Organisational Change And Development In Royal Mail

Organisational replace And Development In imperial sendThis assignment has been undertaken in pitch to examine and evaluate the modernisation of the olympian post. It go expose go with identifying the solid ground for castrate inside the club, and how the need for reposition was detected. After which the implementation of mean revision in the kingly institutionalise will be discussed and its authorisation will be evaluated.The tolerant factors they met whilst trying to implement this modernisations programme will alike be discussed. An evaluation of the plotted kind will be conducted in order to assess the extent of its effectiveness.The composing will purpose will an analytic thinking of the Business Trans forgeation 2010 and Beyond national savvy between violet commit the Communication Workers Union, implications for failure will be assessed from this agreement theory will be linked throughout the brood with evidence and discussion.Table of contents la unching (p. 4-5) main FindingsReasons for modernising the purple Mail (p. 6-7)How tilt was be after in the empurpled Mail (p. 8-10)Types of castrate (p. 11) opposite to change in the empurpled Mail (p. 12-13)Kurt Lewins 5 Force analysis utilization to the regal Mail (p. 14)Kotters 8 cadence plan applied to the Royal Mail (p. 15)Effectiveness of the Planned change in the Royal Mail (p. 16)Implications of failure (p. 16)Reference/Bibliography (p. 17-)IntroductionThe Royal Mail is weaken of the fabric of the country and the lives of the cardinals of people who use it e precise day. Uniquely it has the net lucre of people and sorting offices spanning the country that tolerate quit to every house and business at one bell, six days a week. hardly the future of this ne 2rk is under threat as people more than and more switch to digital engine room as their preferred look of life of communicating (Mandelson, 2009).Rollinson (2005) determine the term change refers to an organisation having to move from one status to an other, in the modern world creation able to change ass besides be the dividing factor of an organisations failure or success, Beer and Nohria (2000) alike set that 70% of completely change initiatives fail.Martinez et al (1997) identified five change objectives toughened out by Royal Mail in the eighties as privatization, modernization, commercialization, separation and automation, of these modernisation, which is the main focus of this puzzle outup, automation and privatisation argon compose non finalised, thirteen years after this article was written.The Labour establishment has been besideston for privatisation of the Royal Mail for years ever since the Thatcher g everyplacenment, it gestated the move would helper in financing occasion of the pension dearth and also lease the ships northern more competitive in this liberalised grocery, which was introduced in 2006. Lord Mandelson was pushing legislatio n up to 2009 in the hope of selling parts of the nationalised company (Hooper et al, 2008 Porter and Griffiths, 2008 Porter, 2009 Datamonitor, 2008).Hooper (2009) states that modernisations without privatisation would be very difficult imputable to the unceasing discussion from government, Private postal companies throughout the world induct identified this constant intervention as the major factor in union disputes (Hooper et al, 2008). resistor from the CWU on modernisation has been a constant topic as they believe that modernisation will plant about pedigree losses, much(prenominal) rampart has especially been seen in the last two years by way of two massive strikes by postal workers (Poulter, 2009 Hooper et al, 2008).These strikes came at one of the pip epochs in UK history, a fadeoutal was in full propel for the second in 2009, however after recording loses over numerous years the Royal Mail made a 4% cabbage in 2009 of 184 million comp bed to 2008 figured of 177 million, unfortunately this profit was overshadowed with the overall angle of dip in group revenue repayable to a decline in arms volumes because of the downturn and a rise in digital media, this has lead to a 5-7% yearly drop in sales since 2005, during this beat ply were informed there would be brook freezes which inflamed already stress relations with the union (Royal Mail, 2009 Prince, 2009 Hooper et al, 2008).In 2000 the postal services act which governs the postal industriousness within the UK was introduced, the act provided for the Post Office to be reborn to a PLC, set in place a unexampled licensing system, gave the postal services commission (Postcomm) powers to protect the universal service, promote greater contender within the UK marketplace and offer more protection to consumers with the introduction of Postwatch (Hooper et al, 2008).Main FindingsReasons for modernising the Royal MailHooper et al (2008) has stated for the Royal Mail to give-up the ghost competitive in this it mustiness first be be intimate more efficient, in order to become more efficient it must change. It must be noted that even though the country is in a recession which had a major impact on the company, this was not a think for the company to modernise (Hooper et al, 2008). There be eight earths for modernisation