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Leadership And Strategic Change: Sergio Marchionne In Fiat Company

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Question:

Discuss about the Leadership and Strategic Change for Sergio Marchionne in Fiat Company.

 

Answer:

Introduction

Project management discipline has some known tools that support its implementation and execution. They include; the statement of work, the work breakdown structure, project charter and finally the schedule. Some people view the change management like it is an usual communication but it is however, effective when it is takes as a holistic set of tools aimed at supporting people through defined changes (Vermersch, Carteado and Johnson, 2016, p.59). Sergio Marchionne, a scholar and philosopher having been the elected one to the Fiat S.P.A board in May 2003 with no experience in organizational management, was appointed as the Fiat’s CEO in 2004 where he served in that capacity till 2006. Sergio was later appointed as an overseer in the USA’s third-largest car manufacturer, Chrysler, in 2009. Through his tenure as the chief officer of these two companies, Marchionne adopted various levers of change management for proper maximization of the companies’ profits (Cerruti, 2015, p.37). Such levers of change management include; communication plan, resistance management plan, training plan, coaching plan and sponsorship roadmap.

Type and Kaleidoscope of Change adopted by Sergio

Revolutionary Change:

It can be regarded as the change that entails rapid and major strategic changes as well as cultural organisational change. Having a clear strategic direction. Marchionne articulated a clear strategic direction and action plan for Fiat in 2004. His aim was to achieve great integration and remove several management layers. Revolutionary change is one of the abrupt change in that it is not gradual but it is mostly instant. Though it is risky for such a change in a big organisation, Sergio would make sure that the change he revolutionary introduced in management layers was well taken care of and managed. 

Top-Management Change:

He found that in Fiat, the habit of upward referral was so ingrained in the management, that he had to let 2000 managers and executives go. This change helped in that, the managers who failed in their duties were done away with. The positions they could hold did not function until they were let go. One of the important benefit to this is that there was a good establishment of line management that Sergio had not met in the company (Marchionne, 2014, p.27).

 

Culture Change:

Marchionne worked with elements of existing culture at Chrysler. He drew on the experience of the existing management team to improve the product range. This step made him more successful than others who came before him.

Monitoring Change

Marchionne set unambiguous targets for his staff to achieve. These were linked to financial targets. In this effort to reduce costs on Chrysler, many jobs were cut and wages were slashed. He was a manager in the company. Nothing would be seen to go wrong because of the changes that he would have suggested for implementation. Changes come with different challenges. For the Human resource to adapt to new systems, it takes time, however, Sergio monitored the changes appropriately regarding the workers and the company’s reputation. The change in monitoring systems brought relief to the employee and easy coordination for the company’s wellbeing (Buchanan, 2017, p.343).

Multiple Styles of Change Management:

Marchionne was able to identify 26 young leaders in Chrysler, from some levels below the top management, who were to report directly to him, in order to flatted out the organization. He could incorporate different styles of change, one after the other. This was appropriate as he was able to assure that the changes adopted would work efficiently for the company and for the whole of the employee welfare. He would monitor performance by multiple changes which he was to introduce and adapt (Bushuyev et al., 2015, p. 496).

Levers For Change And Turn Around Strategie Adopted By Sergio Marchionne

Communication Plan

Communication is a crucial component of executing change, though it is not independent on itself, it can act as the basic requirement for the successful change. Marchionne spent the first 50 days setting up the proper communication channel for successful management as CEO at Fiat, to accomplish the projects successfully for the organization. He listened to people while analysing the situation that he found at the time of entry at Fiat. He transformed the communication channel that was earlier dominated through the secretaries to their executives. A well-established structure of communication plan would present right messages at the best way and by the best channel through to the right sender (Herrmann and Nadkarni, 2014, pp.1318). The managers as well in Chrysler were as reluctant in decision making as the communication was only cantered in the chairman’s office. Marchionne changed the management and as well as improving how the communication would flow from one person to the other, getting much involved in decision making was considered the key factor the success of Fiat and Chrysler organizations.

Effective Sponsorship Roadmap.

Effective sponsorship is one of the general contributor to the success of any project in an organisation. Having a clear sponsorship roadmap would involve visible and also active participation, building the team of together with other stake holders and communicating directly and indirectly with employees about all the necessary reasons for change. Sometimes, the best senior leaders who are expected to show excellent skills fail to demonstrate effective sponsorship (Rothaermel, 2015, p.108).

Sergio’s personal engagement with the employees directly was of more value than the former formal assessment. This helped in developing the top team which had strongly held common values. He brought this strong team to come up with the business plan that acted as the roadmap towards the change in Fiat. In Fiat, Marchionne had recognized the young talented managers, whose management abilities were not well recognized in the previous leadership leading to their misplacement in line of duty, i.e. working in the marketing sections and some areas not influenced by the head office. On his walk to get the required successful managers, Marchionne appointed 20 leadership positions and other areas where he offered promotions.

Training Plan

Training is another important aspect in adapting change. Employee need to be oriented to the change before it takes place. The procedure would help to make sure that there is no breakage of the psychological contracts, new changes do not affect negatively on the current production gauge. It is categorised as an important part which can aid in creating successful change. Marchionne achieved this in step at Chrysler, where he was able to identified 26 young leaders who were from some levels below the company’s top management and had until then been muffled by the existing hierarchy. The direct reporting to him enabled good training for the youngsters to exercise their full potential (Leonard, 2013, p. 68).

 

References

Vermersch, W.L.R.P., Carteado, R. and Johnson, A., 2016. Change management as an indispensable component when planning for NRW control.

Marchionne, S., 2014. An Open Letter to Employees, published in its entirety by Michael Wayland.“Chrysler CEO Sergio Marchionne on Moving Jeep Production to China.” Mlive. com, October 30, 2012.

Buchanan, D.A., 2017. Managing Change. The Oxford Handbook of Management, p.343.

Bushuyev, S.D., Bushuyev, D.A., Rogozina, V.B. and Mikhieieva, O.V., 2015, September. Convergence of knowledge in project management. In Intelligent Data Acquisition and Advanced Computing Systems: Technology and Applications (IDAACS), 2015 IEEE 8th International Conference on (Vol. 2, pp. 496-500). IEEE.

Rothaermel, F.T., 2015. Strategic management. New York, NY: McGraw-Hill.

Herrmann, P. and Nadkarni, S., 2014. Managing strategic change: The duality of CEO personality. Strategic Management Journal, 35(9), pp.1318-1342.

Leonard, D., 2013. Standards Engineering. The Official Journal of SES.

Cerruti, G.C., 2015. Il World Class Manufacturing alla Fiat ei dualismi sociali e organizzativi della produzione snella. Economia & lavoro, 49(3), pp.37-54.

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