key characteristics of the organization in the case study, and the circumstances surrounding the change initiative/ program

Shanghai Michelin Warrior is a tire manufacturing industry in China, which was established through a joint venture between Michelin that was France based company and Shanghai Tire and Rubber Group Ltd that was based in China. In 2008, the company had to face huge losses since its development. The company never got success in earning profits and competing with other tire manufacturing companies.

According to the plant manager of company, the employees do not have trust on management of firm. The employees due to lack of trust in management were unable to show discipline and morale while working in organization. In addition to this, after joint venture the team which was established in company was of French and Chinese employees. There was no cohesiveness in leadership team. Due to the joint venture of both corporations, the plant manager had to face a lot of challenges. This change initiative resulted in lack of team cohesiveness as team was of people with having different cultural backgrounds. The team members were unable to understand each others’ language.

After the joint venture there was 2,000 employees from Shanghai Corporation among them 700 were having low performance. This resulted in reducing the overall performance of company as it has been promised by management of company that it will not fire any employee. The performance appraisal system of company was also not efficient due to which employees were not satisfied with management. There was a need of changing performance appraisal system of company but Michelin was not in favor of this change.

2. The change processes involved and the extent to which the change has impacted on both individuals and teams

In Shanghai Michelin Warrior different change processes have been experienced after joint venture. All of the changes that were implemented in organization impacted both employees as well as teams working in that organization. Mr. Ballarin after joining the firm felt that there is a need of changes in various processes of company.

Change in organizational culture

Organizational culture is defined as a way according to which employees and teams perform activities while working in an organization. Organization culture depicts set of values, norms and beliefs of overall company and all the employees have the responsibility of following those norms and standards. In Shanghai Michelin Warrior, as joint venture has been done between a French and Chinese firm, so both had different corporate cultures. So, the employees felt difficulty in understanding background culture of each employee. This change in organizational culture affected both individuals as well as teams. The individuals after joint venture had to work in a corporate culture that was different from their previous workplace setting, so they felt difficulty in understanding that corporate culture. The change in corporate culture affected negatively on employee performance because change in corporate culture results in hindrance to employee. As according to Theory X, the employee must feel psychologically comfortable in an organization in order to perform in a better way. So, employees of Shanghai Michelin Warrior felt issues due to change in corporate culture. Due to cultural change, the employees working in team also felt issues. The employees were from Japan as well as China, so they had different values, norms and beliefs. According to Kurt Lewin Model, there is a significant role of teams in organizational change. It is important for all individuals to accept shared norms and beliefs in order to work in the form of teams. This thing was missing in teams of Shanghai Michelin Warrior due to sudden change in culture (Stephan, Patterson and Kelly, 2015).

Change in Technology

In Shanghai Michelin Warrior, another change process experienced by employees was of change in technology. Mr. Ballarin had the pressure by management to implement MDP (Management System of Daily Production). Mr. Ballarin was not in favor of implementing MDP in organization, as most of the employees did not have knowledge of using this technology. But, due to management pressure this innovative technology was implemented in organization. This technology implementation affects the performance of employees. As, at the time of technology implementation most of the employees did not get training regarding the knowledge of using that technology, so, they did not feel comfortable in using that. So, this change in technology helped in increasing the quantity of products manufactured by company but performance of individuals was not enhanced due to this change in technology.

Change in Employee Incentive System

After joint venture and after change in leadership, the employee incentive system has also been changed by Mr. Ballarin. According to previous employee incentive system, the set targets for employee were so high and employees had to work so hard to achieve those targets. Mr. Ballarin changed the performance management system and lowered the set targets for employees. This affected the performance of technicians through rewarding them with bonuses. The employees were highly motivated through change in employee incentive system. There is a significant positive impact of employee incentive system on motivation level of employee. When incentive system of employees was changed in Shanghai Michelin Warrior, then this resulted in increased motivation level of employees. The high motivation of employees and technicians resulted in high performance and due to this the team performance was also enhanced.

Change in Quality Management System

Mr. Ballarin also focused on production of goods in company. He changed the quality management system and asked production department not to halt production due to rejections. The quality management system was reviewed and employees were asked to focus on improving quality of products being manufactured in company. This resulted in enhancing overall productivity and performance of employees.

Change in Leadership Teams

After joint venture, the leadership teams had also been revived. Mr. Ballarin decided to include Chinese individuals as middle managers in teams. In this way, the next five years plan had been established by Mr. Ballarin and Plant Senior Management Team. This integration in team members helped in elevating the confidence of team members and assisting to change their psyche and make them capable of accepting culture of Michelin. The new teams were formed by following Tuckman (1965) model, according to which there are four stages of team development. First of all the teams were formed and in the end it was adjourned.

Change in Human Resource Practices

After change in leadership and plant manager, the human resource practices have also been reformed. The human resource management department has been reformed in a way that five business areas have been made with having human resource managers for each area. This affected the employee performance in a way they became capable of communicating with their supervisors and then workshop managers.

The employees were also motivated through changed human resource practices of hiring and contracting employees. The contracts had been signed by employees for a year or two. This resulted in long term retention of employees in company. Before change implementation, the salaries and wages of employees were low as compared to industry standards, so this resulted in lower quality employees. After change in human resource practices, the employees were offered wages and salaries according to their experiences and education (Goetsch and Davis, 2014).  

3. Aspects in the organization and its environment that either aided or hindered this change initiative

In Shanghai Michelin Warriors the management had to face different issues that hinder the change implementation process. There was a need of having knowledge, capabilities and skills for adapting to change but also for identifying when it was required and ways of successfully leveraging opportunities.

