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Establish a foundation for developing the skills necessary to manage change in the organization
Explore emotional and organizational issues related to the implementation of change
Discuss at least 3 theories of change management (eg. Kotter, Lewin, Nadler, action research, and appreciative inquiry).
Include specific pros and cons of each.
What is the best way to ensure the implementation of an organizational change?
Communication Plan (100-150 words):
• What stakeholders require communication?
• What will be communicated to them?
• Who will send the communication?
• What communication medium will be used?
Transformational Change of Off shoring
The organization selected for the paper is Starbucks, which is going through the transformational change of off shoring its production facilities. Starbucks is a US based coffee giant that has outlets all around the world and is recognized for its unique and high quality coffee across the world. Starbucks is one of the most famous and successful coffee house chains, which is known for its employee welfare policies, as well.
Off shoring in simple words can be regarded the movement of one or different operations (product manufacturing, service centers or operations) of an organization to another country due to different reasons, like low labor costs, suitable economic conditions, better production techniques and so on. Off shoring is different from outsourcing because when a company offshore, it changes the location of a service or manufacturing of a part to abroad. In the current globalized environment due to rising competition, pressure to reduce costs and to deal with political tides, companies often rely on off shoring activities.
Although, off shoring has positive financial insinuations for a company, but off shoring is also related to layoffs, and social responsibility concerns. Therefore, companies must consider the different stakeholders, such as investors, employees and community before making the decision to offshore operations because if the company fails to avail its benefits, it may end up losing the resources linked with these stakeholders.
The transformational change of off shoring production facilities was initiated in Starbucks because of the growing operational costs rising and declining sales of the company. In order to manage the rising costs and keep merging of revenues, the international coffee supplier executed a threestep plan for the purpose of improving the performance of its supply chain and prepares itself for future competition and dynamic customer needs. Off shoring was significantly accepted in Starbucks and received the support of the top management of the company so that company's operations can be maintained well (Cooke, 2010).
Factors Driving the need for this Transformational Change
Globalization: It is considerable that Starbucks became the sufferer of its own success as the company was starting stores all across the world at a fast pace, it become difficult for it to keep up with the high rate of expansion. The costs of running the operations were rising constantly and the company needs to create a balance between cost and performance by making changes in its operations, and thus, it was forced to do this transformational change (Lia, et al., 2008).
Cut Throat Competition: Like any other organization, Starbucks is facing issues of extensive market competition and to comply with diverse needs of customers in the different parts of the world, it is essential for the company to offshore its production facilities. Off shoring enables Starbucks to expand its team devoid of expanding its fixed costs, facilities, and capital outlays, and thus, the company was able to manage competition to an extent (Abdelzaher, Newburry & Kundu, n.d.).
Increasing Costs: Few years before, things were not going right in the company, its operational expenses were increasing considerably and sales were diminishing. It is notable that in the year 200708 the supply chain expenses of Starbucks in the United States increased from $750 million to above US $825 million, hitherto sales for U.S. stores decreased by 10 percent that that had been open for at least one year, at the same time period. Therefore, to reduce the cost of operation or production and to enhance sales figure, it becomes essential for the company to take hold of its transformational change (Cooke, 2010).
Off shoring: A Transformational Change
Off shoring is considered as a transformational change because it changes the organization processes and affect organization wide activities. Off shoring production facilities is a transformational change for companies because when they espouse on this alternative, the future is unknown to them and they have no idea whether it is going to be successful or end up as a failure. Further, off shoring demands new mindsets and behaviors in the organization to execute this new strategy.
The firm cannot keep doing what it was doing because of the dynamic market forces and competition. It was essential for the company to bring this radical change in its business operations so that it can come with superior quality services. In order to sustain the momentum for improvement and to make sure a future flow of revenues and sales in the organization, Starbucks need to take this initiative as a transformation effort and needs to stop doing from what it was doing (Lia, et al., 2008).
Management's Role in the Transformational Change
The role of managers in the transformational change is to come up with right strategies for managing the change effectively. Management needs to reinforce organizational health by managing performance, shape and deliver transformational change by creating a vision and establish targets linked with business outcomes. The role of management is to change behavior to shape organizational culture for managing change.
It is considerable that remaining competitive in the recent business era is not an easy task, especially for multinational organizations. Therefore, even though there are other alternatives to remain competitive, but this one is essential to maintain pace with the market change.
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Most of the companies are trying to introduce productive changes for managing the competition in an effective way. Recently the CEO of the Google changed, and it will directly influence the future operations of the company. Now we can analyze the important theories of change management in an effective way.