Executive Summary
In the recent past, organisations have embraced change management as a way of increasing productivity when faced with economic, social, technological, or environmental challenges.
To assess the effectiveness of change management, this report delves into an analysis of drivers of organizational change at the Virgin Blue Holdings, as well as the barriers it may face in the change management process, including the management barrier, vision barrier, and the resource barrier.
More so, through a review of literature, the report underscores diverse models used in change management, including procedural model, Kotter’s model, and EFQM Excellence model, with a view of finding out the most viable change management theory that should be adopted by the Virgin Blue Holdings.
As such, this report recommends the procedural model over other change management models by demonstrating its effectiveness through analysing the stages involved in the process.
This indicates that an effective change management strategy should address each phase separately, as this helps to highlight the barriers to organisational change, as well as to provide recommendation for improving the change management process. This report brings to light the rationale behind adopting change management as a viable managerial practice.
Introduction
Change management is a critical tool to human resource managers, as it persuades and enables workers to accept new ideas, values, technologies, processes and administration.
Change in the workplace is inevitable as changes in environmental, technological, economic, social, as well as the legal factors make businesses constantly apply new technologies, upgrade systems, and change their management practices in an effort to improve productivity.
This change is normally faced with many challenges, and key among them include realignment of human resources and redeployment of capital resources (Kanter 2003, p.237).
Thus, change management is an indispensable process that facilitates acceptance of new ideas, values, technologies, processes, and administration, and its participation should include all the staff members as well as the stakeholders (Saka 2003).
It is from this perspective that the field of change management has been evolving over the years to ensure that all employees embrace change within the organisational settings.
This paper will provide a report on the case study of the “Virgin Blue Holdings” to give an informed review of change management models and theories and their effectiveness. It will begin with analysing the drivers of organisational changes and proceed to evaluate the models and theories necessary for an effective change process.
Analysis Of Drivers Of Organisational Change At The Virgin Blue Holdings
Despite the fact that many organisations resist changes during the initial stages and find it expensive to implement, a number of aspects force them to make operational changes.
Thus, an organisation can be forced to adopt relevant changes when its alters its mission statement; when its products / services become obsolete due to technological factors, among other factors; or when it is faced with a stiff competition that can only be conquered through a merger (Gebauer, Fischer, & Fleisch 2010).
One of the most important drivers of organisational change is when companies fail to achieve financial targets. This makes them evaluate their business objectives and processes in a bid to avert the crisis. The Virgin Blue Holdings reports a 62% decline in the net profits, a profit margin that is below the target level.
This portrays that the company is experiencing an inadequate financial performance, thus necessitating change in its business operations. The decline can be attributed to strong competitive forces, making it attain only 10% of the market share.
And since the Virgin Blue Holdings wants to attain a competitive advantage, it has been forced to adopt a move that cannot be overemphasized: restructuring its business operations to match the dynamic trends.
Thus, extreme competition is a driver to organisational change as it forces some organisations to change their objectives and strategies. In this regard, the Virgin Blue Holdings has made an endeavor to change its objectives and strategies by making sure that it takes the necessary steps that aim at including the corporate travelers, besides the leisure travelers, as part of its market share.
Its change management approach stems from the fact that companies that understand and address the ever-increasing demands of their customers are major competitors than the companies that neglect the rising trends, as this reduces their chances of facing a diminishing market share (Gebauer, Fischer, & Fleisch 2010).
Moreover, it is imperative to note that businesses should not only adapt to organisational changes due to technological innovations but also due to peoples’ attitudes and social behavior affecting them (Penger et al. 2007).
In this regard, the Virgin Blue Holdings is required to acquire a profound understanding of the social factors that may affect productivity of the company by trying to understand the current demand of the employees.
More so, companies should create social relations and collaborate with other companies’ practices that are in line with its change strategy. And it is for this reason that the Virgin Blue Holdings has taken the initiative of benchmarking its uniform with a popular fashion industry, which is commonly known as the Project Runway.
Additionally, when a product reaches the end of its product life cycle, companies are forced either to cut the operating costs of the product in question or to introduce another product in the market.
This is evident in the Virgin Blue Holdings as it seeks to introduce Airbus A330 aircraft to operate between Sydney and Perth. This aircraft is expected to present a new product in the market by introducing a new business class cabin and a “superior economy class.”
Companies can also be forced to change their management system as they seek to cut costs that prove to be detrimental to the company’s profit. This is normally achieved by collaborating with other companies in the field.
At this stage, some companies take the approach of partnering with existing competitors, and this, in turn, facilitates structural changes to company’s business processes through teams that help to sustain performance.
To cut excessive costs, the Virgin Blue Holdings has taken the initiative of collaborating with the Skywest, and this provides it with an opportunity of flying the Turboprop aircraft to regional routes.
However, such kind of a partnership is characterised by redundancy or threats to organizational culture, and this elicits organisational changes due to differences emanating from divergent views of management practices and cultural values of two different companies as they seek common ground (Kanter 2003, p.253).
Thus, an effective change management process is required to bring this to fruition. In a bid to adopt an effective change management process, it is paramount to analyse a number of challenges that the Virgin Blue Holdings may face in the process.
