A Case Study of Change Management from External Forces: Dell Computers

A Case Study of Change Management from External Forces: Dell Computers Two things characterize the business environment today; they are competition and change. Therefore, todays environment puts a premium on effective leadership. In fast- changing, team- oriented environment, managers need effective leadership skills so they can motivate knowledge workers, build self-managing teams, and lead transformation. In 1994, Dell was a struggling, the company ordered its components in advance and manufactured to inventory. Change was needed and was triggered by factors outside the company. The new business model that Dell implemented converted its operations to a build-to-order process, eliminated its inventories through a just-in-time system, and sold its products directly to consumers putting these new supply chain capabilities at the core of its strategy. Dell developed a supply chain mastery that went far beyond the simple pursuit of efficiency and asset productivity. However, the company had to make a series of very difficult strategic tradeoffs to bring its functional activities into alignment with its new business model. (Copacino, 1999). James Burns who wrote a book about called Leadership says changes like these require the guidance of transformational leaders who bring out change, innovation, and entrepreneurship. They are responsible for leading a corporate transformation that recognizes the need for revitalization, creates a new vision, and institutionalizes change. Transformational leaders inspire their followers to want to make the change and attempt to raise the needs of followers by promoting dramatic change in individuals, groups and organizations. Such leaders also encourage and obtain performance beyond expectation by formulating visions and then inspiring subordinates to pursue them. They focus on accomplishing the task at hand and maintaining good working relationship. It is common for the transformational leader to passionately communicate a future idealistic organization that can be shared. He or she uses visionary explanations to illustrate what the employee work group can accomplish in order to motiv ate the employees to achieve these organizational aims. Therefore, a transformational leader could make the company more successful by valuing its associates. One such example is Dell CEO Michael Dell who did it installing one of the worlds most sophisticated direct- sales operations; eliminating resellers markups and the need for large inventories, and keeping a viselike grip on cost. Dells mission statement is be the most successful computer company in the world at delivering the customer service experience in markets we serve. With their markets changing so fast Chairman Michael Dell had to constantly focus his companys and employees attention on the companys mission. He has been quoted saying that looking for value shifts in the companys mission companys customer base is the most important leadership responsibility. In other words, Michael Dell had to constantly monitor what Dells customers want in terms of value. He had to stay in close contact with customers, and make sure that everything Dell does, Dell is addressing the customer needs. How do you build such a company? For Dell computers, the answer meant using technology and information to blur the traditional boundaries in the value chain among suppliers, manufacturers, and the end users; it basically meant that there are no intermediaries like wholesalers or retailers to come between Dell and its customers and suppliers; thus, Dell can be much faster-moving company that it might otherwise be. For most computer companies, the manufacturing process is like a relay race; components come in from suppliers, these components are assembled into computers, and the computers are then handed off to be distributed through wholesalers and retailers to the ultimate customers. Dells system changed all that. Dell interacts with and sells to customers directly, so it eliminates the activities of the wholesalers and retailers in the traditional distribution chain. The current economical crises are having a tremendous impact on how companies do business. Even one of the worlds biggest computer companies, like Dell has experienced this recession and had to make critical and dangerous decisions of lowering down the cost of expenses and tightening their belts. Today, Dell Inc. is cutting costs to weather a soft PC sales market, and even founder and CEO Michael Dell is feeling the pinch. The company disclosed proxy information that showed his total compensation declined by more than $200,000 in the latest fiscal year, to $2.1 million. The decline came mainly in the value of option awards, which were higher the previous year. Michael Dell received $931,731 in salary, stock options the company valued at $16,766 and personal security services valued at $1.1 million. Because Dell Inc.s bonuses for senior executives are tied to company performance, Michael Dell did not receive a bonus in the latest year, just as he has not the past three years. (Ladendo