China’s Role in the World Economy

Over the past decades, the competitiveness of the United States economy has been outstanding because of its capacity for innovation, higher education system, market size in terms of labor and product markets, and flexible capital markets. These advantages have allowed U. S. industries to take a leadership role in the global economy, providing products and services demanded worldwide. However, the U. S. economic powerhouse faces expanded global competition. Economic liberalization throughout the world, skills upgrades in developing countries and massive technological advances mean that the United States faces expanded competition for jobs and investment. The United States’ overall competitive position in the world economy is threatened by uprising developing countries such as BRIC—Brazil, Russia, India, and China. This paper will focus particularly on China’s role in the world economy. At a time when the U. S. nd other traditional economic powers are weakening, China’s economic power is strengthening, indicating that it will try to find a much more assertive role in shaping the future of the world financial order. China, after all, has one-fifth of the world’s population, or roughly twice the population of the European Union, the United States, and Japan plus a handful of other high income nations. China sees the global downturn as an opportunity and it has the resources to seize the moment. Although Chinese leaders are struggling with shrinking trade and rising unemployment, China’s economy is still growing faster than those of other major nations. Chinese banks are more stable and the Beijing government is sitting on the largest stockpile of foreign reserves in the world. China's power has been increasing in recent years as it has surged to become the third biggest economy, after the U. S. and Japan. Since the late '70s, however, China's economy has doubled every eight years. In that same period, the U. S. conomy has doubled once. Today, average Chinese have some ten times the purchasing power they had just a quarter century ago. China's growth was led by exports and investments in fixed assets, such as factories and roads. China is now a powerful trading nation, and in recent years has been an avid consumer of industrial commodities such as copper, iron ore, and steel to fuel its rapid industrialization. Additionally, another main driver of Chinese growth was the Beijing Summer Olympics whom people looked to as a defining moment of China's rise. China's run of economic prosperity has been great news for millions of Chinese who have seen their living standards improve, as well as for global trade and the broader world economy. However, with all the foreign investment China is receiving, the country will only grow more and more interdependent upon the world economy. The impressive growth rate of China’s economy is not without its shortcomings. Problems such as inflation and inefficient state-owned enterprises plague the rise of the Chinese economy. Some of China’s economic problems seem to be internal, and connected with supporting the massive population while divesting the government of money-losing businesses. Its integration into the international economic order poses major difficulties for the rest of the world. These problems include bringing China's mixed market/centrally planned economy into the GATT, adapting to competition from labor-intensive Chinese exports, encouraging further market-oriented reform, and accommodating its demand for international capital. But China's participation in the global economy also offers important opportunities for trade, investment, and international cooperation to promote world prosperity and stability. The average Chinese GDP is still very low, meaning that it is a country with a lot of poverty. Since China has limited natural resources, the incremental increase in demand for these resources will have to come mainly from imports. Demand for energy and for certain other resources will thus grow very rapidly and China will have to expend large amounts of foreign exchange on their purchase, but China will have the oreign exchange required. And it is also clear that for the developed world, we have to react intelligently and strategically to what China is doing, accepting its aspirations, but also being aware of our own national self interest, and being clear about the ways we can work together. China is a manufacture based economy and is also graduating 350,000 engineers each year, six to seven times more than the U. S. These engineers are joining the manufacturing sector where manufactures now play an important role in response to global demand. The use of information technology in organizations is inevitable, be it manufacturing. It has contributed largely to the process advancements in countries much like Eastern Asia. Chinese manufacturers, for example, will continue to seek out and perfect the implementation of the latest strategies and technologies in the future. A comparative analysis of the investment patterns of U. S. manufacturers versus China is quite astounding. †¢ U. S. Manufacturing plants spent 3% of sales on capital equipment in 2004 whereas China spent 20%. †¢ In the U. S. 53% of manufacturing plants were expected to increase their capital-equipment spending in 2005 compared to China at 72%. †¢ IT spending was expected to increase at 42% of U. S. Plants in 2005 whereas in China, 75% of plants were expected to increase their spending on IT. In short, China has a manufacturing base that is, more cost-efficient today and investing more heavily in the capital equipment and IT that will enable it to become more innovative tomorrow. The impact of information technology in global trade is on the rise, as several advancements are focused on to be implemented in various developing countries like China. American entrepreneurs have pounced on the opportunity of growth in these countries, specifically in China. China is highly populated and is increasing in middle class citizens who have enabled the creation of consumer markets in China. While continuing to grow, entrepreneurs have leaped at the chance to be apart of the business and consumer growth. They learn the Chinese culture, language, and government regulations through their own research and or with the help of locals. Using the opportunity of unpenetrated markets and low resource and production costs, these entrepreneurs are able to build successful ventures. With high business growth, more Chinese citizens are able to afford purchase of imports and exports. Certainly, China is poised to become the world’s next economic super power and largest trading entity, in terms of inward and outward trading flows. If China would keep growing at this pace its economy would be bigger than the American’s economy by 2030 (Prasad, 2004). Their success in attaining that status will depend largely on how they collectively deal with their existing and future economic issues. The economy is showing positive changes but still faces very big difficulties. Despite its problems, China's economy is forecast to grow by at least 5% this year, in stark contrast to many major global economies that are shrinking. But these are speculations about the future. As for the present, China’s emergence is already a major challenge for other developing countries, for Asia, and for the world. That challenge will not diminish anytime soon.

Of Mice and Men: John Steinbeck Essay

Task: Say what happens on each of the three times we Curley’s wife and what we learn about her. Curley’s wife only appears three times throughout Of Mice and Men, even though she is a pivotal character in the story. The three times she appears are all small parts in the book, but are key scenes. They give us clues about her appearance, character and an insight into her life before she married Curley. The final time we see her is the vital scene where the plot comes together. The first time we see Curley’s wife is chapter 2, where she visits the bunkhouse. Curley’s wife enters the bunkhouse where Lennie and George are unpacking and George is telling Lennie where to go if he gets into trouble. Curley’s wife comes in looking for her husband; she stands in the doorway provocatively trying to get attention from Lennie and George. George ignores Curley’s wife, knowing what she is trying to do, but Lennie is instantly besotted with her. After Curley’s wife doesn’t get very far with Lennie and George she turns her attention to Slim and leaves the bunkhouse. This is only a short scene in the book, but we still learn a lot about Curley’s wife. The fact that she is only ever referred to as Curley’s wife suggests that she is only ever seen as the possession of Curley’s and has no individuality of her own. We learn that she has full, rouged lips and wide-spaced eyes, heavily made up. Her hair was hung in little rolled clusters, like sausages†. The part about her hair could be taken as an insult about her appearance and that she has failed in making herself attractive. She is descried as wearing mainly red rouged lips, fingernails were red, red mules with little bouquets of red ostrich feathers† which could be interpreted as a colour of danger or a sexual colour which she uses to gain attention from the ranch hands. Curley’s wife strives for attention; by always wearing a lot of make-up and bright clothing she gets the attention she craves so much. Because Curley’s wife is the only woman on the ranch she has no other women to walk to or be friends with and is therefore seen as a sexual object by the ranch hands. She uses this sexual image the ranch hands have of her to gain attention. Her body language suggests that she flirts provocatively her body was thrown forward†, showin her legs†. Her voice was said to have a brittle quality, which could imply that she is as so brittle herself, easily broken or venerable. Because Curley’s wife cannot escape from the sexual image that the other men have of her she uses it as a means of getting the attention she lacks. It is shown this scene that she doesn’t have a good relationship with Curley, because even though she says she is looking for Curley, when she is told where he is she looks apprehensive and rushes back to the bunkhouse as if she would be in trouble if she were not there. Also in this scene shows us that she is lonely and wants someone to talk to because when George answers her brusquely she still stays there and tries to talk to them. After she has gone George speaks of her despairingly bitch†, piece of jail bait† meaning that she has failed to impress him. This scene is like a prediction of what will happen later on in the story, before Curley wife comes into the bunkhouse George is telling Lennie where to go if he gets into trouble, then Curley’s wife walks in. This could be an indication that she is or has something to do with what gets Lennie into trouble. Over all in this scene we find out that Curley’s wife is lonely, pretty, flirty, frightened of her husband and is seen as a possession of Curley’s. The second time we see Curley’s wife is in chapter 4. This scene is where we see Curley’s wife visit Crooks room, gathered there are all the misfits on the ranch. They have been left behind while everyone else has on into town for the night. These people are left behind because they are misfits i.e. are not a young healthy white male. Crooks is black and is crippled, Candy is old and crippled, Lennie has learning disabilities (seen as being thick) and Curley’s wife is a woman. Candy, Lennie and Crooks are discussing the plans for the farm they are going to own, when Curley’s wife comes in looking for Curley. Candy and crooks want Curley’s wife to leave so the don’t get into trouble, but she persists in trying to talk to them. She asks them if they know what happened to Curley’s hand even though she all ready has worked out what has happened. When Crooks tells her to leave or he’ll tell the boss not to let her in the barn any more she becomes angry and tells him not to open his mouth, she threatens that if he dose she will get him strung up on a tree. Curley’s wife only leaves when she thinks the other ranch hands including, Curley have come back from town. Again in this scene we are shown that Curley’s wife is a very lonely person and only wants someone to talk to well, I ain’t givin you no trouble. Think I don’t like to talk to somebody ever’once in a while? Think I like to stick in that house alla time†. She is also again shown to use her appearance to get attention, Her face was heavily made up. Her lips were slightly parted. She breathed strongly, as though she had been running†. Curley’s wife shows discontent in the life that she has now and a great dislike for her husband Curley, Sure I gotta husban’. You all seen him. Swell guy aint he?†, I’m glad you bust up Curley a little bit. He got it comin’ to him. Sometimes I’d like to bust him myself†. She has this dislike for Curley because of his failure to satisfy her emotionally. Even though this scene is a gathering of the ranch misfits Curley’s wife has a slight advantage over the others. This is because she has a superior social standing as a young white female, she uses this to threaten dominate the other misfits. This happens on several occasions i.e. when she talks down to them You bindle bums† and also when Crooks orders her out of his room. By doing this he aggravates him and she attacks him verbally You know what I could do?† Well, you keep your place then Nigger. I could get you strung up on a tree so easy it ain’t even funny†. Crooks was an easy target for Curley’s wife to pick on because he is black. People were prejudiced against ethnic minorities in those days and this made it easy for her to frighten Crooks. In my opinion I think that she took pleasure out of his suffering and this particular scene shows a nasty side of her personality. The last time we see Curley’s wife is in the barn with Lennie, chapter 5. In this scene all of the men on the ranch except Lennie are outside taking part or are watching a horseshoe tournament. Lennie is in the barn playing with has pup, but accidentally kills it by stroking it too hard. Curley’s wife enters the barn because she is lonely and wants someone to talk too. She tries to flirt and impress Lennie by telling him about her life before she met Curley. She only really gets Lennie’s full attention when he tells her he likes to stroke nice things. When he tells her she invites Lennie to stroke her soft hair, but when Lennies stroking becomes harder, she panics; in a effort to stop her panicking and screaming Lennie puts his hand over her mouth, this in turn makes her panic even more. In the end Lennie like with the pup breaks her neck. He half-buries her in the hay and runs off. Candy later finds her body. Even though this is the last time we see Curley’s wife we still learn a lot about her and things we already know are reinforced. The fact that Curley’s wife is lonely is reinforced again in this scene I get lonely† this again makes her crave attention from other people. She attempts to gain Lennie’s attention in many ways in this scene, one of the ways she tries is by flirting here feel right her†. Another way is by playing on her own loneliness for sympathy even she shows none for Lennie when he shows her his dead pup. She tries to impress Lennie by telling him about her life before she met Curley She looked closely at Lennie to see whether she was impressing him†. Curley’s wife shows herself to be impatient and selfish by not letting Lennie tell his story before hers she went on with her story quickly, before she could be interrupted†. Again in this scene like the one before she shows a great dislike for Curley. This is because she married Curley only because she was let down by a man who said he could put her in movies, she married Curley so she could get away from home, but this turned out to be a hasty and bad decision for her. Because Curley doesn’t give his wife the attention she needs and tries to keep her from the other men on the ranch, she begins to hate Curley and seeks the attention from the other men on the ranch. Curley’s wife is also naive and lacks any common sense; this is because she believed that the man at the Riverside dance could put her in movies, when it is most probable that he just said it to sleep with her He says he was gonna put me in the movies. Soon’s he got back to Hollywood he was gonna write to me about it† I never got that letter†. Also the fact that she let Lennie to stroke her hair after he told her that he killed his pup by stroking it shows that she lacks any common sense. Many of the characters show contempt for Curley’s wife; they feel that she is a troublemaker. Candy calls her a tart and even when she is dead he says to her you god-damn tramp†¦Ever’ body knowed you’d mess things up. You wasn’t no good. You ain’t no good now, you lousy tart†. In my opinion I think that she deserves pity rather than contempt, because her husband is insensitive, possessive and aggressive. From the three times we see Curley’s wife we can say that she is a pivotal character in the story. Because of her hasty marriage to the possessive Curley she has become lonely in her isolation. To try to escape from the loneliness she uses the sexual image the ranch hands have of her to gain attention from other people, even those at the bottom of the social hierarchy. The fact that she is known only as Curley’s wife and is never called by her real name by ether the ranch hands or the author shows that she is seen only as a possession and is not treated as an individual.