Barriers To The Organisational Change
While managing organisational changes, it is paramount to establish whether the new paradigm is acceptable to all members of the team because this facilitates implementation of a viable framework to counter the organisational change barriers, which include the management barrier, vision barrier, and the resource barrier.
These barriers emanate from inadequate requirement planning, failure to consult the affected members, and inadequate training (Coram & Burnes 2011).
Because of this, sufficient justification and education should be put in place to realign individuals with the new company’s direction, since the move of coming up with new strategic changes may not be fully embraced by the employees as well as other stakeholder.
Nevertheless, change agents, which involve managing employees’ attitudes, can assist with the changing process despite the fact that not all agents are acknowledged in change management.
For case in point, while the Virgin Blue Holdings has taken the initiative of collaborating with Skywest, some staff members of the Virgin Blue Holdings may not appreciate the move since it may raise discomfort, which normally emanates from working with an organisation that has been considered as a rival over the years.
Organisational changes present an organisation with a new mission and vision statement, making the employees attain new job specifications.
The employees may tend to resist these changes after realising that the move will necessitate additional skills, which they may lack at the time of the change implementation (Coram & Burnes 2011). In such a case, the organisational barrier emanates from failure to plan adequately and ignoring the affected employees, who, in turn, affect the rest of the employees within the organisation.
Additionally, inadequate training serves as a barrier to organisational changes. For case in point, many employees are offered basic skills in computer software operation with a view of increasing their proficiency in computer operations.
However, this does not always provide them with an opportunity to handle logistics involved with the new line of business operation. Thus, the Virgin Blue Holdings should ensure that it provides formal training required to handle the new line of business, namely, the new airport lounges and the business class products.
Techniques, Theories, And Models Of Change Management
A vast majority of organisations are faced with a dilemma when it comes to managing change. This has necessitated an analysis of change management models to underscore the prime factors that should be considered in order to achieve the change process successfully.
Some models are designed in such a way that they are in a position of addressing a number of barriers, including decision phase barriers, preparation phase barriers, design phase barriers, and implementation phase barriers. It is from this perspective that a number of change management models have emerged in order to counter the challenges faced with the overall change management process.
Diefenbach (2007) affirms that an effective change management technique should entail analysing the change process using a number of dimensions, with the first dimension emphasizing on the essence and the extent of change. The changes are then arranged in sequence in an effort to differentiate the reactive from the anticipated change.
The procedural model, according to Cameron and Green (2009, p.124), defines organisational change as evolutionary, meaning that changes continuously evolve from one department to the next, while the EFQM Excellence model puts more emphasis on evaluating as well as aligning a company in an effort to meet the expected quality after the change process takes effect.
And while the procedural model compares with the Kotter’s model in the sense that both operate under the platform of sequential procedure, the procedural model is flexible in that it is able to react positively to unexpected changes emanating from environmental factors affecting an organisation (Cameron & Green 2009, p.127).
With this in mind, the Virgin Blue Holdings can adopt the procedural model to achieve the desired change effectively.
Developing And Implementing A Change Management Strategy
Given that business strategies are built around innovation, flexibility, speed, customer service, affordable quality, and competitive advantage, developing and implementing an organisational change strategy for Virgin Blue Holdings requires the key decisions to be guided by a set of organisational values and culture.
Although the role of top executives is important in sustaining transformation in the firm, the overall participation of all shareholders occupies a central place in this model. Such shareholders include the government, union managers, employees, line managers and top executives.
The principles guiding the change process using the procedural model are divided into five phases, namely, the decision, preparation, design, implementation, and, finally, reinforcing changes phase. These phases are discussed below in turn.
The Decision Phase
Effective development of strategic change can only be achieved when a company defines the factors that affect its productivity (Self & Schraeder 2009).
In this regard, the clients, society, government policies, competitors, as well as the environment affect the Virgin Blue Holdings’ productivity as it seeks to come up with new airport lounges, new uniforms, as well as a new business class.
Thus, this phase entails taking a decision that would enable it cope with dynamic changes of business process in order to be in a position of coordinating its business operations for the next strategic period.
Developing strategic changes starts with making decision on the intended nature of change. The challenge with decision-making, however, may create an assumption that the managers are in a position of predicting the future. The employees, in contrast, may express doubts towards the success of the new strategic change.
However, a detailed description of how this model works and what it encompasses can be made possible by carrying out a critical analysis of its strong and weak points and the opportunities and threats that it presents in the management of change in the workplace.
In doing so, the Virgin Blue Holdings acquires sufficient knowledge that would help to prioritise alternatives as well attract change through creating a positive attitude to the employees as they handle the new line of business (Proctor & Doukakis 2003).
The Preparation Phase
Managers involved in the strategic change are increasingly required to demonstrate the ability to contribute to the overall welfare of their organisations. As such, they should strive to participate in the accomplishments of the organisation’s objectives and visions.
Thus, they should not only focus on their departments but should engage in an increased cooperation with the in-line managers. More so, they should display a wide range of knowledge on how to effectively design work systems that encourage organisations’ success.
