Tag: brexit

Change Management in GlaxoSmithKline-Brexit

David Cameron once said: A vote to leave is the gamble of the century. And it would be our children’s futures on the table if we were to roll the dice. Brexit will negatively affect the United Kingdom’s economy since the country will no longer be part of the common market that allows free movement of capital, labor, materials, and products within the members of the European Union (EU). For instance, the phenomenon will have detrimental effects on one of UK’s giant pharmaceutical manufacturer, the GlaxoSmithKline. The corporation will have colossal operational problems as a result of Brexit since it has already successfully grown to acquire significant control both in the UK and in other EU countries (Bloomberg, 2019). In the UK, Brexit will have an adverse impact on producing and distributing of drugs and medicine-related products since it influences major governing laws. Consequently, firms need long-term planning of at least ten years before the production of a new drug. Hence, GlaxoSmithKline must apply change management strategies to open a new subsidiary plant in another EU country to impede the detrimental effects of Brexit that threatens the survival of its business. 

The Problem Caused by Brexit

The EU requires that for any country to distribute pharmaceutical products in the region, the manufacturing plant must be located within a member country. The regulation means that GlaxoSmithKline’s products that are manufactured in the UK will have no chance of entering EU nations (Kwon, 2018). In fact, adherence to all EU’s rules, specifications, and standards is a strict requirement. Such enforceable licensing restrictions will undermine the corporation’s ability to sell in EU member countries due to Brexit, leading to loss of revenue. Hence, GlaxoSmithKline will face difficulties in accessing raw materials and labor when UK leaves the EU, increasing manufacturing costs.

The Change Required for GlaxoSmithKline

By opening a new subsidiary in an EU member country to manufacture some of its products, GlaxoSmithKline is able to protect its market share in Europe. The new plant will be apart from the current UK organization to shelter any detrimental effects in the aftermath of Brexit. Separation of operations between the parent company and the subsidiary will also protect its market share away from home country, securing segments in the other EU nations (Kwon, 2018). However, the new subsidiary in a EU member country is an achievement that will come through great sacrifice of resources to cater for the startup costs.  

Despite the increased expenditures, a change in management is necessary because the firm will have to deal with the complexity of building coordination between the two branches. Consequently, GlaxoSmithKline will have to establish a new structure of information sharing and monitoring enterprise activities. According to Burnes(2009), the best way to achieve this aim is through employing a knowledge-based data sharing system as it ensures continuity of internationalized businesses. The susceptibility of deviating from the operational norms of the organization also calls for the integration of management functions. Such action will allow a reasonable level of autonomy for GlaxoSmithKline, enabling the foreign subsidiary to address its unique problems differently from the host country. In the end, a shift in management will force the two GlaxoSmithKline business branches to comprehend variation in regulations and standards of manufacturing between the two countries. 

A relocation of few workers from the UK to the foreign country is also inevitable. Such transfer will allow smooth operation of the new subsidiary. Consequently, cultural change, as it relates to flexibility in dealing with diversity, is another challenge required by GlaxoSmithKline’s workers and its leadership (Kotter & Schliesinger, 2008). Ultimately, the relocation of few employees demands the firm to prepare for a framework of learning in order to maintain workforce motivation and performance in the new subsidiary. 

The Action Plan

            Implementing change at GlaxoSmithKline is aligned with the Lewin’s change model. The concept effectively deals with the numerous complexities associated with new business ventures, simplifying transition processes (Creately, 2019). In relation to GlaxoSmithKline, the framework proposes three major steps:  unfreezing, changing, and refreezing. 

  • Unfreezing: GlaxoSmithKline has to make thorough corporate arrangements prior to implementing the subsidiary change. The planning entails educating the workforce in the UK to realize the significance of opening the new subsidiary in an EU member country. During this stage, employees have to be conversant with the new organizational structure in order to build motivation. The leadership has to identify the necessary resources required for the change process.
  • Changing: this is the period where the transition process is initiated, applying all business tools and operational methods. Firstly, GlaxoSmithKline workers will learn new skills, cultural shifts, and previously unknown work-related patterns in compliance with the subsidiary’s diversity requirements. Secondly, the change in production processes will also be implemented at this stage, complying with new regulations in the EU country. Thirdly, the leadership will learn new managerial dictates such as cultural competency and tolerance to new policy disparities. In the end, a new advanced communication network will be popularized at this phase.
  • Refreezing: upon successful transition, the firm’s leadership has to define the new traits and operation patterns as key components of the organizational culture. The act will allow the business shift to be permanent, guaranteeing successful business operations in the new region.

