1CHANGE MANAGEMENT Introduction Owingtothedynamicnatureofbusinessenvironmentsacrosstheworld, organizations have had to change the scope of their business in terms of structure, processes, or leadership for the purpose of minimizing threats and utilizing the opportunities available to them to their full potential. There are various drivers, which influence change processes in business organizations. These drivers may include rapid advancements in the technological field,changingeconomiesofthecountries,changesinthepurchasingpowerofthe consumers, competition faced from rivals in the industry and the like (Hayes 2018). The essay will further focus on the implementation of a change management process in Cathay Pacific Airways Limited, based in Hong Kong. This change management process is hugely dependentontheinternalandexternalenvironmentofthecompany,aswellasan identification of the forces that drive or resist the change process (Lines and Reddy Vardireddy 2017). The importance of a change management process in the company lies in its ability to improve the overall performance of the members of the organization as well as thebusinessprocessesandoperations,therebyaidingthecompanytoobtainhigher productivity and profitability. Another important aspect about this change management process includes its impact on the organizational structure and leadership of the company. The following sections will provide a detailed discussion on the abovementioned aspects along with an outline on the manner in which any negative impact that may arise from the change management process may be prevented or controlled. Discussion Overview of the Company Cathay Pacific Airways Limited is an airlines company founded in the year 1946 and based in Hong Kong. It conducts its operations in more than sixty countries across the world
2CHANGE MANAGEMENT (Cathaypacific.com 2020). The primary services of the company include scheduled cargo and passenger services to more than 190 destinations in the countries in which the company operates. The mission of the company is to become one of the greatest service brands in the world by treating each journey by the individual customers as their most important journey, therebyaidingthemtoconnectwithmeaningfulplaces,peopleandexperiences (Cathaypacific.com 2020). The vision of the company is to become the best airline company in the world by striving to excel in the quality of their operations and services to the customers. Furthermore, the company also engages in environmentally sustainable business practices, thereby performing their responsibilities towards not only the environment but also the communities that they serve. The company additionally prioritizes the well being and safety of the members of the organization as well as the customers, in order to derive optimum customer satisfaction. The following sections will provide a detailed analysis of the internal and external business environment of the company. Analysis of Business Environment PESTEL Analysis A PESTEL analysis provides an evaluation of the various political, economic, social, technological, environmental and legal factors that may be influencing the business activities and function of an organization. In this regard, it can be mentioned that the political factors influencing the business operations of Cathay Pacific Airways Limited include the political stability of the countries in which the company operates as well as federal and state legislations pertaining to the aviation industry. Furthermore, other political factors like governmentalpolicieson the securityand safety of passengers, trade barriersamong countries and taxation policies also play an important role in determining the business activities and operations of the company (Narandaran, Hamid and Habibullah 2016).
3CHANGE MANAGEMENT The economic factors that influence the business operations and activities of the company include foreign exchange rates, inflation rates and gross domestic product of the different countries in which the company operates, regulations pertaining to wages and employment as well as the potential for investments for the company in the different countries (Morrell 2018). Furthermore, the disposable income and purchasing power of the customers and fluctuations in the prices of fuel also determines the nature of business operations for Cathay Pacific Airways Limited. The social factors influencing the operations of the company include the tastes and preferences of the different customers based on their demographics and the cultural and linguistic differences that may exist among them (Guercini et al. 2014). The technological factors influencing the business operations of the company include the recent developments of technological infrastructure in the airline industry in terms of cost and fuel efficiency (Sustainability.cathaypacific.com 2020). Furthermore, the strength of network connectivity, technological infrastructure available at the various airports and the maintenance and servicing of aircrafts are other technological factors that influence the operations of the company. In this regard, it may be noted that these technological factors would ultimately determine the investments made by the company in the field of research and development (Belobaba, Odoni and Barnhart 2015). The environmental factors affecting the operations of the company include regulations pertaining to fuel usage, emissions and environmentally sustainable business activities (Srivastava and Hancsok 2014). The legal factors determining the efficiency of the activities of the company include laws pertaining to discrimination in order to protect the employees and the customers, health and safety laws for the members of the organization as well as the customers and regulations pertaining to the maintenance of quality standards.
