The race for securing dominance in the global market is heavily affecting the major agricultural, construction, and turf care companies such as Deere & Company. In an effort to leverage resources and institute cost-saving measures, John Deere released approximately 800 salaried employees and revised its organizational structure. There are several interventions that can be applied to structural design. This paper will examine the interrelated application stages of reengineering and downsizing as well as execution concepts . Reengineering – Downsizing 1. Clarifying the Organization’s Strategy According to Zedong (2011), downsizing is “typically an ill-conceived attempt by people in power to pander to shareholders or the public to reduce costs. It is an admission of failure” (p. 1). In 2009 Sam Allen, the CEO of Deere & Company along with senior executives introduced a strategic plan to reduce costs and expand business interests globally. First, in order to reduce costs John Deere offered a voluntary separation program for all salaried employees. As a result, approximately 800 employees left the company. Thus, the program provided John Deere with a cost saving of $75 million. Moreover, in order to compete globally, John Deere introduced a global operating model (GOM) that merged two formerly distinct divisions, agriculture equipment and commercial & consumer equipment into one division: Worldwide Agriculture and Turf (Golden, 2009). According to Golden (2009), strategic public relations director for Deere, “the voluntary separation program was designed to help Deere immediately leverage the efficiencies of the merged divisions. The company expects the new operating model will enhance the company’s competitive positio... ... middle of paper ... ...ere has exceeded forecast projections for 2011 and has posted one of its highest third quarter results in years. Conclusion The ultimate goal of an organization is to gain a competitive edge and increase profits by providing a quality product or service to its targeted customer base. Thus, companies must be able to differentiate themselves from the competition by taking calculated risks. John Deere, one of the oldest companies in America, implemented a change strategy that was risky and unconventional. It can be argued that the term voluntary separation is a euphemism for terminating employees, John Deere’s approach was well constructed. While reengineering and downsizing yield negative connotations; these interventions are how companies remain in business. Therefore, in order to be successful proper implementation and a humane approach are essential.
Broadway Broker’s management team is faced with the challenging task of downsizing and consolidating the organization. A thorough investigation as to how to execute proposed changes will need to occur before the organization can forge ahead. Change processes must be executed in a fashion that portrays compassion and consideration for all involved. For change to be successful the management team must have understanding and empathy for the psychological impact of imposed change and how employees will react. Most humans are fearful of change and do not embrace change in a positive manner. The road ahead will be difficult for the management team at Broadway Broker’s, however; with proper planning and understanding positive change can sustain the future of the organization.
John Deere Component Works (JDCW), subdivision of John Deere and Co. was in charged specifically of the manufacturing of tractor component parts. The demand for JDCW’s products had problems due to the collapse of farmland value and commodity prices. Numerous and constant failures in JDCW’s competition for bids, alerted top management to start questioning their current costing methods. As an outcome, the analysis has to be guided to research on the current costing methods with the intention of establishing legitimacy and to help the company in adopting a more appropriate costing system.
The case deals with two major transformational organisational changes that take place within a span of 5 years in Marconi PLC. The first change process was under the leadership of Lord Simpson who took over this large diversified conglomerate in 1996 when the company was in a mature phase, already in decline. The company was under performing, had a rigid structure, lacked a clear vision and the employees had become change averse and complacent. To recharge the company Lord Simpson lead a change process with a clear vision with a growth oriented strategy, acquisition and a cultural change process for the employees. To motivate the employers to embrace the cultural change he introduced an attractive stock option plan.
