Assignment Topic
Review the case study below and prepare a report detailing how you would advise Meg to solve the management problems detailed. Remember you can draw on any/all of the topics studied in this module. Your report should follow standard report format and be accurately referenced. Your report should include the following points as a minimum:
Identification of the management problems.
Discussion of potential solutions to the problem.
Implementation plan for the chosen solution.
Justification of this choice.
Scope for further research.
Please note that your report should focus upon the people issues, in relationship to change and leadership management, within the organisation rather than a consideration of global strategy.
Access the case study here.
The word count for your report is 2,500 words.
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Word Count
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The case study :
CASE STUDY: MANAGING CHANGE
Megan looked forward to her new lifestyle: being CEO of a 3,500-member organization,
called CAR, operating in the car industry in Dearborn, Michigan, was a job that
exceeded her life expectations. It was a dream job and paid really well. She enjoyed the
accoutrements of being a CEO: the first-class flights, the beautiful loft apartment, the
chauffeur-driven limousine were all things that she came to enjoy. The job offered more
than that, for it gave her the creative freedom to direct a large and, she thought, well-
managed company. However, after a couple of months she noticed that beneath the
seemingly pleasant surface of the new job and people perhaps something was not quite
right. The latest figures from the sales staff were disappointing. More worryingly, a major
and long-term partner, one who used to make up about 20% of the turnover of CAR, had
swapped to one of CAR’s main competitors. And this was something that had happened
in Megan’s first week in her new job that she felt she had never really recovered from –
even though it could not have been her responsibility.
What was going on? Meg took a cold, hard look at CAR; she looked beyond the hype
which had intoxicated her when she was first headhunted for and then accepted the
position. Why was it that none of the past three CEOs had stayed for longer than twelve
months? In fact, Bob, the last CEO, told Meg that he tried to initiate changes but found it
too hard to drive through the changes that he wanted to achieve. The basic problem was
one of costs and profits. The environment around CAR had become pretty rough in the
last couple of years. New competitors had popped up from China (a region that used to
be no threat at all because of strict import regulations – but these had disappeared
eighteen months ago). These competitors were offering similar products, at a much
better price, and CAR was wondering how they managed to do so. It was not just a
question of cheaper labor costs: CAR’s products were not that labor intensive and labor
costs did not amount to much more than 10% of factor input costs. In the old days, CAR
was supplying technical parts to over four different car brands in the USA, including Ford
and Chrysler. CAR incrementally developed new technologies and the car
manufacturers bought it. Period.
With the entrance of competitors, things changed dramatically. Even long-term clients
stressed that they were looking globally for the best price/value package: they expected
rapid changes in product style and function such that the lifetime cycle of the product
was reduced. The old tried and tested certainties of CAR’s business model seemed to
be somewhat out of date, as CAR’s clients expected innovative products to be able to
offer something new. In this new, tough world, CAR did not really sit comfortably. What
should it stand for? Where should it go? Should it strive to be a mass producer of cheap
parts or a niche provider of innovative high-tech products?
Meg was called to attention by Anne entering her office and she turned to focus on the
immediate context. Anne was formally Meg’s personal assistant, but in reality she was
much more: Meg trusted her a lot since they had known each other and worked together
for ages, before she came to CAR, in fact. Anne was bringing her the latest range of
analysts’ reports that had downgraded their stock values yet again. This was not looking
good – but who could she turn to discuss the problems? At CAR, Meg found it hard to
make friends: most of the senior executives were male and Meg felt that it was not easy
for them to accept her as their boss. Meg could feel in meetings and in less formal
situations that both senior members as well as most of the other organizational members
did not really trust her. In fact, turnover of staff had increased by around 30% in the last
three years at CAR. A lot of talented young engineers had gone elsewhere and some of
the older staff had left as well, many going into retirement. Even more problematic, it
was hard for CAR to get good people from top universities, since they did not have the
reputation of a “funky” or “creative” organization. Also, business partners did not
perceive CAR as first choice when it came to collaborating on a new concept for a
product. Put simply, CAR was rapidly losing its knowledge base.
A recent report from a consulting company had identified the relatively high turnover of
staff and the lack of motivation of the workforce as key problems. CAR depended heavily
on product innovation in order to remain a profitable company. In the last two years,
however, the R&D department had not come up with more than a handful of ideas, all of
which had run into problems during the implementation process.
Meg thought that these problems must be related: the falling stock values, the innovation
failures, the problems in attracting and retaining the right people. Somehow, she
thought, it must be possible for CAR to recover its know-how leadership in its industry.
Like a puzzle, it was hard to see how everything fitted together. Meg’s puzzle parts were
as follows. Her gut feeling told her that she could not break the ice between her and her
employees without formulating a strong, empowering vision which offered everybody
buy-in. People did not feel comfortable with the challenges that the environment was
presenting, and they did not know how to manage them well. Of course, such anxieties
and discomfort were not a good starting point for creativity and innovation. But she also
realized that she needed good people who were able to explore and exploit new ideas,
and translate innovation into tangible competitive advantage, and it was not clear that
these people were to be found in-house. Finally, Meg saw the global market as the
ultimate challenge for CAR: instead of being tied to US manufacturers, she envisioned
Europe, Asia, South America, and even Africa as future growth markets. But how was
she to bring about all these changes?
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Use UoEO Harvard referencing throughout.
