Running Header: Summary Paper 1 Summary Paper Alexis Rogers BUS610: Organizational Behavior Neil Mathur 7-16-2012
Summary Paper 2What is the Change?The organization I worked for was Kraft Foods and they supply multiple brands to key grocerystores all over the world. Kraft has just changed its structure from one large company to twosmaller companies to allow for more focus on individual brands rather than the entire portfolio.Kraft became too large to give the full attention to all the brands that it served and continue to beeffective in their growth. The decision was made to separate the company into two separatecompanies to global ready and non-global ready items to give them more focus from theemployees in the field (Schultz, 2011). Kraft has been known for its signature brands and hasmarketed them mostly to moms but the introduction of gum and candy required a differentapproach. The creation of the confections company was because Kraft believed there would bemore chance for growth in emerging markets (Ebrahimi, 2011). I believe that using Kotterseight steps to leading organizational change would have been the better way of handling this splitfor the employees involved. I will show how Kotters eight steps would have facilitated asmoother change for everyone at Kraft Foods.StakeholdersThe key stakeholders were those that had stock in the company and the employees that weregoing to be affected by this change in organizational structure. The stock holders have beenseeing a real growth in stock in the last couple of years, but only in North America. Thecompany was about to head overseas and there would be a more needed focus for the wellknown brands in emerging markets. This move affected the stock price of the company plus itwas now two separate companies which meant two different groups of stock and two differentboards.
Summary Paper 3The employees were affected because there was now going to be two different companieshandling the portfolios. Employees would have to be downsized from one company and addedto another. This affected those employees lives, retirements, pay, responsibilities, and locations.They were heavily relied upon to implement these changes and to ensure that growth continuedduring the major changes.Kotters Change management approachUsing Kotters eight steps to leading organizational change includes establish a sense of urgency,create the guiding coalition, develop a vision and strategy, communicate the change vision,empower broad-based action, generate short-term wins, consolidate gains and produce morechange, and anchor new approaches in the culture (Kinicki & Kreitner, 2009). Starting a changehas three phases which are unfreezing, changing, and refreezing (Kinicki & Kreitner, 2009).Starting with establishing a sense of urgency, this should inform every employee of the companyof why this change is needed and important. This is also the start of the "unfreezing" stage in themodel of change (Kinicki & Kreitner, 2009). The strategic move to buy Cadbury was torevitalize that industry and add a leading name brand of confections from overseas to Kraftsportfolio. The issue with keeping all of these brands under the same umbrella is marketing andgrowth. Trying to market confections and gum to the same consumers as Kraft did with itshealthier name brands such as Oscar Mayer and Jell-o is a difficult campaign (Schultz, 2011).Separating the grocery side from the confections would allow a more focused marketingcampaign. Marketing also covers where Kraft will market their newly founded companies. Thesteady grocery side of Oscar Mayer, Jell-O, and Maxwell House arent as successful in emergingmarkets where as confections like Oreos and Cadbury are very popular (Schultz, 2011).Establishing the sense of urgency needs to start with the management so it can be communicated
Summary Paper 4with the passion it needs to be successful. If management is fully aware of the reasoning behindthis split, they will be more affective. This first step is described as "unfreezing the organizationby creating a compelling reason for why change is needed" (Kinicki & Kreitner, 2009). In thiscase, just showing the management all the facts should be enough to show the sense of urgency.Once the management is informed of the facts and what needs to happen, they will now use theirinterpersonal relationships with their staff to convey the message. "People at all levels need tobe convinced of the need for change, or the transformation efforts imposed can be slowed orsabotaged" (Kotter, 2008).Next is creating a guiding coalition that incorporates traits such as leadership skills, bias foraction, credibility, communications ability, authority, and analytical skills (Kotter, 2008). Thisteam of individuals has to be made up of respected and trusted team players. This team needs tobe a cross-level set of people as well. Hearing about changes from only upper management canbe overwhelming for employees. I myself wasnt trusting