Organizational Development Report: 2 Cheap Cars Case Study, AM806001

This report provides a comprehensive analysis of 2 Cheap Cars, the largest used car company in New Zealand, focusing on its organizational development, particularly the critical issue of communication gaps. It explores the impact of this issue on various aspects of the business, including sales, revenue, decision-making, and reputation. The report applies organizational development theory, examining concepts like organizational climate, culture, and strategies. Furthermore, it evaluates the application of systems theory and change process principles to address the identified organizational development situations. The report concludes with recommendations for improving communication and overall organizational effectiveness within 2 Cheap Cars, aiming to enhance its performance and maintain its leading position in the market. The report is based on the assignment brief to evaluate the organization and applying systems theory to organizational development situations and providing recommendations to address organization performance issues.

Running head: DEVELOPMENT OF EFFECTIVE ORGANIZATIONS
Development of Effective Organizations: 2 Cheap Cars
Name of the Student
Name of the University
Author’s Note:

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Table of Contents
Introduction................................................................................................................................2
Discussion..................................................................................................................................2
Brief Description of 2 Cheap Cars.........................................................................................2
Organizational Development Issue in 2 Cheap Cars..............................................................3
Application of Organizational Development Theory in 2 Cheap Cars..................................5
Evaluation of Systems Theory and Application to the Organizational Development
Situations in 2 Cheap Cars.....................................................................................................7
Application of Change Process Principles for Achieving Specified Organizational
Outcomes in 2 Cheap Cars...................................................................................................11
Conclusion................................................................................................................................13
Recommendations....................................................................................................................14
References................................................................................................................................15

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Introduction
The organizational effectiveness can be stated as the subsequent concept to check how
much effective any organization could be during its overall achievements of outcomes and
goals that they are intend to produce (Hoobler, Lemmon & Wayne, 2014). These
organizational effective groups within the companies eventually concern themselves with
some of the major and the most significant areas. 2 Cheap Cars is the largest car company of
New Zealand that was founded in the year of 2011. The company headquarters is in
Auckland, New Zealand and currently it is termed as the most enhancing organization in the
entire New Zealand. They have achieved various achievements in their business and currently
they are serving in more than 16 locations (Lewis, Cantore & Passmore, 2016). This report
will be focusing on the organizational development area of 2 Cheap Cars. Communication
gap is the major and the most significant organizational development issue in this particular
company. Organizational development theory will be applied in this report for this company.
Moreover, proper application of systems theory and change process principles will also be
required in this case.
Discussion
Brief Description of 2 Cheap Cars
2 Cheap Cars is the largest used car organization of New Zeeland that was founded in
the year of 2011 by Eugene Williams and Yusuke Sena. The headquarters of this particular
organization is in Auckland, New Zealand (2 Cheap Cars.co.nz. 2019). The organization
initiated their first outlet in unit 11 Highbrook Drive of Auckland. Within the year of 2016,
there have been fewer nation wise outlets of this particular organization and they are serving
in more than sixteen locations. In the year of 2014, 2 Cheap Cars was subsequently ranked in
second position over the list of fastest growing organizations in New Zealand and was also

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marked as the Fastest Growing Retail Business and consumer Business within the Auckland
as well as upper North Island region. Moreover, this particular organization was the first
investor of Kiwi Regional Airlines with an overall stake of 23%. It even helped in the launch
of the newer company by simply backing the total investments of this launching project. In
the year of 2015, 2 Cheap Cars eventually started parallel importing of the new cars from the
organizations like Mazda, Toyota and Honda (2 Cheap Cars.co.nz. 2019). They have also
used Maori culture in an advertisements for promoting Waitangi Day sale.
Organizational Development Issue in 2 Cheap Cars
In the organization of 2 Cheap Cars, the communication gap is the major
organizational development issue (Ghorbanhosseini, 2013). This particular issue is
responsible for ceasing the growth and success of the company to a much higher position and
gain popularity even in the international market. The four distinctive aspects in which the
organizational development issue of communication gap is creating problem are as follows:
i) Sales: The first and the foremost aspect that is majorly getting affected from the
organizational development issue of communication gap in the company of 2 Cheap Cars is
sales (Anderson, 2016). Although, 2 Cheap Cars is the largest used car company in New
Zealand, it is highly required for them to maintain their position under every circumstance so
that they are eventually able to enjoy their position without much complexity. Due to this
type of communication gap, the juniors do not get proper instructions from their superiors
and hence the overall productivity of the company is being affected (Jones, 2013). The poor
communication eventually lead to the delay or failure in completing projects, missed
performance objectives, increased stress, lost sales and lower morale. For the presence of this
particular organizational development issue, 2 Cheap Cars faced major turbulence in the
sales. The impact of poor communication was responsible for issues related to customer life
cycle (Engbers et al., 2013). Various stages of customer life cycle are present and all of these