rf, 2009). Meanwhile, to cut operational costs and to save funds, the company has shut down factories and outsourced hardware manufacturing. Also, the company has laid off 1,900 employees and shifted its European PC manufacturing operation from Ireland to Poland. Like many companies, Dell has also been looking down the road and plans on spending $70 billion on computer parts from China between 2007-2009. Thats a lot of cash, but this could also save the company in a recession when people do not have much money and want much cheaper computers. Dell also cut 10% in global jobs last year, and announced further job cuts at its Ireland sites earlier this year. But what I found most interesting is the acquisition of David Johnson the former top IBM Corp. in early June. Although IBM still is pursuing a lawsuit against Johnson, saying his move to Dell Inc. violated a noncompet agreement; recent court rulings have freed him to take an active role guiding Dells acquisition strategies. Johnsons hiring cou ld be a signal that Dell intends to buy other companies, a growth strategy it has used less often than many of its industry peers. CEO Michael Dell also is expected to talk about the companys growth prospects, both from existing operations and from any companies that it might buy. Analysts are split on whether Dell will try to do big, transformational deals that would change the makeup of the company, or smaller, less risky acquisitions. A.M. Toni Sacconaghi with Bernstein Research said he expects Dell to make smaller deals as it tries to bolster its corporate-oriented service and product offerings. He quoted Brian Gladden, Dells chief financial officer, as saying the company is unlikely to do big deals and that it viewed its $1.4 billion acquisition of EqualLogic last year as the sweet spot. EqualLogic, which sells data storage systems, is Dells largest acquisition to date. Sacconaghi concluded that for Dell, smaller deals make sense because no obvious transformational targets exist, the odds of successful integration of the acquired company are better with smaller deals, and large acquisitions could distract top executives from the their two-year campaign to turn the company around integration of the acquired company are better with smaller deals, and large acquisitions could distract top executives from the their two-year campaign to turn the company around. (Ladendorf, 2009). One Wall Street analysts who follows Dell Inc. say theyve been impressed by the companys ability to cut costs and generate cash flow in the face of a steep industry downturn. Forward-looking businesses are using IT to target unnecessary cost and complexity, Dell said. Dell Inc. will continue to tap into IT for innovation and efficiency, and doing so now Dell Inc. will set itself apart as the global economy inevitably improves Dell identified three keys to smart IT: Increased standardization and virtualization; Better resource management that reduces IT maintenance; Greener computing that not only reduces carbon emissions but saves on energy costs. Dell itself has reaped the benefits of such IT improvements: facility improvements and a global power-management initiative that switches off computers when not in use is saving the company about $3 million a year and reducing its carbon footprint by some 20,000 tones. (Greenbang, 2009). Today the Dell machine is firing on all cylinders. In addition to being a PC juggernaut, Dell is moving fast into the $10 billion network server business. In notebook PCs, Dell has become the sixth-largest seller in the $40 billion market. Now, Dell is working on ways to combine its PC knowhow with better networking service. Through a partnership with network equipment maker 3Com Corp., Dell is trying to slash the 60 to 90 days required to test computer and networking configurations to just two weeks. Instead of each running independent tests of the same gear, Dell will deliver to 3Com each new computer so that 3Com can test compatibility with its networking devices (Business week). Leading and organizational change can be treacherous; there are no silver bullets or single- shot method of changing organizations successfully. (Ashford University). Single shot rarely hit a challenging target. Usually, many issues need simultaneous attention and any single, small change will be absorbed by the prevailing culture and disappear the change may require the cooperation of dozens of managers and resistance may be considerable. However, whether the required change is simple or complex, technological or structural or the basic organizational change process remains basically the sameà ¢Ã¢â€š ¬Ã‚ ¦executives must ask themselves three basic questions. What are the forces acting upon them? What should we change? And how should we change it? According to Hesselbein and Cohen (1999), organizations that take the time to teach leadership are far ahead of the competition. By becoming familiar with the transformational leadership approach and combining the four Is, (idealized influence, inspirational motivation, intellectual stimulation, and individual consideration), managers should be able to