09 Aug FIANANCIALMAMGEMENT
Kotter (2007), summarized and listed that transformational change may fail, due to the unguided vision and lack of surge of urgency to change, poor communication channels, complacent behaviour towards obstacles in hindsight and lack of collaborative approach. He further stated that the change has to be anchored and fully embedded before defining the victory to avoid the risk of failure.
Further disintegrating the factors, no or lack of communication and teaming with others to resist the change seem to add the list of attempted change resulting in failure.
1)No Communication: Richardson and Keith (1996), cited that one of the crucial factor leading to the failure of efforts to execute the implied change, is due to no or lack of communication at the organizational level. Employees come to terms of learning the change being implemented, through outsiders than direct. The cases of inaccurate and lack of communication can be widely seen in organizations or companies opting for mergers and acquisitions, restructuring and downsizing processes.
Example: The current case of Deutsche bank highlighting 18000 employees being laid off under the restructuring program is a prime example of improper or lack of communication. The bank decided to curtail the derivative operating function by exiting its equity sales and trading business. Such a huge change being undertaken was not properly conveyed to the employees and staff, as a result of which some of them were laid off without any notice or deadline at their branches in London, New York, and Asia on Jul 08, 2019. Their shares fell down by 6% as the news of restructuring spread in the market. The organization announced its radical transformational change through media forum than giving priority to the employees of conveying the change message directly. Had the bank communicated properly and in a reasonable time the employees would have prepared themselves for the outcome of the change and its impact on their jobs (Forbes, 2019). The seemingly undergoing change is being doubted to come to fruition, basis the predictions by the analysts and economists and bank’s past history of poorly performing assets. If it fails to impress at any given point then this change may bring out a drop in their revenue as a global bank.
2) Team up with others: Unanticipated change is generally perceived as fearful and a threat to the current working culture by the employees. According to Palmer, Dunford, and Akin (2016), the idea behind teaming with others is a result of prevailing insecurities due to past experiences and attachment to the current working conditions as a comfortable routine. Employees and staff may find it difficult to understand the intended change if the management fails to deliver the message with a shared vision and full clarity. The intended efforts and lack of support due to resistance can lead to failure of the transformational change and its resultant outcome.
Example: Palmer, Dunford, and Akin (2016), share the case of Brtish Airways and Swipe card debacle in 2003, giving insight into the case of teaming with others and forming a union to stop or avoid the intended change. The British Airways staff went on unsanctioned and spontaneous 24-hour strike at Heathrow airport, London, against the introduction of swipe card system meant for monitoring their clock in and out time records. This system to be implemented as part of the broader restructuring plan had led to laying off of 13000 employees as recorded in the previous two years. The staff reviewed this change and introduction of technology as a manipulative tool and a possible threat which can be misused by their managers owing to lack of trust and confidence in them. Due to the emerging cuts and shortfall in ground staff, the departures were getting affected, stress and absenteeism due to the overload of work leading to sickness also saw the rise. BA’s vision was to bring in the modernization and adopt new technology to improve the current staff management processes and services, but the staff viewed this as a threat leading to salary cut or job cut. BA promised that it would not affect the staff salary or their shift hours plausibly but they couldn’t convince the staff as staff doubted its management potential to keep the promise. The staff called in for the spontaneous strike to show their resistance to waive away the system or change being executed.
BA, lost 40 million pounds and its reputation was affected because of the cancellation of flights and delayed departures, owing to the strike. As a resolution to this crisis, BA decided to delay the implementation process by a few months and offered pay rise based on the performance to the administrative staff. This example signifies that deploying change without complete support from employees and staff, if not conveyed properly can lead to failure of the intended change management.
References :
Forbes, (2019). Deutsche Bank Layoffs Hit New York Office.Retrieved from (online) https://www.forbes.com/sites/lisettevoytko/2019/07/08/deutsche-bank-layoffs-hit-new-york-office/
Forbes, (2019). Deutsche Bank’s Latest Restructuring Plan Fails To Impress. Retrieved from (online) https://www.forbes.com/sites/francescoppola/2019/06/17/deutsche-banks-latest-restructuring-plan-fails-to-impress/
Kotter, J. P., (2007). Leading change: Why transformation efforts fail. Harvard Business Review. Retrieved from (online) https://hbr.org/2007/01/leading-change-why-transformation-efforts-fail .85(1):96–103
Palmer I., Dunford R., & Akin G., (2016). Managing organizational change: A multiple perspectives approach (3rd ed.). New York, NY: McGraw-Hill.
Richardson, P., & Keith, D. D.,( 1996).Communicating Change. Human Resource Management (1986-1998). Vol 35, 2; pg. 69.
2)jinwoosung
“Top management, sales managers, peers, company policies and personal values of the salesperson all play a role in influencing a company’s ethical culture (Kokemuller, 2016).” Our company doesn’t have a separate sales department, but top management, such as president, VP’s and account managers take key roles in increasing sales of the company. Our company sells analytics and healthcare packages of doctors. One of the possible ethical issues I believe a management can face would be including doctors who could be their friends, family, or relatives in the package to help them attracting more patients. I do not know details of regulations and audits in terms of sales, but our management has built trust and credibility in the industry for being an excellent data-driven services.
Reference
Kokemuller, N. (2016, October 26). Sales Techniques vs. Ethics. Retrieved froml
3)maria
My company streams of funding come from different sources. As we are in an early stage, we can not survive from our revenues, therefore, other sources of income help us achieve financial stability. Our current funds come from:
· Private investors: We have multiple private investors from technological companies that want to invest in machine learning human capital to venture capitalist that find economic value in our value proposition.
· Loans: last quarter my company asked for a loan to increase our liquidity
· Company Revenue: currently our projects help us finance around 50% of our total costs.
· Cryptocurrency:
· Investments: we have several investments in other companies cryptocurrencies
· Own currency: our cryptocurrency is linked to etherium so as the value of etherium
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