Critical Analysis Of Change Management Process In General Motors

Change Management in Organizations: Theories and Conceptual Framework

Write a professional report that provides a comprehensive critical analysis of the change management process that has occurred within the chosen organization.

The organizations, especially the commercial and business institutions across the world, in the contemporary period, operate in a wide, diverse, complex and dynamic environment as a whole. Much of these dynamics and diversities experienced by the contemporary business organizations can be attributed to the global economic and socio-political-commercial phenomena like Globalization as well as liberalization and expansion of the commercial sectors of the different countries across the world with time (DaSilva and Trkman 2014). These events have encouraged increasing number of businesses of all sorts to expand their operations in countries and geographical regions and explore new and diverse emergent markets, which is even more facilitated by the technological innovations and infrastructural development across the globe.

With the businesses going global and an increasingly inclusive international business environment, each of these businesses now experience considerable number of customers as well as supply side rivals, which in turn has led to an increase in the competition in different industries. The preferential patterns and choices of the customers also tend to vary considerably with time as well as across regions (Sharma and Mishra 2014). All these factors together indicate towards the fact that in the recent periods, the businesses always need to take into account the changing and hugely dynamic framework in which they operate, which in turn makes the concept of ‘Change Management in Organizations” a concept and practice of increasing importance in the global scenario (Langley et al., 2013).

With the increasing application of the same in businesses across the globe in the contemporary period, the concerned report tires to highlight the theoretical framework existing in this aspect, emphasizing specifically on the Burnes’ Change Management Framework. Keeping this into consideration, the concerned report tries to critically evaluate the change management process which has been taken up by the popular brand, the General Motors, in their operational framework, under the light of the Burnes’ Change Management Framework (Hayes 2014). The report tries to analyse and explain the type of change under this framework which fits the concerned organization the most, thereby recommending better strategies for the company which can be implemented in the near future.

The term “Organizational Change Management”, being existent in the global commercial scenario for years, have diverse definitions from different perspectives, but in general refers to the steps and strategic frameworks implemented by the organizations across the world  to bring in as well as monitor the changes in their processes, structures, cultures as well as in the overall operational frameworks of the organizations in order to achieve cumulative organizational goals and sustain in the markets profitably (Burnes and Cooke 2012). There exists a substantial number of theories in these aspects, few of which are as follows:

• Lewin’s Model for Change Management-In this model change is managed through three stages of Unfreezing the current activities with the emergence of the need for change, brining in the actual Change post preparation for the same and monitoring the process of implementation and adaptation of the same and the final phase of Refreezing the same such that the new changes are sustained and are not replaced back by the old habits (Shirey 2013).
• McKinsey 7-S Model-This is a far more intrinsic and targeted model, emphasizing on implementing and monitoring changes in the seven aspects in the organizations, namely, Strategy, Structure, Skills, Systems, Staff, Style and Shared values. The aspects are in turn inter-related and have implications on one another (Singh 2013). This model is however, efficient for small organizations with very limited number of workers.
• ADKAR Model-In this model, there is nothing sequential and the companies set several goals for their employees, which are as follows:

Burnes’ Change Management Theory

Awareness of the need to change

Desire to bring change

Knowledge about change implementation

Ability to change

Reinforcement of the change to bring sustainability (Lewis 2012)

All the above mentioned theoretical frameworks, as well as many others like Kotter’s Model, Nudge Theory, Bridges’ Transitional Framework, though sounds theoretically robust are constricted to some extent in the sense that they do not take into account the varieties and the level of dynamics in the procedure of implementation as well as management of the changes in the organizations itself and generalizes the changes according to their own terms and convenience of understanding (Appelo 2012). However, change and change management in business organizations cannot all be considered of same type as these changes vary according to their nature, magnitude, time of implementation as well as the targeted arenas in the organizations in which the changes are implemented.

These aspects are considerably taken into account in the Burnes’ Change Management Model, which is described as follows:

The organizational change management framework suggested by Burnes is comparatively a much comprehensive and inclusive framework which incorporates the fact that not all the changes implemented in the organizations are of same types and depending upon the needs of the organizations, the issues they need to address and also on their individual perceptions of change the change management framework also varies (Nasiri, Ansari and Fathi 2013). There usually exist three types of changes, on the basis of the extent of abruptness and smoothness, which are as follows:

• Bumpy Incremental-The changes mainly include acceleration in the otherwise smooth flows in the organizational changes.
• Smooth Incremental-These are mainly slow and systematic which gradually bring in evolutions in the organization’s operational framework (Hall et al. 2012).
• Discontinuous Changes-Often organizations bring in disruptive and punctuated changes in their otherwise smooth and conventional operational structure.

