Applicability Of Lewin Change Management Theory Essay.

Discuss about the Applicability Of Lewin Change Management Theory.

The vision of Coca Cola is segmented under the heads of 5Ps. These are the:

• Producing value for the people whom they serve.
• Maintaining a clean and transparent portfolio of the company.
• Working towards the reduction of the pollution and thus alleviate the environmental conditions
• Sharing the profit equally with the shareholders
• Focusing on maximum productivity

The mission of the company are also basic. They comprise of an aim to refresh the world, to instil and inspire people for the moments of optimism and happiness. The company wants to set an ideal relating to financial, philanthropic and charitable activities.

The first KPI of Coca Cola, Arabia is focusing on the strategic pillars of the company that are building of community trust through CSR based on anti-pollution activities, relating to the consumers, and the method of cost leadership. According to Al-Haddad & Kotnour (2015), this is essential for organisational success.

They also have a distinct strategy that is based upon appraisal of employees who exhibit a mind-set of high performance. One of their KPIs is the achievement of their strategic targets, which involves the following:

Figure 1: Strategic targets of Coca Cola, Saudi Arabia

(Source: Coca-colaarabia.com, 2018)

The industrial sector of Saudi Arabia dominates the economy of the country. The industrial sector accounts for 63% of the total GDP growth of Saudi Arabia. The global recession hit the industrial sector badly in 2009. The business of major MNCs were badly hit with the revenue generation falling by 11.7% and the export rate by almost 25%. As per Bartunek & Woodman (2015), the business infrastructure of Saudi Arabia is excellent with convenient investment structures. The economy of the oil sector of the country has been secluded from the non-oil sector in order to draw multinational investment. Saudi Arabia has monarchy that helps in simplification of the business. The financial sector is also the largest in whole of Asia (Bartunek & Woodman, 2015). Owing to the unprecedented rule of the Royal family in Saudi Arabia, there is very a low rate of political disputes, strike calling and political ill will. This makes the business environment in Saudi Arabia simple, realistic and predictable. Hence the global business leaders like Coca Cola can freely invest in the country.

The organisation has 10 plants across the country. Again, 15,000 employees are employed in the organisation in Saudi Arabia. The economic value that the Coca Cola plants produces is immense. According to Batras, Duff & Smith (2016), in addition to giving employment to the local people, large amount of corporate tax goes to the government’s coffers. Moreover, the organisation works towards capital; progress of the local suppliers also. They pays the local suppliers for capital equipment also. The organisation has various community welfare program also. The organisation took a big step by helping the war victims in 2016 and 2017. Together with Oxfam Asia, they have created a poverty footprint analysis that is used by them as a resource for uplifting the standard of lives of the Asians.   

Key Performance Indicators

The organisation follows the One Brand strategy across the globe. All other products of Coca Cola are their sub brands. A universal storytelling strategy helps to connect the employees of Coca Cola around the globe. Coca Cola has recently introduced two trademarks of Coke Zero and diet Coke.

About 85% of the water available in the Middle East is utilised for agriculture. Hence Coca Cola and other leading beverage plants that utilise lot of water for its products, makes use of the saline water of the Arabian Sea. Hence, in Saudi Arabia, the major investment and technological innovation of the Coca Cola Plant is behind the desalination plants. The company has about 1500 desalination plants all over the country. 5.6 million Cubic metres of distilled water is produced by the plants daily (Coca-colaarabia.com, 2018).

Famous Greek philosopher Heraclitus has said that “there is nothing permanent than change”. Hence it is justified that change management is necessary for the most prestigious and efficient organisations also. This model of change helps the organisation to implement change in the existing atmosphere of the business organisation (Change-management-consultant.com, 2018). As per Cummings, Bridgman & Brown (2016), various organisational changes that might be implemented in an organisation are changes in implied technologies, changes in Management and strategic management and so on. However, each change process requires unique change management techniques.

According to Duffield & Whitty (2016), all Macro and Micro aspects of the organisation changes with time. Hence in order to ensure sustenance in the environment dynamic survival strategies are required. It is evident that human nature resists change in policies and management standards. Hence effective change management strategies are required to inflict changes in the internal policies of the company.

This report aims at discussing a prolific strategy that would enable Coca Cola to involve all their essential stakeholders to enable them to successfully implant change in the internal and the external context of the company.