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stages involve initial purchase, ongoing marketing to the existing clients and even customer
retention.
The poor customer communication was responsible for sustaining the customer life
cycle and the organization missed out the repeat businesses. Furthermore, the customers, who
are calling in to the organization must receive proper courteous and prompt service
(Christensen & Cornelissen, 2013). The most prominent example of this customer retention
would be a system, which transfers the phone calls to several destinations even before putting
the right person on call or even an automated phone call answering system, which does not
enable the customers in speaking with a person. If the customer is not getting a quality
service, he or she would opt for some other substitute products.
ii) Revenue: The second distinctive aspect that is majorly affected from the
organizational development issue of communication gap in the company of 2 Cheap Cars is
revenue (Gerasimov & Gerasimov, 2015). Since, poor communication can eventually lead to
the lack of team cohesion, it is quite important to resolve the issues as it could even lead to
lost revenue and higher turnover rates. The customers provide the basic source of revenue
and it is extremely difficult to distinguish between product improvements upgrades and hence
increasing the sales. This kind of poor communication does not allow for the customers’
input so that it becomes a critical market research while development of new products and
considerations of the existing items (Austin & Sorcinelli, 2013). Product development is a
major requirement here. 2 Cheap Cars are trying to make most advanced and effective cars
for their customers, however, due to the lack of poor communication and major
communication issue, they are unable to understand every demand of their customers and
thus sales and revenue can drop majorly.

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iii) Decision Making: The third subsequent and distinct aspect that is affected from
the organizational development issue of communication gap in the company of 2 Cheap Cars
is their unique decision making process (Benn, Edwards & Williams, 2014). The decisions
are made by a single leader or even larger group of people only after depending on the overall
nature of the company. There are several models present for effective decision making and
each and every model is more or less correct on the decision nature and even the context in
which this decision is being undertaken. Acceptance and authority are the two most
significant requirements for making any decision perfect and proper. A better cooperation
and secrecy is also enhanced in this purpose for providing several benefits to the situations
(Pettigrew, 2014). Due to poor communication in 2 Cheap Cars, the overall decision making
process is highly affected and the decisions turned out to be ineffective in comparison to
others. This was hence quite problematic for the business.
iv) Reputation: The fourth distinctive aspect that is highly impacted from the
organizational development issue of communication gap in the company of 2 Cheap Cars is
reputation (Aarons et al., 2015). Since, it is the leading car organizations in New Zealand, it
is quite vital to maintain a better reputation with the customers. However, they are unable to
do so because of lack of communication with these customers. The brand name and
reputation hence was damaged due to their communication gap.
Application of Organizational Development Theory in 2 Cheap Cars
2 Cheap Cars is considered as one of the major and the most significant and important
organizations in New Zealand (Church & Waclawski, 2017). However, in spite of being on
top, they have faced a major organizational development issue. This particular issue is related
to organizational communication gap. An effective communication is extremely vital for the
overall growth and effectiveness of a company. This communication is required for helping
out the managers in performing the most basic functionalities of the management, which are

