Change Management

Change management is the process by which an organization gets to its future state, and vision. While traditional planning processes delineate the steps on the process, change management attempts to facilitate that process. Change management encompasses the effective strategies and programs to enable those change agents to achieve the new vision. （Lorenzi & Riley，2000）

Regardless of its operational motivation and resources, the complexity of today’s business environment is overwhelming for organizations (Graetz et al., 2006). For example, Brexit has made British companies experience unprecedented challenges. This blog will discuss the automotive industry turmoil caused by Brexit and some of the changes these companies have made in the Brexit event.

The impact of Brexit on the automotive industry

“Brexit” has begun to affect the UK automotive industry. Jaguar Land Rover is a UK-based high-end car manufacturer. Recently, the world’s leading financial analysis agency Standard & Poor’s said that the Jaguar Land Rover credit rating had been lowered from the previous “BB-” to “B +.” In addition, Standard & Poor’s also said that due to the risk of Brexit, if Jaguar Land Rover fails to meet its full-year performance expectations, its rating may be further reduced (Ademcetinkaya, 2019).

The information shows that the Brexit may influence the survival of the British automotive industry. If the UK conducts No-Deal Brexit, it will deal a heavy blow to the auto industry (Winton, 2019). Tariffs, supply chains and markets are currently the main challenges facing for the automotive industry (House of Commons, 2018).

Jaguar Land Rover’s solution.

Under the influence of Brexit, change has become crucial. One of the cornerstone models for understanding organizational change was developed by physicist and social scientist Kurt Lewin in the 1940s and is now one of the most popular methods (Mulholland, 2017). Lewin uses an analogy to change the shape of ice to explain organizational changes. His model is called Unfreeze – Change – Refreeze, which refers to the three-stage process of change he describes (Schein, 1996).

（Mulholland，2017）

The first phase of change, the thawing, involves getting the organization ready to accept the necessary changes. This includes breaking the current state of affairs before establishing a new operating model. According to BBC News (2019), Jaguar Land Rover closed their production line again this week to deal with the impact of Brexit. Large multinational companies such as BMW and Toyota, as well as Peugeot, closed their car factories in the UK.

The second phase is to make changes after the thawing phase produces uncertainty. The transition phase is when people begin to address their uncertainty and find new ways of doing things. Jaguar Land Rover announced that it would cut the cost of £2.5 billion over the next 18 months and lay off 4,500 people worldwide, most of which are based in UK (BBC News, 2019). This is a way to cut costs, but it will make Jaguar Land Rover a painful and slow process in managing change.

The third stage is refreezing. When change is taking shape and people accept new ways of working, the organization is ready to start again (Schein, 1996). The external signs of reassessment are stable organizational charts, consistent job descriptions, etc. The restart phase also needs to help people and organizations internalize or institutionalize changes (Mulholland, 2017). This part needs to wait until this month and next month to get a clear result and then make further plans.

Assessment and action-oriented planning

In managing change, radically improving processes and experience can change a company’s destiny at a critical time in its life cycle (Mulholland, 2017). Layoffs are the best option for Jaguar Land Rover when the Brexit situation is uncertain (GIBBS, 2019). Jaguar Land Rover is talking about layoffs and starting voluntary layoffs, which is the best way to eliminate rumors (GI BBS, 2019). The streamlined organization can make the company more cohesive. Management, marketing and executive positions will be the focus of layoffs, which will also help change management to achieve better reforms (Leather, 2019).

(Mulholland, 2017)

learning result

The overall business of the UK’s automotive industry will be reduced, and losses will gradually increase with the uncertainty of Brexit. Because Brexit will have a huge impact on the market mechanism, whether it is tariffs, supply chains, markets, or talent. The action of the planned cycle change will make Jaguar Land Rover reduce losses to a certain extent, but this is the last resort. It is a huge task for managers or leaders to implement change in this context. In general, if there is no agreement to leave the EU, the automotive industry will have to undergo change management. SMMT (2019) assessed future UK and EU trade patterns and their satisfaction with the automotive industry. From the assessment results, it is much better to have a good Brexit agreement than the internal changes that have to be made.

