Archive for category: Management

PLANNING A CHANGE

PROCESS

CMI UNIT 6003 V-membership number-p 04695630

HARRISH CHANDRA RADHAKRISHNA | | 17 NOVEMBER 2019

TASK 1

Introduction

The Mauritius duty free paradise company ltd(MDFP) is found in Mauritius. MDFP operates retail duty shops at the Mauritius airport and the organization has been set up some 35 years back. We offer for sales a broad assortment of liquor, wines, spirits, perfumes, tobacco and cigars, local made products, high end luxury good like watches, jewelry, leather goods, pen and so on. I have been working for the organization for the last 25 years, I have acted as a sales supervisor for 15 years and I am a shift leader for the past 3 years. I form part of the middle management and I manage a team of 5 sales supervisors along with 80 sales /support/administrative staff. We do work on a shift system depending on flight timings and operations exigencies.

As per Mauritius customs regulations, MDFP is allowed to sell duty free goods to only incoming and outgoing travelling passengers including those travelling by private jets. MDFP also fully owned the Rodrigues duty free shop, which is our sister island around 2 hours’ flight from Mauritius.

MDFP is a parastatal body where the main shareholder (80%) is the government of Mauritius and the remaining 20% for the airports of Mauritius limited. We have a board of directors of highly qualified and top ranked government officials ranging from the advisor to the prime minister to the CEO of airports of Mauritius limited.

This assessment will highlight some of the challenges MDFP is currently facing in regards to input of revenues when compared to similar organizations like DDF.it is the position of this assignment that an increase in the number of MDFP shops as well as introduction of more domestic products could transform MDFP into an internationally recognized retailer making significant contributions into Mauritius economy.

AC 1.1 –DETERMINE THE ORGANISATION POSITION IN THE SECTOR AND MARKET WITHIN WHICH IT OPERATES

MDFP operates in the highly competitive segment of the retail business. The retail industry has experienced a huge transformation with the introduction of online retail with companies like eBay, amazon providing to be a huge source of competition for traditional retailers. However, because MDFP is a duty free retailer operating within Mauritius airport, the online business had a minimal impact on the organization as well as similar retailers.

Furthermore, we do not expect any future developments in online retail to have serious implications on our business since we target mainly travelling passengers at the airport and not the public at large. We do, however, keep looking for different methods that we can employ technology to improve our service delivery with our customers and suppliers. We are the major duty free products retailer in the country and in the region also compared to Seychelles, reunion island, south Africa etc. The largest duty free retailer worldwide is the Dubai duty free(DDF) which is a young organization (1983) but with a huge turnover of USD 2 billion yearly. nevertheless, at MDFP, we are trying to be as competitive as DDF and many of our products line are cheaper than them e.g. liquor, perfumes and confectionery.

MDFP turnover has been constantly increasing since its opening and below figures for the last 3 financial years:

• 2016/2017-€ 54.5 M

Turnover as per products category as follows:

• Tobacco-14%

MDFP yearly profits turnaround € 11M with a constant increase of around 2 to 4% yearly. Actually there is a great demand of local made products/souvenirs and a radical change in terms of new products, opening of new shops with a better and wider assortment of these products will give a boost to our turnover from 2 to around 10% thus an increase of around € 5M for this category. The retail sector is very dynamic and with high flux of travelling passengers, mainly during the forthcoming high season, same will be beneficial to MDFP in terms of profits and turnover.

A PESTLE analysis of MDFP will help understand our environment as same is an important step towards developing new strategy and change as the retail business constantly changes and these changes are crucial. These changes will assist in designing an organizational change process that will allow MDFP to reach similar levels as DDF.it is essential to note that the key step towards accomplishing this will be to attract more local and international passengers into Mauritius.

As more people use our airports, it is expected that their spending will go up leading to improved business for us. Consequently, gaining a deeper understanding of the political, economic, social, technological, Legal and environmental factors that can influence the flow of people both positively and negatively will be crucial. Furthermore, a PESTLE analysis will help us understand the messaging that we will use when trying to inform the world about our improved products in our additional retail stores as well as the current ones.