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planning, organizing, motivating and finally controlling or managing (Cummings & Worley,
2014). Hence, it ca be referred to the fact an effective communication is the respective
building block of the company and it not only helps in facilitating the procedure of
information as well as knowledge sharing, but also helping the organizational members in
developing major relationships with one another. This type of effective and efficient
communication is require for proper growth and development in the company (Verrier et al.,
2014). The overall productivity of the company is also enhanced in this manner and
commitment towards work is being nurtured.
The organizational development theory comprises of three key concepts, which are as
follows:
i) Organizational Climate: Three parts are present here:
a) Defining Mood or Uniqueness of a Company. This particular factor helps to define
the type of the company. In this scenario, 2 Cheap Cars is a car company in New Zealand.
b) Attitudes and beliefs regarding organizational Practices: This type of attitude
eventually create organizational climate for the purpose of influencing member collective
behaviour (Schmiedel, Vom Brocke & Recker, 2014).
c) Climate Features and Characteristics: The organizational climate features and
characteristics are being associated with the overall employee satisfaction, service quality,
stress and results as well as deployment of new programs (Eriksson, 2013). The major
features and characteristics of organizational climate are leadership, leader control, conflict
resolution, openness of communication and many more.
ii) Organizational Culture: The organizational culture comprises of five culture based
elements, which are artefacts, behavioural patterns, behavioural norms, values and
assumptions. 2 Cheap Cars is facing major organizational development issue of lack of

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communication in their business (Gul, 2015). Hence, it is extremely important and significant
to maintain a proper organizational culture in the business by dealing with the assumptions,
values and principles.
iii) Organizational Strategies: The most common approach of organizational
development is for helping the companies in negotiating change, which is action research and
it comprises of four distinctive steps of diagnosis, action planning, intervention and
evaluation (Kuna & Nadiv, 2013). Diagnosis helps the company in identifying issues, which
might interfere with the effectiveness and then assess the underlying reasons and is usually
done through formal surveys of organizational members. Action planning helps in the
strategic interventions to address the diagnosed issues and 2 Cheap Cars has engaged in an
action planning process for assessing the feasibility of implementing the various change
strategies, which lead to action (Parris & Peachey, 2013). The third step is intervention,
which includes change steps are both sequenced and specified, progress is monitored and
finally stakeholder’s commitment is being cultivated. The final step in development of
organizational strategies within the organizational development theory is proper evaluation.
The planned change efforts are being assessed by simply tracking the organizational progress
to implement the changes and also by documenting the overall impact on this particular
organization of 2 Cheap Cars (Posey et al., 2013).
Evaluation of Systems Theory and Application to the Organizational Development
Situations in 2 Cheap Cars
The key areas affecting the overall effectiveness of the companies mainly include
organizational structure and designing, leadership development, talent management,
implementation of the respective change or transformation, designing of several
measurements as well as score cards, deployment of smart processes or smart technology for
the core purpose of management of the human capital of the firm and then formulating the

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broad agenda of Human Resources (Tregidga, Kearins & Milne, 2013). When the specific
organization comprises of few practices as well as programs within the above mentioned
areas, this group of organizational effectiveness completes each of the following roles like
examining proper alignment within subsequent areas for the core purpose of improving them,
strategizing for high adoption rates within the mentioned areas, improving trade-offs within
quality, speed and reliability in the mentioned areas and facilitating the capability building
like structure, people and process of the company (Foster, 2016).
The broad ideology of organizational effectiveness is being applied for each and every
non profit organizations for making the funding decisions. The important and the most
relevant key inter related areas are culture, work processes as well as work culture, people,
decision making and decision structure and leadership (Ruvio et al., 2014). Systems theory is
one of the most common management theory that helps to understand the entire
communication gap within any particular organization. This systems theory can be stated as
the inter disciplinary theory that deals with cohesive conglomeration of every interrelated and
interdependent part, which is either natural or human made (Ocasio, 2017). Each of the
system is eventually delineated by the temporary or spatial boundaries and are surrounded
and influenced by the environment. The systems theory generally follows two general
approaches, which are a cross sectional approach and a development approach (Azevedo,
2017). The cross sectional approach provides with a distinctive approach on the several
interactions, which occur within two systems and the development approach provides a focus
on the several changes within any system on time.
There are four distinctive types in the systems, which are as follows:
i) Adaptive Systems: These systems rely on the external references as well as oriented
towards the future such as economy, financial markets and advertising (Cooperrider &

