Commercial concern

ABF Ltd, like every other commercial concern, has its cardinal objective as profit maximization. As observed from the case-study of the company, realising this objective had remain an illusion until the company started considering a number of necessary strategic changes to address a number of issues like poor quality control, ineffective communication, human relation problems, poor information flow, inefficient resource allocation, production inefficient and other issues. The targeted result of such changes should not be limited to higher turnover alone but also a combination of lower capital spending, larger market share and increasing growth.

According to Thornhill et al (2000), several writers (e.g. Chin & Benne, 1976; Kotter & Schlesinger, 1989; Jones & Bearly, 1986) have categorised the types of change strategies that may be adopted and this falls into three main areas: first, strategies that imply education and employee involvement activities; second, those that lead to a change in personnel; and third, strategies which necessitate changes to structures and systems.

The role of the employees in the successful implementation of these changes is not only strategic but also critical if the desired results would be realised, hence the need to carry them along.

To fully incorporate them appropriate HR strategies should be designed, adopted and implemented in relation to the focus of change, especially as the company attempts to pursue a planned approach to change.

The Human Resource activities likely to be associated with the proposed changes, according to Thornhill et al. (2000), include;

Education and Employee Involvement: Management development, employee training, quality group programme, joint consultation, employee communication like team briefings etc., performance management, employee counselling.

Changes in Personnel: Severance, redundancy programmes, recruitment and selection,

Changes to Structures and Systems: Changes to original structures leading to employee accountabilities, changes to - reward systems, performance management, career management, employee reactions structures.

A soft HRM approach is proposed for the implementation of the strategies as this will result to an emergence of a flexible workforce whose talents are nurtured and developed further to enable them make contributions to the achievement of a competitive advantage (Currie Donald, 2007).

The company should be concerned about communication and motivation in the workforce. People should be led rather than managed and be involved in determining and realizing the company's strategic objectives.

Generally speaking, major changes in ABF will imply employee education and involvement. As noted earlier, employees of ABF Ltd can pose a serious barrier to change success through their resistance to change which can occur in the process of putting the planned developments into action. Their reasons for such resistance could include trying to preserve the existing routine/culture, protecting their pay and employment, avoiding threat to job security and status, maintaining group membership, amongst others. To overcome this resistance, ABF should consider the strategies of one, involving the employees who are going to be affected by those changes at every stage of the decision-making process of the proposed changes: from the planning through implementation, control and reviewing. Two, keeping them informed of the happenings at each stage of the process thereby ensuring that everybody is aware of available options. These approaches could be through communication and education, participation, negotiation, coercion, and top management support. Each of the approaches is dominantly useful at different scenarios. For example, education and communication may be used when the proposed change requires new technical knowledge or employees are unfamiliar with the new idea and then need accurate information and analysis to understand the change. Participation is used when there is need to feel involved or the change design requires information from others or when employees have power to resist. Negotiation approach is adopted when employees has power over implementation or will loose out in the change. Coercion may be employed when crisis exists or initiators of the change possess absolute powers or other implementation techniques have failed. The top management support approach may be adopted when change involves multiple departments or reallocation of resources or when employees doubt the legitimacy of the change (Daft R. L.2006).

To successfully educate and involve the employees, Thornhill et al., (2000), citing other writers, suggested some methods. For example, Team-briefing and other downward communication methods can be used to provide uniform information and messages to employees aimed at educating or re-educating them. Creating quality circles, quality action teams, quality improvements teams, suggestion schemes, employee surveys and other problem-solving involvement and upward communication methods can be deployed to explicitly access employees' experience and skills and gain their cooperation and opinions. Also, consultation methods like joint consultation committees, working parties or groups, staff forums, etc can be used in providing information and testing reactions. Employee involvement through structural changes at job and work organisation levels can be realised via such methods as job redesign (job enlargement and enrichment), work organisation (team-working, autonomous working groups, bonus schemes), etc. The rationale of the above methods is to re-educate the employees, provide them with greater levels of motivation and satisfaction and also to empower them. Employee share ownership plans, profit-related pay, performance-related pay, bonus schemes, are amongst the methods of involving employees financial-wise. This is aimed at also re-educating them and providing them with the necessary incentives thereby promoting their efforts. Involving the employees in managerial style and leadership category aimed at providing support, encouraging positive working relationships and trust and minimizing barriers, can be achieved via methods like participative managerial style; Managers' visibility, accessibility and informality; creating credibility and ensuring that actions are always in line with key messages.

However, while reaping its benefits, the scope of the implementation of this strategy may have to remain open to questions and evaluation because of practical problems associated with its implementation. These problems are related to:

  • Organisational characteristics that negate employee involvement such as: one, the effects of company structures and scope for employees to influence the way they go about their job, and the extent of their sense of involvement. Two, organisational performance and the employee perceptions about the genuine intent of the strategy, job security, development prospects, advancement in the company and the prevailing employee relations climate.
  • The line managers who are central to the implementation may be feeling that the strategy is time-wasting to them or may not be convinced of its intended outcome. They may also be feeling that their freedom of operation is threatened or that their time investment is not properly compensated. They may lack the requisite skills needed to implement the strategies or lack resistant-management skills. The changing nature of many employees' psychological contract; and the multi-faceted nature of employee commitment are also some of the inhibiting factors.