of the Royal Mail listed belowUniversal Postal Service (UPS) The main reason for change which the CWU also hold upon is the survival of the UPS, which is the collection of mail six-days a week from 28 million homes and business across the UK, at prices which watch independent and set at a tariff no amour the distance up and covers five areas up to 2kg for letters and packets (priority and non-priority), up to 20kg for parcels (non-priority), registered and check service, international outbound services and offering services which support the security department of mail (Hooper et al, 2008 POSTCOMM, 2010).Pricing The introduction of a 5% weig hted middling increases by Royal Mail in 2007-2008 led to a reducing in revenues, sales volumes fell as customers increased their use of electronic media, business switched to competitors and there was an increased use of second class mail. It is cognize that the UK offers some of the lowest postal costs compared withal many other atomic number 63an countries so increases are justify but the implementation must be able to offset lost revenue. As volumes fall due to digital media the better choice may be to implement price decreases instead to stimulate growth (Hooper et al, 2008).Pension deficit This is one of the largest within the UK currently standing at 4 billion also until recently it was still possible to sign up for this pension. Figures in 2008 showed it had risen by 2.5 billion since 2006 (75% increase). Due to the costs in paying the deficit, which is currently 280 million per year and will continue for the next 15 years, competing within Europes liberalised market is made very difficult. The deficit is al intimately six times large than the cash generated by Royal Mail qualification it a very volatile problem (Hooper et al, 2008).Improved cleverness The Royal Mail is 40% less efficient compared to its competitors. Its network of mail centres and rejoiny offices hold up not been upgraded in years, Automation is severely inefficient with 70% of mail macrocosm sorted by machine compared to 95% in European companies, also all mail is hand delivered compared to 15% hand deliveries in Europe with walking sequence machines cover the liveing 85% (Hooper et al, 2008).Working practices trusted working practices such as early finishes restrict Royal Mails efficiency to provide a better service, upon finishing rounds postal workers are eligible to return home no matter how early, they domiciliate also allege overtime on extra hours worked to finish a round or female genitalia decide to simply not finishing the round. Covering for absence only wh en receiving overtime, not development equipment at the instruction of the CWU and demarcation, employees refusing to work in other areas of the same site (Hooper et al, 2008).New technology The volume of mail sent has been on a decline even since 2005, this is due to the ascension use of digital media, this is be felt across the world with the UK screening one of the highest fall off figures, -3.2% in 2006-2007, however the internet also provides opportunities by way of the online shopping market as home deliveries have jumped in recent years making this a highly juicy market, also the Royal Mails use of machines to sort letters covers 70% time the some of the leading European companies are hitting 95% (Hooper et al, 2008 Warner, 2009). competitor 2006 saw the Royal Mail lose its 350 year monopoly on the UK postal market, going forward any licensed operator can deliver mail to residential and business customers in the liberalised market of which Royal Mail controls 99% , alt hough the Royal Mail still is postulate to provide a universal postal service (BBC, 2005), interrogation conducted by Lawson (2010) indicates that the national operators in countries such as Germany and Sweden continued to hold onto the majority share of the market years after it became liberalised. Electronic media such as email is also a threat to the company as it become more popular. back breaker net working costs The rising costs of fuel is having a hugely negative impact on the Royal Mail, employees uses over 30,000 vehicles to deliver mail (Hooper et al, 2008), the Royal Mail (2008) has identified a loss in revenue due to higher costs of fuel. However, Attwood (2010) states the Royal Mail is set to trial new Ford Transit vans powered by hydrogen-fuelled home(a) combustion engines in an effort to castrate fuel costs, positive they are also environmentally friendly as they only emit water vapour.How change was mean in the Royal MailPlanned change was a term first coined by Kurt Lewin to distinguish change that was consciously embarked upon and planned by an organisation, as averse to types of change that might come about by accident, by impulse or that might be blackmaild on an organisation (Burnes, 2004).Hooper et al (2008) had explanationed that the universal postal service cannot continue under present policies, problem areas have been identified as the pension deficit, performance and relations between the Royal Mail, unions and the regulator.The BERR report of 2009 includes recommendation made by the Modernise or Decline report compiled by Hooper et al (2008), in which it identifies ternary main areas