Below a PESTLE analysis of MDFP:

• POLITICAL FACTORS
• Competitive products and pricing pressures
• We are imposed quota on tobacco and liquor for our inbound passengers
• Comply with health guidelines provided by government to avoid legal troubles worldwide
• Need also to abide to laws of other countries e.g. allowance of tobacco products to other countries e.g. Singapore is zero tolerance in terms of tobacco for incoming passengers there
• ECONOMIC FACTORS
• Our prices are affixed in euros, exchange rates inflation
• People tend not to spend so much money
• Competition high amongst our competitors
• People save more money to buy products of basic necessity
• Better shape of worldwide economy, higher revenue and higher profits for the organization
• SOCIAL FACTORS
• Increase in use of social media resulting in lots of on line sales
• Tendency to eat/drink healthy so downfall on sales of tobacco/liquor/confectionery
• Preference for local made products by local entrepreneur
• Consumers like good deals-discounts and sakes are the norms now
• Demands of new generation are different and importance of customer service growing more so more focus to be given on customer engagement.
• TECHNOLOGICAL FACTORS
• Use of variety of technology-like website and cash registers to manage money
• Internet makes us reach our clients worldwide-offering online selection but must buy at our outlets only as we cannot offer online services
• Organizations that fail to keep up with technological advances leave opportunities for our competitors or smaller retailers to enter their market
• LEGAL FACTORS
• Legal conditions to be abided by for example labour laws, international laws in terms of security as our product goes around the world through all airlines and passengers, e.g. when targeting foreign passengers intending to buy gifts for their loved ones, certain airlines/countries restrict the amount of liquids or cigarettes in their country. Singapore and Australia are examples where only 2 packets of cigarettes are allowed per passenger. Also some countries like USA may charge airport tax and VAT on goods coming into the country. Thus we should price our products with this in mind.
• One more example all tobacco products should be sold with warning pictorial signs
• Legal scenario is very complex so we have to be cautious since any violation can be damning
• Legal conditions between our suppliers as we deal with famous and important brands
• ENVIRONMENTAL
• Focus on packaging and sourcing in an environmentally responsible way
• We sell food products therefore needs to be very cautious about food contamination/expiry dates are monitored closely
• Environmental issues inside our shops for customers and employee safety-this is set by government and airport authorities

In brief, the PESTLE analysis shows that we need to be up to date with political, economic, social, technological, legal and economic factors that could influence our business model. We must familiarize ourselves with the evolving political and legal changes taking place in other countries so that we ensure our products remain competitive while using technology and social media to market MDFP products.

 

AC1.2-IDENTIFY AN OPPORTUNITY FOR CHANGE IN SUPPORT OF THE ORGANISATION OBJECTIVES.

Small organizations must adapt to the competitive business world for its survival. While MDFP has done considerably well to remain competitive, there is a need to increase our market presence in Mauritius and build our brands to promote Mauritius as a shopping destination. The change process proposed in this assignment will follow Kotter’s (1996) 8 step process in addition to Kurt Lewin’s three steps of planned change, as discussed in later sections.

MDFP is doing very well, nevertheless to attract a larger customer base, increase sales and turnover and meet customer needs is a priority.

We have a great demand for local made products under the label “MADE IN MAURITIUS” and additional 2 shops, one in departure and one in arrival, with a larger variety of products will be beneficial to both the organization and the shareholders. New products will create a buzz and there will obviously be an increase in pax penetration thus sales for other lines of products will go up too.one more important point is that change in product assortment will bring higher spend per pax thus improving service level with the ability to x sell and upsell on other existing brands too.

Investment for this change in terms of staffing/salary will be nil as we will deal with suppliers to provide to us additional staff on their cost to promote their products thus boosting their sales too. This is a win win deal as we are their sole provider of goods at the airport and thus promoting their brans with tourists.

TASK 2

A.C 1.3-DISCUSS A MODEL OR METHOD TO IDENTIFY A CHANGE PROCESS AND THE COMMUNICATION OF THAT CHANGE PROCESS

To fully and successfully implement the change and also meet the stakeholder’s requirements, MDFP will have to support the performance of all staff as they will be the most important partners in the change process. We need to develop staff skills in order to match the requirements needed for the launch. On the other way, a good implementation plan is important as same identifies the goals and objectives, list the project tasks and defines rules and regulations.