The GlaxoSmithKline’s plausible change process helps me comprehend the fact that leading a successful organization needs the ability to deal with uncertainties. Consequently, I believe that failure to implement changes in a timely manner may lead to   collapse. Hence, as a leader, I plan to incorporate a change culture as a continuous process rather than a single event. I now understand that successful change requires the business manager to display a high degree of open-mindedness that realigns the internal resources of the company with its the external forces (McGuire, Palus, Passmore, & Rhodes, 2009). Consequently, I recognize change as the modern form of business operation that guarantees growth and survival.  GlaxoSmithKline’s plausible change process has taught me that organizational change is required to either rescue the firm from a current problem or to win the benefits of a new opportunity created by a possible business risk.   

To recall, GlaxoSmithKline must open a new subsidiary in another EU member country to manufacture some of its products. The shift will enable it to sustain its business in the event that Brexit ensues. The decision of UK to leave EU will have detrimental economic effects on the current GlaxoSmithKline’s plant in the country. The corporation will undergo colossal change since relocation from the UK to a foreign EU country requires some workers to also move to the new subsidiary plant. Lewin’s change model demonstrates how such transformation can enable smooth running of the new business. Consequently, cultural change will happen, requiring GlaxoSmithKline’s management to use operational flexibility to deal with diversity. In the end, GlaxoSmithKline’s leadership will have to solve new challenges, sustaining the firm in the aftermath of Brexit. 

References

Bloomberg (2019). Company overview of GlaxoSmithKline UK Limited. Bloomberg. Retrieved from http://www.bloomberg.com/research/stocks/private/snapshot.asp?privcapId=22512384

Burnes, B. (2009). Managing change(5th ed.). Upper Saddle River, NJ: Financial Times Press.

Creatively, (2019, January 29). The ultimate list of change management tools to drive change like a pro. Creately Blog.Retrieved from creately.com/blog/diagrams/change-management-tools-list/

Kotter, J. P. & Schliesinger, L.A., (2008). Choosing strategies for change. Harvard Business Review,86(7/8), 130-139. 

Kwon, D. (2018, October 12). The UK pharmaceutical industry braces for Brexit. TheScientist.Retrieved from http://www.the-scientist.com/news-opinion/the-uk-pharmaceutical-industry-braces-for-brexit–64926

McGuire, J. B., Palus, C. J., Passmore, W. & Rhodes, G. B. (2009). Transforming your organization. San Diego, CA: Centre for Creative Leadership.


Can culture be managed within organisations?

If we look at companies around the world, we find that organizational culture extremely important to a company’s success. Let’s take Toyota as an example. Since its founding in 1937, Toyota Motor Corporation has grown into the world’s largest manufacturer and seller of automobiles. Much of the company’s success has been credited to the company’s organizational culture, which focuses on the employees’ responses to challenges that the organization faces in the highly competitive market. In this case, Toyota views its organizational culture management as a critical practice that maximizes the innovative capabilities of the human resource. At the same time, Taherimashhadi and Ribas (2018) note that the company has also benefited significantly from its organizational culture because of its immense support in the company’s problem solving. Hence, the various features of the organizational culture, including their shared beliefs, shared values, norms, as well as the individual and group mentalities are focused on overcoming the competition and other market-related challenges that the company faces. 

Despite the immense financial and business success that the company has achieved through its market-oriented organizational culture, the recent developments in the market and the society in general in terms of societal expectations, competitive innovation, and ethical challenges puts pressure on the company to consider c change in the organizational culture.  In particular, the modern society is becoming increasingly conscious of the environment, global warming, and the need for sustainability and eco-friendly human practices (Crutchfield & Roughton, 2013). Consequently, Toyota is compelled to respond to the new market dynamics by establishing an environment-friendly organizational culture to attract, retain, and satisfy the needs and expectations of the target customers and the society at large. 

