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Xia Case study D2

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Contents
IDENTIFYING PROBLEMS ......................................................................................................... 3 General Introduction: .................................................................................................................. 3 Root Cause of Issue: ................................................................................................................... 3 Resulting Issue #1: .................................................................................................................. 3 Resulting Issue #2: .................................................................................................................. 3 Consequence of Issue 2 (Negative): ....................................................................................... 4 Consequence of Issue 2 (Negative): ..................................................................................... 4 DISCOVERY- HOW TO ADDRESS ............................................................................................ 4 Issue Closure of Didcot, UK plant: ............................................................................................. 4 Short-Term Benefit in case of UK plant Closure: ...................................................................... 5 Long-Term Benefit in case of UK not closing the plant:............................................................ 5 Potential Solutions ...................................................................................................................... 7 DREAM- WHAT/WHEN THE SOLUTIONS MIGHT BE: ..................................................... 7 DESIGN- HOW MIGHT IMPLEMENT........................................................................................ 9 DESTINY- PRACTICALITIES +/- ........................................................................................... 9 Theory Help ................................................................................................................................ 9 DESTINY- PRACTICALITIES +/-: ........................................................................................ 11 References ..................................................................................................................................... 13

IDENTIFYING PROBLEMS
Apply your developed theoretically informed knowledge of organizational change to identify what are the key issues that require attention.

General Introduction:
This first part of the case study pertains to the very first D from 5D framework, i.e. DEFINE. The case study undertaken here reveals issues about D2, which is an automobile manufacturing company, France based, having additional plants in Spain and UK. Company has major strengthening factors like product innovativeness, high investment in technology and staff tailoring.

Root Cause of Issue:

However besides these all strengths external issues have interrupted in, due to current global downfall in Economy the Company has been in trouble due to having great impact on demand. For having low product demand company has been struggling to maintain its costs and sustain globally.

Resulting Issue #1:

In order to stabilize the demand supply ratio and fully benefit from Economies of Scale the company has decided to halt production of some components and concentrate on the production of other components at fewer sites. The other site chosen for this case is Blois, France. Reason for expanding production in this area is because it has the most advanced manufacturing technology and the factory is not yet working to capacity. It is anticipated that increasing production at Blois will lead to significant reduction in costs.

Resulting Issue #2:

UK plant has been selected for closure because it has the most outdated manufacturing technology.

Consequence of Issue 2 (Negative):

The closure of UK factory outlet will most probably lead to large scale redundancies and there will be few opportunities for staff to be redeployed to other plants in France and Spain.

Consequence of Issue 2 (Negative):

It may be possible that many of B2 team members (team of engineers who are expected to be deployed at Blois) may feel reluctant to relocate from Didcot to Blois.

These were the main issues that D2 has been facing. The issues came in streamline as demand levels of company got affected by overall economy downfall. This enforces the company to go for cost reduction strategies and points mentioned above, under Issues are these Change strategies that company is about to announce. This solution will give a better analysis in the end that which of these change strategies shall be more focused on, using what execution techniques and what Dos and Donts in order to avoid failure in implementation of change program.

DISCOVERY- HOW TO ADDRESS

Select one of these issues for detailed consideration and justify your choice.
Issue Closure of Didcot, UK plant:
According to my opinion, the issue that needs to be more focused on is the Closure of Didcot, UK plant. This part of the case study is required to employee the second D of Appreciative Inquiry 5D framework (Cooperider, Witney and Stavros, 2008) i.e. DISCOVERY, in which the key point is to address the most focused problem or issue on hand, what leadership style is to choose from, what communication pattern is to follow in order to address the change program properly from top to bottom until its execution.

Based on the literature and coursework studied in class and other articles and journals, my suggestion for D2 company is to hold the closure plan of UK plant and focus on investing to update and upgrade its technology instead.

Short-Term Benefit in case of UK plant Closure:

My recommendation to manager would be to focus on long term cost reduction and brand enhancement strategies rather than saving cost for the shorter time period and loosing immense amount in the longer run. It is obvious that once a plant is brought to closure it will germinate many issues further, like redundancies, unemployment, non operating asset, loss of efficient, reliable, high performer and loyal employees, higher costs of shifting and redeploying Didcots staff in Blois, decreased number of products produced, negative effect on brands perception for closing a plant without facing Loss by it and etc. Closing of a business shall be made when there is a constant decrease in Sales revenue and profit ultimately or where there is zero percent profit available and that business is continuously goes down, then the management shall remain with no choice than closing that business in order to save what is left while carrying on with the other activities which must be the main focus of the company. If D2 closes its UK plant although it will get a high cost reduction in its overall accounts on currently or short term basis but in the long run there are high risks and low return on investment is associated.

Long-Term Benefit in case of UK not closing the plant:

There will be straight forward Long Term benefits in case if UK plant is not closed by D2 manufacturing company, for just having outdated technology and decreased demand. I would recommend that it is much fruitful to reduce cost by improvising the technology rather than shutting things up which can line up many other related issues as discussed above. D2s brand will be strengthened, perception will be positive amongst mind of customers; company ratings will be higher, long term sales, revenues and profits and reduced costs is a must guarantee if technology is improvised and plant not closed.