As a team leader, I will have to manage efficiently as the change will impact on staff but will be beneficial to MDFP. If I can rely on top management and my sales supervisors to help me implementing the change, things would be easier for everyone, for better results.

To assist me in the plan, I will use Kotter’s (1996),8 step process and I will use the first 4 steps for our change plan that is:

• Create a sense of urgency-by making employees aware of the urgency and need of change, they will support and buy in the change. This requires honest and open dialogue and same will be accomplished by informing them about threats we face.
• Build guiding team-a project team to be established in order to occupy itself with the changes. Group should be made of employees in different roles so that they are all well represented.
• Develop a vision-for everyone to understand what we want to achieve, a clear vision needs to be created as same supports and makes the changes more concrete. Employees will accept the vision easier if their ideas are included.
• Communicate the vision-communication is a very important aspect to any form of change as same creates acceptance among the employees. Each time we get an opportunity, we must talk about the organization new vision and also have feedback about their opinions, concerns and anxieties.as leaders we must take the ownership of the change.

The need and importance of change should be clearly communicated to the key stakeholders about the need and importance of adopting changes in MDFP. Change is not always easy as I have witnessed during the past 25 years in MDFP but when we keep our staff involved and informed, things go on well. The goal will be informing the organization’s management that to remain competitive and make greater contribution into the country’s economy, we must take steps designed towards increasing our sales turnover.

We have several ways to communicate our change strategy in order to make same successful:

• Be clear and honest about what is changing and why we must change-honest and respectful communication is the key words

Limeade marketing(2014),8 ways to communicate change[accessed on 22 October 2019, https://www.limeade.com/2014/04/8-ways-to-communicate-change-to-employees/

 

TASK 3

A.C. 2.1 – EVALUATE THE IMPACT OF THE CHANGE PROCESS ON INDIVIDUALS IN THE ORGANIZATION

Organizational changes can have both positive and negative impacts on the individuals working within the institution. The effect of the change process within an organization is largely depends on the style of leadership as well as the methods of communication employed by the senior management. For instance, in the case of participative leadership, it is expected that individuals within the organization will be well informed about the changes, and the process of embracing new organizational culture will be well received by the staff. On the other hand, directive leadership relies heavily on the leader of the organization as well as its senior management team making decisions without involving the junior employees. This section will address the two styles of leadership and discuss the impact each is likely to have on individual employees.

Lussier & Achua (2016) argue that the implementation of organizational change is likely to create tensions and possibly affect employee performances in a negative way. This is especially the case when the change process is not well communicated by the management team, and employees are not fully aware of the roles they are expected to play in the change process, as well as, the impact this change will have on their continued employment within the organization. Thus, using a participative leadership style where the management encourages participation from the organization’s entire workforce is important. Participative leadership style works well when combined with participatory communication. Participatory communication takes place when the company leaders collect the views of the employees after informing them and convincing them of the need for organizational change (Greenwood, Jennings, & Hinings,2015)

On the other hand, a directive leadership style is only useful when dealing with inexperienced employees or where the change is urgent. In this style of and organizational change, tensions, anxiety, and conflicts are likely to arise as each employee tries to understand the change processes occurring within his or her areas of occupation. To this end, Lussier & Achua (2016) recommend that organizational leadership considers good communication with their employees so as to ensure the change process is accepted. by all.

MDFP will rely on participative leadership style and participatory communication throughout the change process. While it is possible that some employees will be affected by the organization’s change process in a negative way, any potential scenarios of resistance to change can be prevented through re training of the organization’s workforce in order to prepare them for their new responsibilities. Also, the organization would also stand to benefit from the contributions made by its employees when participatory communication is employed as opposed to the one-way, top-bottom communication style used in the directive leadership style. The company will, therefore, prevent any possibilities of employee unrest, layoffs, and resistance to change that is likely to arise during organizational change.

