Diageo Case Study: Change Management and Risk Issues Analysis

This case study analyzes Diageo's approach to change management within its global operations. The analysis examines the company's strategies for improving production efficiency through human resource function reviews, technological integrations, and global strategy implementation. The case study highlights the importance of managing change in response to a dynamic external environment, emphasizing stakeholder analysis, phased implementation, and risk management. It discusses the impact of technology, particularly in HR, and its contribution to cost reduction and profit maximization. The study also explores the lessons learned, the importance of leadership, and the three processes of change management: preparation, managing, and reinforcing change within the organization to maintain a competitive edge in the alcoholic beverages market. The document is supported by relevant academic references.

DIAGEO CASE STUDY 1
DIAGEO CASE STUDY
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DIAGEO CASE STUDY 2
Potential Change Management and Risk Issues
It is important for an organization to change management to ensure that there is an
achievement of set goals. The change is due to the dynamic external environment. The external
environment keeps on changing requiring the management to develop strategies that are flexible
to handle the changing business operations. Diageo Company aims at improving the efficiency in
production through a review of the human resource functions. The company is supposed to
change to come up with leadership and staff that are highly qualified to offer diverse spirit
products to the targeted consumers (Jeston & Nelis, 2014). Diageo is required to continuously
improve the spirit products to have a sustainable competitive edge in the alcoholic beverages
industry. The consumers of alcoholic beverages have diverse needs about their drink requiring
the management to implement advanced technology in production. Proper leadership in an
organization makes it possible to come up with an effective team that will work toward
achievement of set goals. The costs of production in Diageo require being revenue to increase the
revenue acquired from the sale of alcoholic beverages products.
Overall change process
Managing change is essential in ensuring that there is a smooth flow of operation of the
business. This is where the change is supposed to be integrated into the production of alcoholic
beverages production by Diageo Company for the achievement of set market share
internationally. The strategies implemented in production and HR department require being
accurate to operate in different nations. Diageo has operations over 180 countries requiring
developing a company policy that will provide a smooth flow of operations. The management of
change process requires analysis of views from the stakeholders of the company (Cavusgil, et al.,
2014). The stakeholders have an interest in the production of the requiring the management to
implement change that is effective in increasing the revenue from the sale of alcoholic beverages
products internationally. Change makes it possible for a company to acquire a competitive edge
in the market due to the continuous change of the external business environment. Diageo
produces high-quality spirits to the people requiring the management to implement change to
deal with the diverse needs of consumers. The overall changes in the organization require
considering technology, economy, growth opportunities and consumer needs for the
accomplishment of set long-term goals (Boons & Ludeke-Freund, 2013). The change is supposed

DIAGEO CASE STUDY 3
to be helpful to the organization in improving the profitability level. Global strategy change by
Diageo is implemented in phases to ensure that there is a proper execution of strategies in
different locations of operation.
Lessons learned/risk
Diageo global strategies are aimed at acquiring a sustainable competitive advantage in the
global alcoholic beverages industry. Risk management is essential in business to improve the
performance of the company in the international market. Diageo strategies aim at reducing the
cost of production of spirit products through the use of technology and proper HR functions. The
strategies are implemented in phases to have a stable foundation in the organization due to the
difference in the external environment in operating countries (Bohari, et al., 2017). The strategies
are implemented by effectively managing the external business environment for the achievement
of set long-term goals of production. Diageo has integrated technology in human resource to
ensure that there is a quality production of spirits for the targeted global consumers. The
technology used in HR is implemented in phases to evaluate the impact of change on the
performance of the company. The governance of global strategy requires considering the service
offered by the organization and business engagement in the industry (Sparrow, et al., 2016).
Diageo strategy focuses on the set vision, mission and company values in ensuring that there is
an improved performance in the global market.
Proper leadership and teamwork in an organization improve the effectiveness of an
organization. Leadership and technology change in Diageo has made it possible for the
organization to cut costs by 20% which improves the revenue acquired from sale of spirit brands
to the targeted global market. In 2006 the Diageo acquired an increase of 6% of profits from the
sale of the 12 top spirits brand produced by the company. Use of technology in production makes
it possible to achieve the set long-term goals (Westerman, et al., 2014). Diageo implemented the
following strategies in using technology in HR functions; PeopleSoft in February 2004, IS
strategy which implemented SAP in August 2004, September 2004 impact of SAP
implementation was assessed, July 2005 there was organizational change, September 2005 SAP
HR was applied in operation to cut the cost of HR functions. The implementation of technology
by Diageo in HR and production made it possible to reduce the cost of production while
maximizing profits.

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Managing change
Change is a process which requires being properly managed to ensure that it has a
positive effect on the performance of the business. Diageo implements changes in phases to
evaluate the effects of change in production properly. The change in an organization requires
providing a competitive edge in the targeted market (Wagner III & Hollenbeck, 2014). Diageo
implements changes to ensure that there is a continuous improvement of the 12 top spirits brands
in the global market. There are three processes in managing change which is preparation,
managing and reinforcing the change in the organization (Dawson & Andriopoulos, 2014).
Preparation is where the stakeholders are required to be identified with the need for change in the
organization. Managing change is developing a time frame to implement change for to monitor
the effectiveness of the change. Lastly, is reinforcing the change to ensure that there are quality
services and products to the consumers for an increase in profitability for the organization.

DIAGEO CASE STUDY 5
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