managing change in ion july assessment

8/4/2019 Managing Change in ion July Assessment

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Managing Change in Organisations

CONTENTS PAGE:

1. (a)Significant organisational change. (2-3)

(b) Drivers for change. (3-5)

2. (a) Process of change. (6)

(b) SWOT Analysis of change. (7-9)

(c) Seven Ss. (9-10)

(d) Kotters steps for transforming organisational change. (10-11)

3. (a) Implementation of the change process. (13-15)



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(b) Managing resistance to change (15-18).

4. Assessment of the extent of change (19-20)

5. Bibliography. (21)

QUESTION 1.

I work for one of the most reputable airlines in Nigeria. Since inception,

the airline has been known for its excellent customer service delivery

and its high standard for safety. The airline was partly owned by a

foreign investor who had the majority share of the airline and the rest of

the shares were held by indigenous business men. The airline observes

and maintains the global aviation safety requirements and it operated

domestic, regional and long haul flights to Johannesburg and London.

It’s was the first airline in Nigeria to become 100% E-Ticket compliant. It

was also the first choice to travel for majority of air travellers and the



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corporate world. The airline carried out its operations from the

International wing of the airport in Lagos. This made it easy for transfer

of passengers who had connecting flights outside Nigeria. This was also

an advantage for the airline as passengers with connecting international

and regional flights on other made airlines made us their first choice

because of the ease and convenience it gave them.

In 2009, a directive came from the Ministry of transport for the airline to

relocate its domestic operations to the new Terminal 2 (the newly built

domestic airport). The airline refused citing that the Memorandum of

Understanding signed before operations commenced gave them the

permission to operate from the International wing and they went to the

court. While the case was still pending, the business class lounge of the

used for the domestic flights was demolished by the airport authority.

The airline was forced to move its domestic operations to the new

Terminal 2. This caused untold hardship for the connecting customers

as the ease and convenience they enjoyed wasn’t forthcoming anymore.

Transfer of these passengers became hectic because of the distance

between the two airports. On the 19th of May 2008, the foreign investor

announced the sale of their shares stating the dispute between the

airline and the Ministry of transport as their grounds for sale.

The employees thought that the drama era of the airline was over little

did they know that more was coming. When the sale of the shares was

announced, the auditors went through the books and it was discovered

that the books of the airline was in huge deficit. The management had

been borrowing from the banks to run its operations and pay salaries.

This huge deficit and debt can be said to have been caused by bad

decisions made by the management and misplaced priority. The first



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signs were the inability of the airline to keep to its schedules and this

caused a lot of delays and cancellations. Some of the aircrafts had to be

returned because the lease for the aircrafts couldn’t be renewed. The

airline couldn’t maintain its schedule and this also caused a lot of

dissatisfaction to the customers. There was a drop in the passenger load

because of the re-occurring delays and cancelations.

Listed below are a few drivers that led to the initiation of the change

process in the organisation.

INTERNAL DRIVERS THAT LED TO THE CHANGE PROCESS:

1-MACHINES AND EQUIPMENTS: The number of aircrafts the airline

had was not enough for it to operate to its optimum. Secondly, the

schedules these aircrafts had to operate were so much, and in most

cases the aircrafts will have technical issues and will be unable to

operate. This usually led to serious delays and cancellations. The

computers and work systems were either obsolete or working below

minimum capacity.

2-FINANCIAL MANAGEMENT: The organisation was not making

enough money to manage its operations and also pay its employees.

The shareholders were also not happy with the way the organisation

was running. Thus there was the need to make the organisation

profitable.

EXTERNAL DRIVERS THAT LED TO THE CHANGE PROCESS.



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1-COMPETITION: The aviation industry is a highly competitive industry

and the inability of an airline to fulfil its obligation means that business

moves to its competitors.

2-CUSTOMER SERVICE ISSUES: Due to the fact that the airline could

not fulfil its obligations to its customers because of its incessant delays

and cancellations, there were a whole lot of customer service issues and

loss of customers to other airlines.