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4CHANGE MANAGEMENT SWOT Analysis A SWOT analysis acts as a strategic tool to evaluate the internal strengths and weaknesses as well as the external opportunities and threats that may be faced by a business organization while conducting its functions and operations. In this regard, it may be noted that the strengths of Cathay Pacific Airways Limited include the presence of a huge fleet and provision of high quality services to the customers, thereby obtaining maximum customer satisfaction (Roymorgan.com 2020). This further leads to an increased brand presence in the aviation industry and large market share (Yang 2014). The weaknesses of the company have been identified to be high leverage leading to increased cost of operations, high price of services offered to the customers as compared to the low cost carriers and limited scope for the expansion of flight services due to financial liabilities. The opportunities available to the company include the potential for growth in the emerging market due to overall development of the economic situations across the world, advancements of technology that may lead to cost efficiency of business operations, and diversification of services provided to the customers (Centreforaviation.com 2020). The threats that are faced by the company include increasing competition in the airline industry, fluctuations in the fuel prices, governmental regulations in the different countries in which the company operates and changes in them on occasions of terror attacks or outbreaks of diseases. Thus, it may be said that the business operations of the company must be designed in a manner so as to utilize the opportunities and strengths of the company to their full potential and reduce the weakness and threats that are faced by it, thereby successfully establishing a competitive advantage in the market (Shaw 2016). Porter’s Five Forces Analysis An analysisof Porter’sFive Forces aidsin the evaluationof the competitive environment in which a business organization operates. An analysis of these five competitive
5CHANGE MANAGEMENT forces with respect to Cathay Pacific Airways Limited thereby determines the nature and scope of their business operations so as to induce growth and obtain a competitive advantage in the market. The threat of new entrants faced by the company is low as the capital investment requirements in the airline industry is substantially high, thereby making it difficult for new entrants to successfully set up their business (Snider and Williams 2015). Furthermore, since the obtaining of economies of scale is difficult to achieve in the airline industry, the large scale producers have a significant cost advantage. The company also faces low threat from substitutes, as the flight services are usually preferred by customers across the world due to its fast and easily accessible nature. The company faces low threat from the bargaining power of the suppliers because of the presence of a large number of suppliers in the market (Ramón-Rodríguez, Moreno-Izquierdo and Perles-Ribes 2011). In terms of the bargaining power of the buyers, the company faces moderate threat due to the presence of a large number of competitors in the market for the customers to choose. However, this force does not affect the business operations of the company in a significant manner. In terms of competitive rivalry, the company faces a high amount of threat. It is so because the airline industry has developed exponentially in the recent years, thereby facilitating the companies operating within it to develop efficient strategies in order to obtain a competitive advantage in the market (Wensveen 2010). Furthermore, the presence of a number of low cost carriers in the airline industry of Southeast Asia proves to be a major threat to the business operations of Cathay Pacific Airways Limited. Force Field Analysis Force field analysis is a tool developed by Kurt Lewin and entails the evaluation of the various factors that either drive or resist changes within the scope of a business organization. In the case that the forces supporting or favoring the change are stronger than the forces opposing or resisting it, the change management process can be conducted within
6CHANGE MANAGEMENT the scope of the business organization in a successful manner. Cathay Pacific Airways Limited requires a change process involving an advancement of technology used in the present business operations in order to import cost efficiency and reduce fuel emissions (Abdullah, Chew and Hamid 2016). Apart from implementing such technological changes the company may also implement the change of adopting new pricing strategies to successfully compete in the sector of low cost carriers. Cathay Pacific Airways provides high quality if services to its customers at prices that are affordable to middle and high income groups. In this regard, it can be mentioned that the company may engage in the expansion of its present market share in the global airline industry by increasing its customer base through the provision of high quality flight and customer services at low prices. One of the major competitors of the company in this sector in AirAsia, which operates as one of the leading low cost carriers in the world (Jeddi et al. 2014). However, the quality of their services is subpar as compared to Cathay Pacific Airways. Therefore, the company may incur huge profits if they expand their services in the low cost carrier sector, maintaining the high quality standards of services provided. The factors driving the change include potential for improved cost efficiency of business operations, fuel efficiency, improved standards of service quality, adherence to environmental regulations, improved customer satisfaction, expansion of customer base, increased market share, and improved performance of the employees. The factors resisting the change include increased investment for the technological advancements and low cost carrier operations, lack of adaptability among the members of the organization towards the change and resistance or conflict among the employees towards the change (Klonek et al. 2014). Therefore, it can be observed that the factors driving the change are more than the factors resisting it.In spite of the resisting factor of increased investment, the change provides the company with the opportunity for cost efficiency in business operations in the
