In the stages of change model, there are a series of cycles that include, precontemplation, contemplation, preparation, action and maintenance. Within each and every function, there are tasks and responsibilities (Ernecoff, Keane, & Albert, 2016).These functions are considered as interrelated and continuous. The healthcare manager therefore needs to consider individuals may change their behaviors and actions in the shorted time may be challenging. This requires an allowance for individuals to work through the various stages.
In this case, the healthcare administrators may use the Stages of Change model in the development of procedures that support the patients and subordinates in behavioral modification (Gantiva, et al., 2015). This helps in initiating motivators that gives the patient’s ability to pass through recovery stages while modifying their behaviors. Healthcare administrators may therefore effectively use this theory in developing interventions that may impact the behaviors of individuals.
Want help to write your Essay or Assignments? Click here
Lessons
This approach aids in understanding the aspects of customary counseling that may not be effective in meeting the needs of these individuals (Koyun, & Eroğlu, 2016). Understanding the stages of behavior change, aids in the development of interventions that help employees to change their behaviors. Employers can use this approach to help employees identify and modify their actions that may negatively impact their productivity in employment.
Employers can also understand and enable the employees undergo the processes and stages of change. With this knowledge, the employers can encourage positive actions and practices that would maintain the behaviors of their employees. The Stages of Change model is a tool that can be incorporated by Human Resource managers in reinforcing positive behavior among unruly staff members within an organization.
Gantiva, C., Ballén, Y., Casas, M., Camacho, K., Guerra, P., & Vila, J. (2015). Influence of motivation to quit smoking on the startle reflex: differences between smokers in different stages of change. Motivation & Emotion, 39(2), 293-298. doi:10.1007/s11031-014-9449-7. Retrived From: http://search.ebscohost.com/login.aspx?direct=true&db=aph&AN=101471616&site=ehost-live
Koyun, A., & Eroğlu, K. (2016). The effect of transtheoretical model-based individual counseling, training, and a 6-month follow-up on smoking cessation in adult women: a randomized controlled trial. Turkish Journal of Medical Sciences, 46(1), 105-111. doi:10.3906/sag-1407-100. Retrieved From; http://search.ebscohost.com/login.aspx?direct=true&db=aph&AN=112148167&site=ehost-live
Want help to write your Essay or Assignments? Click here
Management accounting is also commonly denoted as managerial accounting. It is in practice the process of handing over accounting data belonging to the firm to its board or executives so that they can make progress reports and quality decisions for growth. How well-kept books are determines the success in the projects a company sets out to do and often results in the growth of the business or empire.
Consequently, accountants and other persons in the finance department are mandated with the task of ensuring that management accounting is properly done and that all records are and neatly kept. In line with international accounting principles, management accounting must ensure that accounts are audited before they are brought for review and analysis by management.
This practice of audit is crucial to the sanctification of erroneous accounting data in order for there to be accountability and credibility. The information computer in management accounting portfolio is often done with the aid of computerized management information system. It draws data from smaller transaction processing systems and often affects the way activities are performed in an organization. Here is a look at how the Toyota Company applies management information to conduct management accounting and how that benefits the company moving forward.
1. Introduction
1.1 Background on Change Management at Toyota
The Toyota Motor Corporation is a leading automobiles manufacturer headquartered in Toyota, Japan. The company boasts of the largest fleet of automobiles in the world with the brand even splitting to accommodate space entities affiliated to the mother plant. Toyota manufactures virtually all sorts of vehicle; from cheap salon cars to low consumption SUVs, Toyota even has a luxury automobile; the Lexus.
The company was founded by Japanese engineer Kiichiro Toyoda in 1937 and from its humble beginning; the company has grown over time to become the most successful in the automobiles industry. The Toyota brand currently sells its products in a host of nations outside Asia, especially Africa, Europe and the Americas. Due to her success in manufacturing, Toyota has grown internationally renowned. As shall later be discussed, the Toyota Production System is known as one of the most efficient systems globally (Yang, Yeh & Yang, 2012).
1.2 Why Toyota invests in change management
The fleet of cars under the Toyota name is all made in a unique way that takes advantage of low fuel consumption and comfort. Toyota is extensively involved in research and often releases models every few years. This is, however, as subject to consumer demand for its products. It is necessary to note that the company manufactures a large fleet of models and keeps remodeling and reselling to profit from every successful model. For this reason, every Toyota model in the past has had improvements.
The company encourages renovation and development as it incorporates the sleek and beautiful outline of its vehicles within a well-designed package that sees the consumer fork out less money but for more commodities. Fuel efficiency and concern over the environment are other factors that have made the company favorite among most Non-governmental organization (Helper & Henderson, 2014).
1.3 Factors that promote change at Toyota
Toyota’s motto is; ‘always a better way’. There indeed is a better way in the way Toyota conducts its policies and manufacturing processes. The company is very crucial on its need to cut waste. Using its esteemed Toyota Production System, the company ensures that they cut losses and always register a profit margin. Save for the time of the global recession, the company has consistently made profits.
