Organizational change is no longer an option but a necessity. The current global trends of deregulation etc. are driving the need for change with the critical purpose of gaining competitive advantage across all businesses. This dossier critically analyses such type of change introduced within an organization and its positive and negative impacts. The layout initiates with a brief history of the company. This is followed by analyses of the current issues within the organizations and why there is a need for change. Furthermore, alternative solutions to theses problems are discussed.
The final section comprises of the recommendations based on short listed alternatives. The organization in this case is “Pilkington (Australia) Limited”. Pilkington Australia has three manufacturing sites – Ingleburn & Alexandria in NSW and Dandenong in Victoria. The analyses in this report are based on the Dandenong manufacturing site. Pilkington (Australia) Limited is part of the worldwide Pilkington Group; a glass manufacturer and main glass supplier to the architectural and automotive markets.
Pilkington (Australia) Limited is Australia’s sole manufacturer of glass for automotive and building applications. Pilkington (Australia) Limited operations include distributing, wholesales, retails and processing glass through thirty sales centers around Australia. It also provides servicing for glass merchants, window fabricators and builders. It currently employs 1600 people throughout the country. Dandenong was introduces to the Pilkington float glass plant in 1972 and is now a wholly owned subsidiary of Pilkington plc.
Since its early days, Pilkington has enjoyed steady growth and success, but international competition and internal issues have impacted this growth. It was in 1992, when the General Manager was externally recruited, that the concept of change arrived at Pilkington Australia. As mentioned earlier, since its start Pilkington Australia had experienced success. One of the main reasons for this was the fact that Pilkington was virtually a monopoly till the late 1980s.
It was at this point in time that Pilkington realised that organizational change was necessary due to both internal and external pressures. External Forces: In this case, the competition from foreign companies started to increase and these countries were producing at a low cost which started to cause problems for Pilkington Australia in terms of matching up prices offered by these companies. Internal forces: The internal issues definitely needed more attention from the management in terms of change.
The issue here was not trivial as it involved the ‘culture’ of the company itself. So far the average age of Pilkington employees was between 48-50 and they had created a culture of ‘expected overtime’ within the organization. The dominant culture amongst the employees was that of working ‘slow’ so larger pay packets could be drawn out. Considering the external factors and the massive overtime payroll; change had been deemed necessary to be reputable and profitable.
Another key issue was that of the organizational structure. Based on a top-down hierarchical model, the communication only flowed downwards due to which employees felt demotivated. Demotivation occurred; as the employees did not like to be told on a daily basis by managers, on how/what needed to be done. This formal style of management created a sense of power which the employees did not appreciate, thereby developing a ‘them vs. us’ stance towards the management.
This was probably the most crucial aspect that required change as soon as possible because to maximize performance, Pilkington needed to make sure that all (employees, staff and management) within the organization were working towards the same goal in cohesion.After the arrival of the new general manager in 1992, hierarchical structures were torn down and the need for change was made public. A teamwork approach was adopted where the information would flow from the bottom-up.