HRM and Change at Lion Nathan

This report investigates the problem of Lion Nathan, an Australian wine producer, and analyzes the company's target to change in the light of change management approaches. The report also explores the transactional leadership theory and provides recommendations for the stakeholders.

HRM and change at Lion Nathan
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Executive summary
This report is dedicated to the investigation of the Lion Nathan problem, the fine wine Australian
producer that seeks to implement changes to become the leading wine company in the industry.
The company target to change is analyzed in the light of the theoretical reference of change
management approaches of Lewin and Kotter. The transactional leadership theory is analyzed
and applied to the Lion Nathan case. The stakeholders are investigated and recommendations are
provided.

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Contents
Introduction....................................................................................................................................3
First: Problems identification.......................................................................................................3
Second: Change management theory to explain why the problems have arisen.....................4
Third: Recommendations.............................................................................................................8
Conclusions.....................................................................................................................................9
References.....................................................................................................................................10

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Introduction
Change management is the systematic process that organizations adopt to managing changes
when dealing with employees and resources. Effective change management should control the
process by enabling employees to positively accept the change. Achieving effective and
sustainable change management requires flexibility and collective efforts in transforming the
organization from the status quo to the new desired situation. Currently, change management is
considered an essential process at all types of organizations and an opportunity to develop its
performance, productivity and profits. Organizations choose to make changes or they are
enforced to implement change. Managing organizational change is possible if the change leaders
take place and play an effective role in influencing the employees to adapt to the change process
and avoid their resistance to change. High resistance to change and uncommitted management
may cause the change process to fail and the organization to lose resources (Al-Ali, et al., 2017)
(Comuzzi & Parhizkar, 2017).
Contemporary organizations focus on processes, areas of responsibility and reporting to help
organization constantly update their information about the environmental changes. The business
environment is driven by competition, technological development and changing customer
preferences. Managers should redefine the organizations' objectives and operations in order to
effectively and timely response to environmental change (Kilkelly, 2014).
The following section investigates the problem of Lion Nathan the fine wine Australian
producer. The company target to change is analyzed in the light of the theoretical reference of
change management approaches of Lewin and Kotter. The transactional leadership theory is
analyzed and applied to the Lion Nathan case. The stakeholders are investigated and
recommendations are provided.
First: Problems identification
Lion Nathan is an alcoholic beverage company that wants to become a market leader company in
the industry in Australia. This ambitious target requires organizational change on the cultural,
leadership, strategic and employees' levels. The company management is required to implement
cultural changes to be able to achieve its strategic goals. The leadership development initiatives
included the necessity of senior leaders to switch from command and control leadership style to
coaching and results-oriented style. The HR strategies should be aligned with the organization

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strategy to act effectively. The large scale cultural transformation is devoted to employees'
engagement by doing their best to make a difference.
Second: Change management theory to explain why the problems have arisen
2.1 Change management approaches and models
There are many theories, models and approaches that could be applied by organizations to
manage the process of change in the organization, like Lewin's change management model and
Kotter change model, they are discussed as follows:
2.1.1 Lewin's change management model
Lewin's change management model involves 3 stages of unfreeze, move towards the desired goal
and refreeze. The organization sets its goals to change in the unfreeze stage, where the leaders
act in the best way to lower the severity of the employees' resistance to change. The 2nd stage
witnesses taking the right actions to support the implemented of the new changes in action. The
third stage of refreeze is change implementation (Bukłaha, 2014).
This model enables organizations to transform to the new future desired status by enabling the
leaders and employees to think positively in the change and get ready for it. Despite this, the
employees are used to make comparisons between the benefits they used to attain in the old
system compared with the new system. Moreover, some employees could lose their benefits and
self-esteem due to the change (Rajan & Ganesan, 2017).
2.1.2 Kotter change model
Kotter argues that the change model is a process that goes through eight steps. It begins with
creating a sense of urgency, then formulating a guiding coalition, followed by creating vision and
strategy, then developing a communication process to discuss them with the staff, then
empowering employees, followed by achieving short-term success, then implementing more
changing activities and attaining and in the last step, the new culture is fully dominating the
organization (Rajan & Ganesan, 2017).
Kotter change model clearly defines the change stages to facilitate the process of change. Also, it
concentrates on preparing the employees to accept and gain their support (Imran, et al., 2017).
Despite this, the process of change is long and might lasts for a long time (Imran et al., 2017).
2.2 Applying Lewin's change management model in the case of Lion Nathan company

