Acknowledgement
I would like to extend and acknowledge my sincere gratitude to my
lecturer and tutor Dr. Guru Tej for his vital support and encouragement, his
assistance and understanding, for his constant reminders and much needed
motivation, help and inspiration and all his assistance in the collection of
the relevant information and topics for the report.
At last I would like to take this opportunity to extend and
acknowledge my sincere gratitude to my family members and all my friends.
Thank you all.
Sunil Manandhar
1.
Introduction:
This report has
been prepared on the case study as per the academic requirements on the module Strategic
Choice and Impact. The cases study is based on Faslane, HM Naval Case Clyde in
which various aspects of strategic changes analysis which has been occurred.
To analyze the strategic
change process Balogun and Hope Hailey’s Change kaleidoscope and Lewin’s
Forcefield Analysis was considered change impact. In other to analyze the internal features of
Faslane some analytical tools were used to measure the change such as Mc Kinsey‘s
7S Model and Johnson’s Cultural Web. To
identify the strategic leadership style was compared with Lynch model.
In the case study,
the Ministry of Defence (MOD) and the Royal Navy Decided to partner with
Babcock Marine which is a private company at year 2002. The main reason behind
the joint venture was considered to reduce the cost and improve their services.
The MOD and the Royal Navy targeted to save £76 million in 5years time but the
Babcock was successful in achieving the target and also considered the best.
2.
Analysis:
Faslane change
was successful for the reason that the management team brought people who dealt
with change which helped them to implement changes. Ministry of Defence (MOD)
and the Royal Navy were managing the Faslane until in 2002 they decided to partner
with Babcock Marine (a unit of Babcock International, a private sector
company). The major contribution to their
success was that Babcock was a company from the private sector where thing were
very different such as improved structure, diverse shareholders, strong
competitive and etc. compared to the public sector. To decrease the operational
cost and quality performance all the management and control was handed over to
Babcock which was the major reason for partnership agreement. Successful
changes turned Faslane to become home base for the entire UK’s submarine fleet.
3.
Change Kaleidoscope
Change
kaleidoscope is a comprehensive framework which pulls together and wide range
of contextual features and implementation options that require consideration
during change. It is a tool to conceptualizing the nature of change. Change
Kaleidoscope was developed by Hope Hailey & Balogun (2002). The change
kaleidoscope considers eight contextual features.
Three layer of ring with features of
change which can be enable or constrain change and innermost ring contains the
implementation options.
Fig 3.1: Change Kaleidoscope of Faslane (Adapted
from J. Balogun and V. Hope Hailey)
From
the above figure 3.1, we can see the Change Kaleidoscope has used to analyze
the change context in Faslane. The main object of Faslane was to reduce cost
and improved performance at very short period of time of 5 years. From the
above figure the word “Revolutionary” that can be
used to describe the change process in Faslane as changing the mindset of the
staffs.
We
observe that given a short time of 5 years to achieve the target of saving cost
of £76 million by new
management team (i.e. Babcock Marine) was a difficult. The management team
compromise of diverse workforce, power and autonomy, skilled employees which
had already faced changes. Doing such changes employee’s adaptations to achieve
the target was reduced. Low levels changes started to be implemented which
seemed too easy.
Babcock Marine, the
new management team structure was entirely different in way of working and the
scope compare to Ministry of Defence (MOD) and the Royal
Navy. At the time of change context, new management emphasized on inward
looking. Before the change process was implemented the major focus was on
staffs not the people.
During
the change process Babcock tried mainly to emphasize on increasing the
efficiency without compromising on the quality of service which were provided. Faslane
people mindset was changed by bringing skilled employees. There was flexibility
to work as the employees were given opportunity to form a team of members and
forming a plan. In the team there were mixed of skilled people in which
included Navy and Civilians and also reduced. On other hand majority of the
staffs had no experience and also not ready for the change. In times of MOD and
Royal Navy management style Faslane didn’t feel it need any change in
management.
The
impact of the change was overcome by the high skilled people and also its
capacity was considered positive due to fixed budget of Faslane. Even though
there was a short period of time to achieve the target of £76
million, experience and exceptional capability helped to adopt to the change.
Due to lack of experience employees were not ready for the change however
having negative thought that change would not be beneficial.
4. Lewin’s Force field Analysis:
Force
Field Analysis is a valuable change management tool which evaluates the impact
of all forces that influence change. The forces are categorized into two groups
driving force and restraining force. Driving force are those which promote and
push change where as restrain forces makes change difficult.
