Introduction
VC Brakes specialises in manufacturing aftermarket brake components that are used in commercial and passenger vehicles. The firm has attained steady growth since its inception in 1985 despite the intense competition from Japanese firms. Lantana Industrial acquired VC Brakes in 1998, which specialised in aftermarket and original equipment.
Lantana adopted a hands-off approach in the acquisition process, which meant that managers within VC Brakes were responsible of operations of the acquired firm. VC Brakes experienced remarkable performance after the acquisition, which was driven by sports utility vehicles [SUV] and the truck market segment. The 2008 financial crisis affected the automotive industry adversely.
The industry experienced a 35% reduction in demand for original equipment motor vehicle components. Additionally, the consumers’ shift to fuel-efficient and affordable vehicles also led to a decline in the automobiles’ demand.
On the contrary, VC Brakes was not affected extensively by the crisis, as opposed to the original equipment producers due to an increment in demand for replacement of motor vehicle parts. However, the competition of Japanese aftermarket imports affected VC Brakes’ performance adversely.
The industry turmoil coupled with the poor management by the parent company led to the acquisition of VC Brakes by Crossroads Corporation, which specialised in the production of friction systems, aerospace products, heavy vehicles, and friction systems.
This paper entails a case study of VC Brakes. The case identifies some of the major participants in the operations of VC Brakes and the issues that they faced in their management process.
Description of the issues faced
Resistance to change
VC Brakes had adopted a top-down management system, which affected the collaboration amongst the various functional departments such as the professional staff. Every department operated independently and it was unresponsive to the concerns of other departments. The firm was also characterised by a ‘finger-pointing’ mentality, which affected accountability amongst employees.
The Engineering Department, led by the Vice President, Mitchell Medved, and the Senior Manager, Engineering Services, Mr. Andrew Ryan, intended to change the department’s culture in order to achieve operational efficiency. Ryan was charged with the responsibility of enhancing the firm’s new product development.
Prior to his appointment as a senior manager in the Engineering Services, the department’s effectiveness in new product development was limited by poor product designing, documentation, and concealing underperformance by blaming other departments.
Some of the projects that the Engineering Services department had commenced failed due to the high rate of turnover by some of the key project contributors because of frustration. Subsequently, the Engineering Services department was unable to engage in new product development.
As the leaders in the Engineering Services department, Ryan and Medved focused on turning around the operations of their department. Ryan was of the view that he could utilise his management expertise and experience in promoting business start-ups to rejuvenate the performance of VC Brakes.
Ryan adopted an open communication and participative management approach in implementing the desired change. The motive of adopting this management style was to ensure that all the employees’ inputs were heard in the decision-making process. Some junior employees appreciated the approach. However, some of the departmental leaders were resistant to the proposed changes.
Despite the resistance, Ryan was in a position to steer his department towards successful completion of the intended Ceramic Composite Brakes [CCB] project, which confirmed that the adoption of a different management perspective could stimulate VC Brakes’ competitiveness.
Lack of collaboration amongst managers
Crossroads Corporation intended to transform VC Brakes performance by enhancing its profitability. One of the strategies that were adopted in pursuit of this goal involved transforming the organisation into a customer-centric entity. Therefore, the organisation invested in Total Quality Management as one of the management approaches.
However, successful adoption of TQM as an organisational culture depended on the extent of involvement amongst the various internal stakeholders. In a bid to achieve this goal, the firm organised a management-training program, which was meant to equip managers with skills on how to transform the organisational culture.
However, lack of collaboration amongst the organisation’s managers hindered the transfer of knowledge to lower level employees, which hampered the implementation of the desired changes.
Analysis of issues faced
Organisations are not immune to change due to diverse environmental pressures. Therefore, organisational leaders have the responsibility of steering their firms in implementing the change. One of the aspects that leaders should focus on involves organisational development (Brown 2011).
Kathiravelu (2014) affirm that investing in organisational development fosters an organisation’s ability to deal with internal and external environmental forces. Thus, the chance of implementing change improves remarkably. However, implementing change is often subject to resistance.
Abram et al. (2003) are of the opinion that resistance is one of the major factors that affect managers’ quest to implement organisational change. Resistance to change might be signified by different aspects such as high rate of absenteeism, lack of motivation amongst employees, and high rate of employee turnover.
