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Volvo Management Case Study


Introduction Organizations are part and parcel of every society. This is because human beings are involved in the process of forming organizations with the aim of attaining certain objectives. In essence, human beings are social animals who have the tendency of organizing and ensuring that their affairs are managed within their anticipated objectives.

This is usually done in light of the complex and dynamic environment. For organizations to function there is need to have management. Management is the ability to plan and set down goals and objectives with the goal of ensuring that the set standards are realized within the available resources and opportunities. Organizational change

Change is a complex process. This is because it is more complex than human behavior. Thus, there cannot be a single specified approach which can be regarded as the solution to managing these changes. In essence, a change technique which is applicable in one organization may not necessarily be applicable in another organization.

Organizations are different in many aspects these aspects include the work culture, management and leadership styles, structure and design, employees and their expectations not forgetting the customers who are served within these organizations.

These factors which are dynamic in nature define the entire organizational platform. Thus, for a change to be implemented effectively, one should ensure that the set approaches with regard to the changes are congruent with the dynamics, complexity and the uniqueness of the organization.

What is change?

There is a common statement which holds the belief that there is nothing as constant as change. In this regard, there is need to establish what change means. From one perspective, change may imply dissatisfaction with what may considered to be the old and belief in the new.

Dissatisfaction arises from many aspects or sectors. These dissatisfactions may be associated with the perceived deficiency in the approaches which are in use within a given organization.

In this case, deficiency implies the inability of a system to respond to environmental pressures and the technological impacts. Consequently, change underlies a qualitatively different way of perceiving, thinking and behaving and to improve over the past and the present.

Essentially, change may be perceived in two ways. First, change may be conceived as a continuous and intrinsic to an organization. This means that the changes which are observed within an organization are minute though they are continuous over a given period of time as the organization grows and develops.

In this case, an organization is viewed as state of flux where the elements of its systems and subsystems are always undergoing subtle changes. These changes are minute though they account for major organizational changes which are observed after a given duration of time.

Secondly, change may be viewed as extrinsic and discontinuous. In this case, organizations are viewed as normatively stable structures and change perceived as disruptive, forcing organizations to modify, restructure or reconfigure.

In this case, certain changes occur abruptly and quickly while others take time to occur. In this case they are slow and can be anticipated. In this regard, organizations just like human beings have got certain thresholds for these changes.

Situations where the impacting forces are extremely forceful for organizations present cases where the organizations need to adjust. This is because when these forces are beyond the tolerance level of the organization then progress is usually at the mercy of these forces.

Some organizations are usually not able to adapt to these changes, while others are usually able to maneuver through these changes and come out strong. This is usually a consequence of the creative and drastic changes which are normally taking place.

Managing change

In order to survive and eventually prosper, organizations must have the mechanisms which monitor and evaluate the environmental dynamics which are playing out. This is a proactive measure which is based on the fact that there are times when these changes could be abrupt and forceful that the organization may not be in a position of adjusting to them in good time.

Thus, the ability to monitor and adjust to these changes in time is an important aspect which needs to be put in place in order to ensure that the objectives of the organization are realized. In essence, successful organizations are not organizations which believe in change per se, but rather they are organizations which are proactive when looming changes are observed.

Past success are important, however, what is more important is the aspect whereby the organization is privy to the fact that past success may not guarantee future progress or even success. Healthy organizations are organizations which are able to link up the past to the present, and the future with the present in dealing with change.

Continuity without change leads to stagnation, boredom and frustrations. Furthermore, stagnation is often associated with the decreased level or ability to adapt to environmental changes, ultimately leading to organizational crisis.

Being able to strike a balance with regard to the prevailing environment is a crucial aspect with regard to managing the changes which are desired. The process of managing change is known as coping with change. This process is not easy within any given organization.

This is until the process is characterized by change consciousness among the stakeholders within the organization. Change consciousness in this case focuses on focus, speed, boundarylesseness and goal elasticity.

Change consciousness is usually the understanding of the need or necessity for change. The fact that it is a continuous process entails retooling of strategy, process and people. This is usually done in light of rethinking about the process of having core competencies which are in line with the organization at hand.

Focus refers to the promptness with which the organization responds to internal and external demands and contingencies at all levels. In this case it represents speed in reaching customers, in being motivated and innovative to be able to meet the dynamics which are associated with the changes at hand.

Forces of change

Organizations can be termed as systems which exist within a certain context. In this case these systems exist within the context of an external environment which is characterized by a dependent relationship where they interact in order to grow and survive.

Any factor in the environment that interferes with the organization’s ability to attract the human, financial and material resources it needs, or to produce and market its services or products becomes a force of change. Internal to itself, a number of forces operate in the organization that could facilitate or hinder its functions, processes and actions.

Organizations as systems are usually subject to two types of forces these include the external forces and the internal forces. External forces are forces which affect the organization from the outside. These include political, social, economic and competitive environment. On the other hand the internal forces are those which affect the organization from within. External forces

Political forces; politics plays a key role when it comes to the formulation of policies which inform the operation of an organization. In this case, a political faction might not hold ideologies which favor a certain trend of affairs while another might hold views which uphold and sustain a given trend of affairs.

