Managing Change And Leadership In Air New Zealand And The Warehouse Group: An Essay.

Case Study No 1

Imagine that you have recently been appointed as Chief Executive Officer (CEO) of Air New Zealand, which is New Zealand’s `national` airline. It currently operates a fleet of 105 aircraft and carries over 15 million passengers plus cargo to 22 New Zealand airports and 29 international airports, and employs over 10,500 staff (www.airnewzealand.co.nz). The Crown (New Zealand Government) is still the largest single shareholder in the business, with just over 50% of the shares (https://www.nzx.com/files/attachments/242300.pdf)

Assume that the company is facing difficult trading conditions for its domestic routes and there is speculation in the media that it will be cutting an as-yet-unspecified number of services and staff. Strong passenger growth in its international, business, particularly to South-east Asia means additional staff (10-15% more than currently) and some new aircraft required. The exact timing of any of these changes has yet to be announced.

Your task as CEO is to manage the motivation of staff through this period of change to ensure that the airline runs well and continues to satisfy the requirements of both shareholders and customers.

1. One of the best ways to prepare an organisation for change, especially if you are the manager initiating the change is to put yourself in the position of the person the change is happening to so you can appreciate how they are likely to react.

a. As the Air New Zealand CEO what, for you, would be the three most important reasons why you want to initiate change in the way the business is run, and why? Justify your reasons with reference to appropriate theory.

b. You know that many of the staff at the airline are highly likely to resist any changes being made. What do you think are the three reasons why they are most likely to resist any changes you want to make in the way the airline is run?

c. Using any TWO (2) motivation theories that you are familiar with from your studies, demonstrate how you could motivate your staff in this case study to continue providing excellent customer service while these changes to the business are being worked through. Show how you would use each of your two chosen theories to provide positive motivation for the staff. You may invent any details necessary to support your explanation.

d. Assuming that not all of your staff react positively to your attempts at motivating them using your chosen techniques, show four different ways you could deal with this problem.

You are a business consultant who is preparing to give a seminar to first-line managers (supervisors) from The Warehouse Group (aka `The Warehouse`, or just `Warehouse`), New Zealand’s leading department store retailer. These junior managers are being prepared for advancement within the company, with a view to them becoming Store Managers, and possibly moving further up the corporate hierarchy. As part of their training they need to develop a deeper understanding of leadership and how it can be practiced within their own stores. It has been made clear to them by the company’s senior retail and training managers before your seminar that the quality of in-store leadership is a major positive point of difference between them and their competitors in the industry.

2. a) Leadership and leadership decision making

Using the normative leadership model, show how each of the different methods could be used by a Warehouse manager and explain what you believe the likely results would be.

b) Transactional and Transformational leadership 

• What would you tell these managers if you had to comment, with reference toappropriate theory, on Three disadvantages of using a transactional leadership style at The Warehouse?
• What would you tell these managers if you had to comment, with reference toappropriate theory, on Three advantages of using a transformational leadership style at The Warehouse? 
• What advice would you give these managers to help their subordinates at TheWarehouse develop a transformational leadership style of their own? Your answer, with reference to appropriate theory, should cover Four different points.

1. a: As the CEO of Air New Zealand, it is an integral part of my responsibility to ensure the financial strength as well as the long-term sustenance of the organization. It has been observed that the company is encountering a variety of challenges in its domestic business, and hence it has become imperative to cut down its operational cost in the domestic market. In case the expenditure on the staff members exceed the profitability of the company, it would turn out to be a loss for the company. A strong economy and increasing demand for products and services will mean that companies must consider expansion that might involve the addition of staff and new facilities. Hence, it is imperative to terminate the service of few employees, and send them to South East Asia, if they can, for filling up the gap in labour demand. The next important reason for initiating the change is while the employees would be sent from New Zealand to new South East Asian countries, it is evident that they would encounter multiple cultural issues, and hence they would need to undergo a cross-cultural training session, so that they can learn about the importance of cultural sensitivity (Bridges & Bridges, 2017). According to Steve Kline, while justifying organizational change, the political and strategic lenses are only justified. However, the cultural lens also plays an important role and the same hols truth for this as well. Last but not the least, Air New Zealand would initiate the change as it would help in expanding in new areas and attracting new customer base. According to the Stage Theory of modern times, taken after the views of both Lewin and Roger, an organization must initiate change if it wishes the problem of status quo and embrace innovation to be mitigated (Benn et al., 2014).