Addressing of the Issue:

These underlying problems and outcome of decisions must be addressed from top to bottom and then feedback from bottom to top shall be of the same importance as top to bottom orders are. Decentralized structure is required in order to deal with status-quo, communication gap between upper middle and top management shall be minimised during this time, guiding coalition, consultation.

Decentralized structure: In the organizational structure of D2 decentralization must be brought into practice for change management to be successful. (Marsden and Canibano, 2009) Not only upper management but middle and lower management must also be brought into decision making because in actual its the middle and lower management that enables the execution of decisions made by top management. So views and opinions of middle to bottom management shall have a prominent role in the final decision outcome or change to be.

Communication: Purcell and Hall (2012) Communication is a very essential phenomenon whilst addressing a new idea and/or bringing Change to the existing system. The change that top level authority of D2 has decided must be properly communicated with the whole teams across the globe. (Donaghey, Dundon and Cullinane, 2011) Even if the decision or change designed by upper level management is of most benefit to the middle and lower management but the change or new idea is not communicated well with the middle and lower management levels then these levels will not be able to accept the change and will be readily intended to decline the orders or rebel them while their execution or create hindrances whilst its execution.

Guiding Coalition: Kotter in 2012 noted that putting together the right diversity in a team or in a group of people to lead a change initiative is critical to its success. Coalition is actually a powerful enthusiastic team of volunteers from across an organization. As it is an obvious thing that leaders can not implement new strategies or bring change in existing system, all they can do is to plan and plan more since the idea generation stage till the feedback analysis of a change project. D2 management must create an effective coalition that must have the right composition, a significant level of trust among all levels of organizational structure.

DREAM- WHAT/WHEN THE SOLUTIONS MIGHT BE

Identify and critically review those theories that could aid your understanding of the issue(s) you have selected for special consideration.

Potential Solutions
The answer to this question lies in it DREAM- (what and when the possible or potential solutions might be?). Lets have a look that what possible solutions we can have;

DREAM- WHAT/WHEN THE SOLUTIONS MIGHT BE:

Higgs and Rowland (2005) noted that for a change to be successful in global organization, involving employees, engaging leaders and employees and specific leadership styles have to be chosen. It all depends majorly on a leaders capabilities, effectiveness and ability to balance global/local dilemmas, is crucial to organizational change success.

This model helps us identifying that engagement and involvement of employees throughout all levels of organizational structure is the first and foremost solution D2 car component manufacturing company has to follow.

Hall and Purcell (2012) The second solution which company can follow in order to make its change program a successful run is to train and consult the leaders first, if they are trained and consulted enough to go through the change process and have a full grasp over forwarding the message down through the other employees, then making employees from all level accepting that change is not a big deal but if managers and leaders are not trained and efficient enough to grasp control over such issues then the procedure of change management can come to a flaw full end.

With reference to the studied literature, theories and past case studies consulted, it is recommended earlier that D2 should not bring Didcot UK plant to closure rather invest more in it to make it technically advanced. I do not recommend closing the UK plant since company has

yet not been experiencing loss at all; it is just facing low demand issue for which it intends to reduce cost. (Fuchs and Edwards, 2012) Closing a companys valuable asset or business is not solution to a problem at all until that business unit is giving no or zero percent profit to the company. Similarly situation here in UK does not lead the company to close the plant, to reduce cost company should make a little of more investment in order to make the plant more technically advanced.

Marchington, Wilkinson and Acker (2001) Moreover, leaders and top management at D2 shall play a prominent role in showing efficiency and effectiveness so that they can address the issue and change they want to bring for the company to the employees. (Burnes, 2004) It is certainly to be noted that leaders must not have a beginning role in initiating change but also to manage and maintain change as it is implemented.

Organizational development methods and interventions those are necessary to change implementation must be brought into practice by D2. (Caza, 2012) Top management could use Action planning, future search and open space organizational development interventions that would really aid in bringing and upbringing the change which is to be implemented.

In our current scenario, most of all a shared vision and target must be addressed. (Armenakis and Harris, 2002) Employees throughout all levels of organizational structure can not perform well until their mission, vision and targets are shared with the organizational mission, vision and targets. (Frahm & Brown, 2007) Thus it is a duty and responsibility of managers of D2 company to train and provide consultancy to employees of all levels that company is dually noticing their interests and keeping in view their interests company forms its own mission, vision and strategies. Employees shall be of confident enough that what company is introducing new or if change is to be implemented, it is dually coordinated with their interests and benefits.

Last but not the least, D2 shall be well aware of the legal requirements that it is going to require in order to invest more in Didcot UK plant for the betterment of the company and its employees as well. (Rich, Lepine and Crawford, 2010)

Following these solutions company can be able to avoid redundancies, mass unemployment and high costs of redeployment of UKs engineers to Blois, France. Let us have a look how these solutions can really be coordinated with the whole staff members of D2 and how they can be executed until final required results are met.