Achieving a positive organisational cultural change in ABF Ltd requires a change in the basic assumptions upon which traditional cultural practices are based. Because each employee holds these practices in his/her subconscious mind, changing them may be difficult but definitely not impossible.

According to Lewis (1996), before an organisation can be transformed to a completely new culture, the embedded culture must be unfrozen and made more susceptible to change. The new culture would need to be stabilized and institutionalised. ABF should consider the following steps as typical frameworks for managing culture change: Surfacing actual norms (more or less equivalent to surfacing the culture); articulating new directions; establishing new norms; identifying culture gaps and finally closing the gaps.

A Bottom-up approach which focuses on incremental approaches of change development from the bottom up, tied to the company's 'critical path' (Beer et al., 1990) and spread through the company, is suggested. This approach can be supported by some kind of HR interventions like redundancy, reward, defining job roles, recruitment and selection, employee training and development, etc. However, these interventions are meant to support and facilitate cultural change rather than initiate the change and are to be aligned to the new culture and the general company strategy (Thornhill, et al. 2000).

Successful change in ABF's organisational structure will better be accomplished through a top-down approach since the champions for structural changes are always the middle and top managers who have expertise for administrative improvements. However, this approach does not suggest coercion as the most effective implementation strategy rather the company should consider strategies like employee education, participation and negotiation as most effective (Daft R. L.,2006). Except in emergent situations, the company should not impose structure change on the employees as their utter resistance may mean outright failure of the intended change. While organisational structure choice may be driven by strategies of cost-reduction and quality improvement, HR implications should also be considered as any change would likely affect the reward system, employee relation, performance, etc.

In ABF, changes in structures and systems and those that imply employee education and involvement can be managed through employee performance management strategy. There should be a clearly-focused and well defined rational mission for which employees' commitment would be sought. To do this, assumptions should be made that employees who 'sign on' to the company's goals are more likely to be effective than those who are apathetic or alienated. But without communicating the company's clear mission effectively to the employees, their commitment will be difficult. According to Legge (1995: 180), three commitment factors include ; a strong desire to remain a member of the organisation; a strong belief in, and an acceptance of, the values and goals of the organisation; and a readiness to exert considerable effort on behalf of the organisation'.

The employees should also be made more effective by linking their performance objectives to those of the company. For example, some employees who possess the potential to deliver a contribution specifically to company objectives may be selected and trained for the purpose of realising the objectives. A question of the extent of this may be answered by a quick review of the goal-setting theory which has a long history that has been substantiated over years (Locke et al., (1981) cited by Thornhill et al., 2000).

Involving employees in decision making can also enhance their performance can contribute to organisational change. This employee involvement is one of the most significant ways of gaining employee commitment as they are carried along through the change initiation and implementation process to enable them know why a particular change is being proposed, its coverage, how it will operate, the resources and training to be provided etc., a prelude to self-appraisal.

Performance can also be managed by assisting restructuring through the devolvement of decision making as according to Mabey and Salaman (1995)'s hypothesis, structural, cultural and personnel strategies, when aligned with each other and with the overall business strategy of the company, should result in employee behaviours consistent with the demands of the business strategy.

Linking employee rewards to individual performance (Performance-related pay) is another way of managing their performance. This, in spite of its perceived operational short-comings, has the facility to generate organisational change. The reason being that it has the power of sending across to the employees a message of culture change may be from 'business as usual' to 'the need for a higher level performance'. However, pleasing all people at the same time is impossible. There will be inevitable perceptions of unfairness in some individuals or groups. Problem of funding may also arise even as the company battles with cost-saving. Individual performance-rated pay may also make employees more reluctant to innovate and take risks which are in their set of individual performance objectives as nobody wants to threaten their pay award (West et al.1994). For this there might be the need to include innovation in the criteria for measuring performance. Another advantage to the company is its negative impact on trade unionism as employees becomes more individualistic in their award pursuits. Performance appraisal will also help in the individual employee's training needs and potentials. Be that as it may, the gains far out way the challenges.

Reward strategy can be employed in managing those changes that affect company structures and systems. According to Lawler (1995), cited by Thornhill et al 2000, this consists of three components: the company's core reward values, structural issues and process features. The stronger the alignment between them, the more effective the reward strategy will be in changing employees behaviours. The sorts of behaviours the company may want to encourage include: employee commitment to the company's aims; employee competence; flexibility; and the production of quality goods and services. There must be consistency between what the company says and what it does as lack of this may lead to employee discontent. In designing the reward system, emphasis must be laid on the degree to which the company believes in:

  1. Paying for performance (individual performance-related or team performance-related):-while the first has been seen earlier as a distinct message carrier, the second encourages employees to work more closely in teams as more emphasis are on employees cooperation with one another to get the job done with greater autonomy. A wider range of skills is developed in the employees and team members can interchange jobs more readily to meet demands.
  2. Equity; Employee acceptance is a major factor in determining the success or otherwise of reward strategy and any perceived inequity will lead to its lack and eventual failure of the strategy.
  3. Employees' sharing in the company's success as building an element of success sharing into the reward strategy will definitely promote a high level of employee identification with the pursuit of success;
  4. Employee involvement in reward strategy design and implementation as the chances of a reward strategy gaining employee acceptance is greater when they're part of its design and implementation; and
  5. Combining financial and non-financial rewards as its extent reflects a clear value position. Rewards are not only about financial as employees' needs can also be met by non-financial rewards like achievement, recognition, responsibility, influence and personal growth.