of the change because only uppermanagement had the facts. My immediate supervisor did not have answers to my questions soeven he was not as informed as he should have been. This coalition team will also be able toeliminate those employees that dont feel this will be a good fit for them. There are going to bethose that arent excited about change, and they are going to need options. If the employees hearabout changes from all levels of management, it will be more accepted. "The right team-not justtop players, not just empowered middle managers, not just technologically qualified teammembers-is still a must for effective change" (Kotter, 2008). All levels of Kraft will be involvedwith this major change, so there should be all levels represented in the coalition team.Kraft then needs to develop a vision and strategy which will have a plan to guide the changeprocess (Kinicki & Kreitner, 2009). "Clarify how the future will be different from the past, and
Summary Paper 5how you can make that future a reality" (Kotter, 2008). As far as the strategy for Kraft, it shouldbegin with the separation of the portfolio. What will stay with grocery company and what willgo with confections? Making this decision has to happen before creating the vision and strategy.Nabisco, Cadbury, and Trident are going to the confections company to be promoted worldwide.Everything else like Oscar Mayer, Jell-O, and Maxwell House will be going to grocery companyand will be more concentrated in the North Americas where it has been the most successful.Anyone within the company already knows that Cadbury was a buyout to get into the Europeanmarket as the vision, adding Nabisco for confections to make the company more powerful is thestrategy. Being the best grocery company in the North Americas is the vision, really pushingmore to promote the already successful grocery company in the North Americas is the strategy."A critical mass of people must understand the vision and strategy to bring about successfultransformations" (Kotter, 2008). This cannot be over communicated, there has to be constantcommunication of these visions and strategy if it is to be successful.The next step is to empower broad-based action by eliminating the barriers to change, and usetarget elements of change to transform the organization (Kinicki & Kreitner, 2009). This is alsothe start of the "changing" stage in the model of change (Kinicki & Kreitner, 2009). Eliminatingthe barriers will give the freedom of those that are for this change to flourish with new ideas ofhow to make it successful. This should also encourage risk taking and creative problem solving(Kinicki & Kreitner, 2009). An example of a barrier for Kraft could be job responsibilities.Eliminating the unnecessary responsibilities will allow employees to focus more on what isimportant to help the change. Since both companies will be focusing more on either grocery orconfections, simplifying the job description will make the task of change seem less daunting.
Summary Paper 6Kraft then needs to generate short-term wins and recognize and reward people to contribute tothe wins (Kinicki & Kreitner, 2009). This tactic may convince those that arent sure that thechange is a good idea could and could be beneficial to themselves. Creating visible and clearsuccesses will avoid burnout (Kotter, 2008). Kraft has to remember to celebrate clear successesas soon as possible to renew energy for the efforts ahead (Kotter, 2008). For example, Kraftcould set up different competitions to renew focus on the less emphasized brands of the grocerycompany. For the last five years, the representatives in the field have been focusing on all of theproducts which has spread their efforts to grow the business. Rewarding those representativesfor growth over two percent in a smaller number of categories will give them focus on what theyneed to be giving their attentions to from now on. It will excite them into getting more intocertain categories that they have had little time to focus on.Next, Kraft should consolidate gains and produce more change (Kinicki & Kreitner, 2009).After compiling the short-term wins, the guiding coalition will use that credibility to create morechange (Kinicki & Kreitner, 2009). The coalition has to not let up, pressing harder and fasterafter the first successes will give the change momentum and will make the vision become reality(Kotter, 2008). The best way to give organizational change momentum in a business of sales ismonetary rewards for success. These representatives are top sellers of the organization and willrespond to contest winning, group and individual recognition, monetary rewards and bonuses,trips, and stock sharing. Giving these rewards at a rapid pace will keep the momentum upbecause the employees are being rewarded quickly. Allowing too much time between successand reward can give the employees time to forget what the motivation was in the first place,thereby slowing down the change.