Force Filed
analysis model was developed by sociologist Kurt Lewin in 1951.
From the above figure 4.1 of Lewin
force field analysis of Faslane we can see for and against the change. In the
case study stated that MOD was in need for cost saving without compromising the
service and operational efficiency. The change was initiated from top level
managers with improved quality service which had been expected by the
customers. The change was essential due to rising sustainable cost and future
vision which lead to diversity growth inside the organization.
On the other side restrain factor is also considered. Employees feared
the change would provide no benefit to them. Faslane workforce were thinking
and implementing on traditional method. Conservative thinking of the staff about
passing time and making money. There was no awareness amongst staffs to save
money instead existence of huge spending on the management structure.
Faslane problem was existence of bureaucracy where the staff had limited
freedom. These factors lead Faslane to through the change to cut the cost.
Mainly the change process was initiated to save the cost by 76 million and also
to improve the operational efficiency.
The change
process lead to the positive result where it helps to change the working method
and the people thinking path in the Faslane. This change brought can be
considered revolutionary change because it occurred with the strategy also with
culture.
5. Internal
Features of Faslane:
We will consider the Internal Features
of Faslane with the help of Johnson's Cultural web up to 2001 and next from
2002 to 2010. Also considering the Mc Kinsey's 7S Model is used to consider up
to 2001 and from 2002 to 2010.
Fig
5.1 : Johnson's Cultural Web (up to 2002)
Fig
5.2: Johnson's Cultural Web (2002 – 2010)
McKinsey’s
Seven S Model
|
||
SEVEN
|
STRENGTH
|
WEAKNESS
|
HARD ELEMENTS
|
||
STRATEGY
|
Ä Focuses on customer oriented
|
Ä Delay in decision making process.
|
STRUCTURE
|
Ä Chain of Command from management level
|
Ä Roles and responsibilities are not clear stated.
|
SYSTEM
|
Ä Smooth Management style and Human resources was
improved
|
Ä Responding late on the customer complaints .
|
SOFT ELEMENTS
|
||
SKILLS
|
Ä Mostly staffs were civil servants as they were
experienced.
|
Ä Traditional method of doing the work and fear of
changing process.
|
STYLE
|
Ä Leaders were highly experienced and skilled
|
Ä Small number people in bureaucratic benefited.
|
STAFF
|
Ä Faslane engaged 1700 civil service staff.
|
Ä Readiness to change was less where infrastructure was
major focus.
|
SHARED
VALUES
|
Ä Quality service to Navy as committed.
|
Ä Ethnocentricity beliefs and resistance to change
process.
|
Figure 6.1 McKinsey’s Seven S Models
(up to 2001)
McKinsey’s
Seven S Model
|
||
SEVEN
|
STRENGTH
|
WEAKNESS
|
HARD ELEMENTS
|
||
STRATEGY
|
Ä Quality Service with cost saving.
|
Ä Low quality service on behalf of cutting cost saving
|
STRUCTURE
|
Ä Flexibility to create their team and develop plans
Ä Roles and responsibilities of staff.
Ä Reduction on management layers.
|
Ä Hierarchy of the organization can damage by excessive
freedom.
|
SYSTEM
|
Ä Expert management teams.
Ä Change the mindset of people.
|
Ä Customer complaints were difficult to manage.
Ä Immediate change process.
|
SOFT ELEMENTS
|
||
SKILLS
|
Ä Staffs were experience of change.
|
Ä Babcock Marine was not familiar with the operation of
naval base.
|
STYLE
|
Ä Leaders are experienced with change process.
|
Ä Potential risk associated with change process is
considered.
|
STAFF
|
Ä Over 2000 civil service staffs were engaged in Faslane.
Ä Staffs are focused more on people than infrastructure
and facilities.
|
Ä Risk of jobs after reducing the management layer.
|
SHARED
VALUES
|
Ä Commitment to reduce cost without affecting the quality
of services.
|
Ä Babcock being a private company seek to gain more
profit and hampers the organization strategy.
|
Figure 6.2 McKinsey’s Seven S Models
(2002-2010)
Johnson's
Cultural webs considering Faslane we can see the positive changes in the
management style can which helped to achieve the success. Babcock take over by
the partnership deed for management had managed to get employee commitment,
loyalty and welfare toward the organization. In time when Faslane, which was
managed by MOD and Royal Navy it was not considering the good or bad due to
huge and complex management structure. Employee used to do their daily work
where their plans and ideas were not considered as important as now Babcock
considered. Babcock minimized the management layer from seven to four. During
old management style decision making was hard where lately implemented which
hampered on image of Faslane. There unclear responsibility of the people
affected the customer oriented company. Ethnocentric behavior from management
level to low level was the problem. Where few people were benefitting from the
experience of their leaders due to bureaucratic leaders.
