Saturday, January 18, 2014

Week 30: Faslane casestudy

Fig.: Faslane

1.0 Introduction:

Faslane, a former HM Naval base Clyde is the U.K’s nuclear submarines that carry the trident weapon system. It had been solely run by the MOD (Ministry of Defence) and the Royal Navy and managed by private sector, Babcock marine which is a part of Babcock International. From the year 2002 to 2006 John Howie was the managing director of Babcock marine. In 2002, they established a partnership relation with industrial firms and initially made an agreement contract of five years with Babcock to deliver £76 million. Their main intention for the agreement was to reduce the cost and eventually improve operational effectiveness. The following report is an effort to basically analyse and understand the strategies and changes Faslane implemented for success. The report includes several analytical tools such as:
1)      Force Field analysis
2)      Balogun and Hope Hailey’s change Kaleidoscope
3)      Johnson’s cultural web
4)      McKinsey’s Seven S framework
5)      Kotter’s Change steps
6)      Lynch leadership Model

2.0 Strategic Change Process at Faslane:

“The term strategy is derived from a Greek word ‘strategies’ that means “generalship” but the concept did not originate from the Greeks. Sun Tzu’s classic, The Art of War, written in about 500 B.C, is regarded as the first treatise on strategy.” (Jordan, 2012).
There are two types of strategic change process that any organisation can adapt to and they are intended strategy and emergent strategy. Intended strategy is more of a formal and pre-planned strategy. This kind of strategy is basically a periodic process which would help an organisation to accomplish a series of goals and objectives and thus helps secure the future of the organisation. Whereas, emergent strategy is a kind of pattern that is unintended and comes across as a series of decisions in an organisation. It is not included in the planning phase and does not value for the long term purpose. This kind of strategy happens by chance, without planning.
In my opinion, Faslane’s strategic change process is both intended and emergent. Intended in a sense that, in 2002, Faslane signed a contract of five years with Babcock in order to deliver £76 million of cost saving providing more improvised service to the Navy. This seems to be more of a future oriented planning. However, if analysed the same strategic change they made in a different way than, I would say Faslane adapted emergent strategy change process. They analysed the market situation and then made the decision of cost saving and operational effectiveness. Eventually, the seven layers management structure was reduced to four layers and also the pre-existing bureaucratic system was eradicated to give preference to the views and opinions of the employees. They also reduced the management review process to 6 days from 56 days. Similarly, they made a decision implementing low level changes at first as they were less time consuming. Thus, with all these strategic changes they brought up made a delivery of £100 million cost saving within five years.

3.0 Analysis:

3.1Force Field Analysis:


Force field analysis was created by Kurt Lewin in the 1940s. It is one of the useful decision-making techniques. It helps an organisation to make right decision by analysing the forces for and against the change classified as driving forces (positive) and restraining forces (negative).
Driving forces for Faslane: The main changes to be made were the cost saving and improvised operational effectiveness within five years without affecting the services provided to the Navy. For these changes to be made, some of the positive forces are eliminating bureaucratic system, reducing management level layers and reducing management review process.
Restraining forces for Faslane: The negative force towards the change at the initial stage was the employees had a negative perception on the change. Likewise, the employees only focused on the infrastructures rather than quality service. And also the reduction in management style layers eventually changed the transactional management style to transformational management style. In addition, Faslane also had to face political interventions on the decision making by the civil servants.

3.2 Change Kaleidoscope:

Change Kaleidoscope was developed by Hope Hailey & Balogun (2002) to be a way of pulling together and codifying the wide range of contextual features and implementation options that require consideration during change. In this sense Change kaleidoscope is more of a model than a method, but it is usable tool for conceptualizing the nature of change.( proworkproject.com, 2014)
                              

