Change Management
HK Uranus Investment Company Limited
Executive Summary
Report Summary
It can be noted that the competition in the business world is very stiff, especially now that different technological advancement are occurring. In order to survive in the market, different companies are trying to find the best management style and strategy in order to be successful. Companies, nowadays, have to cut cost to the bone by downsizing, outsourcing, offshore IT development and management. The growth of an organisation now depends on the capability of the businesses to innovate. Accordingly, change is no longer regarded as the exclusive preserve of the research and development department. Instead, many businesses see that innovation must become a part of the core competency of every part of the organisation and its network of business partners (2004).
Relevance with the Organization
Perhaps, each organisation wants to initiate a management and business approach which could maintain the competitiveness, capability and strength of the organisation. It is deemed essential that the management and the leaders of the organisation should be open minded for changes so as to adjust and adapt the most recent development and trends within and outside organizational environment. Since, only constant in this world is change and because of the emergence of new technologies, different industries, find themselves usually adapting. For them, change can bring various enhancement and improvement in certain business elements. In many ways, change enables company to maintain their competitive advantage in the marketplace and helps them determine and meets the needs of their target market.
Hence, as a competitive organization, must be open- minded to changes so as to have sustainable market ability and maintain the competitive advantage of the company.
Introduction
Company Background
Hong Kong Uranus Investment Company Limited is a manufacturer and distributor of digital cameras and other electronic devices in the region. The company has been established in 2005 by its owner. The primary competitive advantages of Uranus Investment Company Limited is its OEM capability, broad experienced in its research and development department, reliability, large product line and good reputation. The brand name of the company is known as EWCA and it is currently exported in major countries like North America, Mid-East/Africa, Asia, Central/South America, and Western Europe.
HK Uranus Investment Company Limited is an ODM and OEM manufacturer to produce different ranges of electronic devices like digital cameras, MP4 and mp3 player, mobile phone, GPS car navigator and digital camcorder. The main objective of the company is to provide quality products and services to the global market.
Brief Description of Change
Each and every industries may it be small or large companies are subject to different factors that affect the firm’s function as a whole. In the light of this, there are certain ways or techniques that can be considered in order to emerge and continue to be competitive within the market place. One of these is the initiation of changes and innovation within the industrial sector so as to provide quality products and services to the consumers and to ensure that the company will be able to outgrow their rival companies. Typically determined as change management, various industries and businesses try to integrate changes into their strategic management so as to be more competent and efficient in satisfying clients or customer needs. Accordingly, change can be regarded as the implementation of and management innovation, in which the vital objective e is to enhance output through an adaptation of new and effective business practices (1998). As an inevitable competitive leader in the fast food and dining-out business, Uranus Investment Company Limited has always try to innovate their products and marketing strategy so as to achieve quality products and services to their customers which is a part of the string commitment with the business. The change process will be in line with the perceived technological advancement of the company to meet the needs and demands of their customers. .
Current Cultural State
Analyzing cultural aspects is equally essential, in order to understand the various needs of different individuals that belongs to different cultures (Hofstede 1991). With this ideology, the company has been able to give importance not only with the Hong Kong and market but most especially to stakeholders in the international level. In addition, Uranus Investment Company Limited management sees to it that they value the opinion of their employees no matter what is their nationality. Since, this company is competing globally; it cannot be denied that they need employees from different cultures to be in the company to help in the decision making. It is also indicated that the international managers has been able to create a positive relationship in the local managers because of the reorganization done by Uranus Investment Company Limited management.
Analysis of Issues
Because of the existence of different competitors that provide quality and more advanced electronic devices like digital cameras, mobile phones and others, Uranus is in need of a change management approach to make sure that they will be able to compete well in the market. The change plan is in line with the perceived development of new products and services for the global market.
Factors for Changes
Companies, industries and working organisations may implement a change in their management system due to the internal and external forces (Yee 1998). The external and internal factors or drivers are considered as the elements and aspects that that force changes in an organisation (Yee, 1998). In this regard, change management may be done at various level in the structure of any industry (Swenson, 1997) and that changes and transformations can be considered as limited or universal (Reigeluth, 1994) in nature.