Boutique Managment System

1. Boutique Management SystemThe purpose of Boutique Management system is to implement the computerization of the clothes inventory and sales etc. BMS (Boutique Management System) that designed to manage your boutique is very user friendly software. With this software, you can generate report based on your preference (daily, weekly, monthly, or yearly).Scope:-BMS (Boutique Management System) should be designed to manage your boutique in a very user friendly way. With this software, you should generate report based on your preference (daily, weekly, monthly, or yearly). The program consists of the following modules:Source listing This module is supposed to identify the products by their discription. Add products This module is supposed to take the inputs from an input device. Add customers This module is capable of adding customers in the specified formats. Update and delete products This module will update and delete products. Update and delete customers This module will be able to u pdate and delete customers SearchingIn this module the admin or employee can search the customer or products from the database based on criteria’s TransactionsThis module will take up transactions like selling products, buying products from supplier updating cash and updating the bills. Appropriate actions will be taken.Report GenerationThis is a client program which will request for reports. 1). Registration of any new product 2) Functional specification for SearchThe search should be a case insensitive search for items which contain the search key word. The search results should display all the items which matched the search criteria. It will return only those items which are up for sale currently. 3) Sell an ItemWhen the user clicks on Sell an item link, then a page comes up which allows the user to do the following: Provide a title for the item and a description of the Item.A text box to put in the price A text box to provide the date.4) Category SearchingWhen the user cl icks on any of the Categories, a new page should open up which shows all the items up for sale in the Category. 5) Buy an Item (Item page)The Item page contains the following:- The title of the Item The Description of the Item The name of the Seller The current price.6) Edit an ItemThe sellers should be able to edit the item. The seller should be able to do the following:- Change Price and description

Write an theoretical analysis on your Diagnostic essay using your

Write an theoretical analysis on your Diagnostic using your summary on Ways of Reading - Essay Example One of the important lessons that I acquired in the process of reading is that it is generally an active process (Bartholomae and Anthony 24). Reading usually entails the search of information by way of communication with the author. The book provides valuable tips and strategies that can help students struggling with English on ways of improving their reading and writing skills. As an active process good reading practices demands that students attempt to get deeper into the thinking of the author by responding to some of the claims made in the book or providing their feelings on the same. Such a way of reading is important in the sense that it helps the student to understand the deeper meanings of the text. The method also helps the students acquire new vocabularies and ideas in ways that are easy to recall. Another important benefit of applying the strategy of active reading is that the student manages to improve his writing skills by observing the new ways and creative manner in which the author develops his writing skills. After reading different books, I have learnt to identify the beauty of words by observing the creative ways in which they have been used. I now know that both reading and writing are arts that can be acquired, developed or lost depending on the way in which students engage in them. Before I read Ways of Reading, I had many problems with grammar and sentence structures. I used to write very long sentences that had a lot of grammatical and punctuation mistakes. After reading the book, I have learnt to observe the rules of sentences and punctuation in different texts, which have helped me to sharpen my own skills in the process. Another important point that is made in the book is that good writers are always good readers. It is not easy for a person to develop good writing skills if he or she does not enjoy reading. The way of reading must be involving on the part of the

E-commerce Research Paper Example | Topics and Well Written Essays - 2500 words

E-commerce - Research Paper Example However, the key challenge has been the fraud and general security issues this affects both the buyer and the seller. Businesses run the risk of phishing attacks before they can transact any business. This is costly for them as a business, but it is inevitable to avoid further losses in future. The customer is the most vulnerable to fraud and security risks the common security issue is hacking of their credit card. My paper seeks to explore deeper into these problems (fraud and security), effects on e-commerce, and ways of improving the security of the business to both customers and the sellers. The recommendations to be made can be used by authorities to make changes in the trade for its success in the future. 2. LITERATURE REVIEW 2.1 Introduction Since the introduction of e-commerce fraud and security issues are a serious blow in the business, of all other issues that people around the globe have had to put up with, fraud and security issues have dominated. Discussions have previou sly been held to try and bring a lasting solution but with little success. Of all cyber crimes in the world, fraud accounts for 3% which is a substantial margin compared to other small offences committed through internet. Garner Group on the other hand estimated that around 1.06% of the total online transactions are fraudulent as compared to the 0.6% (Reynolds 2004). Both statistics above translate to a lot of money loss, which affects clients and sellers of goods or services. Effects and impact of security and fraud in e- commerce are worrying, by year 2003, it was estimated that 1.8 billion dollars would be lost (Debjan 2005). Once one is a victim of security and fraud in e- commerce, majority fear and their perceptions changed. Many fear that they may lose their money again... Since the introduction of e-commerce fraud and security issues are a serious blow to the business, of all other issues that people around the globe have had to put up with, fraud and security issues have dominated. Discussions have previously been held to try and bring a lasting solution but with little success. Of all cyber crimes in the world, fraud accounts for 3% which is a substantial margin compared to other small offenses committed through the internet. Garner Group, on the other hand, estimated that around 1.06% of the total online transactions are fraudulent as compared to the 0.6% (Reynolds 2004). Both statistics above translate to a lot of money loss, which affects clients and sellers of goods or services. Effects and impact of security and fraud in e- commerce are worrying, by the year 2003, it was estimated that 1.8 billion dollars would be lost (Debjan 2005). Once one is a victim of security and fraud in e- commerce, majority fear, and their perceptions changed. Many fe ar that they may lose their money again especially if they lost a lot of money previously.Literature review below has the research and view of people who have done research e-commerce in the past. The literature has a lot of information and data regarding the proposal.E-commerce touches many people’s lives around the globe, a million e-businesses, are registered and operation on the internet, interacting with a billion people both buyers and potential buyers, through trillion interconnected intelligent devices.

Information Sharing in Supply Chain Management Essay

Information Sharing in Supply Chain Management - Essay Example Globalization and regulator threats in industries have tend to empower the customer a great deal and it is more often than not the customer who dictates terms to the businesses operating in the market place. Under such complex and intriguing scenarios the role of supply chain becomes ever more challenging, decisive and vital for the growth and nurturing of a company (Fisher, 2000). The entrepreneurs, having studied the market trends and being well acquainted with the consumer culture, can determine certain variables that are almost impossible to discover otherwise. The entrepreneurs can determine future demand of a particular product that they are selling to a particular segment. A company that needs to become the top of the mind company for its consumers must lay stark inventory management plans that are based on industry dynamics and reliable data obtained from various sources. Indeed managing inventory requires immense amounts of vigilance. However this vigilance is not to be main tained by the producer alone as this is not pragmatic and on the other hand there are several parties involved in the value chain of every product. The producer, supplier, wholesaler and retailer all need to collaborate with one another and share information regarding the level of inventory that each one is required to hold at every stage in the entire process. This is being done and practiced in almost every company today. For sharing information companies spend hundreds of thousands of dollars every year to develop and upgrade their information sharing systems that keep all the involved players in the cycle onboard with minute to minute information regarding inventory levels. This keeps everyone a breast of the levels of inventory required to be maintained at any particular time in the chain (Fisher, 2000). The Value of Information Sharing in Inventory With the introduction of more and more products by the companies and entrance of giant companies that offer products that serve to cater to similar needs and target the same set of consumers have actually helped to make the market place a battle field. Today customers have so many options and choices to choose from. In fact making a buying decision has become a Herculean and specialized task for the customer. Where on one hand intricacies at the end of consumer have increased then on the other the customer has become very powerful as well, and one cannot repudiate the fact that products and brands that do not meet customer expectations are either ousted or kicked out of the market and become forgotten history. Here inventory management becomes a key concept that needs to be discussed and highlighted to limelight. As we talked about the concepts of â€Å"customer expectations† and â€Å"consumer culture† so we also need to understand that they are very closely linked to inventory management. Finding the product on the shelf is one of the most significant customer expectations, significant yet basi c. â€Å"Finding the product on the shelf† implies that the product must be available to the customer at the right place in the right quantity at the right time. This is where Inventory management comes into play. Inventory management has gained more and more significance in organizations during the past decade and this is because of the consumer expectations and strong consumer culture that has risen

Leadership Assignment Example | Topics and Well Written Essays - 1250 words

Leadership - Assignment Example However, a leadership style adopted should be the most appropriate in effectively achieving the objectives of the organization. It is on this premises that it may be asserted that leadership style actually matters to large extents. On the contrary, other people hold unto beliefs that it does not matter which leadership style a leader may adopt. Thus, what matters is not the leadership style, but the leaders themselves. It is on this basis that they assert that leadership is rather innate (Hill & McShane, 2006). This implicates that leadership is predetermined by a person’s distinctive dispositional characteristics during birth. Such a leader is deemed to be born leaders and therefore his leadership is effective irrespective of the leadership style he/she may adopt. Disregarding the leadership style, such people believe that leadership entails possessing power over others. Thus, leadership is a form of power and dominance to over others. This means that no matter what leadershi p style, a leader must always exercise power over people. This means that the type of leadership style does not matter at all. More often than not, those who profoundly discredit leadership style believe that, leaders are positively influential. This is to imply that employees perform well when under guidance of an effective leader. This is to mean that leaders make differences in the people. Thus, no matter what leadership style, leaders are expected to be influential to the people under them. In this regards leaders are deemed to entirely control the outcomes of groups. They are in total control of their groups’ achievements. Be that as it may, management experts have evidenced that leadership styles have palpable effects on a group’s performance. Thus, different styles are effective for different situations. In this regards, each of the leadership style is appropriate in specified circumstances. In determining which leadership style to adopt, it is important to cons ider the leader’s personal background. This may include the leader’s personality, experience, skills, knowledge, ethics and values. It may also be worthwhile to consider the employees being supervised. Indeed, employees are usually individuals with diverse personalities and backgrounds. In considering which leadership style to adopt, it is also important to look at the company’s traditions, philosophy and values as well. This may help in choosing the most suited leadership style that may be effective for the organization. It is therefore important to critically analyze the three major leadership styles with references to where they are most effective, with the aim of establishing that leadership style matters a great deal. To commence with, democratic leadership style defines a style whereby the leader shares the decision-making abilities with the members of the group. In this style, leadership involves the sharing of ideas, discussions, debates, consultations a nd encouraging employees to be part of the decision making. Thus, democratic leadership is otherwise known as participative leadership style. In a democratic type of leadership, the leader is considered as a coach who make the final decision, but this has to be done after consulting various staff members. Such type of leadership may produce high quality and high quantity work. Democratic leadership style is more effective in specific instance. In this regards, it may be the appropriate leadership style