               
Time: Faslane had a target of delivering £76 million of cost saving and operational effectiveness without affecting the service provided to the Navy. The target was to obtain this within 5 years of time.
Scope:  The main scope of Faslane was the set target of delivering the services with minimum cost and maximum management effectiveness without affecting the initial service provided. They eradicated the bureaucratic system and reduced the management levels from 7 to 4.
Preservation: Faslane was to maintain and preserve the quality of service they provided. They also maintained good relationship with MOD, Naval base commander and other stakeholders.
Diversity: John Howie made diverse set of management levels divided into various groups and division. He also focused on the cost reduction and appointed responsibilities to public sector manager with a proper large budget which had no incentive to reduce costs.
Capacity: Faslane had the capacity of minimizing the cost with improvised operational and management effectiveness even when they reduced the management structure level to 4 from 7. With only the team of 250 people, Faslane was capable of achieving the target goal.
Capability: Faslane have the ability to motivate and encourage its employees. They were able to set positive mentality among their employees so as to achieve set goals through sharing of opinions and manage transformational period.
Readiness: With a diverse mix of people, Faslane had people who were ready for the change but at the same time had people who initially did not support the thought of change. However, eventually with the effort of managers, the employees were committed towards personal change.
Power: The system of autonomy was limited due to changes made. However, the managers still had full power to control their workers according to the new change.

3.3 Johnson’s Cultural web:


Cultural Elements
 (until 2001)
2002-2010
Symbols
>only nuclear submarine’s home base
>mainly infrastructural facilities were emphasized
>Entire U.K. submarine’s home base
> emphasis on quality service and operational effectiveness
Stories
>Ineffective management system and management review process
>Cost reduction concept not accepted
>Effective management system and management review process
>Adaptation of cost saving changes
Organisational structure
>250 staffs in a management team
>7 layers management structure
>Reduction of management team to half of the previous number
>4 layers management structure
Power structure
>only top level management made the decisions i.e. bureaucratic system was prevalent
>bureaucratic system reduced and all the employees could share their opinion.
Control system
>Ministry of Defence (MOD) controlled Faslane
>Only elected politicians had the right to question the decision of civil servant
>Privatization in the organisational system
>encouragement to individual decision making
Rituals and routines
>56 days of management review process
>Carelessness in spending
>only 6 days of management review process
>outputs measured by performance scorecard
Paradigm
>Change process not adapted
>time consuming and use of  traditional method
>quality service and cost saving
>Accepted change process

3.4 Mc Kinsey’s seven S framework:

The McKinsey 7S model involves seven interdependent factors which are categorized as either "hard" or "soft" elements:
Hard elements: Strategy, Structure and Systems
Hard elements are easier to define or identify and management can directly influence them: These are strategy statements; organization charts and reporting lines; and formal processes and IT systems.
Soft elements: Shared values, Skills, Style and Staff
Soft elements, on the other hand, can be more difficult to describe, and are less tangible and more influenced by culture. However, these soft elements are as important as the hard elements if the organization is going to be successful.
Until the year 2001 when Faslane was managed and controlled by MOD and the Navy:
Mc Kinsey’s 7 models
Strengths
Weaknesses
Strategy
Emphasis on good infrastructures and buildings
high cost and time consuming
Structure
clear cut decision making by the top managers i.e. bureaucratic system
7 layers of management system, which is a lot
System
Transformational changes were not required due to smooth running of public sector as well as base.
Interference of elected politicians in decision making thus, making the process time consuming and inefficient
Styles
Implementation of bureaucratic leadership style
Many people did not like bureaucratic leadership style
Staffs
7,500 total population of staffs and 250 people in management team
Main focus of work for the staffs was only for infrastructure developments and building facilities
Shared Values
Quality services provided to the Navy
Unaccepting change process
Skills
Experienced and skilled manpower, most of them being civil servants
More focus on waterfront and unawareness on the change in management styles


