Organizational change management assignment on the case study of the Eagle Air
Task: Write an organizational change management assignment of the change context taking into accounts both the internal and external drivers for change. This should include both a PEST and SWOT analysis. Provide analysis of the nature of change facing Eagle Air using key theory. Write a critical examination of the possible types of employee reactions to the proposed change, again using the key theory to underpin the discussion and giving consideration to the different types of employees employed by Eagle Air. Provide recommendations and advise management on how to plan and execute the proposed change so as to ensure its successful implementation.
The case study in the organizational change management assignment involves the UK-based airline Eagle Air (EA) that was initially publicly owned and specialized in long-haul flights across varied destinations. However, later it was privatized and floated in the British stock market which enabled it attract private investors and shareholders from other large corporations. This resulted in a significant salary hike for its staff, pilots and cabin crews while also facilitating revision terms and conditions which were unrivalled by other companies in the airlines. Eventually, the pandemic in recent years resulted in poor performance across the tourism industry that affected the airlines industry as well. While incurring heavy losses, the company management devised a two-fold strategy to ensure long-term competitive advantage while also delivering unique value to the company. Despite numerous benefits gained through the proposed plan, there would be subsequent drawbacks for the company staff which would result in low employee participation and also degrade brand image. As this would require considerable change management process, the organizational change management assignment would critically evaluate the change drivers in Eagle Air and analyse the employee reaction on such changes. The organizational change management assignmentconsists of macro and micro environmental analysis with the help of SWOT and PEST framework followed by the nature of change in Eagle Air based on underlying theoretical models. The employee reaction to the proposed changed has also been assessed to help Eagle Air facilitate optimal change model across the organization. Eventually, plausible recommendations would be provided based theoretical underpinnings and in context to the current industry situation. The attempt in the organizational change management assignmentwould be to align the change process with the union demands while also maintaining sustainability of the business from financial as well as value aspect.
1.0 Analysis of Change Based on Internal and External Drivers mentioned in the organizational change management assignment
The internal and external drivers for implementing an optimal change management process within the organization can be determined through PEST and SWOT analysis which provide insights on key macro and micro environment factors that can influence strategic change (Singh, 2019). It is found in this organizational change management assignment that the contrast in human nature can be better established through determinism and voluntarism approaches which can be ingrained with the company structure to ensure optimal market response. While determinism represents the obligation of businesses to change in response to market changes, the voluntarism approach confirms that the business can control the market to some extent through pricing and marketing strategies and do not need to make drastic changes to suit the market demands (Zimmermann,2011).The PEST and SWOT analysis with respect to Eagle Air and the UK airlines industry in general would help in the organizational change management assignment to further analyse the key drivers.
PEST Analysis (External Drivers) in the organizational change management assignment
PESTLE or PEST analysis is referred to as one of the marketing principles that helps business organizations evaluate the external environment in a given market segment for a given product or service. This framework addressed in the organizational change management assignmentis a pneumonic that represents each external factor in a country or market that might determine the various angles and dimensions affecting the business operations.
Political Factors: With the recent pandemic situation with nationwide lockdowns, most of the nations have shut down their inbound flights preventing Eagle Air from delivering passengers in their usual routes. Despite the active support from the UK government to keep the airline industry afloat, it is found in this organizational change management assignment that the company is struggling due to incurring losses which is further worsened by the increased price of commodities as profit margin and revenue decreases. However, the unprecedented package from the government to aid job retention and business loan schemes can be a major alternative to bridge the differences of the union and the company management (GOV.UK, 2022).
Economic Factors: In the last financial year, Eagle Air incurred a loss of £200 million resulting in an alarming financial situation. The factor of uncertainty about the travel situation is driven by lowering passenger numbers and rising fuel prices as well as higher airport taxes. The company as per the organizational change management assignment analysis, need to rely on leisure trips to fuel their recovery after lifting of the covid restrictions (Bouwer, Saxon &Wittkamp, 2022). In addition to this, the restructuring exercise in Eagle Air for the proposed change is directly linked to industry-average taxation and adapting salary rates of the merger companies.
Social Factors: The UK aviation industry has also experienced significant change in consumer buying behaviour since the outbreak of the pandemic which is a major concern. With medical goods and food provisions have gained top priority, the need for travel has lowered significantly. It is found in the organizational change management assignment that other airline companies like British Airways decided to reduce legroom and increase seating capacities to provide cheaper tickets has resulted in much more cut-throat competition. As a result of this, passengers have lost confidence in their services and experience while the employees are at risk of losing jobs resulting in poor performance creating a negative service loop.
