Strategic Change Management: Motorola - Thinking Bookworm

Strategic Change Management: Motorola

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Introduction

??????????????? Currently, the world of business is facing different changes, which continuously challenging different companies in different countries in order to maintain their competitive advantage and their share in the market. ?The impact of globalization and the Internet, together with the different technologies ? and now, the problem of global economic crisis ? are continuously changing the different macro- and micro-environmental factors which affect the business environment and the industry which individual companies are operating. As a result, many companies, particularly those multinational companies are focusing on implementing different strategic movements such as acquisitions, mergers, application of advance technologies, restructuring and downsizing, in order to maintain competitive advantage, which in return add up to the growing climate of uncertainty.

??????????????? As a result, change is considered as constant in the world of business. As have said by Drucker (2007), change is normal and healthy for business, because it helps companies to be aware of simultaneous transformations and shifts about the entire structure and system of an organization, together with its culture, behavior and competency (Tushman and O?Reilly, 1997). Change helps organization to be consistent by considering the different development in the external and internal environment in the decision-making process, therefore, the actions or strategies to be implemented will help in order to use the company?s strengths, improve its weaknesses, to take advantage of the different opportunities and prevent or counterattack the risks related to threats in the environment. However, in spite of its importance, it is still considered as one of the most taken for granted processes (Balogun, Hailey and Johnson, 2008).?

??????????????? This paper will discuss and evaluate how Marks & Spencer approaches strategic change management by using different change models.

Background of the Company: Marks and Spencer

??????????????? Marks & Spencer is the largest retailer in the UK, become a limited company in 1903, with a total of 300 M&S company-owned stores, which sell clothing, footwear, gifts, home furnishing and food. Most of the products are sold under the private label of M&S ? St. Michael. M&S owns a total of 100 M&S stores in other parts of the world, such as Europe, Hong Kong and Canada. A total of 85 franchise stores are established in Europe, Australia, Bermuda, the Bahamas, the Far East and the Middle East (Funding Universe, n.d.). Currently, the company has a total of 68,000 employees and 286 stores and factors in Britain. It is serving more than 13 million shoppers and customers with its lines of products. During 2000, the company reported that a total of 85 million of sandwiches had been sold weekly (Berend, 2006).

??????????????? M&S started that Michael Marks opened his first M. Marks Penny Bazaar, which later one grew to 12 market stalls in Lancashire and Yorkshire. Later on, he decided to expand his business by partnership with Tom Spencer, to gain more capital of ?300. The first Marks and Spencer Bazaar store was opened in Manchester and by 1903, the company becomes public with 36 market bazaars and shops, which include 3 in London. Later on upon the retirement of Spencer and death of Mark, Simon Marks entered the family business with Israel Sieff, which resulted for the company to established 135 stores with 10,000 employees in 1927 and additional lines of products (Berend, 2006, 249).

Drivers Affecting Change in Marks and Spencer

??????????????? For a long time, Marks & Spencer is considered as one of the most popular and most successful businesses in the world. It had been able to show improvements and growth in terms of its sales and profits, together with its success in ensuring innovative growth and the market by jumping the bandwagon of globalization. However, for the past few years, Marks & Spencer is experiencing decline in growth. In 2001, it has been reported that the sales of clothing, footwear and gifts ? which are considered as the key to the recovery of the company had slumped 9.1 pc. or ?85m. In addition, the clothing market of the company has decreased from 1.9pc to 11.7pc in the past 6 months ? lesser than any of its competitors (Jackson-Proes, 2001).

??????????????? According to analysts, the said decline is due to the different changes in the environment. First, is the changing economic condition of the world, particularly Europe, which is considered as the largest market or the mother country of the company. There are many direct and indirect competitors who have already successfully entered the industry, particularly Next and Asda ? the company?s major competitors in clothing sales and Tesco ? company?s major competitor in the food products. These companies, unlike Marks & Spencer enable to foresee the growing appeal of cheaper products with high quality. For example, in terms of clothing, particularly jeans, premium brands, such as M&S are facing problems because, due to the economic crisis, customers tend to avail cheaper products with high quality (Wood and Finch, 2009).