Mc kinsey’s seven S model from the year 2002-2010 when Faslane was managed by Babcock marine:
Mc Kinsey’s 7 models
Strengths
Weaknesses
Strategy
>Cost saving and improvisation in operational effectiveness without hampering the quality services provided to the Navy
>Strategy of cost reduction has the chances of affecting employee’s performance ultimately hampering the quality of service
Structure
>4 layers management structure
>Low-level changes put up front
>Change process accepted by the employees
>Changed management system could lead to failure
>only 250 members in the entire management team
System
>Employees had positive mind set about the management change strategy
>less time consuming and cost efficient structure
>Drastic change in management system was implement in a short period of time
Styles
>reduction of bureaucratic system and skilled staffs had an involvement in the change process
>implementation of excessive democracy system which is risky
Staffs
>The staffs had to focus and emphasize more on the goal and objective of Faslane rather than it’s infrastructural developments
>Less number of staffs in the management team gradually leading to less effectiveness in performance
Shared Values
>Improvisation of quality service, cost saving and maintaining quality service
>Babcock being a private company may focus more on profit which eventually can risk the reputation of Faslane
Skills
>Use of skilled and experienced workforce
>However, the Naval base operations were new for them to operate



3.5 Kotter’s 8 step process for change:


Step 1: Establishing a sense of urgency
John Howie the former managing director was able to identify the problem of high operational cost and need of management structural change for Faslane. He identified the change process was a case of urgency after analysing the market scenario.
Step 2: Creating the Guiding Coalition
While the employees were not ready to accept the cost saving changes, the effective managers were able to set positive perception in employees’ mind on the change process. The 250 members’ management team along with the employees were encouraged to work for the management change process effectively.
Step 3: Developing a change vision
John Howie basically set a changed and clear vision/goal for the organisation. The target was to reduce cost, improvise operational effectiveness and continue to provide quality service. Faslane then made a change by reducing 7 layers management system to 4 layers management system and also adopted both intended and emergent strategy in order to achieve the goal.
Step 4: Communicating the vision
It was a hard task to communicate vision of management structural change to the staffs as some staffs were ready to accept the change while others were not. However, they conducted sessions such as ‘event in tent’ which resulted to be successful in sharing ideas and visions of all the members.  They also used several possible means to communicate the new vision of management structure change.
Step 5: Remove obstacles
John Howie eventually reduced the 7 layers management system to 4 layers management system. He also reduced the 56days of long management review system to only 6 days. Likewise, the changed structure also focused on cost saving and encouragement towards non-traditional methods.
Step 6: Creating Short-term wins
The immediate change made by reducing the days of management review process and management structure layers can be counted as the short-term wins of Faslane.
Step 7: Build on the change
Firstly, Babcock brought John Howie in 2002, John then saw the need of change in the entire management structure and strategy. They targeted an achievement of £76 million cost saving and the improvement in operational effectiveness. To achieve the target, John strengthened the process with new theme and also the employees who could implement the vision were promoted.
Step 8: Incorporating Changes into the Culture
They identified the needed change and set new vision of change. They encouraged and motivated employees towards cost saving strategy even though they were not accepting to implement such change.

3.6 Strategic Leadership styles at Faslane (2002-2010):

In the year 2002, John Howie became the managing director of Babcock, he handled the position until 2006 and then Craig Lockhart took his position in the year 2006. During these periods Faslane underwent a drastic change of success. Both the directors managed Faslane with same change in management structures and strategy which ultimately turned out to be a success factor for Faslane.

3.6.1 Lynch Leadership style model (Faslane):

The five elements of successful and effective strategic model (Lynch Model) of Faslane:
§  Developing and communicating the organisation’s purpose: Faslane’s main objective was to achieve cost saving and operational effectiveness. They did their best to communicate the changes to be made to the employees by operating open discussion sessions and changed the negative perception of employees towards change into positive.
§  Sustaining competitive advantage over time: Faslane’s change strategy worked well, achieving the targeted goals at targeted time of 5 years. This secured the financial stability of Faslane. In addition, they became the home base for the entire U.K. submarine.
§  Defining and Delivering to stakeholders: They had a set goal and objective to describe to the Stakeholders which was to reduce the cost and maintain quality service provided to the Navy. They continually conducted meetings with the stakeholders and also maintained a good relationship with the naval base commanders, officers’ e.t.c.
§  Setting ethical standards: Faslane was able to maintain minimum operational cost and also was able to generate 2000 employment opportunities by the year 2010, setting a standard.
§  Managing human resources and organizational decisions: Faslane re-engineered the whole management structure. They set an ultimate goal for everyone to work on effectively. Developed autonomy, giving employees the chance to share their views.