The prime reasons why the organisation needs change are as follows:

Table 1: Reasons for the implementation of Change in the Company

(Source: Influenced from Endrejat, Baumgarten & Kauffeld, 2017)

Change management involves three stages in all. They are preparation for the change, management of the change and reinforcement of the change. The preparatory phase of the change includes an assessment of the segments where change policies can be implemented within the organisation. The next activity of this stage is the development of a proper strategy that would be able to help the company to incorporate the change in its organisational structure. The second phase that is the managing phase includes activities such as planning, implementation, supervision and evaluation of the change policies implemented in the first phase. According to Golež et al. (2017), the last phase, that is the phase of reinforcement of the change, involves activities such as collection and analysis of the feedback information collected by the change managers in the company. The second step of this phase is the gap analysis of the change management program carried out recently. Thereafter the organisation calculates and anticipates the degree of resistance, both internal and external that is responsible for the hindrance of the change management process. The final step is the undertaking of corrections actions which would successfully commence the change management program.

Influence of External environment

Table 2: the essential steps of change management

(Source: Hornstein, 2015)

Lewin’s 3 step model upholds that change management in an organisation is an episodic process. The steps can be counted among three episodes, which are as follows.

Figure 2: The three stages of Lewin’s Change Model

(Source: Hossan, 2015)

The Managers of the Coca Cola, Saudi Arabia Company would be able to communicate and motivate the employee about the crucial nature of the change that is going to bring positive outcome for the organisation. According to Kavanagh & Johnson (2017), the staff should be effectively trained so that they might act skilfully in the change implementation phase. Training might be external or internal.

The “Changing Phase” would allow the organisation to initiate the practical steps that are involved in the strategic change planning. He major approaches that the organisation might undertake in this stage are development of strong emotional relationships within the employees and between the hierarchy and the employees. The next step is the offering of cash rewards on bearing and participating in the change management phase proficiently. This is an informal employee appraisal program (Lewin, 2014).

The freezing phase allows the organisation to incorporate the recently innovated changes in the scope of their regular work regime. This is an essential part of the change management strategy that would help in the sustenance of the change and prevent the organization from retreating to the previous operational standards and work methods (Lewin, 2014).

In Saudi Arabia, Coca Cola operates as a retailer, manufacturer and a bottling company. The product of the company are non-alcoholic beverages. The organisation is a parent company of Georgia, United States of America. The net income of the Saudi Arabian facility has been 55 million Saudi Riyal in 2010. The net income from the country receded to 38 million in 2012. Since then the organisation, in-spite of being counted as one of the top peering organisations of the FMCG industry of the country have not been able to mark substantial increase of sales in the country. Besides the organisation has increased its target market also. In spite of that the rise in the number of employees have been low.

Coca Cola has about 800 employees working at present. An additional of 350 employees are working in the bottling plant of the company. The organisation is also competing very hard to be counted among the first three market occupants of the cold drinks industry of Saudi Arabia. However, the organisation has invariably remained lower than Saudi Soft drinks and PepsiCo in Saudi Arabia.

Economic situation

Coca Cola is a type of organisation that requires making changes in the products and the business strategies depending on the expectation of the consumers and the influence from the external business atmosphere of the FMCG industry in Saudi Arabia.

The eternal factors that the organisation needs to consider are Government regulations, changes and changing trends in the labour markets, sales market conditions, the economic scenario and so on. According to Lock (2018), the internal factors susceptible to change in the company are workforce and workforce management policies, resource management and allocation, the attitude of the workers in the bottling plant and the effecting manufacturing and sales strategy adopted by the organisation in Saudi Arabia. The change management strategy was initiated in Coca Cola Corporation after the Second World War. The company suddenly faced reckless terror and also became exposed to new target markets. Various other entrepreneurs as well as peering beverage companies came into encounter with Coca cola. Moreover, as per Morrison (2018), the Middle East became a huge market for all of the world’s best beverage companies. Especially, Saudi Arabia gradually became one of the top five consumers of cold drinks in the world. Generally also, the demand of premium consumer products is high in Saudi Arabia. One import change management strategy was the installation of vending stations all over the battle ports of the countries where the soldiers could avail free cold drinks. The company used this move as an effective sales strategy also, as this exhibited the patriotic emblem that the organisation carried with them. Saudi Arabia was the only hub in the Middle East, where the vending machines were manufactured and marketed from. The network that the organisation created in the war time, in Saudi Arabia, helped them in expansion of sales in the post war period. The organisation provide effective training to the Asian employees working in Saudi Arabia by means of the R&D experts of the company in Georgia. At the time of the large Financial Crises in Asia, during 2000s, the company adopted the market acquisition strategy in the Middle East and specifically in Saudi Arabia. The Company introduced the business of tea, coffee, and bottling in Saudi Arabia along with other eminent Asian markets that have the highest level of disposable income. According to the ideas of Sallis, Owen & Fisher (2015), the enlarging market in Saudi Arabia allowed the organisation to bring in versatility in the product range. They introduced new products like Diet Coke and Coca Cola Zero. The employees required time to get accustomed with the production policies and accordingly modify the production line that was accustomed to handle two to three mainstream products.   

