Managing Change In An Organization: Importance Of Functional Strategy

Importance of Functional Strategy

Discuss about the Organization Culture and Impact on Diversity.

Transition in any organization is an inevitable occurrence hence the need to identify the specific areas that need the change before making the necessary adjustments. In order to effectively manage change in an organization, there is the need to have in place the right functional strategy (Al-Lamki, 2012). The functional areas in an organization usually include: finance, human resource, product/promotion, Information systems management as well as research and development.  A functional strategy is therefore crucial in a number of ways. To begin with, it enables a company to identify the loopholes before coming up with the necessary counter measures. The corrective measures play a crucial role in improving productivity especially if the transition is human resource related. This is because properly managed organizational changes increase the level of worker motivation which in turn enhances their general output. Functional strategies also increase the effectiveness of financial operations within a company. Good financial accountability also plays an important role in enhancing the flow of resources which equally affects the other procedures at the company.

A functional strategy also does a lot in cleaning the work environment in a bid to ensure that it is void of any obstacles to the free flow of processes. A conducive organizational environment is a major function of organizational success and continuity. This is because a work environment has a direct influence on both the consumers and the human resource department. A functional strategy is dependent on business and corporate strategies due to the nature in which they are intertwined (Alvesson & Ka¨rreman, 2011). For instance, the functional strategy ought to be based on the existing business model and when the change is successfully implemented, the effects flow into the company’s corporate arena as well.

The other importance of a functional strategy is the fact that it aids in the achievement of company goals and objectives. Additionally, it plays a crucial role in supporting the actualization of the organization’s vision and missions. This is because a functional strategy is always linked to the key business model which implies that implementing the elements of the functional strategy has a direct correlation with the achievement of the stated targets and objectives.  At the same time, a functional strategy enhances the competitive advantage of an organization. This is because the plan covers a number of core areas within the organization whose success easily flows into the overall success of the company (Anderson, 2013). For instance, under product and promotion, the ideas suggested and implemented in this area have a direct influence on the performance of the product in the market. Proper product promotion strategies increase the level of clients’ awareness and interest in the products which in turn enhances customer loyalty, effective sales and market stability. It can consequently be deduced that an effective functional strategy gives the organization the necessary strength need to stay relevant in the rather dynamic corporate world.

Issues at Mobil Oil

Furthermore, a functional strategy in the area of finance plays a pivotal role in controlling the flow of money and resources in and out of the organization. The increased level of accountability through constant auditing ensures that the organization incurs no losses associated with embezzlement of funds. Good financial management also ensures the availability of other resources like machine and labor all of which play a part in enhancing the day to day organizational processes. At the same time, a proper financial image helps the organization to identify any need for financial support to ensure that that all areas within the system are kept not only functional but also effective (Weick, 2015).

A functional strategy also offers the necessary guidelines and procedures which could be instrumental in ensuring that the human resource fraternity remains highly productive. Such strategies may include motivational approaches, proper work environment, continuous reward and appreciation of exemplary performance in addition to the availability of resources which make work smoother and easier. The human resource department forms a pivotal organ within a company; successful management of the workers culminates in good rewards in terms of sales and hence return on investment. The level of commitment of the people within an organization to its mission, goals and objectives entirely influences the success and sustainability of the organization. When the strategies put in place to monitor these operations are effective, other processes equally become efficient.

A functional strategy also has a direct impact on the improvement and development of an organization. This is majorly achieved through research management. During the research projects, an organization identifies the areas within an organization which requires the necessary adjustments. Research is then done to deduce the possible solutions to the identified problem before the recommendations are handed over to the management for implementation (Yukl, 2014). For instance, the research team may carry out a study to reveal the current market trends and hence suggest to the company the right adjustments which would ensure customer loyalty and market stability. Lastly, a functional strategy plays a pivotal role in enhancing the transmission of crucial information from one place to another. Through information system management, communication which is an important tool for organizational success is largely enhanced. The information management also identifies the areas with loopholes in communication which when improve make the process more efficient (Anderson & Anderson, 2011). This could be managed by improving the signals, obtaining better gadgets and equipments like phones and computers which enhance the process of transmission of the necessary information from one level to another. Due to the special place that a functional strategy has in an organization, there is the need to put in place the most effective approaches which enhance organizational success.

Proposed Change Model

Before coming up with a change management plan, it would be important to point out the main issues at Mobil Oil, a Franchise organization of the multinational in New Zealand. The company deals in a number of products apart from the supply and distribution of fuel and gas. Each of the Mobile Franchise has a mini mart in which various products are sold. The products include: confectionaries, pies, coffee and drinks, car accessories, snacks as well as lubricants. Apart from the products, there are other internal functions which involve procurement and inventory. Mobil’s marketing functions include sales and promotion of the products. It is a fact worth noting that each of these functions are all related to the business strategy of customer service.