Nevertheless, it is expected that some of the disadvantages of participative leadership may affect the implementation of our planned change, and we should be prepared for this. For instance, Participative leadership style is time and resource consuming, especially when there are difficulties arriving at a consensus (Greenwood et al.,2015).to avoid delays, the communication inviting input from the employees will be carried out three months before the change process is initiated.

 

A.C. 2.2 – ASSESS THE IMPACT OF THE CHANGE ON ORGANIZATIONAL STAKEHOLDERS

The stakeholders of the MDFP are also expected to benefit from the pending organizational changes. For instance, the expansion of the company’s offerings will most probably draw more people to Mauritius, leading to increased traffic and potential customers for the products and services offered by MDFP.  This increase in potential customers offers the organization the opportunity to increase its sales, thus, increasing the returns on behalf of the key stakeholders, mainly the government of Mauritius and the airports of Mauritius. The increase in profits generated can help the government and the airports of Mauritius to expand the operations of MDFP to more airports while at the same time expanding the organization’s product range. As previously discussed, most of the products offered by MDFP are common to the products provided by similar retailers across the world. However, with the increased profits and the potential for expansion, the retailer can increase its product line and incorporate goods and services that are not currently in offer in other duty-free shops across the world.

Other beneficiaries of the upcoming changes are the local producers and manufacturers of products sold within MDFP. For example, local jewelers, tea, rum manufacturers, toymakers, and other local producers and suppliers within the industry are expected to benefit from increased demands for their products. In this case, the higher number of visitors and travelers will expand the consumption of local products, thereby leading to an input of foreign currency into the country. This would potentially lead to more jobs and income for the government through tax revenues. Making Mauritius a shopping hub, similar to Dubai, would help increase the flow of foreign tourists further benefiting the local population, local businesses, MDFP, and the government in the same way that DDF has benefited from the conversion of Dubai into one of the world’s leading destination for shoppers and tourists. For instance, in a publication by Mack (2019, the author noted that Dubai was ranked the highest by MasterCard in terms of visitor spending in 2018, in the world, this being the 4^th year in a row. Furthermore, MasterCard reported that spending in Dubai was at use 553 per person per day when compared to second placed Paris where visitor spending was around Us 296 perday.in Dubai, the city gained in excess Us 30.8 billion from visitors expensed(Mack,2019). given Dubai weather (hot all year long) and geographical location, it is our belief that we would be able to achieve more than our current turnover if we put in extra efforts to marketing and implementing the right changes. In short, an argument can be made that the various stakeholders of MDFP will experience financial and branding gains once the organization carries out the organizational changes, as discussed in this paper. These benefits may be either direct, in the case of immediate stakeholders, or indirect, for the entities not directly tied to MDFP, the Mauritius airports, or the government and also all employees of MDFP.

 

TASK 4

A.C. 2.3 – ANALYZE THE IMPACT OF THE CHANGE ON ACHIEVEMENT OF ORGANIZATIONAL OBJECTIVES

The objectives of the expected changes within MDFP include increasing the demand for locally made products, “Made in Mauritius,” and growing the country’s economy through the expansion of the tourism sector and the travel industry. The planned changes in MDFP are expected to increase the demand for local products and services both within the country and abroad. Consequently, the expansion of the current number of retail stores will undoubtedly lead to higher sales volumes of local products through our duty-free shops located within the country’s airports. The current numbers of shops are limited to selling specific and specific volumes of products that are locally made, a fact that leaves out a variety of products that could potentially benefit the economy. For instance, local artists and businesses operating in the fashion industry are presently not well represented in the current setup of MDFP shops within our airports. Furthermore, most of the alcoholic beverages being sold in our shops is imported from foreign manufacturers, and the fact that MDFP is a duty-free shop provides them with an unfair competitive advantage over our local products. This is not applicable to alcoholic beverages alone since MDFP also sells other imported products ranging from jewelry, cosmetics, toys and garments. Given the fact that these international brands enjoy a significant advantage of financial power and brand equity over our locally made products, local producers and manufacturers are faced with tough competition. Thus, increasing the number of shops will offer the local industry an opportunity to grow, market their products, and possibly make sufficient profits to finance the sale of products that are “Made in Mauritius” in foreign markets.

