Introduction
This report is a critical analysis of Mitsubishi Motors Corporation in relation to change management. Mitsubishi is in the process of selling its only functioning plant in the United States located in Illinois. The paper will critically analyze and review the features of change and how it can be managed and controlled on the basis of the Kotter’s 8-Step Approach.
Company Overview
Mitsubishi Motors Corporation is multinational automotive manufacturer which originates from Japan and has its headquarters in Tokyo. It is the sixteenth largest producer of cars in the world. Mitsubishi acquired a manufacturing plant in Normal, Illinois in 1988 and has used it as the sole North American assembling unit since 1991.
The plant in Normal reached its peak in the early 2000s when it used to manufacture over 200,000 each year. However, due to high cost of production and the inability to sell more cars to the US consumers, Mitsubishi has decided to sell the Normal, IL plant and concentrate on creating a global supply chain whereby production will be done in Japan and Asia. This implies that Mitsubishi in North America will have to source for its cars from Asia and market and promote them in the United States without assembling them in the country. Hence, the Mitsubishi operation will focus mainly on marketing and providing after-sales support in the United States.
Diagnosis
Shutting down a manufacturing unit of a major entity like Mitsubishi is going to lead to major modifications in the strategic processes of the company. First of all, there will be some workers who will be laid off by Mitsubishi. This is a painful and difficult moment for such persons, their families and other relatives and it is likely to lead to pain and panic.
Secondly, there will be the need to redesign the organizational structure of Mitsubishi in order to achieve efficiency and effectiveness. This will entail the proper integration of the United States and Canada into the global supply chain system of Mitsubishi and the proper representation of the needs, tastes and preferences of America and Canadian clients in the manufacturing system and cycle of Mitsubishi’s Asian manufacturing plants. This will also include creating a strong shipping system, a proper approach to marketing the cars and the creation of appropriate after-sales services and maintenance systems to ensure that Mitsubishi clients in the United States are duly satisfied and protected from all potential issues and problems.
Finally, the new system must be tried and tested in order to ensure that the best processes are retained whilst the wasteful and inefficient systems are rejected. This will require proper planning and a strong rigid strategy that will be based on the practical elements of the market as well as an emergent strategy that will complement it. The emergent strategy will be one that will change to integrate new systems and processes in order to improve performances and procedures.
The model for diagnosing the actual problems is steeped in Kurt Lewin’s model which has three main elements:
Unfreeze
Move
Refreeze.
Unfreezing will include the closure of the current plant in Normal, IL and the closure of supply chain routes from the Illinois plant to the different distribution and export outlets. This will mean the closure of the production unit and the research and development processes that link to it as well as the support units – administrative, finance, legal, marketing and others that are based on the old model of production.
Move is concerned with the attempt to position Mitsubishi in the global supply chain system of the Mitsubishi global operations. This will include the establishment of a new warehousing system for new cars shipped from Japan and Asia to America and the creation of new supply chain lines from these points to distributors in the US and Canada. There might be the creation of new contracts with stakeholders like wholesalers, distributors and sales outlets. New standards and legal compliance measures must be integrated into Mitsubishi since they are now an all-out international manufacturer of cars in the United States. Furthermore, an appropriate research and development system must be created that will link the average American driver with the manufacturers in Asia.
Refreezing is about creating a new corporate strategy for the new Mitsubishi. This will include the creation of a comprehensive strategy based on what is ideal for the company in the face of these changes. This is because being a US car manufacturer is very different from being a US-based marketer and servicer of foreign manufactured cars sold in the United States. These are two different corporate models and they have different goals and objectives. Hence, the new system must include the definition of new strategic ends that are based on the new corporate model. The new strategic system must define a specific vision and mission for the restructured Mitsubishi. This vision and mission must be implemented but in a very flexible manner that will allow a unique corporate culture to evolve. This evolution mist be based on the adoption and the institution of codes of best practice. In other words, the systems and strategies that work must be encouraged whilst the processes that are counterproductive and do not encourage the company to seek the redefined corporate vision must be discouraged. This is an emergent strategy and system that must work for the best interest of the company.
The central obligation is on the strategic management of Mitsubishi. They are the ones going through the corporate reengineering and as such, will have to account to shareholders for the progress and results of the company in this period of instability and change. The strategic managers often include the directors and senior executives who are closely linked to the board of directors. They will have to deal with the specific elements of closing down the operations in Normal, IL and will be required to do so legally by paying all outstanding benefits and costs to laid-off workers. They will have to ensure that the most efficient, effective and economical strategies are put in place to move the company from its current status to the envisioned end. Finally, they will have to supervise the routine evolution of the company and will be obligated to entrench the items and codes of best practice that worked and discourage the things and processes that failed. This will encourage a responsible growth and drive the company to an expected end.
Applying the Kotter’s 8-Step Approach
The Kotter’s 8-Step Approach is a popular system through which the strategic managers of a company can transpose the elements and features of change in a given organization. It involves a number of stages that are important and necessary to achieve an expected strategic end in a period of change and exceed this by adopting the best processes and systems for the optimizing resources after the change process.