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7CHANGE MANAGEMENT long-run. Such cost efficiency may enable the company to maximize its profits in the long- run. Furthermore, with the help of the advanced technology, the company may be able to conduct fuel-efficient operations thereby helping them to adhere to the governmental policies regarding environmental sustainability. The commencement of operations in the low cost carrier sector of the airline industry will help the organization to gain an increased customer base, enabling them to obtain greater customer satisfaction and loyalty. Lewin’s Change Management Model The change management process to be adopted by Cathay Pacific Airways Limited must be implemented using the three step model of change management proposed by Kurt Lewin. Lewin’s change management model involves the three steps of unfreezing, change implementation and refreezing (Cummings, Bridgman and Brown 2016). This simplicity of this model allows the business organizationsto effectively implemented the proposed changes in order to bring about the desired business outcomes. The first step of the model pertaining to unfreezing the current business operations and functions involves the establishment of the purpose and need to implement the proposed changes (Rosenbaum, More and Steane 2018). In this regard, it can be noted that the proposed changes for Cathay Pacific Airways Limited pertain to the diversification of flight services in the low cost carrier sector, along with the establishment of advanced technology in order to improve the cost and fuel efficiency of business operations. The step of unfreezing the current business operations requires the communication of the purpose of implementing the proposed changes among the various members of the organization. This communication is essential, as it will help in the obtaining of maximum participation and engagement from the members of the organization. Furthermore, an effective communication about the purpose of the change implementation process will enable the organization to conduct the change management procedure efficiently through the minimization of resistance or conflicts towards
8CHANGE MANAGEMENT the change (Luo et al. 2016). Leadership also plays an important role in this step, as it is the duty of the leaders to integrate the business functions and operations of the various members of the organization with the goals and objectives of the proposed changes. The second step in this process pertains to actually implementing the proposed changes within the scope of business operations. This change implementation refers to the obtaining of adequate infrastructural, technological and human resources for the purpose of commencing, managing and operating the new low cost carrier sector. Furthermore, the company must also gather resources and funds from the investors in order to install the required fuel efficient technology in order to improve the efficiency of the employee as well as business performance. The final step in the change management process pertains to freezing the changes implemented in the previous step. This step is essential as it helps in the establishment of the desired changes in the business process and activities as normative and an integral part of the business operations of the company (Doppelt 2017). This step further help in stabilizing the business processes thereby preventing any reversion from the employees or other members of the organization. The step of refreezing also involves a constant evaluation of the newly implemented changes and their acceptance among the employees. Impact of Change on Organizational Strategy The impact of implementing changes within the scope of a business organization is observed through a change of organizational strategies directed towards the utilization of the full potential of implemented changes in order to improve the efficiency of business activities and obtain the desired outcomes. In this regard, it can be deduced that changes in the organizational strategies of Cathay Pacific Airways pertains to the gaining of a competitive advantage in the market through the use of resource and cost efficient technology along with
9CHANGE MANAGEMENT the commencement of services in the low cost carrier sector. Such competitive advantage is obtained by the organization through the expansion of its customer base and improving the presence of the brand in the global airline industry. The impact of the implemented changes on the organizational strategies of the company may be positive or negative (Hornstein 2015). The positive impacts of changes on organizational strategies include the increase of profitability in business operations and obtainingofgreatercustomersatisfactionthroughtheimprovementoftheoverall performance of the employees and the organization at large (Hussain et al. 2018). The negative impact of changes on organizational strategies may include resistance or conflicts faced from the members of the organization that may cause discrepancies in the operational activities of the company. In order to make the change implementation process successful such conflict and resistance must be either prevented or solved by the organization with the help of efficient leadership and effective means of communication. Impact of Change on Leadership The process of change implementation has a direct impact on the leadership of the business organization. During the change management process the leader has to assume a key role of managing any kind of direct resistance that may directly or indirectly affect the productivity of the members of the organization and their business activities. Furthermore, the leader also plays an important role in creating and managing a clear vision regarding the outcome of the change implementation process and aligning the interests of the various members of the organization with the organizational objectives (Sharif and Scandura 2014). The goals of the change process can be segmented as being specific, measurable, achievable and time-based. The leader, I this regard, plays an important role in ensuring that these goals areobtainedthroughtheimprovedperformanceoftheemployeesandtheirbusiness activities.