??????????????? In addition, Marks & Spencer also failed on its innovation process, it mainly focuses on targeting its older customers. As a result, it had failed to capture the interests and attention of that younger group of possible customers who are holding strong influence towards the market. In connection, its competitors had already stolen its core business, particularly in the clothing sector, because of outdated fashion that it is offering. As a result, the overall brand image of M&S had become out of date and not in fashion. In addition, the company has also faced problems related to its overall image, because of the fact that in the past M&S implemented massive close of its stores, which resulted to huge job losses, thus the trust, anxiety as well as commitment of the employees and the possible employees had been affected. This is an important factor to be considered because human resource is a vital aspect in ensuring high quality of products and services being offered towards its end customers.

??????????????? As a result, for the last years, the company had experienced a succession of different changes in management as well as corporate structure, due to the massive decline in sales. Therefore, that company that is used to be a leading brand in terms of high quality food and clothing products had become an out-of-date and uncompetitive blur in the stock market of the UK.

Strategic Change Management in M&S

??????????????? There are different theories related to change management. These theories enable to show the different procedures and processes that are involved in managing change inside the organization (Cameron and Green, 2004). This theory pertains to change as planned change which was implemented by the upper level management. M&S used planned change in order to improve its performance, reframed shared perceptions, influence the future changes, at the same time, and adapt with the different changes in the external environment (Cummings and Worley, 2008).

Change Models

Lewin?s Planned Change Model

??????????????? The strategic change management in M&S can be explained with the use of Lewin?s Planned Change model, which is considered as the most popular change model. Lewin conceive change as a modification of different forces by keeping the behavior of the entire system in stable manner (Cummings and Worley, 2008). The model see behavior as a dynamic balance of different forces that are working in opposing directions by driving forces which facilitate change because they push employees in the desired direction. Restraining forces delay change due to the fact that they push the employees in the opposite direction. As a result, all of these forces must be analyzed, thus the model help to shift the balance in the direction of the planned change (Kritsonis, 2004 ? 2005). There are three steps involved in change process, which include: unfreezing, moving and refreezing.

??????????????? In the first stage of change management, the company mainly focuses on the different external factors in the environment which directly and indirectly influence the company. This includes those that have been tackled in the first part of the paper. The upper management started to realize the different challenges and risks that are related to the company. In this stage, status quo was maintained, the different processes, procedures and standards being implemented inside the company have been maintained in order to ensure, and ready the employees, from the upper level, regarding what to do in the future. The upper level management, which include the CEO, board members, department heads and other authorizes in upper level of the organization, M&S focus on motivating them to participate in the future changes, establish trust in order for them to recognize the need for change as well as their active participation in knowing what the problems are and brainstorm solutions in the group.

??????????????? Upon establishing continuous connection and relationship with the employees regarding the decline in the performance of the company, particularly in terms of sales and profits, in the end, M&S came to realize that maintaining the status quo is not advantageous for the company, thus it is important for each and everyone in the upper level management to apply changes, in order to improve the current situation of the company.? After the changes have been implemented, and the desired outcome had been achieved, the company proceeds to the next step, which focuses on sustaining over time, which pertains on the actual integration of the new values within the values and tradition of the company. The actions included in this stage are the reinforcement of new patterns, and institutionalizing them via different formal and informal mechanisms, particularly new policies and procedures inside the company (Kritsonis, 2004 ? 2005).

Lippit?s Phases of Change

??????????????? Another popular change theory was recommended by Lippit, Watson and Westley (1958) which further improved or extend the theory of Lewin. This model include 7-steps which mainly focus on the roles and responsibilities of the change agent, than the evolution of the change itself, at the same time, information is being exchanged in the entire procedure.

??????????????? First, M&S focus on diagnosing the problem, which mainly focus on its capability to handle different pressures due to the changes in the external environment. The company focus on the regaining of its high sales and profits and high share in the market as main motivation, while its main capacity focus on its brand, size and human resource. The change agent is the CEO of the company. It is important to consider that this procedure had been done by the company for 4 times, due to the changes of CEO because of the negative performance of the company.