The focus of management changed to repositioning and restructuring

the finance and profitability of the airline and also finding a buyer for theshares that were up for sale. On the 9 th of January 2009, the airline

suspended its long haul flights to London and Johannesburg to be

effective from the 29th of January 2009. This was the first step in the

restructuring and repositioning process by management. Staff strength

and flight schedule was reduced by 30%.

On the 2nd of June 2010, the airline was acquired by a debt-buy-over

deal by the current chairman of the airline.

QUESTION 2.

The change in ownership of the airline led to a change in management.

The new management with the middle level managers came together in

a brainstorming and strategy session to analyse and strategize on how

restructure and re-organise the airline. At the brainstorming session, the

following was discovered:

That the airline was barely making enough money to manage its

operations.



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The airline had just a few aircrafts for the domestic routes but had

so much flights on their flight schedule

Flights had to be cancelled, merged or delayed due to limited

aircrafts.

Due to these flight disruptions, there was a huge decline in

customers.

The airline was heavily indebted to the banks and suppliers such

as the fuel suppliers.

The employees’ salaries were always paid late. This was one of

the major reasons for the indebtedness because money had to be

borrowed to pay salaries.

Also a SWOT analysis was carried out by the managers. The essence of

the SWOT analysis was for managers to list out the following:

1. The strength of the airline and focus on it.

2. The threats that the airline was facing and to determine ways to

minimise this threats.

3. The opportunities available to the airline and take the greatest

possible advantage of the opportunities.

4. The threats facing the airline and how to address and eliminate

these threats.

The outcome of the analysis is listed below:STRENGTH WEAKNESS OPPRTUNITIES THREATS

Employees Excess debt

burden

Large market High cost of

aviation fuel

Customer

service

Misplaced

priority on

Goodwill from

corporate clients

Insufficient

aircrafts



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spending by the

management

The only

Nigerian airline

that has passed

the IOSA audit.

Misappropriation

of funds.

Unimaginable

flight disruptions

Technology Poor

understanding of

the market

Brand Limited access

to funds

Its

consciousness

for safety

However, the major crisis the airline seemed to have been facing was

facing was the lack of funds to run the day to day operations of the

airline. With the SWOT analysis, the managers were faced with the

challenge of developing strategies and tactics best suitable for the

airlines’ operation. They also had to come up with a new focus, vision

and mission statement for the airline. The new focus of the airlinebecame “to dominate the domestic and regional markets”. The new

vision became “being the leading African airline with exceptional

experience”. Also the new mission of the airline became constant

delivery of quality service that exceeds customers’ expectation and

providing employees the proper work environment build careers that

they enjoy and achieve excellence.



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There was also a need to restructure certain arrears of business. The

major area that faced restructuring was the finance department. The

finance department was split into 2 (the finance department and the

treasury department). Certain departments were merged for seamless

operations. Role profiles and core-competencies were redefined for

every employee.

The final step was re-assessing the operations of the airline and how to

restructure it to deliver quality service to customers. The first step was to

increase the airlines’ fleet of aircrafts thereby increasing frequency of

flights to various destinations. There was also an increase in the

domestic and regional routes. The airlines’ website was redesigned for

easy access with required information concerning traveling.

The SWOT analysis is one of the models of change an organisation canuse when it going through a change process whether the change is

planned and intentional or unplanned and unintentional. It can be said to

be a systems theory for planning change. Systems theory is concerned

with understanding relationship, structure and interdependencies. It

looks beyond the organisation, as a closed internally focused system. It

examines organisational interactions with other systems in theenvironment and how this affects the way it works and performs. An

organisation is affected by social, economic, political and other changes

(RDI 2011a).

The SWOT analysis despite its being flexible and simple has its own

limitations. The analysis is vague as it does not give an idea of answers



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the managers should look out for despite the fact that it provides the kind

of answers to be asked while strategizing. The managers may have

difficulty in identifying the elements of the analysis (an example being

customer service as a strength which might in truth be a weakness for

the airline). Managers have to understand the environment in which it

operates to enable it function effectively and be competitive in the

market that it is in. Change is a process that cannot be avoided if it plans

to match the environment it operates. However there are other models of

change that can be used in strategizing for change. The Seven Ss

Model (RDI 2011b) describes the role played by systems within an

organisation. This model describes an organisation as an interconnected

series of elements; each element starts with the letter S. The model

emphasises that the Ss are mutually interdependent, alerting the change

strategist to the need to co-ordinate the whole organisation in change

initiatives. The seven Ss are as follows.

