The purpose of the given report was to discuss how the CEO of CAR could solve the management problems presented in the case scenario. In the first part of the report, the issues faced by the organization and its CEO have been determined. They mostly relate to Megan’s poor image as a leader, the uncertainty among employees caused by the loss of competitive advantage by CAR, and their natural resistance to change.
In the second part of the paper, potential solutions to address the problems are discussed. They include the establishment of Megan’s credibility as a leader, the development of a clear vision statement, the creation of communication strategies to deal with employee resistance, and the involvement of change agents to facilitate the change implementation process. Based on the suggested solutions, the implementation plan has been created, the scope for further research has been suggested, and some recommendations for Megan have been given.
Change has become an ever-present feature in the life of any organization. The reason for this is the fast-moving external business environment to which companies should adapt in order to remain profitable, meet the needs of customers, and not lose their competitive edge. However, organizational change is linked with a number of complications which, if not managed appropriately and in a timely manner, may cause enormous damage both to a company and its workers. In employees, the process of change often invokes fear and active and passive resistance, which, apart from high turnover, may lead to the failure of change.
In the context of change, the role of competent leadership is generally considered to be an important aspect of work that defines the success of an organization. The given report focuses on the identification of the management problems faced by CAR and its CEO Megan, the discussion of potential solutions, and the creation of the implementation plan to boost the performance of workers and help CAR recover its know-how leadership in the industry.
Identification of the Management Problems
First of all, the management problems concerning Megan should be identified and critically assessed in order to determine viable solutions to them. Based on the case study materials, one may say that there are at least three serious problems in CAR. Firstly, Megan is not perceived by her employees as a CEO or a leader. The majority of the personnel are males who do not want to work for a female boss. This problem is also reflected in the lack of trust which Megan receives from senior members.
Despite the fact that the issues faced by CAR relate more to the emergence of new competitors and the loss of customers, it is possible to state that none of these problems can be solved without the strong leadership of the CEO. As a leader, Megan is expected to navigate and deal with arising disputes and conflicts between employees (Clegg et al., 2019). However, she cannot fully realize her potential as a CEO until workers accept her as a leader. Perhaps if Megan managed to establish better relationships with her colleagues, they would not leave the company so fast and would be more eager to participate in the change implementation process.
A CEO who is not perceived as a leader by his or her staff is unable to promote organization development interventions, inspire and motivate people to embrace change, reduce the turnover rates, and deal with employee resistance. Being an internal organizational driver, a new CEO can set a new direction and bring promising ideas in order for CAR to efficiently respond to challenges posed by the global market. However, leadership is another internal organization driver, the lack of which hinders planning and the implementation of a change initiative.
The second issue is the absence of a strong empowering vision that could offer the personnel buy-in. One may note that this problem stems from the first one since it is a leader who is responsible for delivering a new vision to the staff. The change vision could not only give the organization a picture of what the future will be like after the change has been successfully implemented but also how each individual worker will benefit from it. As for now, employees are unsure how they should work and what advantage they will gain from changing something in their routine. It is possible to assume that the previous CEOs failed to lead a change initiative partially because the staff was not prepared for a major transformation.
The third issue is associated with the uncertainty among the personnel about the changes presented by the environment. Since the company heavily relies on product innovation, which has always attracted new customers and retained old ones, employees are worried about a handful of ideas offered by the R&D department. CAR is not expected to achieve its usual profit margin until something is changed in its structure. Being uncertain about the future of their company and thus, their own future, people either leave their place of work or do not know what to do at it. Therefore, the high turnover rate and the lack of motivation in the workforce are among the other serious management problems.
Discussion of Potential Solutions
Current literature on change management indicates that there is a number of different implementation options available for change agents and change leaders. The given section will concentrate only on some of them. Megan can use the Change Kaleidoscope framework to define the type and extent of change required. Among contextual constraints and enablers on which the CEO can focus are time (how much time does Meg has for change?), scope (what is the extent of change?), and preservation (is there a need to maintain continuity in processes?) (Hailey and Balogun, 2002). She can also consider diversity (are the values and attitudes of the staff homogeneous or heterogeneous?) and capability (what is the level of competence for managing change?).