Brown (2011) emphasises that resistance to change can either be organisational or individual. Some of the factors that might trigger individual employee resistance include economic, personal, or social factors. Conversely, Brown (2011, p.46) argues that organisational ‘resistance might originate from organisational structures, organisational constraints, threats to power, and influence’ (p. 94).
Ryan and Medved experienced both organisational and individual forms of resistance. VC Brakes had adopted a bureaucratic management structure, which meant that the communication system in the organisation was top-down and the lines of authority were clearly outlined. This organisational structure limited the flow of ideas amongst employees.
In their quest to turnaround the performance of VC Brakes, Ryan and Medved adopted an approach that challenged the existing management philosophy by adopting a participative approach and open communication. This approach made some of the organisational managers to develop the perception that their status quo, influence, and supervisory authority were under threat.
Brown (2011) argues that employees ‘who have been in an organisation for a long time invest a substantial amount of energy in protecting the traditional way of operation’ (p. 96).
This aspect is commonly referred to as ‘sunk costs’ of skill and energy. Brown (2011) further affirms that some individuals have low propensity to change, and thus they do not appreciate change. One the other hand, some of the personal reasons that hinder change include ego-defensiveness and fear of the unknown.
Change management theory and application
Previous attempts to explain organisational change has led to the formulation of diverse change management theories. Examples of such theories include the contingency theory and the power-influence theory coupled with the behavioural and trait theory. The prevailing uncertainty in the contemporary business environment requires organisations to adjust their operations in order to succeed.
Ryan and Medved encountered remarkable behavioural challenges in their quest to implement the desired organisational change, as evidenced by resistance of some individuals in the management team. The resistance experienced in VC Brakes can be well explained by different change management theories/ models as evaluated herein.
Kurt Lewin change management theory
This model is based on a force-field analysis, which means that successful implementation of change depends on the effectiveness with which an organisation balances the opposing forces in implementing change. Cornelissen (2011) affirms that change occurs if the prevailing equilibrium situation is disturbed by favouring and opposing forces.
However, a new equilibrium must be established. The theory postulates that organisational leaders must take into account three main stages in an effort to implement change. These stages include the unfreezing, moving, and unfreezing.
Unfreezing – this phase is based on cultural influences and it argues that it is imperative for organisational leaders to incorporate new forces by influencing the prevailing human behaviour. The model asserts that organisations are motivated to change by diverse forces such as intense competition, technological changes, and poor financial performance.
However, the existence of opposing forces such as lack of adequate managerial skills, negative employee attitude towards change, and the existence of organisational culture limit the change process.
Ryan and Medved experienced diverse opposing forces in their quest to implement diverse change interventions such as implementing the Total Quality Management system. Some managers in VC Brakes did not perceive the importance of adopting the change initiative, which increased tension and collaboration amongst the managers.
Despite this aspect, it is imperative for organisational leaders to focus on developing a positive attitude towards the intended change. This goal can be attained by ensuring that all the internal stakeholders understand the relevance of the intended change by pointing the prevailing gaps. Cummings and Worley (2009) affirm that the unfreezing stage is mainly focused on reducing employee resistance.
Changing – this step involves making the necessary organisational adjustments in order to foster an organisation’s excellence and long-term existence. In a bid to succeed in implementing change, it is crucial for organisational leaders to focus on changing the employees’ attitude or behaviour.
The change process should be undertaken in phases in order to ensure that the desired change is implemented effectively (Hellriegel & Slocum 2011). In an effort to implement the desired total quality management approach, Ryan and Kante were nominated for a training program that was aimed at equipping them with adequate knowledge on how to implement the TQM system.
However, the two managers were not collaborative during the training program due to resistance from Kante, one of the departmental leaders.
Refreezing – this phase involves the consolidation of the implemented change through the formulation of diverse mechanisms such as the organisational norms and policies (Miner 2007).
Kotter change management model
Kotter argues that organisational leaders should appreciate that change is a process. However, most failures in implementing organisational change arise from failure to recognise change as a process. Kotter developed an 8-step model that organisational leaders should adopt in implementing change.
The various stages are interdependent of each other, and thus it is imperative for organisational managers to ensure that a system approach is adopted in implementing change. The eight stages are illustrated below.
Establishing a sense of urgency
Organisational managers should appreciate that their firms are not immune to environmental forces. Therefore, a culture of continuous environmental analysis should be adopted in order to understand the prevailing environmental changes. The environmental analysis will aid in understanding the existing opportunities and threats.