Challenges Faced by Toyota

            Among the major problems faced by Toyota is the recall crisis, which has led to the fluctuations in the company’s sales volumes and revenues. Since its formation, the company has continually prioritized building quality automobiles. According to Babeĺová and Vaňová (2014), the Japanese Kaizen concept, which emphasizes on continuous improvement for the manufacture and distribution of reputable, affordable, and quality vehicles. However, the concept has not kept up with the customer demands, which has led to significant financial losses for the company. For instance, the larger proportion of the recalled vehicles and the emotionally-charged accidents were attributed to the vehicles’ sudden acceleration, which are attributed to poor combustion systems. In addition, the vehicles have also been faulted for excessive emissions, which contravene the customers’ desire for an emission-free environment (Winkler, U’ren, & Abraham, 2018). Although vehicle recalls are not uncommon, especially in the United States where stringent laws have been operationalized to guarantee safety for motorists and the environment, the recalls reported by Toyota are worrying, especially for a company that prides itself in prioritizing quality of the vehicles and customer satisfaction. 

Besides, Toyota is faced by an intense competition other automobile producer who have invested significantly in meeting the society’s expectations and desires for environmentally-friendly vehicles. For instance, Honda provides a stiff competition in the manufacture of Hybrid vehicles that exhibit both environmental and innovation competiveness, which threatens Toyota’s survival and profitability in the lucrative automobile industry.

Implementation Strategy

The implementation of the environmentally-friendly corporate culture should begin with the understanding that cultural change is a routine form of organizational evolution, rather than a revolution. Hence the first step would involve nurturing motivation and commitment to the proposed change among the stakeholders. According to Babeĺová and Vaňová (2014), the employees constitute the most valuable group in culture change because they are the ones with the ability of implementing the desired environmental practices through their daily work. Hence, the motivation and commitment of the employees becomes the priority for Toyota management as a way of fostering willingness to alter their working schedules and patterns. 

The next step in the culture change should involve communicating the envisioned change to the organization. Winkler, U’ren, and Abraham (2018) emphasize on the significance of communication as a method by which companies can keep their employees constantly committed when initiating cultural and organizational changes. Ultimately, the sufficiently aware employees are more likely to ensure and participate in a voluntary transition to becoming a more environmentally-friendly community, which is more valuable, considering the need for employees to understand the reason for change and the benefits or problems that their new practices are expected to solve.  

            The management would also be expected to communicate the organizational goals and vision to the employees. Managers are tasked with creating new organizational visions. After stipulating the goals and objectives, the change leaders should lay down the policies for cultural change, which include the codes of conduct and rules that stipulate the core ideals of the organization. In many cases, policies foster organizational commitment. In the end, the implementation process should be gradual but steady for easy execution. The tasks should be broken down into numerous pieces with short-term visible goals to motivate the employees and ensure success for the company.

Conclusion

            Toyota Motor Corporation should use a more democratic approach of leadership in the implementation of the corporate culture change to create a learning environment where employees have the right material and morale support, which will encourage them to embrace and execute the environmentally-friendly manufacturing practices.

So, What are your thoughts? Can Culture be managed within Organisations?

References

Babeĺová, Z. G., & Vaňová, J. (2014). Crucial Role of Corporate Culture to Align Organizational Goals with Economic Success. Electronic Journal of Knowledge Management, 12(4), 241–250.

Crutchfield, N., & Roughton, J. E. (2013). Safety Culture : An Innovative Leadership Approach. Oxford: Butterworth-Heinemann.

Taherimashhadi, M., & Ribas, I. (2018). A Model to align the organizational culture to Lean. Journal of Industrial Engineering and Management, 11(2), 207-221.

Winkler, M., U’ren, B., & Abraham, D. (2018). Innovate or die: Insights on entrepreneurial leadership. Governance Directions, 70(11), 723–728.