English 2 - DB 5 Essay Example | Topics and Well Written Essays - 250 words

English 2 - DB 5 - Essay Example I have learned to pay more attention to pre-writing research in order to have enough valid information for own research. Researching can be time consuming; however, it shows different points of view on the same issue which helps to develop own opinion and express it in writing. There is a great difference between oral communication and written communication. While it is possible to make mistakes and correct them immediately while speaking, there is a need to spend additional time on revising the paper to make sure that there are no ambiguities in writing.. Any research paper needs an outline to follow to cover all necessary points. Inaccurate expressions can confuse the reader; working on my last written assignment I read it to my friend to make sure that it sounded clearly. The process of peer revision is very helpful because it gives an objective feedback about ones work; I cannot say that I can assess my writing totally objectively as I always treat it as my achievement. In this way, help of my peers can be really valuable to see ho I can improve my writing. Overall, I understand that I need to work hard to become a better writer. Currently I lack some experience in research writing and this course is really helpful because it complexly improves my writing skills. Now I see the difference between relevant and irrelevant sources of information and understand why I need to spend more time on selecting the best sources for my research. I am learning to keep my writing clear and concise and any writing assignment greatly contributes to my writing and researching

Construction assignment Example | Topics and Well Written Essays - 500 words

Construction - Assignment Example In order to implement a given responsibility, relationships need to be established in partnering. Type of relationship depend on the type of partnering, for example in the joint venture contract between a contractor, and a design firm is a one-off type of relationship since it does not last. A single firm with both the design and construction capability is a long-time relationship type since the parties involve are employed full time and permanent. When the agreement is successful, then the flow of work is always continuous, for example, a contractor will undertake all the work awarded to him. The contractor will then get a written approval from the Engineer-in-charge or the supervisor. The contractor will then plan its operation. If the supervisor realize that there is a risk factor involve, the supervisor has the right to stop the work. An inspector always ensures that the construction meet the quality level required, but they do not have the authority to get a contractor to give the owner of the highest quality material. If the engineer or the owner dispute the work being performed by a subcontractor, then the owner should attempt to resolve the issue with the main contractor first before embarking on the administration. CQC is the contractor Quality control. The purpose and function of the CQC are to assure that the completed project meets the quality requirement. The representative also has the duty of guiding the contrac tor by preparing a plan. However, the Corps ad engineer provides guidance to Corps in performing effective CQM. In order to manage construction firm but fair policy need to be implemented. Firm but fair policy is a type of policy where both or all parties involve are considered to stick to the laid down policy. An inspector always ensures that the construction work is done according to the laid down codes. They are responsible for; pointing

Options for Implementing a Leadership Change Essay - 1

Options for Implementing a Leadership Change - Essay Example Change of leadership entails huge implications for an organization. For one, this change accompanies a new vision, to where the direction of an organization will be set for a period of time. This change in vision can entail major overhauls within the organization, which include changes in the organizational structure, leadership style of the new leader, processes, etc. Thus, a change in leadership will cause stress within the organization and implementation of this change has to be handled with a smooth transition. Stephen Robbins, in his book Organizational Behavior lists some of the more popular approaches to managing change. But of the three that he mentions, which include Lewin’s classic three-step model of change process, action research and organizational development, Lewin’s model of change is the one most pertinent to a change in leadership, which does not center only on a specific process to be improved or a certain problem that needs to be acted upon like the other two. The first step to managing a change within the organization is to unfreeze the prevailing norms within the company. In order to unfreeze these prevailing norms, or the status quo, overcoming resistance among individuals and conformity among groups is crucial. In Lewin’s model, the shift to a desired state can be done by one of the three: lowering the restraining forces to change; increasing the driving forces to get into the desired state; or both. The change in leadership entails a new vision. And in order to carry out this vision, there are specific steps the new leadership lays out which will be the cause of individual resistances within the corporation. The first alternative is to increase the driving forces. Driving forces usually come in the form of incentive, for employees to accept and comply to change. It may assume other forms, but driving forces

Bombardier Inc. Railway System Project Report Essay

Bombardier Inc. Railway System Project Report - Essay Example The project is bound to increase economic growth by limiting the time a nation’s population spends on transit, the financial expenses incurred in fuel and provided its innovations of higher speeds and varieties of rail vehicle specialties. This project qualifies into the global category also owing to it necessitating inter-boundary mobility across countries, which is bound to improve international relations, while at the same time complementing other means of heavy load transportation at higher speeds with increased safety. It also meets increasing demand for decent travel, at the maximum securities through its signaling system. Resource savings will be experienced in automobile operating costs, relieved highway congestion, reduced exhaust emissions and energy consumption. More benefits include enhancement of the region’s current transportation system, its practicability as a private and public investment, job creation, community development as well as freight and commu ter rail improvements. The future of this project and many others will depend on the way its implementation will affect the business. If the business would be realized to have grown, then such projects will be given a go ahead without hesitation. However if that is not the case, then there will be no further projects after the end of this one. The project director will summarize the security products produced and installed against the initial objectives and aims of the company with regards to cost and time taken.

