Executive Summary Purpose Set a management plan that can make Rolls Royce become more competitive and effective under the global economy background Scope Management and the four new plans of Roll- Royce Company Main points discussed • Organization structure ? The traditional hierarchical structure: advantages & disadvantages ? Suggestion: make a new structure & strength • Organization culture ? Analysis values, norms and artefacts & examples ? Suggestions in changing organization culture • Change management 1. Likely reasons for resistance to change Uncertainty and insecurity to change ? Threat to status and skill 2. Likely reasons for resistance to change ? Motivate all levels of employees ? Strengthen the education and communication • Other relevant factors ? Financial report and budgetary control is essential for the plans ? Managing marketing is also very import to get the global marketing Conclusions Rolls-Royce could get huge of profits if they change the organization and management which we suggest under the current situation.
Recommendations Mission: design a change management plan
Objective: To design a plan in term of analyzing current organization structure, culture in light of the recent changes in the global economy. Introduction Background: In 1904, Charles Rolls and F. Henry Royce decided to create a company in England together which the name called “Rolls Royce”. The company was mainly producing engines and luxury cars. In 1906, they produced Silver Ghost and then, they became the best car company. During the First World War, Rolls Royce produced a new aero-engine that supplied important power to allies.
Therefore, they became a successful airplane company. (T. A. Heppenheimer, 2008) Recently, Rolls Royce announced to invest ? 300m to open 4 factories about nuclear power and aero-technology and It may also create 800 jobs. (Guardian, 28 July, 2009) Purpose of report: The purpose of this report will introduce a management plan which includes organization structure, organization culture, changing management and other relevant factors to ensure Rolls Royce become more effective and successful, especially under the recent changes in global economy. Organization structure Current structure:
Organization structure is the way in which it divides its labor into distinct tasks and then achieves coordination among them. (David Boddy, 4th, P319) • Rolls-Royce uses a hierarchical structure to manage the company. • It belongs to a pyramidal structure and there are a lot of layers between the top and the bottom in the company. • Each division has managers for supervision and the staff in each division needs to follow the manager’s decision. • Advantage of hierarchical organization is that employees know their objectives clearly in their job task and carry out efficiently.
Furthermore, every staff specialize their job. Suggestions for changing in structure: In order to adapt to the global markets as well as maintaining the existing strengths, managers constantly need to find a variety of creative ways to build and arrange the work of the organization, and try to take actions in response to the demands of customers, employees and other stakeholders. Finally, managers are determined to create a leaner and more agile support structure. (Times online, 11 Jan 2008) It is the matrix structure that is highly fluid and flexible.
Without the division of functions and rigid hierarchy, decision-making and action-taking slowly are avoided. Organization Culture Current culture: General speaking, organizational culture is the personality of the organization and it is divided into the value, norm and artefact. (Carter Mc, 2000) • David L. Goetsch and Stanley B. Davis points at that value are explained as what the organization thinks is important. (David and Stanley. 2003, P. 153) • The second one is norms which is a kind of intangible behavior and informal way to guide people how to do. (David, B. 2008) Suggestions for changing in culture: We think that Rolls-Royce need to change a minority of organization culture although its culture is good in terms of many evidences from many resources. Rolls-Royce should pay more attention to other sections because the majority of revenue is from service and many sections have not get high revenue, such as energy, marine, defence and civil. (Rolls Royce: The half-year report 2009 presentation, 2009) Change management Likely reasons for resistance to change: • Uncertainty and insecurity to change ? It will cause the resistance if the change threats the personal status. Prentice Hall, 2002) With the change progressing, some of the employees will be promoted; however, part of the position of employees will be reduced. Obviously, this part of staffs is more likely to resist change. ? For skills, the organizational change often accompanies the change of skills. Such as nuclear technique, for instance, nuclear technique is new skills to English people, so people have to learn more skills to adapt the work, which will also cause the resistance. Likely precautions taken to run change smoothly: • Motivate all levels of employees • Strengthen the education and communication
The best method to remove the sense of uncertainty of staffs is to educate and communicate with them frequently. (John P. Kotter and Leonard A. Schlesinger, 1979) Ensuring staffs get all of the information about change and inspiring their confidence to the future is the premise for staffs to accept the change. Administrator should let the staffs realize the necessity of the change and provide all of the information as much as possible. Once the staffs realize the progress of change and likely consequences, they will often help with the implementation of the change and will become the suppliers of the change but not the resisters.