The Burnes’ Framework, takes these types of changes in consideration, thereby differentiating the organizational change managements in the aspects of the speed of change, the approaches of implementation and management of change as well as continuum of change, which are discussed as follows:

Speed of Organizational Changes 

Depending upon the targeted areas where the changes are brought forward by the organizations, there occurs difference in the length of time required implementation and adaptation of the change:

 

Figure 1: Focus and Speed of Organizational Change

(Source: Burnes 2014)

Slow Transformation- Often due to changes in the internal as well as external business environments the organizations need to bring about changes in the overall organizational culture and behaviour existing in the current environment. Such changes, however, takes considerable time and patience as it is a time-taking process to convince and encourage all the entities associated with the institutions to leave their comfort zones and to adopt to something new. The effects of such changes are also long term (Contrafatto and Burns 2013).

Approaches for Change

Rapid Change- There also often arises threats in the existing operating framework of the companies, which in turn forces them to change the overall structures and operational procedures of the companies abruptly, thereby bringing in disruptive sorts of changes.

The change management frameworks in the organizations also vary according to the types of approaches taken by the same:

 

Figure 2: Differences in Change Management according to Approaches

(Source: Burnes 2014)

Planned Changes- The companies often design and plan the changes in their operational framework, which can be related to a stable environment in the organizations. The changes are structured and implemented in a pre-planned environment and follows a controlled path with pre-determined beginning and an expectant end and are thus predictable.

Emergent Changes- Contrary to the planned changes, often the organizations bring in emergent changes taking into account the fact that the business operations are subjected to constant changes and dynamics which are considerably unpredictable and arises unexpectantly and also have to be addressed abruptly (Kuipers et al. 2014). These types of changes are brought through constant analysis and interactions thereby having the scopes of changes and flexibilities. The effects of such changes can however be unpredictable unlike that of the former sort of changes.

Continuum of Changes 

The nature and magnitude of changes in the organizational scenarios also vary according the scale at which the changes are required to be implemented, depending upon the situations which the companies are facing:

 

Figure 3: Continuum of Organizational Changes

(Source: Burnes 2014)

Incremental Changes- Often the problems being of small scale, changes are required to be implemented in small steps in an incremental manner for gradual betterment of the organizations. These changes, known as incremental changes, enhances the operational activities of the companies without hampering modifying the existing structural frameworks and constructs of the same.

Transformational Changes- The organizations in the global framework, often perceive the need to change the operational frameworks as a whole, owing to threats and situations which they face (Carter et al. 2013). This in turn calls for transformational changes in the companies, which are large scale and organization-wide modifications which when implemented often entirely replaces the old operating construct with a new one.

Thus, keeping all these changes and the differences in their nature, magnitude and duration for implementation into consideration, the Change Management Framework of Burnes divide the overall change management processes incorporated in different organizations across the globe into four main types, which are as follows:

 

Figure 4: Comprehensive Framework for Organizational Changes

(Source: By, Burnes and Oswick 2012)

1. Emergent Changes-These types of large-scale changes are brought about in some turbulent scenarios across the organizations, focussing mainly in changing the overall organizational culture and are time-taking in nature.
2. Bold Stroke-These includes the overall organization-wide changes in the structural as well as procedural frameworks and are abrupt as well as large-scale in nature.
3. Planned Changes-These changes focussed on small and gradual transformations in several sectors or at individual levels in the organizations (Marshall et al. 2012).
4. Kaizen Changes-These are also small and individualistic or focussed group changes brought in the commercial organizations but vary from the former one in the sense that these changes are abrupt and show effect comparatively faster, which are also much more unpredictable.

Taking these four broad types of changes and change management into consideration, the following part of  the report discusses the changes which have been seen to be implemented in one of the largest global companies in the contemporary scenario, the General Motors, to sustain competition and bring more profitability and sustainability to the company, thereby critically evaluating the pros and cons of such changes, in the light of the Burnes’ Conceptual Framework of Organizational Change Management.

Being one of the primary global manufacturers and distributors of vehicle and vehicle parts, the General Motors Company is headquartered in Detroit, USA and have 396 facilities in the six continents and employs more than 180,000 employees across the globe. The company enjoys an average annual revenue of 148 billion USD and is considered as one of the most influential as well as globally operating companies in the automobile sector with nearly 9,600,000 vehicles in the market in the contemporary period (Gm.com 2018).

This more than a century old company has however faced considerable hurdles as well as reduction in their revenue and profit generation in the last few decades, much of which can be attributed to the increased competition which the company has been facing with passing time as the number of supply side providers in the global automobile industry and a major shift in the number of clients enjoyed by the concerned organization in the contemporary periods (Drucker 2012). These have in turn, induced the need for implementation of changes in the operational framework of the company in the recent periods.

The reasons or the forces which led to the perception of the need for change in the company can be divided into two broad types- the external as well as the internal forces:

External Forces-The primary exogenous factor which led to the need for change in the organization itself is the increased competition which the same has been facing in the contemporary periods, especially from the Japanese automobile manufacturing company, Toyota, with the latter increasingly capturing the market of the former, in the global framework.

 

Figure 5: Declining market share of General Motors in the USA over the years

(Source: Cain 2018)

The Toyota Company presently enjoys a huge market share in the markets of the USA, the effects of which can be seen from the declining sales which the General Motors has been experiencing in the recent years, as is evident from the above figure. This rival company, along with other competitors have been affecting the sales of the General Motors company considerably. Apart from that, the company has also been affected adversely by the financial crisis which has led to the decrease in the cash flow of the same.

