Monitoring the Change
The proposed change involves updating Kudler’s accounting system by applying the fixed costs equally, based on a proportion of sales. The purpose of this change is to enable the company to accurately determine the true profitability of each of its products. Consequently, making effective business decisions will be easier. Implementing this change requires consistent monitoring to ensure that the desired outcomes are met.
During the implementation process, three measures will be used to aid monitoring. To begin with, the progress in implementing the planned activities will be measured. This will involve determining whether the planned update of the accounting system is being done within the set timelines and budgetary limits.
The output of the planned change will also be measured in terms of the accuracy of the profitability figures of each product. Finally, the outcome of the proposed change will be measured in terms of the business decisions made using the new output (profitability figures generated by the updated system).
The accuracy of this output and the extent to which it facilitates efficiency in decision making will be used as success indicators. The main observation tools will include surveys and interviews which will be used to gather information about the management’s perception of the usefulness of the proposed change.
In addition, participatory techniques, as well as, output/ effect indicators will be used to monitor the change. Participatory appraisals will involve discussing the success of the change with key stakeholders. Output/ effect technique will involve using predetermined targets to measure the effectiveness of the proposed change.
Opportunities for Adjustments
In change management, adjustments are often made to ensure that the implementation process is responsive to emerging needs and challenges. Consequently, the following adjustments are likely to be made to ensure success. First, the timeline for implementing the change is likely to be adjusted.
This is because the accounting staff responsible for measuring fixed costs will have to be trained on how to use the updated system. Since training outcomes depend on the trainee’s ability to learn, it will be necessary to extend the timeline if the accounting staff is a slow learner.
The benefit of this adjustment is that, the accounting staff will be able to understand and use the new system correctly. Consequently, technical errors will be avoided.
Secondly, updating the accounting system involves costs which can change during the implementation process. For instance, the proposed budget for the change will have to be reduced if the company experiences financial constrains.
Similarly, the proposed expenditure will have to rise if costs such as the cost of training the accounting staff increases over time. Thus, adjusting the cost will help in preventing failure by ensuring that the available funds are adequate for the implementation of the change.
Change Resistance
The proposed change in Kudler’s accounting system is likely to be resisted in the following areas. The change is likely to be resisted on financial grounds. The management is likely to be reluctant to adopt this change if its return on investment is not clear.
Additionally, the proposed change is likely to be resisted since it represents a significant departure from the accounting principle that is currently being used by the company to measure fixed costs. The accounting department is not likely to adopt the proposed system if they do not understand the weaknesses of the existing one. This potential resistance can be averted as follows.
To begin with, it will be important to create a sense of urgency regarding the proposed change. This will help in stimulating the initial motivation that is required to have the change implemented. The sense of urgency will be developed through honest discussions about the threats posed by the existing accounting system, as well as, convincing reasons that highlight the opportunities presented by the proposed change.
The next step will involve leading the change process by building a powerful coalition that brings together the accounting staff and influential people in the company such as managers. Change is less likely to be resisted if it is led by top management and other influential people in the organization.
Additionally, building a change coalition promotes teamwork and creation of a shared objective during change implementation. Finally, it will be important to set short term goals whose achievement will be used to highlight the importance of the change. Every achievement will be an opportunity to analyze what was done right, as well as, what should be improved in order to win the confidence of all stakeholders.
Using the Organization’s Culture
The proposed change can only stick if it is incorporated in the organization’s culture. In this regard, linking the proposed change to the company’s overall vision will enable the employees to understand its importance. Similarly, aligning the change to the core values that underlie Kudler’s organizational culture will facilitate acceptance of the change.
Thus, effective communication of the change ideas, as well as, values to both existing staff and new hires becomes apparent. Since Kudler has a culture of excellence, publicly rewarding the employees who support the proposed change in their bid to maintain excellence will motivate other employees to adopt the change.
Additionally, developing plans to replace change leaders who leave the company will help in ensuring that the legacy of such leaders is retained. Overall, incorporating the proposed change in the organization’s culture will enhance its acceptance.
The proposed change is likely to affect Kudler’s organizational culture in a positive way. As a company that is focused on providing fine wines and spirits, an effective decision-making process is central to Kudler’s organizational culture.
The proposed system will enable the company to generate accurate information regarding each product’s fixed costs and profitability. Thus, the company’s culture as reflected in its business decisions, product offerings, as well as, relationships with clients will improve.
Evaluating the Change
The change process can be evaluated in terms of its purpose and impact in the organization. The main aim of the proposed change is to enable the company to determine the true/ accurate profitability of each product. Thus, the evaluation will focus on determining the improvements in the accuracy of the profitability figures for each product.
This can be achieved by comparing the figures before and after implementing the change. The long-term goal of the proposed change is to improve efficiency in making business decision. Thus, the impact of the proposed change will be evaluated in terms of the extent to which efficiency in decision making has improved, following the implementation of the change.
References
Conner, L., & Stackman, R. (2003). Managing Organizational Change. New York: John Wiley and Sons.
Harigopal, K. (2006). Management of Organizational Change. New York: McGraw-Hill.