MANAGING

CHANGE

TO

CHINA

Report has been compiled by group III for the 12 Oclock Monday Tutorial
Group. For the eyes of Felicity Davies, recently appointed MD.

1. Terms of Reference
Manufacturing of products must cease in the U.K. and be outsourced to
China, and marketing campaigns must enforce the brands European image.
Report written to inform Felicity Davis of the best strategy for achieving this,
how to plan and how to overcome any resistance.

2. Change Strategies
2.1 Choices
Three generic strategies are available:
The empirical-rational approach is to change through rational persuasion and
empirical argument, the preaching of factual and credible information and the
proffering of incentives.
The power-coercive approach utilizes a position of power to create change by
decree, resting on the assumption that people are basically compliant.
The shared power method has as its base the idea of involving others in change,
and is linked to the normative approach of changing the culture of a business into
new values and commitments.

2.2 Recommendation
Here it is quite clear that there is a fairly short timescale for rather dramatic change
to take place, as the threat faced is a serious one. Cultures cant change overnight
and incentives may not work when shutting down U.K. manufacturing is concerned.
So in this case I would recommend the coercive approach, as involving many people
may protract decisions when the parent company has already got a clear vision.
However, an effort must be made after this power approach to keep any disaffected
people onside.

3. Factors for planning

A number of factors are important for planning change here.
One is the nature of the change; within a taxonomy of change, we are
looking at a planned change here, and a radical one; transformational, with a

major repositioning, perhaps even revolutionary change. This is why a

coercive change strategy is perhaps the best option.
Culture and power are also factors to plan, but as we are dealing with a
subsidiary here it can be assumed that any culture is overridden and enough
power is present, with these orders coming from above, to effect change.
Management capacity can be an issue is there a capability to effect
change? Here we can assume that Felicity does have the capability as she
has been newly appointed for this task.
Resources and readiness are further points, that will have to be assessed
before any big marketing campaign is carried out. Although the business
should be saving resources by transferring to China, things like sponsors and
agents and the local culture should be considered.
Stakeholder groups should also be identified and communicated to, but if this
change comes at a time when European markets are being undermined, it is
reasonable to expect that most will be happy to see efforts for improvement.

4. Neutralising Resistance
The major form of resistance is going to come from the disgruntled employees
whose jobs become redundant after the manufacturing plant is closed. Their fear of
the unknown is going to result in them opposing the direction of the change. As the
change is something that has been decided upon and has to be done, the main
method of neutralising this opposition would be to set up meetings, send out emails
and letters all of which are detailed with explanations. They may also have to battle
with unions and give generous redundancy packages.
With a new workforce in China, we wont see too much group inertia or individual
disruption, as they will be starting new jobs and presumably have the necessary
skills.
There may also be resistance especially from other managers towards Felicity as
she has been recently appointed as the managing director. They may try to discredit
her as the change leader. This could be neutralised by keeping them well informed
and involved in the process.
There will be some structural inertia as the closing down of the manufacturing plant
results in loss of a lot of the structural systems that had been set up. This would be
hard o neutralise, and perhaps will just have to be accepted.

5. Summary

Coercive change may be necessary and so is advised

A lot of planning factors are dealt with by the fact that we are dealing
with a subsidiary company, and a managing director specifically
employed to carry off change. Necessary resources should also be
considered.
There will be disgruntled employees and people annoyed with Felicity
as the MD they should be treated fairly and kept informed.