for the Postal operate Bill to addressRegulation Transferring responsibility of regulation which Postcomm currently holds to Ofcom, providing for future financial support for the UPS, extending competition law powers to the postal market and providing for a new access regime (BERR, 2009).Pensions Provide powers to establish a new government s cheme, rights to move members to the new scheme, amend the existing scheme, set out a new division for Post Office Ltd employees and the ability to pitch assets from the scheme to government (BERR, 2009).Partnership Royal Mail companies providing the UPS will remain in the public sector, part- privatisation of the Royal Mail, Hooper et al (2008) has identifies this as universe a necessity if the company is to achieve modernisation and additional legislation being obligatory for a Government to sell more than a minority stake in the company (BERR, 2009).Planned change is more related to to the Royal Mail compared to Emergent change as it involves strategically thought-out and planned objectives/ inclinations, which are used to change the environment of an organisation, whereas emergent change is capricious and dynamic, does not work off plans compared to planned change and is continuous (Burnes, 2004)Although these changes were planned and most were enforced in the 2010 Nationa l compact, part-privatisation of the Royal Mail real alot of disapproval from other party members and the CWU. due to the currently climate quill Mandelson admitted he was unable to find a suitable candidate for the investing so ended the proposed privatisation plans from the postal services bill (Wintour and Webb, 2009).To to the full perceive planned change it is necessary to look at the works of Kurt Lewin who is regarded as being the father of planned change, he believed that only through schooling and the understanding of the environment in which an individual is establish, could a resolution to fond conflicts be achieved and improved. Lewin developed four methods which were necessary in reaching planned change three-step modelling, field theory, group dynamics and action research (Burnes, 2004).The Three-Step model This is praised as being Lewins contribution to the study of organisational change, although the three-step model was not mean to stand alone but be part of his over-all Planned uprise to change, which also included the field theory, group dynamics and action research (Burnes, 2004).The three step model is based on Lewins belief that fortunate change is brought about by using three steps abject from one fixed state (Unfreezing) through an advanced shift (Moving), to some other fixed state (Refreezing). Unfreezing involves the creation of the right conditions in which change can occur, people create a sense of familiarity with their surroundings and any change no matter how minor will cause resistivity (Burnes, 2004).The goal is to move a person to a change ready/ liquify state. This was accomplished between the Royal Mail and the CWU through the 2010 National apprehension in which both parties, after years of bitter disputes have agreed to improve their relationship for the better of the company, employees and customers (Burnes, 2004 National Agreement, 2010).Burnes (2004) identifies the next distributor point in Lewins model as Moving, which he describes as being on a journey taking people to the Unfrozen state, old ways are in the past and the new are in the development stage of being implemented, it is here that support should be given to employees to assist with the changes being introduced (Burnes, 2004).The Royal Mail is in the Moving stage of the 2010 National Agreement as they try to implement new modern and efficient changes to the company by way of automation, technology and industrial relationships. This will take time to fully execute, Lewins model states that without reinforcement change is short lived, both sides must begin to agree soon on the changes otherwise relationships will begin to break down once again (Burnes, 2004 National Agreement, 2010).Refreeze is the final step in which the environment is stabilised, its sometimes difficult to separate from moving, many organisations dont fully implement the whole extent of the change as another form of change is usually on the rise. This st age cannot be evaluated as the 2010 National Agreement between the Royal Mail and the CWU is still being implemented at this time (Burnes, 2004 National Agreement, 2010).Types of changeDue to outside influences cause change organisations are forced to keep up to speed, if change is required the appropriate changes are implements to reflect these external environmental factors in a timely and smoothly manner so to avoid putting added wring on the company (Price, 2009).Grundy stated that many dole outrs viewed change as being the same whilst others viewed it as having a negative impact, he identified three types of change as smooth and incremental, bumpy incremental and discontinuous, the Royal Mail uses none of these types (Senior, 2002 Price, 2009).Incremental change Continuous Change Punctuated EquilibriumBurnes (2004) identifies two other type of change as continuous transformation, which identifies the need for unbroken dramatic adjustments