Answer & Explanation:Assignment from nickkynickkyI have attached week 2 works. I need you to do week 4 only. Please take same things as week 2 and continue to make it till week 4.Transformational Change Management PlanYou will create an entire Transformational Change Management Plan for a medium-sized public company that has lost business to a competitor that has chosen to outsource much of its production operations. The company has been based in a small Midwestern town, it is one of the largest employers, and it has an excellent reputation for employee welfare. It is now planning to do the very same offshoring, which will involve large layoffs of long-term employees.The project deliverables are as follows:Week 2: IntroductionWeek 2: What is driving the need for this transformational change?Week 4: Theories of Change ManagementWeek 4: Communication PlanWeek 5: Implementation PlanCreate the following new material for Week 4:Theories of Change Management (200-400 words)Discuss at least 3 theories of change management (eg. Kotter, Lewin, Nadler, action research, and appreciative inquiry).Include specific pros and cons of each.What is the best way to ensure the implementation of an organizational change?Communication Plan (100-150 words):What stakeholders require communication?What will be communicated to them?Who will send the communication?What communication medium will be used?
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Running head: TRANSFORMATIONAL CHANGE
Transformational Change of Offshoring
Name
Institution
Date
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Introduction
Modern businesses and organizations are faced with the challenge of staying afloat in the
global market mainly because of the stiff competition exists. This calls for a continuous
rejuvenation of the companies’ operations and strategic plans to ensure that they ahead of the pack.
What is Offshoring?
Offshoring is a transformational strategy used to relocate business operations e.g. for the
manufacture of a particular part of a product to another country or region. This means that
companies may produce various product parts from other countries and later shipped to the parent
company for final assembly (Contractor et al., 2010). Offshoring is however not limited to product
parts but may also involve services which may either be administrative or technical.
How Stakeholders Were Affected
A good example of a company that oversaw a transformational change through
implementation of offshoring is the Nordex Company located in Germany that manufactures wind
turbines and associated products in the wind energy sector. This change though necessary had both
positive and negative effects on the shareholders. The strategy ensured that the company was less
affected by the European recession hence realized profits during such difficult times (Olsen, 2006).
The most notable effect of the change was, however, laying off of a significant number of
employees, including some who had worked with the company for years. Despite offering the
individuals a compensation package, the loss of such high-quality technical services had a negative
effect on the company operations in the later years.
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What initiated the change?
Nordex Company management amid the increasing production costs in the country and
government charges on manufacturing companies decided to offshore some of its parts to Chicago
and Jonesboro both in the USA in the years 2008 and 2010 respectively.
How Well the Change was Received
Despite the initial resistance of a majority of the shareholders who the consequences of
laying off of the workers, the change proved to be a success as the company profit margins were
reported to double in 2011. The shareholders ultimately recognized that such changes were
necessary especially if the economic conditions were unfavorable locally.
Drivers of the Need for this Transformational Change
Why the Change may be Considered a Transformational Change
Transformational changes are meant to improve company performance and strengthen the
company’s position in the market. The offshoring strategy adopted by Nordex Company may,
therefore, be regarded as a transformational change since it was a drastic shift from the company’s
production methods that saw several product parts manufactured in other countries (Schwörer,
2013). Furthermore, the change resulted into sustenance of the company as a leading figure in the
global wind energy products due to the increased profit margins and market growth.
Why the Firm had to Shift from What it was Doing
The company acted quickly to the economic difficulties that saw an increase in production
costs. The failure to adopt such a change could have resulted in declining production rates as well
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as heavy losses due to high production costs. This would, on the other hand, affect the workers’
welfare and a drop in the company’s popularity caused by the poor image created.
The Role of the Management in the Change
The management of Nordex Company has a significant role to play especially in the
identification of the transformational strategies that need to be adopted to reverse company
fortunes in a positive way. The expertise of the management is hence a crucial factor in solving
the day to day challenges that organizations face. The management is also tasked with making
critical decisions as well as convincing other shareholders of why the company should make
certain operational changes.
Other Alternatives in Transformational Change
Apart from offshoring, there are other strategies that companies may adopt in their quest
to remain relevant in the market amid rising economic or operational challenges. Companies, for
instance, may decide to outsource products or services from other firms which produce them at
cheaper costs. Other strategies that managers may use include vertical integration where a
company aims to expand its business in a stepwise manner and lean production where a firm seeks
to reduce wastage during the production process (Gunasekaram et al., 2008).
Conclusion
In conclusion, outsourcing and offshoring are two of the most implemented strategies that
companies continue to adopt in the modern world to ensure profitability and effectiveness of the
business. These strategies often lead to organization transformational changes that affect not only
the company’s image and operations but also the welfare of the employees.
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References
Contractor, F. J., Kumar, V., Kundu, S. K., & Pedersen, T. (2010). Reconceptualizing the firm in
a world of outsourcing and offshoring: The organizational and geographical relocation of
high‐value company functions. Journal of Management Studies, 47(8), 1417-1433.
Gunasekaran, A., Lai, K. H., & Cheng, T. E. (2008). Responsive supply chain: a competitive
strategy in a networked economy. Omega, 36(4), 549-564.
Olsen, K. B. (2006). Productivity impacts of offshoring and outsourcing.
Schwörer, T. (2013). Offshoring, domestic outsourcing, and productivity: Evidence for a number
of European countries. Review of World Economics, 149(1), 131-149.
Transformational Change of Offshoring
Thesis Statement: Modern businesses and organizations are faced with the challenge of staying
afloat in the global market mainly because of the stiff competition exists thus the need for
continuous rejuvenation of the company operations and strategic plans to ensure that the company
stays ahead of the pack.
I.
Introduction
A. Definition of Offshoring
B. How stakeholders were affected in A company that
C. What initiated the change?
D. How well the change was received
II.
Drivers of the Need for this Transformational Change
A. Why the change may be considered a transformational change
B. Why the firm had to shift from what it was doing
C. The role of the management in the change
D. Other alternatives in transformational change
III.
Conclusion
…
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