BMA 314 Organisational Change & Development Semester 1/2017 Case Studies Case Study #1: The Last Resort Background The Last Resort is a 4-5star integrated hospitality and tourism resort situated in regional Tasmania. It developed from a wildlife park and then progressively from standard to luxury accommodation and a range of tourist activities including high-end walking tours, game fishing and an 18-hole golf course with a reputation for both beauty and difficulty. The business has had success marketing to local, state and interstate customers with an emphasis on a tourism but also attracting corporate clients and locals (who help maintain customer levels during the quieter winter months). It is a providing a well-established business and has the following accommodation facilities; 25 x 5 star rooms (Recent/new additions) 15x 4-star self -catering chalets styled units (1 & 2 bedrooms) 80 x 4 star units Its range of services includes conference/function facilities, 3 restaurants, bars, gym, pool/spa, golf pro shop, small marina and guided 4WD tours (including night wild-life tours). The current business environment is mixed with increases in international tourists and from ‘grey nomads’. These groups split into three market segments that are either: Having a short break (2-3 days) and wish to cram as much as possible into that time; People with an environmental focus who stay 5-7 days; Those focused on sporting activities such as game fishing and golf. There is overlap between these groups, but the ‘experiences’ sought are different and require employees who can effectively cater for the differences. Recently, the Last Report has become the major venue for weddings in the region. This has upset some of the existing venues which have lost business. Challenges include airline and ferry service schedules which sometimes limit total numbers but also are not always attractive to the more ‘high end’ customers. There is a current application proposing a helipad and a landing strip. Organisational context The GM grew up locally and had a 15- year international career in luxury hotels and cruise ships prior to returning to Tasmania 5 years ago to take up the GM role. The Last Resort has enjoyed a relative integrated and comprehensive human resources approach (by hospitality industry standards). This was developed by the previous GM (who had an HR background) and supported by the current GM although she is a bit sceptical of whether the value of the HR function is worth the cost. The senior management team (outside of the GM) consists of: The Hotel Manager (who is also the Deputy GM); Tourism and Development Manager; Functions and Events Manager (new to the Last Resort); Chief Financial Officer (who started an accounts clerk when the business first opened) Transport and Logistics Manager (all visitor transport and all supplies for the Resort) There has been good corporate culture with ‘team work’ at its core. A stable management team leads a somewhat constant part-time and full-time core crew that is augmented over the peak season with casual labour. During the softer season the staff numbers are around 150 however, that can swell to above 250 during the peak season. The macro level outlook for the labour market in regional Tasmania is tight despite unemployment being above the national average. Skills shortages in key areas such as chefs, tourism professionals and HR together with an ageing workforce are exacerbated by the relatively low image of hospitality/tourism as a positive long term career option. The Last Resort has been increasingly employing people from interstate, those on ‘working holidays’ and those on 457 Visas. The GM believes that it is time for The Last Resort to thoroughly review its current approach and plan to become the premier tourism destination in Tasmania in the next 5-7 years. The senior management team has conducted a diagnosis of the current opportunities and threats prior to developing a change strategy and the key findings are: Whilst the current reputation is strong, there is a declining percentage in return customers and a view that Tasmania may be starting to lose some attractiveness as a destination. There are also some proposed new developments, that are targeting high-end tourists, and new golf courses; There is an opportunity to target the Last Resort as a honeymoon destination for couples from North Asia and India; There are challenges in selecting and developing employees who can consistently produce high-end service to customers who appear to be increasingly demanding. There have been a couple of recent poor reviews on ‘Trip Advisor’: one alleging food poisoning and the other that employees were ignorant and insensitive to cultural practices and preferred cuisine; A linked issue is increasing complaints from Local Councillors and candidates for the next State Elections arguing that the Last Resort is a poor corporate citizen for not employing and training many locals (too many 457 visa employees) and by environmental concerns about activities of game fishing, 4WD tours and that the proposed helipad and airstrip will destroy the habitat of local wildlife. Whilst corporate culture has been strong, there are signs this may not last as turnover has been increasing, the level of cooperation between Departments is reducing and the effectiveness of internal communications has declined: this was managed by the previous Functions and Events Manager but the new appointee is still coming to grips with the scope of this role. As a result, there has been a marked increase in rumours and speculation about restructuring and redundancies. The GM is keen for the change process to proceed quickly but has a strong commitment to a transparent, inclusive and ethical process. As HR Manager (who has been at the Last Resort for 2 years), you have the task to develop a project plan for the change strategy to be delivered to the senior management team in four weeks.  