??????????????? After these, action plans were developed, together with the strategies that have been developed. Under the plan of Chairman Luc Vandevelde, the strategies focus on:

• Selling own brand products;
• Focusing on ready meals and prepared food;
• Improving quality of clothes, which include style and fit;
• Introducing Per Una range by George Davies;
• Developing home and health & Beauty departments;
• Renovating more stores in faster manner for lesser cost;
• Reallocating selling spaces inside the stores.
• Developing store card and financial services of M&S;
• Cataloguing direct clothing;
• Opening continental Europe stores
• Selling Hong Kong stores for franchise; and
• Selling unneeded assets in order to acquire more return on equity and assets.

On the other hand, the strategy of Rose focuses on:

• Selling financial services (credit cards, loan, etc.) business to HSBC;
• Slashing strategic projects from 32 to 10;
• Focusing on the traditional customer segment: 35 ? 55 years old by offering high quality products at the right price;
• Focusing on quality and innovation in the food business;
• Establishing cozy stores in lesser cost;
• Lessening the number of stores;
• Launching new brands;
• Changing the supply chain by paying the suppliers less; and
• Cutting jobs. (Sagepub.com, n.d.)

It is clear that the chairman play a vital role in the change management; however, there are many experts that have been asked for opinions and advices in order to ensure that the actions being implemented in the company is on the right track. New technologies were implemented in order to ensure that all of the departments, units, together with the stores in different parts of the globe are communicating in efficient manner. Feedback is very important, because it enables the upper management to be aware of the outcomes of the strategies being implemented.

Kotter?s 8 Step Model

??????????? In order to explain the strategic change management in M&S, it is important to focus on the Kotter?s 8 step model. This model enables to address some of the power issues in making change happen, at the same time, it helps in order to focus on the significance of a felt that is needed for a change inside the organization and highlight the need to communicate and maintain the level of communication in high manner in the entire process (Nieuwenhuizen and Rossouw, 2009).

??????????????? The change effort by M&S, under the management of Rose, started by focusing on the critical need for change, by stressing that the existing state is weak. According to Rose, the inventory was not being managed in effective manner, the decision making was being delegated without accountability of sign-off from the upper level management, at the same time, and the customers are being attracted to newer, vibrant and more innovative competitors. As a result, he emphasized that change was critical and vital.

??????????????? After this, the chairman started the change process by coordinating with a core team which is consists of trusted and highly talented people that he had worked with, thus he already knew their strengths and capabilities. He brought different people in different departments and business units who included Executive Director of IT, Supply Chain and Property and the Executive Director of Marketing and Store Design. According to Rose, with the help of this team, they will be able to improve the current situation of the company.

??????????????? Next, Rose decided that it is not necessary to call in a group of consultant in order to analyze the current attributes of the market, which include the demographics, segmentation of the customers, industry analysis, competitor analysis as well as the restructuring of the organization. According to the chairman, these activities did not help M&S to go any further, which was evident from the prior management. These analysis and studies only added factors in complexity of change management. Instead of these complex and hard studies, he focused on Kawasaki?s mantra and Collin?s good to great or hedgehog concept. The chairman offered a simple, clear and communicable statement of the goals, aims and vision of his management. With this, it had helped in order to disseminate information towards the receiver of information in faster and reliable manner. In addition, the statements are easily understood, than using numerical or statistical data. This enables to show operational, simple, short and accessible guiding vision towards the employees of the company.

??????????????? After this, the chairman focuses on strengthening of the communication of message symbolically in order to support the point, at the same time, focus on the energy around the core direction.? For example, massive housecleaning ? due to the fact that there we no longer huge variety of subbrands in M&S?s shops, there are lots of signage, titles, posters on cardboard that are all cluttered in the shops. The company skipped delivered to all the stores, thus every single one of the signage and titles in the cardboard were tossed in the store. The result of the said activity helped in order to create a store that is more appealing, not just towards the customers, but the employees as fell. Thus, the message was communicated towards the customers. As a result, food halls were currently being decked out in matte steel refrigerators and shiny black tile floors in order to generate an ambiance which will make people feel good about buying premium products at high price, but of high quality.

