This case study discusses Jinnah Foundries, a Pakistan-based prominent foundry and machining business. Due to labor financial costs, the company hired consultants, which provided recommendations that the company had to implement. The company's problem now is how to implement the proposed changes the best way.
Zunaira Saqib, Maria Khan, Asfia Obaid
Harvard Business Review (W20093-PDF-ENG)
February 13, 2020
Case questions answered:
- Using the principles of change management (using one change model: different change models include, i.e., Lewin’s Model of Change; Kotter’s Eight Step Model), how would you advise Jinnah to implement the changes recommended by the HR consultants?
- How would you justify the need for the proposed change to Jinnah (discuss the proposed change, forces driving change, resisting change)?
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Case answers for Jinnah Foundries: A Lesson in Change Management and Human Resources Restructuring
1. Using the principles of change management (using one change model: different change models include, i.e., Lewin’s Model of Change; Kotter’s Eight Step Model), how would you advise Jinnah Foundries to implement the changes recommended by the HR consultants?
At Jinnah Foundries, the family-owned business recognized the importance of change in the workplace.
Organizational development and change management prepare employees, senior management, and the organization to accommodate and adapt to the needed changes, so the company can transform and meet its defined objectives.
Organizational development is the process of planned activities that aim at improving the effectiveness and efficiency of the company through managing change initiatives.
By the same token, change management is a structural solution to transforming people, teams, and organizations from the present state to the ideal future state. It is also an internal mechanism intended to help workers recognize, commit, and embrace changes in their new business climate.
Following joining Jinnah Foundries in 2013 as a director, Hamza Afaq had a phenomenal vision for problem identification and seeking long-range solutions. After having partnered with external HR consultants and agreed on the recommendations for shifting daily wage and contractual workers to permanent employees and developing an employment grading structure, it is time to put words into action.
Nevertheless, Hamza Afaq raised a major concern about implementing the grading structure while causing as little damage as possible to both the employees’ wellbeing and the production levels. Such an affair is critical and considered the prerequisite step for efficiently executing the aforementioned recommendations. Yet, it is highly sensitive as some employees would be downgraded, while others would be promoted, along with other benefits changes.
For that reason, we have come to suggest Kotter’s Change Management Model (KCMM) for Jinnah Foundries to implement this paramount change and achieve high-yielding outcomes. The KCMM is an 8-step process for leading change through changing people’s behavior, where each step is identified as below:
[YM1]Thank you for providing the rationale first.
Figure 1: The 8-step plan of Kotter’s Change Management Model
Establishing a sense of urgency is the first step in Kotter’s Change Management Model to identify the key urgency for a prompt change. For Hamza Afaq, implementing the employment structure was his major concern as it raised inquiries about the repercussion it brings afterward.
Jinnah Foundries was experiencing a toxic disorganized hierarchy due to the absence of HR professionals and a lack of management practices and policies. Thus, Hamza recognized the need to address these issues that resulted in high turnover rates, employees’ dissatisfaction, demotivation, lack of career development and training programs, working overtime, and production delays.
Turning 70% of the workforce on daily wage into permanent employees was only halfway through the ultimate solution for Jinnah. Therefore, the remaining was to construct an employee grading system that ascertains who would be promoted, under what criteria (set of qualifications), and the pay rate for each employee, considering their years of service.
Because there were huge disparities between salaries of employees within similar grades and designations, the biggest concern was how to tackle the change’s aftermath in restructuring the grading system of employees.
Usually, a change will likely be unsuccessful if only one person is pushing to its implementation. Thus, forming a powerful guiding coalition is the second step that requires gathering a specific group of people with enough power and knowledge to drive as a team to the change’s success. At Jinnah Foundries, management cooperated with HR consultants from a local business school to make the change smoother and feasible.
The HR consultants played a crucial role in setting up the amendments that Jinnah aspires to fulfill. Both the consultants and management team came up with the idea to introduce loyalty allowance as part of the grading structure based on employees’ number of years of service.
As most of those employees served no more than a year, it is much easier to have them as adopters who can benefit from the grading scheme. As a result, those unskilled employees that comprise 70% of the company will probably accept the change being introduced along with having the HR consultant’s physical presence on the ground, engaging with employees, and being considered as an outsider factor-force who calls for this change, would allow the change to be welcomed than if it was only from the management.
Create a vision serves as the third step in this change management model that focuses on showcasing a picture of what the future state for Jinnah will look like after implementing the desired change.
As the case at Jinnah Foundries, the management team sets one’s heart on providing a clear hierarchy and healthy working environment that…