1. Superordinate goals: This is the aspirations of the organisation, itsbeliefs, principles and aims that will help it work towards achieving

its success.

2. Strategy: The plan set in place to help it achieve its intention and

how it plans to deal with the external factors such as its

competitors and the market.

3. Structure: The way the organisation is built, how it operates, itsplanning process and decision making process.

4. Systems: The internal process the organisation uses to carry out

its activities.

5. Style: The culture of the organisation and a reflection of the people

within the organisation.



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6. Staff: The workforce of the organisation. It deals with the Human

Resources of the organisation, its abilities, competencies and

policies.

7. Skills: Describes what the organisation is good at as an entity.

John P. Kotter (2006) identifies eight steps to transforming an

organisation. They are:

1- Establishing a sense of urgency

Examining market and competitive realities.

Identifying and discussing crises, potential crises or major

2- Forming a Powerful guiding coalition

Assembling a group with enough power to lead the change

effort.

Encouraging the group to work together as a team.

3- Creating a vision

A vision to help direct change effort.

.Developing strategies for achieving the vision.

4- Communicating the vision

Using every vehicle possible to communicate the new vision

and strategies.

Teaching new behaviours by the example of the guiding

coalition

5- Empowering others to act on the vision

Getting rid of the obstacle to change.

Encouraging risk taking and non-traditional ideas, activities

and actions.

Changing systems or structures that seriously undermine

the vision



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6- Planning and creating short-term wins.

Planning for visible performance improvements.

Creating these improvements.

Recognising and rewarding employees involved in the

improvements.

7- Consolidating improvements and producing still more change.

Using increased credibility to change systems, structures

that don’t fit the vision.

Hiring, promoting and developing employees who can

implement the vision.

Reinvigorating the process with new projects, themes and

change agents.

8- Institutionalising new approaches.

Articulating the connections between the new behaviours

and corporate success.

Developing the means to ensure leadership development

and succession.

The change process in the organisation is still on-going and as new

situations arise, new strategies are put in place to handle these

situations.



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QUESTION 3.

Putting the change process into action is the next step after planning

and strategizing for changes. The management in implementing change

made the following decisions.

1-Efforts will be made towards enhancing the further knowledge and

skills of employees.

2- It also initiated was the purchase partnership negotiation with fuel

marketers to mitigate flight disruptions. The outcome of these



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discussions will be a further boost schedule integrity and improve on

time performance.

3-the airline will continue to employ global best practices in its day-to-

day flight operations, maintenance and management of its fleet with its

pool of well trained and qualified engineers and professional manpower

supported by expertise from technical partners who provide the technical

support that ensures that safety is not compromised.

Also employees were enjoined to participate in the on-going change

process for a successful implementation of the change strategy. Part ofthe strategy implementation led to the suspension of vacation leave of

employees. There was also zero tolerance for employees not committed

to the change. Employees were expected to act as the “owners of the

company” by controlling any wastages & miss-use of company

properties. They also asked to grow the culture of high quality service

delivery to its customers. Emphasis was laid on bringing back customerservice satisfaction to the customer. Fuel cost has to be controlled and

any loop hole for abuse has to be identified and fixed. Finally, salaries of

staff will be paid on time.