3.6.2 Transcendent Leadership style model in Faslane:

The transcendent Leadership style model includes the following,
Leadership of self: The former managing director of Babcock marine, John Howie, as a leader had a clear vision of changes he had to implement. He focused on the cost saving factor and delivering quality service factor from the beginning and finally implemented it within the targeted time.
Leadership of others: All the employees had the chance to share their opinion and ideas and participate on the decision making process. They were encouraged to work for a common goal.
Leadership of the organisation: The need of change in management structures and strategies was clearly communicated among all. Re-engineering of the management review process and management structure was done. The organisation also maintained good relationship with its stakeholders.

4.0 Conclusion

 Faslane, a public sector organisation formerly managed by MOD and Royal Navy was afterwards managed by a private sector organisation Babcock marine from 2002. After this transformation, Faslane went through several changes which gradually turned out to be as effective and successful for them. After thoroughly going through the case study of Faslane and then critically analyzing it with the help of various strategic models, we could get to a conclusion that Faslane adopted various strategic and management structural changes which ultimately helped it be successful. As we can see, from the case study only after Babcock started to manage Faslane, all the critical management structural change and review process changes took place. Faslane eventually went through a management structure change, change in objective, change in employees’ perspective and change in management review process and achieved several short-term wins and finally was able to succeed by becoming a home base for the entire U.K. submarine.


 5.0 References

Kotter, J. (1995) ‘Leading Change: Why Transformation efforts Fail’ Harvard Business Review, March-April pp.59-67.

Lynch, R (2008) ‘Strategic Management’, 5th Edition, Prentice Hall, pp. 619.

Johnson, G. Whittington & Scholes K. (2011) ‘Exploring Strategy’, 9th Edition, Prentice Hall.

J. Balogun and V. Hope Hailey (2009) ‘Exploring Strategic Change’, 3rd Edition, Prentice Hall


Jordan, R.M.G.a.J., 2012. Foundations of Strategy. John Wiley & Sons.

mind tools. (n.d.). Retrieved December 28, 2013, from www.mindtools.com: http://www.mindtools.com/pages/article/newSTR_91.htm

Pro work Project. (n.d.). Retrieved December 30, 2013, from www.proworkproject.com: http://www.proworkproject.com/prowork/change-kaleidoscope.html











Thursday, January 9, 2014

Week 27: Lady Gaga Case Study


1 In your own words and using referenced quotes explain why strategy theories developed in the last 10 years tend to be quite different from those developed in the 1960‟s (c200
words)
In the last 10 years we have noticed certain change in the business function that differ greatly from the 1960’s. There is a universal truth that ‘Nothing remains for constant’ so this applies in business process, trends and theories. Business strategy theories are evolving according to the environmental needs and demand to sustain its management activities in this new age of era. The basic aim of strategic planning is to make daily organizational decisions with vision of organizational objectives and goals. According to change in time, people adapt the various strategic theories due to high competition and to sustain business related activities
Some of the major changes in business strategy theories developed in the last 10 years and 1960’s can be done through strategy theory responses:
        Option theory: as compared to last 10 years and 1960’s, today’s business firm has rigorous competition among them. These competitions drive market-fierce with new entrant of substitute goods and threats. The market is changing unexpectedly, adopting flexibility on change is consider to be the most important to remain competitive among others firm. So today’s business firm are changing their strategy as per the company need and to cope with the changing environment.
       Complexity theory: if we look at the recent technology advancement and globalization there is Dynamic environment. It has been seen that everything is unpredictable. The major determinants of adapting change start with the flexibility. That could be of emergent strategy as most of companies are following these days. Unlikely, implementing deliberate strategy may take much time to bring change. 
       Rapid adaptation: as compared to last decades, today’s firm are using different advance technology to provide quality and effective service. So customers’ demands and desires are also changing as per the time. So firms are adopting strategy change according to change in environment.

2 You attend a job interview for an entry level managerial position and mention that you completed a 30 week strategy module. Your interviewer seems interested and explains that this job role would enable you to become involved in the strategy making process. In 200 to 300 words explain to your interviewer how the module has helped to prepare you for a strategy role. 