For this industry, the internal drivers may include the evolving business needs, revision to corporate strategy objectives, organizational restructuring and other factors in the internal environment of the industry. On one hand, external drivers can include enhancement in technology, especially in this kind of business and also the economic aspects that influence the value for money and profitability of the relationship and the need for electronic or technical service.
Change management can be noted as a specific business activity in realizing the objectives and mission of an industry even as change management is the sensible or physical steps of employing an innovation. The employees and their good relationships are regarded as the main components to its successful implementation, and sustainable systems are needed to attain e the development and improvement in its process. The identification of sections for enhancement and development is the first level of the change procedure followed by the integration and combination of plausible solutions to address business conflicts and issues which are being identified. Actions in this part of the process are being held independent of the position within the company.
Herein, the chance process may be imposed at different sectors in the structure of firms (Swenson 1997) and that transformations may be universal or restricted (Reigeluth 1994). Internal forces that drive changes include growing business needs, organisation reform, or adjustment and modification of the corporate strategy or business objectives. On the other hand, external drivers may include the improvement of technology, the need for electronic and technical services and the economic trend and development that influence the profitability of the industry.
In initiating changes within a business sector, there are many factors that must be considered in order to make certain that the changes will enhance business performance and adheres to the vision or goals set. One of these factors is the willingness of the management of the company to initiate innovation. Without the support of the entire management, the innovation of the company will not be possible. In line with Uranus Investment Company Limited it is important that the management of the company will provide its full support for the innovation plan, process and design. Another factor that must be considered is innovation manager. Another factor is having a thriving organizational culture. Organizational culture is the “deeper level of basic assumptions and beliefs that are shared by members of an organisation, that operate unconsciously, and that define in a basic ‘taken for granted’ fashion an organization’s view of it and its environment.” (Schein 1985) A less precise definition is that culture is the way we do things around here. Organizational culture involves symbolic actions and physical settings.
Scope of the Changes
For this report, it can be said that the change scope will be limited to the implementation of the new product development approach in Uranus Investment Company Limited. In this innovation, the critical factors that must be given attention is the management system and manufacturing department as well information technology department of Uranus Investment Company Limited.
Sources of Resistance
Although there are different factors that support innovation, there are also some aspects which inhibits or restrain innovation. The following are the possible resistance that inhibits the success of innovation; these are the perception or reaction of stakeholder, absence of management support and organizational culture and absence of support.
One of the sources of resistance that can be associated with his change management is from the employees that include their reactions or the members of the Uranus Investment. Although there are staffs and employees who will be in flavour in the changes for example in advancing the technological facilities of their offices, some may not be in flavour or such implementation. Some would say that the improvement should not be done for these facilities due to the tendency that to malfunctions. In addition, the people that implement such technological advancement might not have enough technical and technological skills to resolve the malfunctioning of the facilities.
Inability of the management to provide support on the implementation of the innovation will hinder the transformation in achieving the set goals. Furthermore, it is also important to note that communication skills are also a factor that must be considered. Lack of communication among management and mangers who will implement the innovation may lead to conflict which may affect the overall progress of the innovation. The cultural attributes of the members of the Uranus Investment may have the tendency to create inner conflicts in the company. Due to cultural differences, the staff of the company may not have harmonious relationship thus making the implementation of change complicated and unsuccessful. Furthermore, cultural differences may lead to new conflict within the Uranus because of the arguments and other conflicts that might be created from this issue. When reviewing the interaction between empowerment and culture, the Uranus must be able to determine and understand those subcultures that might engender a business environment more or less empowering than the larger organizational strategy (Wilkins & Dyer, 1988).
Contingency Plan
In this contingency planning, the Uranus should be able to create a thriving organizational culture and a stronger organization strategy by good management of the employees and other members of the organisation, providing their needs so as to make them motivated for the benefits of the organisation. Furthermore, business elements like organisation design, work processes, organization design, performance management, and compensation program and career path are part of management strategy and strategic plan to ensure continuing success in the change management approach. The change management process created by the company must have been seen that they may also encounter some conflicts with some of their employees like employees, customers and others.