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10CHANGE MANAGEMENT Effectiveness of Leadership Approaches in Change Management The conception of transformational change involves changes made in the culture of business organizations through the transformations in the strategies and business operations conducted (Schein 2015). Leadership skills and competencies play an important role in determining the efficiency of the newly transformed organizational culture and business processes. The most suitable form of leadership in business organizations undergoing change management processes in situational leadership. Situational leadership encompasses the utilization of the skills and knowledge of the leaders of a business organization for the purpose of adjusting their activities according to the needs of the organization (Thompson and Glasø 2015). During the change management process, the organization may be encountered by several challenging situations that were not predicted beforehand. In order to be able to efficiently tackle such situations, the leaders of the organization must adopt a situational style that allows them to analyze each situation and weigh the opportunities and threats that may be faced by the organization under those circumstances (McCleskey 2014). Situational leadership thereby allows the leaders to utilize the opportunities available to the company under each circumstance efficiently and prevent the company from getting affected by the challenges or threats severely.In the case of Cathay PacificAirways,theadoptionofsituationalstyleofleadershipmaybedeemedas advantageous as it will help the organization to effectively tackle the challenges that may arise from the change management process and obtain the desired business outcomes. Certain example regarding the effectiveness of situational leadership can be cited, which depict how this form of leadership aids the leads to efficiently utilize the opportunities available to them in spite of challenging situations in the business scenario. The former Chief Executive Officer of Barclays plc, an investment company in the United Kingdom, helped the organization in managing the challenging situations of a government bailout and credit
11CHANGE MANAGEMENT crunch after the deregulation of financial markets by Margaret Thatcher in the year 1986. Through the adoption of a situational leadership Bob Diamond succeeded in guiding the company towards becoming a global giant in the investment banking industry. Minimization of Negative Impacts The negative impacts associated with change management processes in business organizations includes conflict or resistance from the members of the organization regarding the change implementation process. Such resistance may arise due to uncertainty and ambiguity regarding the purpose and outcome of implementing changes. Resistance to change among employees and other members of an organization may also arise due to a sense of potential threat of failure, loss of authority, lack of self-esteem or inability to adapt to the implemented changes. The possible dimensions of such change resistance are primarily cognitive, behavioral, intentional and emotional (Jabri 2017). One of the most effective ways to reduce conflicts among the members of a business organizationregardingchangemanagementprocessesandpreventresistanceis communication. The purpose of the proposed changes to be implemented within the scope of business must be communicated with the members of the organization so that they may be abletoaligntheirinterestswiththeorganizationalobjectives.Furthermore,efficient leadershipalsohelpsinthereductionofnegativeimpactofchangesonabusiness organization. It is so because the leader helps in aligning the differing interests of the members of the organization with the objectives of the change implementation process. Furthermore, the leader also integrates the activities of the different members so that they may be able to perform their functions in a smooth an efficient manner.
12CHANGE MANAGEMENT Conclusion From the above discussion regarding the change management process at Cathay Pacific Airways Limited, it can be deduced that implementing changes in the business operations is essential for an organization to adjust with the changing business environments and obtain a competitive advantage in the market. The proposed change for the organization pertains to the diversification of their services into the low cost carrier sector and the installation of advanced resource and cost efficient technology to improve the overall performance of the organization. This change management process can be conducted using theLewin’sthreestepchangemanagementmodelinvolvingthestepsof unfreezing, changing and refreezing. However, it may be noted that the company may be faced with certain challenges during the change management process including conflicts and resistance towards the change from the employees. In order to tackle and solve such challenges, effective means of communication and a situational style of leadership may be adopted which will not only increase the engagement and participation of the employees in the change process but also help the organization to utilize the opportunities available to them and prevent the threats from affecting them severely.