Also changes in company structures and systems can be strategically managed through employee relations. Creating a flexible workforce using core-periphery strategy where a core of employees is surrounded by peripheral workers may be adopted. This will help in saving production costs as ABF may end up employing greater percentage of her workforce from agencies at a salary about one-third lower than what is paid the core employees, with no additional costs like pension, NI and holidays. Since these workers are not direct ABF employees, their services can be called on to a greater or lesser degree to suit production needs.

Flexible workforce can be created via flexibility of working hours, implying that hours of workers can be arranged such that they can work at times when it best suits the need of the company. This includes employment of part-time and temporary workers as well as the traditional methods of overtime and shift working. Labour costs can also be minimized via the strategy of annualised hours (a system of averaging working time across a year), as this will enable the company vary work-hours according to business needs. There are two types of annualised-hours system, according to Blyton (1994). In one, employees work longer hours in busy periods and shorter hours when demand drops. The other is where the number of shifts rostered (X) in the annual schedule is less than the agreed maximum of annual hours (Y). Having to pay less overtime and not having to employ temporary workers result to reduction in labour costs and this will assist the company deploy resources resulting in increased productivity.

This strategy may be good to the employer as it isn't good to the employee. Core-periphery may be okay for those at the core but then expectations might be higher due to the exalted status. Greater demands like taking on a wider range of skills may be required of them. This may lead to multi-skilling strategy which also has obvious training and employment relationships implications. Periphery workers are the worst hit as they face job insecurity, unpredictability and are completely at the mercy of the company. Those on annualised hours may also be faced by unpredictability making it difficult for them to plan their leisure time and other extra-job activities.

Another good strategy is creation a unitary workforce which Salamon, (1998:5) cited by Thornhill et al (2000), described as an integrated group of people with a single authority/loyalty structure and a set of common values, interests and objectives shared by all members of the organisation. Some of the employer strategies that have implications for the way in which the employment relationship is regulated at a collective level include:

Employing recruitment and selection strategy to manage changes that may lead to changes to personnel base, a proactive, more broadly-based approach of fitting the job to the individual and then to the company rather than the other way round should be adopted. Selection basis should be against core competencies or skills and not on specific job demands.

According to Thornhill, et al., (2000), the relevance of recruitment and selection to strategically driven change in ABF should revolve round three concepts. One is adoption of Purcell's (1989) construction that viewed strategy as operating at three different levels starting with corporate strategy and moving through the strategic issues relating to organisation structures to end with functional strategies(i.e. human resourcing). Two is the acknowledgement of the existence of an 'downstream' on one hand and 'upstream' on the other hand of relationship between what happens at the functional levels and that of the corporate level. And the third is the advocacy that while various dimensions of human resourcing are being integrated with corporate strategy, it should also be integrated internally with each other (Mabey and Iles, 1993: 16-17). The implication is that since its being driven by the desire for quality and profit, all HR dimensions should encourage the recruitment of quality staff, investing significantly in the development of the company's skills base, defining and rewarding quality performance, involving employees in continuous improvement, etc. (Thornhil et al 2000).

This strategy may be expensive in terms of both money and time due to its emphasis on tailor-made procedures and as such may not be compatible with the cost-reduction strategy in ABF (Schuler and Jackson, 1987). The short-term perspectives, rooted in accountancy traditions and traditional patterns of corporate ownership may encourage managers to adopt quick-fix solutions (Storey and Sisson, 1993).

In conclusion, these management of change strategies have merits and demerits. For example, while the strategies in managing changes that imply employee education and involvement promotes greater sense of employee ownership, introduces fresh ideas into the company and has long-lasting effect, it is time consuming, slow, expensive and most likely to meet resistance through attitudes to change. Those for managing Changes in personnel may have greater impact and may be faster but will have to deal with the negative consequences for employees, and may possibly be expensive. Strategies for managing Changes to Structures and Systems may be longer-lasting; regenerating in terms of employee knowledge and skills, and tired systems; its challenges include, slower impact and it may be difficult to establish causal link changes to structures and systems and organisational change ( Thornhill et al,2000).

Being good at listening to staff may be a positive attitude of ABF.

Please be aware that the free essay that you were just reading was not written by us. This essay, and all of the others available to view on the website, were provided to us by students in exchange for services that we offer. This relationship helps our students to get an even better deal while also contributing to the biggest free essay resource in the UK!