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Lewin model could be used as a tool for strategic management that enables firms to create their
new vision and effectively manages the transformation process (Roh, et al., 2017). Lion Nathan
should create a shared sense of urgency in order to effectively implement the process of change
and gain the employees' acceptance to achieve the organizational goal of becoming the leading
company in the wine industry.
 Unfreeze: Lion Nathan change management focuses on three pillars, as follows:
 To create a sense of purpose, vision and values
 To develop the leaders capabilities that shapes the organizational culture in the form of the
accepted behaviors
 Applying the new behaviors through adequate management processes and systems that the
employees accept.
The change process begins with stressing the importance of change among the company
leaders and employees by stressing on the company core values of acting with integrity,
passion, achieving together and being sociable. Also, ensuring that every staff member
understands and demonstrates behavior, which is consistent with these values.
 Move towards the desired goal: This stage assumes that the company new vision is created
to reflect the cultural desired change of Lion Nathan in the future. Lion Nathan new vision is
"To become Australasia’s leading alcoholic beverage company". The HRM strategic function
is core to business success. Also, the stakeholders, including people and organizational
coaches; employee champions represent culture stewards. The HR manager, Barbour helped
to strengthen the HR role of adding value to the business by maintaining a good fit and
alignment between HR strategies and the strategic agenda and enhancing employees work
together effectively in order to achieve the company’s strategic intentions. The ethical factors
of being honest with people in communicating transformational change information. In
addition to respect people's opinions, organizational rules and the laws. Moreover, to protect
the company secrets and act ethically (Cameron & Quinn, 2011; Raineri, 2011). Considering
the cultural aspects of Lion Nathan in the implementation stage is very important and it is
considered vital to the success of the change strategy.
 Refreeze: In this stage, Lion Nathan should implement the change. The staff should
communicate their shared values when dealing with the organization stakeholders and
concentrate on the quality of work to support Lion Nathan’s business model and strategy of

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growth through. The company strategy stresses on the importance of higher-quality products.
2.3 Stakeholder change management
Stakeholders' engagement could be implemented through the various ways that the organization
can adopt in sharing its cultural aspects, values, knowledge and information to enable it to create
a strong cooperation with various stakeholders (Caputo, Evangelista, & Russo, 2016).
 Internal stakeholder interests: They are represented in the managers at various levels,
leaders and employees. In some cases, both leaders and some volunteering employees act as
change agents to influence the staff in implementing the required change (Raelin & Cataldo,
2011; The United Nations, 2012). In Lion Nathan, leaders need the top management support
to be able to coach the daily activities and fulfill the company strategic goal. A more
constructive leadership style is required to maintain a commitment to change and its
successful implementation. The employees should be satisfied, rewarded and empowered to
feel that they gain career benefits
 External stakeholder interests: The customers are those who buy Lion Nathan products,
they are concerned with the product quality. The matter that required the company response
to their needs through implementing the new change management process.
2.4 Organizational leadership and changes
2.4.1 Theories of leadership
There are different theories of leadership that explain the characteristics that differentiate
between leaders and non-leaders and between different leadership styles. Most of the leadership
theorists have transformed away from the theories that define the leader personality traits to the
modern situation theory. The latest argues that the main characteristics of leadership define the
context where leadership takes place. Therefore the leadership theories are classified among
certain perspectives that consider leadership to be a process, specific behavior or a portfolio of
traits (Amanchukwu, et al., 2015).
2.4.2 The transactional theory
The transactional theory of leadership assumes that both of the leader and the followers'
exchange valuable things that result in benefits for each party (Yahaya & Ebrahim, 2016). Bass

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has accumulated on Burns work by developing the transactional leadership theory. The theory
argues leaders objectivity and goal oriented, they are concerned with goal achievement more
than employees' development. Therefore, they specify the work requirements to the followers
and expect that the employees will excel in their performance to be rewarded according to their
agreement with their transaction leader. This relationship between the transactional leader and
his staff members is built on exchanging work for rewording upon the agreements between the
two parties. This theory assumes that the leader and the followers affect each other. According to
Bass as cited in Khan, et al. (2016), the transactional leadership reflects the contingent-reward
process that ensures the existence of an active and positive exchange of work and reward
between the leader and the staff members, where employees are rewarded based on their
achievement of the pre-agreed upon objectives. Quality work is exchanged with rewarding
support. The leader reveals his appreciation to his followers by rewarding them with bonuses and
promotions. Despite this, the transactional leader could notice errors and drawbacks.
2.4.3 Transactional leadership style application in Lion Nathan
The transactional leadership style could be broken down into three major parts; the reward,
active management by expectations and passive management by expectations. Contingent
rewards reflect the expected performance of the followers who are rewarded for their well-
performed activities. The relationship between the transactional leader and his followers takes
the form of contractual agreement that represents the main motivator for work. This contractual
agreement utilizes the intrinsic reward to influence the followers to work and increases their job
satisfaction and confidence of the leader and team members. The second part is the active
management by exception that describes the leaders' behavior towards the followers'
performance deviation from the expected performance. Positivity reflects that the leader
expectation of the employees' performance cannot exceed the expected performance results,
because the work runs smoothly and the leader trusts the work of his followers, but
communication between them is poor. The control factors between the leader and followers are
the time and degree of technical expertise. The third part is passive management by exception
that does not involve agreements between the leader and the staff members. The leader
comments on the wrong activities and waits for them to happen to be able to take an action
(Khan, et al., 2016; Sorensen, et al., 2011; Simoes & Esposito, 2014).