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13CHANGE MANAGEMENT References Abdullah, M.A., Chew, B.C. and Hamid, S.R., 2016. Benchmarking key success factors for the future green airline industry.Procedia-Social and Behavioral Sciences,224, pp.246-253. Belobaba, P., Odoni, A. and Barnhart, C. eds., 2015.The global airline industry. John Wiley & Sons. Cathaypacific.com(2020).Aboutus.[online]CathayPacific.Availableat: https://www.cathaypacific.com/cx/en_IN/about-us.html [Accessed 27 Feb. 2020]. Centreforaviation.com (2020).Cathay Pacific outlook: HK Express & runway 3 are golden opportunities.[online]CAPA-CentreforAviation.Availableat: https://centreforaviation.com/analysis/reports/cathay-pacific-outlook-hk-express--runway-3- are-golden-opportunities-465364 [Accessed 4 Mar. 2020]. Cummings, S., Bridgman, T. and Brown, K.G., 2016. Unfreezing change as three steps: Rethinking Kurt Lewin’s legacy for change management.Human relations,69(1), pp.33-60. Doppelt, B., 2017.Leading change toward sustainability: A change-management guide for business, government and civil society. Routledge. Guercini, S., Misopoulos, F., Mitic, M., Kapoulas, A. and Karapiperis, C., 2014. Uncovering customerserviceexperienceswithTwitter:thecaseofairlineindustry.Management Decision. Hayes, J., 2018.The theory and practice of change management. Palgrave. Hornstein, H.A., 2015. The integration of project management and organizational change management is now a necessity.International Journal of Project Management,33(2), pp.291-298.
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16CHANGE MANAGEMENT Thompson,G.andGlasø,L.,2015.Situationalleadershiptheory:atestfromthree perspectives.Leadership & Organization Development Journal. Wensveen, J., 2010, February. The airline industry: trends, challenges, strategies. InFaculty of Economics and Business Leadership and Policy Seminar(pp. 29-34). Yang, H.P.S., 2014. Case Study 16: Cathay Pacific Airways Using LinkedIn for Brand Building. InMarketing Cases from Emerging Markets(pp. 159-162). Springer, Berlin, Heidelberg.
17CHANGE MANAGEMENT Appendix 1.SWOT Analysis StrengthsWeaknesses High quality of services High rate of customer satisfaction Brand presence Positive brand identity High costs of operations High price of the services Limited scope of expansion OpportunitiesThreats Technologicaladvancementsfor resource and cost efficiency Diversification of services into low cost carrier sector Fluctuating fuel costs Highinvestmentsormaintenance and servicing of aircrafts High competition 2.PESTEL Analysis Political Regulations pertaining to airline industry Excise duties Health and safety regulations Political stability of countries Economic GDP Disposable income of customers Employment and wage regulations Fluctuations in fuel prices SocialTastes and preferences of customers based on demography Cultural and linguistic differences
18CHANGE MANAGEMENT Technological Network connectivity Resource and cost efficient technological advancements Infrastructural facilities at airports Maintenance and repair costs of aircrafts Environmental Environmental regulations pertaining to fuel consumption and emissions Regulations pertaining to sustainability of business activities Legal Laws and regulations in countries and states relevant to the airline industry Wage and employment regulations for employees Health and safety standards 3.Porter’s Five Forces Analysis Threat of new entrantsLow Threat of substitutesLow Bargaining power of suppliersLow Bargaining power of buyersModerate Competitive rivalryHigh 4.Force Field Analysis Forces driving changeForces resisting change AlignmentwithorganizationalIncreasedinvestmentandfunding
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19CHANGE MANAGEMENT mission and vision Potentialforincreaseincustomer base and market share Fuel efficient technology Cost efficiency of operations Potentialforincreasedcustomer satisfaction Competition Technological advancement for the change Lackofadaptabilityofthe employees to the new system Resistance within the organizational structure