Cultural resistance

There was cultural difference issue at the time of joint venture (Hayes, 2014). Both the corporations were from different countries, so cultural backgrounds were also different. While initiating change, the companies faced cultural issues. People were unable to recognize each others’ values, standards and beliefs. There were only some of the employees who felt the importance of changed technology but others found it difficult. The changed technology and human resource activities were difficult to be understood by employees of different values and beliefs. So, cultural differences resulted in creating hindrances to joint venture between Michelin and Shanghai. In the initial stages of change, the people were not comfortable while working in the form of teams.

Communication Barrier

The communication was an important aspect that was proved as a barrier to change implementation. The language of employees of both companies was different, so they could not understand each others’ language. It was difficult for Mr. Ballarin to understand language of employees. The communication barrier also resulted in difficulty in training regarding MDP. Proper training was not provided to employees related to the use of MDP due to communication difference.

Lack of alignment and accountability

This aspect of alignment and accountability is important for long term success of organization. The company when implemented MDP then it faced difficulty due to no link between employees’ individual goals and project’s goal. The employees were not informed about importance and benefits of using MDP, so they were not too much encouraged towards using that technology. The management also faced hindrance due to lack of accountability. The employees at that time were not accountable for outcomes of technology. There was a need of using right management systems in organization. The people were not properly aligned with goals and objectives of organization for effective implementation of change.

Leadership support

While implementing MDP as technology in organization, leadership support was something that aided in implementation of change. Leadership involvement is important for success of organization. Mr. Ballarin was a plant manager and due to his support the change has been implemented in an effective way. He also changed the human resource activities in order to ensure high productivity and performance of organization. The leadership was supportive that helped the employees in understanding the importance of change within organization (Wang et al, 2005).

4. Critically evaluate the success of the leadership strategies employed to manage the change program, giving examples of how they supported or hindered the success of the change program.

Mr Mr. Ballarin created what turned into a six-section strategy. He started by distinguishing initial advocates, and after that stabilizing and enhancing their backing by imparting his vision to them. Confidence needed to be built in the third step to reduce confrontation or disagreement to management changes. While a management team was edified in the fourth step – including Chinese workforce – to steer the alterations, including adding to their management abilities. The fifth component was an all around systematic, orderly change process. The last bit of the riddle was picking up independence from Michelin central station. The regulated procedure completed in three and a half years. During the first three months Mr Mr. Ballarin watched and surveyed the approach, level of confidence and capacities of the management group and workforce. In October 2008 he started commending little improvements, for example, enhancing the workplace and raising a few work staff pay scales. In 2009 and 2010 he took steps to enhance the management skills of work staff and to motivate them. As an initiative a few reward related targets were made more achievable and, and all workers were welcomed to a supper to commemorate the Chinese New Year. Mr Mr. Ballarin frequently conveyed his objectives, the difficulties the plant confronted and its triumphs to the employees. A standout amongst the most significant moves to persuade and satisfy the head office to bear an expenditure of Rmb45m on overhauling machines in 2009-10; this exhibited Michelin’s investment approach. Despite the fact that it was hard to influence head office to defer execution of the MDP, Mr. Ballarin discovered the truth that was to keep it up to boost arrangements and progress. Along these lines, he won more opportunities to persuade workers at the plant for change. Mr. Ballarin managed the workforce through changing the human resource activities. The payroll of employees was changed and these were increased according to skills and capabilities of employees. The front line leaders of company were also trained with aim to create capability of understanding concerns of employees. The modules for training included employee management, efficiency improvement and using MDP. Mr. Ballarin also trained two technicians for developing a module for every kind of machine. This helped the front line managers in learning the ways of using those machines. In order to strengthen skills of front line managers, PSMT was bought by Mr. Barallin. This was done by Mr. Ballarin for enhancing the skills of employees in order to implement change effectively. Before joining of Ballarin, the workforce of company was overloaded with work. The employees were not motivated and committed towards work. There was a need of cost controlling and improving efficiency and for this Mr. Ballarin defined some management policies for blue collar employees and also led a project of empowerment in order to ensure high performance. Mr. Ballarin also focussed on training of employees in order to make sure that employees learn about MDP technology. This technology is very beneficial for Michelin Shanghai Factory, but there was need of having enough skills and capabilities to use that technology. In order to ensure this, Mr. Ballarin focused on giving training to employees. The physical environment of company has also been improved by Mr. Ballarin. The improved physical environment helped the employees in working. The indoor smoking rooms have been demolished by management. In addition to this, the lounge rooms were also renovated. The cleanliness of water was also ensured by Mr. Ballarin and in the end of year the walls were also painted and water was also cleaned. These all leadership strategies used by Mr. Ballarin helped him in managing change in an effective way. Through all these efforts, the change has been implemented effectively and there are also chances of performance improvement in Michelin Shanghai Factory.

References

Goetsch, D.L. and Davis, S.B., 2014. Quality management for organizational excellence. England: Pearson.

Hayes, J., 2014. The theory and practice of change management. UK: Palgrave Macmillan.

Stephan, U., Patterson, M. and Kelly, C.M., 2015, January. Organizations Driving Positive Social Change: A Review of Mechanisms and an Integrative Framework. In Academy of Management Proceedings (Vol. 2015, No. 1, p. 14391). Academy of Management.

Tuckman, B.W., 1965. Developmental sequence in small groups.Psychological bulletin, 63(6), p.384.

Wang, W., Yuan, Y., Archer, N. and Guan, J., 2005. Critical factors for CPFR success in the Chinese retail industry. Journal of Internet commerce,4(3), pp.23-39.