The Effectiveness Of Organisation Change Tools To Grow And Increase Its Revenues

Introduction

Every company in the world goes through changes that either grows the company or loses money for the company. In this report, two change tools will be used to discuss on a service company and a manufacturing company to evaluate the effectiveness to changing the company. The purpose of this report seeks to define how organisation change tools can help an organisation to grow and increase its revenues. Every organisation needs to evolve with the changing environments as consumers are changing, and their needs and wants change.

The report starts off with a brief introduction on the companies before evaluating on the tools used in that company. The report will end of with a conclusion on this topic before ending it off with the reference used

.Company overview: Ford Motor Company (Manufacturing Company)

Ford Motor Company was founded and incorporated by Henry Ford on June 16, 1903, with 12 investors and sold their first cars which was the Model A on July 23, 1903. Based in Dearborn, Michigan, a suburb of Detroit, Ford is an American automaker and the world’s fifth largest automaker based on worldwide vehicles sales. Being a manufacturing company that has gone through a century, Ford has made different changes to the company to ensure its survivability and growth.

Company overview: Amazon (Service Company)

Amazon.com, inc is an American electronic commerce based in Seattle, Washington and was founded on July 5, 1994 by Jeff Bezos. It is currently the largest internet retailer in the world in terms of market capitalisation and revenue but second largest after Alibaba Group in terms of total sales. Having 44% of all US E-commerce sales in 2017, Formerly known as Cadabra, Inc, it was named Amazon as Bezos wanted the name to be different and that the Amazon river was the biggest in the world and he wanted his company to be the biggest. It started off as a bookstore but has grown to be a retailer that sells all sorts of products from tools, sporting equipments and even groceries.

Successful change tools have been used for this service company, for it to grow such a bookstore to the leading online retailer of today. Impact on organisations through organisational development toolsThe two tools that will be used on the two companies would be, TQM and best practices. There are a total of 9 change tools, socio-technical system approach, organisational development school, the learning organisation, lean production, TQM, business process re-engineering, best practice, high-performance work organisation and Lewin’s classical model. These tools have helped different companies in developing and growing of the companies. Changes in an organisation is common and some benefits that comes with it includes, technological advancements, crisis management, external factors, and organisational culture. The technologies in an organisation will be improved to cope with emerging needs or technological advancements in the society to help a business, and organisation will better manage problems through different changes. In times of crisis for the organisation, companies can better prepare or rectify the problems. An organization's’ culture will also be affected in such changes and may result in a competitive advantage when good organisational culture is practised.

Organisational change tool does not allow such internal factors only but it affects an organisation’s external factor such as globalisation, where it helps organisation to cope with globalisation, making it possible for companies to produce goods at different countries and equipping leaders with the knowledge of developing strategies for the market. A change tool is important as it provides different methods of practices or policies that company can learn from that best satisfy their vision and the ideal spot that a company wants to be in within a given time frame.

TQM

TQM stands for total quality management and it is defined as a management approach to long term success through customer satisfaction. There are eight basic principles when it comes to TQM: it must be customer-focused, and have total employee involvement, process centered, integrated system, strategic and systematic approach, continual improvement, fact based decision making and communications. For an organisation that uses TQM, there are several benefits that can come with it if done properly. The advantages of TQM includes, cost reduction, customer satisfaction, defect reduction and increase in morale. Having the strong emphasis on quality of products, lesser time is needed to fix errors which reduces the number of defects and as such, reduces the total cost in an organisation, especially in area such as areas of scrap, rework, field service and warranty cost reduction. Less customers will also be complaining when the quality of products increase, this will result in higher customer satisfaction towards the product and the company, increasing the morale of employees, reducing employees turnover and the cost of hiring and training new employees. However, TQM requires a period of time to be implemented and the refusal of change from employees may happen. There will also be a short term negative effect on costs of employees as they will be away in TQM training and will not directly be able to contribute to the work.

Best Practices

Best practices can be defined as finding and using the best ways of working to achieve the business objectives.This practice can be done by two ways which includes benchmarking and standards. Best practice through benchmarking means comparing against business and learning from them on how your business can improve, and best practice through standards is using technical standards where a business can compare the specifications of its products to measure its quality or using management standards as models for achieving the best organisational practices. Best practices strategy helps an organisation in a couple of benefits including, reducing cost and improving efficiency, become competitive, using technologies for better efficiency, reducing waste and improving quality, and responding more quickly to innovations in the particular sector.