The main issue which can be deduced from Mobil’s case study is the aspect of inventory maintenance. The mart has a good storage area and space which has not been effectively managed leading to inconveniences both on the workers and consumers. The products at the mart include dairy products, cheese, lubricants, chocolates, cookies and ice cream just to mention but few. Each of these products has different dates of expiry. The stock of these products is not kept in one place (Sturdy & Grey, 2013). While the cycle stock is stored in one place, the safety stock is stored in a different place. This has made the inventory management procedure quite a challenge in the organization. The fact that the inventory is not kept in one place leads to pressure on the employees who have to go an extra mile of manually deducing and refilling the records. Secondly, the stocking has been done with no reference to their expiry dates and life span. This has led to a mix up in the racks which forces consumers to take longer hours looking for their desired products. Additionally, there are no records for the expiry dates which force the workers to manually refill the stock every day. This is cumbersome and time consuming.

• To increase consumer convenience by rearranging the racks with products with similar life spans
• To minimize the cost and time frame of production will maximizing worker output through a centralized inventory management system.
• To establish a stable record system of product expiry dates to aid in the process of stock refilling
• To create a better work environment through space management and inventory management which ensure the workers do not have to manually check and refill the stock.

The proposed change model is drawn from Kotter’s assertions in his 8 step change model. To begin with, the management at Mobil needs to identify the need for change before creating the urgency among the workers within the mart. In this case, the change leaders can initiate healthy dialogues with key stakeholders within the company on the impacts that the identified issues may have on the company’s performance in the market. For instance, pointing out the lack of record of expiry dates reveals the effect that this problem may have on the sale of the products which may also extend to low consumer loyalty (Ashmos & Huber, 2008). When the threats associated with the problem have been carefully examined, the need for a quick adjustment is then created among the people within the organization. During this process, the change management team may also consider taking in the support of the customers and other key stakeholders. Their feedbacks and responses on the mart’s current stocking approaches would help the workers to identify the potential impacts of this problem which is then followed by the urge to obtain a quick solution. Urgency creation is therefore the first step of change management (Cox & Blake, 2011).

Creating Urgency for Change

After creating the urgency for change, the next step involves creating a team of dedicated individuals whose main task shall involve spearheading the change process. These people can be picked from different sections and departments within Mobil Petrol depending on the level of their commitment to the change process. The change team may also include key company stakeholders as well as consumers (Bennett, 2013). Once the team has been established, the right team building strategies are implemented in a bid to ensure cohesion and efficient adherence to the teams core objectives. To improve the effectiveness of the team, the weak points are continuously identified and addressed hence ensuring that the change team is made up of a good mix of individuals who shall remain supportive throughout the change implementation process.

The next step involves creating a vision for the change. This ensures that the change team as well as the other members in Mobil Company has a clear idea of where the project is headed. To achieve this, the values that are central to the change are identified and summarized in a concise statement which is easy to understand and comprehend (Dean, 2009). Once the values are stated, there is the need to create a strategy which would be used to execute it. It is also important to ensure that the change team internalizes and makes this vision part of their daily routines.

Once the vision is created, the next step involves communicating the need for change to the other members within the organization. The information ought to be passed in an effective way through meetings, exhibitions, circulars and any available platform. To ensure that the message sinks, it can be made part of the daily communications within the company. This acts as a reminder to the members about the impending change which improves awareness and preparedness (Grant & Marshak, 2011). Effective communication of the change before its actual implementation has a special way of minimizing resistance hence making the implementation process smooth and easy.

The fifth stage involves removing obstacles. In the process of the implementation of the change, there are obstacles which may exist in form of people or systems. The change team needs to identify and remove any obstacles. This can be done by ensuring the change team comprises leaders who are dedicated to the change like change leaders. The people who are supportive to the change process are recognized and rewarded. On the other hand, the individuals who are resistant to the change are addressed on the need for change (Ka¨rreman & Alvesson, 2011). Other drastic measures may involve removing the people from the company’s fold as a means of removing obstacles.

Establishing a Dedicated Team

The next stage would involve creating short term wins. The challenges of poor inventory management at Mobil have already been felt through a drop in sales and loss of customers. Creating short term practical and achievable targets would be a motivating factor. For instance, the team can place the number of customers likely to be retained within a span of six months if the stocking approaches were change, expiry dates recorded and products arranged according to their lifespan. The targets ought not to be costly as this would lead to constraints in resources even as the organization prepares for the long term project. At the same time, the people who would be pivotal in achieving these targets need to be identified and wholesomely involved in the change process (Knippenberg, 2010).

The 7^th stage according to Kotter’s model involves building on the change. In this case, the short term successes are analyzed and the necessary loopholes are identified. These anomalies are then adjusted in a bid to improve the effectiveness of the change. Fresh ideas and the incorporation of new change leaders enhance improvement which ought to be continuously with respect to the change process (Little, 2014). The last stage involves incorporating the change into the organization’s culture. This can be done by including the change values in the organization’s core values so that the new members are easily incorporated into the change culture. Mobil New Zealand can make use of the steps above to overhaul the current stocking process through proper inventory management and product labeling.