Sharma (2007) affirms that environmental analysis aids in stimulating a sense of urgency in implementing the desired change. VC Brakes was under pressure to rejuvenate its performance in order to prevent its collapse due to the prevailing environmental problems such as economic recession. Thus, the organisation’s managers should have appreciated the sense of urgency in implementing change.
Developing a guiding coalition
The process of implementing change is influenced by the knowledge and expertise of the steering team. Thus, it is essential for organisational leaders to ensure that the change process is undertaken under the guidance of an experienced group that should be comprised of different departmental leaders.
However, the initiative to implement change in VC Brakes was led by a section of managers, which limited teamwork. Additionally, some members in the guiding coalition did not collaborate in understanding the organisational problems faced by the firm. This aspect affected the formulation of the strategy to be adopted in establishing a culture of change amongst the firm’s employees.
Creating a vision
It is essential for organisational managers to ensure that all the internal stakeholders are guided the same organisational vision. In this case, some organisational managers in VC Brakes did not have a clear vision regarding improving the company’s performance despite the intense competition and economic downturn.
Communicating the vision
According to the Kotter’s model, success in implementing change is influenced by the degree to which the various internal stakeholders are integrated into the change management process. Thus, it is essential for managers to nurture a high level of employee involvement.
In a bid to achieve this goal, organisational leaders should integrate both top-bottom and bottom-top communication strategy. Furthermore, the guiding coalition should ensure that all the employees are informed of the importance of the desired change.
Eliminating obstacles
It is fundamental for organisation managers to identify potential obstacles in implementing change. An example of obstacle that managers should focus on entails resistance to change. Managers should understand the reasons behind the resistance. Some of the major sources of employees’ resistance that organisational leaders should evaluate entail the individual and organisational sources.
Establishing short-term successes
Managers should be concerned on establishing a positive attitude towards the desired change. This goal can be attained by establishing short-term wins, for example, by rewarding employees who have succeeded in implementing change. Rewarding employees is a fundamental element in fostering their motivation. Establishing short-term wins plays a vital role in eliminating uncertainty regarding the intended change.
Consolidating change
Kotter argues that managers should ensure that the attained successes are integrated effectively into the organisational system. Additionally, additional change themes should be adopted in order to enhance organisational change.
Despite proposing the strategies that the Engineering Services department was to adopt such as the TQM cycle in order to deliver high quality products to customers, the managers were not committed in ensuring that the production standards and procedures were observed.
Additionally, Ryan focused on ensuring that employees in VC Brakes developed a customer-centric culture. However, the organisation received numerous cases of employee complaints, which indicates a lukewarm approach in the employees’ commitment to implement the proposed changes.
Institutionalising the changes
Successful implementation of change can be evaluated by assessing the extent to which it has been integrated into the organisational culture.
Recommendations on the strategies that Ryan and Medved would have adopted in implementing change
An evaluation of the issues faced at VC Brakes illustrates two main challenges that Ryan and Medved experienced in implementing organisational change. These challenges relate to resistance to change and lack of collaboration by some members within the firm’s management team. Currently, organisations are operating in an environment that is undergoing a high rate of evolution.
Thus, organisational managers have an obligation to adjust their organisations’ management and operational practices in order to survive in the long term. One of the areas that the organisational leaders should focus on entails developing an effective organisational culture.
Subsequently, the process of implementing change should be guided by the desire to improve the organisational culture. In order to deal with the challenges faced at VC Brakes, Ryan and Medved should have considered adopting a number of strategies as evaluated herein.
Education and communication
Ryan should have adopted an empirical-rational approach in his quest to improve the VC Brakes’ performance. Yue (2008) asserts that one of the most effective models of empirical-rational approach of implementing change is based on the dissemination of knowledge and expertise. Therefore, Ryan should have focused on establishing an organisational-wide communication strategy.
This assertion means that all the departments in VC Brakes should have been involved in implementing the change. On the contrary, Ryan and Medved concentrated on the Engineering Services departments. Therefore, incorporating the top and lower level employees in the process of communicating change would have played a fundamental role in entrenching the intended total quality management system.
In a bid to reduce the opposing forces, Medved and Ryan should have concentrated on educating the resisting managers on the benefits that the organisation would gain by implementing change. By adopting an effective communication strategy, Ryan and Medved would have established a high level of trust and faith amongst the internal stakeholders.