Organisational Change:Ford

As more and more consumers are inclined to patronise from a company that has good social responsibility and are environmentally cautious, Ford adopted these practices and came up with different policies on conserving the environment. An example would be investing $11 billion in electric vehicles with a goal of putting 40 fully electric and hybrid cars on the road by 2022”. Ford was not the first company that supported conserving the environment but they knew that it was a good practice that consumers would like and Ford adopted it. Another example was the introduction of the world’s first moving assembly line, it consists of breaking the car 3000 parts into 84 distinct steps for the workers to work on. This revolutionary process dropped the time of producing a vehicle from 12 hours to 90 minutes. This not only helped Ford to assemble a car faster but it also means that the price of Ford’s automobiles can be sold at a lower price, increasing greatly in the number of sales. This practice has been a game changer and was being adopted as the best practice for Ford and also manufacturers of different products like vacuum cleaners and television.

Quality is a key aspect to the survivability of a company and Ford is committed to delivering high quality automobiles by creating a quality team to monitor qualities of their products which shows how customer oriented Ford is. An example of Ford’s involvement in TQM is investing in the EQUIP programme, which is also known as the Engineering Quality Improvement Programme. This programme will teach engineers on improving the products’ quality and update their technical skills in the area of product quality improvement, learning new technical and people skills, and change their approach to engineering. This has shown Ford’s recognition for the need of quality products and TQM importance in a sustainable business. Bennie Fowler, Vice President of quality for Ford said that quality can only be defined by the customers and when it comes to quality of their products, they rigorously analyse the needs and wants of customers before translating it to design specifications and standards. After the development and manufacturing of Ford’s product’s quality, what is left is consistency that keeps the company successful. Ford also has a fast feedback system where subsystems team and vehicle functions team are there for any specific vehicle to be ready for informations and feedback from customers to be delivered to Ford, ensuring reliability even after the purchase of products from Ford. Ford also invited key suppliers to benchmark other companies’ vehicles where they selected a few components to tear down and see which design where the most efficient and how much it will cost. Similar to other automobile makers, Ford is trying to achieve lower cost for adding equipments to connect the car to the internet, greater fuel saving and improve safety.

Organisational Change: Amazon

As a successful E-commerce, Amazon have taken part in building a good brand name by constantly engaging in good corporate social responsibility and giving back to the society. Since 2011, Amazon has invested over $160 billion in the US, including infrastructure and compensation to the employees, increasing United States of America GDP. Amazon have strategically used a checkout system called the one click purchase system where it got patent. This was a practice that was very well-planned as consumers tend to purchase a product easily compared to consumers having to press a few more buttons to purchase a product, letting them have the room to think about bailing out. Although this patent has expired, this was one of Amazon best practice, changing the normal practice of a check out system to be one that could help indirectly in generating profits. Amazon also allows sellers to optimise the product listings, creating a marketplace for the consumers to carefully pick with pictures and descriptions by the sellers, giving business owners or sellers to market their product with it. As a Service company, Amazon uses TQM too. It uses TQM by making their service different or of higher customer’s satisfaction. An example of what Amazon has done is the use of a product graph. It uses a series of keywords to associate with a product to display the product, making search easier and more accessible for everyone.

A customer review section is easily seen but Amazon takes reviews of products or services from them more seriously. Initially, Amazon started out on giving incentives such as discounted price for items or free gifts for honest negative reviews on products or services but this was misused by some consumers. Amazon started a programme called Amazon Vine Programme, where a team will carefully facilitate reviews and feedbacks from suppliers and customers. These group of trusted and helpful reviewers are then asked to post opinion of new or pre-release products.This review will not be incentivised and will not influence the content of the product reviews and this programme has been proven to help newer products get more sales through the review. This example has shown that even though Amazon is willing to share honest reviews of products so that customers can know what kind of quality products they are getting. Amazon is customer-orientated and will deliver the closest products that customer wants and need.

Conclusion

From the above examples of the two companies, it shows how they have adapted to the organisational change tools and the importance of it. Best practices have been used to measure on the importance of the company and how it can be improve using practice from different company or even starting a new practice that is beneficial. In Ford, Founder Henry Ford revolutionised the practice of manufacturing in his era and set a practice for other automobile companies to learn from. TQM does not only work for a product but only a service, Amazon has come a long way from a bookstore to be the biggest e commerce in the world. It not only provides good delivery services of products but also friendly user interface for existing or new customers to shop from. From the above example used, it shows some of the ways Amazon keeps high standards of quality for its services and comes up with new innovations, to stay as the top e commerce in the world. These two tools have used to show how the companies have used the following organisational tools, TQM and best practices, to improve its services and achieve their current standing in the market. Other change tools have also been seen to be used on the two companies such as lean production where Amazon focuses on waste prevention.