Other contextual constraints include capacity (the amount of financial resources to support change), readiness for change, and power. It is clear that the change is required immediately as CAR is already losing its profit and employees. Speaking of its scope, the change should affect the whole organization and the R&D department in particular. All the staff should be preserved, but new talented engineers need to be hired as well. The degree of diversity in terms of values and norms is low, and the personnel are mainly negative about change. The degree of Megan’s capability to manage change is low as for now, because workers do not perceive her as a good leader.
As has been mentioned before, the key issue is the lack of a strong leader that could mobilize the staff and implement change. However, Megan cannot be perceived as a leader unless workers respect and trust her. Thus, Megan should concentrate on breaking the ice with people, let them know about her professional background, management style, and goals at CAR. It is unlikely that her male colleagues will start to trust her immediately, yet the ice will be broken, and it is likely that Megan will become closer to the workforce.
Building Credibility as a Leader
One may note that it is important that Megan establish her personal credibility as a leader. To do this, she should treat her colleagues with respect in order to gain their loyalty and respect in return. The CEO should share only truthful information with people and show consistency in her behavior, which will contribute to a stable work environment. The decisions of Megan should not be reversed, and her course of action should not be shifted in order not to cause stress in her team. As a leader, Megan needs to model the way for others and set a good example with the consideration of certain values.
It is crucial to keep in mind that employees pay attention to and are encouraged by positive traits owned by senior management. Even though Megan is a female, it is not gender but behavior that earns a leader respect. For example, Megan is recommended to work side-by-side with colleagues, support employees and address their concerns with willingness and optimism, ensure effective two-way communication, and handle critical incidents with composure.
Determination of a Leadership Style
An essential thing for Megan to consider is the type of leader she wants to be. It is the leadership style that defines the manner in which the direction for an organization is provided, plans are implemented, and employees are motivated.
Among the most common leadership styles are transactional, transformational, coaching, democratic, laissez-faire, servant, and autocratic leadership. Megan may be recommended to spend some time reflecting on what type of leader she is and what type of leader is needed for CAR and its workforce. For example, if Megan acts as a laissez-faire leader, this may only make the situation worse since a strong involvement of the CEO is needed to improve the company’s performance. If Megan decides to act as a transactional leader, this is not an appropriate solution, too, because the personnel are too scared of the changes in the external environment of CAR.
One may suggest that Megan should consider the role of a transformational leader who is committed to the objectives of the organization. According to the transformational leadership theory, leaders must focus on transforming others in order to support a company (Palmer, Dunford and Buchanan, 2017). Such leaders guide the personnel through inspiration and motivation and focus not only on the organizational development but also on the personal development of each worker. Low levels of this leadership style may lead to a decrease in work engagement. If Megan undertakes the role of a transformational leader, she will be able to inspire workers to embrace change by fostering a culture of mutual trust and respect, accountability, and workplace autonomy.
Development of a Vision Statement
To address the second issue identified in the previous section, Megan should establish a clear vision. In contrast to the mission statement, the vision looks ahead in the future. It is the vision statement onto which employees cling and which guides them in their work. Megan has to consider that the main aim of the vision statement is to inspire and motivate the workforce. At the same time, the vision statement should be based on the primary goals of the organization and be specific so that employees could align it with their daily tasks.
Therefore, Megan has to decide what she wants from the business. If she wants to focus mainly on product innovation on which CAR depends, this should be clearly indicated in the vision statement. It is important that the CEO encourage employees to participate in the development of the vision statement. Being inspired by a shared vision, the workforce will engage in working toward the shared goal.
Increasing Work Engagement
Uncertainty in a company has a tendency to create hearsay, which makes it difficult for employees to perform their duties and trust senior management. Thus, Megan should pay attention to ways in which she could engage workers during uncertain times. First of all, Megan may be recommended to stay honest and consistent. During the period of uncertainty, people do not want good intentions from management. Instead, they want leaders to be transparent and truly caring for the safety of the personnel. Thus, Megan should give honest answers to any questions asked by the staff. She needs to admit that CAR is facing hard times.
Then, Megan should consider meeting with workers more often to share any ideas they have (Schein, 2005). This will help Megan engage with her employees and get a clear understanding of how they feel and what they think about the uncertainty. As the CEO, Megan ought to listen carefully to everything that goes on in CAR. During the next staff meeting, she may discuss her notes and observations with her colleagues to get more insight into how to handle tension.
