Case Study Problems Perrier Essay

1. Identify the key elements of the resistance to change described in this situation.

To identify the key elements of the resistanceto change described in this situation, one may make use of the six Change Approaches of Kotter and Schlesinger.[1]The model prevents, minimizes or descreases resistance to change in organizations. According to Kotter and Schlesinger (1979), there are four reasons that why people resist change, three of which are applicable to this case:

The Parochial self-interest occurs when people are concerned with the impact of the change on themselves and how it may affect their own interests, rather than considering the effects for the success of the business. The union suggests this of Nestles. Jean-Paul Franc, head of the CGT at Perrier, sees the situation differently. In regard to the company’s plan to cut 15 percent of its workforce he protests: “Nestle can’t do whatever it likes” He says, “There are men and women who work here… Morally speaking the water and the gas stored below this ground belong to the whole region.” [2]

Misunderstanding which evolves through communication problems or inadequate information. Management of a company could not agree to a decision, perhaps due to a lack of information of the real problem. Relating to this case it is not very clear what is causing the lower production at this plant. According to Nestle CEO Peter Brabeck-Letmathe, “We have come to the point where the development of the Perrier brand is endangered by the stubbornness of the CGT. Where else according to Jean-Paul Franc, head of the CGT at Perrier as mentioned before, “In regard to the company’s plan to cut 15 percent of its workforce he protests, “Nestle can’t do whatever it likes.? He says, “There are men and women who work here… Morally speaking the water and the gas stored below this ground belong to the whole region.”[3]

Different assessments of the situation occurs when employees disagrees on the reasons why the company has to change and on the advantages and disadvantages of the process of change. This applies to the above differences in assessment of the problem and solution by the Nestler’s CEO and the union head.

2. Construct a change management strategy for dealing with this situation. In so doing, identify what approach (es) to managing resistance you recommend and provide a clear justification for your choice.

Kotter and Schlesinger set out six change approaches to deal with resistance to change. In the following we make use of four of the approaches: [4]

1. Education and Communication There is a lack of information or inaccurate information and analysis. Instead of discussing directly with the employees, that sales were dropping, the manager used a form of manipulation in form of placing the competition’s bottles water e.g. Badoit Rouge in the factory cafeteria, which further antagonized workers. This action was opposed to the intended motivation. One of the best ways to overcome resistance to change is to educate people about the change effort before change occurs. Up-front communication helps employees to see the change effort. This reduces incorrect rumors concerning the effects of change in the organization.

2. Participation and Involvement This approach is useful when that the initiators do not have all the information they need to design the change and where others have considerable power to resist. This is the case at Perrier, where an identification of the real problem is essential. When using this approach it allows including the employees in the problem definition as well as potential solutions. It encourages open communication. The union and Nestles need to set the same goals. When employees are involved in the change effort, they are more likely agree with the change rather than resist. This approach is likely to lower resistance and those who merely acquiesce to change.

3. Negotiation and Agreement Someone or some group may lose out in a change and where that individual or group has considerable power to resist. This would be effective in dealing with the union at Perrier. This can be done by allowing change resistors to veto elements of change that are threatening. Another way is that change resistors can be offered incentives to leave the company through early buyouts or retirements in order to avoid having to experience the change effort. This approach is appropriate where those resisting change are in a position of power, like the CGT.

4. Explicit and Implicit Coercion This is a last resort approach where speed in change is essential. Managers can explicitly or implicitly force employees into accepting change by making clear that resisting changing can lead to losing jobs, firing, transferring or not promoting employees. Working together with CGT, Nestles can negotiate a projected percentage of increased production or otherwise the suggested number of layoffs (15%) will be required.

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