in organisations change like regula r training of mental faculty, and punctuated equalizer, this recognises that change can occur at erratic and explosive periods of time (Senior, 2002 Price, 2009).Punctuated equilibrium is the type of change more associated with the Royal Mail, one outlining factor is the company has not changed in many years but in 2010 reached a groundbreaking agreement with the CWU for implementation for such things as a 6.9% pay rise plus working hours reduced to 39 (Hooley et al, 2008 National Agreement, 2010). opponent to change in the Royal MailResistance doesnt necessarily bulge out in standardised ways. Resistance can be overt, implicit, immediate, or deferred. It is easiest for precaution to deal with resistor with it is overt or immediate. The greater challenge is managing resistance that is implicit or deferred (Robbins, 2001)Burnes (2004) identified resistance to change as the obstacles created by others to stop change some forces will be more resistant than others such as the actio ns taken when people feel change to be a threatening factor, such as the modernisations planned by the Royal Mail, this has received huge resistance from employees and their union through planned strikes throughout the last two years, as they perceived the modernisation process would reduce stave numbers. The report identifies four main forces against the change process at the Royal MailUnion resistance The CWU also known as the Communications Workers Union is the largest union for the communications industry in the UK it has 250,000 members most of which are Royal Mail employees, and was formed in 1995 (CWU, 2010).The sheer size of union take ups it a very powerful force to be reckoned with, its also well documented throughout the years that the CWU and management at Royal Mail have very different views on what is best for the company, resulting in strikes against the modernised plan proposed by the Royal Mail, this was because the CWU felt its members were at attempt from new technological advancements that they felt would result in staff numbers being reduced (Hooper et al, 2008).This could also be a result of the CWU using this tactic as a means of living up to a unions reputation with Warner (2009) adding that the chronic union militancy that once characterised shipbuilding, steel, car making and coal industries lives on in Royal Mail. wariness and employee relations is abject There is a long history of poor industrial relations between the Royal Mail management and CWU which continues to this day, this has impacted severely on the company to the extent that it has prevented the Royal Mail from modernising and expanding which has led to a high level of inefficiency (Hooper et al, 2008). However, with the introduction of the Business Transformation 2010 and beyond agreement both parties agree that central to success is the need to fundamentally transform relationships and promptly build a culture of mutual interest between managers, union and employe es.Reluctance in staff to use new technology lag in the Royal Mail believes that through the use of new technology certain position within the company will become redundant, and due to advice from the CWU they have refused to use this modern machinery which would aid in the efficiency of the Royal Mail (Hooper et al, 2008).Employees disliking the modernisation plan Adam Crozier who was the chief executive director of Royal Mail from 2003 to 2010 is quoted as saying Change is difficult for everyone, but Royal Mail has no alternative but to change and modernise if it is to compete in todays highly competitive communications market. This is against the wave of criticism from employees and unions against the proposed modernisation plan due to uncertainty felt for their position (Thomas, 2009).Management at Royal Mail have declared that the plan is already seeing results with operating profits up 7 million in 2009 compared to the year previous, however employees and the CWU have stated that they believe they deserve to be rewarded for the success they have brought to this change process, which has delivered a 4% increase in half-year profits. A pay freeze is no way to thank staff who have seen colleagues leave and workloads rise (Thomas, 2009).This pay freeze was proposed due to the recession in a bid to counter its affects it only resulted in already strained industrial relations becoming more intense (Prince, 2009). A gradual introduction of more work due to reduced staff numbers would have been a better plan when engaging with staff.Kurt Lewins 5 Force Field AnalysesThis analysis by Lewin was developed in the 1960s, its based on the assumption that when the need for change arises there will be forces for and against change the theory states that when two forces are equal change can only happen if the force for change is built and the force against change weakened (Senior and Fleming, 2006).The forces for and against change within the Royal Mail Group are list ed belowDriving ForcesRestraining forcesUniversal servicePricingPension deficitImproved efficiencyWorking practicesNew technologyCompetition rapture net working costsModernisation processUnion resistanceManagement and employee relations is poorReluctance