The Faslane had
a major changes after the Babcock Marine, a private sector company managed. Change
was experienced by bringing new
employees who had experienced the change process and implementation was easy
and successful. Babcock brought employees to actively participation. The
freedom provided to the employees to create a team and encourage to work on
business plan. There was align employees working around common objectives and
goal. Being a customer oriented company it
considered people as the asset of the company rather than
infrastructures. Management level was reduced from 7 layers to 4 layers where cost
was directly impacted. After cutting the layers of work process the management
reduced the review period 56 days to 6days. Cut off unwanted jobs and
reappointing the jobs which helped the company to obtain its objectives.
Process of
change by cutting the jobs could hamper the quality of service which was also
the primary objective of the company. Employee were given autonomy such
flexibility can create huge loss to organizational hierarchy. At the time of
management layer minimization from 7 layers to 4 layers resulted in significant
loss of job was encountered. Such factor may consider the employees performance.
Change process initiated by the Faslane
was in favor. This changed the organizational complete management style,
structure, goals and objectives within the period.
7. Strategic
Leadership Style at Faslane:
John Howie the new appointed Managing
director of Babcock Marine after Craig Lockhart in 2002. From the new appointed
director there was a significant change process. Babcock competitive advantage
was experienced in management skill, had different target and from other
service sector. We can compare the organization with the help of five members
of Successful and effective Strategic model.
7.1
Developing and communicating the organizations' purpose:
Leaders play a
major role in an organization. As it has to set the purpose and then
communicate them to every part of the organization. Employee was allowed to
create a team of their own and work on the common objectives. Encouraged and
motivated employees to openly discuss by organizing "the event in the
tent".
In contrast, the
employees lost their jobs like reducing the layer of management, which lead to
discouragement for the employee in putting more efficiency.
7.2
Managing human resources and organizational decisions:
Babcock
understood that the change should be started from lower level to obtain
success. Babcock managed the human resources by keeping limited and cutting
jobs to reduce the cost. There was restructuring decision made by reducing the review
period from 56 days to 6 days. Employee were self motivated by making the
business plan.
7.3
Setting ethical standards:
Faslane received
a huge budget from every year but when the money is not spend on fiscal year
amount would be deducted in upcoming next year. Due to fear of deduction of
budget the money is waste in an unethical manner. In order to reduce the cost
Babcock was given responsibility to manage Faslane.
7.4
Defining and delivering stakeholders:
According to
Lynch Model, “Leaders need to maintain good relation with stakeholders inside
and outside the organization.”
Babcock target
was to save £76 million in 5 years but he managed to make more this shows that
he was successful in managing the cost without compromising on quality of performance.
Where as many customer satisfaction was obtained where as job cut lead to
unhappy employees.
7.5
Sustaining competitive advantage over time:
Managers are
responsible to achieve the goal of an organization. Faslane managed by Babcock
Marine was successful as per the improving performance and reducing the cost.
Babcock introduced the same team effect which was effective in decision making
process. Faslane is expected to become
home bas for entire UK submarine fleet.
Now, we can say
that they have properly used the Lynch Model and the Faslane foremost
achievement on objective was to cost saving and improving the operation which
was successful.
Babcock marine was a successful venture
with Faslane.
8.
Conclusions
From the above
analysis we can clear find that the Faslane has been successful in implementing
change. The case study show that with the helps of the strategic tools like
Change Kaleidoscope, force Field analysis, Johnson's Cultural Web, Mc Kinsey's
7S model can be used to achieve the goals.
The change
process was effective implemented with the help of employees and experienced
management team. Allowing flexibility to the staffs had helped to transform te organization to a successful
one. It is considered as evolutionary transformation of public sector into
private sector.
In 2002 when
Babcock took over the company the employee were self motivated by given a
chance to explore themselves. Babcock considered its human resources as the
major asset of the company. It maintained the clear role and responsibility and
management structure was also decreased which lead to cost saving.
The adaptation
of change process on Faslane was successful due to unique management system.
The management team inside the Faslane has helped to perform and achieve its
objectives.
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Ä
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