Coopers Creek Wine Management Essay Example for Free

Coopers Creek Wine Management Essay 1.0 Introduction Coopers Creek, established in 1982, became one of New Zealand’s more successful medium-sized wineries by following a strategy of resource leveraging via networks of co-operative relationships with other New Zealand winemakers in the domestic and export markets. This strategy allowed Andrew Hendry, the managing director, to consciously manage the growth of the company to retain the benefits of small size. However, with increasing globalisation of the wine industry, the changing nature of export markets, the early maturity of the New Zealand industry and the constrained supply facing New Zealand wine makers, Andrew Hendry was faced with the decision of how to position a smaller company for the future. He had to decide whether the network-based strategies that served the company so well continued to be appropriate under conditions of industry concentration, increasing competition and emerging globalisation. (Robbins S, 2006) 1.1 The NZ wine industry When Andrew Hendry established Coopers Creek, the New Zealand environment was highly regulated. By 1984, the New Zealand government had initiated a programme of deregulation, which included devaluation of the New Zealand currency, exchange rate flotation and general anti-inflationary measures. (Porter M, 2001) The opening of New Zealand’s domestic market meant that businesses had to improve their efficiency substantially over a short period. The agricultural sector sought out new markets, to replace the loss of their traditional dependence on the UK market with its increasing commitment to its European trading partners, and new products, reflecting a growing awareness that much of New Zealand’s exports were of a commodity nature. This period saw growing exports to Australia, the United States, Japan and the rest of Asia and exports of predominantly sheep meat and dairy produce being accompanied by more fresh fruit, venison and wine. A further response to fiercer competi tion at home and in overseas markets was an increasingly strong focus on quality, a case in point being the New Zealand wine industry. The New Zealand wine industry accepted the consequences of the liberalisation  of the domestic economy and recognised the need to understand how on-going changes in the international economic environment affected its prosperity and how to plan accordingly. Building from a low international base in the 1980s ($4.5 million in exports in 1987), New Zealand wine exports achieved phenomenal growth and accounted for $168 million in 2007, comfortably exceeding the $100 million by 2007 target set in 1999. The UK market was the most important export market for the industry in 2007, and at $84 million it accounted for around 50.22 per cent of total exports by value and 54.28 per cent by volume. Europe accounted for 66 per cent of exports with 85 per cent of that going to the UK. Four large firms, namely Corbans, Montana, Nobilo and Villa Maria, dominated the wine industry in New Zealand in 1999. The following year, Montana purchased Corbans and Nobilo was bought by BRL/Hardy of Australia. Between them, these large firms accounted for around 80 per cent of all exports in 2007, with another 17 medium-sized companies, of which Coopers Creek was one, handling 16 per cent in combination. For the most part, industry participants exported between 30 and 35 per cent of their production, but a few producers had much higher export intensity. (Wheelen, 2006) 2.0 Key Issues The key issues are: (Study Guide, 2008) (1)Despite entering early maturity, coopers creek remained constrained by issues of supply. (2)The cost of new land for grape planting was rising and more previously marginal land became economic to grow on, the problem was still one of access to capital for these resources. (3)A possible over supply of grapes in New Zealand, which could lead to heavy discounting. (4) A contraction in ownership within distribution companies in New Zealand and in USA, which could lead to certain markets being effectively closed to coopers creek. (5)Protection of strategically important grape supplies so the can insure they still get a proportion of the very highest quality grapes. 3.0 Planning 3.1 Life Cycle From a demand perspective, the worldwide wine consumption has stagnated. According to the Wine Institute, there is only a 2.04% growth in wine consumption from 1997 to 2001. In fact, worldwide consumption dropped from 227,875 hectoliters to 226,646 between 1999 and 2000. Generally there is a drop in consumption from the traditional wine drinking countries like France and East European countries, whilst demand has growth significantly from China. (Grant R, 2005) The production of wine has shifted from the traditional vineyards in France to the rest of the world. There are New-World Wines from Australia, New Zealand and South Africa. These wines are generally thought to be of moderate to high quality and are essentially challenging the traditional wine producers on the quality front. Furthermore, there are wines coming out from China and India. Because of the lower wages in these countries, wines can now be produced at a fraction of the costs of the French vineyards. Price has now become a big challenge that the traditional wineries have to face. Some authors even suggest that the Old-World producing countries like France has followed growth decline and now has entered a second life phase. While the New-world countries are in an emerging or growth phase As the industry moves towards maturity phase of its life cycle, the pace of consolidation will increase. (Times of India,2007) 3.2 PESTEL Analysis The following is a review of the major environmental factors, which will impact the industry to a large extent. A closer examination of the more important factors amongst them will allow for a tighter integration between the external environmental factors and the corporate strategy chosen for Coopers. Political factors Government regulation has always played a major role in the WI. There are increasing concerns that there will be new barriers and trade impediments to trade in the WI. One such example is the trade disagreement between US and European Union in the level of farm subsidies that the US alleged that the EU farmers receive. The same allegations may also be similarly levied on the European vineyards. In the Wine Institute report on International Trade Barriers to U.S. Wine 2006, European wine producers were noted to have received certain subsidies . Tariffs also have been the most important barrier to the international wine trade. Some governments impose unusually high tariffs on wine imports. Recent announcement in the media like India opening its market and slashing duties on imported wine and spirits bring good news to the industry, as this will allow them to enter this lucrative untapped market. Though due to WTO pressure the tariff has been reducing, which has lead to major wine producing countries imposing various non-tariff trade barriers. One such non-tariff trade barriers are research fundings made available by local governments to improve the overall harvest yields and quality of the countrys grapes . Economical factors The rising number of middle class worldwide has led to an increasing appreciation of wine and demand for wine. In developing economies of China and India, this class of consumer is expected to increase significantly over the next decade. With the continued increase of economic growth rates for both countries, these consumers can now afford to consume wine is expected to grow significantly as well . The effect of currency fluctuations on the WI will continue to play an integral part in influencing the WI. The proportion of wine being exported outside the wine producing country has increased. Even in a traditionally large wine consuming market, the proportion of wine, which ends up in foreign land, has been increasing. The continuing trend of exporting to new markets such as India and China is going to increase as wine producers cope with the declining wine demand in traditional home markets As a result, the wine producers exposure to fluctuations in currency exchange rates will increa se further. Socio-cultural factors The increased spending power, sophistication of the middle class in many countries with increased tendency of copying the west has helped to increase the demand for wine consumption. This growing group of earners from various countries is often well traveled highly educated consumers with needs and wants for the better things in life. The number of middle class across Asia is expected to grow by 1 billion in the next 8 years . With the shift in demographics in the developing countries, there will be more wine drinkers in the future. Increasingly, there are also more scientific evidences that there are health benefits to be derived from moderate drinking of wine especially red wine. As a result, there is an increasing acceptance of the beverage as health-product leading to a healthy heart. Technological factors Innovation and technological factors continue to drive improvement in production yields and better storage of wine. The Australian WI today has transformed itself from a small cottage industry to one of the largest exporter of wines internationally, even to the extent of eclipsing some of the older Old-World countries. The great leap forward for Australia can be attributed to the Australian wine producers clustering to innovate and improve existing processes. (Read C, 2006) The growth of e-commerce infrastructure and the increasing acceptance of buying things online have led to new opportunities for wine connoisseurs and wine producers alike. With this new technology, niche wine growers are able to reach out to the individual wine consumers without being drowned out by the marketing noise generated by the large wine producers. The ability to ship small quantities directly to individual wine drinkers without passing through layers of middlemen may mean that small niche growers may be able to find their position in a market dominated by large brand names . Environmental factors Within the Food and Beverage (FB) industry, the WI is markedly different from the other products due to the fact that FB products are limited by market, while the WI is limited by resource (land and grapes). Reason being wine is grown in moderate climates and on certain types of soil. Sudden climatic changes may adversely affect production yields or may even destroy crops all together. The significant changes expected in the environment from global warming, rising sea levels, rising carbon emissions and increasing acidity in the waters will all add to contribute to the adverse conditions for which growers will find themselves in. These conditions together with a scarcity of good arable land may act to constrain or even reduce the industrys supply. On the positive side, in one of the rare articles published in Newsweek on the positive effects of global warming, the author highlights that fast melting of Artic glaciers and increase in global temperatures may lead to opening of new vine yards in many parts of the world with weather conditions similar to the Frances Champagne region. Legal factors External environmental legal factors have acted in line with other environmental factors changes. For example, the advent of the Internet e-commerce has resulted in changes in legislation for wine sales, which crosses state lines in the United States . In addition, the origin of the grapes used to make wines also became a contentious issue for many wine-producing countries. The origin of these grapes and the proportion of local grapes used became an issue for branding and labeling of wines; as governed by new local legislation controlling wine labeling. 4.0 Organising 4.1 Porters 5 forces analysis We have analyzed Coopers internal environmental factors using Porters Five Forces analysis. Being in a specialized industry, it is not easy for another player to just come in wanting a portion of the pie. The WI requires specialized skill sets, special knowledge and extensive experience to stay competitive. It also needs very high investment especially for equipments used for processing of wine. This indirectly induces high entry cost which  is work as a barrier of for new entrants. There is also the expected retaliation faced by new entrants from existing players. Coopers together with other existing players may collaborate to deter competitors from coming in. For example, Coopers may start dropping its price and the other existing players may follow suit leading to a price war. On the whole, the force of threat of entry is low here. 4.2 Threat of Substitutes This industry faces stiff competition from not only other wineries but also from other alcoholic drinks such as beer, spirit and pre-blended mixed drinks and carbonated drinks. Product-for-product substitution is also possible should customers of Coopers decide to try out other brands/types of wine. For the health conscious, bottled water, energy drinks and natural fruit juices also provide competition. Possibility of generic substitution is also there where as customers may prefer to spend on purchasing cigarettes rather than drinking wine. Thus, there is a high force of threat of substitutes in this industry. 4.3 Threat of entry Competitive rivalry among existing firms is evident in this industry. Larger companies are acquiring smaller wine producers to monopolize the market resulting in dynamic competition amongst these companies. As the WI is at its mature stage, companies start to take market share from competitors to survive. As there are too many wine producers, adding on to the high power of buyers, companies may decide to go for price wars due to high fixed costs to gain market share. This industry has high entry and exit barriers due to the extensive capital investment and knowledge skill set needed. In addition one must have sustainable resource, as it takes several years for wine to mature. This means that industry players do not have many choices. Again this induces competition amongst them and price wars and low margins situations are likely to happen. Based on the information above, the groups came to the conclusion that the industry is Medium Attractive. 5.0 Directing 5.1 Porters Generic Competitive Strategies Using Porter generic competitive strategies, we find that Coopers has the ability to outperform its competitors by adopting a strategy of Focus Differentiation. Porter proposed that a firms competitive advantage in an industry is determined by its competitive scope – i.e., the breadth of companys target market coupled with companys unique resource (product range, distribution channels, target market etc.), For Coopers the scope of the target market is narrow. It is mainly targeting niche markets for premium wines in the wine drinking markets of Europe, US, Australia, Japan and a few emerging Far Eastern Asian markets. When targeting niche markets, the company either can go for Cost Focus or Differentiation Focus. Coopers should not be following the Cost focus strategy as NZWI compete in the high quality premium category wines. Reduction of overall cost is achievable only to a certain extent, as this industry is highly capital intensive with many inherent costs along the supply chain. Instead Coopers should concentrate either on particular market segment, or product line segment or geographic market with high growth potential or all three. By following a differentiation strategy Coopers would be able to better focus its resources capabilities to the serve the special needs of a narrow strategic target more effectively than its competitors. 