In addition, in managing people with different norms and cultures, the management of Uranus should also incorporate a governance process to make sure that equality among employees are being provided. Hence, even though it can be considered as one of the most difficult things to handle in a change management plan, this would improve the employee’s loyalty and hard work that which may not only provide good outcome for the company but also to the whole market environment.
Another conflict that may be encountered in the change management is the absence of support in sustaining the success that can be attained in the process. Since change is considered as a social process which should be undertaken in all the phases and not just a decision activity, those who are included in the change process must undergo learning experiences to be able to appreciate the objectives of the change.
To be able to solve such conflict, the management of the Uranus Investment must be able to see to it that the purpose, goals and objectives change management have been disseminated properly and that all the members of the company must know that they are important in making such change process successful. Thus, Uranus must have the ability to anticipate all the possible conflicts that might be experienced which would hinder the employees and other involved company members to support the change that would be implemented in the company.
Leadership
Leadership comprises the aptitude and ability to inspire and influence the thinking, attitudes, and behavior of other people (Adler 1991). Leadership is a process of social influence in which one person is able to enlist the aid and support of other individuals in the achievement of a common task (Chemers 1997). The current leadership style of Uranus Investment is the authoritative or democratic style of leadership. In this type of leadership, the leader and the selected subordinates are involved in the process of the decision making. Herein, the subordinates have the right to voice out their ideas and thought which they think would be helpful for the leader in making the final decision. On the other hand, in this style of leadership the leader is in control or has the authority for the final decision. This kind of leadership style is very suitable for implementing the said change for the organization. Through this, the leader of the company may be able to know the opinion of the subordinates in order to effectively impose the changes within Uranus Investment Company Limited.
Prognosis: Scenario
No Change Scenario
The company is assured that they still do not need the changes of their products since they know that all their products are still more advanced in terms of technology than other company. In this manner, Uranus Investment believes that having a new product development is not yet advisable for the company because of the ongoing support of their customers to the products and services that they offer. The company also believes that changes in this aspect are not necessary because the products and services are still in quality manger with high technological advancement than their competitors. In this manner, if the choice of the company is to continue their marketing and product development process without changing or imposing new management approach. Herein, Uranus Investment will continue to use their market approach and provide support with this existing approach by improving its concept and have a trained and skilful staffs to handle such existing manufacturing strategy.
Change Scenario
The change is needed so that the customers will be aware that Uranus Investment Company Limited adheres to the needs and demands of the customers for having a technologically advanced products offered. The change will be implemented as soon as the organization had strategically plan the changes and all the concepts needed to make the change successful. The change is needed so that the company will be able to have a more comprehensive product development that will meet the needs of their target market in this generation in the global market.
Conclusion
Accordingly, the management of Uranus must be willing to keep their fingers on the needs of the company by monitoring what is efficiently working and not working in the change management. To be able to execute strategic changes successfully and effectively throughout the company, the management must establish a better environment for changes, reassure, support, and commitment on the industry.
Hence it can be concluded that that, changes of management is indeed one of the most important aspects that must be considered by an organisation. The management must see to it that the changes made really improved the strength and competitiveness and strength of company. It is said that it is successful, if and only if, a thorough assessment and evaluation of the industry’s performance has made. And if such study recommends that there is a need for change, then that is the only time, the management of the company should implement required changes to be done. Since change management system is very crucial, inefficient decision can make the company faced its biggest downturn instead of having a more competitive business portfolio to survive to the stiff competition in the global market.
It is recommended that HK Uranus Investment Company Limited must see make sure that the changes are well planned and strategically imposed because these will the basis for having a successful implementation.
Strategic Analysis:
HK Uranus Investment Company Limited
Introduction
There are a number of business industries operating all over the world. Specializing in various product and service lines, these industries aim to succeed through considerable sales generation and high market coverage. In Hong Kong, several businesses are operating as well. As there are many industries in the country, competition for sales and market is strict. Operators are then applying various methods and strategies that will help in maintaining stable business status, continuous growth and success.