b: Although it is imperative for many organizations to bring in change, it is an undeniable fact that the employees often resist change as they suffer from a sense of uncertainty owing to their lack of comprehension as to why the change is being implemented in the organization. As far as the employees of Air New Zealand are concerned, the employees may suffer from a fear of job loss, considering the troubles the company is facing in the job market. The employees are likely to apprehend that they would soon lose their jobs, and hence there is no point in working dedicatedly for the organization (Armstrong & Taylor, 2014). Since some rumour is already doing the rounds in the media that the company is likely to terminate its employees, the employees may feel de-motivated and resist. Secondly, a sense of stability might be damaged while the work is progressing during the change. The employees working in a status quo, may have to be called for meetings and may be asked to work overtime, or stay back for interactive sessions, and this might not turn out to be an acceptable phenomenon. Thirdly, it is very important to consider an important issue, that the company will involve replacing or retraining personnel, heavy capital equipment investment and operational changes (Lewis et al., 2016). This is likely to affect the organizational culture of the company, and hence the employees may resist unless the situation is changed by close interaction with the employees by special behaviour training.

Case study No 2 Leadership and Decision-Making

c: Although change in any organization is imperative if it intends to sustain itself in the long run, it is undeniable that the employees are likely to resist change, considering the uncertainty and instability that accompanies the idea of organizational change. Hence, it becomes highly important to motivate the employees so that they do not resist to the organizational change. It is interesting to elaborate the ideas of two motivation theories and examine how the same can be applied in a professional context. First of all, the Equity Theory of Employee Motivation, as propounded by John Stacey Adam, claims that pay and workplace condition are not the sole factors determining employee satisfaction. Rather the employees feel motivated when they are being fairly and advantageously treated, and a sense of equity prevails in the organization (Miner, 2015). Hence, Air New Zealand should introduce employee motivational policies through the increase in pay policy and the introduction of flexible working policy, for all the employees, belonging to the management as well as the grass-root level, so that the employees feel valued. It should be mentioned in this context that usually the employees looks for maintenance of the parity between the inputs which is usually brought to a particular job along with the outcomes which is obtained from such inputs. They are measured against the outcomes and inputs perceived from others. Since some of the employees are likely to apprehend a loss of job, it is recommended that the employees should feel a sense of security and motivation while working for the airline company (Pinder 2014). The next important motivational model for employees that can be applied in the present scenario, was proposed by Hackman and Oldham. According to this theory, meaningfulness of the job being assigned, a sense of shared responsibility as well as knowledge of outcomes helps in motivating the employees to a considerable extent (Bakker, A. B., & Demerouti, 2014). Since Air New Zealand is going to implement a drastic change within the organization, the management authority of the company should organize meetings, regular interactive sessions and employer-employee discussion rounds to elaborate on the purpose and scope of organizational change and the individual employee benefits. This will help in creating a sense of meaning and purpose amongst the employees through effective communication, and will motivate them to engage actively in the organization (Lazaroiu, 2015).

