Change is a significant factor that, if properly managed, can ensure the success of an organization for years ahead. If uncontrolled, change can ruin all the company’s achievements and lead to dire consequences. Therefore, change management is an essential mechanism in business administration that assists in implementing alterations in a manner that is beneficial and non-damaging for any involved party. World Travel Agency and Holiday Seekers Travel Agency undergo a serious and complex transition to becoming one company. This process can entail numerous difficulties which need to be adequately managed to ensure stable operation and profitability. In this report, I will identify and explain multiple aspects of implementing change in application to this case.
Impacts of the Change on Stakeholders
One of the most significant impacts of the merger is the reduction in the number of physical branches and, consequently, the number of employees. Workers are one of the core stakeholders of the company, and the news of their jobs being reduced may lead to the emergence of negative feelings and arguments with the higher management. The outcomes for the World Travel employees may be less painful as they will likely retain their jobs.
In addition to that, the merger is likely to lead to the creation of new workplaces in the department that handles online clients. The reason for this is the increase of traffic that would flow to the website of the newly emerged company. The management of the clientele who will likely be the former clients of Holiday Seekers Travel will require more personnel.
Another important stakeholder in this change process is the clients. The decrease in the number of offices would likely cause an unmanaged flow of people who require physical service that the new company may struggle to provide due to the decreased presence in the physical world. Higher management will also be affected by the change in several aspects. For instance, they would be required to solve the issue of reducing the number of branches, and personnel.
Besides, they will likely face a problem of former client management and public relations. Branding would also become another pressing issue that will have to be resolved quickly. Another outcome of change that will likely affect the management is the issues with selling or relocating the equipment from the closed branches. The board members will have to resolve matters concerning the new CEO appointment, and legal procedures that accompany the merger (Jalagat 2016).
Another party that will be affected by the matter at hand is the partners such as hotels and air carriers. They will have to rearrange their agreements with the newly merged company because some of the concurrences were made with Holiday Seekers Travel and others with World Travel. Shareholders may feel at risk due to the planned merger as its effect is difficult to envision in mid-to-long term perspective. The change may influence them to sell their shares until they lose their price. On the other hand, if shareholders can be assured that the change will be to the benefit of the company, better loyalty could be expected.
All in all, the change is rather global in terms of the number of parties it concerns. Basically, the two organizations will have to change or adjust their operations, agreements, internal, and external relationships. The scale of change and its gravity for both companies seems to be overwhelming. For Holiday Seekers Travel, the change will be especially tough to manage as the company has a long history and well-established name which is recognized across the Middle East.
The merger with the company where operations are based on a completely different model will require considerable adjustments and possibly, re-education for the staff members who will retain their positions. For World Travel, the change is no less important and challenging. In juxtaposition to Holiday Seekers Travel, the company is smaller and younger which implies less experience as well as insufficient means for handling a sudden increase in demand. Therefore, for such large-scale change, there is a need for proper management interventions that will help the two companies merge successfully and operate on a higher level of profitability.
Measures for Managing the Impacts
Change management incorporates several mechanics that may be useful in handling the impacts induced by the change. The first step to change management is to recognize and acknowledge change (Jalagat 2016). This concerns not only the perturbation in the face of the merger that happens directly to companies in question but also the change to the industry, political landscape, and environment.
Recognizing these changes and taking them into account are essential for any action that is devised in response to them. The next important mechanism of change that needs to be implemented is a careful account of every aspect of the company that is subject to change. Keeping track of all alterations will simplify the task of managing them. According to Brenner and Holten (2015), arranging them in a systemic manner and analyzing them could help increase the quality of measures that will be introduced for the transition to happen.
In this particular case, training will become a vital part of change impact management. The adjustments will be numerous, and the personnel on all levels also need to adjust their professional practices as well as build up mental preparedness in order to become a valuable asset to the merged company. Training will undoubtedly be of assistance to the employees at Holiday Seekers Travel as they are accustomed to physical client service and have an established company culture.
World Travel, in their turn, will also need to be informed of their new colleagues’ traditions and ways of performing daily tasks in order to achieve synergy. As most of the clientele is planned to be services through an online platform established by World Travel, the company has lots of data stored digitally. In Holiday Seekers Travel, most of the data is likely to be stored physically as their services are sold face-to-face. In light of this, in the merged organization, employees will have to deal majorly with electronic document flow, which also requires additional skills of the former workers of Holiday Seekers Travel.
