Electro Ltd manufactures electronic components. In recent years, the company has shrunk from 800 to 450 employees. Tis shrinkage had various causes. In the frst place, there was a decline in the economy and therefore in demand for electronic products. In the second place, there was increased competition. In the third place, in the company’s productivity was too low, which made the price of the manufactured components too high be competitive.

In 2008, a new managing director was appointed. He decided to take steps for the survival of the company in the short term and growth in the longer term. He hired an organisational consultant. Te consultant’s brief was to produce a plan for the creation of a modern, fexible, customer-oriented and productive organisation.

Te consultant started with a strategic orientation round. Te company director and heads of departments participated. Objectives were specifed and translated into concrete goals in the short and longer term. Te consultant then formed a steering committee. Tis group had to initiate, manage and evaluate the process of change.

Te group also had the task of handling internal and external information concerning the change process.

Te third phase consisted of analysing the problems. Te goal of this phase was to determine what problems could be resolved in the short term and what changes were necessary for this. Five groups of ten employees were formed to this end. Tese groups had frst to produce a bottleneck analysis and subsequently make proposals for improvement. Te steering committee inventoried the proposals from the fve groups and drafted a plan for the change process.

Te fourth phase comprised the execution of the plan. Te steering committee opted for three main types of action. First came ‘quality now’ action, focused on improving the quality of the products. In each group, the employees had the task of reducing product defects through better observation, faster intervention and greater care.

Second was ‘improvement action’ – as proposed by the working groups – that could be implemented relatively simply and quickly. Tis was focused on better coordination within and between groups and departments, so that decisions could be taken and breakdowns resolved more quickly and machinery used more efciently. Tird came ‘renewal campaigns’ focused on redesigning the production process. For the execution of these three types of action, a project team was appointed in each department. Because by no means all the activities proceeded according to plan and people generally wanted to do too much at once, a project coordinator was soon appointed and the working groups were assisted by the consultant. Te consultant helped with the management of the projects and taught the groups to draft concrete plans, indicate priorities and manage and control performance. Employees who were not in the working groups were kept informed about the plans through wall posters, meetings and written information focused on the change activities.
a Changing an organisation can be regarded as a solution to a structural problem, a problem of internal relationships and/or a problem of external orientation. Which was it at Electro LTD?
b What external causes determined the decision to implement change? (see section 11.2)
c What was done to discourage resistance to change and increase willingness to change?
d Which phases can be identifed in the planned approach?
e To what extent was there a design or a development approach in this case? What reveals this?
f What was the nature of the structure created to manage the change process? Show this by means of an organisation chart.