In this case, when a political approach is taken it depends on the views of the political class. For instance, the laws which are passed are usually influenced by the politics of the day. Thus this ends playing a key role regarding the politics of the day.

Economic forces; economy is a major cause of change. Present and the perceived future changes influence the decisions and choices which are made within an organization.

For example, fluctuating interest rates, declining productivity, uncertainties arising from inflation or deflation, low capital investments, the fluctuating price of oil, recessions and the lowering of consumer confidence have a marked impact on different economies, therefore, on organizations.

Technological forces; the global changes are usually driven by the technological advancements. This century has witnessed dramatic changes which have revolutionalized the approaches which are taken. The world is presently characterized by dynamic and dramatic technological shifts.

The technological shifts and changes particularly in the communication and the information and technology sector have played a key role in organizational changes.

The work place has changed and thus the organizations have also changed. This has resulted in having a different set of affairs with regard to the services which are offered. It is also worth mentioning that advances in technology have contributed to the development of economies.

Government forces; governments play a major role when it comes to changes which are being witnessed within any sector. Governmental interventions in the form of regulations also lead to change. Some of the influences which the government has include deregulations which are put in place by the government.

Deregulation is the lessening of the government rules and the process of increasing decentralization of economic intervention at the level of the state. Foreign laws always play a major role. Foreign exchange affects international trades which in turn affects organizations which are involved in these kinds of trade.

Volvo’s Management Revolt

Does the proposed merger between Volvo and Renault discussed in the case represent planned change or unplanned change? Briefly explain

In essence to change is to move from one state to another. In addition, to change is to move from the present to the future, from a known state to a relatively unknown state. In the case, of Volvo, the change is to move from the state of independence to a state of dependence.

This would come as a result of a merger between Volvo and Renault companies. There are different types of change. Planned change or developmental change is change which is usually undertaken to improve the current ways of operation.

It is usually arrived at as a consequence of a calculated change. It is aimed at achieving a certain desired output or performance and to make the organization more responsive to the internal and external demands. In the case of Volvo’s merger, it was a form of unplanned change.

This is because despite the fact that the change was based on the realization that the organization was realizing the objectives which it had set in terms of car production and sales.

The change was reactionary and it was intended to avert the challenge that Volvo was facing regarding the sale of cars. The main aim of this change was for the survival of the organization. This eventually led to giving the long term objectives of the organization secondary considerations which were not embraced by most of the stakeholders within the company.

What were the major personal and organizational barriers to organizational change which led Volvo to back out of the merger?

There are many factors which influence the process of change within an organization. In this case, there are some aspects which hindered the process from taking place. The major factor that hindered this process was the prevailing market conditions that were observed.

The employees who were against the merger leaked documents which indicated that Renault did not have a steady intention of a merger. In addition, the prevailing conditions within the Renault Company were not appealing. As an organization, Renault was facing harsh economic times as compared to Volvo. Thus, most felt that joining hands with Renault would not be a wise move.

Secondly, technological advancement was also an issue that arose from the merger. The technological ambitions of these two companies were not in tandem. This was characterized by consistent disagreements when it came to the joint work which was being done by these companies.

Thus, some stakeholders within the Volvo ranks felt that there was something lacking which hindered the process which was being done. Thirdly, there was government interference whereby the French government was not clear whether the company would be privatized on not.

Thus the Volvo group felt that not all issues were being tabled and this hindered the process which was under consideration. The decision to cancel the merger with Renault left deep division in Volvo and some accusations of betrayal and duplicity. What could Volvo have done differently to avoid some of the bitterness that resulted?

Communication is fundamental for any process of change to take place. In this case, communication channels were deficient. Communication was not clear and not everyone was privy to the process thus it was treated with a lot of suspicion. In essence, the leadership of Volvo could have carried out a survey from all the stakeholders to identify the major reasons and challenges which were being faced by this organization.

This would enable everyone to give their views and suggestions which would have paved way for a more inclusive approach in the decision which would have been made. Eventually, the process would have taken place based on mutual understanding.

Based on the information presented in the case study, what can we infer about the organizational culture at Volvo?

What comes out regarding the organizational culture at Volvo is that this is a company where communication is limited. In addition, not everyone is given an opportunity to air out their views reading the future of the organization.

As a consequence there is strife when it comes to make major changes within the organization. What can be inferred from this case study is that communication and consultation are invaluable assets when it comes to running a successful organization. Thus, in everything that is done within any organization, one should always seek to create an atmosphere which favors consultation towards a given objective.

References

Cummings, T. G., & Worley, C. G. (2008). Organization development & change. California: Cengage Learning.

Elsbach, K. D. (2006). Organizational Perception Management. New York: Routledge.

Harigopal, K. (2006). Management of organizational change:leveraging transformation. New York: SAGE.

Jackson, J. C. (2006). Organization development:the human and social dynamics of organizational change. New York: University Press of America.

Kotter, J. P. (1996). Leading change. New York: Harvard Business Press.

McLean, G. N. (2005). Organization Development:Principles, Processes, Performance. London: Berrett-Koehler Publishers.

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