The establishment of proper support for the changes from all the employees is also an important measure. Making sure that everyone is on board with the merger, as Mohammed-Aminu and Pearl (2011) argue, helps make the transition process smoother and quicker. When employees understand the need for change and the benefits that the improvement will bring, change management becomes easier to implement. In addition to that, employee compliance will save the company the efforts of hiring additional personnel to make up for the staff losses due to the change disagreements. Therefore, by following the four measures mentioned above, Holiday Seekers Travel and World Travel may be able to successfully prepare for implementing change and carry it out.
The Choice of Change Leader
In each case of change, there is a need for a skillful leader who will guide others and the organization towards a successful fulfillment of goals and plans. The merger situation in this case dictates the need for a person who understands operations in both companies well enough to minimize asset losses. In addition, that individual needs to produce an inspirational effect on others in order to win the support of the board members, employees, managers, and other stakeholders. A change leader might be an outside person who has a vast experience of organizing mergers. For instance, Peter Browning, a leader who had an experience at implementing change at Bondware, was assigned to White Cap company, even though he was not familiar with it (Jick & Peiperl 2010).
The benefits of such a choice will include a fresh outlook on the problems that the companies have and will have during the transitional period. Also, these people are motivated to implement change as they are not tied emotionally or otherwise to any of the organizations. A recruited professional can better ascertain the leadership needs of the company and establish connections between all stakeholders, provided he or she possess the necessary skills and experience.
An outsourced change leader can advise the owners on the expectations and needs of the company after the change will occur in order to be realistic about the planning. A third party leader can also organize staff training and informing activities in order to ensure the change is implemented effectively. Due to the fact that change leadership is the professional field of interest of a hired specialist, he or she is generally aware of the latest practices and methods of leading change in organizations.
On the other hand, the board may consider entrusting this task to one of the CEOs of the merging companies. A CEO of the Holiday Seekers Travel can be assigned to this position due to the notion that he probably has more leadership experience and his or her company is larger. The size of the company, in this case, is of significance, because it has to undergo a more significant number of changes since most of the services will now be sold online. This will require more effort from the first company than from the second, which is why the CEO of the Holiday Seekers Travel might be a suitable candidate for the position.
A CEO of World Travel might also be considered an appropriate person for the job. The ultimate direction to which the companies are heading lies within the competence of this company, which is why its CEO could be a better leader. In addition, the fact that World Travel is oriented in using cutting-edge technologies may suggest that it implements the latest management practices as well. Out of the three presented options, I would suggest choosing the first one.
Firstly, an outside candidate is unbiased and will not advocate for one or the other company in terms of resource, personnel, management, and other issues. Secondly, he or she could be more effective at finding common ground with the board as, again, he or she does not represent any of the companies’ interests. After the merger is complete and the change is effectively implemented, one of the CEO’s could be returned to his or her duties. Which of them to assign to this position should be decided on the board meeting.
There are a variety of leadership styles that may be rendered useful for the change under consideration. Researchers state that among the most effective ones are the transformational and transactional leadership styles (Brenner & Holten 2015). Transformational leadership is based on proactivity as a feature that changes the attitude towards change and innovation. Judging from its title, it motivates people to transform the patterns of acting and thinking about development. A leader that utilizes such a paradigm works primarily with the corporate culture and alternates it in a manner that suits current and future goals of an organization.
In this case, transformational approach could be highly appropriate, especially with Holiday Seekers Travel because this company and its personnel are highly vulnerable to a large-scale change ahead. Transformational leadership here, if implemented correctly, will bring new ideas that are important to merge two conceptually different corporations with dissimilar corporate culture. As new identity is introduced, changes to corporate culture will be inevitable and transformational leadership is a key to establishing a solid basis for global change.
Ideals and values are another side of transformational leadership that will be necessary to take into account. Proper application of this paradigm, in accordance with the data collected and analyzed by Brenner and Holten (2015), includes motivation techniques that to appeal to the employee’s higher ideals and values. The key here is to forge a new identity or perception of the firm that would appeal to the personnel as something that corresponds to their personal goals and values of human beings. For instance, Bosch company regards quality as the cornerstone of their philosophy which also applies to the people who work there (Bosch Global n.d.).
Thus it may be safe to argue that employees of Bosch regard themselves as top-skilled professionals who create masterpiece products for their customers. In the case of World Travel and Holiday Seekers Travel, it is also paramount for a transformational leader to encourage employees to see beyond their personal interest and apply efforts for the benefit of the unit. In this transitional period, the company desperately needs teams that recognize the power of teamwork and ready to put extra effort into achieving stable company performance.
Another paradigm that could be useful for facilitating the transitional period is transactional leadership. This leadership style is in many ways similar to the previously-discussed transformational style, yet possesses a set of distinctive features. Firstly, transactional leaders emphasize stability and continuous quality. This model is not oriented on innovation as much as the transformational style. It is designed for the companies that undergo hardships and changes to keep them from major collapses. In this case, it could be useful to introduce a highly performance-oriented environment that the model presupposes.