in staff to use new technologyEmployees disliking the modernisation planThe restraining force of staff wavering to use new technology is in direct contrast to the hotheaded force of new technology, the driving force of new technology can only be accomplished if the restraining force to use new technology is weakened.This was accomplished with the introduction of the Business Transformation 2010 and Beyond agreement which states, Royal Mails investment in new equipment and technology is a fundamental part of transforming the operation, this was accomplished by introducing new ways of working, including workload measurement, compliance to standard, engine room team coach, maintenance of equipment outside of the mail centre and tech nical operators (National Agreement, 2010).A new development plan for training and professional development plus apprenticeships in line with standards applying to Engineers based at HWDC. This was agreed by CWU which meant the restraining force was weakened so the driving force for new technology was strengthened and is in the process of being implemented (National Agreement, 2010).Kotters Eight-Step PlanBurnes (2004) identified that in order for change to be successful all of the eight stages in Kotters plan must be completed in sequence, any disagreement from these steps will result in problems for the organisation. The Royal Mail did manage to achieve some steps but many more have still to come as the company at last embraces modernisation.Step 1 Create urgency May 1997, deciding that modernisation was required, March 2010, at last implementing it.Step 2 Form coalition Management and unions agreeing to work on a modernisation plan.Step 3 Create new visions discussions on the Business Transformation 2010.Step 4 Communicate the vision (Unfreezing) Introduction of the Business Transformation 2010.Step 5 Empower othersStep 6 Reward wins (Movement)Step 7 Consolidate improvementsStep 8 honor the change (Refreezing)Effectiveness of the Planned change in the Royal MailWith the introduction of the Business Transformation 2010 it gives hope to the belief that harmony has finally been reached between the Royal Mail, CWU and employees. Adam Crozier, commented This agreement is good for the business as it allows Royal Mail to get on with its modernisation, its a good and handsome deal for our people, and its a good deal for our customers as it ensures stability over the next three years (ICM, 2010).The main points of the agreement will be the introduction of a 39 hour working week, 6.9% pay rise, more job security for employees, CWU to be involved in all change matters going-forward, and the Royal Mail to remain a 75% full-time industry (CWU, 2010). These chan ges have been agreed on the basis that employees will embrace the Royal Mails 2 billion modernisation plan which includes the introduction of new automated machinery and delivery equipment (ICM, 2010).Dave Ward, CWU Deputy General Secretary, said Its been a long time coming, but this deal delivers on the major issues which postal workers have fought for. Theres a balance of pay and operational changes which will help offset job losses and ensure our members are fairly rewarded for change.Both sides seem to be in agreement for the first time is years that modernisation is the way forward for the Royal Mail, but has this planned change been implemented too late, will the refusal of employees to let modernisation be implemented sooner be the downfall of the Royal Mail, rival companies such as Deutsche Post and trinitrotoluene have still managed to make substantial profits even with the added downturn in the postal market due to the recession and the explosion of the digital era (BERR, 2009).There is also the added concern of the pension deficit which stands at 4 billion, one of the largest in the UK, which the Royal Mail is required to make contribution into every year. It begs the question of how can a company who has such a huge cost output every year make proper investments into the future and still manage to return a profit (BERR, 2009), and will these investment in new technology and automation bring the rewards that Royal Mail believes it will, even with many people moving to digital media (BERR, 2009).Implications of failureThe universal postal service is important. The ability to deliver items to all 28 million business and residential addresses in the UK is part of our economic and social glue (Hooper et al, 2008).As agreements listed in the Business Transformation 2010 for the plaque have finally been reached, the implication for failure for the Royal Mail would be the loss of the universal postal service. It has been mentioned many times in this rep ort the importance of the UPS to the UK and its people, also the loss of a public service that so many have fought to keep in the public domain, against recommendations made by the Hopper et al (2008) and BERR (2009) reports to part privatise the company.Without modernisation eventually the Royal Mail will decline taking with it masses amounts of tax payers specie that was used to keep the company afloat, leaving many unemployed which would be a tragedy for the UK who are still suffering the effects of a world-wide economic recession.