Figure 1: Kotter’s Model of Change Management
These distinct stages or steps provide the impetus for the transposition and application of major pointers and indicators to ensure that a given change management drive occurs. Kotter’s model provide practical guidelines that help to actualize Lewin’s three-step model and this aids in achieving results and instituting the right level of action to achieve optimal results in given strategic change process. This model is applicable to the Mitsubishi case and can help to transform the company in its current state to a desired end in order to change it to fit the best and most appropriate indicators or pointers.
Step 1: Establish a Sense of Urgency
At this stage, the leaders of Mitsubishi will have to examine the market and competitive realities that are relevant to Mitsubishi now. Based on that, they must formulate a set of practical and attainable targets that will be the benchmark and bottom-line for change and growth in the new restructured company. With this done, the managers of Mitsubishi must identify the major opportunities, problematic pointers and crisis that they are likely to face. This can be done by sharing the vision and telling the workers of the company about the revolution and evolution ahead. This will change the environment and for preparation to change. Usually, it might be necessary to demonstrate the pointers outside the company that will influence the change, like other automobile companies in America that utilize the global supply chain model like Chinese and German car manufacturers and how successful they are and are improving the quality of life of their workers. This must be shared with the workers of Mitsubishi.
Step 2: Build the Guiding Team
There are many interest groups that will be formed with competing demands and expectations. There are some members of Mitsubishi that will be laid off. This include the workers of the Normal, IL factory who will not be needed anymore. However, some members of the factor who might have different roles in the restructured company. This includes researchers, some supervisors and some experienced persons whose skills and knowledge are necessary for the new company. Such persons must be told of their importance and they must be used as tools to promote the change. These individuals must be brought on board to form a coalition for the new era ahead. They must be used where necessary to reduce the negatives of the change transition.
Step 3: Formulate the Right Vision
The change is from one point to another. This transition needs to be given a specific conceptual form that workers can look up to in order to change and streamline their actions to reach. This vision should be created in a way that is specific and direct and must be applied to the different workers who will survive. The vision must be communicated and shared and jointly, the managers of Mitsubishi must formulate a strategy for attaining the vision with the new generation of workers. In this case, a vision of making the company a global player must be shared with the workers and stakeholders.
Step 4: Communicate Vision
Most workers who will survive the reformation will understand the vision. However, they might see it as a distant and far-removed process. In order to make it more practical, there is the need for Mitsubishi’s managers to communicate with them regularly. This includes regular brainstorming sessions and forums and meetings to drive home the point of the vision of change ahead – to make Mitsubishi USA a part of a global entity in order to function better and increase the prosperity of the workers and its stakeholders. This must be a simple and heartfelt communication that will build the foundation for new behaviors that align with the new vision and strategies of the new Mitsubishi.
Step 5: Empowerment and Inducing Action
Those who have a place in the future Mitsubishi must be encouraged and given the right tools and competencies to grow the company. This includes the need to change the systems and train and develop those who will stay on. This includes the formulation of new processes and the creation of a responsible transition process whereby new skills and competencies can be formulated in the company. Thus, the workers of Mitsubishi will need to be trained and where necessary, sent to Japan to see the manufacturing plants and given a walkthrough test to understand how the new system works. From there, all necessary tools for the new challenge must be given to the workers to encourage them to be effective and efficient for the future.
Step 6: Create Short and Easy Wins
This will mean that Mitsubishi must create a system whereby easy ways of doing tasks will be created. This will allow the workers to demonstrate their understanding. Thus, a set of easy demonstrative projects can be put up for the workers and these should be such that they can easily pass and gain results. Ideas of setting up easy wins include the creation of tasks that the workers are familiar with as well as new projects that they can easily do without having to struggle at their level of expertise and competency. This will guarantee interest and a desire to change and modify the system in a quick fashion.
Step 7: Consolidation of Results
There must be a plan for the creation of visible performance improvement throughout Mitsubishi. This includes the creation of a set of indicators that will provide a basis for the achievement of results. In every situation where workers manage to achieve desired ends and goals in the transition process, there must be recognition of these goals and this must be rewarded to promote involvement and enhance various incentives. This way, positive and result oriented behaviors will be rewarded whilst those actions that do not lead to any positive results can be discouraged.
Step 8: Institutionalize Change
The new things that are productive and helps Mitsubishi to achieve its goals must be made to stick. This should be done by articulating the connections between new behaviors and corporate success in the new era. With time, they will be instituted and made to be a part of the company and this will ensure there are better results and the system is made to run in a way and manner that leads to better results. Hence, the productive actions and positive things that worked will be instituted as code for best practice and this will become integrated into the organizational culture and organizational strategy. Those that are counterproductive must be discouraged so that the company can become more effective and efficient.
Conclusion
Mitsubishi will need to close down its US production unit in Illinois and restructure the company as a marketer of Mitsubishi cars produced in Japan to ensure the stakeholders are served best. The Kotter’s model indicate that the managers must create a rapport with workers by constant communication and coalition building with the workers who will stay after the changes. The vision of making Mitsubishi USA a global supply chain outlet must be shared with the workers who will survive the restructuring and this must be communicated regularly with a sense of urgency. The workers who will stay after the restructuring must be empowered and they should be given easy tasks. Results of the tasks must be publicized and consolidated. The best practices must be instituted whilst counterproductive practices must be discouraged. This way, a new corporate strategy and culture will evolve that will support the new code of best practices in Mitsubishi as a global supply chain outlet rather than an American manufacturer.
References
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