5.2 Bowmans strategic clock Using Bowmans competitive strategy clock† too, Coopers falls under category 5, Focused Differentiation. This strategy is similar to the Porters generic model, which tries to provide high-perceived product benefits justifying a substantial price premium usually to a selected niche market segment. Coopers can use this strategy in new markets, by targeting sales into the same niches in more countries. While in established markets Coopers could even adopt Category 4 Differentiation –with price premium by offering better wine at the same price or by pricing it slightly higher than competitive brands in the same price bracket, to take advantage of the fact that fine quality wine will always demand a premium and at the same  promote it as premium category. (Meredith R, 2007) Cost Leadership may not be sustained for Coopers because of some of the following reason: Competitors can imitate – differentiation may not be sustainable it can easily replicated by competitors like South African or South American wine producers Bases of differentiation become less important to buyers Competing on just quality to demand high price may not be enough. For example in price conscious markets like UK, Holland and Germany, wines from South American and South were seen as better value than NZ wine Target segment can become structurally unattractive: Structure erodes This could happen for Coopers target market in US, restaurants and boutique retailers. They may form a group for centrally sourcing activities to drive down costs, somewhat similar to what happened with Tesco Supermarket Chain (UK). (Aylward, 2006) Demand disappears – there may be new research findings in future that may lead to lower consumption of wine. Or even they may be new legislation banning consumption of alcohol products in public places similar to that of smoking, which may lead to total disappearance of a target segment. From the evaluation of Coopers core competencies, the followings were recognized. Coopers is a typical entrepreneurial venture in that the founding entrepreneur, Andrew, had driven its development and growth. A critical factor of success of Coopers is Andrews ability to build relationships, within the context of an innovative and flexible approach, in order to leverage critical resources to pursue growth. Coopers strategy was based on having a carefully controlled but finite quantity of wine to sell every year. With Andrews commitment to quality, it has earned itself a relatively good reputation in the industry. From the evaluation of the KSF of the WI, the followings were recognized. Historically, the NZWI had focused on the production of premium wines, given its constrained supply, small scale, high cost structures and distinctive ‘clean and green growing conditions. Availability of consistent high quality products that has strong brand value and recognition are highly sought after and considered KSFs. 6.0 Monitoring 6.1 Wineries Both management employees of wineries play a key role and yield great power in terms of the quantity type of wine to be produced. Great deal of collaboration exists between the local wineries to share knowledge costs. 6.2 Grape growers Being key players, they control the quality and quantity of grapes grown. Many of the wineries are backward integrated by owning lands or having long-term contracts with individual producers. Power of suppliers is low. 6.3 Industry Associations Wine Organizations in NZ like Wine Institute, former Wine Guild with backing of the NZ government are very powerful. All Wineries have to take up compulsory memberships and contribute towards funding running of the organizations. These key roles of these organizations are promoting NZ wine in international markets, lobbying with foreign governments to open new markets, lowering of trade restrictions and tariffs etc. They also initiate research programmes and training for the entire industry, funded by the wineries. (Zalan T, 2005) 6.4 Consumers The final end user, this group needs to be well informed kept satisfied by providing high quality premium products with consistent quality and availability at affordable prices. Power high. 6.5 NZ Government NZ government is a key player with considerable power who has played a  pivotal role in the development of the NZWI. The government has been implementing new legislations in consultation with NZWI to meet the current market requirements. Some examples would include changes in government policy in the 1980s making it favorable for local manufacturers to export to foreign markets . (Harvard University, 2007) 6.6 Distributors, Retailers, Buyers Buyers like Supermarkets are powerful players who dictate the price type of wine stocked on shelves. WI is a buyer driven industry, where buyers hold a lot of power. 6.7 Domestic and Foreign investors This group needs the minimal amount of effort. They are satisfied as long as they get a good return on their investments. 7.0 Critical Analysis 7.1 Competitor Analysis The world WI is currently experiencing a situation of over-production. In the EU alone, it was reported by Food Drink.com that there is a surplus o f 1.5bn litres of wine, enough for every European Union citizen to take roughly four free bottles each. Millions of Euros have been spent to turn these excess wines into industrial alcohol. (All Things, 2006) The WI is a highly fragmented, with over a million wine companies around the globe. None of the firms control more than 1% of the retail sales, with top 10 players controlling 11% of the global market share (based on volume) . These industry competitors come from different wine growing countries and continents. This is especially true for Old-World Countries in Europe (France, Italy, Spain, Portugal and Germany) accounts for 60% of the world wine production and 80% of world trade . In contrast, the New-World Producers (Australia, South Africa, Argentina, Chile, USA, New Zealand) wines are more consolidated. On average these countries appear to be more structurally attractive compared to Old-World Countries. Moreover, in the last decade the industry structure has been undergoing dramatic change. There is a growing trend of consolidation. Cash flow rich alcoholic beverage  companies are investing in the WI as their own markets of beer and spirits are maturing. 7.2 Stakeholder analysis The WI being a competitive industry has a varied, vibrant and balanced group of stakeholders, with frequent and varied channels of communication. All the forces involved try to build consensus within which the primary decisions in the industry are made. 7.3 Life-Cycle Analysis We have identified Coopers to be in the phase of Mature stage in the life-cycle model. In view of its competitive conditions, we also identify there may be many competitors which are likely to resort to price-cutting strategy for volume. Therefore one of Coopers directive is to differentiate its product portfolio through leveraging on its enhance brand equity to promote customers retention and loyalty within its existing customer-based and new customer groups whilst consistently driving cost efficiency through economies of scales and innovative efficient ways of bringing cost down. (Pape E, 2007) 7.4 Positioning analysis Coopers currently enjoy relatively good brand equity amongst its market segment. To infuse the same branding principle across distinctive first label allows them to capitalize on its already successful branding strategy, further maximizing the returns of their marketing investment especially for the second label. 7.5 Value chain analysis Through new ways of doing things such as possible bottling in import markets to reduce shipping costs, backward integration either through ownership or long term leasing with good quality of vineyards across NZ and beyond, could potentially reduce their overall cost per unit yet enabling them to utilize cost advantage strategy to expand the perceived value for the brand. 7.6 Business profile analysis This growth strategy do not require a complete reinvention of wheels, it  capitalizes on the existing goals and values of the group, its resources and capabilities, its structure and management systems and its industry environment to further produce enhanced features and products thus major increase in expenditures is not expected, instead an increase in financial perform is forecasted due to the additional opportunities from new market penetration. (Heijbroeck, 2003) 8.0 Recommendations: 1.The expansion of the cooper’s creek network of export markets and the development of second labels. These second label wines could generally be sold at lower prices thus protecting the price status of the Coopers Creek labels but gaining extra sales volume for the company. In most cases the second labels will sell through different distributors. 2.The above strategy will also help with over reliance on a few key distributors. In the case of the rapidly growing US market, coopers creeks have not appointed one exclusive national importer. Instead they will sell to some 20 independent importer/distributors in different states either by direct shipment from the winery or out of a warehouse in California. This will ensure the company doesn’t become a victim of the rationalisation of a large importers or distributors catalogue of wines carried. (Kogut B, 2006) 3.The steady acquisition of control of the vineyards producing their best grapes. That has taken the form of either complete acquisition by purchase, long term leases or the establishment of joint ventures with the vineyards under cooper creek’s management and tied up under long term supply contracts. In the last two years they have purchased three vineyards, leased one and entered one joint venture with an existing contract grape grower. They are currently looking at two further existing vineyards with a view to purchase or lease. 4.Continue to produce consistently high-quality products. 5. Maintain and increase its brand equity and recognition as a premium wine producer. 6.Establish international supply management to facilitate its global market operations. 7.Maintain or improve its already good relationships with stakeholders. 8. Ensure there is cost efficiency in its operations so as to maximise profit with minimum cost. 9.Last but not least, continue innovating in terms of its product and marketing. †¢Current  turnover is NZ$5.5M †¢Current production is at 1100tonnes per year (approx 85,000 cases) and aiming to be 1800tonnes by 2008 †¢They should purchase more of their own vineyards in the Hawkes Bay region in the last few years which would prove beneficial to them. †¢They should increase production of Pinot Noir which is one of their best vineyards by 400% and this will become a feature varietals alongside Sauvignon Blanc and Chardonnay for the future †¢All wine is made on site at their Auckland vineyard. On site facilities include Cellar door tasting room and retail shop, Plant buildings (tanks) and bottling line, warehouse and barrel store, landscaped gardens with picnic areas and children’s playground. (Johnson, 2005) A cellar/courtyard wine bar will open for lunches and private group bookings late 2003. Plans have been drawn up for a cafà ©/function centre but as yet no time frame as to when maybe initiated, which should be implemented soon. (Nielson A, 2006) 9.0 Conclusion It can be concluded, the NZWI is still considered to be at an early maturity phase of its lifecycle, as evidenced by a small number of takeovers and increasing concentration. As the industry matures, there is a need for NZ wine producers to retain focus on quality, differentiated products, while holding their premium price position. In addition, they need to play to their strengths in white wines and introduce more red wines into their portfolio. (Ghoshal S, 2007) As a company, Coopers needs to realize the trend toward deteriorating industry profitability is a constant threat in mature industries. As rivalry encourages overinvestment in capacity, international competition increases, and as differentiation is undermined by commoditization, attaining a competitive advantage becomes essential to achieving positive economic profits. Cost is the overwhelmingly important key success factor in most mature industries and three cost drivers tend to be especially important: Economies of scale, low-cost inputs and low overheads. Cost efficiency in mature industries is rarely a basis for sustainable  competitive advantage; it is typically a requirement for survival. Deteriorating performance among mature companies typically triggers the adoption of turnaround strategies, of which the company must choose the most suitable one for its profile. Coopers have so far maneuvered its way past the many problems that plague other producers. However, more emphasis might be needed in terms of differentiating itself from the other NZ brands. It would have to build on its brand equity, and continue to leverage on Andrews contact network. Most importantly, the establishment of a succession-planning project would also has to be included in future strategic plans so that the company will continue to prosper should Andrew decide to depart or retire. (Robbins S, 2006) 10.0 BIBLIOGRAPHY: 1. (Johnson, 2005) Johnson, Scholes Whittington , Exploring Corporate Strategy, Prentice Hall, 2005 2. (Porter M, 2001) Porter Michael E., The Competitive Advantages of Nations, The Macmillan Press Ltd., 2001 3. (Wheelen, 2006) Wheelen, Thomas L. and Hunger, David J., Strategic Management and Business Policy, Prentice Hall, 2006 4. (Grant R, 2005) Grant, Robert M., Contemporary Strategy Analysis, Blackwell Publishing, 2005 5. (Read C, 2006) Read, Charlotte, Stakeholder Consensus Marketing. An explanatory national competitivess model for the New Zealand Wine Industry, September 2, 2006 6. (All Things, 2006) All Things Considered. Washington D.C., Global Warming Endangers California Wine Industry, December 5, 2006 7. (Times of India,2007) India plans duty cuts on wine, spirits, http://timesofindia.indiatimes.com/NEWS/India_Business/India_plans_duty_cuts_on_wine_spirits/articleshow/1897262.cms, April 12 2007 8. (Pape E, 2007) Pape E., Bordeaux Meets Beijing; Chinas eager oenophiles are reviving the flagging French Wine Industry, Newsweek, April 16, 2007 9. (Meredith R, 2007) Meredith, R. and Hoppough, S., Why Globalization Is Good, Forbes, New York, April 16, 2007 10. (Aylward, 2006) Aylward, D. K. and Glynn, J., SME Innovation within the Australian Wine Industry: A Cluster Analysis, 2006 11. (Smith J, 2006) Smith, J.M, The e-Commerce Pendulum, Brandweek, September 18, 2006 12. (Pape, 2007) Pape, Eric Vineyards on the move Newsweek, April 2007 13. (Nielson A, 2006) Nielson, A., Harvard Journal of Law and Public Policy, Vol.29, Iss 2, Spring 2006 14. (Asimov E, 2005) Asimov, E., New York Times. (Late Edition (East Coast). New York, N.Y., August 31, 2005 15. (Zalan T, 2005) Zalan, T., Global, Local or Semi-Global? The Case of the Wine Industry, Australian Centre for International Business, Working Paper, No. 6, August 2005 16. (Heijbroeck, 2003) Heijbroeck, Arend M.A., Consequences of the globalization in the wine industry, Report made by Rabobank International, Symposium International, October 8 2003 17. (Ghoshal S, 2007) Ghoshal, S, Global strategy: An organizing framework. Strategic, Management Journal 8, 2007 18. (Kogut B, 2006) Kogut, B., Designing global strategies: Comparative and competitive value-added Chains, Sloan Management Review (Summer), 2006 19. (Porter M, 2004) Porter, M. E.,Clusters and the new economics of competition, Harvard Business Review, November-December 2004 20. (Harvard University, 2007) How Competitive Forces Shape Strategy. Harvard Business Review, March-April 2007 22. (Slater S, 2002) Slater S. Malcolm, Michael Porter. Notes on Diversification As a Strategy. Harvard School Publishing, 2002 23. (Slater F, 2002) Slater F. Stanley, Olson. Eric, A Fresh Look at Industry and Market Analysis, Business Horizons. Kelly School of Publishing, January-February 2002. 24. (New Zealand Growers, 2006) New Zealand Wine Growers Research Committee, Research Development Strategic Plan, December 2006 25. (Robinson J, 2008) Robinson, Jancis, The Fast-Changing World Of Wine, http://www.sifst.org.sg/pdf/article-thefastchanging.htm. 26. (Robbins S, 2006) Robbins S., Bergman, R., Stagg, I. Coulter, M. @006, Management, 4th Edition, Prentice Hall, Sydney. 27. (Study Guide, 2008) Foundations od Management Study Guide 2008, Southern Cross University.