In this regard, this business report aims on analyzing the strategies used by one of the industries in HK, which is Uranus Investment Company Limited. The strategic analysis of this company will focus on the evaluation of its marketing environment. In this manner, the industry will be able to apply a more appropriate plan based on existing business situations and challenges. In this paper, the electronics industry, specifically the digital camera industry will be taken into account. Various marketing assessment tools will be used to assess the industry. The findings of these tools will then be used to foresee the standing of the company in Hong Kong in the coming years.
Overview of the Company
Hong Kong Uranus Investment Company Limited is a manufacturer and distributor of digital cameras and other electronic devices in the region. The company has been established in 2005 by its owner. The primary competitive advantages of Uranus Investment Company Limited is its OEM capability, broad experienced in its research and development department, reliability, large product line and good reputation. The brand name of the company is known as ECA and it is currently exported in major countries like North America, Mid-East/Africa, Asia, Central/South America, and Western Europe.
HK Uranus Investment Company Limited is a ODM and OEM manufacturer to produce different ranges of electronic devices like digital cameras, MP4 and mp3 player, mobile phone, GPS car navigator and digital camcorder. The main objective of the company is to provide quality products and services to the global market.
Strategic Analysis
The description of the industry above suggests its strength in the Hong Kong setting. However, a more detailed analysis is necessary in order to determine the real strengths and possible problems that surround the industry. For this purpose, various tools will be used to analyze the electronic industry of Hong Kong.
PESTLE
Political
The political aspect of the country has less impact to its business sector, or more specifically, to the electronics industry. The Basic Law of the country actually protects it from major transitions in law in spite of its transfer to China. Through this basic law, the way of life as well as the capitalist system of the country will remain the same for fifty years since the transfer. Thus, political factors have minimal effects on the electronics industry. The production, export and import of materials for digital cameras will not be affected for the next ten years due to this political agreement. Hence, the production facilities for digital products situated in China will not be forced to relocate back to Hong Kong due to regulative measures. Hence, Hong Kong enterprises in the industry can continue to benefit from low cost production in China.
Economic
The economy of Hong Kong is highlighted by the status of its international trade. The country is one of the leading trading nations worldwide; hence, it is one of the important aspects of the country’s economy. Hong Kong market has been favorable to trade and has been efficient in balancing its exports and imports. The significance of trade in the country suggests the richness of its other related fields such as the electronics industry. This has been evidenced by the high contribution of digitalized products to individual company sales and overall economic development.
The important role of the electronics industry in Hong Kong suggests that there are several similar businesses that exist in the country. Due to high levels of competition, the companies operating in this industry are placed under much stress of offering the very best. This also implies the significance of strategic management among these companies not only to contribute to the economy, but most importantly to maintain strong business foundation as well as combat competition.
Assuming that the prosperity of the economy in Hong Kong improves for the next ten years, the electronics/AV equipment industry will then continue to improve and acquire various developments. But then of course, economic status is among the most unpredictable aspects of a country; hence, the industry must be prepared for future challenges that may arise. These future challenges include economic crisis, price fluctuations and problems on international trade.
Social
The societal and cultural background of the country is mainly influenced by the Eastern and Western influences. This perhaps, is partly due to the status of the country as a major center for business and trade. Although the country is greatly influenced by a number of different cultures, the country still has its old Chinese features intact. While keeping old Chinese traditions and cultural practices, the country is also open to changes brought about by international influences. This in turn makes the nation’s culture rich and varied. The prosperity of Hong Kong’s economy is significantly reflected in its citizens’ lifestyle. Compared to other Asian countries, the people in Hong Kong are among those who live with the highest standards (Microsoft Encarta Online Encyclopedia 2005). This implies that the people of Hong Kong have access to some of the finer things in life, including technology.