The planned change will also help market Mauritius as a shopping and tourism destination in the similar fashion that DDF has managed to market Dubai to the rest of the world. Increased flights and visitors to the country will play a key role in expanding the country’s economy as well as marketing domestically manufactured products to the rest of the world. As a result, it is our belief that the planned changes will help us in meeting our objectives of increasing the marketing of “Made in Mauritius” products and the growth of the local economy.at the same time, it would be irresponsible if we fail to plan for the potential negative impacts of increase in tourism, for example, issues such as vandalism, pollution, traffic congestion and local goods becoming expensive. As a result, part of the money generated by the increased tourism traffic will be set aside to address the potential side effects of high tourist traffic into the country.

TASK 5

A.C. 3.1 – DESCRIBE HOW TO SECURE SUPPORT FOR THE CHANGE PROCESS FROM SENIOR MANAGEMENT

There are different approaches to securing support for the organizational change process from senior management.one of the main challenges will be addressing the board because MDFP is owned by airports of Mauritius and the government of Mauritius. However, while getting in touch with the prime minister will be challenging, we can always address the board of directors including members that represent the government and the ministry of commerce. The first step is by convincing them of the need to implement change in order for MDFP to become competitive and increase its contwill be conducted in relation to the performance of other duty-free retailers of island nations as well as other African countries. This will be crucial given the fact that Mauritius is a small country with a population of about 1.2 million people, and it would be unfair to run comparisons with countries that have significantly high populations like Europe, China, and the USA. Once this comparison has been highlighted, for example, with the use of DDF, it will be possible to convince the senior management that MDFP is capable of improving its performances in order to match that of DDF.

The second step is to persuade the management that organizational change is not only necessary for the organization’s continued competitive growth but that it is also important for the organization to survive. As mentioned before, small organizations have to continuously change their approach to doing business if they hope to survive in the modern economy. At present, most developed and developing nations are constantly evolving at a faster rate in an effort to increase tourism into their country and market locally made products. Thus, it will be crucial for MDFP to improve as well and help the country market its domestic products in the current highly competitive market. Having a strong and highly competitive MDFP would benefit the country’s economy through the sale of domestic products, a fact that would be of interest to the senior management since 80% of MDFP is owned by the government.

Finally, the senior management would have to be drawn to the fact that the planned change process will help the country’s economy by improving the competitive advantage of the local businesses. For instance, I have highlighted the fact that the current setup disadvantageously affects locally produced goods that are forced to compete with imported products in an unfair environment for the local producers. The additional MDFP-owned shops will have a higher percentage of shelf capacity set aside for local products in order to give them a fair chance to compete competitively with their foreign competitors. Also, the cost of implementing this change will be minimal owing to the fact that MDFP is owned by the government and airports of Mauritius, who, in turn, own the airports and space where the additional shops are expected to be set up. With this proposal, it is expected that the management will see the need for change, the benefits of the change, as well as the low expected costs of implementing the change when compared against the potential benefits.

 

A.C. 3.2 – DEMONSTRATE HOW INDIVIDUALS IN THE ORGANIZATION WILL BE SUPPORTED DURING THE CHANGE PROCESS

The key objective here is to eliminate the possibility of resistance to organizational change by company employees. Myers, Hulks, & Wiggins (2012) argue that one of the biggest challenges to implementing organizational changes arise from poor communication and support for individuals within the organization. Failure to offer the necessary support can cause some employees to be left behind, leading to disruptions in the implementation process as well as the possibility of failing to achieve the organizational goals. Thus, this change process will require the training and retraining of company employees whose skills do not meet the requirements for our objective. Moreover, the organization will aim at implementing an open-door policy where those individuals experiencing difficulties with the change process can communicate freely to their supervisors, myself or other senior managers so as to ensure that their concerns are addressed. According to Mann (2019), there are 9 steps to follow when implementing change within the organization:

1.Enlist champions-this may include the use of mentors and experts to help employees requiring assistance to meet the challenges created by the change process.

2.Establish goals-the goals of the planned change will be clearly communicated to the workforce so as to minimize confusion and ensure that each employee is aware of what is expected of him.

and relevant safety requirements.