handle the unforeseen change more effectively. Transformational leadership strategy must also make sense in terms of the business overall competitive strategy. Today, leaders have to be able to transform their company fast. Socio Economic Inequalities: Health Socio Economic Inequalities: Health Research on health inequalities is grounded in social epidemiology, which explains how peoples social circumstances affect their health (Graham, H 2007:5). Explanatory frameworks have been presented and theories proposed in order to explain the variations in health across social class (Asthana, S Halliday, J 2006:45). This essay will discuss and analyze the sociological theory necessary to understand social class inequalities in health within the UK. Implications for health policy and practice will also be discussed. Discussion: Socio-economic inequalities in health: demographic, mortality and morbidity information: Reports outlined since the 1980s the extent of which ill-health and death are unequally distributed among UK: The Black Report (1980), Health Divide (1988), The Acheson Report (1998), The Solid Facts, WHO (2003), The Marmot review (2010). These documents identified a social gradient in health: socio-economic status (SES) influences health, whereby higher position equates to better health (Caspi, A Poulton, R 2003). From here, sociology found a correlation between mortality against social position. Britton et al (1990), Rosato, M et al (1998), Reid, A Harding, S (2000a)(2000b) Asthana, S. et al (2004) Marmot Wilkinson, (2005) Barry Yuill, (2008) Health Survey for England (HSE) provide information on mortality and morbidity by social class: people in class I have longest life expectancy while people in Class IV have the shortest life span; mortality is greater in Wales, Scotland, N. Ireland and N. England than in S. England; same patterns appear for IHD, stroke and cancer mortality in between social classes, but is less evident for accidents and suicide; risk of developing chronic illness in adult life is high for people with low SES; childhood mortality is more prevalent in socially disadvantaged groups; Sociological theory: The cultural / behavioral explanation: In this argument primary responsibility for the differential between social position and health is placed within the individual, rather than the larger society {a culture of poverty approach}(Matcha, D.A 2003:90). Explanations focus on the way individuals from different social groups lead their lives (Clarke, A 2003:122). Smoking, alcohol, diet and exercise are chosen for detailed enquiry, as they are thought to be voluntary choices (Blaxter, M 1990:113). Social epidemiologists identified a hard and a soft version of cultural/behavioral explanation. Both versions start by observing that health-damaging behaviors are more prevalent among the poor than the socially disadvantaged (Asthana, S Halliday, J 2006). The hard version implies that behaviors are voluntary, the result of individual decisions (Blaxter, M 1990) thus, the fact that people adopt unhealthy behaviors is due to ignorance, recklessness or fatalism (Asthana, S Halliday, J 2006:26). The soft version suggests that rather that seeing health-related behaviors as a cause of health inequalities, they should be seen as outcome or consequences of differences in the material circumstances between socio-economic groups {behavior as a result of culture} (Asthana, S Halliday, J 2006:27). For example, in Britain smoking displays a clear class-gradient: the less advantage social class, the more likely is the individual will smoke (Bartley, M. 2004:65). Townsend, in 1995 shows that 70% of single parents on low income, social housing, manual occupations, with few educational qualifications, are regular smokers. Also, in 1998, The Office for National Statistics showed that levels of smoking for men were 12% for class I and 41% in class V. However, in sociological research focus exists on behavior rather than culture (Woodward et al, 1992; Lynch, Kaplan and Salonon, 1997b) because reckless behavior is not accepted as a definition of culture (Bartley, M. 2004:68). Bosma, Von Mheen and Mackenbach, (1999a) (cited in Bartley, M 2004:66) suggest a direct behavioral model in which people with low status and income are less endowed with intelligence and coping skills which make them unable to grasp the long-term health consequences of things that give them short-term pleasure (e.g. smoking, drinking, etc). Regarding education and behavior Blaxter, 1990; Gran, (1995), Hoeymans et al., 1996 (cited in Bartley, M. 2004) find that education is correlated with health behavior: educated people have a better understanding of health. They also make better use of preventive health measures such as contraception, screening services or immunization. For example, a survey published in 2007 by Health Survey for England (HSE) Healthy lifestyles: knowledge, attitudes and behavior 30% men and 24% women agreed with the statement I get confused over whats supposed to be healthy and what isnt(p. 108). Marmot et al (1981 ) that individuals from class V have high incidence of CHD due to diet being