Educating and communicating with the sources of resistance would have also improved Ryan’s understanding on the reasons behind the high rate of resistance amongst some managers hence improving the unfreezing process. Subsequently, Ryan and Medved would have formulated effective change management strategies. For example, the two managers would have been in a position to manage emotions amongst the resisting managers.
Therefore, Ryan and Medved should have invested a comprehensive amount of time and energy as VC Brakes’ change agents. One of the ways through which this goal could have been attained is by adopting effective leadership style. In this case, Ryan and Medved should have utilised their transformational leadership style in order to foster implementation of change.
Fostering organisational identification and collaboration
One of the major reasons that explain the high level of resistance to change amongst individuals in the VC Brakes’ management team is the lack of common vision. Some managers within the firm’s management team were in pursuit of personal interests, as the desire for status quo within the firm. This assertion explains their negative attitude towards the intended organisational change.
In order to deal with this challenge, VC Brakes should have focused on leveraging on the theory of organisational identification. Ryan et al. (2010, p.135) assert that organisational theory of identification ‘emphasises on three main organisational elements, which include feeling of solidarity, behavioural, and attitudinal support of the firm and the perception share by the various organisational members’.
Therefore, organisational identification is based on nurturing a strong organisational culture whereby all employees appreciate and identify positively with the organisation. This strategy would have enabled the organisation to eliminate conflict of interest within its management team.
Furthermore, Ryan et al. (2010, p. 135) affirm that organisational identification ‘impacts the employees’ level of satisfaction, their effectiveness, and behaviours’. Furthermore, Carmeli, Atwater, and Levi (2010) assert that a high degree of organisational identification facilitates the establishment of a strong link between the employees’ behaviour and their commitment in executing the assigned job or tasks.
Boros (2008) asserts that attaining organisational competitiveness is subject to the degree to which the organisation operates as a unit/ system. Thus, it is essential for organisational leaders to establish a high level of interdepartmental collaboration. In a bid to improve collaboration amongst its departments, VC Brakes should have invested in a project-based approach in its new product development processes.
The project teams should have been comprised of employees from different departments (Hermarij & Tineke 2013). This approach would have provided employees in different departments to participate in the firm’s production processes. Additionally, integrating the project-based approach would have enhanced interaction amongst the various employees, hence their information sharing capability.
Furthermore, organisational identification affects the extent to which employees interact with each other (Fuchs 2012). VC Brakes experienced a major challenge in its quest to implement TQM due to lack of cooperation amongst. One of the obstacles in implementing change entails focusing on a single unit in implementing change.
Thus, the organisation failed to establish an information sharing mechanism amongst the various departments, which promoted a culture of ‘finger-pointing’ and lack of collective accountability. Moreover, lack of collaboration affected the organisation’s innovative capacity adversely. Thus, the organisation’s capacity to attain synergy in its operation was affected negatively.
In order to deal with this challenge, the VC Brakes’ management team should have considered the organisation as a system. Thus, the firm’s management team should have adopted the 7S change management that focuses on the importance of understanding the complexity amongst key organisational elements, which include skills, staff, style, structure, strategy, systems, and shared values.
Jones and Brazzel (2012) assert that the 7S model highlights the multiplicity of elements in implementing organisational change. Therefore, Ryan and Medved should have adopted a holistic approach in implementing organisational change.
One of the aspects that the organisational managers should have focused on entails establishing the strategic fit between the intended change and the various 7S components. In this case, the two managers only focused on the Engineering Services department, which constitutes only one element of the organisation system.
Conclusion
The experiences at VC Brakes show that effective change management is a fundamental element in sustaining an organisation’s long-term performance. Failure to implement change might affect a firm’s competitiveness, hence its ability to survive in the long-term. Organisational managers should adopt a holistic approach in managing change.
Thus, organisational managers should develop an extensive understanding of the necessary change, which can be attained by adopting the unfreezing-moving/change- refreezing model. During the change process, it is essential for managers to ensure that all the departments are involved in order to minimise the likelihood of the change process being counterproductive.
This goal can be attained by communicating and educating employees on the benefits of the intended change. This approach will play a fundamental role in reducing resistance. Furthermore, organisational managers should ensure that employees develop a positive attitude towards the firm by nurturing a high degree of organisational identification and collaboration.
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