Technological
Hong Kong is a melting pot of both Western and Eastern backgrounds (Chu, 1997). The Western and Eastern influences that make up the country’s socio-cultural background play a significant role to its current technological status. Considering that Hong Kong has direct access to technological developments (Simon, 1995) from different countries worldwide, these can be adapted in the country quite easily. Moreover, the high standards of living among the country’s citizens imply the ability of the people to support technology as well as their ability to apply or implement them. The exposure to technology of both local and international market makes digital products, like camera, a marketable product.
Legal
Locally, the political aspect mentioned previously does not seem to affect the electronic industry in Hong Kong. In international trade, the laws on open trade and free port allow the industry to exports its digital products to foreign markets. Though the Hong Kong industry can distribute its digital products freely abroad, the openness of trade as well as the globalization aspect further worsens the competition among similar companies under the same industry. If competition will affect businesses in the industry, it is likely for other nations to implement legislations that will control the entry of imported products. This will greatly affect the status of the Hong Kong industry if this will occur.
Environmental
One of the major issues under the environmental aspect that directly affects the industry is probably its location of production building and facilities in China. The cost of labor and land in China, particularly in the province of Guangdong, is significantly cheaper than in Hong Kong. Thus, it is more practical to conduct the core activities of the electronics industry in China. However, products produced by the AV industry require skills among its work force. Thus, cheaper labor cost may no longer be possible as companies would have to pay larger salaries for skilled and highly educated employees. Moreover, a number of manufacturing companies are also relocating to China, thus land costs tend to be higher as compared before (1997).
Competitors Analysis
The production of digitalized products falls under the electronics company, specifically under the audio-visual equipment category. In Hong Kong, the competition in electronics industry is considered as one of the most vigorous and tough. The manufacturing companies of digital cameras and other electronic devices in HK are made up of SMEs or small and medium sized enterprises. The production facilities however of most companies are located in mainland China. Thus, the Hong Kong offices are concentrated more on product development, quality assurance and marketing (Hong Kong Trade and Development Council, 2004). One of the competitor of Uranus Investment Company Limited in HK market is the Canon industry and other industries that offer digital cameras and electronic products all over the world such as Sony, Panasonic and others.
According to the HKTDC (2004), digitalization trends paved the way for the industry’s significant development which makes it digital camera and electronic industry more competent. In addition, the company has many rivals since there are many other competitors which provide a wide range of digital and electronic devices to meet the increasing demands of these products. players have increased considerably. This business trend led to the increased profit derived from high sales of digital products, suggesting the strong chances of success in the industry. Moreover, profits from exported digitalized products are high in Hong Kong as well. This then implies that international market strongly supports the industry.
Porter’s 5 Forces Model
Rivalry
The rivalry within the electronics industry comes in two categories. Locally, the main competition is between the small and large enterprises. Major companies in the electronics industry have stronger brand names and have greater capabilities of reaching the international market. This is a significant factor as brand names in digital products represent the overall quality of the item which consumers are after. Major companies also have more resources to promote the product through more expensive forms of media advertisement. Thus, smaller companies are directly affected. In the international level, the rivalry exists between the Hong Kong companies and the major AV equipment companies of other countries.
Competition from Substitute Products
With the rise of technology, alternative options for gadget and similar products are very much available. Digital cameras and other products are no exception. At present, cellular phones are manufactured with camera features, allowing consumers to use the phone not only for calling or sending text messages, but also in capturing and storing images. Other video camcorders have camera features as well; thus, some consumers would prefer to but an item where all features are already integrated. Web cameras are also alternative products for digital cameras. In addition, some of these alternative products are less expensive and more practical as compared to buying a digital camera alone.
Competitive Threat of New Entry
The percentage contribution of the industry to the Hong Kong economy suggests the huge number of businesses manufacturing digital products. This then suggests that barriers of entry for new business entrants are low. New business could easily operate locally; moreover, the Hong Kong industry offers multiple product lines under different brand names. Hence, competition is rather strict. Moreover, most of the business in the electronics industry is considered SMEs, implying that the levels of small businesses or new entrants are high. With the high availability of digital production facilities, new entrants could easily start manufacturing and marketing digital products.