higher in sugar content than in fiber. National Food Survey (1985) shows that low-income groups purchase less vegetables, fruits or whole meal bred. Behavioral explanations view consumption patterns as a reflection of cultural differences in the way people live their lives. Lifestyles are thought to be shaped by traditional views and socially accepted patterns of behavior. The fact that low income may constrain food choice is ignored or rejected (Clarke, A 2001: 123) Critique and weaknesses of the cultural/ behavioral explanation The problem with this explanation is that it separates behavior from the social context in which it takes place and effectively blames the victim of health inequality for the poor health that they experience (Asthana, S Halliday, J 2006:26). Instead, individual decisionà ¢Ã¢â€š ¬Ã¢â‚¬Ëœmaking should be seen in the context of the social structure and of the constraints that impede the behaviors of people. In support to this, Dobson et al 1994(cited in Barry Yuill 2006) researched forty-eight households to observe food purchasing and attitudes toward eating. They found a pattern of life under constant economic restrictions. Also, in 1991, the national Childrens Homes survey on nutrition and poverty finds that 1 child in 10 and 1 adult in 5 skip meals because of costs. Thus, it is not people failing to practice good health habits but their choice is affected by limited funds (Barry Yuill 2006:108). Also, in an HSE survey (2007) 22% men and 20% women agree, it costs too much[to eat healthy] (p. 108). In 2010, The Marmot Review emphasized that insufficient funds to lead a healthy life is a significant cause of health inequalities (p. 29) Although health-damaging behaviors are more common among low groups, these groups also lack: adequate income, decent housing and secure employment. Therefore it is hard to separate behavioral explanation (Gatrell, C.A 2003: 113) from structural/material explanation (poor housing Ġº unhealthy life) and social selection explanation (poor health for low classĠº unhealthy life) Health policy response to inequalities in health linked to social class: Advocating healthy public policies is the most important strategy we can use to act on the determinants of health. (CPHA Action Statement on Health Promotion 1996) Up to date health policies include: The New NHS (1997); A First Class Service (1998); Choosing Health (2004); The Wanless Report (2004) Tackling Health Inequalities (2008); Darzi Report (2008); The Marmot Review (2010) The Marmot review: Policy objectives A-F:  · Give every child the best start in life  · Enable all children, young people and adults to maximize their capabilities and have control over their lives  · Create fair employment and good work for all  · Ensure a healthy standard living for all  · Create and develop healthy and sustainable places and communities  · Strengthen the role and impact of ill-health prevention. (UCL Research Department of Epidemiology and Public Health, 2010) Implications for health care practice: Important documents: Choosing health: making healthy choices easier (2004) and Health Challenge England (2006) people need convenience and choice in advice available to prevent ill health. Health care practice can contribute to reducing health inequalities through:  · Assessment / use of evidence: accurate assessment of peoples health promotion needs; linking evidence of practice outcomes to broader changes  · Strategy: population specific health care strategies; getting the promotion/prevention/treatment balance right  · Communication Collaboration: 1.collaboration with people: involving and engaging most excluded; 2.collaboration with MDT: assessing / implementing / evaluating / updating  · Training: improving training and professional development, particularly in relation to work with most disadvantaged  · Service development: being well informed about health inequality trends, impacts and intervention effectiveness  · Service access: reducing financial barriers to health care  · Resource allocation: making conscious, informed choices about priorities. (Wiseman, J 2007) (Choosing Health 2004) The time for action on health and health inequalities Health in the consumer society Children and young people starting on the right path Local communities leading for health Health as a way of life A health-promoting NHS Making it happen national and local delivery Consultation making it happen Assessment suitable assessment of local needs (collaborative therefore patient and public involvement / use of evidence) Strategy Communication appropriateness (methods and means) Service Needs (recruitment, training) Resources (access, materials, skills mix {MDT?, suitable tools and interventions) References: Asthana, S., Gibson, A., Moon, G., Brigham, P. and Dicker, J. (2004) The demographic and social class basis of inequality in self reported morbidity: an exploration using the Health Survey for England. Epidemiology and Community Health, 58, (4), 303-307 Blaxter, M. (1990) Health and Lifestyles, London: Tavistock Payne J, Coy J, Milner P, et al. 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