Technological Factors: Despite the access to UK’s advanced aviation infrastructure, Eagle Air has been under constant pressure to switch to green energy sources to reduce carbon emissions and provide eco-friendly travel options (Petitions - UK Government and Parliament, 2020). As per the organizational change management assignment with the current reduction in revenue, the company is also unable to invest in research for more efficient and green energy sources. Fuel-efficiency programs and technological implementation can help businesses grow enormously which has been constrained due to the pandemic and is a major concern for Eagle Air.
SWOT Analysis (Internal Drivers)
The SWOT analysis is a framework that helps business organizations determine their competitive position in a market based on their internal and external aspects like strengths, weaknesses, opportunities and threats.It is found in this organizational change management assignmentthat businesses are able to determine the present competition and performance of the company as well as the risks and future potential that they might encounter in a market scenario with the help of this analytical framework.
• Eagle Air has significant brand power due to their unrivalled terms and conditions for staff members that enhance performance.
• The company also has access to advanced aviation technologies due to robust infrastructure in the country.
• Highly skilled and experienced aviation and hospitality employees to provide quality customer experience.
• The loss of £120,000 per day in one financial year was caused due to increase in airport renting and maintenance.
• The company being privatized from public ownership prevents it from being compensated by the government.
• The decrease in online bookings has also reduced its ad revenue streams from third-parties. Opportunities:
• The proposed merger can help the company deliver more travel routes to its passengers with more destinations and larger fleets.
• The alliance can help the company link with other companies and get published in the stock market ensuring more investors.
• Increased service portfolio from long and short haul flights.
• The company might be subject to reduced insurance capacity with daily incurred losses if the pandemic condition continues.
• With employees and consumers losing confidence, the company can experience loss of market shares.
• The proposed merger and alliance can also involve staff reduction and salary reduction affecting staff performance.
It is evident from the evaluation of internal and external factors in the organizational change management assignment that planned and emergent changes can eventually lead to logical incrementalism. As a result of this, the company can get out of the union and management deadlock and achieve a middle ground. The strategic approach to the proposed change needs to be evaluated on the basis of four dimensions namely financial, internal business processes, customer related process and learning and growth aspects. It would also ensure a balance and fundamental symmetry between people and business strategies and thus yielding an optimal outcome needed for long-term company sustainability (Johnson et al., 2020).
2.0 Nature of Change in Eagle Air (EA)
It is found in the organizational change management assignmentthat the typology of change proposes by Nadler and Nadler consist of four-part matrix that represents various responses to change consisting of tuning, adapting, redirecting and overhauling. Of these, the tuning aspect is represented by continuous or incremental change and is generally anticipatory in nature. On the other hand, the adapting aspect is attributed by reactive response while the radical and discontinuous change makes way for redirecting or reorienting nature of change (Wright et al., 2018). Finally, the recreation or overhauling change is subject to reactive response initiated by discontinuous change. Based on change examples studied by organizational change management assignmentexperts, flexibility can be considered as a key trait that is needed for successful change implementation across the organization. In context of Eagle Air, the nature of change that would be optimal based on the existing business model and proposed change strategies can be evaluated for each dimension. The employee union reacted in approval for the incremental change that would benefit the company from the merger in the long run. However, they were quite angry at the compulsory job cuts and changes in terms and conditions of employment and were unwilling to comply with the unilateral decision of the management. This is the contrast between incremental change which occurs overtime and transformational changed that is sudden and dramatic. Given the current scenario of heavy losses incurred by Eagle Air due to the pandemic as per the organizational change management assignment, a transformational change is required to gain significant competitive advantage and turn around the business position. At the moment, Eagle Air is in a reactive and transformational change response which would imply an overhaul or recreation of the business structure based on the two-fold business strategy. The proactive participation of the employees and union guided towards an incremental change would have resulted in a tuning approach which would have in an optimal change design. However, with 10% of employees to be laid off and adopting salary structure of Air Fast would imply reduce benefits for the staff members would prevent both tuning and adapting to the changes. Also, it is analysed in the organizational change management assignmentthat re-orientation can be achieved by Eagle Air management if they are able to pursue or convince the union to actively participate in the change process and get out of the current deadlock.