(SMMT,2019)

References

Ademcetinkaya (2019) Jaguar Land Rover Automotive PLC Downgraded To ‘B+’ On Weak Profitability; Ratings Kept On CreditWatch Negative. ademcetinkaya.com.Available at: https://www.ademcetinkaya.com/2018/12/uk-based-jaguar-land-rover-downgraded.html[Accessed 10 Apr. 2019]

BBC News (2019) Discovery Sport sales boost JLR in UK. BBC News.Available at: https://www.bbc.co.uk/news/topics/c4mlqp91m90t/jaguar-land-rover[Accessed 10 Apr. 2019]

BBC News (2019) Jaguar Land Rover starts Brexit shutdown. BBC News. Available at: https://www.bbc.co.uk/news/uk-england-47845057?intlink_from_url=https://www.bbc.co.uk/news/topics/c4mlqp91m90t/jaguar-land-rover&link_location=live-reporting-story[Accessed 10 Apr. 2019]

Burnes, B. (2009) Managing Change. 5th Edition, Financial Times Press.Available at:https://books.google.co.uk/books?hl=en&lr=&id=9J5Ri4xatEMC&oi=fnd&pg=PP11&dq=Managing+Change&ots=q4qafxhZaO&sig=dkFbBonEUXAMccdY5IRpaBXKSug#v=onepage&q=Managing%20Change&f=false[Accessed 6 Apr. 2019]

GIBBS, N (2019) Why JLR is losing money and how it plans to return to profit. Autonews. Available at: https://www.autonews.com/manufacturing/why-jlr-losing-money-and-how-it-plans-return-profit[Accessed 10 Apr. 2019]

Graetz, F., Rimmer, M., Lawrence, A., Smith, A.(2006) Managing organizational change, 2nd Australasian ed.Malden, Mass. Available at:http://dro.deakin.edu.au/view/DU:30010399[Accessed 10 Apr. 2019]

House of Commons（2018）The impact of Brexit on the automotive sector. The House of Commons,Fifth Report of Session 2017–19.Available at: https://publications.parliament.uk/pa/cm201719/cmselect/cmbeis/379/379.pdf[Accessed 8 Apr. 2019]

Leather, H (2019) Jaguar Land Rover to pause production due to Brexit uncertainty. Shropshirestar.com. Available at: https://www.shropshirestar.com/news/business/2019/01/25/jaguar-land-rover-to-pause-production-due-to-brexit-uncertainty/[Accessed 8 Apr. 2019]

Lorenzi, N.M& Riley, R.T(2000) Managing Change: An Overview. Journal of the American Medical Informatics Association, 7(2), pp. 116–124. Available at: https://doi.org/10.1136/jamia.2000.0070116[Accessed 10 Apr. 2019]

Mulholland，B (2017) 8 Critical Change Management Models to Evolve and Survive. Process .St. Available at: https://www.process.st/change-management-models/[Accessed 10 Apr. 2019]

Schein, E.H (1996) Kurt Lewin’s change theory in the field and in the classroom: Notes toward a model of managed learning. Systems practice, 9(1), pp. 27–47. Available at: https://link.springer.com/article/10.1007/BF02173417[Accessed 7 Apr. 2019]

SMMT (2019)INDUSTRY TOPICS: Brexit. Smmt.co.uk.Available at: https://www.smmt.co.uk/industry-topics/brexit/[Accessed 7 Apr. 2019]

Winton, N (2019) No-Deal Brexit Would Decimate Britain’s Auto Industry, Or Maybe Not. Forbes.com.Available at: https://www.forbes.com/sites/neilwinton/2019/03/12/no-deal-brexit-would-decimate-britains-auto-industry-or-maybe-not/#13c75418defa[Accessed 8 Apr. 2019]