In my graduate level course, I took a module of strategic choices and impact wherein, I thoroughly completed the 30 week strategy module in blogspot. After completeing the module, I understood and learned to analyse several analytical tools such as SWOT analysis, Porter's 5 forces analysis, TOWS matrix, PESTLE analysis, change kaleidoscope, Force field analysis, Mc Kinsey's seven S model and many more. Through all these studies, I am now capable of understanding the business firms, the problems faced by the firms and how to effectively eliminate such problems.

With the help of the module, I learned to critically analyse and understand the internal as well as external environment of any organisation. Taking current scenarios as the basis, the module has gradually helped me understand the importance of strategy and it's impact in the business world. 


LADY GAGA CASE STUDY:



                    

             'Don't you ever let a soul in the world tell you that you can't be exactly who you are'
                                                                                                                      -Lady Gaga

 Why has lady Gaga been so successful? What strategy has she followed?

One of the world famous artist Lady Gaga is actually named as Stefani Joanne Angelina Germanotta. She was born on march 28, 1989 in an Italian American family based in New york. She is an American recording artist, activist, record producer, businesswoman, fashion blogger, philanthropist and actress. Gaga rose to prominence with her August 2008 debut album, The fame which was a critical and commercial success. Everything was large, bright and skimpy but she made it worth it for her fans worldwide by resembling a sculpture than a fashion. (Jamie Anderson, 2013).  


Even though, Gaga has always been in the target of controversy, she has managed to sell 23 million albums and has been able to maintain a  huge Fan base. The 5 Grammy award winner and quoted as one of the world's most powerful celebrities by Forbes', Lady Gaga is the emergent and successful artist. 


Some of the major strategies adopted by Lady Gaga are she developed some co-branding and used the product placement strategy through various marketing techniques. Similarly, she chose the path of social media such as Facebook and Twitter to highlight her talents and eventually gained a huge fan base which is also a good strategy she adopted to gain success and be famous. Her characteristics such as her outrageous fashion statement, focusing and giving importance to her fan followers are some of the other strategies she adopted to finally achieve success. 


   If you were advising her on her future strategy – what analysis would you undertake? What models of theories would you use?

My advise to Lady Gaga on her future strategy, the analysis I would undertake is market analysis and the porter's 5 forces analysis. As according to the critics, she lacks in creativity, so for this we can carry out an internal analysis to use some of the best skills she has in her.

Visibility: Lady Gaga is a famous pop star and with amazing personality and various talents. Her first solo 'the fame' made 10 million copies of sale and is still growing. She has been well known all over the world for her extraordinary talents and her outrageous Fashion sense.


Credibility: She is uniquely talented and hardworking at the same time.

Expertise: She is an expert in whether it's piano playing or giving live performances.

Attractiveness: Lady Gaga is one of the few celebs who can easily attract any eye wither with her unique fashion sense or her catchy lyrics. 

Power: Gaga has already shown her talent and expertise in the industry and has sold albums that strengthened the industry in many ways. She is a very powerful image in the music industry.

 References:
 Lady Gaga, 2014 http://www.goodreads.com/author/quotes/2945649.Lady_Gaga, [Accessed on january, 2014]
 Hans Haferkamp and Neil J. Smelser (1992), ‘Social Change and Modernity’ Available at: http://www.ssc.wisc.edu/~jmuniz/Social%20Change%20and%20Modernity.pdf  [Accessed on 6th Jan, 2014]

Jamie Anderson, J.R.a.M.K., 2013. London Business School. [Online] Available at: http://bsr.london.edu/lbs-article/724/index.html [Accessed 5th Jan, 2014].

 Johnson, M., April 15, 2013. ft.com. [Online] Available at: http://www.ft.com/cms/s/2/da6559ce-a289-11e2-9b70-00144feabdc0.html#axzz2qAOGLZjP [Accessed 5th Jan, 2014].

  M.Parker, j.H.&., 1993. Postmodernism and Organizations. London: Sage Publications.