Case Study #2: University of Hard Knocks The University of Hard Knocks (UHK) is an organisation in transition: it has never had the opportunity to settle down and develop a clear sense of identity. It was “created” by amalgamating of a regional Institute of Technology (IT) and a college of advanced education (CAE) located in an outer metropolitan suburb. The CAE had previously been affiliated with one of the G8 Universities whilst the IT had been in existence for five years. The structure contains three faculties: Science, Education and a combined Arts/Business Faculty. The other key Departments are Student Services and Professional support (HR, IT, Marketing and Property Services) The former CAE and former IT campuses are 50km apart but had significantly different structures, management styles and organisational cultures. UHK has grown rapidly over its 15-year existence due to three factors: Exploiting the reputation of the former IT in core areas such as agriculture, manufacturing, veterinary science and mining; “Trendy” new courses appealing to students seeking a “different degree”; Successfully targeting international students with aggressive marketing campaigns supported relative low cost accommodation/living cost “colleges”. In the last two years, there have been “cracks” in the growth pattern due to: declining numbers of local students because of population demographics and more local students going to University in the larger cities. The geographic area in which UHK is located has a significantly lower proportion of residents who have undertaken post-secondary study; part of the reason for the population shifts has been structural changes to the local economy with contractions in manufacturing and mining. Large employers in these industries had provided significant financial support to UHK with employees competing qualifications and facilities being used for staff development activities. The growth industries are small to medium sized tourism, wine companies and niche agricultural producers; publicity given to allegations that international students were graduating despite being given failing grades by academic staff. Additionally, there had been recent instances of assault on international students by drunken youths who accuse international students of taking jobs from locals and receiving substandard pay and conditions. There have been four Vice-Chancellors (VCs) over the 10 years. UHK has developed a reputation as the “proving ground” for ambitious University administrators using UHK as a stepping stone to a G8 university. As a result, previous VC’s have used UHK as a vehicle for implementing the latest “best practice” change management techniques leading to 7 major restructures in its 15-year period of operation. The new VC was appointed to deliver increased student load and to develop a Health and Regional Medical Sciences (HARMS) School linked to a new regional hospital which is well-funded as it is in marginal seats at Federal and State levels.  The new VC has assembled a small working party, including the HR Director, to oversee a change strategy with three major outcomes: Completely revamping preparation and support programmes and introducing associate degrees as a way of increasing the proportion of local students who have university qualifications; Restructuring the Faculties to include HARMS into Science and to combine Education and Arts/Business into a Faculty Largely of Professions (FLOP); Reviewing the approach to recruiting overseas students to diversify the countries where students are drawn and increase the proportion of post-graduate students. The Working Party has conducted a diagnosis and identified key issues as: Organisational silos based on the common first year degree structure that requires students to select units from all three Faculties. This has been a source of simmering tension from the Science Faculty which has experienced relative enrolment decline and seeks a have a higher percentage of units in its degrees taught within the Faculty; The creeping managerialism that has gradually centralised power and control from faculties to central administration reducing expenditure flexibility and increasing competition between Faculties for resources. This has been accompanied by a growth in senior executive positions and in marketing positions to support large aggressive domestic and international marketing campaigns; A high number of courses in Arts/Business coordinated by casual staff, some doing the same role for more than seven years. This developed from a practice of offering annual casual contracts as courses commence (mainly targeted to International students) to enable each course to demonstrate financial viability; There are differing staff profiles across the faculties: Science is male dominated with most employees over 50, Education has two