On the other hand, Dhammika, Ahmad, and Sam (2013) argue that transformational leadership outperforms transactional in terms of commitment and job satisfaction. In addition, transactional leadership is reported to be useful mostly in emergency situations. The merger could possibly be classified as such, but there is apparently no reason to suspect any major issues because the two companies have an established structure and trained management that has carried them through years of successful operation.
The Culture to Accept the Change
Business culture is a critical aspect of facilitating change. Establishing a culture that will stimulate the employees to perform at the top of their capacity is a non-trivial task that requires substantial organizational effort. The difficulty of such an undertaking is aggravated by the fact that there are two companies with an established corporate culture, and there may be a clash of ideas and styles that will undermine the stability of performance.
To avoid unnecessary complications, there is a need for careful preparation. According to Jick and Peiperl (2010), adjusting to a new environment and new organizational structure could become a challenge, perhaps one of the most significant ones. Older employees are especially at risk of a decrease in performance due to the assimilation issues. Values, assumptions, and goals of the new company will change which will undoubtedly influence both companies and their employees. In order to avoid complications, there is a need to create a culture that will embody the values of both companies.
The first step towards changing the culture is making the employees recognize the need for a change. In that way, the transition to a new culture could be made relatively painless. Simple verbalization, as Walker and Soule (2017) state, will not work as in companies that have been long in the market are often change-resistant. Instead, the leaders should frame the issues and lead by demonstrating the effectiveness of the new values.
Gradual change is also a notable technique to use. Former environments should continue to exist parallel to the introduction of the new in order to establish a “safe haven” for workers and not disturb their senses too much. In this regard, it should also be pointed out that continuous monitoring needs to be in order. The employees of the two merged companies are likely to face new working conditions, change of schedules, new colleagues, and so forth and frictions are bound to happen. Management of these frictions is critical to the successful establishment of the new culture.
It may occur that the change will cause some employees to part with the company. In order to establish the new culture more firmly, the company needs to reflect the changes by implementing them into their new hiring policy. Each new worker along with the remaining ones has to share the newly-forged culture and values so the company could step by step become an effective and united being. With time, changes that were introduced by action need to be reflected on paper, which means that the company has to create a new code of conduct for the employees. This code should contain everything from client handling to workplace and look.
Choosing the right change model is one of the most critical steps in implementing organizational change. There is a certain number of change models with each of them suitable for particular situations and companies. Among the most recognized and utilized among business and scientific communities are the ADKAR Model, Lewin’s model, Kotter’s 8-step model, and Kubler-Ross five-stage model. ADKAR stands for awareness, desire, knowledge, ability, and reinforcement.
Overall, the model is reported to be rather flexible (Magnúsdóttir 2018). Kubler-Ross five-stage model that presupposes that employees are negatively predispositioned against change (Magnúsdóttir 2018). Despite the fact that there is a risk that certain employees will negatively respond to the change and exhibit strong change resistance, it can be argued that Kotter’s preparation-based model could be more effective at mitigating that risk.
The choice of the model has to be based on the needs of the company. Other than wording, many change models have common phased structure and the difference between them is, essentially, how they conceptualize the steps of implementing change.
One of the most recognized and widely used models is Kotter’s 8-step approach. It has plenty in common with other models in terms of stressing the importance of leadership, strategy, and communication. Due to its detailed nature, the model is quite useful to implement in environments with a high degree of uncertainty. In the case of World Travel and Holiday Seekers Travel, the uncertainty level is rather high as the employees in both companies are still unaware of the upcoming change.
The Kotter’s model has a strong emphasis on the preparation aspect. The first few steps one through five only establish a basis for definitive action and successful change implementation. This will hopefully remedy the shock and lack of understanding regarding the merger. Unlike other models mentioned above, Kotter’s does not include a separate stage that monitors the change after it has been implemented. However, the last step called “institute change” presupposes leaders to support the change until it stops being a change and becomes everyday practice.
Change Model Implementation
The implementation of the chosen change model will occur in accordance with the steps that it suggests. During the first step, the establishment of urgency, there is a need to ensure that the majority of the personnel understands the change and is ready to act. Here, as Auguste (2013) argues, it is essential to emphasize that for the change to occur each employee needs to contribute now.
The second step, building a guiding coalition, requires forging a team of people who will lead the change and organize the process. Since the two companies have a large number of personnel who are accustomed to different organizational cultures, a coalition needs to be created from the representatives of both World Travel and Holiday Seekers Travel. The third step, forming strategic visions and initiatives, is aimed to communicate the final result and help employees observe the positive effect of the change for the wellbeing of the company. This vision needs to be articulated carefully and be focused enough for everyone to ensure that everyone agrees with the necessity of alterations.