Internationalisation

The company introduced an effective market blender also, when Saudi Soft drinks introduced a new caffeine based product that was smooth and stated sweet.  Coca Cola, Saudi Arabia renamed the Saudi Arabia version of the diet Coke as new Coke. However, this market strategy faced criticism and the sales rate of the product dropped effectively from 78% to 60% approximately.

The change reinforcement policy was introduced by the company and the old formula of the product and the old product name was restored. Further unfreezing of the internal improvisation continues as the organisation plans to create more sub-brands of Coca Cola franchise, which would be dedicated to various flavours of juices as well as energy drinks. This proves, that the company is responding to the changing nature of the taste buds of the customers of Coca Cola. As an effective part of Coca cola’s effective Change policy of the second stage of Lewin’s Change model, that is changing, the organisation introduced and implemented some effective changes in the people dimension of the internal environment of the company. In order to respond to the changing demands if the external stakeholders of the organisation, they introduced some other changes in the advertising style of the products of Coca Cola. The company segregated its Coca Cola brand packaging, publicising and showcasing. The other product lines were equally streamlined. Packet information that were necessary began appearing in Arabia and Urdu in Saudi Arabia and local ingredients went into use in the products (Coca-colaarabia.com, 2018).

The global reach of the business of the Coca Cola Company is fair and competitive. However, in some countries the employee engagement rate is effectively low. The company faced the same issue in Saudi Arabia as well.

The recent change strategies introduced by the company in its workforce, are aimed at creating more intrinsic values and elevating the motivation level of the employees of the company in Saudi Arabia. The system of internal communications have been made stronger by fostering brand relationship among the employees. According to the ideas of Worley & Mohrman (2014), this would help the employees of Coca Cola to engage theme fully with the values of the organisation. Training and induction program for making the employees aware of the significance of the new branding policies and changed production standards is required. This would help them to understand the significance behind changes introduced by the company in Saudi Arabia (Coca-colaarabia.com, 2018).

Technology

These change management policies would help the organisation to realise the following values.

Figure 3: Significance of the change implementation and change management for coca cola in Saudi Arabia

(Source: Coca-colaarabia.com, 2018)

Two Change management tools have been implemented by Coca Cola to ensure the stakeholders’ engagement to their change management. These are Force Field analysis and the AKADAR model. Force field analysis is an essential tool of Lewin’s Change model that involves induction of different stakeholders in different ways to ensure their involvement. At first the management held separate meetings with different stakeholder’s group and then implemented the Force Field model to update the stakeholders about the organisational changes associated with the change management.

Again, the AKADAR model allows creation of awareness among the stakeholders regarding the needs of change in various departments of the organisation. This would in turn make the employees desire to participate in the change.

Table 3: SMART table for the change management policies of Coca Cola, Saudi Arabia

(Source: Created by the Researcher)

Systems thinking might be introduced in the company in order to guide successful change in the organisation. The model emphasizes the workers to inflict wholeness, interdependence, a chain of influencing each other and initiating a need for balance of life-work and adaptability. There are ample subtle avenues to impose equi-finality among the stakeholders of the organisation. The preferred usages are line, commune and dictator networks.

Coca Cola had been an entrepreneur campaign where the formula of one small organisation was purchased and made globally acceptable in the form of a beverage manufacturing and selling firm. Company is going to introduce a new change named “machine bureaucracy”. The policy aims at maintaining proper labour guidelines, well divided labour hierarchy and centralised decision making. This would require technical competence along with standardisation of work-rules.

Hindrance to change management is a usual human attitude. Generally the workers resist, changes in organisational culture and policies. Hence, it is necessary to engage the employees in a better way so that they can associate them with the organisational goals. The first step in this regard is the education of the employees regarding the benefits of change management. The final step is negotiation and agreement with the workers. Other important actions are specially addressing these people who are unable to cope up with the changes for some disability or some physiological issue.

Conclusion

In conclusion it might be commented that communication is the most effective way of change management. Post communication of the changes, the stakeholder groups should be explained why the necessary changes are crucial from the company perspective. This would ensure e positive outlook of the employees and other stakeholders towards the change who would then appreciate and welcome the change. Finally, it can be concluded that the ulterior motive of change management is ensuring that the company is poised in the finest position in the market under all odds in the market.

Reference list

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