Business Policy

In a lame man's term, change can be said to be the process of becoming different. In becoming different, a lot of factors come in place physically, emotionally and maybe spiritually to hinder these changes. These are called barriers to change. Before discussing the major barriers faced by CEO Von Gri nberg during his tenure at Continental. We shall use an academic theory to ascertain this.

The transtheoretical model in psychology assesses an individual's readiness to act on a new healthier behavior, and provides strategies, or processes of change to guide the individual through the stages of change to action and maintenance. The transtheoretical model is also known by the acronym "TTM" and by the term "stages of change model". (Prochaska et. al, 2008). It is "arguably the dominant model of behaviour change, having received unprecedented research attention, yet it has simultaneously attracted exceptional criticism (Armitage, 2008)

History and core constructs of the model James O. Prochaska of the University of Rhode Island and colleagues developed the transtheoretical model beginning in 1977(Prochaska and DiClemente, 2005). It is based on an analysis of different theories of psychotherapy, hence the name "transtheoretical. " The original model consisted of four variables: "preconditions for therapy," "processes of change," "content to be changed "and" therapeutic relationship". The model was later refined on the basis of research that they the authors published in peer-reviewed journals and books.

By 2007, the model consisted of five "core constructs": "stages of change," "processes of change," "decisional balance," "self-efficacy," and "temptation" (Hutchison et. al 2008)In addition, the researchers conceptualized "relapse" (recycling) which is not a stage in itself but rather the "return from action or maintenance to an earlier stage" (Prochaska and Redding,2008). To progress through the early stages, people apply cognitive, affective, and evaluative processes.

As people move toward maintenance or termination, they rely more on commitments, conditioning, contingencies, environmental controls, and support. Prochaska and colleagues state that their research related to the transtheoretical model suggests that interventions to change behavior must be "stage-matched," that is, "matched to each individual's stage of change". There are three major barriers to organizational change that businesses often overlook, says organizational change expert Gayla Hodges of Change Agents, Inc.

They are inadequate culture-shift planning, lack of employee involvement, and flawed communication strategies. Regarding culture shift: "When changes in corporate culture and the feelings of employees are overlooked, the result is often deep resentment because some unrecognized taboo or tradition has not been duly respected. " Regarding employee involvement: "Involving employees as soon as possible in the change effort, letting them create as much of the change as is possible and practical, is the key to a successful change effort.

" Regarding communication: "Ideal communication strategies attend to the message, the method of delivery, the timing, and the importance of information shared with various parts of the organization. They do not overwhelm people with too much information or leave them guessing about how they will be affected by the change. " After identifying theoretical justification of barriers to change, we can now go directly into the major barriers faced at Continental in the early 1990s.

This can be attributed alongside the sources of organizational rigidity and can be linked to the transtheoretical model as stated out earlier and we classify them below. Cultural resistance: The traditional Continental was a colossal one, with little basis for accountability or initiative, one could expect to find an organization blind to changing circumstances and well geared to frustrating any deviant ideas that might threat its current status quo.

Continental was not proficient enough to changing its view on how processes were organized, business was done or how it served its markets and also had little or no insight for emerging markets and business opportunities. Political resistance: Continental was a large organization which had a lot of power hierarchy. The problem was that the knowledge workers weren't the ones in power but the people that administered the organization.

Based on the case, Dr. Von Gri nberg did not follow the traditional sequence when appointing new managers at crucial positions and made use of young managers to effect change, he also always provided certainties to managers that had to support change. Moreover, the Dr. Von Gri nberg's demonstrations of taking unpopular decisions such as plant closures and dissolving entire businesses could hardly be missed by the management corps and had a clear signal function to anyone with adverse plans.

Psychological resistance: Continental in the early 1990s can be regarded as an organization with an autocratic system where methodologies and business processes from above are absolute on fixed routines and habits. It is beyond doubt that anything not in line with the logic of centralization, administration, mass-production, volume, planning and other well-established certainties of the organization would evoke delay, ignorance, and any other form of either hidden or open resistance from Continental's management and workforce.

Dr. Von Gri nberg had to layoff several top managers to get the company moving forward and this can be seen as autocratic in nature but was more beneficial to the company at the long run. Stakeholder lock-in: According to the case study cited, in the early 1990s, Continental was not committed to its buyers and supplier. The relationship was on a transactional basis not customer retention. The case is not explicit about Continental's commitments to local or national governments, tax authorities or workers unions.

It can be taken as a given that banks will have been major investors in Continental and that they must have given Dr. Von Gri nberg their support – or at least some space to maneuver – to turn the company around. Competence lock-in: The success pushers at Continental in the early 1990s were the engineers who thrived in an environment favoring competencies for the mass-production of tires and other products with high rubber content. The biggest challenge faced by them was to master ways of process and product innovation.

The case description shows how research and development received top priority at Continental's turnaround and how this eventually resulted in new tire lines, building machinery and production concepts. Later on, the competence base was also extended towards cross-technological fields combining electronics, shock absorption and rubber technology. For management particularly their well-developed administrative skills seemed to hinder a shift towards more entrepreneurial and cross-functional capabilities. Investment lock-in: This has to do with investment tied up in business.

This can be seen in how much capital was invested in Continental's brands, buildings, laboratories, factories and mass-production technologies. Any attempt of discontinuous renewal at Continental's would potentially risk obsolescence of these high-capital investments and threat a decent earn-back. This is quite a high barrier to change because investment on anything needs to be realized and also continous. System lock-in: Also known as vendor lock-in has to do with making a customer dependent on a vendor for products and services, unable to use another vendor without substantial switching costs.

Although this case was not made explicit, but one could expect that the Carmakers forced their requirements upon their tire suppliers with regard to properties and costs. In addition, particularly the commodity status of tires pushed Continental to pursue a mass production system aimed at scale economies. In fact, the move to become an automotive systems supplier meant a breakaway from the mass-produced commodities treadmill. As things worked out, this move enabled Continental to become a co-designer with regard to new car development instead of an exchangeable supplier.