DESIGN- HOW MIGHT IMPLEMENT DESTINY- PRACTICALITIES +/Explain how these theories might inform the advice you will offer?
Theory Help
The answer to this question lies in both DESIGN- (How and in what ways might these possible solutions be implemented?) and DESTINY (Recognition of Limitations to your design and consideration/formulation of possible solutions which might address and balance these limitations).

DESIGN- HOW MIGHT IMPLEMENT

The prominent solutions devised above are: Engagement and involvement of Employees, Training and consultancy for Leaders first to enhance their efficiency and effectiveness, using OD efforts and Interventions, shared vision and mission, fulfilling Legal requirements and the most important one Investing more in Didcot UK plant.

Each of the above mentioned solution will be individually described in detail that how it has to be executed and practiced, here under as;

Investing more in Didcot UK plant and Legal Requirements: The basic solution to the problem D2 has been facing is to invest in the place which is already the hub of product engineering talent. As it is clearly mentioned in the case study that pace and quality of product development has been an important factor contributing to the companys pre-recession success. Product development has been concentrated at Didcot because the area is an international centre for auto product development. Many other companies including Formula One racing teams are located nearby and this has led to the development of a word class pool of product engineering talent in the area. This certainly advocates my point of view that Didcot UK plant shall not be brought to a closure. Since it is obvious to see that this area has been joined by famous car manufacturing teams like Formula One, which increases more value of this area and if D2 company closes its plant it would really create a negative impact in the mind of the customers plus D2 would readily loose a strong place including the engineering talent which is famous of all. Didcot is not only a working place of D2 company rather it is like its one of the strengths to have its plant working in a place where famous car manufacturing companies have created a strong engineering talent for product development. So my recommendation is to invest more in this area because D2 has the ability to convert the weakness it is facing at UK to its strength.

Investment can be made by following legal procedures; D2 shall announce its objectives and must apply for money for investment from one or more of the UK governments Regional Growth Fund to enable this project to go ahead. This would be the first step of making change i.e. by arranging funds for the investment for the better good of the company and its employees as well. (Truss and Soane, 2010)

Engagement and involvement of Employees, Shared Mission and Vision, efficiency and effectiveness of Leaders: Employees throughout all levels must be asked for the problem of resolving the cost reduction issue. (Welbourne, 2011) It is quite certain that none of the team members form UK would facilitate to close the UK plant as everyone would certainly be interested to boost the investment in the place where they have been working because it will eventually benefit the workers and employees besides benefiting the company. It is certainly the responsibility of a leader to create such mindset of his employees or team members. Leaders shall negotiate well with the middle and lower management that what company is doing is not

only for its own interest but for the interest and benefit of its employees also. (Vakola & Nikolaou, 2005) Employees shall have a clear cut idea in their minds that their interests and mission, vision is always associated with companys interests and mission, visio n. In this way the human resources can also be made ready to accept and help top management implement the change, besides doing with the financial resources. Right Restructuring of D2 teams globally can also reduce costs in the current scenario.

DESTINY- PRACTICALITIES +/-:

In this section the limitations of the solutions mentioned above are going to be discussed and furthermore the solutions of these limitations will also be addressed. Finances for investment from Governments Regional Growth fund might be of some issue. But to persuade them the D2 company shall present a report underlining its continued long-term commitment to its core activities in the UK and program of specific s of investment in advanced manufacturing, engineering and research and development until a specific period of time. This report has to be persuasive enough to convince the regional growth fund to assist the Company. While addressing about the change to be implemented, its a human nature to contradict and create conflict besides. SO here the Human Resource department of D2 must be an active participant. Regular seminars, on and off the job training sessions must be practiced to help convince the workforce to implement the change program.

Some top management members can limit this decision of huge investment in a plant that is technologically low, during this cost reducing efforts regime. Moreover Blois teams can also be a limitation against investing in the plant which is not technologically high while ignoring for the moment Blois which is technologically advanced and have capacity though. But they shall be addressed well as well that it is companys fault that its plant is technologically not advanced, it is not the fault of that place, and rather Didcot is a centre hub of technologically advanced car manufacturing companies and highly trained engineering pool. So these points must be addressed well to every employee throughout all levels of the organization structure.

Regarding the Blois issue, company shall fully make use of its capacity by expanding production because it is believed that expanding production here will decrease immense costs, but it is not to be mixed with investing in Didcot UK plant.

For reducing costs the employees at UK, France and Spain must undergo a process of Restructuring. But this is to be noted carefully that those interventions of restructuring are followed which in long term are favourable rather just saving cost in the short run. (Gandolfi, 2008) For example Downsizing seems to reduce costs abruptly, but managers shall be aware of the fact that it has direct and indirect costs associated with it. Indirect hidden Costs are those that D2 can incur in recruiting and training new employees after downsizing. These hidden costs are sometimes underestimated and such unexpected expenses could go more than the productivity saving through downsizing.

References
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