Reference no: EM13140271

Case Study 
Problem Statement: 
You need to consider how you will identify the range of issues and problems in the following problem statement. 
Lee Bineesh is a highly qualified but aggressive Singaporean CEO educated in Sydney who has just taken over as CEO of a company we shall call VRD Industries located in Singapore. Lee had a track record of working in fast cycle markets and achieving above average growth in developing industries. Lee's arrival at VRD was greeted with much initial surprise followed by a steely resolve to change things. For over 40 years, the company manufactured component parts for the auto industry in both Europe, GM in the US and other US automakers. Recently, VRD has also exported to GM in China which has been identified as a growth market. VRD operated as three product-divisional strategic business units (SBUs) all located within the same industrial complex: 1) Automotive Parts 2) Infotainment and 3) Electrical& Energy. Each SBU has its own Divisional General Manager with a small office staff, a manufacturing manager, Quality Control Engineers, Process Supervisors, leading hands and upwards of 150 staff working within each factory centre. The three SBUs shared the normal Head Office functions of R&D, Technical, HR, Sales & Marketing, Accounting and Warehouse and Distribution. The top management team comes from the main VRD Head Office structure (8 senior managers). Middle management consists of about 12 managers in each factory. Functional or line managers consist of another 6 managers. 
Lee took over from Frank Delacy who had worked his way up in the business from the factory and had retired at age 70. For over 30 years, Frank had a steady team of managers at each of the SBUs including middle managers. Staff turnover was low with most managers (functional staff included) having been with the company for over 20 years. Staff loyalty to Frank was extremely high. Changes had been few. Despite discontinuities within the auto industry, Frank and some senior sales staff had built up long-term relationships at Detroit resulting in a fairly consistent sales growth with consistent supply contracts to Europe. Recently, discontinuities and the relentless pace of competition from China, Taiwan and Vietnam for component exports placed heavy pressure on VRD to compete. A new line of managers at Detroit following the GFC and aggravated supply contracts out of Europe meant sales had halved. This coincided with Frank's retirement placing heavy pressure on Lee and the top team. Lee also appointed a change manager, May Wong, to assist the divisional and manufacturing managers to implement a change agenda. After some weeks of constant review, Lee realised that the company was too slow in production, had old job design methods and that conflict existed between the SBU divisional managers and their teams and between each SBU. 
The basis of the conflict related to maintaining the current processes and systems that had held the company in good stead for many years and the type of change being imposed by Lee. For his part, Lee wanted an agile company, highly responsive to shifting markets, a cooperative team, and a highly efficient production process. It was no surprise then that each divisional manager had been advised that a staff reduction of 10 per cent had to occur within the next 6 months. This was difficult for senior management who had long-standing friendships with lower managers and line staff dating back to the 1990s and in some cases, the 1980s. Indeed, some factory staff had been on the same machine and processes for over 20 years. That processes needed to change and that manager's had to "get off their backsides and do some real work" had suddenly become the 'new' culture. This shocked the senior team as they were more familiar with Frank's easier fine-tuning and collaborative style. The problems and issues facing VRD came to a head for Lee after May's quite detailed interviews and assessment of staff practices and policies. Mays exit polls consisting of qualitative questionnaires and several focus groups revealed further issues. Warehousing and Distribution staff accused sales and marketing of imposing unrealistic delivery estimates. Sales and marketing accused warehousing of being 'too slow'. Fractious lines of communication started to appear within groups in each factory since more pressure was being placed on divisions for more efficiency. Also, following Frank's departure, the impact of less capital expenditure and funds for resources appeared to create conflict between each SBU manager competing for a decreasing slice of the pie. This led to falling morale, a clash between managers for updating technical processes, and lower-level staff accusing managers of ruining a perfectly good company. After 6 months of constant conflict and falling sales, Lee asks May to also hire an outside change consultancy firm to assist the organisation deal with its next phase of growth. Lee was struggling for control and May was being flooded with an increasing list of day-to-day issues. 
Task -required: Based on less than perfect information supplied about the VRD problem statement, you are required to act as an external change consultant to assist 
the firm to: 
1. Develop a set of realistic assumptions that you can add to the issues and problems expressed. These might typically be related to each other at: a) the organisational level, 
b) the group level, c) the individual level. For instance, you might develop assumptions about leadership, about teams at each level, about creative thinking or lack of creative thinking, about innovation. List each assumption and discuss in a small paragraph why you have chosen this assumption. For the purposes of this analysis, you are presupposing 
that your assumptions are real based on your own data collection; 
2. Using existing theory(s) as a guide to assist your analysis, identify the type(s) of change that is occurring at VRD; 
-Radical /Incremental/ Punctuated/Continuous Transformational modal of change / OD practitioner 

3. Why is the company finding it difficult to change given the theory-to-practice link? 

4. Using the open system model outlined in your study book and text, identify the issues (from the problem statement and from your own assumptions) by redrawing and 
populating each connecting box. Complete this exercise for as many times as you see connecting systems within (or external to) the company that is influencing change. 
5. From point 4, use theory to justify your selection of the open systems identified. Here, you should use at least 7-10 separate references that support your selections and systems' linkages.