Sample Management Essay Paper on Transformational Change Management Plan

Transformational Change Management Plan

Week 1: Introduction

The organization selected for the paper is Starbucks, which is going through the transformational change of off-shoring its production facilities. Starbucks is a US-based coffee giant that has outlets all around the world, and that is recognized for its unique and high quality coffee across the world. Starbucks is one of the most famous and successful coffee house chains, which is known for its employee welfare policies, as well. Off shoring can be regarded as the movement of one or different operations (product manufacturing, service centers or operations) of an organization to another country due to different reasons, like low labor costs, suitable economic conditions, better production techniques, and so on. Off shoring is different from outsourcing because when a company undertakes off shoring, it changes the location of a service or manufacturing of a part to abroad.

In the current globalized environment, due to rising competition, pressure to reduce costs and to deal with political tides, companies often rely on off shoring activities. Although off shoring has positive financial insinuations for a company, it is also related to layoffs and social responsibility concerns. Therefore, companies must consider the different stakeholders, such as investors, employees, and the community, before making the decision to offshore operations because if the company fails to avail its benefits, it may end up losing the resources linked with these stakeholders. The transformational change of off shoring production facilities was initiated in Starbucks because of the growing operational costs and declining sales of the company. In order to manage the rising costs and enable merging of revenues, the international coffee supplier executed a three-step plan for the purpose of improving the performance of its supply chain and prepares itself for future competition and dynamic customer needs. Off shoring was significantly accepted in Starbucks and received the support of the top management of the company so that company’s operations can be maintained well (Cooke, 2010).

Week 2: Factors driving the need for this Transformational Change Globalization

 It is notable that Starbucks experienced problems because of its own success, as the company was starting stores all across the world at a fast pace, as a result influencing difficulties in keeping up with the high rate of expansion. The costs of running the operations were rising constantly and the company needs to create a balance between cost and performance by making changes in its operations, and thus, it was forced to do this transformational change (Lia, et al., 2008).

Cut Throat Competition:

Like any other organization, Starbucks is facing issues of extensive market competition, and to comply with diverse needs of customers in the different parts of the world, it is essential for the company to offshore its production facilities. Off shoring enables Starbucks to expand its team devoid of expanding its fixed costs, facilities, and capital outlays, and thus, the company was able to manage competition to an extent (Abdelzaher, Newburry & Kundu, n.d.).

Increasing Costs:

A few years before, things were not going right in the company, its operational expenses were increasing considerably, and sales were diminishing. It is notable that in 2007-08, the supply chain expenses of Starbucks in the United States increased from $750 million to above US $825 million. Sales for U.S. stores decreased by 10 percent; these had been open for at least one year, at the same time period. Therefore, to reduce the cost of operation or production and to enhance sales figures, it becomes essential for the company to take hold of its transformational change (Cooke, 2010).

Off shoring:

A Transformational Change Off shoring is considered as a transformational change because it changes the organization processes and affect organization wide activities. Off shoring production facilities is a transformational change for companies because when they espouse on this alternative, the future is unknown to them and they have no idea whether it is going to be successful or end up as a failure. Further, off shoring demands new mindsets and behaviors in the organization to execute this new strategy. The firm cannot keep doing what it was doing because of the dynamic market forces and competition. It was essential for the company to bring this radical change in its business operations so that it can come with superior quality services. In order to sustain the momentum for improvement and to make sure a future flow of revenues and sales in the organization, Starbucks need to take this initiative as a transformation effort and needs to stop doing from what it was doing (Lia, et al., 2008).

Management’s Role in the Transformational Change

The role of managers in the transformational change is to come up with right strategies for managing the change effectively. Management needs to reinforce organizational health by managing performance, shape and deliver transformational change by creating a vision and establish targets linked with business outcomes. The role of management is to change behavior to shape organizational culture for managing change. It is considerable that remaining competitive in the recent business era is not an easy task, especially for multinational organizations. Therefore, even though there are other alternatives to remain competitive, but this one is essential to maintain pace with the market change.