The company operates on a profit and non-profit basis for community organizations, amongst special factory price payments with distinctive dealer pricing (Leslie, 2014). In order to be eligible show proof of your charitable non-profit status, and the dealer will assist you in selecting the right equipment for the task, which will then provide special pricing for your organization. John Deere 's mission is to "Double and Double Again the John Deere Experience of Genuine Value for Employees, Customers, and Shareholders." This will be accomplished by rapidly expanding global customer coverage on the farm site, worksite, home site, and turf site by being first in creating smart and innovative customer solutions through machines, service, and concepts. The company 's business strategies of Running Smart, Running Fast, and Running Lean will help John Deere achieve its mission (Leslie,
Change had always been a value at Winning Ways, but how change is managed is as important as the substance of the ideas. The implementation of new ideas as well as the mobility of the employees within the company became areas of concern. There was a great deal of confusion regarding company decisions and the purpose of certain initiatives. Although there was a commitment to seeking new management approaches, employees felt as though many ideas were pushed off to the side without ever being considered. Others were implemented, such as teams, but the actual structures were not sustained, creating confusion and tension as employees tried to work within a framework that did not always make sense. Although constant change was once embraced as a vehicle for innovation and increased success, it became increasingly difficult for the employees to follow large shifts. While change can create progress, it can also reflect a lack of focus and/or signify a lack of clear interest in a strategy or approach. In order for changes to be effective, they have to be clear and be implemented in a way that allows for their evaluation. Furthermore, as the company continued to hire from the outside, current employees found themselves isolated with no opportunity for upward mobility. New hires often had higher levels of education as compared to older workers who provided experience, were committed to the company, and had a strong interest in learning. Because people often feel out of the loop, it would be wise for Winning Ways to introduce employee involvement programs. For example, participative management allows for joint decision making in which subordinates share decision-making power with their supervisors (Robbins & Judge, 2012). As a result, employees would feel as though their voice can be heard and have a better
It is likely to extend these gains in the coming quarters; this makes it a good stock to hold.
to determine if the team members were on the right team, and if they could work
So at first there may not be a huge difference. But this will free the company to focus on products that they know do well in the current market, and allow them to focus on getting that product out to market that are not currently held by them. Also the downsizing and regrouping will change the structure of executive staff, allowing for changes in compensation to be made. Though it is very important for current staff to feel important so they do not leave, the shareholders are important as well. By downsizing we can create a better budget around compensation so that it’s reflective around revenue. This will allow for a more fixed cost, when a company is able to control its compensation around the revenue they could be viewed as a better managed company, which should attract investors in the long run.
Corning’s resource allocation process shows another ill fated effort towards an organized and objective budgeting and planning process. The inefficiencies and disorganized implementation of the plan that resulted plague company performance. The underlying problem of inadequate communication dissemination of Corning has led the managers, workers and committees to focus on different goals. The Resource Committee and Business Committee through the splitting of a previously larger group, which was believed to be slowing down innovation due to conflicts of interest between two subgroups (cost reduction and innovation). However, by just splitting the two groups, nothing was effectively put into place to arbitrate the issue, and once again the resource committee (known for having only accountants) focused mainly on cost reduction while the business plan focused on which projects had innovative ideas.
During the 1980s and 1990s, in our increasingly global marketplace, downsizing and re-engineering became a common practice in business, eliminating much of the need for middle managers, cutting costs, speeding up decisions, and flattening organizational hierarchies worldwide. Middle managers began to be seen as unnecessary costs, easily replaced by displacing responsibility downward to their subordinates, and uncooperative, even having a negative impact on change.
...strategy when the initial downsizing failed to take them out of the red or gain back lost market share.
Change Management Plan Change is essential to today's business environment. If a company is to survive and succeed on a macro level, they should analyze and adopt the best overall plan for change on an enterprise level. When examining the best way to make changes in a company that will globally affect the company, it is usually best to look at the total picture before acting, lest the plan fail. This paper will briefly summarize four key areas that leaders and managers must understand in order to successfully make a change, or in the case of our model company CrysTel, manage change dynamically throughout the life of the company. In order to understand completely the change it wants to make, the company must understand the implications of the change and the human variables of change implementation.
Organizational changes that reduce cost. The M&S reduced its management levels to reduce the cost.
Ford Motor Company is the world’s second largest manufacturer of cars and trucks with products sold in more than 200 markets. The company employs nearly 400,000 people worldwide, and has grown to offer consumers eight of the world’s most recognizable automotive brands.
It is apparent that the only thing constant in business is change. Organizational change is often an overwhelming challenge for business leaders, managers and employees alike. The need for change may be the result of market shifts, economic environment, technology advancements or changing work force skill-set demands. Today Organizational change occurs for reasons that originate external to the organization (Chandler, 1996: Hannan & Freeman, 1984), as well as internal to the organization (Baker 1990: Prechel 1994). Thus, External constraints, internal constraints, resource dependency and increasingly growing competitive markets force organizations to change in order to maximize economic potential. Although organizational changes are usually a response in reaction to an event, companies and leaders should still expect to encounter issues. Organizations need to be more proactive and contingent on how to handle the problems that will inevitably come about. This will make the process of organizational change go smoothly as well as reduce resistance through proper management techniques. Resource dependency argues that both environmental and organizational constraints impact organizational change (Pfeffer & Salancik, 2003).