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Srivastva, 2017). Adaptive systems are one of the most common types of systems that are
being used by several organizations.
ii) Goal Attainment Systems: The second type of system is the goal attainment
system. These systems have the internal orientation as well as a proper focus on the future
like the political system or career path.
iii) Integration Systems: System integration is one of the major and the most
significant requirement in an organization that helps in proper integration of every sub system
and hence making the organizational process much more effective and efficient (Sanders,
2016). The systems focused on the integration of system elements or disparate systems is
termed as integration systems.
iv) Maintenance Systems: Finally, the fourth type is the maintenance systems, which
are responsible for maintaining long term patterns in any organization.
Each of these above mentioned systems are the parts of one another and they
eventually create the most effective organization after identification of its issues and
problems. The systems have boundaries, which isolate the system from the environment after
depending on the kind of systems (Ehrhart, Aarons & Farahnak, 2014). Open systems allow
interactions without any type of boundaries, however closed systems are the systems that
have closed boundaries or even a loose concept of the system edge.
Systems theory provides a brief theoretical shift from various approaches to
understand communication gaps in a company. The interconnectedness of the human
communication is being focused with this theory. There are three significant components of
communication, which are input, throughout and output. The interaction occurs between
input and output. Input is what enters into the system from the outside and output is what
leaves that particular system for the environment.

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Figure 1: Diagram of Systems Theory
(Source: Kaufman, 2017)
The above provided figure gives a proper description on the entire concept of systems
theory. The input is provided into the system and a throughput a present within the system.
After crossing the throughput, finally a proper output is gained. In the organization of 2
Cheap Cars, the organizational development issue is communication gap (Goetsch & Davis,
2014).
The system theory application to 2 Cheap Cars is as follows:
i) Input: The input for 2 Cheap Cars are used cars, mechanics, employees, software
system, finance, exhibition places and services. More than 100 employees are working in
New Zealand’s branch and hence it is extremely important and significant to consider them in
the system, which is the entire organization.
ii) Throughput: The throughput for 2 Cheap Cars are purchase, import, repair,
inspection, sale and New Zealand registration (Chmiel, Fraccaroli & Sverke, 2017).
iii) Output: The output of the system of 2 Cheap Cars includes used cars, automobile,
maintenance and after sales service insurance.

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iv) Feedback: The final component of system theory is feedback. Once the entire
system is being completed, feedback is provided. There are two types of feedback, which are
positive feedback and negative feedback. Positive feedback occurs when the message is well
received in complete and when it eventually brings the desired results (Carley & Christie,
2017). On the other hand, negative feedback occurs, when the message is not received on
time and is not complete. This type of feedback could eventually bring out negative,
undesired and delayed outcomes. The feedback from 2 Cheap Cars is car sales rate,
consumers’ satisfactions and consumer complaints (Ellemers, 2014).
After proper evaluation of 2 Cheap Cars, it is being evaluated that in spite of
providing efficient inputs like mechanics and software system, the output was not as
expected. This was mainly because of the processing of the intended message within given
time was not proper between various working departments and hence they faced a major
communication gap within their business.
Application of Change Process Principles for Achieving Specified Organizational
Outcomes in 2 Cheap Cars
The rapid advances within technology helps to bring various principles that are to be
followed under every circumstance. The four principles or disciplines in this type of scenario
are decision making, change and learning, group effectiveness and self organization and
adaptive systems (Jeske & Axtell, 2016). The decision making principle helps to undertake
proper decisions for effective implementation of results and to make the company effective.
Kotter’s change model can easily depict the entire change process principles to achieve the
specific outcomes in 2 Cheap Cars. The eight steps of Kotter’s change model in 2 Cheap Cars
are as follows: