Ajax Minerals and Perrier
Organizational change often faces what is known as employee resistance which is a negative behavior portrayed by employees and it undermines the effectiveness of change. Employee resistance is one of the major causes of failure of change initiative and as such, change agents should always focus on employee reactions. Such employee resistance has been witnessed at Ajax Minerals as well as Perrier. This essay examines the sources of resistance to change in the companies as well as how the company diagnosed and approached change. The essay also proposes adjustments that should be made for each company in order to address the resistance to change.
Sources of resistance to change at Ajax Minerals
The main sources of resistance to change in Ajax Minerals were uncertainty and lack of communication. The company has had a history of poorly run changes and management-employee relations. There has been a high level of uncertainty in the company that workers also treat any change with uncertainty, fearing that something bad would happen to them. For instance, employees at Ajax felt suspicious that the management was up to something bad like layoffs or pay cuts whenever changes are introduced. This shows that the employees always expect negative changes to occur as a result of any organizational changes hence resisting change. There was a lack of communication in the company as the management has not been able to effectively communicate changes to employees and this led to the resistance to change.
According to Smollan (2011), most employees, especially junior employees resist change because they lack information about the change, and any queries about certain aspects of change are always by marginalization of junior employees. Lack of effective communication between the management and employees during organizational change makes employees feel ignored and marginalized. This in turn leads to employee resistance to change. In order to deal with each type of employee resistance to change, Ajax management knew that they had a poor relationship with the employees and so they decided to address the situation. Ajax addressed the lack of communication between the management and employees by establishing interactive sessions involving managers and supervisors.
This way, the company’s management was able to involve the employees in the change. In order to address the uncertainty, the management involved managers and supervisors in interactive sessions about change, and in so doing, the employees would be able to have their fears and questions addressed. The management also adopted an open book approach whereby employees were allowed to access Ajax’s financial performance, particularly the numbers that really mattered to the company’s success.
Sources of resistance to change at Perrier
The main sources of change to resistance in the Perrier case study were the company’s plan to cut 15% of its workforce and the action of Perrier’s management of putting bottles of Badoit Rouge in the factory cafeteria. Since Nestle took over the company, Perrier has been struggling to make a profit and the workers’ productivity at Perrier is low compared to the productivity in other mineral water brands by Nestle. The fear of being laid off can definitely lead to employees resisting change. The action of putting bottles of Badoit Rouge in the factory cafeteria to remind employees of their competitors provoked negative feelings among employees and hence they resisted change.
According to Wittig (2012), employees resist change as a defence mechanism, especially in response to perception of danger. The employees fear losing their jobs through the 15% workforce cuts, and this could be the main reason they were resisting change. Poorly managed change communication and exaggerating the negative impacts of change could result in resistance. The action of Perrier’s management of putting bottles of Badoit Rouge in the factory cafeteria raised fears and highlighted negative impacts of change, and this in turn provoked defence mechanisms from the company’s employees.
According to Smollan (2011), resistance may not be inevitable in some situations and so the management should anticipate and if possible manage it when it is manifested. In order to deal with employee resistance, Perrier’s management put bottles of Badoit Rouge in the factory cafeteria to constantly remind employees what they were competing against. However, there were a lot of changes that Perrier employees went through within a short period of time, and clearly, the employees ignored the changes. The way the management at Perrier dealt with resistance led to more resistance by the employees and this just made things worse.
How management diagnosed and approached change at the two companies
While employee resistance is common during organizational change, the conventional approach to resistance to change is that the resistance should be overcome and different books and articles teach managers how to overcome resistance to change. However, there are different misconceptions on what resistance to change is, why people resist change, what it means to an organization and how the change should be managed. Ajax and Perrier used different methods to diagnose and approach change. At Ajax, the company management knew that there was already a history of poorly run changes and the management-labor relations were poorer. The company knew that there was no way their employees would accept change if the poor labor relations and the way change was addressed at the company was not checked. As a result, Ajax management responded to the situation by establishing interactive sessions with managers and supervisors to make a compelling case for change before introducing any more strategies.
At Perrier, while the management knew that the relationship between the management and employees was not good, they went on to introduce more changes without consulting the employees. Perrier thought of laying off some of their workers and resorted to extreme measures like putting bottles of Badoit Rouge in the factory cafeteria. While Ajax management understood the importance of employees in implementing change, Perrier’s management considered their workers as stubborn and that they would always resist change.
In order to better deal with resistance to change, managers should handle resistance with care. The management should never assume that resistance to change is wilful and ignorant like what happened at Perrier. The management should always understand that resistance is conscious and ensure that there is full and honest communication regarding change. Ajax management dealt with resistance to change in a more effective manner as they handled change with care and underlined their processes and outcomes with regular, full, and honest communication.
Adjustments to improve Ajax’s change strategy
While Ajax management diagnosed and approached change more effectively than Perrier’s management, Ajax needs to improve its change strategy. Ajax started off well by enhancing communication between the management and the employees, and as a result, a new level of cooperation between management and labor was achieved. According to Kotter and Schlesinger (1979), managers can employ different strategies to address change. The main strategies proposed by the authors include education and communication, involvement and participation, negotiation and agreement, facilitation and support, manipulation and co-optation, and coercion.
Ajax management had already started on education and communication by establishing interactive sessions and they also enhanced involvement and participation by introducing the open book policy. In addition, they provided facilitation and support to employees.
Before choosing a strategy to deal with employee resistance, the management needs to consider the ramifications and the power of employees to undermine the effectiveness of a change. Ajax therefore needs to consider how the change affects its employees, how the employees undermine change, and how to ensure that employees accept change. The company should ensure that employee participation and involvement in change is valuable and that the employees’ concerns are addressed to ensure that change is effective. The company also needs to manipulate and coerce employees in such a way that employees are valued and the job gets done at the end of the day. The staff should not be alienated for the purpose of getting the job done.
Another adjustment that Ajax management has to implement is to introduce performance appraisal activities and employee reward systems. Since the company is up against stiff competition from other mining companies, they will need their employees to improve their performance and productivity. Introducing performance appraisals and employee reward systems would make employees feel valued and appreciated, and at the end of the day, they would be working hard to achieve the key performance numbers.
Adjustments to improve Perrier’s change strategy
At Perrier, the management knew that there were problems since Nestle bought the company. The company is yet to recover from the setback following the finding of a minute trace of benzene in 1990. Perrier’s factory is dull and this clearly affects the productivity of employees as their production is lower than the production at the other international mineral water brands by Nestle. When faced with resistance to change, Perrier failed to adopt the six strategies proposed by Kotter and Schlesinger (1979). There was lack of communication and education, no employee involvement and participation, no facilitation and support, and no negotiations or agreements. However, the company used coercion and manipulation to get the work done and the end of the day, this created more subtle forms of employee resistance to change.
In order to address resistance to change, Perrier’s management needs to adopt some changes. The company needs to engage in education and communication among employees. Since the success of change initiatives rely on the reaction of employees, the company needs to communicate to employees information about change, how it will affect them and how it is necessary. Effective education and communication will reduce employees’ uncertainty and fear of change.
Another thing that Perrier’s management need to do is to enhance employee involvement and participation in change and decision making. Clearly, employees at Perrier are ignored and are always in the dark when it comes to company decisions and changes. The company should engage their employees more so that they address their concerns and at the same time gain mutual respect, trust, shared visions and common direction. Sharing decision making between managers and their subordinates is vital for acceptance of change and ensuring that employees remain committed to organizational goals. At the end of the day, the management and employees should be in the same page.
In conclusion, resistance to change is not always the plague that it is mostly made out to be like the situation at Ajax. Rather, it highlights the need for the management to engage with employees to initiate change in more productive ways. Managers should therefore view resistance to change in a different light.