In order to monitor the progress of the change process, a number of tools have been put in place. To begin with, performance indicators shall be placed against a scorecard. These shall ask as the short term targets which when achieved effectively will be a clear indication of the progress of the change process. The performance indicators include operation costs, daily working hours, internal customer satisfaction, number of errors made by employees and the number of employees meeting the job demands. The implementation of the functional strategy is aimed at reducing the cost of operation while reducing the work load and hence working hours for employees. The other objective is to realize a considerable improvement in the level of customer satisfaction due to better inventory strategies. Finally, the change process is aimed at reducing the number of errors made by employees at work will increasing the number of workers who effectively meet the job demands. The Gant chart on the other hand indicates a schedule and time span within which each of the 8 steps shall be executed. The performance monitoring and evaluation tools shall therefore be used hand in hand to ensure the effectiveness of the change process.

Creating a Vision for the Change

In the process of implementing the change, there are a number of imminent challenges which may act as obstacles to the successful achievement of the change objectives. To begin with, there is the challenge of inadequate resources (Lorenzi, 2010). Adjusting the stocks and rearranging the inventories would require additional personnel and experts to aid in accounting and auditing. Additionally, the restructuring of the racks shall require the use of resources which may lead to the organization incurring costs. When the resources are not adequate, a number of processes within the change process are largely hindered. In order to ensure that the implementation process is flawless, Mobil New Zealand may need to put aside enough resources which would be essential in the achievement of the change goals and objectives (Lorenzi, 2011).

The second challenge is the aspect of hindrance offered by the people. People within an organization may prevent the effective change implementation. This happens especially in case where the intended change is likely to scrape off certain privileges and comfort zones for the workers. The change equally poses a threat to some of the company members’ job positions. With proper inventory maintenance, there shall be no need for an increase in the number of shifts. The current arrangement is such that the workers have to work in shifts where they manually check all the products and restock as necessary (Marquis, 2013). Through proper stocking strategies which shall be envisaged in the change, some of these people are likely to lose relevance hence might be relieved. These very people offer high level resistance to the change process which does not only slow down the implementation process but may equally make it more expensive.

The other challenge in achieving the project involves time related constraints. The strategies and steps may need to be implemented.  Due to the fact that the organization equally has various other projects to handle, getting enough time to efficiently complete each of the steps may be a challenge (Patrick, 2010). Consequently, some of the stages are done hurriedly which has a direct impact on the efficiency of the change program. The last challenge is the unavailability of trained personnel to aid in the implementation of the change progam. The values being introduced by the change may require the incorporation of experts for instance in the field of inventory management, stocking and change leading. In case these people are not readily available, the company may be forced to train some of its workers which is not only time consuming but leads to the incurrence of costs (Reagans & Zuckerman, 2011). For effective change implementation, there is the inevitable need to identify and address them and hence create an environment in which the incorporation of the change strategy shall meet the least resistance.

Developing Strategies and Ensuring Cohesion

In order to deduce the necessary information for the completion of this project, I read books, journals and case studies not only on Mobil Company but also on the various areas covered by functional strategy in an organization. The process also involved observation of activities at the Mobile franchise marts to ascertain the reliability of the information obtained from the case studies. It was observed that the workers had to operate in shifts and manually had to check the products before restocking.

There are a number of insights that were gained through process. To begin with, there was much to learn with respect to management of people. The experience revealed that people tend to work effectively when the work procedures are definite. The work environment equally enhances productivity while relieving the workers of any unnecessary pressure. The major purpose of this activity was to come up with a change model which would assist in doing away with the identified issues.

The successful implementation of the change model would help enhance the Mobil’s competitive advantage. The experience was also essential in helping me note and appreciate the value of teamwork in an organization. These values can be used to improve my skills and effectiveness in line with my career.

Conclusion

Organizational development is largely linked to variations in procedures and processes which need to take place continuously while improving the competitive advantage of an organization. Functional strategies associated with research and development enables the management to identify the specific areas in need of adjustment. The adjustment process may involve a number of transitions, challenges as well as obstacles. This therefore implies that the most effective change management approaches ought to be used while executing these ideas. The paper focused on Mobil New Zealand where the main issue identified was poor inventory maintenance and stocking. The suggested change model was drawn from Kotter’s discussions on change hence providing the company with a step by step procedure which the management could embrace while planning to overhaul its inventory maintenance procedures. The discussions also revealed the various challenges to effective change management which include human resistance in addition to time and resource constraints. The challenges can however be managed through effective team work, communication of the change vision as well as the creation of specific targets. Using KPI, a balanced scorecard and a Gant chart, the progress of the change process can be monitored, evaluation and accompanied by the necessary adjustments.

References

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