Other relevant factors • Financial report and budgetary control Rolls-Royce announces ? 300m for UK factory plan, so it is a huge plan of the capital. In addition, government contributing ? 45m, it means that this plan integrate with government and Rolls-Royce company. However, the relationship with government is very important. Therefore, the financial report and budgetary control are essential. Because it is fundamentally important to understand the financial environment in which organizations operate. (Boddy, D. 2008) Rolls-Royce is planning to achieve ? 55. 5bn order book by the four plans over the next five or six years.
Obviously, managers need budget every year for the next years’ plan for the company and government. After that, Rolls-Royce could make decision for next step to achieve objective and even overreach the objective. • Managing marketing The plans are about aerospace technologies and new nuclear power stations. These both belong to external point technology. It could develop the global marketing if these plans successful. Because the plans include research program about cutting CO? emissions from aircraft and improve fuel efficiency. It is good for current situation that global warming and in short of fuel supply.
Therefore, we will put the plans on the global marketing. Conclusion Rolls-Royce is a top company in the world which is built in 1904. Nowadays, the company has 4 new plans about aero-technology and nuclear power in UK. We discuss the Rolls-Royce’s organization structure & culture, change management, and other factors to analysis the company how to get the highest profits. Although it is one of the successful companies in the world, it still has some disadvantages in their organization and management. So, our view of the opinion is changing some organization and management which we suggest that Rolls-Royce could get huger of profits.
Recommendations • Rolls-Royce should change a more flexible structure that is the matrix structure. • The company should pay more attention to other sections except service. (Rolls Royce: The half-year report 2009 presentation, 2009) • Rolls Royce could deliver unemployed people to new plants in order to minimum the quantity of cutting employees and providing unemployment compensation to unemployed people. (Guardian, 28 July, 2009) • People will be more willing to accept and implement the change if people are able to take part in planning a change. Administrator should let the staffs realize the necessity of the change and provide all of the information as much as possible. • The company should change a more flexible structure that is the matrix structure. Appendices • The performance of Rolls Royce is still positive in half 2009, such as in the aspects of order book, revenue, underlying profits, average net cash and payments to shareholders. [pic] • Rolls Royce’s customer service is outstanding because Rolls-Royce has exactly aims of service. (Service of Rolls Royce. 2009) • Background of change management
It will cause the resistance when there are conflicts between organizational change and personal habits and value. Personal habit and value is formed by long-term accumulation, which is relatively difficult to change. Once the organizational change impacts personal habit and value, there would be the cause resistance of change. • The “human side” of Change management Any major changes will have the problem of people. The new managers will be promoted; jobs will be change, staffs need to learn new skills and improve capabilities. If the manager acts against each other, the morale of staff and the ultimate effect will be affected. Evaluate the culture of company With Successful enterprise change management from top to bottom, it will gradually enhance the implementation of the speed and strength. Therefore, it is very important for leaders of every level to understand and lead corporate culture. Enterprises always make mistakes that assessment the culture of enterprise too late or never. A thorough assessment of corporate culture can help to evaluate whether the changes for the upcoming fully prepared to identify the main issues and clear internal conflicts. References Alan, J. 2008. The independent: Top UK firms announce hundreds of job cuts.
Available at: Boddy, D. (2008) Management: An introduction, Essex: Pearson Carter McNamara, MBA, PhD. Published by Authenticity Consulting, LLC, 2000. . Copyright 1997-2008. Available at: David, G and Stanley, B. 2003. Quality Management: Introduction to Total Quality Management for Production, Processing, and services. Boston P. 153 Earth Times. 2009. Rolls-Royce shines with increased 2008 profit amid gloom. Available at: Falkirk Council. 2004. Available at: Graeme. W, Guardian, 28 July, 2009. Rolls-Royce announces ? 300m UK factory plan, Available at: Rolls Royce: Engaging employee. 2009.
Available at: Rolls Royce: services. 2009. Available at: Stephen P. Robbins, Management 9th Edition, P263. Rolls-Royce, management Available at: T. A. Heppenheimer, 2008, Rolls-Royce and Its Aircraft Engines, available at : Times Online 2009. Brown in charge of a dysfunctional Government, says top donor, Available at: TimesOnline. 2009. Rolls-Royce to cut 2,300 white-collar jobs. Available at: The half-year report 2009 presentation and appendices. Available at: John P. Kotter and Leonard A. Schlesinger, 1979, Adapted reprinted by permission of Harvard Business Review, Six Method for Dealing with Change.