In addition to this, a good preparation phase calls for effective communication skills. This stems from the fact that effective communication facilitates reaching a point of consensus with the employees while planning and designing the organisational changes.
More so, communication explicitly analyses the barriers to organisational changes in the event where the employees share their opinions regarding the proposed changes. This, in turn, helps to reduce employees’ resistance to organisational changes (Lewis 2011, p. 56).
However, in order for communication to achieve its objectives in the organisation change process, it must be done face-to-face and through the company’s website. In the face-to-face interviews, the managers should ensure validity in the communication process in order to avoid biased opinions from the employees.
And while using the company’s website, the managers should use an ordinary computer since a new computer model may end up scaring some workers who are not accustomed to it.
The preparation phase should also include the affected members who may be displaced due to adoption of new line of business operations. Effective communication with the affected members should be carried out in a manner that does not affect the other employees’ attitude towards change.
This stems from the fact that employee dissatisfaction and resistance to change could only be countered if the strategic changes of the organisation are well understood and accepted by all, including the affected members (Proctor & Doukakis 2003).
The Design Phase
This is the stage where the organisational managers meet with the employees for discussion on the planning of the change process. The managers define the behaviours and competencies expected of the employees and the target on what the employees are expected to achieve over a given period of time.
Thus, this phase entails motivating and empowering the employees towards achieving the set target, and it can be achieved by introduction new technologies and products in a timely manner.
The Virgin Blue Holdings has designed its strategic change by defining ways in which it is expecting to achieve its objects, such as penetrating pricing and new marketing campaigns, in a manner that takes into account the time intervals and deadlines under which the strategy is expected to achieve its purpose.
In doing so, the Virgin Blue Holdings is in a position of identifying change constrains before implementing the subsequent strategic changes, as well as managing the change process effectively due to timely distribution of cost of the change process (Cameron & Green 2009).
The Implementation Phase
In this phase, the organisation defines the changes and the time the company would take to adopt the changes effectively. Thus, the implementation phase monitors the deadlines and the expected target adopted in the design phase.
This target definition is vital since it helps the management to assess whether the intended changes have been achieved. More so, the implementation phase should address all the disciplines within an organisational setting, with each head of department taking the role of controlling, monitoring, and ensuring that the changes are in line with the set boundaries (Cameron & Green 2009).
This is paramount because, even with high sense of vision and direction, it is very risky for one individual to take the lead in large-scale organisational changes.
The Reinforcing Changes Phase
It is imperative to mention that change management process should be designed in such a way that it is able to assess whether the changes adopted are valid and congruent with the company’s culture (Coram & Burnes 2001).
Additionally, this phase should be used to establish other environmental or social factors that may further lead to a subsequent development of mission and vision statements.
This phase is paramount because it manages information regarding the change process in the implementation phase, including the employee’s attitude towards change, and forms a good background for implementing an effective change process in future.
Conclusion
This report has clearly analysed and developed change strategies that could be considered by the Virgin Blue Holdings in order for it to survive and prosper. With the tensions and uncertainty faced by organisation while adapting to innovations, it is advisable that the Virgin Blue Holdings adopts an appropriate change model and strategy that would allow it deal with such threats.
This report has underscored the barriers to organisational changes, including management barrier, vision barrier, and resource barrier, and has recommended the procedural model for the Virgin Blue Holdings change management process since it seeks to manage the change by monitoring closely the five phases of the change process in a sequential order.
List of References
Cameron, E & Green, M 2009, Making sense of change management: A complete guide to the models, tools & techniques of organizational change, Kogan Page, London.
Coram, R & Burnes, B 2001, ‘Managing organizational change in the public sector: Lessons from the privatisation of the Property Service Agency’, The International Journal of Public Sector Management, Vol.14 no.2, pp. 94-110.
Diefenbach, T 2007, ‘The managerialistic ideology of organisational change management’, Journal of Organizational Change Management, Vol. 20 no.1, pp.126–144.
Gebauer, H, Fischer, T, & Fleisch, E 2010, ‘Exploring the interrelationship among patterns of service strategy changes and organizational design elements’, Journal of Service Management, Vol. 21 no.1, pp.103 – 129.
Kanter, R 2003, The Challenge of organizational change: How companies experience it and leaders guide it, Free Press, New York.
Lewis, L 2011, Organizational change: Creating change through strategic communication, Wiley-Blackwell, Chichester, West Sussex.
Penger, S, Črnak-Meglič, A, Tekavčič, M, Hrovatin, N, & Skornšek, P. 2007. ‘Strategic change management in the public sector: The Slovenian case’, Reflecting on Issues and Controversies in Current Management Trends, pp.189-206.
Proctor, T & Doukakis, I 2003, ‘Change management: the role of internal communication and employee development’, Corporate Communications: An International Journal, Vol. 8 no.4, pp. 268-277.
Saka, A 2003, ‘Internal change agents’ view of the management of change problem’, Journal of Organizational Change Management, Vol. 16 no.5, pp. 480-496.
Self, D & Schraeder, M 2009, ‘Enhancing the success of organizational change: Matching readiness strategies with sources of resistance’, Leadership & Organization Development Journal, Vol. 30 no. 2, pp.167-182.