Bargaining Power of Suppliers
In the case of the Hong Kong electronics industry, the bargaining power of the suppliers is high. Most of the materials used for producing AV equipment are imported from suppliers, thus they have greater control over the prices of supplies as well as the delivery.
Bargaining Power of Customers
Customers have access to multiple alternatives for AV equipment and products, thus, they have greater control over which item to purchase. The high competitiveness within the industry allowed consumers to have access to a number of options, from brands to types and prices of products. Thus, consumers have a high bargaining power over the electronics industry. In this case, the smaller enterprises are greatly affected. Although consumers have different purchasing behaviors, in most cases brand names greatly influences the preferences of buyers. If there will be other options, consumers is likely to buy known brands even if they will have to pay extra.
Evaluation
Based from the environmental and competitive analysis done for the electronics industry, the findings will then be evaluated. In this section, the possible developments of the industry for the next ten years will be considered. Factors that could affect this progress, both positively and negatively, will be cited.
Optimistic
Based on the analysis done, the HK Uranus Investment Company Limited is likely to succeed and progress in ten years time due to two important factors. One of these factors is the market of the industry. At the local level, the consumers are very much aware and exposed to highly technological gadgets such as the digital camera. In other foreign markets of the Hong Kong industry, such trend is also evident. In ten years time, technology will continue to grow and introduce high-tech gadgets and products that people will patronize. Thus, the future development of digitalized products made by HK Uranus Investment Company Limited will be supported by the market due to their openness to technology. Moreover, this market patronage will naturally result to continuous profit generation and market growth.
Another factor that will contribute to the success of the HK Uranus Investment Company Limited ten years from now is the continuous rise and development of globalization and open trade. Through these aspects, Hong Kong will have greater market access abroad, leading to better market and business outcomes. Furthermore, free port will allow the HK Uranus Investment Company Limited access to more modern technologies that can be useful for manufacturing and marketing digitalized products. This in turn will make the HK Uranus Investment Company Limited more competitive against foreign brands.
Pessimistic
While there are great opportunities that the HK Uranus Investment Company Limited can use for future progress, certain obstacles could hinder it from development. For instance, the use of technology is highly accessible to all potential business operators in the industry, increasing the problems on competition, less distinct products and brands. In addition, technological gadgets like digital cameras lose value at a fast rate; thus, it is likely that such innovations would lose their worth to the market, or worse, this product could be phased out totally form the industry and be replaced with better substitutes.
Problems in the economy are also a challenge. Crisis in the economic aspect is omnipresent and difficult to predict; hence, it is always a problem for all industries and business sectors. Due to these problems, prices for labor, land, production and other business activities could increase, making it difficult for the industry to succeed.
Prediction
Based on business outcomes in the past, the pessimistic scenario is the one that is likely to occur in the future. Old electronic products like mobile phones, cameras and computers for instance, had been easily replaced by digital ones due to fast-phased development in technology. At present, several companies in the electronics industry are still conducting researches in order to introduce new technologies that the market demands. In addition, economic crisis is a natural occurrence, though an unpredictable one. Thus, even without predicting when this will happen in the future, businesses attempt to overcome the effects of economic challenges by preparing themselves in advance.
Although it is likely for the optimistic scenario to occur as well, businesses in this industry must focus themselves on overcoming the worst scenarios. By preparing in advance, the businesses can prevent further problems in the future as well as maintain the progress of the industry.
Conclusion
In spite of the apparent success of the HK Uranus Investment Company Limited in Hong Kong, certain factors in its environment can cause its possible failure in the years to come. Economic challenges, competition and varying consumer trends are just some of the external factors that the industry must overcome in order to ensure future progress. Although these matters may appear inevitable, certain actions could help the industry to succeed, locally and internationally. Continuous product enhancement and development for instance, can help in countering fast-paced technology. Conducting consumer studies on the other hand can facilitate the challenge on changing consumer behaviors. These actions in turn can help in combating business competition and globalization issues.
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