Business Transformation and Change: Stena Line Case Study

This report provides an in-depth analysis of the Stena Line case study, focusing on the business transformation and change management initiatives undertaken by the company. The report examines the key factors driving change, including commoditization, digital revolution, social media, and globalization, and how these factors influenced Stena Line's operations. It explores the leadership style of CEO Gunnar Blomdahl, identifying his transformational leadership qualities and his approach to change management. The report also delves into various change management strategies, such as incentives, cultural values, authority, and recruitment, and assesses their effectiveness in the context of Stena Line. Furthermore, the report analyzes the methods used to measure progress, including organizational performance, individual performance, and change management performance. The report concludes with a comprehensive overview of the challenges and successes of the transformation process, offering valuable insights into the complexities of organizational change. The report is based on the YouTube video 'Undercover Boss: Stena Line' and the provided assignment brief.

BUSINESS TRANSFORMATION AND CHANGE

Table of Contents
Introduction 2
Key Factors Driving Change 2
Leadership Style 3
Change Management Strategies 3
Progress Analysis 4
Conclusion 5
References 6
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Introduction
Business transformation is an important concept in today’s changing business environment.
Globalization has opened scopes and opportunities for overseas business interactions all across
globe. The changing trends and patterns in business needs and demands signify an important
change in the way businesses are dealt (Roome & Louche, 2016). In order to keep up with the
changing business environment, it is absolutely necessary for all organizations to bring specific
changes in the organizational processes in order to meet the new requirements of the time. A
business transformation is referred to the process of changing an organization’s systems and
operational processes with new modernized systems and devices in order to reap added benefits
to the organization.
In order to develop an in-depth analysis of the concept of business transformation, this paper
takes up the incident of Stena Line Company of ferries and discusses the process of business
change in details (Nohria, 2017). The CEO of the Company, Gunnar Blomdahl, had recognized
the need to bring in relevant changes in the business organization and invested a significant
amount for increasing the look and size of the operation. However, it is not enough to apply
changes in an organization; it is also necessary to govern the execution of changes in the process
of transformation and assess the improvement of the organization.
Key Factors Driving Change
The key drivers of change in an organization are inclusive of the dynamics of internal and
external business environment. A successful innovation strategy requires understanding the
specific needs and requirements of the corresponding business market (Alvesson & Sveningsson,
2015). As per the incidence of Stena Line, the increase in the use of ferry as a mode of travel has
increased their business opportunities; however, inefficient understanding of the changes
required has left their innovation incomplete and inefficient. The various factors that drive
change in an organization need to be assessed carefully by the CEO of the Company, in order to
achieve success in the transformation process. The key factors driving change in organizations
are briefly discussed below:
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Commoditization: Commoditization of products and services is a key factor that drives change
in an organization (Carayannis, Sindakis & Walter, 2015). With the increase in demand for
products and services the price of the same falls down significantly, causing monetary loss for
the organization. Therefore, it is necessary to analyze the corresponding business market that
would provide sufficient information about the external conditions of the organization and
indicate towards the relevant changes.
Digital Revolution: The digital revolution is another key factor driving changes in
organizations. The digital boom has led to increased access to information regarding Companies
and organizations-- giving rise to more options and opportunities, when it comes to buying and
selling (Kane, Palmer, Phillips, Kiron & Buckley, 2015). The easy access to information through
the internet makes it suitable for the consumers to compare the products and services offered
with similar alternatives with lower prices.
Social Media: Social media is another key factor that plays a vital role in driving changes in an
organization. Social media provides an open platform for multiple business interactions,
including sharing reviews of used products and services. It is a vital source of promotion as well
as criticism (Hwang, Ramakrishnan & Wood, 2015). Social media is also an important platform
that can be used to gather relevant information about the corresponding business market and the
consumers. In order to present the organization as per the demands and expectations of the
present consumers, it is necessary to have an in-depth understanding of the business environment
and bring in relevant changes in the operational processes.
Globalization: Globalization is another major factor that has made the world a smaller place for
business interactions. Free trade amongst countries all over the world not only offers a larger
market for the products and services produced, but also provides a larger scope for buying for the
customers. Customers now can compare different products regarding their pricing, utility and
convenience before deciding on their purchase (Singla, Ahuja & Sethi, 2017). The availability of
alternative sources in the market increases the stiff competition amongst the various market
forces. It also forces the organization to take up relevant changes that would make their products
more suitable and attractive for the target consumers.
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Leadership Style
Gunner Blomdahl’s leadership style has quite resemblance with transformational leadership. His
unique way of dealing with challenges are quite naturally delivered. The better management of
the organisation is understood by Stena Line’s CEO. The wish to go undercover was way ahead
of the then current scenario. The natural ability to think as per situation makes CEO Gunner
Blomdahl a quite natural leader.
Kotter’s criteria makes one understand the standard by which a leader must act in order to ensure
a successful business operation to deliver best experience to customers.
Building a sense of urgency: In order to ensure that an organisation clearly deal with challenges
of competitors and other business environment, leaders must identify and discuss the crisis,
opportunities and other potential crisis that may become a catalyst for the change. In case of the
spinner line Cruise going Undercover as a simple worker was a improvised move of the CEO,
which ensures that there was a sense of urgency to understand the reason behind the company
hitting the rocks in terms of profit (Youtube.com, 2019).
Formation of a powerful coalition: Assembling the TV or the media crew to focus on every
tipsy undertakes within the cruise is the formation of powerful collision by CEO Gunner
Blomdahl. This has helped the leader to document all the requirements and changes to be
incorporated.
Creating a vision: The CEO when undercover, got in touch with the problems of the employees
and made them think of their families betterment, creating a vision for them and for organisation
as a whole.
Communicating the vision: The difficulty in language delivery by the front desk managers in
the cruise was another problem noticed by CEO, for which he ensured a vision of letting the
management know the importance of being bilingual (Youtube.com, 2019).