Implementing change on paper and implementing change in actual fact

are two different scenarios. For the airline, the actual implementation of

all the plans seems to be moving slowly. The major achievement since

the takeover is the acquiring of more aircrafts, increase in flight

schedules, the opening of new domestic and regional routes. Managing

these new routes became problems and was flights to those routes were

stopped. In aviation, flight operation is the key to the survival of the

business. This is where funds are generated for the airline. It is



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expected that the airline will give its customers quality service. Quality is

inextricably linked with customer satisfaction today. Strategies such as

the learning organisation, knowledge management and business

process transformation are all based on the principle of continuous

improvement. The mark of a 'quality' company is viewed by customers

as one that is continuously improving. The Kaizen method of continuous

incremental improvements is originally a Japanese management

concept for incremental (i.e. gradual and continuous) change (i.e.

improvement). Kaizen is actually a way of life philosophy, assuming that

every aspect of our life deserves to be constantly improved. The kaizen

philosophy lies behind many Japanese management concepts, such as

Total Quality Control, Quality Circles, small group activities and labour

relations. Key elements of Kaizen are quality, efforts, and involvement

with all the employees, willingness to change, and communication (RDI

2011c.) Quality in service will mean flights will minimal or no disruptions

but this has not been so as the process of controlling fuel costs andfixing loopholes had become so technical. The suppliers of aviation fuel

now supply fuel on a cash and carry basis however the process for the

release of funds for the fuel is tedious as it has to go through the finance

department and treasury department before approval.

Due to these incessant delays, there has been a drastic drop of

passengers and revenue for the airline has dropped. Instead of the

management reviewing the issues and look for a better way render

quality service to the customers by reducing or eliminating these delays,

fares were increased and this also led to a further drop of passengers.



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There has been little or no training for the employees. Only in-house

training are organised for the employees and this is even minimal.

Training of employees on how to render quality service is very essential

in a service delivery organisation. With the new management, it was

hoped that the problems that the airlines had previously encountered will

be over as money will be injected to help with the operations of the

airline. This has not been the case as things have returned back to

status quo and if the necessary steps are not taken, the airline will go

back to the way things were before the takeover.

MANAGING THE RESISTANCE TO THE CHANGE IN THE

ORGANSATION

Managing change is fundamentally a people issue. In every organisation

there is usually a resistance to a new change. According to Katherine

Kane (2005) “Managing change is about motivation and influencingbehaviour, about breaking old habits and attitudes, and about creating

an environment that’s conducive to embracing the new. It is human

nature to resist change and one of the biggest causes to resistance to

change is behaviour and attitude of those introducing the change and

the managers seeking to implement the change. Managers need to

avoid making the common mistake of assuming that because they havetold people what they want to happen, that it will happen. There is also

the need to understand why employees resist change and address such

resistance as it will be helpful in improving the performance of the

change strategy.



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There were some resistance to the change in the organisation. Some of

the reasons for this resistance were

1. Fear of the unknown: Employees were uncertain about the security

of their jobs with the takeover by the new owner. There was the

fear that there will be a fire at will policy.

2. Increasing workload: The new change was going to bring with it

more work for the employees. Due to the cut down of staff strength

by 30% at the initial stage of the change process, there was also

the fear that the employees will be over worked.

3. Scepticism and want to be sure that the new ideas will be sound:

The aviation industry is not like any other business. A simple

mistake can lead to hours of delay and most of these delays are

reactionary. The new ideas and process being introduced will have

to address the issues of the operations of the airlines to reduce or

eliminate the unnecessary and unwarranted delays.

A lot of people resigned at the beginning however management

stated that more staff will be recruited even though this is yet to be

fully implemented. The cancelled leave for staff was re-instated for a

few months and then cancelled again. The middle level managers

were however mandated to deal with whatever resistance that will

occur in the departments that they supervise. Those that couldn’t

cope with the new workload resigned and currently no one has been

recruited to replace them thus further reducing the number of

employees.

Secondly, the depression of the economy has not helped the employees

as there are no other jobs to move on to thus employees hold on to the



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jobs that they have. Welfare for the employees especially the ground

service staffs in the outstations has gone to zero level. A lot of these

employees have been mugged on their way to work as there are no staff

buses to take them to work.

Employees have been asked to act as owners of the organisation but

what seems to be the case is that everyone is working for their end of

the month pay. There is also no job security as any employee can be

fired at will. Employees go to work hoping that they will get a better job

and resign from the organisation. However, most of employees have

worked together over the years and have created a bond amongst them.

This has helped them manage the change in the organisations.

Managing resistance to change in an organisation should be seamless

as everyone is part of the change from the beginning. In most cases, the

need for change is obvious and welcomed. There are different ways of

dealing with resistance to change. John Kotter and Leo Schlesinger1979) listed out six key techniques for managing change. They are

Education and Communication, Participation and Involvement,

Facilitation and Support, Negotiation and Agreement, Manipulation and

Co-optation, and Explicit and Implicit scenario.

In managing the resistance to the change that occurred in the airline, the

facilitation and support method would have been the appropriate method

to have been implemented. This will involve training of employees, re-

instatement of employees’ vacation and proper welfare management

system for staff.



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QUESTION 4

The goal of the takeover was to improve the financial standing of the

organisation. The main objective was to revamp the operations of the



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organisation to make profit from its operations and wipe out the

indebtedness of the airline. The takeover was during the peak period

and with the newly acquired aircrafts and the new domestic and regional

routes there was a 100% growth in sales. Flights were always on time

except in cases where bad weather was the cause of delay. After the

peak period sales dropped because there was a reduction in the number

of travellers. The organisation came up with promotions and discounted

tickets to increase sales. This also boosted sales for a while. The life line

for organisations is quality service delivery. Where an organisation is

unable to deliver this quality to its customers, there will be a drop in its

customers irrespective of the offers and discounts given to them.

The airline has experienced a serious drop of passengers. In trying to

make the airline profitable, the organisation has lost focus on preserving

its customers. The greatest challenge the airline is facing in carrying out

its day to day business it the ultra-autocratic and compulsive interfering

of the chairman. The Chief Executive Officer of the airline has a

limitation to certain decisions it can take as concerning the airline. There

is a limitation to the amount of money the CEO has access to in the day

to day running of the business. Where it exceeds the said amount, only

the chairman can authorise the release of the funds. The major issue the

airline has is in managing the delays caused by fuel. It is expected that

by now, the total amount of fuel used for the day to day operation of

flights should be stated. It is also expected that at every point in time, the

fuel for the next day’s operation has been settled and all outstanding

debts paid for. In maintaining profitability in an airline, all that is required

is on time performance. Delays and cancellations cannot be totally



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phased out because there are usually unforeseen circumstances like

weather and technical problems but they can be better managed.

Also the airline only has 2(two) fuel marketers and where they are both

out of stock, operation suffers. The major sufferers of this crisis are

usually the passengers who are made to wait for hours for a flight that

would have taken 55 minutes. In this situation, customer service

recovery is made difficult as the passengers are already aggrieved. In

running a business, you have to pay your creditors who will provide you

with the materials you need to render quality service to the passengers.

Increasing fares will not improve profitability if disruptions keep

occurring. Employees should be encouraged to use their initiatives in

taking decisions and should not act in fear that they might lose their job.

The airline must be run like an airline rendering quality services with

impeccable customer service. It shouldn’t be run like a motor

transportation business.



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BIBLIOGRAPHY.

1. Managing Change in Organisations, Understanding and Involving

Others in Change, Systems Modelling, pg 5 of 13 RDI (2011) -.

2. John .P .Kotter - Leading Change, Why transformation efforts fail,

Harvard Business Review on Leading Change pg 18 (2006).

3. Managing Change in Organisations, Understanding and Involving

Others in Change, Systems Modelling, pg 6-7 of 13, RDI (2011).

4. Managing Change in Organisations, Strategies and Models for

Change, Business Process Transformation and Total Quality

Management pg 11 of 20, RDI (2001).

5. Katherine Kane - Creating the Climate for Change, Mobilizing the

Executive Team and Your Organisation, Managing Change to

reduce Resistance, The Result Driven Manager, pg21 (2005).

6. John .P. Kotter and Leonard .A. Schlesinger (March/April 1979) -

cited in Organisational Behaviour, Master of Business

Administration, University of Leicester, MN7203/D, pg 298-300

(2008).

managing change in ion july assessment

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