Week 3: Theories of change management

One of the theories of change management is Lewin’s theory, and it notes that change management occurs in three stages namely unfreeze, transition, and refreeze stages. In the unfreeze stage, there is resistance from people towards the embrace of change, and this is overcome by initiating unfreezing, which is pushed through motivation. The transition stage fast succeeds the initiation of the change, and it is pushed to success through adequate leadership coupled with reassurance (Hayes, 2014). The theory notes that stability of organizations is highly likely after the acceptance and successful implementation of change. At this juncture, organizations are prompted to refreeze their operations, a stage known as the refreeze stage. The advantage of this model is that it is used easily in organizations. However, it is disadvantageous because it takes time to implement (Hayes, 2014).

Kotter’s theory states that change in organizations is like a campaign, and this is because employees only accept change once they are convinced by leaders of how urgent the change needs to occur. Kotter’s theory adds that change management involves eight steps that include increasing the urgency for change, building a team that is dedicated to change, creating a vision for change, communicating the need for change to employees, empowering employees with ability to change, creating short-term goals, remaining persistent, and making the embraced change permanent. Its benefit is that it is an easy step-by-step model, and focuses on the preparation as well as acceptance of change. However, its implementation takes a long time (Mento et al, 2002).

McKinsey’s theory asserts that change management involves seven operational factors including shared values, strategy, structure, systems, style, staff, and skill, and it is preferred because it offers an effective method an organization’s diagnosis and understanding. Moreover, its preference is owed to the fact that it facilitates the provision of guidance in change management. However, its disadvantage is seen in the fact that it is complex, and using it poses the risk of failure (Sharma, 2007).

The best way to ensure the implementation of an organizational change, which should be embraced by Starbucks, is to introduce connective leadership behaviors such as working closely with the members of the organization and providing support throughout the change (Pathak, 2010).

Week 4: Communication plan

Starbuck’s communication plan will target both the leaders and employees who require communication. The leaders will communicate to the employees about the intended change whereas the employees will communicate to the leaders about the steps to be taken during the change. The organization’s leaders will either reach the employees directly or pass information to them through assistants. Starbucks will use communication mediums such as letters, emails, and telephone calls to facilitate horizontal and vertical communication.

Week 5: Implementation plan

  1. Major implementation steps

To enhance effective and successful change implementation, Starbucks will consider key implementation steps. First, the management will be prompted to offer support for the change. Second, a case for change will be created, and this will be followed by the involvement of the employees.  Subsequently, the organization’s management will communicate the intended change after which the change will be implemented and followed up. Finally, the organization will remove any barriers that could prevent the successful implementation of the change (Pathak, 2010).

  • Key criteria for success

To successfully implement the change, Starbuck’s management will take into consideration key criteria such as working together with the stakeholders and provide full support for the change.

  • Summary

The implementation plan will take into account the fact that the organization in focus is Starbucks, and the change it intends to embrace is off-shoring. The implementation will also consider the need for the transformational change at Starbucks and while exploring the various theories of change management. The implementation plan will also consider the right communication plan for successful implementation of the change.

  • Rollout

The implementation of the change will also take into account possible risks such as resistance from the stakeholders (Kegan & Lahey, 2009).

References

Abdelzaher, D., Newburry, W., & Kundu, S.K. (n.d.) The Hidden Costs to Offshoring: Exploring the Mediating Effects of Social Responsibility and Employee Layoffs. International Business: Research, Teaching and Practice, 7592.

Cooke, J. A. (2010). From bean to cup: How Starbucks transformed its supply chain. Retrieved from: http://www.supplychainquarterly.com/topics/Procurement/scq201004starbucks/

Hayes, J. (2014). The theory and practice of change management. Palgrave Macmillan.

Kegan, R., & Lahey, L. L. (2009). Immunity to change: How to overcome it and unlock potential in yourself and your organization. Retrieved online on September 21, 2015 from https://books.google.co.ke/books?id=HChpTPeKxIEC&printsec=frontcover&dq=barriers+of+change+in+organization&hl=en&sa=X&redir_esc=y#v=onepage&q=barriers%20of%20change%20in%20organization&f=false

Lia, Y., Liua, Y., Lib, M., & Wua, H. (2008). Transformational offshore outsourcing: Empirical evidence from alliances in China. Journal of Operations Management, 26 (2), 257–274

Mento, A., Jones, R., & Dirndorfer, W. (2002). A change management process: Grounded in both theory and practice. Journal of Change Management, 3(1), 45-59.

Pathak, H. (2010). Organisational change. S. I.: Pearson.

Sharma, R. R. (2007). Change management: Concepts and applications. New Delhi: Tata McGraw-Hill.