The next process focus on changing down the entire DNA of the organization, not just by placing everyone in basic training, but enable them to sit on operational daily meetings up to the level of micromanagement in order to pertains on the conversation in more detailed on important points. Aside from this, incentive structures were also realigned in order to reward the service performance, instead of just focusing on the aspect of seniority, which helped in order to redefine the career progression path. Thus, it can help in order to focus on the importance of non-financial motivators. In addition, the entire workforce of the company was also put to different motivational seminars and training sessions, which mainly focus on relationship between employees and improving customer relationship.

In general, it shows that change model enables M&S to focus on the different important matters in change management. First, it helped them to recognize the importance of different external factors in their current and future performance. In addition, the company enables to take importance of the help and cooperation of different stakeholders, particularly all of those in the upper management, because they are aware and well informed of the changes, challenges and opportunities being faced by the company in their respective department.

Problems and Risked in Change Management Effort of M&S

??????????????? There are different factors or problems that have been encountered upon the implementation of change. One of which, is the money or the cost that are needed in order to cover the monetary or financial needs of the company in establishing new stores, renovating remaining stores and the continuous training of the employees. However, this was handled by the company by cutting jobs and selling assets ? particularly those properties that are no longer in use by the company.

??????????????? Another issue is the human resource, which is very important. They are greatly affected by the changes implemented by M&S because, particularly in the issue of cost cutting and job cutting. Their experiences in the company are very vital factor which affect their performance, which subsequently affect that of M&S. In order to prevent problems related to resistance to change, communications were opened by the management, which enables the upper management to communicate with the middle level management, then enables the second to communicate with the lower-level management. With this, it had helped in order to explain in in-depth and clearer manner the current condition of the company, and how change will be helpful in order to improve the current performance of the company.

Conclusion

??????????????? Change is considered as inevitable. This is particularly applicable in the world of business, specifically in today?s environment, where in there are different environmental factors which directly and indirectly influence the entire business environment and industry, which affect how a business operates or perform. Change is important in order to come up with the strategies and decisions that will help to maintain good relationship with the customers and other important stakeholders of the business. As a result, it is important to focus on the different development and transformation in both macro- and micro-environment in order to ensure that the company?s strategies are updated.

??????????????? Marks & Spencer is considered as one of the largest companies in the world, with long history of changes in order to survive the ever challenging environment. However, based on the analysis done in the case of M&S, it was found out that its failure to implement and manage change is the root of its current problem.

References

Berend, I. (2006). An economic history of twentieth-century Europe. Cambridege: Cambridge, University.

Balogun, J., Hailey, V. H. and Johnson, G. (2008). Exploring strategic change. FT Prentice Hall Financial Times.

Cameron. E. and Green, M. (2004). Making sense of change management: a complete guide to the models, tools & techniques of organizational change. Kogan Page Publishers.

Cummings, T. and Worley, C. (2008). Organizational development & change. Cengage Learning.

Drucker, P. (2007). Innovation and entrepreneurship: practice and principles. Butterworth Heinemann.

Jackson-Proes, A. (2001). ?Trouble deepens as Marks & Spencer sales decline? (July 12). Telegraph. Retrieved 11 November, 2010, from www.telegraph.co.uk.

Kritsonis, A. (2004 ? 2005). ?Comparison of change theories?. International Journal of Scholarly Academic Intellectual Diversity. 8(1).

Nieuwenhuizen, C. and Rossouw, D. (2009). Business management: A contemporary approach. Juta and Company Ltd.

Sagepub.com. Change management at Marks and Spencer. Retrieved 11 November 2010, from http://www.uk.sagepub.com/millward/files/slides/Chapter5_notes.doc

Tushman, M. and O?Reilly, C. (1997). Winning through innovation: a practical guide to leading organizational change and renewal. Harvard School Press.

Winch, Z. and Finch, J. (2009). ?A new face, but the same old problems at Marks & Spencer? (November 22). Guardian. Retrieved on 11 November 2010, from http://www.guardian.co.uk/

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