As per the organizational change management assignment based on theory of evolution for species, two approaches of change are noticed namely gradualism and punctuated equilibrium, change management in business organizations can also be implemented. In gradualism, the change is slow and steady where selection and variation occurs more gradually overtime (Pediaa, 2018). As the changes are adapted over long periods of time, they are often hard to notice and involves small increments over the entire change period. On the other hand, punctuated equilibrium refers to slow evolution but over short events that speeds up the overall change process. Punctuated equilibrium is mostly driven by stress from the environment that facilitates rapid variations on an isolated population.Given the multitude of factors both internal and external associated with Eagle Air that was successful due to the psychological bond with its employees, the use of the Burke-Litwin performance and change model might help interrelate all the relevant component parts within the company. The three embedded processes mentioned in the organizational change management assignment that can have significant impact across the organization include leadership, mission and strategy and organizational culture (Accipio, 2018). A bottom-up change should be prioritized as the staff members are the most affected components through the proposed merger and alliance strategy.
3.0 Critical Assessment of Employee Rection from the Proposed Change
The bridging of the differences between the company management and the employee union would eventually result in implementation of the proposed two-fold strategy and the subsequent change process across the organization. It is believed in the organizational change management assignment that as such the different types of employees in Eagle Air are subject to varied reactions to these changes and should be anticipated beforehand by the company management.The reactions to change in Eagle Air have been assessed based on the following two models.
Kirkpatrick’s Reaction to Change discussed in the organizational change management assignment
1. Determining the need or Desire for Change: In case of Eagle Air considered for the organizational change management assignment, the need for the change is driven by the urgency of making up for severe losses incurred in the past 2 years as well as achieve cost savings while also transforming the company into a larger yet leaner and fitter organization.
2. Preparing Tentative Plans: The planning for the change process has to be conducted with complete participation of the employee union and meeting the personal needs of the employees as well. When conducting the meeting with the union, it was a mixed response from the union and resulted in a deadlock situation.
3. Analysing probable reactions: As the company management provided no room for negotiation on the change of employment terms and conditions and lacked a proper plan for terminating contract of the existing employees, the reaction was that of anger mostly with some approval for the multiple benefits the merger could bring to the company.
4. Making a final decision: The final decision should ensure that the employee needs and their future professional path are taken care of in order to reach a common ground with the employee union. Both parties need to go back to the drawing board and reflect on the decisions.
5. Establishing a timetable: As time is crucial and the company is running out of options, the merger and the alliance need to be conducted over the next 6 months with proper employee layoffs performed through career consultation.
6. Communicating the change:it is found in the organizational change management assignmentthat communicating the change to all employees and union leaders across the entire organization is necessary for successful implementation.
7. Implementing the change: Once the remaining employees are on board with the company terms, the implementation should occur throughout the organization. However, due to its transformational and sudden change, the process should be followed by proper training and adaptive measures for the employees.
Carnall’s Coping Cycle
When responding to change as mentioned in theorganizational change management assignment, there are 5 stages to human response that would help determine reaction of Eagle Air employees.
1. Denial: The employee union in EA is currently denying to comply with the company management resulting in a deadlock.
2. Defence: The major defence is due to the proposed levels of compulsory job cuts and changes in employment terms and conditions.
3. Discarding: The meeting with the management broke up without any agreement as the management did not provide any room for negotiation. This discarding of the implementation strategy mentioned in the organizational change management assignmentwas caused due to the disastrous effect that can happen on employee morale and commitment due to the termination of contracts.
4. Adaptation: The company management in Eagle Air need to implement a company wide training process with transformative leadership and also hire professionals to conduct career counselling for the terminated employees (Carnall, 2018). This would help the existing employees to adapt to the enhanced service portfolio and Air Fast salary structure.
5. Internalization: Finally, the sudden and transformative change mentioned in the organizational change management assignmentwould take time to settle in and the employees would be able to work as per the wider airline industry and achieve a larger yet leaner business structure.
Image 1: Colin Carnall’s Coping Cycle
(Source: Carnall, 2018)
In order to draw connection between the proposed changed management process and psychological contract between the employees and the company, use of three theoretical concepts has been used in the organizational change management assignment to determine three different types of employees that the company might be dealing with. These are the expectancy theory, equity theory and exchange theory, all of which depict employee reaction from breach in psychological contract.Due to the breach and violation of the psychological contract between the employees and the company, it can lead to anger, distress, frustration and helplessness as 10% of the staff members are being laid of as means of cost-cutting measures. As for the remaining 90%, the proposed change can result in attitudinal responses like reduced organizational commitment, loss of motivation and even cynicism. Also, reduced effort, resistance to change and absenteeism are relational aspects of employees that the company addressed in the organizational change management assignmentneed to consider before implementing the change process through an optimal model.