d: It should be remembered that not all the employees would get easily motivated, and hence in order to ensure the effective implementation of the aforementioned strategies, it is imperative to ensure the implementation of few steps, that can encourage employee participation. First of all, the employees should be summoned for meetings with the employer, general managers and other stakeholders of the company to discuss the necessary causes of the imminent change, and also for announcing personal benefits that the employees will be able to derive from the same, such as higher salary (Hon et al., 2014). Next, the employees still likely to oppose and resist, would be called in, and asked about their feedback in the form of suggestions and advices. Thirdly, the company will need t ensure as well as announce the extent to which it is able to align employee benefits with organizational change plans. The employees will be made aware via discussion rounds as well as personalized emails sent to each employee about the future prospects of the organization (Cullen et al., 2014). This will help the employees realize how working in an organized way as per the proposed change will enable the employees achieve increment in salary and other compensation allowances owing to the increasing rate of profitability of the company. Fourthly, it is very essential for ensuring that the employees receive the feedback and appraisal, and hence the employees will be rewarded compensation in the form of allowances or extra leave a moth for participating within the change process of the organization. Employees that are involved within the change process of the organization displays elevated motivation levels as well as operation methods that are internalized. These strategies help in transition in a better way helping the organization to increase productivity efficiently. (McKay et al., 2013).

1. Reasons for Change, Employee Resistance and Motivation Strategies in Air New Zealand

2a: Decision making normative model is usually the model of leadership that helps the manager in taking decisions for the organization. Decisions are also taken for the involvement in decision-making process for the team members (Chen et al., 2015). Victor Vroom designed the normative model for decision-making that helps in measuring the participation and involvement degree of team members as well as the managers within process of decision-making. Further, within the case study, the warehouse manager is able to use various forms of techniques and strategies in effective leadership as well as process of decision-making.

The first step is the decision stage called Autocratic Type 1 or A1 where the Warehouse manager should make the decisions based on his own expertise and show rely on it. This would help the manager to solve the problem on its own and make self-decisions through the available information.

The second step is the consult that is known as Autocratic Type 2 or AII individually where usually the managers conveys the entire problems to the individual team members, as well as collects feedback from the team members individually and then makes the decision. This would help the Warehouse manager to obtain information from his associates or subordinates without their involvement and eventually makes self-decision.

In the third step called the Consultative Type 1 or C1, usually the manager conveys the issue, keeps it as the top agenda in team meeting, colleting the feedback, and then makes self-decision. This would also give the manager a chance to share the problems and related information with a specific group of associated or subordinates and finally makes a decision that is either self-decided or may be through the suggestions of the team members.

In the fourth step called the facilitator or Consultative Type 2 or CII, in which the manager usually conveys the issue as top agenda in team meeting as well as acts as the major facilitator for obtaining a unified decision in regards to the entire team. In this step, the ideas and recommendations received from the associates or subordinates can be arranged and gathered and this would help the manager to make self-decisions (Wheelen & Hunger, 2017).

In the last step called the Delegate or Group based Type 2 or GIII, the manager plays the role of providing information and allows making decisions taken by the team. This would provide the manager to share the problem with the associates or subordinates and solve the problem by asking their different ideas, views and solutions.

2. Normative leadership model and Transactional and Transformational Leadership in The Warehouse Group

By following the above five strategic steps, the Warehouse manager would be able to assess the influential and situational factors that have an impact on the associates and subordinates involvement in the decision-making by the manger or leader.

2b: There is no point denying the fact that transformational leadership is the most efficient style of leadership as it helps in communicating the change most convincingly to the employees, while fostering trust amongst the employees, and inspiring them to work harder. Nevertheless, the transformational style is not free from disadvantages as well. The first and foremost disadvantage associated with this style is that the transformational leaders often seen to bring about changes and drastic innovation, and for accomplishment of same places too much pressure on the employees. This leads to longer working hours, strict deadlines that leave the employees fatigued and stressed. Secondly, often the leaders are the risk takers taking huge risks in business, and not so well-thought out plans create operational nuances, that may also cause immoral leader and is driven by selfish interests (Dumdum et al., 2013). Often the employees are forced to work overtime, and although productivity increases, this can lead to the loss of employee inspiration.

