Business Studies

Think of a change in a company with which you are familiar.

• Who were the stakeholders involved in this change?
• Discuss what concerns different stakeholders might have and how communication is needed to address those concerns.

ANSWER

Stakeholders and Corporate Change

The General Motors Company was formed in 1908 and boasted of being the leading vehicle producing company in the United States. Renowned for new inventions of cars exhibiting different styles and designs, the company introduced various vehicle brands like the Chevrolet, Pontiac, and Buick. However, with the arrival of the Japanese market that produced similar products at a considerably lower price, the company started facing competition (Mahato, 2015). It, therefore, initiated management and cultural change to explore new markets, new designs and accrue profit through cost-cutting. The stakeholders involved were the manager and employees. The managers decided to lay off the staff to reduce labor costs and cannel energy into innovation. The employees understood that the competition from the Japanese entailed utmost convenience and respected the management’s decision to reduce the number of staff (Mahato, 2015).

However, the cultural and organizational change was not welcomed by the different stakeholders who were not on board with the idea. For instance, the fired employee in labor unions was against the company’s significant change that saw thousands of employees fired by the company (Mahato, 2015). The managerial stakeholders were also wary of other managers as they suspected the change was based on opportunists taking advantage of the declining company and putting their self-interest above the interest of the company.

Like any other misunderstandings among different organizations, communication is a key factor that can help solve problems. In this case, communication would ensure that both stakeholders, the management, and employees have a tabled meeting that would ensure everybody understood why the company was engaging in such changes (Butt et al 2016). Communication would help them understand that the decision was not political or based on self-profiting, but for the sake of the company to match the new competition in the market.

References

Butt, A., Naaranoja, M., & Savolainen, J. (2016). Project change stakeholder communication. International Journal of Project Management, 34(8), 1579-1595.

Mahato, M. (2015). Organizational change: An action oriented toolkit. South Asian Journal of Management, 22(4), 197.