Identification of the Reasons
Change management process is becoming an integral part of the contemporary business organizations. This is due to the reason that in the current business state of affairs, organizations are facing issues and difficulties from different perspectives. In this case, change management process is important in resolving these issues (Cameron and Green 2015). Change management process refers to the concept of initiating change in the existing business practices of the organizations and implements newer practices in accordance to the current business needs. Effectiveness of the process of change management determines the efficiency of the business processes in the long term. However, it should also be noted that initiation of the change management process is having number of barriers to be faced and these barriers should be effectively considered (Kuipers et al. 2014).
Tesla is one such organization that is facing number of challenges in the recent time mainly in their production process, which should be resolved in order to maintain their business viability. Tesla is facing this production bottleneck mainly due to the reason that they are not having enough infrastructural resources as some other major carmakers (Tesla.com 2018). However, with the demand for the mass market car of Tesla, Model 3 is skyrocketing; they are facing the issue in increasing their production rate and thus facing the negative word of mouth in the market. This situation is leading to the fact that Tesla is having the need for effective change management process to change their existing production process and implement a more effective one.
This report will discuss about the causes and impact the production issue for Tesla and how this will affect their business operation. In addition, the potential barriers to be faced by them in implementation process will be discussed. Change management model will be used to design a solution plan for the identified issue.
One of the major reasons of the production issues with Tesla is overdependence on the robotic technology. It is reported that majority of the production process in Tesla is being done by robots. Thus, it is becoming difficult for Tesla to change their technology in short term in accordance to the increase in demand. On the other hand, it is also a time consuming job for Tesla in acquiring new technologies and robots for further increase of their production rates (inverse.com 2018). With the extensive use of technology in the production process, it is also becoming difficult for them to train the new employees regarding the complexities of these technologies and made them work. Another reason identified for the production bottleneck for Tesla is lack of ability of increasing the production rate of batteries. For the electric vehicles, batteries are the major components and this area is also the strength of Tesla. However, it is reported that they are not being able to cope up with the demand in the market and it is affecting the production of batteries (businessinsider.in 2018). This is restricting the production of batteries and in turn is affecting the production f their cars.
Impact of the Identified Issue
Space crunch in their production facilities is another major issue for Tesla in increasing their production rates. This is due to the reason that currently Tesla is having only two manufacturing and assembling facilities in the United States and they are operating at their highest peak. Thus, it is having fewer chances that they can be able to increase their production rate further (Vynakov, Savolova and Skrynnyk 2016). It is reported that due to the demand of their cars, Tesla is forced to start new assembly line in the vacant premises of their plant. This is also denoting the ineffectiveness and limitations of their business processes that should be changed.
- One of the major impacts for Tesla due to their production problem is lower sales revenue. This is due to the fact that advance bookings for the Tesla Model 3 are huge and it is impossible for Tesla to meet this demand with their current rate of production. Thus, customers already booked a car will not wait for more and will look out for other alternatives in the market (Larson et al. 2014). This will reduce the business for Tesla. In addition, it should also be noted that till the time Tesla will take in achieving their target production rate, competitor firms will come up with more viable options in the market. Thus, in the long term, Tesla will lose their market potentiality due to their production issue.
- Another major impact for Tesla will be lack of interest among the primary investors. This is due to the reason that if Tesla cannot able to perform as expected and lose their market to the competitors, then the investors will withdraw their investment and will cause financial crunch for Tesla (Banker 2018). This will affect the long term operational viability of them. It is reported that Morgan Stanley already reduced their price targets on the stock of Tesla.
- Ongoing production problem for Tesla will also affect the long term business plan along with their internal management. This is due to the fact that it is reported that existing employees in Tesla are already working without any breaks to keep up with the demand. In addition, the set patterns of the assembly line of Tesla also got affected due this pressure. This is actually affecting the entire business approach especially the pattern of internal management of Tesla. In addition, the global expansion plan for Tesla will also face obstacles due to their production issue.
There are number of issues or challenges being identified for Tesla in the above section and an effective process of change management are important to overcome the challenge for increasing production rate. However, it is important for Tesla to consider the fact that implementation of change management process will face a few barriers. The following section will discuss about these barriers.