7.implementing changes within set time frames-it is important to ensure that the planned change can be reviewed on a regular basis.to accomplish this, a monthly review will be done to assess the progress and determine where we are lagging behind or ahead.

8.making policy changes-planned change without changes in organizational policies is in vain, thus it is the responsibility of management to make organizational policy changes to reflect our new goals.

9.providing post implementation support-in line with Kurt Lewin’s steps of planned change, it is important to provide support during the refreezing stage. This means that the organization must help employees get used to the new company culture.

This further supports the need for a participative communication style between the management and the staff, especially considering that it is the staff who are most likely to be impacted the most by the change process. Therefore, the organization will utilize communication and retraining in order to support the change process.

A.C. 3.3 – CONSTRUCT A PLAN TO IMPLEMENT AND MONITOR THE CHANGE PROCESS

Given the fact that this is a planned change on the part of the organization, the most appropriate plan to implement and monitor the change process will be Lewin’s theory of planned change. This theory utilizes three steps to implement change, namely; unfreezing, movement, and refreezing. As far as MDFP is concerned, the first step is to identify the problem the organization is facing and coming up with the most appropriate solutions that are capable of resolving the issues in question, in this case, the need to expand its product range by opening more shops. The movement stage in Lewin’s theory of planned change involves the entire organization taking the necessary interventions in order to bring about the required change. For the part of the management, this will involve the injection of the capital and space required to construct the extra shops for MDFP. It also involves contacting local producers and suppliers and informing them of the available opportunities for them to market their products in the new retail space. The final step in the implementation of this change process is refreezing which involves allowing the newly acquired organizational culture and changes to be part of the standard practice within the organization.

Pre-implementation Stage
Time	Task/Change Process	Goals
Four Months	Meet with board of directors	Inform them about the need to change and obtain permission to start change process
Three Months	Call for employee meeting	Inform employees about the planned change and receive input on how to proceed.
Two Months	Identify relevant sites	This will be strategic sites for the new shops
One Month	Start contracting construction companies	Get companies capable of constructing the entire project within the shortest time (preferably a year
Initiation of Change Process
1st Month	Clear out work stations and hand over to construction company	Leave the construction process to the contracted party.
2nd-12th Month	Carry out monthly inspections	To ensure that the work is progressing as planned and that health and safety of workers meets legal requirements
6th -12th Month	Employee training	This will be done to provide support to employees in need of extra training to manage in the new organisational structure
8th -12th Month	Contact local suppliers and manufacturers	A message will be sent out that there is extra space for locally made products within our duty free shops
12th Month	Open new shops	To sell products to our customers
12th Month onwards	Offer continued support to our employees	The support will be to keep our standards high in order to remain competitive and achieve our long-term goals

 

References

Business-to-you.com, 2018. PESTEL Analysis (PEST Analysis) EXPLAINED with EXAMPLES: B2U. [Retrieved October 19, 2019, https://www.business-to-you.com/scanning-the-environment-pestel-analysis/]

Business Balls, 2019. Change Model-Kotter. [Retrieved October 22, 2019, from https://www.businessballs.com/change-management/8-step-change-model-kotter/]

Lussier, R.N., and Achua, C.F., 2015. Leadership: Theory, application, & skill development. Nelson Education.

Marketing, L. (2019, June 18). 8 Ways to communicate change for better employee experience. [Retrieved October 22, 2019, from https://www.limeade.com/2014/04/8-ways-to-communicate-change-to-employees/]

Myers, P., Hulks, S., and Wiggins, L., 2012. Organizational change: Perspectives on theory and practice. Oxford University Press.

Lussier Robert N and Christopher F. Achua (2016), Leadership: Theory, application, & skill development, Nelson Education.

Mack, B. (2019, September 5). Dubai tops world in tourist spending – again.[ Retrieved from https://gulfbusiness.com/dubai-tops-world-tourist-spending/]

Greenwood, R., Jennings, D., & Hinings, B. (2015). Sustainability and Organizational Change. Leading Sustainable Change, 323–355. doi: 10.1093/acprof: oso/9780198704072.003.0013