Sources of resistance to change at Ajax Minerals
Ajax Minerals was operating at full capacity and making profits over the years. However, there was a threat to its competitiveness, whereby another similar organization, Pacific Rim, was expected to start mining and shipping the same minerals at a cheaper cost. The leaders took the initiative to implement changes that would put the company in a position that would help it compete favorably against Pacific Rim.
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The implementation of changes at Ajax was a challenge in the past due to resistance from employees. Ajax also experienced resistance in its change process due managing change poorly in the past. Change management is very essential in avoiding resistance from employees (Paton & McCalman, 2008). There should be good communication involving the management or the change agents, the employees of the organization, and the people who are affected by the change (Cameron & Green, 2012). The management of Ajax Minerals previously failed in managing change, first by planning for change without involving all the stakeholders. The employees were suspicious by the time the change was being implemented and would think that the management was planning for something that would not be pleasant to them.
The second source of resistance to change at Ajax Minerals was poor labor relations. In an organization that wishes to implement change, it is important to assure the employees that their jobs are secure (Colling & Terry, 2010). This is done through good labor relations. This lacked at Ajax Minerals, which led to change resistance, as employees were afraid of layoffs and pay cuts that could come as a result of the change.
Ajax Minerals was aware that it had to deal with these sources of resistance to change in order to implement the intended change successfully, as failure to implement change would result in the loss of its competitive advantage to the Pacific Rim. First, it established an interactive session, whereby the management would interact with the supervisors and plan the change with them. This ensured good communication about the change and prepared the supervisors for the change. Secondly, the management opened the books of accounts to the employees, which improved the labor relations because the employees could view the performance of the company. This assured the employees that the leaders were not planning an unpleasant action against them.
Sources of resistance to change at Perrier
One of the main sources of resistance to change at Perrier was its strategy in tackling its dwindling financial performance. The company came from a highly profitable season in the 1980s to a point where it started making losses in the 1990s and it was acquired by Nestle. Despite the acquisition, Perrier continued to perform dismally compared to Nestle’s other water brands. The employees continued to earn high salaries, despite the company’s dwindling performance and lower productivity. Nestle’s management, therefore, decided to improve the financial performance of the company by reducing the workforce by about 15% (Palmer, Dunford & Akin, 2009). This move was opposed by the workers, through their CGT workers union. Nestle’s management felt that the CGT was the main stumbling block to Perrier’s improvement.
Another source of resistance to change faced by Perrier was the stiff competition its brand, the Eau de Perrier, faced. A rival company, Danone, launched competitive product, the Badoit Rouge, which was doing equally well compared to the Eau de Perrier. The management felt the need to emphasize this stiff competition to the employees. However, it took a wrong approach of communicating the message by putting the Badoit Rouge in Perrier’s factory cafeteria. The workers showed resistance to the move by removing the bottles and dumping them in front of the director’s door. They felt that the director had provoked them.
How the management of Ajax Minerals diagnosed and approached the change as compared to Perrier
Perrier diagnosed the poor performance it experienced through assessing and analyzing the profitability of the company. The downward trend in the profits signaled a problem that needed to be addressed. The approach that the company took was to cut the expenses by reducing the number of workers. This was not the best approach, as the management did not take time to identify the cause of the dwindling profits.
On the other hand, Ajax Minerals diagnosed the problem by focusing on the market and the competitive situation. The management sensed that it was likely to face stiff competition from the Pacific Rim in the future. In addressing the problem, the Ajax management took the approach of implementing change that would improve the company’s performance and help it gain a firm stance in the industry. This approach was good, as it involved all the employees. It took the views of all the employees into consideration and gained the support of the entire organization. Consequently, Ajax Minerals dealt with resistance to change better than Perrier.
Two adjustments that can be made to improve the change strategy at Ajax Minerals
To improve the change strategy, the change agent should ensure proper communication with the employees. He should explain to the employees how the change will be implemented and what effects it will have on the employees and their various positions. In case the change will have any effects on their positions, then the effect should be explained to the employees clearly. This could be done by involving them in the interactive sessions. As of now, the employees are not involved in the interactive sessions. The interactive sessions should also incorporate the employees to enhance the speed of adapting to change. Secondly, the employees should be involved in the planning process. This will give them responsibilities in the process and make them feel as part of the change. It will, therefore, enhance their support for the change.
Two adjustments that can be made to improve the change strategy at Perrier
Perrier’s change strategy should incorporate an effective problem solving and decision making model. The first step in solving a problem is being clear what the issue is. In this case, Nestle did not identify the cause of Perrier’s dwindling performance before it decided to reduce the workforce. The facts in the case show that the profitability of Perrier started going down, especially in the US, because of the traces of benzene found in one of its bottles in the 1990s. Nestle should have addressed this problem first by improving its public relations in the US immediately it took over Perrier. Nestle should stress that Perrier is now under new management of a credible company to drive away the notion that Perrier’s water has benzene traces. This should boost sales in the US.
Secondly, Nestle’s management should show confidence in its Eau de Perrier brand by not stocking a competitor’s brand in its shops or offices. Perrier’s factory director should focus on the Eau de Perrier brand, instead of the rival brand, to boost confidence in the employees that their brand is superior. The employees represent and sell the brand, thus they should be fully confident that their brand is superior.
Cameron, E., & Green, M. (2012). Making sense of change management: A complete guide to the models, tools and techniques of organizational change. London, UK: Kogan Page.
Colling, T., & Terry, M. (2010). Industrial relations: Theory and practice. New York, NY: John Wiley & Sons.
Palmer, I., Dunford, R., & Akin, G. (2009). Managing organizational change: A multiple perspectives. New York, NY: McGraw-Hill/Irwin.
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Paton, R. A., & McCalman, J. (2008). Change management: A guide to effective implementation. London, UK: Sage Publications.