That said; there need be mention that the company is sufficiently geared towards consumer satisfaction. The company has a declared aim to; “ever have better products ….To achieve our goal we design parts with good features, and standardize these for each region, spanning different platforms. This provides better efficiency and cost reduction, with the resulting savings used to improve products further.
This virtuous cycle for building better cars leads to sustained growth.” This is the working principle behind the production system that looks to cement the Toyota values into its work force. The company maintains a highly industrious work ethic that sees its employees always take their work with utmost seriousness and pride (Becker, Carbo & Langella, 2010).
2. Literature review
2.1 Employment culture and practices at Toyota
Toyota is aware of the need to maintain high credibility standards in its work force. This calls for the vetting and rigorous interviewing of its work force. However, the same hardly calls for bureaucracy and other measures than instigate discrimination. The company ensures that they get the qualified staff to undertake all the activities and functions required of them. This creates an industrious staff that is committed and dedicated to its role at the company. The success of Toyota has taken years of history, investment in product development and a strong culture.
What is more important is that the company has always learned from its mistakes and done better to improve an unfortunate situation. According to Sui Pheng & Shang (2011); even with challenges in testing that have led to the recalling of some of its major brands, the company has ultimately managed to maintain its customers. The Toyota brand keeps growing among its competitors due to the ability to utilize human labor and machine efficiency in a completely effective model.
Toyota’s work force has over 300,000 employees. This has made the company especially get great popularity and prominence across the world. Management accounting enables employees to justify their actions and often account for excesses every once in a while (Abdel-Maksoud, Cerbioni, Ricceri & Velayutham, 2010). Management thus takes advantage of the fact that most of the activities undertaken in the firm can be accounted for. Employees have to be accountable to management for their actions and activities in a company.
To achieve this in the best way, companies that have methods such as performance contracting often finds themselves on the receiving end with most employees being resistant to this form of accountability. However, as employees become used to their efforts and how to exercise their efforts towards growth, the company grows substantially. This leads to an increased appreciation for the management accounting practices and principles.
According to Yamao & Sekiguchi (2015); employees are often resistant to management accounting. This is because most persons are unable to account for the use of miscellaneous resources. Processes such as auditing and the confirmation of accounts can be really scary and thus often, they are afraid of them. Managers thus ensure that the systems in a working environment are enough to ensure that employees essentially account for their work.
Managerial reports, transaction processing systems, as well as registers, are some of the key areas of accountability in a firm. The use of these extensively can ensure that no single employee is complacent in their work. Toyota especially practices this form of accountability to have all employees reporting to a higher authority and that failure to prove productive can lead in dismissal. While employees may work under pressure due to such constraints, they need to be as practical as possible in what they do.
2.2 The Manufacturing process at Toyota
According to Hibadullah, Fuzi, Desa & Zamri (2013); the manufacturing process at Toyota can be underlined by one singular word; Monozukuri. Basically, the word stands for ‘manufacturing things’. It is a Japanese principle that decries complacency and advocates for consistent innovation. Toyota has been on the forefront of manufacture in Japan. The company has continued to uphold the Monozukuri culture thus verily coming up with new models and designs every financial year.
The investment in research and development is quite large. This allows for there to be consistency in development and innovation throughout the entire automobile industry. With time, accelerated development has lessened cost of production since the templates have grown in volumes. The expertise and experience of the engineers have also augmented. That is why the Monozukuri culture is not only for Toyota, but for Japan.
According to Helper & Henderson (2014) manufacturing at Toyota is one of the most efficient waste management practices ever developed by the organization. Indeed, the company is very particular about the lean manufacturing model. Toyota prides in manufacturing for the larger market. With very few luxury car models and brands; the concentration is on developing products for the larger consumer market without having to minimize on quality.
The balance between quality and volume is achieved by precise designing. The design process takes consideration of change factors such as engine capacity, steering capability, brake system improvements and the development of better safety measures with each model. All these changes are made without necessarily affecting the cost of the vehicle to a point that may make the vehicle unaffordable.
2.3 Lean Manufacturing Strategy
Toyota has redefined Monozukuri as the art of translating design data into finished products. This has been necessitated by the development of these designs through research. The company prides itself in understanding the market well. Researchers go to extend of even hiring houses around the target areas so as to monitor their movements, their taste as well as what would suite them best. Toyota car designers and engineers work together to put the beautiful car designs into perspective.
This is so as to have a great final product that is as well feasible to manufacture and importantly, leave room for improvement (Prakash & Kumar, 2011). While there may actually be little room for this improvement, the company has often written records with new inventions that have suited the market, against a tide that was not on their side. In essence, pulling market forces towards it has been a result that inevitably happened as a consequence of proper planning and implementation of the Monozukuri culture and principle.
The Toyota Production system is a designed working system that seeks to eliminate; muri, mura and muda. Muri is the overburdening of personnel with redundant work. It is singled out as one of the activities that lead to inefficiency in a firm. Mura, on the other hand, is the waste that accrues from activities that are done in excess. The system seeks to reduce these wastes in a number of ways as shall be later identified in this paper. Muda is the process of eliminating waste.