There are numerous benefits of transformational style in leadership, the first and foremost one is that it leads to less employee turnover rates. A transformational leader engages with the employees and encourages their active participation in process of decision-making, and this leads to higher rate of employee productivity as well. This is especially because more and more employees feel pleased because of the same (Avolio et al., 2016). A leader being transformational helps in increasing the effectiveness during engagement in corporate learning that is the basic definitive business advantage. A leader being transformational helps in bringing effectiveness increasingly to the staff when he engages in corporate learning -- a definite advantage for any business. The transformational leader brings increased effectiveness to work, and equip them to increase employee productivity.

In order to develop the transformational leadership amongst the employees of Warehouse, the managers should train the employees regarding the steps involved in becoming a transformational leader. The employees can be enrolled for external training sessions as well as in-house training sessions, where the subordinates will be taught how to create an inspiring vision, as well as to motivate people to embrace the same (Renko et al., 2015). The subordinates should also be asked to seek help from the self-assessment tools of leadership so that they can examine their leadership style and bring about changes in the same accordingly.

Reference List:

Armstrong, M., & Taylor, S. (2014). Armstrong's handbook of human resource management practice. Kogan Page Publishers.

Avolio, B. J., Keng-Highberger, F. T., Schaubroeck, J., Trevino, L. K., & Kozlowski, S. W. (2016, January). How Follower Attributes Affect Ratings of Ethical and Transformational Leadership. In Academy of Management Proceedings (Vol. 2016, No. 1, p. 16854). Academy of Management.

Bakker, A. B., & Demerouti, E. (2014). Job demands–resources theory. Wellbeing.

Benn, S., Dunphy, D., & Griffiths, A. (2014). Organizational change for corporate sustainability. Routledge.

Bridges, W., & Bridges, S. (2017). Managing transitions: Making the most of change. Da Capo Press.

Chen, Y. M., Liu, H. H., Ni, Y. T., & Wu, M. F. (2015). A rational normative model of international expansion: Strategic intent perspective, market positions, and founder CEOs/family-successor CEOs. Journal of Business Research, 68(7), 1539-1543.

Cullen, K. L., Edwards, B. D., Casper, W. C., & Gue, K. R. (2014). Employees’ adaptability and perceptions of change-related uncertainty: Implications for perceived organizational support, job satisfaction, and performance. Journal of Business and Psychology, 29(2), 269-280.

Dumdum, U. R., Lowe, K. B., & Avolio, B. J. (2013). A meta-analysis of transformational and transactional leadership correlates of effectiveness and satisfaction: An update and extension. In Transformational and Charismatic Leadership: The Road Ahead 10th Anniversary Edition (pp. 39-70). Emerald Group Publishing Limited.

Hon, A. H., Bloom, M., & Crant, J. M. (2014). Overcoming resistance to change and enhancing creative performance. Journal of Management, 40(3), 919-941.

Lazaroiu, G. (2015). Work Motivation and Organizational Behavior. Contemporary Readings in Law and Social Justice, 7(2), 66.

Lewis, S., Passmore, J., & Cantore, S. (2016). Appreciative inquiry for change management: Using AI to facilitate organizational development. Kogan Page Publishers.

McKay, K., Kuntz, J. R., & Näswall, K. (2013). The Effect of Affective Commitment, Communication and Participation on Resistance to Change: The Role of Change Readiness. New Zealand Journal of Psychology, 42(2).

Miner, J. B. (2015). Organizational behavior 1: Essential theories of motivation and leadership. Routledge.

Pinder, C. C. (2014). Work motivation in organizational behavior. Psychology Press.

Renko, M., El Tarabishy, A., Carsrud, A. L., & Brännback, M. (2015). Understanding and measuring entrepreneurial leadership style. Journal of Small Business Management, 53(1), 54-74.

Wheelen, T. L., & Hunger, J. D. (2017). Strategic management and business policy. pearson.