Managing Change in Small Organisations

Managing Change in Small Organisations 1.0 Introduction The phenomenon of resistance to change is the bane of all Algerian bakeries that convey ideas for change. For the same one who proposed the change, the resistances are usually synonymous with hostility, intrigue deadlines, polarization, conflict, and impatience, many problems which are likely to frustrate and undermine the success of his bakery. Basically, resistance to change is built up from many sources; internal and external. Overcoming resistance to change requires first the identification of those sources. Therefore, the owner of the bakery â€Å"El-Bahdja† is looking for an expert or professional advice in the field to help managing change effectively. Hence, as this topic is part of the international business and management studies, the owner asked me to do some research on this matter. Ultimately, this research is divided into two major chapters, first; the literature part that discusses the main topic theoretically, it starts off by mentioning the general sources that fuels the resistance to change, then it goes on with hofdstedes point of view on resistance of change based on cultural differences and it concludes by describing the steps of managing change effectively and it concludes with. The second major chapter is the analysis of the findings from the primary data that have been collected through interviews with owners and employees from the bakery El-Bahdja and owners from other bakeries. Finally this paper is closed by recommendations for the owner of the bakery El-Bahdja on how to overcome resistance to change and how to manage change. 1.1 Research objective Many companies in North Africa particularly in Algeria are making loss and could not improve the quality of their business due to the habit of following common procedures and the high consideration of sunk costs invested in the status quo and fear of new ideas. Lack of adequate information fuels rumors and gossip and adds to anxiety generally associated with change. This fear creates resistance to change in the Algerian bakery industry Therefore, this research focuses on finding the elements that fuel the resistance to change in the Algerian bakeries and specifically the bakery â€Å"El Bahdja† that produces and delivers all kind of bread and pastries. The owner of the Algerian Bakery â€Å"El-Bahdja† is an old man and has been in the business since 1967. The owner is facing the closing down due to lack of managing change skills in the bakery and the high resistance from the employees to change. The main objective of this research is to provide the owner of the bakery â€Å"El-Bahdja† with guidance to effectively managing change when it is in the process of the implementation. 1.2 Research questions To provide guidance on how to manage changes for the owner of the bakery â€Å"El-Bahdja† it is essential first to find answers to the following research questions. â€Å"Does Algerian culture welcome changes† â€Å"Why most Algerian employers and employees resist changing?† â€Å"What are the external factors that prevent Algerian employers and employees from changing?† â€Å"How do Algerian employers and employees manage change when applying the new ideas?† 1.3 Methodology This study is based on both primary and secondary data that help in understanding the causes of resistance to change from both the Algerian owners and their employees: Secondary data collection: this method studies the previous cases that have already been written about and find the similarities between the cases. This method is very helpful in collection data from different cultures that share the same fact which is fear of new ideas that have direct effect on their traditional way of doing business. Therefore, the resources of the secondary data collection are mainly from books, journals, and internet. Primary data: a very crucial data and plays a big role in making final decision. The primary data which is better called direct communication or field research, on other word; facing people and have them interviewed. The objective of this method is to collect factual data that helps in answering the research questions of this study and this after interviewing people from the same field on the main topic. Reflection on the research methodology: the methods followed for collecting data are linked together. The secondary data helps understand the theoretical concepts that have been concluded from previous cases and compare them to the new facts. In this method; the 7s model of McKinsey, the theory versus the real world by Jeff Hiatt and Arab identity by Halim Barakat are used as starting point for facing organizational change in Algeria. The primary data is basically the tangible evidence for decision makers, observing and interviewing people are the major tools to be used in collecting data for this study. Reliability and validity of data are the essential axes of this method. Therefore, the interviews take place specifically with owners of bakeries and their employees in Algeria and in the Netherlands for comparison to see whether culture differences is a matter for resisting changing. 2.1 Why managing change? â€Å"Change is believed to happen Changes are fact and every person is subject to these changes. People faces changes regularly in their life or in their workplace, part of them deal with these changes successfully and the other part fail to adjust to change. In the life, for instance a family with children; parents believe that children are subject to changes and may change to better or to the opposite that parents plan for them, however these changes would not affect the family as a whole but the person himself. Nevertheless, in a business changes there are two ways and no third, successfully manage change or failure. In organization whether you are an executive, supervisor, coach, consultant, project team leader or manager of any type where your job is to manage people, you likely have experienced resistance to change from employees. However you may not recognize the role that you can play in preventing that resistance and leading change. Many managers do not make this connection until they have personally experience failure in an important change project (Jeff Hiat, Timothy J. Creasey 2003) When asking people after this failure what would you do differently if you had the chance to do it again? The common response would be using an effective and planned change management program. The question to be risen here is whether this program is sufficient enough to prevent resistance to change from happening in the first place and deal with people emotions and pursue them to change. The real barrier to success is a lack of change management and not management program. Some people do not lack of vision or an understanding of the marketplace but they feel simply short when managing the people side of change. In other words, things did not go exactly as planned. The unexpected happened. Not managing the people side of change impacts the success and introduces risk into the business (Jeff Hiat, Timothy J. Creasey 2003) Change management skills have shown that is not only mitigates these business risks, but also can avoid them entirely. Business leaders have change management skills to not only manage resistance once it appears, but to prevent it from occurring. 2.2 Change and the manager â€Å"Change needs to be portrayed in positive terms, a necessity to ensure long term survival (Robert A Poton, James McCalman, 2008)† Organizations and their managers must recognize change, in itself, is not necessarily a problem. The problem more often than not is a less than competent management o the change situation (Rob Paton, James McCalman, 2008). Managers must realize that one cannot separate strategic change management from organizational strategy; both must work in tandem. The importance of the human side of change cannot be underestimated, one must identify and manage the potential sources and causes of potential resistance and ensure that motivators are built into new processes and structures (Forlaron, 2005). i) Change competency: â€Å"Change is part of the businesss philosophy† â€Å"The successful organization is the organization that understand change will occur, expect it and support the change during implementation (Jeff Hiat, 2003) An organization that faces constant demands to change and uses effective management over and over with each new initiative may experience a fundamental shift in its operations and the behavior of its employees. Sponsors begin to repeat activities that made last change successful. Managers develop skills to support employees through the change. Employees see part of their job as navigating these new changes. Each level in the organization will have internalized its role in change and developed the skills and knowledge necessary to react to constant change. The organization has become ready and able to embrace change; it has developed change competency (Jeff Hiat, Timothy J. Creasey, 2003). However, building change competency is not paved with flowers; it requires a belief that change is now an ever-present feature of organizational life (Burnes, 2004). Change competency is similar to change management, but there are several key distinction. First, change management is ultimately the use of specific activities like communication, coaching, sponsorship and training; to realize successful outcomes with business changes. Change competency is not a specific activity; it is an organizations ability to react to change over and over again Second, while change management can be taught and learned, change competency requires a fundamental shift in culture and values. It must be simply part of day-to-day operations and cannot be simply demonstrated in training or instructional material. Third, change competency must penetrate every facet and level of the organization. This distinction especially relates to the front-line employee. An organization may have expertise in change management in its sponsors, consultants and change management. However, the front-line employees are the ones whose day-to-day activities are changing. To build change competency into the organization, you can take the first step by ensuring that solid change management practices are applied consistently for each change initiative. The second step is to begin building the following competencies into your organization (Jeff Hiat, Timothy J. Creasey, 2003) ii) Change and Human Resource Technology has played a major role in ensuring that a coherent business approach and managerial performance can be maintained from a reduce resource base. The key success in such moves has been the mobilization of the human resource (Pettigrew and Whipp, 1993). 2.3 Managing resistance once it appears â€Å"Believing in changes to be happening is a key principle to reducing resistance to change† People are often afraid of new ideas. They may feel threatened by new ideas and fear that they will not be able to cope with a change in working patterns that is demanded of them or that they will not understand how to use a new technology; example of that many older people are afraid of materials that they are not able to handle and may make them calling the technician every moment (Tony proctor 2005). The fear of new ideas is a natural feeling; people live with this fear and it not a bad manner. Fear of new ideas becomes negative when is surrounded with sources that increase the tension of fear that leads to high level of resistance and consequently aggravation of the failure of any project. Change more often than not produces suspicions and resistance. To many it implies a move from familiar ways-mastered over long periods of time- to an unknown and threatening environment. In order to deal effectively with resistance to change, people must understand its causes (Jack Rabin, Marcia B. Steinhauer, 1988). Lawrence and Greiner 1970, identify the main sources that feed the resistance of change. Fear of the unknown, lack of information, threats of status, fear of failure, and lack of perceived benefits. Regarding the first group of sources of resistance, change starts with the perception of its need, so a wrong initial perception is the first barrier to change. This first group is called ‘distorted perception, interpretation barriers and vague strategic priorities (Pardo del Val, Manuela Martà ­nez Fuentes). It includes: (a) Inability of the company to look into the future with clarity (Barr et al., 1992; Krà ¼ger, 1996; Rumelt, 1995); (b) Denial or refusal to accept any information that is not expected or desired (Barr et al., 1992; Rumelt, 1995; Starbuck et al., 1978); (c) Perpetuation of ideas, meaning the tendency to go on with the present thoughts although the situation has changed (Barr et al., 1992; Krà ¼ger, 1996; Rumelt, 1995; Zeffane, 1996); (d) Implicit assumptions, which are not discussed due to its implicit character and therefore distort reality (Starbuck, Greve and Hedberg, 1978); (e) Communication barriers, that leads to information distortion or misinterpretations (Hutt et al., 1995); (f) Organizational silence, which limits the information flow with individuals who do not express their thoughts, meaning that decisions are made without all the necessary information (Morrison and Milliken, 2000; Nemeth, 1997). The second main group of sources of resistance deals with a low motivation for change. Five fundamental sources: (a) Direct costs of change (Rumelt, 1995); (b) cannibalization costs, that is to say, change that brings success to a product but at the same time brings losses to others, so it requires some sort of sacrifice (Rumelt, 1995); (c) Cross subsidy comforts, because the need for a change is compensated through the high rents obtained without change with another different factor, so that there is no real motivation for change (Rumelt, 1995); (d) Past failures, which leave a pessimistic image for future changes (Lorenzo, 2000); and (e) Different interests among employees and management, or lack of motivation of employees who value change results less than managers value them (Waddell and Sohal, 1998). The lack of a creative response is the third set of sources of resistance. There are three main reasons that diminish the creativeness in the search for appropriate change strategies: (a) Fast and complex environmental changes, which do not allow a proper situation analysis (Ansoff, 1990; Rumelt, 1995); b) Reactive mind-set, resignation, or tendency to believe that obstacles are inevitable (Rumelt, 1995); and (c) Inadequate strategic vision or lack of clear commitment of top management to changes (Rumelt, 1995; Waddell and Sohal, 1998). Taking into consideration all those sources of resistance mentioned above can reverse the situation into preventing resistance in the first place. Cultural web: Cultures differ from each other in their resistance to change. The strongest resistance to change characterizes of high power distance, low individualism, and high uncertainty avoidance. Among these cultures are most Latin American countries, Portugal and Korea, followed by Japan, France, Spain, Greece, Turkey, and Arab countries. Cultures with low levels of resistance to change are low on power distance, high on individualism, and low on uncertainty avoidance. This category includes the Anglo countries, Nordic countries, and the Netherlands, followed by Singapore, Hong Kong, and South Africa (Harzig and Hofdestede, 1996 2.4 Making sense of change management â€Å"7S model of McKinsey†: The Mckinsey 7S model defines the seven components that encompass an organization and that by changing any one of the S components there is impact on the other S components. This model is such a conceptual aid by acting as good checklist for those setting out to make organizational change, laying out which parts of the system need to adapt, and the effects of these changes in other parts of the system (Mike Green, 2007) The 7s categories are: Staff important categories of people within the organization, the mix, the diversity, retention, the development and the maximizing of their potential. This component helps to determine how committed resources to make it all work? Skills distinctive capabilities, knowledge and experience of key people. The role of this component is to identify how ready and competent are the staff based on where the organization is heading? Systems processes, IT systems, HR systems, knowledge management systems. In other words, what are the suitable systems to be used to support the transition? Style management style and culture. How we are getting from here to there? Shared values guiding principles that make the organization what it is. Strategy organizational goals and plan, use of resources. Briefly is where are we transitioning to? Structure the organization chart and how roles, responsibilities and accountabilities are distributed in furtherance of the strategy. â€Å"The Mckinsey 7S model provides an effective framework for analyzing an organization and its activities that determine whether an organization is strong enough to adjust to any changes. Furthermore, this model helps in avoiding some of the sources that feed resistance to change in the first place† 2.5 Five steps for effective change process (Thomas and Christopher, 2008) Step 1:Motivating change: â€Å"Moving from the known to the unknown† Organizational change involves moving from the known to the unknown. The future is uncertain and may adversely affect peoples competencies, worth, and coping abilities. Organization members generally do not support change unless compelling reasons convince them to do so. A key issue in planning for action is how to motivate commitment to organizational change. This requires attention to two related tasks: creating readiness for change and overcoming resistance to change. Creating Readiness for change: peoples readiness for change depends on creating a felt need for change. This involves making people so dissatisfied with the status quo that they are motivated to try new work processes, technologies, or ways of behaving. Generally people and organization need to experience deep levels of hurt before they will seriously undertake meaningful change. The following three methods can help generate sufficient dissatisfaction to produce change: Sensitize organizations to pressures for change. Modern organizations face unprecedented environmental pressures to change themselves, including heavy foreign competition, rapidly changing technology, and the draw of global markets. Internal pressures to change include new leadership, poor product quality, high production costs, and excessive employee absenteeism and turnover. Organizations can make themselves more sensitive to pressures for change by encouraging leadership to surround themselves with devils advocate; for instance by cultivating external networks that comprise people or organizations with different perspectives and views; by visiting other organizations to gain exposure to new ideas and methods. Reveal discrepancies between current and desired states. Significant discrepancies between actual and ideal states can motivate organization members to initiate corrective changes, particularly when members are committed to achieving those ideas. A major diagnosis is to provide members with feedback about current organizational functioning so that the information can be compared with goals or desired future states. Convey credible positive expectations for the change. When organization members expect success, they are likely to develop greater commitment to the change process and to direct more energy into the constructive behaviors needed to implement it. The key success to achieving these positive effects if to communicate realistic, positive expectations about the organizational changes*. Research suggests that information about why the change is occurring, how it will benefit the organization, and how people will be involved in the design and implementation of the change was most helpful.