The system identifies seven types of wastes; waste due to overproduction, waste due to time on hand (wastage of time), waste due to inefficient transportation, waste that occurs in the processing itself, waste due to unutilized stock or property at hand, movement and defective products. Having identified these wastes, the system proposes methods to ensure that they are eliminated; therefore, the company can become more productive. The rest is a look at some principles that help in waste reduction and proper utilization of resources (Hibadullah, Fuzi, Desa & Zamri, 2013).
2.3.1 Kaizen
The Kaizen is a Japanese principle for continuous improvement. Toyota production system uses the Kaizen to eliminate wastes that result from time wasting, defective products and unutilized stock. Indeed, the kaizen is a very crucial value for most Japanese companies. Those who abide by it work with deadlines to ensure that they have products ready for a waiting market. Knowing that the desire for new and better automobiles is insatiable, Toyota invests in the redevelopment of models of very kind each year.
It is only inevitable that as this practice continues, the company finds it easy to come up with a new product to compete against other market leaders. There is indeed no market front that Toyota cannot venture. This is because they do not just enter the market to produce a similar product; they offer cheaper yet better products thus entirely convincing the consumer. With the spirit of Kaizen, the company always scales new heights in automobile development (Hibadullah, Fuzi, Desa & Zamri, 2013).
In the company’s hiring practices; Kaizen is also practiced. For instance; Toyota is very efficient in the company’s interviewing. Eliminating non-valuable processes in an organization is crucial to the growth and development of an institution. This is because; the non-value-adding processes are costly just like the operational expenses incurred by any other process in the organization or business. They impose an extra cost to the business yet do not offer any benefit. For instance, the process of hiring new employees is very elaborate. It includes vetting, sifting through applications and choosing the most appropriate candidate.
However, it may be unnecessary to have four or five interviews. Minimizing the interviews to one often makes the interviewing process effective. For efficiency, a company would choose to have aptitude tests to minimize the number of applicants to interview. Value addition thus does not have to have a lot of bureaucratic processes that may not be necessary. It is all about saving time and minimizing cost, effectively leading to efficiency (Senge, 2014).
2.3.2 Just in Time
Just-in-time policy ensures that products are delivered to the consumer on demand and within a specified period of time. Toyota believes that if a product is delivered late, then it is as good as not delivered. The same applies to all departments within the company; no one is allowed the luxury of time. Employees are consistently on their toes trying to meet very strict deadlines and often do so in order to live by this principle. The just-in-time policy ensures that the waste of time is eliminated for good.
It involves aspects of punctuality in job reporting, delivery of goods, development of new designs and even the completion of the manufacturing process (Prakash & Kumar, 2011). Essentially, these time limits are set even before the employee embarks on the task. Working to meet deadlines is a great policy that ensures that work is done in a convenient time. The result is that the company is successful in its undertakings and pushes the employment to higher limits. Even for the employees, the just-in-time policy makes better employees out of them as they continue to observe punctuality.
2.3.3 Jidoka
Jidoka is the intelligent automation of automobiles. As much as possible, Toyota cars are made to accept easy human instructions using levers and gears. With the introduction of the auto cars from the use of the manual cars, Jidoka was extensively applied. Indeed, the issue of intelligence in automobiles is a grey area, as cars are just machines. However, with time, these machines have evolved to understand danger situations, accident safety and haptic response.
In the process of troubleshooting erroneous machines and defective system, four steps are applied using the Jidoka principle; detecting the abnormality, stopping the entire production process, fixing the problem and finding ways to ensure that the problem never recurs. This ensures perfection to a great extent but mostly, it leads to elimination of the waste due to production errors that result in defective products (Prakash & Kumar, 2011).
Want help to write your Essay or Assignments? Click here
2.4 Quality challenges at Toyota Corporation
Toyota has been on the center stage of quality development using its Production System. The Jidoka principle of continuous manufacture ensures that with time, the company masters the art through practice. Toyota has however its fair share of quality issues and strategy failures has. These emanate from circumstances that the company has ever been challenged with dealing.
The most pressing of the company’s major quality concerns has to do with the product testing bit. Toyota has thus been on the receiving end of most critic auto magazines and general media over faulty brake systems and air bags. This has often led to the recalling of her products from the market. Only in 2010, the company has to recall volumes of its SUV models for the faulty brake systems. The company has since made efforts to rectify their manufacturing and testing errors with little success.
According to Dedoussis & Littler (2010), strategies put in place by Toyota to deal with her challenges have been communicated by the management on the various occasions the company has been called upon to account for their weaknesses. Mr. Akiyo Toyoda did mention in 2010 that the company was making plans to increase its testing facilities in order to accommodate larger volumes of test cases.
The company also thrives in the fact that it is market specific thus most of its problems hardly affect the entire market. This has been a contributing factor to the company’s growth over the years. Aside from that, the fact that the company has a great consumer appreciation and compensation policy makes it achieve great success with regard to popularity ratings. The company has thus dealt with all its suits and managed to ensure consumer satisfaction even with the defects and challenges with its models from time to time.