Eagle Air can gain insights from the above discussed analysis in the organizational change management assignment and devise their change management model that would be most suitable to their company requirements. One of the most popular change models is Lewin’s model that comprise of three simple steps namely unfreeze, change and refreeze. Implementing this model would require complete participation of the employees and minimal resistance to change (Hussain et al., 2018). As per the organizational change management assignment integration of new technology or shifting a business model requires this change model as most of the employees retain their previous job roles without need for complete restructuring of the organization.
Lewin’s Force Field Analysis discussed in the organizational change management assignment
Using Lewin’s force field analysis model, in the organizational change management assignmentcase study of Eagle Air can be summarized with driving and restraining forces that can help reach a state of equilibrium ideal for long-term competitive success. It is found in the organizational change management assignmentthat while the restraining forces tend to maintain the current state, the driving forces should drive change for Eagle Air. The most common elements that serve as driving or restraining forces consist of people, habits, customs and attitudes (Harrington, 2016).
(Optimal for Change Implementation Success)
(Eagle Air Current Position)
Kotter’s 8 Stage Model discussed in the organizational change management assignment
In order to go through a process of change, Eagle Air can implement Kotter’s 8 stage model as per the organizational change management assignmentthat would help overcome the resisting forces and challenges and implement large-scale change successfully.
1. Creating a sense of urgency: Eagle air need to identify the opportunities with the two-fold merger-alliance strategy and convey the urgency of recovering from 2 years of losses through various cost-cutting measures.
2. Forming powerful guiding coalitions: Eagle Air as per the organizational change management assignmentneed to convince the employee union to prevent any strike action and convince them of the long-term benefits of the proposed changes. This can be done by proper utilization of transformative leadership qualities across the company (Radwan,2020).
3. Developing a vision and a strategy: The change leaders in the company should be made aware of the long-term competitive advantages that the company can gain from the changes.
4. Communicating the vision: Communicating the vision might be tricky as the employee jobs are at stake and the company addressed in the organizational change management assignmentis unable to reach a middle ground with the union. However, providing career counselling and restructuring exercises can help the staff adapt to the change.
5. Removing obstacles: Providing room for negotiation can help Eagle Air considered for the organizational change management assignmentcater to employee needs while also convincing them about the benefits of the proposed merger.
6. Creating short-term wins: In order to gradually convert the employees in favour of the change, the company management need to reward them through incentives.
7. Consolidating gains: Implement continuous improvement culture by using other case studies and past experiences in the corporate culture.
8. Anchoring change in corporate culture: It is recommended in the organizational change management assignmentto provide consistent support to the employees and work in collaboration with the union even after the change to ensure more proactive participation towards long-term organizational goals.
Image 2: Kotter’s 8-step Model
(Source: Radwan, 2020)
Other recommendations for Eagle Air based on the optimal model mentioned in the organizational change management assignment includea balance between people and business strategies and coming to common terms with union. Instead of conducting employee appraisal on past performance, a thorough learning process should be provided to each and every staff member and then their behaviour change needs to be assessed after their learning curve. Also, a bottom-up approach of change is required as the ground level staff members are most affected by the proposed change. The company as per the organizational change management assignment should also plan on covering psychological bond for the laid off employees through career counselling as it was the basis of the company success.
The organizational change management assignment considers the various outcomes of the proposed changes in Eagle Air and anticipates the employee reactions based on theoretical underpinnings. The two-fold strategy proposed by the Eagle Air management would provide longer-term shareholder value and significant competitive advantage in the ailing aviation industry in return for declining employee benefits and subsequent layoffs. However, it is found in the organizational change management assignment that in order to achieve a balance with the employee union and reach a common ground, a thorough internal and external analysis of the business environment have been conducted through PEST and SWOT analysis. The proposed change management mentioned in the organizational change management assignment to prepare for the merger and alliance has been based on a critical evaluation of the nature of change that would affect the various components of the organization. This was further developed by anticipating the different types of employee reactions based on theoretical underpinning. Finally, the overall information gathered from the entire evaluation and analysis process in the organizational change management assignment was considered to devise an optimal change management model that Eagle Air can implement as well as other recommendations were presented that would ease the implementation process.
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