The next step, the creation of a volunteer army, is critical because if it fails, the change and all prior efforts will yield no result. This step is concentrated on message delivery. Here the leaders of the two companies need to establish a rapport with their combined workforce and ensure they all agree and understand what actions need to be performed and what the results will they yield. The wording needs to be chosen carefully, and the text should not be too long and complicated.
It is vital that the leaders themselves follow their words and work towards change implementation, therefore, leading by example. Enable action by removing, barriers is aimed at eliminating mental and structural obstacles to change. After communicating the vision and change implementation strategy leaders may face change resistance, budget miscalculations, lack of management, and so forth. Training and guiding all the participants of the process is essential for the change to tackle the issues.
Generation of short-term wins is the next step in implementing change in accordance with the Kotter’s model. Laying milestones of success is vital for making the signs of progress visible to other people. For instance, changing one’s workplace organization or schedule or duty arrangements and using them to the benefit of performance, leaders can demonstrate that the effectiveness of the change. Sustaining acceleration is one of the most critical steps that precede successful implementation of change.
At this stage, the first positive consequences of innovations should surface, and for leaders it is important not to mistake them for the success of the change implementation. Instead, organization executives need to wait for the changes to become properly anchored in the corporate culture. The final step is to institute change. At this stage, the changes should be in effect and visible for some time for leaders and managers to analyze and present the results to the employees. A point needs to be made here that change has brought positive results. Thus, it will become possible for everyone to accept that the new manner of conduct should be permanently imbued with the corporate culture.
The model under which the change was advised to be implemented above may not contain all the answers and techniques needed for successful merger and change in the organizations under consideration. Jick and Peiperl (2010) suggest that there is no reliable and universal step-by-step way to success. Therefore, there is always a necessity for constant monitoring and assessment of the process of change. In this case, the initial communication act with the personnel and informing them about the changes should be carefully planned and executed perfectly. From that initial statement depends on the number of employees who will become the true agents of change and will help managers and leaders to implement everything in accordance with the plans.
Measures to Sustain the Change
Implementing change and sustaining change is equally vital because what was introduced can be discarded if insufficient effort is applied. In regard to the change that occurs with the organizations in question, sustaining relates not to the companies being merged because it is unlikely to change. Instead, sustaining relates to the changes that are proposed to be made to the company culture and new operation procedures, hiring policies, and so forth. In order to sustain change, Gleeson (2017) argues, there is a need to effectively communicate about barriers, resistance, and other issues that may undermine the progress. Rapid recognition that a problem is present and immediate action to remedy it is what, in many occasions, able to help sustain changes.
Formal and informal methods of communication should be exercised by the leaders in order to reduce change resistance. Transparency is another vital strategy for sustaining change (Gleeson 2017). The initial decision to conceal the fact of the merge and decrease the number of branches could undermine the trust of workers towards the companies’ leadership. Therefore, from this point, leaders should be totally open with their personnel and help them understand the reasons behind such decisions. It is also vital to note that transparent communication needs to become regular and in the course of the information exchange a theme of new values and goals should be recurring. It is also vital to instigate proper motivation for the employees to be proactive about change implementation.
When personnel recognizes that change can positively influence the value they create, and helps them achieve their personal goals within the organization, then change can be sustained. In this case, it may be problematic, as significant staff reductions are scheduled, and the remaining workers might sense risk coming from the upcoming changes. Therefore, the company leaders need to articulate that everyone who chooses to be a part of the new company will become successful. Finally, one of the most important measures to sustain change in application to this case is measuring the interim results of the change and contrasting them against the projected goals (Gleeson 2017). In this manner, the company can ensure rapid correction.
The company name is an essential element of the brand which predicts a particular part of the clients’ attitudes towards the company. Companies that undergo merges with no unity under a single brand risk severing their relations which will negatively influence firm performance (Green & Jame 2013). Therefore, a name that would be recognizable and distinctive should be produced. The study conducted by Green and Jame (2013) suggests that companies that have short and easily-pronounced names enjoy higher investments, valuations, and larger share turnover.
On the other hand, completely rejecting the name Holiday Seekers Travel would also be a mistake because the company is recognized across the Middle East. Thus, it could be considered reasonable to retain a part of the name in the new company identity. The name I propose is “Holiday World.” That name contains the meaningful parts of the formerly-separate companies and drops “travel.” Travel part of the names can be omitted due to the fact that many travel companies use that word in their names and this does not serve as a part of the company’s unique image.
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