* Overcoming Resistance to change: At the organization level, resistance to change can come from three sources. Technical resistance comes from the habit of following common procedures and the consideration of sunk costs invested in the status quo. Political resistance can arise when organizational changes threaten powerful stakeholders, such as top executive or staff personnel, or call into question the past decisions of leaders. Finally, culture resistance takes the form of systems and procedures that reinforce the status quo, promoting conformity to existing values, norms, and assumptions about how things should operate. Empathy and support. A first step in overcoming resistance is learning how people are experiencing change. This strategy identifies people who are having trouble accepting the changes, the nature of their resistance, and possible ways to overcome it. Communication. People resist change when they are uncertain about its consequences. Lack of adequate information fuels rumors and gossip and adds to anxiety generally associated with change. Effective communication about changes and their likely results can reduce this speculation and allay unfounded fears. Participation and innovation. Involvement in planning the change increases the likelihood that members interests and needs will be accounted for during the intervention. Consequently, participants will be committed to implementing the changes. They also can identify pitfalls and barriers to implementations. STEP 2: CREATING A VISION The second activity in leading and managing change involves creating a vision of what members want the organization to look like or become. Generally, a vision describes the core values and purpose that guide the organization as well as an envisioned future toward which change is directed. It provides a valued direction for designing, implementing, and assessing organizational changes. The vision also can energize commitment to change by providing members with a common goal and a compelling rationale for why change is necessary and worth the effort. Research suggests that compelling visions are composed of two parts: (1) a relatively stable core ideology that describes the organizations core values and purpose, and (2) an envisioned future with bold goals and a vivid description of the desired future state that reflects the specific change under consideration Step 3: DEVELOPING POLITICAL SUPPORT Managing the political dynamics of change includes the following activities: Assessing Change Agent Power. Greiner and Schein 1988, indentified three key sources of personal power in organizations (in addition to ones formal position); knowledge, personality, and others support. Knowledge bases of power include having expertise that is valued by others and controlling important information. For example, leaders in organizational units undergoing change can call on their informal networks for resources and support, and encourage subordinates to exercise power in support of the change. Identifying Key Stakeholders. This can start with simple question. †who stands to gain or to lose from the changes? Once stakeholders are identified, creating a map of their influence may be useful. Consequently, provides change agents with information about which people groups need to be influenced to accept and support the changes. Influencing Stakeholders. There are three major strategies for using power to influence others in organization development; First strategy is playing straight; this strategy involves determining of particular stakeholders and presenting information about how the changes can benefit them. The success of this strategy relies heavily on the change agents knowledge base. He or she must have the expertise and information to persuade stakeholders that the changes are a logical way to meet their needs. The second strategy is using social network; in this strategy change agents attempt to use their social relationships to gain support for changes. This social networking might include, for example, meeting with other powerful groups and forming alliances to support specific changes. This strategy also might include using informal contacts to discover key roadblocks to change and to gain access to major decision makers who need to sanction the changes. The third strategy is going around the formal system; the change agents charisma, reputations, or professional credibility lend legitimacy to going around the system and can reduce the likelihood of negative reprisals. For example, managers with reputations as winners often can bend the rules to implement organizational changes. However, this power strategy is relatively easy to abuse. Therefore; the OD practitioners should consider carefully the ethical issues and possible unintended consequences of circumventing formal policies and practices. Step 4: MANAGING THE TRANSITION Implementing organizational change involves moving from the existing organization state to the desired future state. There are three major activities and structure to facilitate organizational transition: activity planning, commitment planning, and change-management structures. Activity Planning This involves making a road map for change, citing specific activities and events that must occur if the transition is to be successful. Activity planning should clearly identify, temporally orient, and integrate discrete change tasks and should link these tasks to the organizations change goals and priorities. Commitment planning this activity involves identifying key people and groups whose commitment is needed for change to occur and formulating a strategy for gaining their support. Change-Management Structures Because organizational transitions tend to be ambiguous and to need direction, special structures for managing the change process need to be created. These management structures should include people who have the power to mobilize resources to promote change, the respect of the existing leadership and change advocates, and the interpersonal and political skills to guide the change process. Step 5: SUSTAINING MOMENTUM Once organization changes are under way, explicit attention must be directed to sustaining energy and commitment for implementing them. A strong tendency exists always among organization members to return to old behaviors and well-known processes unless they receive sustained support and reinforcement for carrying the changes through to completion. The following five activities can help to sustain momentum for carrying change through to completion: Providing resources for change. Additional financial and human resources are required for implementing organization change, particularly if the organization continues day-to-day operations while trying to change itself. Extra sources are always helpful to provide a buffer as performance drops during the transition period. Building a support system for change agents. Organization change can be difficult and filled with tension, not only for participants but for change agents as well. A support system typically consists of a network of people with whom the change agent has close personal relationships people who can give emotional support, serve as sounding board for ideas and problems, and challenge untested assumptions. Developing new competencies and skills, reinforcing new behaviors, and staying the course. In organizations people generally do things that bring them rewards. Consequently, one of the most effective ways to sustain momentum for change is to reinforce the kinds of behaviors needed to implement the changes through for instance informal recognition, encouragement, and praise. Staying the course. If the organization changes again too quickly or abandons the changes before it is fully implemented, the desired results may never materialize. There are two primary reasons that managers do not keep a steady focus on change implementation. First, many managers fail to anticipate the decline in performance, productivity, or satisfaction as change is implemented. Organization members need time to practice, develop, and learn new behaviors; they do not abandon old ways of doing things and adopt a new set of behaviors overnight. Second, many managers do not keep focused on a change because they want to implement the next big idea that comes along. Successful organizational change requires persistent leadership that does not waver unnecessarily. References Books and articles Ansoff, I.H. (1990), â€Å"Implanting Strategic Management† Prentice Hall International, Ltd. London Cynthia D. Scott, Dennis T. Jaffe. (2003), â€Å"Managing change at work: leading people through organizational transitions†, edit 3 Greiner, L.E. (1972), â€Å"Evolution and revolution as organizations grow† Harvard Business Review, pp. 37-46. Greiner, L E and Schein, V E. (1988), â€Å"Power and Organization Development: Mobilizing power to change†, Reading, MA: Addison Wesley Halim Barakat. (1993), â€Å"The Arab world: society, culture, and state† Berkeley, Calif.: University of California Press, Hutt, M.D., Walker, B.A. and Frankwick, G.L. (1995) â€Å"Hurdle the Cross-Functional Barriers to Strategic Change† Sloan Management Review, 36 (3), pp. 22-30. Jack Rabin, Marcia B. Steinhauer. (1988), â€Å"Handbook on human services administration† Public Administration and Public Policy/34, pp. 305 Krà ¼ger, W. (1996), â€Å"Implementation: The Core Task of Change Management† CEMS Business Review, 1, pp. 77-96. Lawrence, P.R. (1954), â€Å"How to Deal with Resistance to Change† Harvard Business Review, (May/June), pp. 49-57. Mike Green. (2007), â€Å"Change management masterclass: a step by step guide to successful change†. Tony Proctor. (2005), â€Å"Creative problem solving for managers: developing skills for decision making†. Edition 2, pp. 241 Pardo Del Val, Manuela Martà ­nez Fuentes â€Å"RESISTANCE TO CHANGE: A LITERATURE REVIEW AND EMPIRICAL†, p. 5-7 Rob Paton, James McCalman. (2008), â€Å"Change Management: A Guide to Effective Implementation†, edition 3, pp. 39-54 Rumelt, R.P. (1995), â€Å"Inertia and transformation†, in Montgomery, C.A., Resource-Based and Evolutionary Theories of the Firm, Kluwer Academic Publishers, Massachusetts, pp. 101-132. Rusell Tobin. (1999), â€Å"Overcoming resistance to change†, Second Edition, pp. 142 Starbuck, W., Greve, A. and Hedberg, B.L.T. (1978) â€Å"Responding to crisis†, Journal of Business Administration, 9 (2), pp. 111-137. Thomas G. Cummings, Christopher G. Worley. (2008), â€Å"Organization development change†, Edition 9, pp. 165-182 Waddell, D. and Sohal, A.S. (1998), â€Å"Resistance: a constructive tool for change management†, Management Decision, 36 (8), pp. 543-548. Zeffane, R. (1996), â€Å"Dynamics of strategic change: critical issues in fostering positive organizational change†, Leadership Organization Development Journal, 17, pp. 36-43. Websites: http://www.explorehr.org/articles/Orga Managing Change in Small Organisations Managing Change in Small Organisations 1.0 Introduction The phenomenon of resistance to change is the bane of all Algerian bakeries that convey ideas for change. For the same one who proposed the change, the resistances are usually synonymous with hostility, intrigue deadlines, polarization, conflict, and impatience, many problems which are likely to frustrate and undermine the success of his bakery. Basically, resistance to change is built up from many sources; internal and external. Overcoming resistance to change requires first the identification of those sources. Therefore, the owner of the bakery â€Å"El-Bahdja† is looking for an expert or professional advice in the field to help managing change effectively. Hence, as this topic is part of the international business and management studies, the owner asked me to do some research on this matter. Ultimately, this research is divided into two major chapters, first; the literature part that discusses the main topic theoretically, it starts off by mentioning the general sources that fuels the resistance to change, then it goes on with hofdstedes point of view on resistance of change based on cultural differences and it concludes by describing the steps of managing change effectively and it concludes with. The second major chapter is the analysis of the findings from the primary data that have been collected through interviews with owners and employees from the bakery El-Bahdja and owners from other bakeries. Finally this paper is closed by recommendations for the owner of the bakery El-Bahdja on how to overcome resistance to change and how to manage change. 1.1 Research objective Many companies in North Africa particularly in Algeria are making loss and could not improve the quality of their business due to the habit of following common procedures and the high consideration of sunk costs invested in the status quo and fear of new ideas. Lack of adequate information fuels rumors and gossip and adds to anxiety generally associated with change. This fear creates resistance to change in the Algerian bakery industry Therefore, this research focuses on finding the elements that fuel the resistance to change in the Algerian bakeries and specifically the bakery â€Å"El Bahdja† that produces and delivers all kind of bread and pastries. The owner of the Algerian Bakery â€Å"El-Bahdja† is an old man and has been in the business since 1967. The owner is facing the closing down due to lack of managing change skills in the bakery and the high resistance from the employees to change. The main objective of this research is to provide the owner of the bakery â€Å"El-Bahdja† with guidance to effectively managing change when it is in the process of the implementation. 1.2 Research questions To provide guidance on how to manage changes for the owner of the bakery â€Å"El-Bahdja† it is essential first to find answers to the following research questions. â€Å"Does Algerian culture welcome changes† â€Å"Why most Algerian employers and employees resist changing?† â€Å"What are the external factors that prevent Algerian employers and employees from changing?† â€Å"How do Algerian employers and employees manage change when applying the new ideas?† 1.3 Methodology This study is based on both primary and secondary data that help in understanding the causes of resistance to change from both the Algerian owners and their employees: Secondary data collection: this method studies the previous cases that have already been written about and find the similarities between the cases. This method is very helpful in collection data from different cultures that share the same fact which is fear of new ideas that have direct effect on their traditional way of doing business. Therefore, the resources of the secondary data collection are mainly from books, journals, and internet. Primary data: a very crucial data and plays a big role in making final decision. The primary data which is better called direct communication or field research, on other word; facing people and have them interviewed. The objective of this method is to collect factual data that helps in answering the research questions of this study and this after interviewing people from the same field on the main topic. Reflection on the research methodology: the methods followed for collecting data are linked together. The secondary data helps understand the theoretical concepts that have been concluded from previous cases and compare them to the new facts. In this method; the 7s model of McKinsey, the theory versus the real world by Jeff Hiatt and Arab identity by Halim Barakat are used as starting point for facing organizational change in Algeria. The primary data is basically the tangible evidence for decision makers, observing and interviewing people are the major tools to be used in collecting data for this study. Reliability and validity of data are the essential axes of this method. Therefore, the interviews take place specifically with owners of bakeries and their employees in Algeria and in the Netherlands for comparison to see whether culture differences is a matter for resisting changing. 2.1 Why managing change? â€Å"Change is believed to happen Changes are fact and every person is subject to these changes. People faces changes regularly in their life or in their workplace, part of them deal with these changes successfully and the other part fail to adjust to change. In the life, for instance a family with children; parents believe that children are subject to changes and may change to better or to the opposite that parents plan for them, however these changes would not affect the family as a whole but the person himself. Nevertheless, in a business changes there are two ways and no third, successfully manage change or failure. In organization whether you are an executive, supervisor, coach, consultant, project team leader or manager of any type where your job is to manage people, you likely have experienced resistance to change from employees. However you may not recognize the role that you can play in preventing that resistance and leading change. Many managers do not make this connection until they have personally experience failure in an important change project (Jeff Hiat, Timothy J. Creasey 2003) When asking people after this failure what would you do differently if you had the chance to do it again? The common response would be using an effective and planned change management program. The question to be risen here is whether this program is sufficient enough to prevent resistance to change from happening in the first place and deal with people emotions and pursue them to change. The real barrier to success is a lack of change management and not management program. Some people do not lack of vision or an understanding of the marketplace but they feel simply short when managing the people side of change. In other words, things did not go exactly as planned. The unexpected happened. Not managing the people side of change impacts the success and introduces risk into the business (Jeff Hiat, Timothy J. Creasey 2003) Change management skills have shown that is not only mitigates these business risks, but also can avoid them entirely. Business leaders have change management skills to not only manage resistance once it appears, but to prevent it from occurring. 