With the myriads of success and milestones covered by the company, it would be argued that the company would relent and bask in the glory of her successes. However, there are no limits to what the Japanese auto dealer can achieve. Indeed, with the introduction of relatively cheap automobiles, other manufacturers thought that the practice would be unsustainable. On the contrary, Toyota has continued to prove critics wrong. Not only has the company grown to be more successful, it has consistently led the way in automobile innovations.
Over the last decade, the car that was initially thought of as low class has continued to attract favorites across the globe. Toyota demonstrates that, with proper management accounting principles, any company can achieve success, even with the least amount of time possible. This success nonetheless gets addictive as it sets the benchmark for the next target. As long as the company continuously invests in bettering its products, there are no limits to the amount of income that can be accrued from the same (Zubir, Habidin, Conding, Jaya & Hashim, 2012).
3. Concepts of Change management at Toyota USA
3.1 History of Toyota USA
The Toyota Corporation maintains a subsidiary in the United States dedicated to North American sales. This subsidiary is refered to as the Toyota Motor Sales, USA Inc. The company was founded as an offset of the Toyota Corporation in 1957, and headquartered in Torrance, California. Initially, the American motor market had been controlled by three major market players, General Motors, Ford and Chrysler. Toyota as an entrant began by attempting market domination with a fleet of luxury cars under the brand ‘Lexus.’
The Lexus model was however not as successful in the United States as it had been in the United Kingdom. Sales for many Toyota brands were also low. The company had to come up with a strategy to guarantee market penetration. This was however not a significant challenge to the mother company as the models from Japan were more popular in Asian and European markets than any other Auto manufacturer. Capturing the United States market would mean a little more investment in research (Bunkley, 2016).
In the early 2000s, the USA subsidiary of Toyota Corporation released a new model into the market. The model dubbed ‘Prius’ to target a different market segment; the young drivers. The sleek design and the fairly low cost gained a lot of traction among American teenagers. The fleet of ‘Prius’ vehicles was so successful that Toyota leased the brand to a subsidiary manufacturer to work on developing the brand; which Toyota still owns to date.
The company (Toyota USA) managed to penetrate the American market using lean management and the incorporation of the concept of economies of scale. Although Toyota did not capture the high-end market and still does not make the most revenue out of the United States market, the company continues to research further and is driven by the principles that drive the mother company; Jidoka, Kaizen and Monozukuri. Toyota USA C.E.O; Jim Lentz has on various occasions hinted on the research into the next generation cars ongoing at Toyota USA. However, not many models have been presented by the company (Undercoffler, 2015).
3.2 Lean Management at Toyota USA
Toyota USA has continued to thrive and achieve unprecedented success due to its management accounting practices. The company has consistently devised new ways to improve productivity thus hardly make any wastage. Toyota can be praised for the great turnaround after the recession of 2009. The company posted a net loss of $4.2 billion but was soon able to emerge successful the following year. The management has been interchanged successfully every few year, but that has not changed the company’s management system.
Consistency in the management of resources and basic management accounting has enabled the company to be efficient in spending and utilization of resources. The trickle effect has been the growth of the company to have subsidiaries and affiliates. However, there has been a consistent focus on development more than management policies. Nonetheless, the management has been on the forefront in driving development agenda for the company (Muller, 2016).
Toyota can well manage its fleet as it ensures that no management wastes are recorded. Fleet management is important since it helps the company know how to maintain a consumer base as well as a consistent demand and supply ratio. The gap in demand is always met by supply. With time, the company has increased fleet production to a record high of 10.1 million in the 2013 financial year. In the automobiles business, mistakes cannot be condoned in the development of vehicles as they have to attract a particular design.
The company has a policy to get it right the first time. There is thus little if any room for improvement. The consequence is that the company develops a highly competitive model every time it releases the same onto the market. These models thus have very high demand even years after they have been released. This is very essential as it certifies that its models can often be recalled and resold to other markets if they do not meet the threshold demand for a particular market (Truett, 2016).
3.3 Impediments to Change management in America
While it is necessary to improve a system or process, this improvement does not come automatically. There is need to identify areas where the change process or areas to make the organization better can be isolated for investment. Opportunities for improvement are not easy to identify. There are many factors that impede the identification of the opportunities to improvement. However, two main factors impede the identification of opportunities for improvement.
The investment in these opportunities is first impeded by the financial cost of changing processes. There is significant financial investment involved in making processes efficient. There is also need for research to identify these areas for improvement. Such research desires that there be funds to actualize the same. This is why it is necessary to consider financial implications (Cummings & Worley, 2014).
The second impediment which is a major concern to the process of improvement is the presence of bureaucratic laws and procedures. Many organizations have very rigid structures that seem to be difficult to change or alter. This is why investment in the change process or identification of change areas may be unnecessary or impossible. Where the change process is impeded by a lengthy process, it has time constraints that may not be in the interest of the organization.
It is thus important review organizational processes and laws in order to ensure that they do not affect the organization’s ability to change. Change is important and as such, should be encouraged within the realms of company law and constitution (Senge, 2014).