- One of the major barriers to be faced by the leader will be lower access to the fund. This is due to the fact that this already Tesla is facing the issue of divestment by their primary investors and implementation of new processes will require more fund (Geotsch and Davis 2014). Therefore, the change leader will face the barrier in gaining access to fund for the implementation of the change. Cash crunch for Tesla will further affect the sourcing of different elements for the change management process in the long term.
- Another potential barrier to be faced by the change leader is from the side of the employees. This is due to the reason that existing employees may resist to the change or implementation of new technology in the workplace (Mitchell 2013). They may not get comfortable with the new systems or they may get suspicious regarding their job security due to the implementation of new processes. In addition, on the other hand, if the new process is more concentrated towards enhancing the human work over the robots, then also the employees may resists to get trained with new expertise and skills.
- The problem identified for Tesla should get resolved within a shorter time. This is due to the reason that production bottleneck for Tesla should be resolved in immediate basis in order to operate in the competitive automobile market. Thus, the change leader is having less time for implementing the change management process (Jadhav, Mantha and Rane 2014). However, in order to resolve the issue for Tesla, change leader should have to recruit more employees, train them, resolve the space crunch and install new assembly line. This will take time to get desired outcome. Thus, shortage of time will be another barrier for the change management process in Tesla.
In the above section, the major issues with Tesla are being identified along with its reasons and impacts. In addition, the potential barriers in the implementation of the change management process are also identified. This can be concluded that Tesla can have effective process of change management without having the impact of any barriers only if the process is implemented in proper manner. In this case, Lewin’s model of change management will be beneficial for the change leader in implementing the change process effectively (Shirey 2013). The following sections will discuss about this change model and how it can be aligned with that of the requirements of Tesla.
According to the Lewin model of change management, the first stage in any change management process will be the unfreezing. This refers to the process of identifying the needs for the change in the organization and areas where the change should be implemented. This is important due to the fact identification of the needs for change will help to design the vision or approach of the change management process accordingly (Cummings, Bridgman and Brown 2016). In addition, unfreezing also refers to the process of determining the infrastructural needs of the organization and to what extent these requirements can be met. This is also important due to the fact that change management process should be designed in accordance to the organizational capability otherwise the entire process will get failed in the long term. Therefore, according to the Lewin model of change management, unfreezing stage will help the change leader in having the basic understanding about the requirements and organizational capability.
Identification of the Potential Barriers
In the case of Tesla, it is important to first identify the potential areas where the change process should be implemented and why it should be implemented. Tesla is having issues in their existing assembly line and they should implement new assembly line along with increasing the human labor in place (Sarayreh, Khudair and Barakat 2013). Thus, in this unfreezing stage, the change leader should communicate the reasons of implementing the change management process and why it is critical for the organizational success to all the stakeholders including the employees. This will help in making the employees aware about the change and they will also have the idea about how they will be benefited from the change process.
The next stage is the implementation of the change in place. In the previous stage, employees and other involved stakeholders are already got to know about the change process and its objectives. In this step, it is important for the change leader to determine the feedback and opinions from the side of the employees regarding the change process. If they are having any kind of issues, then these issues should be mitigated. According to the Lewin model of change management, proper determination of the feedback of the employees will help to maintain the ethical and transparent approach along with preventing the issue of resistance in the long term (van den Heuvel et al. 2013). Involvement of the employees in the change management process will also help in enhancing the motivation of them and thus the change can be implemented in more holistic manner.
In terms of Tesla, the employees should be made aware about why the change is important and if they are having any issues to their job security. In addition, the employees should also be encouraged in giving their views and how they are thinking about enhancing the production process of Tesla. This will increase the involvement and engagement of the employees with the change process and Tesla will find more options for their production process.
Refreezing is the last step in this model that refers to the process of stabilizing the organizational processes after the implementation of the change. This includes the management of the employees effectively, evaluating the organizational performance and gathering feedback from the involved stakeholders (Burnes and Cooke 2013). It is important for Tesla to initiate the continuous process of evaluating the feedback from the employees to determine the effectiveness of the change process.
Development of the Change Management Plan
Conclusion
This report concludes that production bottleneck problem for Tesla is their major issue that should be resolved in immediate manner. In addition, the reasons and the impacts of issue on Tesla are also being discussed in this report. It is concluded that Tesla will have number of long term challenges due to this and an effective process of change management should be implemented. In accordance to this, Lewin model of change management is discussed in this report that will further help Tesla in overcoming their production challenges.
Reference
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