2.2 Change and the manager â€Å"Change needs to be portrayed in positive terms, a necessity to ensure long term survival (Robert A Poton, James McCalman, 2008)† Organizations and their managers must recognize change, in itself, is not necessarily a problem. The problem more often than not is a less than competent management o the change situation (Rob Paton, James McCalman, 2008). Managers must realize that one cannot separate strategic change management from organizational strategy; both must work in tandem. The importance of the human side of change cannot be underestimated, one must identify and manage the potential sources and causes of potential resistance and ensure that motivators are built into new processes and structures (Forlaron, 2005). i) Change competency: â€Å"Change is part of the businesss philosophy† â€Å"The successful organization is the organization that understand change will occur, expect it and support the change during implementation (Jeff Hiat, 2003) An organization that faces constant demands to change and uses effective management over and over with each new initiative may experience a fundamental shift in its operations and the behavior of its employees. Sponsors begin to repeat activities that made last change successful. Managers develop skills to support employees through the change. Employees see part of their job as navigating these new changes. Each level in the organization will have internalized its role in change and developed the skills and knowledge necessary to react to constant change. The organization has become ready and able to embrace change; it has developed change competency (Jeff Hiat, Timothy J. Creasey, 2003). However, building change competency is not paved with flowers; it requires a belief that change is now an ever-present feature of organizational life (Burnes, 2004). Change competency is similar to change management, but there are several key distinction. First, change management is ultimately the use of specific activities like communication, coaching, sponsorship and training; to realize successful outcomes with business changes. Change competency is not a specific activity; it is an organizations ability to react to change over and over again Second, while change management can be taught and learned, change competency requires a fundamental shift in culture and values. It must be simply part of day-to-day operations and cannot be simply demonstrated in training or instructional material. Third, change competency must penetrate every facet and level of the organization. This distinction especially relates to the front-line employee. An organization may have expertise in change management in its sponsors, consultants and change management. However, the front-line employees are the ones whose day-to-day activities are changing. To build change competency into the organization, you can take the first step by ensuring that solid change management practices are applied consistently for each change initiative. The second step is to begin building the following competencies into your organization (Jeff Hiat, Timothy J. Creasey, 2003) ii) Change and Human Resource Technology has played a major role in ensuring that a coherent business approach and managerial performance can be maintained from a reduce resource base. The key success in such moves has been the mobilization of the human resource (Pettigrew and Whipp, 1993). 2.3 Managing resistance once it appears â€Å"Believing in changes to be happening is a key principle to reducing resistance to change† People are often afraid of new ideas. They may feel threatened by new ideas and fear that they will not be able to cope with a change in working patterns that is demanded of them or that they will not understand how to use a new technology; example of that many older people are afraid of materials that they are not able to handle and may make them calling the technician every moment (Tony proctor 2005). The fear of new ideas is a natural feeling; people live with this fear and it not a bad manner. Fear of new ideas becomes negative when is surrounded with sources that increase the tension of fear that leads to high level of resistance and consequently aggravation of the failure of any project. Change more often than not produces suspicions and resistance. To many it implies a move from familiar ways-mastered over long periods of time- to an unknown and threatening environment. In order to deal effectively with resistance to change, people must understand its causes (Jack Rabin, Marcia B. Steinhauer, 1988). Lawrence and Greiner 1970, identify the main sources that feed the resistance of change. Fear of the unknown, lack of information, threats of status, fear of failure, and lack of perceived benefits. Regarding the first group of sources of resistance, change starts with the perception of its need, so a wrong initial perception is the first barrier to change. This first group is called ‘distorted perception, interpretation barriers and vague strategic priorities (Pardo del Val, Manuela Martà ­nez Fuentes). It includes: (a) Inability of the company to look into the future with clarity (Barr et al., 1992; Krà ¼ger, 1996; Rumelt, 1995); (b) Denial or refusal to accept any information that is not expected or desired (Barr et al., 1992; Rumelt, 1995; Starbuck et al., 1978); (c) Perpetuation of ideas, meaning the tendency to go on with the present thoughts although the situation has changed (Barr et al., 1992; Krà ¼ger, 1996; Rumelt, 1995; Zeffane, 1996); (d) Implicit assumptions, which are not discussed due to its implicit character and therefore distort reality (Starbuck, Greve and Hedberg, 1978); (e) Communication barriers, that leads to information distortion or misinterpretations (Hutt et al., 1995); (f) Organizational silence, which limits the information flow with individuals who do not express their thoughts, meaning that decisions are made without all the necessary information (Morrison and Milliken, 2000; Nemeth, 1997). The second main group of sources of resistance deals with a low motivation for change. Five fundamental sources: (a) Direct costs of change (Rumelt, 1995); (b) cannibalization costs, that is to say, change that brings success to a product but at the same time brings losses to others, so it requires some sort of sacrifice (Rumelt, 1995); (c) Cross subsidy comforts, because the need for a change is compensated through the high rents obtained without change with another different factor, so that there is no real motivation for change (Rumelt, 1995); (d) Past failures, which leave a pessimistic image for future changes (Lorenzo, 2000); and (e) Different interests among employees and management, or lack of motivation of employees who value change results less than managers value them (Waddell and Sohal, 1998). The lack of a creative response is the third set of sources of resistance. There are three main reasons that diminish the creativeness in the search for appropriate change strategies: (a) Fast and complex environmental changes, which do not allow a proper situation analysis (Ansoff, 1990; Rumelt, 1995); b) Reactive mind-set, resignation, or tendency to believe that obstacles are inevitable (Rumelt, 1995); and (c) Inadequate strategic vision or lack of clear commitment of top management to changes (Rumelt, 1995; Waddell and Sohal, 1998). Taking into consideration all those sources of resistance mentioned above can reverse the situation into preventing resistance in the first place. Cultural web: Cultures differ from each other in their resistance to change. The strongest resistance to change characterizes of high power distance, low individualism, and high uncertainty avoidance. Among these cultures are most Latin American countries, Portugal and Korea, followed by Japan, France, Spain, Greece, Turkey, and Arab countries. Cultures with low levels of resistance to change are low on power distance, high on individualism, and low on uncertainty avoidance. This category includes the Anglo countries, Nordic countries, and the Netherlands, followed by Singapore, Hong Kong, and South Africa (Harzig and Hofdestede, 1996 2.4 Making sense of change management â€Å"7S model of McKinsey†: The Mckinsey 7S model defines the seven components that encompass an organization and that by changing any one of the S components there is impact on the other S components. This model is such a conceptual aid by acting as good checklist for those setting out to make organizational change, laying out which parts of the system need to adapt, and the effects of these changes in other parts of the system (Mike Green, 2007) The 7s categories are: Staff important categories of people within the organization, the mix, the diversity, retention, the development and the maximizing of their potential. This component helps to determine how committed resources to make it all work? Skills distinctive capabilities, knowledge and experience of key people. The role of this component is to identify how ready and competent are the staff based on where the organization is heading? Systems processes, IT systems, HR systems, knowledge management systems. In other words, what are the suitable systems to be used to support the transition? Style management style and culture. How we are getting from here to there? Shared values guiding principles that make the organization what it is. Strategy organizational goals and plan, use of resources. Briefly is where are we transitioning to? Structure the organization chart and how roles, responsibilities and accountabilities are distributed in furtherance of the strategy. â€Å"The Mckinsey 7S model provides an effective framework for analyzing an organization and its activities that determine whether an organization is strong enough to adjust to any changes. Furthermore, this model helps in avoiding some of the sources that feed resistance to change in the first place† 2.5 Five steps for effective change process (Thomas and Christopher, 2008) Step 1:Motivating change: â€Å"Moving from the known to the unknown† Organizational change involves moving from the known to the unknown. The future is uncertain and may adversely affect peoples competencies, worth, and coping abilities. Organization members generally do not support change unless compelling reasons convince them to do so. A key issue in planning for action is how to motivate commitment to organizational change. This requires attention to two related tasks: creating readiness for change and overcoming resistance to change. Creating Readiness for change: peoples readiness for change depends on creating a felt need for change. This involves making people so dissatisfied with the status quo that they are motivated to try new work processes, technologies, or ways of behaving. Generally people and organization need to experience deep levels of hurt before they will seriously undertake meaningful change. The following three methods can help generate sufficient dissatisfaction to produce change: Sensitize organizations to pressures for change. Modern organizations face unprecedented environmental pressures to change themselves, including heavy foreign competition, rapidly changing technology, and the draw of global markets. Internal pressures to change include new leadership, poor product quality, high production costs, and excessive employee absenteeism and turnover. Organizations can make themselves more sensitive to pressures for change by encouraging leadership to surround themselves with devils advocate; for instance by cultivating external networks that comprise people or organizations with different perspectives and views; by visiting other organizations to gain exposure to new ideas and methods. Reveal discrepancies between current and desired states. Significant discrepancies between actual and ideal states can motivate organization members to initiate corrective changes, particularly when members are committed to achieving those ideas. A major diagnosis is to provide members with feedback about current organizational functioning so that the information can be compared with goals or desired future states. Convey credible positive expectations for the change. When organization members expect success, they are likely to develop greater commitment to the change process and to direct more energy into the constructive behaviors needed to implement it. The key success to achieving these positive effects if to communicate realistic, positive expectations about the organizational changes*. Research suggests that information about why the change is occurring, how it will benefit the organization, and how people will be involved in the design and implementation of the change was most helpful.* Overcoming Resistance to change: At the organization level, resistance to change can come from three sources. Technical resistance comes from the habit of following common procedures and the consideration of sunk costs invested in the status quo. Political resistance can arise when organizational changes threaten powerful stakeholders, such as top executive or staff personnel, or call into question the past decisions of leaders. Finally, culture resistance takes the form of systems and procedures that reinforce the status quo, promoting conformity to existing values, norms, and assumptions about how things should operate. Empathy and support. A first step in overcoming resistance is learning how people are experiencing change. This strategy identifies people who are having trouble accepting the changes, the nature of their resistance, and possible ways to overcome it. Communication. People resist change when they are uncertain about its consequences. Lack of adequate information fuels rumors and gossip and adds to anxiety generally associated with change. Effective communication about changes and their likely results can reduce this speculation and allay unfounded fears. Participation and innovation. Involvement in planning the change increases the likelihood that members interests and needs will be accounted for during the intervention. Consequently, participants will be committed to implementing the changes. They also can identify pitfalls and barriers to implementations. STEP 2: CREATING A VISION The second activity in leading and managing change involves creating a vision of what members want the organization to look like or become. Generally, a vision describes the core values and purpose that guide the organization as well as an envisioned future toward which change is directed. It provides a valued direction for designing, implementing, and assessing organizational changes. The vision also can energize commitment to change by providing members with a common goal and a compelling rationale for why change is necessary and worth the effort. Research suggests that compelling visions are composed of two parts: (1) a relatively stable core ideology that describes the organizations core values and purpose, and (2) an envisioned future with bold goals and a vivid description of the desired future state that reflects the specific change under consideration Step 3: DEVELOPING POLITICAL SUPPORT Managing the political dynamics of change includes the following activities: Assessing Change Agent Power. Greiner and Schein 1988, indentified three key sources of personal power in organizations (in addition to ones formal position); knowledge, personality, and others support. Knowledge bases of power include having expertise that is valued by others and controlling important information. For example, leaders in organizational units undergoing change can call on their informal networks for resources and support, and encourage subordinates to exercise power in support of the change. Identifying Key Stakeholders. This can start with simple question. †who stands to gain or to lose from the changes? Once stakeholders are identified, creating a map of their influence may be useful. Consequently, provides change agents with information about which people groups need to be influenced to accept and support the changes. Influencing Stakeholders. There are three major strategies for using power to influence others in organization development; First strategy is playing straight; this strategy involves determining of particular stakeholders and presenting information about how the changes can benefit them. The success of this strategy relies heavily on the change agents knowledge base. He or she must have the expertise and information to persuade stakeholders that the changes are a logical way to meet their needs. The second strategy is using social network; in this strategy change agents attempt to use their social relationships to gain support for changes. This social networking might include, for example, meeting with other powerful groups and forming alliances to support specific changes. This strategy also might include using informal contacts to discover key roadblocks to change and to gain access to major decision makers who need to sanction the changes. The third strategy is going around the formal system; the change agents charisma, reputations, or professional credibility lend legitimacy to going around the system and can reduce the likelihood of negative reprisals. For example, managers with reputations as winners often can bend the rules to implement organizational changes. However, this power strategy is relatively easy to abuse. Therefore; the OD practitioners should consider carefully the ethical issues and possible unintended consequences of circumventing formal policies and practices. Step 4: MANAGING THE TRANSITION Implementing organizational change involves moving from the existing organization state to the desired future state. There are three major activities and structure to facilitate organizational transition: activity planning, commitment planning, and change-management structures. Activity Planning This involves making a road map for change, citing specific activities and events that must occur if the transition is to be successful. Activity planning should clearly identify, temporally orient, and integrate discrete change tasks and should link these tasks to the organizations change goals and priorities. Commitment planning this activity involves identifying key people and groups whose commitment is needed for change to occur and formulating a strategy for gaining their support. Change-Management Structures Because organizational transitions tend to be ambiguous and to need direction, special structures for managing the change process need to be created. These management structures should include people who have the power to mobilize resources to promote change, the respect of the existing leadership and change advocates, and the interpersonal and political skills to guide the change process. Step 5: SUSTAINING MOMENTUM Once organization changes are under way, explicit attention must be directed to sustaining energy and commitment for implementing them. A strong tendency exists always among organization members to return to old behaviors and well-known processes unless they receive sustained support and reinforcement for carrying the changes through to completion. The following five activities can help to sustain momentum for carrying change through to completion: Providing resources for change. Additional financial and human resources are required for implementing organization change, particularly if the organization continues day-to-day operations while trying to change itself. Extra sources are always helpful to provide a buffer as performance drops during the transition period. Building a support system for change agents. Organization change can be difficult and filled with tension, not only for participants but for change agents as well. A support system typically consists of a network of people with whom the change agent has close personal relationships people who can give emotional support, serve as sounding board for ideas and problems, and challenge untested assumptions. Developing new competencies and skills, reinforcing new behaviors, and staying the course. In organizations people generally do things that bring them rewards. Consequently, one of the most effective ways to sustain momentum for change is to reinforce the kinds of behaviors needed to implement the changes through for instance informal recognition, encouragement, and praise. Staying the course. If the organization changes again too quickly or abandons the changes before it is fully implemented, the desired results may never materialize. There are two primary reasons that managers do not keep a steady focus on change implementation. First, many managers fail to anticipate the decline in performance, productivity, or satisfaction as change is implemented. Organization members need time to practice, develop, and learn new behaviors; they do not abandon old ways of doing things and adopt a new set of behaviors overnight. Second, many managers do not keep focused on a change because they want to implement the next big idea that comes along. Successful organizational change requires persistent leadership that does not waver unnecessarily. References Books and articles Ansoff, I.H. (1990), â€Å"Implanting Strategic Management† Prentice Hall International, Ltd. London Cynthia D. Scott, Dennis T. Jaffe. 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