Honda Motors Inc. Change Management: Stress Factors and Solutions

This report analyzes the organizational stress factors affecting Honda Motors Inc. of Canada, examining internal, external, human resource, and supply chain issues. It provides an overview of the company's background, including its history and values. The report identifies weaknesses, threats, and external risks like currency fluctuations and increased competition. It also addresses human resource challenges and supply chain uncertainties. To mitigate these issues, the report proposes a change management plan based on John Kotter's eight-step approach, aiming to avoid future organizational failures. The plan includes establishing a sense of urgency, building a guiding coalition, developing a change vision, communicating the vision, empowering action, generating short-term wins, consolidating gains, and anchoring new approaches in the company culture. The report emphasizes the importance of proactive change management for long-term success.

Running Head : ORGANIZATIONAL CHANGE MANAGEMENT
Organizational Change Management
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Executive Summary
The aim of this report is to analyse the organizational stress factors of Honda Motors Inc of
Canada. The report provides a brief overview of the company of research. It further analyses
the internal, external, human resource and supply chain related factors. The report at last
prepares a change management plan for the company to avoid failure in future following
Kotter’s eight steps of managing change.

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Background
About the company
The Honda Canada Inc is considered to be the Canadian division of Honda Motor
company. The company was found in the year 1969 and has been serving in places like
Ontario, Alliston and the head office is situated in Markham. The company has been
committed to reducing the environmental impact of the business since the year 1964. It is
considered to be the most popular manufacturer of automobiles in the Southern Ontario and
also the second most after General Motors in Canada. Among the first Honda products,
motorcycle was the first. The company has integrity and reputation for the ethical practices
along with the core values which are considered to be essential in achieving trust of the
customers and the partners (Honda.ca, 2019). The company has created a compliance and
ethics policy. The aim of the policies is to communicate the commitments of the company in
conducting the business with highest ethical standards. There are almost 208, 399 employees
working in the company. The main headquarter of the company is located in Tokyo, Japan.
The organizational stress factors
Internal factors
The SWOT analysis of the Honda motors company suggests that there are few of the
internal stress factors which might affect the operations of the company afterwards. The
company has the weakness of depending on North America for generating most of the
revenues. Secondly, the low investments in the research and development lead to the
innovation of products. The threat analysis of the company’s surrounding suggests that,
competition has increased up to greater extent. The biggest competitors of Honda Motors

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are Ford Motors company, Nissan Motor company, General Motors company, Tata Motors,
Hyundai Motor company, Toyota Motor corporation, Volkswagen and many others. It might
increase the difficulty of gaining the competitive advantage in the automobile industry
(Bebeteidoh & Takim, 2016). Moreover, there are environmental and global regulations
imposed by the government.
External Factors
Through the PEST analysis of the Honda Motors company, it can be said that Honda
is a mature company but there are few aspects which might worsen the success levels. There
are a number of external risk factors that might affect the earnings estimates driven by the
future growth. The factors are the unfavourable currency fluctuations, worsening condition of
home market, inflection rates and the political aspects along with the risk of stagnation in the
auto sales of Japan. Throughout the fiscal year 2016, the company was able to post the higher
Japanese revenues with expanded margins. This prospect does not seem favourable for the
Honda company. Any type of sharp depreciation of the yen against Euro and UD dollar can
hurt the profitability of the company. As a consequence, it might reduce the future earnings
along with the growth forecast.
The human resource factors
In any business organization, the employees are the one of the most important
stakeholders, the employee management is a key factor. The working condition of the
employees might also pose as a problem. Since the company has international expansion,
there are various employees who are sent abroad for operating. This might initiate cultural
diversity related issues and communication gaps. The organizational performance might gt
affected through this and leads to the administrative issues. The leadership is highly
responsible for this and determine the vision of the company in future.

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The factors in supply chain
As far as the supply chain related factors are concerned, steel and aluminium tariffs
are on the verge of creating uncertainty, unsettled environment and unpredictability for the
constituents of the supply chain. The complex nature of the automotive supply chain can
bring uncertainty to the business if not managed well. Although the Honda Motors of Canada
is having a full-line manufacturing and the R&D in the United States, the suppliers of raw
materials for the Honda company are not available domestically always. The company is
further seeing retaliatory tariffs on the supply chain’s export side.
The change management plan
After the above mentioned detailed audit of the company, it is evident that there is a
need for the change management in order to improve on the stress factors which could lead to
organizational failure if not managed. In this case, John Kotter’s 8 steps for the management
of change would be beneficial (Hornstein, 2015). It has been said that having followed the
eight steps, the organizations can avoid failure and adept at change. After improving the
ability to change, the chances of success can be increased. The steps are as follows:
Establish a sense of urgency- In this step, the organization should examine and evaluate the
market along with the competitive realities. It must recognize and discuss about the crises, the
major opportunities and the potential crises of future. A sense of urgency will gather the
attention of the workforce towards the need for change.
Developing the guiding coalition- In this step, a group with enough power has to be
assembled to lead the change effort . The group also has to be encouraged to work as a team
and enhance the collaborative efforts.

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Developing a change vision- In this step, a vision to help in directly changing the effort has
to be developed along with the strategies to achieve the vision.
Communicating the vision-buy –in- This step is needed for using almost every possible
vehicle to communicate the strategies and the change procedure. This will enable the teaching
of new behaviours along with the example of Guiding Coalition.
Empowering broad-based action - Now, the barriers to change will be removed. Those
change structures or systems which undermine the vision will be removed along with
encouraging the risk taking ideas, actions and activities (Stouten, Rousseau & De Cremer,
2018).
Generating short-term wins – The areas of performance improvement should be planned for
and those improvements have to be created. Moreover, the potential employees should be
recognized and rewarded who are involved in the improvements.
Consolidate the gains and produce more change- The increased credibility to the change
systems have to be used along with the policies and structures which do not fit the vision.
Anchor new approaches in the culture- The connections between the organizational success
and new behaviours have to be articulated. There has to be various approaches to ensure the
leadership development along with its succession.

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References
Bebeteidoh, O. L., & Takim, S. A. (2016). Toyota’s Slow Response to Manufacturing
Defects Leading to Recalls: Result of Poor Communication Strategy. Journal of
transportation technologies, 6(05), 420.
Honda.ca. (2019). Honda Canada | Official Automotive Website. Retrieved 10 August 2019,
from https://www.honda.ca/
Hornstein, H. A. (2015). The integration of project management and organizational change
management is now a necessity. International Journal of Project Management, 33(2),
291-298.
Stouten, J., Rousseau, D. M., & De Cremer, D. (2018). Successful organizational change:
Integrating the management practice and scholarly literatures. Academy of
Management Annals, 12(2), 752-788.