Internal Forces-Problems not only existed in the exogenous business environment but also in the internal operational framework of the company, the primary one being high cost borne by the company. The average wage cost of the company used to be considerably high ($74/hour compared to that of $44/hour of that of Toyota). The company also needed to keep 80% of its full capacity employed irrespective of their needs (Asee.org 2018).

These factors were found to be affecting the profitability and sustainability of the company hugely and also led to the bankruptcy of the same. These in turn led to the need for considerable organizational changes in the operational framework of the company and the same over the years implemented several crucial changes, which along with their aftermaths are discussed as follows:

The primary changes implemented and monitored in the operational framework of the company in the recent periods are as follows:

1. Cost Cutting-The primary inherent operational limitation of the concerned company being its cost inefficiency in the production process, the company implemented a change in the production process in the aspect of cost cutting of the same. This had been done by decreasing the cost of production of some of its products as well as cutting the wages of the employees to some extent (Asee.org 2018).
2. Structural Changes-The company also focussed on changing the overall culture of the company and especially among its employees. To bring such changes the company removed several stagnated boards of employees, with low productivity and loss of purpose in the organization and made the communication channels much clearer with lesser number of intermediaries with the notion of making the communication among the organization. Mainly employees are now entitled to approach the CEO of the company with their queries and ideas, which is intended to speed up the flow of ideas and decision-making process of the organizations.

The cost cutting decision, taken under the change management framework of the company, has been seen to be partially effective as the company was found to be saving nearly 15 billion in the recent years. However, the change being brought about by cutting the wages of the employees of the company, led to problems of loss of motivation and satisfaction of the employees and also created problems with the trade unions existing in the economic scenario of the countries in which the concerned company operates (Helper and Henderson 2014). On the other hand, the structural changes brought forward by the company was found to be a culturally top-down approach as the modifications and remodelling in the organization were not taken by interactions and consultations with the employees, especially those who were part of such changes. This also caused considerable amount of employee dissatisfaction as they did not feel to be valued by the company but felt like being instructed by the top management to change and adapt to the modifications all of a sudden (Hashim 2014).

The changes brought by the company, had both positive as well as negative implications on the same. On the positive side, the change management process helped the company to regain a considerable share of the market, especially in that of North America, which the company previously lost to Toyota and other competitors. However, there also arose several negative implications of the changes undertaken by General Motors, especially in terms of employee satisfaction and employee turnover as the company experienced a considerable share of loss of human capital in the last few years.

The types of changes brought by the concerned company in its operational process can be mainly classified under the quadrant of “Bold Stroke” under the conceptual framework of the Change Management Model of Burnes, as discussed in the above sections of the report. Under this model, “Bold Stroke” refers those strategies which are abruptly taken by the companies in their overall organizational framework to bring in large-scale transformations in the turbulent business environment (Burnes and By 2012). Generally, such changes are brought in the structure and processes in which the organizations operate and are of mainly disruptive in nature, displacing the existing operational frameworks with new and hugely different ones.

This is seen to be occurring in the case of the change management process of the General Motors, as the company, realizing the threats cropping up for its existence in the market and feeling the need for changing its activities and way of operating, brought significantly abrupt changes in its employee structure, communication channels as well as in its production processes to address cost cutting objectives. All these changes being disruptive, abrupt as well as organization-wide ones can be categorized under the category of “Bold Stroke” in the Burnes’ Change Management Framework.

However, bringing in such bold and abrupt changes though helped the company especially in the short run, has also led to dissatisfaction among the employees, which if not addressed can have long term negative implications. For the employees to be efficient and accepting to adapt to such changes, the company needs to implemented changes in the overall cultural environment and also needs to make the employees and other stakeholders not only part but also contributors to the change management and implementation processes (Briody, Meerwarth Pester and Trotter 2012). Thus, for the change management process of General Motors to be efficient and long-term sustainable as well as profitable, “Emergent Change” framework seems to be more suitable for the company, under Burnes’ Change Management Framework.

Conclusion 

From the above discussion, it is evident that Change Management is increasingly becoming an essential component in the aspects of efficient operations of business organizations across the world, the needs of the same being arising more in the contemporary period. Depending upon the needs perceived by the organizations in their business environment as well as on the situations and adversities they are subjected to, the companies employ different types of changes and change management process in their organizational framework. In this context, the changes implemented by the General Motors Company, in the contemporary period are seen to be more of the nature of “Bold Stroke” change management process, in the light of the conceptual framework of Burnes’ Change Management Process.

However, though these strategies are seen to have short term and primarily financial benefits for the organization, several problems, especially in the aspects of adaptations of the changes on part of the employees and stakeholders, are seen to be cropping up in the organization, which can be efficiently combated by implementation of overall and gradual cultural change in the organization as a whole. For the same, “Emergent Change” framework seems to be most suitable for the company and can be implemented by the same in near future for better prospects and long-term profitability and sustainability of the company

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