Empowerment to others in order to act on the vision: Contractual work in the cruise line has
created issues in the motivation level of workers like single mothers in the work department of
the cook. Empowering them to think independently and loyally have really enabled the CEO to
get better understanding of the ground level
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Planning for and creating short term wins: Changes in the building space and time gap for the
filipino workers working in low wages prove to be a plan for short wins
Consolidating improvements and producing more changes: The development of the time
management and the increment in the wage rate of the contractual workers proves to be
important in producing new changes (Youtube.com, 2019).
Change Management Strategies
Management of change in organizations is a complex process that involves the benefits of
multiple stakeholders like consumers, employees, authority and the government. Various
strategies have been theorized that help in managing change in a transforming organization
(Chang, 2016). Since organizational change is an important element in the development of an
organization, it needs to be controlled and governed efficiently to reap the maximum benefits.
The various change management strategies that can be used to control the changes of Stena Line
are briefly discussed below:
Incentives: Since most of the changes in the operational processes of an organization are carried
out or executed by the employees of the organization, it is extremely important to look after their
needs and demands (Al-Haddad & Kotnour, 2015). Offering significant incentives to the
employees for taking up the new direction of the organization through executing relevant
changes can be a useful method to increase the efficiency of applying changes.
Cultural Values: Cultural value of an organization is another element that needs to be
considered while driving change. The organizational culture directs employees and managers to
behave and function in a particular way. With increased focus on the new changes of the
organization, it can be brought under organizational culture to be dedicated towards the
execution process.
Authority: Change is often resisted by the employees of the organization, who are more used to
their old ways of working. Depending on the necessity of change, the organization can choose to
exercise its authority over the employees to make sure all the necessary processes are carried out
flawlessly.
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Shifting Change: Transferring the burden of change from the old organizational set up to a
completely new one can be useful in efficiently controlling change in the organization. While
most employees are opposed to the ideas of change, especially changes that deem unnecessary or
undesirable to them; they adapt to new environments quite quickly (Burke, 2017). Therefore,
while applying changes to the organization it is important to change the structure of the
organization in a particular way that would be relevant for the employees.
Recruitment: One of the most important elements of successfully driving change in an
organization is by recruiting skilled laborers that would execute the process of transformation
(Ghaly, Anh Dang & Stathopoulos, 2017). Inefficient employees may not achieve the same
amount of success that professionals would be able to. Therefore, it is necessary to recruit skilled
professionals of change for the organizational transformation.
Progress Analysis
Introducing change management in an organization is not enough unless the improvements are
monitored and recorded. In order to keep a check on the developments of the Stena Line
Corporation, it is necessary to develop suitable metrics that would help in comparing the past and
present productivity and relevance of the organization. An all-round development of the
organization is possible only when all the stakeholders involved in the process significantly
benefit from it (Kerzner & Kerzner, 2017). One of the major indicators of performance is Key
Performance Indicators (KPI) that helps in measuring the productivity and efficiency of each
individual performer contributing in the organizational processes (Podgórski, 2015). The other
metrics that can be used to measure the performance of the organization are briefly discussed
below:
Organizational Performance: The first indicator of progress is the performance of the
organization as a whole. The main objective of organizational change is to meet the changing
demand and criteria of the external market (Tolonen, Shahmarichatghieh, Harkonen &
Haapasalo, 2015). Successfully achieving the targets set by the organization in relation to the
customer-demands can be considered organizational progress. The expected outcomes of the
transformation process can be measures with the actual outcomes in order to identify the
particular developments.
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Individual Performance: The next indicator of success is individual performance. Measuring
the performance of each individual involved in the process is extremely necessary in order to
analyze the progress of the organization (Salas, Prince, Baker & Shrestha, 2017). The
organization needs to define clear indicators of performance that can be used as a basic standard
for the employees of the organization (Chiniara & Bentein, 2016). This metric keeps a track
whether the individuals involved in bringing change to the organization experience benefits
individually.
Change Management Performance: This is the final metric to compare performance and
development of an organization. The performance of change management can be identified
through the net development of the organization after adopting change management strategies.
The metrics of change management performance is directly connected to the individual activities
that execute the change. The outcomes of these activities reflect the performance of change
management in the organization.
Conclusion
To conclude, business transformation is a valuable element in today’s business organizations.
The dynamic market environment, internally and externally, force the organizations to change
and adapt to the new demands and requirements. The need for organizational change in a
contemporary business organization has been discussed and analyzed. The paper took up the case
of Stena Line to carefully analyze and discuss the process of organizational transformation and
the contribution of its CEO in the process. The paper emphasized on the fact that it is not just
sufficient to bring in new changes in the organization unless the execution of the changes is
properly governed and monitored.
The leadership qualities of the CEO of the organization have been discussed with the analysis of
his undercover project. Various shortcomings in the process of transformation could be identified
with the undercover action. The key factors that drive change in an organization have been
discussed in detail. Factors like digital revolution and social media play important roles in raising
the need for change in the organization. Various change management strategies that can be
utilized to measure and compare the development of the organization have been identified and
discussed. Finally, the paper also discussed various ways to measure the net development of the
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organization as a whole as well as individually. The performance of the business transformation
can be measured with the net development in the particular change objectives.
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References
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Chang, J. F. (2016). Business process management systems: strategy and implementation.
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Youtube.com, (2019) Retrieved from https://www.youtube.com/watch?v=Ug2zhZSppsk
Retrieved on 3 May 2019
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