3.4 Defects and quality problems at Toyota Motor Sales
3.5 Justification of the case study
Toyota indeed presents a lot of challenges to other corporations not only in the automobiles industry, but the rest of the world economy, as well. Toyota being a leading brand; it would suffice that some of the practices that the company boasts of be borrowed elsewhere. This has been demonstrated by the vast acknowledgement of the Toyota Production System as an international standard in management and overall production. The company prides itself in virtues that have seen it grow over the years.
The management and the staffs are indoctrinated into a tradition that appreciates the significance of hard work, determination and progress in everything they do. This has been the cornerstone behind the company’s success. The leadership style is impeccable, and the management has always been accountable for its decisions. Even when there are numerous complaints due to defects, the management never shifts blame to the production teams but instead owns up and cleans its house internally.
In management accounting, the only success that can be derived from the same has to be tangible evidence of growth in the area of concern. In production and automobile development, Toyota continues to set the pace among other leaders in car and motor developers. The central positioning of the company in a highly industrious economy; Japan also gives it an edge over the rest.
The company consistently manufactures models that fit a particular market. Toyota has specially been credited with the development of cheap brands to suit a low income economy, as well as suffice for the third world markets. Toyota’s efficiency in manufacture has enabled its brand of vehicles to be sold cheaper in comparison to other models, at the same category. This has especially popularized its brands for there is always value for money in the same and more so, the re-sale value for most Toyota cars still remains high.
Toyota is a great case study topic. It has been deemed one of the most successful companies of our time and continues to set the pace in automobile development. Aside from being a corporation that upholds high ethics and moral standards, the company prides itself in being the pioneer behind low energy consumption vehicles. This was achieved by development of electron fuel injection model that allowed the vehicle to run on the battery while the fuel maintained the battery charged.
Toyota models are thus mostly manual and affordable despite the effort in the technology used. Toyota has thus essentially lowered the production through consistent management accounting. This has with time been extended to the consumers who have in turn enjoyed reduced prices and affordable cars for them. It is the greatest illustration of proper application of management accounting principles.
The choice of the case study could not have been better. Despite the numerous challenges Toyota faces, it has proved to the world that none of these is insurmountable. With regular changes being made to their production process, the testing bit has often proved to be a challenge. This has especially occurred due to the sampling methods used in the testing process that have often been unfruitful.
This has led to the development of faulty fleets of models from the same plant. Toyota has nonetheless often taken responsibility about the matter and the company Chief Executive; Akio Toyoda has often come under fire, even as far as the company being accused of being ‘lazy’ in its testing policies. Nevertheless, the company has been ranked the 14th most successful corporation in the world as far as revenue development is concerned (Horngren et al, 2012).
It, therefore, should not come as a surprise that this would be the company to base the study on. Being that only a few companies across the globe match up to the prowess and success record of Toyota, it was an inevitable choice that would be inherently natural. More so, there is a need to appreciate that the company has ever been on an upward trend with its management seeing that no one has entirely exclusive executive powers for an entire decade. This has formed the basis for proper management accounting in the company thus pushing the corporation higher the success ladder.
References
Abdel-Maksoud, A., Cerbioni, F., Ricceri, F., & Velayutham, S. (2010). Employee morale, non-financial performance measures, deployment of innovative managerial practices and shop-floor involvement in Italian manufacturing firms. The British Accounting Review, 42(1), 36-55.
Becker, W. S., Carbo, J. A., & Langella, I. M. (2010). Beyond self-interest: integrating social responsibility and supply chain management with human resource development. Human Resource Development Review, 9(2), 144-168.
Bunkley, N. (2016). Carter: Toyota’s bullish on U.S. sales. Automotive News, (6720).
Dedoussis, V., & Littler, C. R. (2010). Understanding the Transfer of Japanese Management Practices. Global Japanization?: The Transnational Transformation of the Labour Process, 4, 175.
Helper, S., & Henderson, R. (2014). Management practices, relational contracts, and the decline of General Motors. The Journal of Economic Perspectives, 28(1), 49-72.
Hibadullah, S. N., Fuzi, N. M., Desa, A. F. N. C., & Zamri, F. I. M. (2013). Lean manufacturing practices and environmental performance in Malaysian automotive industry. Asian Journal of Finance & Accounting, 5(1), 462-471.
Muller, J. (2016). Toyota Recharges. Forbes, 197(7), 50-56.
Prakash, D., & Kumar, C. (2011). Implementation of lean manufacturing principles in auto industry. Industrial Engineering Letters, 1(1), 56-60.
Senge, P. M. (2014). The dance of change: The challenges to sustaining momentum in a learning organization. Crown Business.
Sui Pheng, L., & Shang, G. (2011). Bridging Western management theories and Japanese management practices: Case of the Toyota Way model. Emerald Emerging Markets Case Studies, 1(1), 1-20.
Truett, R. (2016). 5 minutes with … Ed Laukes, vice president of marketing, performance and guest experience, Toyota Motor Sales U.S.A. Automotive News, (6712).
Undercoffler, D. (2015). Toyota targets big leap in U.S. sales for RAV4. Automotive News, (6702).
Yamao, S., & Sekiguchi, T. (2015). Employee commitment to corporate globalization: The role of English language proficiency and human resource practices. Journal of World Business, 50(1), 168-179.
Yang, C. C., Yeh, T. M., & Yang, K. J. (2012). The implementation of technical practices and human factors of the toyota production system in different industries. Human Factors and Ergonomics in Manufacturing & Service Industries, 22(6), 541-555.
Zubir, A. F. M., Habidin, N. F., Conding, J., Jaya, N. A. S. L., & Hashim, S. (2012). The development of sustainable manufacturing practices and sustainable performance in Malaysian automotive industry. Journal of Economics and Sustainable Development, 3(7), 130-138.
Want help to write your Essay or Assignments? Click here
Want help to write your Essay or Assignments? Click here
Culture in Change Management
Introduction
The only constant reality in life is change. Change is not only observable on a personal level but also an organizational front. Nonetheless, managing change is a challenging task that it takes effort, energy, training, and time (Hickman & Silva, 2018). Change is also characterized by uncertainty and fear, and therefore most people and organizations prefer to maintain the status quo.
With the Internet Age introduced by the 21st century, maintain the status quo is harmful to business as it puts companies at the risk of losing their competitive advantage as witnessed by various companies such as Levi Strauss & Co., which is a textile company in the United States. Given that change destroys the familiar corporate culture and status quo, managers should be very careful when implementing change because people are inherently resistant to change. Understanding and applying the best change theory helps a company to implement change efficiently.
Want help to write your Essay or Assignments? Click here
Unfortunately, managers in most organizations rarely pay attention to the impacts of culture on organizational change, even when confronting major problems. Often, managers disregard the power of culture in maintaining the status quo as they regard culture as too mushy and soft to address (Kezar, 2011). Other managers think that a company’s culture adjusts itself once the new strategy is in place or feel that the costs for changing the company’s culture are considerably high as well as difficult to achieve.
Others yet, believe that they can avoid addressing their company’s culture until the company has implemented the change, which may include new policies and procedures. What such managers fail to understand is that when change is introduced in an organization, stakeholders, including employees, shareholders, suppliers, and investors, expect an intrusion or a disruption (Kezar, 2011). As such, the culture that these stakeholders are used to fights hard to defeat the change and maintain the status quo. Consequently, significant changes mean more intrusion and more disruption, and therefore, the culture works very hard to defeat the implemented changes.
Want help to write your Essay or Assignments? Click here
Purpose of the Study
As a result of the tremendous change that has come with the Internet Age, the business environment is constantly changing, which makes it important for managers to apply the right systematic strategies in limiting stakeholder resistance towards a positive corporate change process. The main purpose of this research paper is to investigate the significance of an organization’s norms, values, as well as principles in change management. This paper with pay special attention to one of the textile companies in the United States, Levi Strauss.
Significance of the Study
Levi Strauss & Co was among the leading textile companies in the United States. However, today the company experiences significant challenges in maintaining a competitive advantage over other companies such as L Brands, Inc., Abercrombie & Fitch, Co, Coach, Inc., American Eagle Outfitters, Inc., and Urban Outfitters companies among others. This paper is important because it provides useful information on how textile companies such as Levi Strauss & Co. can revolutionize the company through change management strategies while paying special attention to its culture.
Want help to write your Essay or Assignments? Click here
Research Questions
Some of the questions that this paper seeks to answer are:
What value does culture change create for the company and the customers?
Why do people resist change?
What role does culture play in change management, and how can a company limit resistance?
How has globalization created a need for change in the textile industry?
What are the advantages and risks of not making the necessary change?
What theories support the role of culture in change management?
Methodology
This paper investigates the role that corporate culture plays in change management. The methodology that is applied in this research study includes a literature review, interview, and descriptive studies. The materials used in this research paper provide detailed information about the importance of considering culture in change management. The literature review offers supporting evidence that links cultural consideration to successful change management within an organization. The descriptive studies offer information about the best practices during organizational change supported by theories.
The criteria that are used for the inclusion of the articles for both literature review and descriptive studies pay attention to the nature of articles, timeframe, keywords, and search area. The timeframe applied for the secondary resources is within the past 30 years. The nature of the resources used includes business news articles, peer-reviewed articles, and journals. The keywords used include organizational change, corporate culture, change resistance, strategic change management, and culture change.
The search areas include business websites such as the Society for Human Resource Management (SHRM)and the United States Department of Labor and Organization for Economic Co-operation and Development (OECD). The inclusion criterion helps in setting research boundaries for the literature review to ensure that the research paper is focused and the discussion is valid.
Want help to write your Essay or Assignments? Click here
Background information on Levi Strauss & Co.
Levi Strauss & Co. is a privately owned textile firm that was established by Levi Strauss about 164 years in 1853. For many decades, Levi Strauss & Co. was able to effectively compete as a clothing company known globally for Levi’s brand of denim jeans. This company was the first textile corporation to make the first blue jean across the globe, and since 1853, the Levi Strauss & Co. has heavily relied on innovation to come up with new products.
Throughout the 1960s, this company benefited from various U.S movements such as counter-culture groups and campus rebellion groups, which wore jeans as their uniform. During this period, sales doubled, and in three years, the company revenue almost hit $200 million. By 1979, the Levi Strauss & Co. had become the largest clothing industry across the world and had licensed its brand to be used in other products such as socks as well as shoes.
By this time sales had hit $ 2million. Levi Strauss & Co. had ventured in about sixty nations. During the prosperous years, Levi Strauss & Co. had fifty-three production facilities and thirty-two customer service centers in forty-nine nations. Some of these countries included Japan, Europe, South Africa, Argentina, India, Australia, New Zealand, and the Philippines.
Want help to write your Essay or Assignments? Click here
Nonetheless, from the beginning of 1980, Levi Strauss & Co. started to experience market difficulties, and although the demand for denim jeans stabilized, its profits flattened. Thus, to enhance distribution, Levi Strauss & Co. reached agreements with marketing companies such as Sears and J.C Penney, but the profits still fell by about 25% (Au, & Ho, 2006). In 1982, the company was forced to shut down nine production plants, which led to layoffs of 2,000 employees globally.
In 1885 Levi Strauss & Co. restructured the company and was taken private in a leveraged buyout for $1.45 billion. The company afterward introduced a successful upscale men’s pants line known as Dockers, which saw that sales increase to $4 billion. Since then, the company invested in adverts, campaigns, and stand-alone jeans boutiques to maintain sales. Despite these endeavors, the company still faces stiff competition from other leading companies across the United States.
Want help to write your Essay or Assignments? Click here
Interview
In an effort to provide the best analysis for the importance of culture in change management, a research interview was conducted with Levi Strauss & Co. CEO Mr. Chip Bergh. Chip Bergh has been the chief executive officer of Levi Strauss & Co. since 2011 and is also a member of the company’s board of directors. As such, the Chip Bergh is well acquitted with the company’s history, market trends in the textile industry, the corporate culture that guides Levi Strauss & Co., challenges faced by the company, and what needs to be done to ensure market competition.
Interviewer: As a textile company, who you say that Levi Strauss & Co. has a competitive advantage in the market today?
Interviewee: No.
Interviewer: Why is that?
Interviewee: The textile industry has undergone a great deal of change, specifically due to the high levels of competition and global sourcing. More so, the textile and clothing industry is now characterized by significant changes such as high volatility, short product lifecycle, high chances of impulse buying, and low predictability. Additionally, retailers across the world source for their textile supplies from companies that can meet their specific needs in time. This has been a huge setback for the company because it has failed to adopt the necessary strategies for its supply chain.
Interviewer: What do you think is the main hindrance in implementing effective change?
Interviewee: Our corporate culture. Levi Strauss & Co. is largely a bureaucratic corporation, which makes the implementation of change very difficult. Our employees, shareholders, and some managers resist change.
Interviewee: What do you think should be done?
Interviewee: The Company needs to change its supply chain and adopt one that enables it to optimize efficiency, minimize acquisition and delivery time, cut on operations costs, and improve product distribution globally.
Literature Review
According to a report given by OECD, many companies are driven to change because of several reasons today (Rothaermel, 2016). These factors include technology, globalization, market conditions, organizational growth, and poor performance. Whichever the cause, stakeholders in a company will always resist the change, which puts the company at risk because failure to adopt the necessary changes may influence the company’s ability to secure a competitive advantage in the market.
A survey conducted by the SHRM (2007), change resistance is one of the biggest reasons why most corporations fail to change. During change, a company may experience active resistance, passive resistance, or compliance, which is destructive to a company’s endeavors for change. Effective change management out to cultivate enthusiastic support from the stakeholders and to achieve this. The corporate managers have to understand how their corporate culture is affecting the change.
Want help to write your Essay or Assignments? Click here
People simply resist change because it disrupts their “way of doing things,” which can be defined as culture. Notably, culture in change management is a significant component in every firm that all corporate developers and managers in human resource departments must consider when making plans and executing any viable changes within an organization.
Organizational change management refers to a systematic and organized way through which corporations apply their tools, resources, and knowledge in an effort of facilitating change. According to Kneer (2013), change management can be defined as the strategy of systematic and planned chance that is achieved based on how the structure of the organization influences the culture of an organization and stakeholder behaviors.
The endeavor of change management implies that the change process demands proper planning and systematic management. Proper change management facilitates progressive, efficient, and effective implementation of new methods and systems within a firm. Change management also involves a company’s response to external stimuli when it cannot straightforwardly influence factors such as political, social, competitor’s strategies, legislations, technological advancements, and globalization.
Want help to write your Essay or Assignments? Click here
Pfister (2010) asserts that the culture of an organization refers to a shared understanding of a specific group of individuals in a specified context. The shared understanding originates from a set of principles, values, and norms that the individuals deem significant to them and, as such, align their practices towards those particular standards. According to Bhasing (2010), the principles, norms, rituals, and values of a company define its culture.
Typically, organizational culture refers to the profile of a group of individuals within an organizational context in regard to factors like standards, values, and behaviors. In the business world, culture defines the way things are done within a company and entails the fundamental patterns of assumptions that have been working for the company in the past and are considered valuable.