Summary Paper 7Finally, Kraft has to make it stick by anchoring the new approaches in the culture (Kinicki &Kreitner, 2009). This is also known as the "refreezing" stage in the model of change (Kinicki &Kreitner, 2009). Reinforcing the changes by showing the connections between the new way ofdoing things and organizational success and developing methods to ensure leadershipdevelopment and succession (Kinicki & Kreitner, 2009). The organization has to create a newculture, they have to hold on to the new ways of behaving and make sure they succeed until theybecome a part of the culture (Kotter, 2008). Kraft has to increase their larger meetings acrosssales teams to show the success and build camaraderie amongst the representatives. Therepresentatives are what is going to make these changes successful, so showing them how thesechanges are benefiting both the organization and its employees will keep them on board with thechanges. Kraft management have to continue to reward quickly and efficiently to maintain thechanges within the culture. If management starts to slack on the rewards, then employees willslack on their efforts. Kraft management also have to lead by example. Telling the employeeshow to change their focus is not as effective as showing them.There are four mistakes that leadership can make that will cause failures which are writing amemo instead of lighting a fire, talking too much and saying too little, declaring victory beforethe war is won, and looking for villains in the wrong place (Kotter, 2008). There are times thatleaders have tried to institute changes with just a report and expect the people to rally behind it(Kotter, 2008). This brings me back to Kraft having larger meetings with as many employees asthey can at once. Getting everyone together and hitting all of them with the greatness of thesechanges will rally everyone quicker than with just a memo. When I worked for Kraft and thissplit was announced, it was by memo. I can attribute my personal lack of enthusiasm becausesuch a huge change was communicated in such an impersonal way, even though it was going to
Summary Paper 8change every aspect of how we went to business drastically. Talking too much and saying toolittle is definitely a crime that was often committed by upper management. These changes werejust not communicated enough for everyone to understand why it was so important. Peoplewatch their bosses closely and inconsistent behaviors fuel the cynicism and frustration (Kotter,2008). This was another reason that I was not personally on board with these changes, I didntunderstand why it was happening in the first place. Declaring victory before the war is over is away for management to fabricate success. They were celebrating our national victory over beingthe number one grocery company in North America just because we dropped the confectionscompany from the portfolio. "Celebrating is a great way to mark progress and sustaincommitment, but note how much work is still to come" (Kotter, 2008). Looking for villains inthe wrong places can be a costly mistake when trying to institute organizational change. "Theperceptions that large organizations are filled with recalcitrant managers who resist all change isunfair and untrue" (Kotter, 2008). I personally saw the most resistance coming from therepresentatives from the field. Their jobs were going to be the most affected in terms ofresponsibilities, pay, location, and what would be expected of them. I was in that group ofpeople and all of these leadership mistakes became the main reason for me leaving the companyafter the announcement. I felt that because of the lack of proper communication, I was not readyor motivated for these changes to take place. There was no certainty of where employees likemyself would end up, that was a risk I was not willing to take with a company that wasntkeeping me as informed as they should have.ConclusionIn conclusion, using Kotters eight steps to organizational change would have made it smootherfor Kraft to create the two separate companies. My personal experience with the changing of
Summary Paper 9Kraft Foods management only tried to use a couple of Kotters eight steps for leadingorganizational change. "Successful change of any magnitude goes through all eight stages"(Kotter, 1996). Keeping the employees on board every step of the way rather than springing theannouncement on them after the fact would have helped with retention and overall jobsatisfaction. Organizational change doesnt happen from only the top, it has to have everyoneinvolved to make it a true success that will stand up to the ever changing climate of businesstoday.
Summary Paper 10 ReferencesEbrahimi, Helia. (2011, August 5). Kraft splits the company in two. The Daily Telegraph,3. Retrieved July 13, 2012, from ProQuest Newsstand. (Document ID: 2417544991).Kinicki, A. & Kreitner, R. (2009). Custom book for Ashford: Organizational Behavior  (VitalSource Bookshelf), Retrieved from http://online.vitalsource.com/books/0390145599Kotter, John. (1996, September). Transforming organizations. Executive Excellence, 13(9), 13. Retrieved July 16, 2012, from ABI/INFORM Global. (Document ID: 10220667).Kotter, J.. (2008, March). Sense of Urgency. Leadership Excellence, 25(3), 10. Retrieved July 13, 2012, from ABI/INFORM Global. (Document ID: 1460770841).Kotter, J.. (2008, December). Transformation. Leadership Excellence, 25(12), 20. Retrieved July 16, 2012, from ABI/INFORM Global. (Document ID: 1629118511).Schultz, E. J. (2011, August). Could Kraft split be a blueprint for blue chips :Its soon-to-be- separate companies offer up case study on why some brands go global--and others dont. Advertising Age, 82(29), 1,25. Retrieved July 13, 2012, from ABI/INFORM Global. (Document ID: 2422635381).