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Lion Nathan has moved from a ‘command and control’ leadership style to coaching and results-
oriented style. This is equivalent to the transactional leadership style, which is capable of leading
Lion Nathan the company change efforts. The leaders of Lion Nathan have high moral values
they lead high-potential talent with strong learnability, emotional intelligence and traditional
strategic ability, therefore they desire remuneration and reward. The implementation of
performance management and 360-degree feedback systems are essential to ensure successful
change management implementation.
2.4.4 Leadership engagement application in Lion Nathan
Communicative leadership refers to the leaders' ability to listen, direct, coach and provide
constructive feedback. Therefore, communication increases the effectiveness of the organizations
either formal or informal communication (Ruck, et al., 2017). Leadership engagement involves
high commitment that could be achieved by setting a clear vision, mission statement and
organizational values to be achieved by leaders. They have to strongly believe in these aspects
and transmit them to their followers. It is important that leaders lead by example and become
goal oriented by adopting the transformational leadership style (Markos 2010). Lion Nathan’s
transformational culture change is not easy to process nor a quick to implement. It is committed
to creating an organizational culture which is appropriate to its mission and attracts and develops
employees that can adapt to that culture through the implementation of a set of integrated HR
policies and practices. The business model and strategy of growth of Lion Nathan’s depends on
delivering higher-quality products and introducing new product development that could generate
strong earnings, achieve continuous annual growth of about 6% and was able to successfully
expand into fine wines production and ready to drink spirit products. The matter that reveals
initial indicators of the success of the change management process and goals achievement.
Third: Recommendations
Leaders have a significant role in organizational success because the employees' satisfaction and
motivation are related to the relationship between the leader and his followers positively.
Successful leaders are those who can significantly influence the employee and succeed in their
engagement (Ruck, Welch & Menara 2017). Employees seek to upgrade their skills and develop
them through training and organizational learning. Ruck, Welch & Menara (2017), argues that
performance management activities are dedicated to followers' motivate them to enhance their

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performance. Therefore, training and development represent a good action that Lion Nathan
CEO and HR manager could implement to ensure employees engagement when implementing
the new cultural changes in the company. Engaged employees will be able to continue their
development through their career path. Also, training and development will enable the
employees to feel job secure and eliminate their resistance to change through the engagement in
the new requirements of producing high-quality products (Gruman & Saks 2011). The suitable
training can increase the employees' knowledge, skills and capabilities. It will leverage their
knowledge of the job requirements, enable the employees to perform well from the direct
supervision and enhance their self-efficacy and engagement (Markos 2010).
Conclusions
Lion Nathan is an alcoholic beverage company that seeks to take the leaderhip in the industry in
Australia. This ambitious target requires organizational change on the cultural, leadership, strategic
and employees' levels. The company management is required to implement cultural changes to be
able to achieve its strategic goals.
Considering the cultural aspects of Lion Nathan in the implementation stage is very important
and it is considered vital to the success of the change strategy. The staff should communicate
their shared values when dealing with the company stakeholders and concentrate on the quality
of work to support Lion Nathan’s business model and strategy of growth through. The company
strategy stresses on the importance of higher-quality products.
leaders need the top management support to be able to coach the daily activities and fulfill the
company strategic goal. A more constructive leadership style is required to maintain a
commitment to change and its successful implementation. The employees should be satisfied,
rewarded and empowered to feel that they gain career benefits. The customers are those who buy
Lion Nathan products, they are concerned with the product quality. Therefore, the transactional
leadership style is capable of leading Lion Nathan the company change efforts through the
exchange relationship between the leaders and staff members.

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