Sharing Key Learning Moments
Apart from letting employees know that she is mindful of their concerns, Megan should also share her key learning moments during quick impromptu sessions. In such a way, the personnel will know that the CEO is able to make something positive from a potentially negative situation. Besides, this is a good method to stimulate employee engagement and make them oriented toward gaining a positive impact in any type of environment.
Managing Employee Resistance
It is crucial that Megan keep in mind that resistance to change is a natural human reaction since people generally prefer stability and predictability. For some workers, the organizational change can appear to be rather traumatic, and they will need to go through several stages before accepting it. Usually, a change is unsettling as people will have to adapt to a new order of things. Megan can use Fisher’s personal transition curve to understand how her workers can react to change. Their reactions may vary from anxiety, fear, and threat to happiness, gradual acceptance, and moving forward (Fisher, 2012). If the CEO knows the individual reaction of each worker toward change, she may find an appropriate approach to influence their attitudes and facilitate the reorganization process.
Implementation Plan for the Chosen Solution
Considering all the possible solutions discussed above, an implementation plan may be developed. In the first step, the organization’s direction should be set, which is why the analysis of its mission, vision, and strategy needs to be performed. This will help highlight the purpose of CAR and establish goals in accordance with this purpose. Ways in which employees will benefit from change should be clearly explained by Megan. In the second step, the CEO should assess the individual reactions of workers, as well as their personal issues and concerns, and develop strategies to overcome resistance to change.
Those who have the power and dedication to lead the change among the personnel should be identified. In the third step, together with senior management, Megan should develop strategies to achieve the vision, taking into account CAR’s resources and capacities. In the fourth step, workers should be empowered to act on the vision. The obstacles that may hinder change implementation need to be identified and addressed. In the fifth step, a system of monetary rewards may be developed to motivate employees and achieve short-term wins.
Justification of the Selected Solution
The change implementation plan developed in the previous section has several advantages. Firstly, it provides for the elaboration of a vision statement that sets a defined direction for the workforce. Secondly, the plan takes into account psychological reactions to change and focuses on dealing with employee resistance by applying an individual approach to each worker. As a result, both active and passive resistance will be managed more effectively. Thirdly, according to the plan, some workers will be empowered to lead the change, which may motivate the rest of the personnel, given that the CEO has not gained enough trust from people yet. Fourthly, this plan will help Megan establish herself as an honest, transparent, confident, and reliable transformational leader who cares about her employees and can lead organizational change effectively.
Scope for Further Research
A particular question that should be further researched by the CEO is why the R&D department had not developed more than a handful of ideas and why the ideas developed by it faced problems during the implementation process. CAR lost its long-term clients due to a lack of technical or economic superiority of its products. Thus, Megan should consider why the performance of the R&D department decreased and whether this was associated with the dismissal of particular professionals.
In summary, the main management problems in the given scenario include Megan lacking the credibility necessary to lead change effectively, the absence of a strong vision statement that could offer employees benefits from change implementation, and the uncertainty among the workforce caused by the deterioration in the company’s performance. Among the potential solutions to address these issues are the development of vision statement, the elaboration of strategies to deal with employee resistance, as well as strategies to communicate the need for change to the personnel, and the creation of a system of rewards to increase work engagement.
Strategies for hiring talented young engineers should be developed, given that CAR lost its reputation of a “funky” or “creative” organization. The company desperately needs an inflow of the qualified workforce who could create a new concept for a product and attract new customers. If the organization manages to recover its know-how leadership in the industry and offer an innovative product to its clients, the chances are that the stock values will stop falling and adversely affect CAR’s profitability.
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Hailey, V. and Balogun, J. (2002). ‘Devising context sensitive approaches to change: the example of Glaxo Wellcome’, Long Range Planning, 35(2), pp. 153-178.
Palmer, I., Dunford, R. and Buchanan, D. (2017). Managing organizational change: a multiple perspectives approach. 3rd edn. New York, NY: McGraw-Hill.
Schein, E. (2005). ‘From brainwashing to organizational therapy: a conceptual and empirical journey in search of ‘systemic’ health and a general model of change dynamics. A drama in five acts’, Organization Studies, 27(2), pp. 287-301.