MS-25 Managing Change in Organizations Test Paper

MBA - Master of Business Administration

Note: This paper consists of two sections A and B. Attempt any four questions from Section A. Section B is compulsory. All questions carry equal marks.

1. Discuss the process of Leveraging Structure in bringing change in organisations. Explain with suitable examples.

2. Evaluate critically the importance of Weisbord's Six-Box Model for diagnosis in an organisation,

3. Discuss the concept of Total Quality Management and its relevance in bringing change in an organisation.

4. Discuss how cultural change can be brought in an organisation. Explain with examples.

5. Write short notes on any three of the following :
(i) Managing transition
(ii) Managing resistance to change
(iii) Transactional vs. Transformational leader
(iv) Types of change
(v) Behaviour modelling as an intervention

SECTION B

6. Read the following case carefully and answer the questions given at the end :

In 1995 Ford Motor Company announced a major reorganization called "Ford 2000." The idea, championed by Chairman and CEO, Alex Trotman and Chairman Edward E. Hagenlacker, eliminated more than a dozen engineering design centres around the world and consolidated them into only five - four in Dearborn, Michigan, and one in Europe. The one in Europe was responsible for creating one basic design for small cars for the world market and then making minor modifications for local markets. For example, the same template will be used in Europe, South America, and Asia. The four design centres in Dearborn will do the same for large front wheel-drive cars, rear–wheel-drive cars, pick–up trucks, and commercial vehicles. The consolidation effort requires that more than twenty-five thousand salaried employees relocate or at least report to new managers. Manufacturing and assembly will still take place in plants around the world.

The purpose is to integrate Ford's operations around the world and revolutionise the way it designs and builds more than seventy lines of cars and trucks, which it sells in more than two hundred markets. The goals are reduced duplication of effort, increase volume purchasing, save more than $4 billion per year, and double profitability. All this for a company that made $3.8 billion profit from automotive operations in 1995 and $53billion overall. Trotman continues to have the support of the Ford family, who still controls 40 percent of the voting stock in the company.

Part of the new plan is a top-secret strategic document that outlines every new car and truck Ford will design, produce, and sell around the world through 2003. The plan calls for reducing the basic design platforms from 24 to 16 and increasing the total number of models by 50 percent, while saving billions of dollars. For example, the new 1996 Taurus serves as the platform for several other models, both in the United States and around the world.

In structure, the new system is really a matrix. Rather than working in a functional organization with traditional hierarchies and centralized decision making employees are assigned to a design centre, such as small cars, and then to a group according to their specialties, such as drive trains. Managers then mediate the disputes that occur between the design centres and the specialties. Employees will have to change their ways of doing their work as they design cars and trucks to fit global markets rather than a single, relatively homogeneous one management knows that employees feel a great deal of insecurity and uncertainty about the company and their jobs as they make the shift. Carrying the message to all employees has been a constant job for Trotman and Hagenlacker since the original announcement, Management also knows that Ford tried a similar design integration with their ''World Car" in the late 1970s, which failed primarily due to turf battles among designers and engineers. The cars that resulted were rarely the cost savers Ford hoped for and were so dull in their design that no one bought them. Trotman expects different result this time because of the consolidation of the design centres, the new organisation structure, and because advances in technology have made the inner working of cars so similar that only the outer, visible portions of the cars need to be different to satisfy regional tastes.

By mid 1996, however, the reorganisation was not going so well. The transition had left many employees still wondering whom they worked for and with a feeling that everything was out of control. The culprit seems to have been a reorganization of the reorganisation! Trotman now plans to reduce the number of design centres from five to three. People are moving and reporting relationships are changing once again. Group Vice President Jacques A Nasser, who may succeed Trotman by 1998 or so, has promised $11 billion in savings under the new system. Some have claimed that the "new" reorganisation really puts things back the way they were before the first reorganisation. However, three design centres is a lot Iower than the dozens that existed before. But this second reorganisation, before employees really got settled into the first one, may have devastating effects. Suppliers and employees do not know whom to contact to get questions answered or disputes resolved. All they get on the phone is voice mail, since everyone is in meetings trying to work out the new reorganisation. Top management claim9 that these problems are inherent trying to turn around such a big organisation that has been in relatively successful through the years. They say that the organisation needs to evolve to meet their ambitious goals and the competition.

Questions:

(a) Describe the changes in structure that Ford expects from the Ford 2000.
(b) How do you explain the continuing problem that employees are having with adapting to the new structure of Ford 2000?
(c) Is a matrix structure the proper structure for Ford 2000?