New stakeholders are inducted to embrace them while working with the organization. While change management purposes to take a corporation through various levels of development as stipulated by the goals put in place by a firm, several factors make a huge difference in determining the failure or success of change management tasks.
Want help to write your Essay or Assignments? Click here
Doppelt (2017) argues that people adopt and maintain certain cultures because of their personality, feelings of certainty, fear of failure, the impact of the change, the prevalence of the change, and the perceived loss of power in case of change. When a corporation is comprised of many stakeholders with a low self -concept, they are likely to resist the change because they feel that they may not be able to adjust to the change accordingly and be successful in the new system.
As such, they fight to keep the status quo and culture of the organization. Secondly, change brings feelings of uncertainty. Changes such as mergers make people lose jobs while the company’s revenue may take a turn to the worse. The uncertainty created results to fear and stress because people feel that they may lose control.
Corporations also fail to change because the stakeholders fear failure as they do not know how performance may be affected by a new system. People also resist change because it may impact their lives negatively and only welcome change that is favorable to them. The prevalence of change may also cause change resistance, mainly if it involves key departments. Lastly, people may fear change if it is associated with losing influence with the company.
Want help to write your Essay or Assignments? Click here
According to Hickman & Silva (2018), a flexible organizational culture limits resistance and helps people to adopt changes implemented in a new system easily. Company managers need to understand the relationship between culture and change management. One of the questions that corporate managers ought to ask themselves when orchestrating significant changes is how the existing culture and mindset are similar to the required set of behaviors expected to realize the change.
When the disparity is high, the company is at risk of not realizing its goals. According to Lewin’s Change Management Model proposed by Kurt Lewin in the 1950s, a company should apply three steps to achieve systematic and effective change (Ala et al., 2013). The first step is the Unfreeze stage, where the company prepares for change by purposefully changing the stakeholder’s mindset and behaviors towards a proposed change. During this step, the change managers should focus on breaking the status quo and eliminating fear and uncertainty.
Want help to write your Essay or Assignments? Click here
The second step is to change implementation. During this phase, the company implements a real transition. The success of this stage depends on how well the management creates the vision for change, communicates the change plan, develops a sense of urgency, builds a coalition, engages employees in decision making, and provides support prior and during the transition.
The last step, according to this theory, is refreezing. The company ensures that people embrace and implement new policies and procedures. During this stage, the management tracks the changes to ensure that the organization is stable again. The behaviors, norms, principles, and values of the company must be aligned with the new system.
Discussion
Currently, industries have adopted outcome-based strategies rather than input-based (World Economic Forum, 2015). The success of a 21st industry is measured through its outcome-based targets and its ability to connect with the significant teams across all functions. It is also measured through is the ability to find the right partners to form collaborative platforms and bridges.
With the current demand for speed, the textile company would also need to form meaningful alliances with the transport industries, including road, railway, shipping, and air transport. A collaborative ecosystem will require innovation, flexibility, and efficiency as its core strategic approach.
Want help to write your Essay or Assignments? Click here
These demands make it necessary for companies in the textile industry such as Levi Strauss & Co. as well as others in different sectors to employ the necessary changes to acquire a competitive advantage in the global market. Levi Strauss & Co. need to collaborate with suppliers that can supply raw materials promptly and at a low price. The company needs to access its culture and destroy the current status quo to adopt new supply chains that will be more beneficial to the company.
Conclusion
Conclusively, companies are prone to change due to poor performance, technological advancements, globalization, workforce demographics, organizational growth, and market conditions, among other factors. Nonetheless, regardless of the factor, people will always resist change as it disrupts and intrudes on their status quo. Based on Lewin’s Change management model, a company must systematically plan change around three steps, which include unfreeze, change, and refreeze.
References
Ala, R. D. (2013). Values as Predictors of Attitudes toward Changes. International Journal of Trade and Finance, 4 (5).
Amah, E. (2012). Corporate Culture and Organizational Effectiveness: A Study of the Nigerian Banking Industry. 212 – 229.
Au, K. F., & Ho, D. C. (2006). Electronic commerce and supply chain management: value-adding service for clothing manufacturers. Integrated Manufacturing Systems, 13(4), 247-255.
Bhasing, N. (2010). Change in perception of organizational culture after the merger: The Influence of Motivation, Acceptance, and Knowledge. University of Twente Press.
Doppelt, B. (2017). Leading change toward sustainability: A change-management guide for business, government, and civil society. Routledge.
Hickman, C. R., & Silva, M. A. (2018). Creating excellence: Managing corporate culture, strategy, and change in the new age. Routledge.
Kezar, A. (2011). Understanding and Facilitating Organizational Change in the 21st Century: Recent Research and Conceptualizations: ASHE-ERIC Higher Education Report, Volume 28, Number 4 (Vol. 155). John Wiley & Sons.
Kneer, C. (2013). Change Management Enhance the Ability to Survive. München GRIN : Verlag GmbH.
Pfister, J. (2010). Managing Organizational Culture for Effective Internal. Berlin: Physica-.
Rothaermel, F. T. (2016). Strategic management: concepts (Vol. 2). McGraw-Hill Education.
