similarly the company also cut pay of employees which was the major problem to company. The company has achieved the target of cost cutting up to 15 billion in recent year.

Cultural Change

The general motor also changed the culture of the company, the GM removed it automotive product board, and automotive strategy up to 8 men board decision making team which were responsible to report directly to CEO. The main objective of such change is to speed up the day to day decision making process. The GM also changed the culture to improve the efficiency of the employees and make accountable and responsible one.

Problems to Change Process

In change management process the GM faced a variety of problems

Problems in Cultural Change The cultural plan was based on top down approach, which ignored totally the involvement of the employees as compared to other companies , some suggested that the company has not down top approach, in which employees feel satisfaction, so this regard the company empowered the employees by introducing in tailoring the down top approach. Rather than merely telling to employees what they do.

Problem with Cost Cutting As the cost cutting has an important place in the change management but it was faced great problem from the agreement of trade union, as the company was an agreement with not lowering the pay of the employees and maintain the capacity level.

Results of the Change Process As we have discussed that the GM had adopted changed previously also but these changes are recently those changes which adopted by the company in the year 2009. The results of he changes are as under.

Result of Cost Cutting The result of cost cutting of GM seems from its employment figure of 98 to 2009, it was reduced from 226000 to 101000 workers, and now the company is concentrating on sale rather than to further cut off, and also the company is deciding to reduce the worked force of the factory from 6oooo to 4oooo. And it will certainly lead to cost saving to the company.

Result of Cultural Change The general motor had also achieved good result from cultural change, and the employees now becoming aware about the responsibility and accountability, as well as the company also empowered the employees to give better productivity.

As we have discussed above that the general motor adopted tow main strategies for change management, recently one was cost cutting strategy for change management and other was cultural change management strategy, the company adopted two other change strategies but these are the most recent, by developing such strategies the company has achieved its market shares in north America again, as the company was threatened by the emerging of competitors in the automakers industry but the company decided to bring changes and now the company again in better position and he again maintained the brand of core products, beside of these the company also achieved the cost benefits by implementing these change strategies in the company.

Q1.Discuss Lewins model and Kotters model for change with reference to GE Motors.-7 marks

Q2.What are the two strategies adopted by GE Motors in order to bring change and gain market share.-8 marks.

Answer 1

Q1.)

Lewins Model:

Kurt Lewins Model was the most well known theory in the field of organisational change. As time passes, new techniques develop and therefore there is need for upgadation. Lewins model deals in 3 step process:

• Unfreeze :  

  In the first stage, the organization must “unfreeze” to allow the behavior, systems, and process changes to happen. During this phase, the motivation for change needs to be understood and explained to the organization and the staff. During this phase , there is need to develop a compelling message explaining why the old ways of doing things cannot be sustained and provide a vision for the future. Therefore, Communication is very important during this phase.

• Change :

  During this stage the organization and the staff accepts the change plan and is transitioning to the new way of doing things. It’s especially important at this stage that employees and leaders take an active role in the changes and overcome the pressure of individual resistance and group conformity.

• Refreeze :

At this stage, it is important to manage for consistency so that the changes are internalized by staff, monitored for reinforcement and adjusted if needed. Here, Leader plays a vitol role in implementing the change and reinforces it with positive feedback for the betterment of the organisation.

Kotter model

Kotter provided eight step process for the organisational change. They are:

• Establish a sense of urgency (for change)
• Create the guiding coalition
• Establish a vision and strategy
• Enlist a volunteer army
• Empower (or enable) broad-based action
• Create short-term wins
• Sustain acceleration
• Anchor new approaches in culture

Explanaton of these two models with refernce to GMotors:

GM ,till 2001 gained lot of profit in the market, But , company started feeling threat when Japan's Toyota came into existence.

Due to their presence , GM faced loss and somehow had to sell his company in some parts of world. Thereafter, they gained strength and decided to have a comeback.

For this, they adopted a organisational changes with the help of lewins and Kotter model.

the company ultimately decided to bring or make change in the company. So the company decided to bring changes on some areas of the business such as:

• structural change
• cost change
• process change
• cultural change

by adopting such changes, they were able to somehow gain profit. These steps were equivalent to the steps that LEwins and Kotter explained in their organisational changes.

Q2.)

Eventually, two strategies adopted by GE Motors gor change management was:

• Cost cutting strategy for change management
• Cultural change strategy for change management.

Cost cutting : the company has reduced its cost of some brands to maintain the profit level, such as the Saturn and hammer, by keeping the other company cost. Similarly the company also cut pay of employees which was the major problem to company. The company has achieved the target of cost cutting up to 15 billion in recent year.Due to cost cutting , company broke the agreement with the trade unions and the employees thereby faced reduction in sales. The result of cost cutting forced the company to concentrate on sale rather than cut off certainly leading to cost saving to the company.

Cultural change: The GM removed its automotive product board and automotive strategy up to 8 men board decision making team which were responsible to report directly to CEO. The main objective of such change was to speed up the day to day decision making process. The GM also changed the culture to improve the efficiency of the employees and make accountable and responsible one.The cultural plan was based on top down approach, which ignored totally the involvement of the employees as compared to other companies , some suggested that the company has not down top approach, in which employees feel satisfaction, so this regard the company empowered the employees by introducing in tailoring the down top approach. Rather than merely telling to employees what they do.The general motor had also achieved good result from cultural change, and the employees now becoming aware about the responsibility and accountability, as well as the company also empowered the employees to give better productivity.

Despite, these two changes GM took more changes like strategical changes in order to gain market share which eventually helped them to gain their share.The company also achieved the cost benefits by implementing these change strategies in the company

Conclusion:

After facing the intense competition and bankruptcy the general motor now improved again the company activities,and still the world largest car manufacturing company, the company has gotten a change recently which has also improved the working condition of the company, but the company will must see the weakness and public perception to increase the sale and market shares. Before formulating any type of strategy the GM should make SWOT analysis to gain competitive advantages in the market place.