groups – over 50s and under 30s while Business/Arts has mixed ages but 80% male at senior lecturer and above; The HR function has reputation for being bureaucratic, unresponsive and not providing effective services to the Faculties, Departments and staff. The function has a difficult relationship with the Unions representing the staff particularly from the Science faculty which traditionally has high union membership and from a new union representing the casual staff led by ambitious and charismatic Julia Bligh (also the first female coach of the local men’s football team); There is a low level of morale across the University and a general feeling of change fatigue. Whilst there is some optimism about new opportunities, there is considerable speculation about the implications of the restructure. UHK has not been effective in communication and consultation. Some of the senior staff in Faculties have been open in their hostility to aspects of the change programme. There are numerous rumours circulating. A new Industrial Agreement is due to be completed in the next six months which is to include positions to support Associate Degrees and new health professional classifications (who will coordinate and supervise student placements). The VC wishes the change strategy to proceed quickly but has a strong commitment to a transparent, inclusive and ethical process. As HR Director (who has been at UHK for 2 years), you have the task to develop a project plan for the change strategy to be delivered to the working party in four weeks.  Case Study #3: Unhealthy General Hospital Organisational background The Unhealthy General Hospital (UGH) is a hospital based provider of health services to a city and surrounding regional area. Two years ago, here was an amalgamation of an existing Government Hospital and a private hospital (that has been sold off by the Government 10 years earlier). Population growth and a rapidly ageing population together with significant media coverage and public comment had given the Government Hospital a poor reputation. It would be fair to say that UGH has been a political and media ‘football’ with rarely a week passing without either a ‘front page’ story, question in parliament or public statement by one of the 3 major unions generating unwanted publicity. The assertions include nepotism in staffing decisions and awarding contracts and having a managerial style and communication approach with as little as possible information being shared. There have been complaints that mistakes have been covered up and anyone who raising issues or problems being marginalised and bullied. There is strong political and community pressure to provide a greater range of community based services which will require: Employees to work in a range of settings outside of the hospital; Cooperative service delivery with a range of community based organisations; Extensive restructuring of existing organisational units and both new positions and redundancies. Organisational context The Structure of UGH is traditional. There is an Executive Group that includes: The Chief Executive Officer (CEO); The Director of Clinical Services (who is also the de facto Deputy CEO); The Director of Nursing; Head of Allied Professional Services Chief Financial Officer; Head of Planning and Development (newly created position just filled). The most senior HR position (Manager People & Culture) reports to the CEO but is not a member of the Executive Group. There are 10 positions in the HR team, including 3 in payroll (the Chief Financial Officer is lobbying for payroll to be transferred to Finance). Organisational culture & management style The CEO (the third in 4 years) was appointed 6 months ago and has brought in key people from their last organisation. The CEO is particularly keen to implement a change strategy that will result in a common vision and clear strategies to improve service delivery whilst increasing the range of services offered. Whilst the amalgamation resulted in a significant improvement to infrastructure and facilities, the project was seen to be poorly managed and communicated which resulted in staff and patients being severely inconvenienced by noisy and dusty building works (including allegations of exposure to toxic substances) and staff unaware of the timing of physical changes to their work locations. Contractors using car parking traditionally utilised by hospital staff was a simmering issue throughout the construction phase. The management style through the amalgamation process was largely autocratic and the consultation was not considered genuine. Most of the senior employees have been promoted due to technical capability and there is acknowledged lack of expertise in leadership, people management and change. The Executive Group has encountered periods of cooperation and conflict. The Director of Clinical Services, a Doctor, is concerned that the increase in community based services will reduce the role of doctors in managing patient care. The Director of Nursing is supportive of the community outreach provided that issues of rostering and staff safety can be effectively addressed. The Chief Financial Officer is concerned about the implementation costs of the change strategy and is most at risk if there is a more transparent process to investigate complaints of nepotism in staffing and contract decisions. The longer serving members are wary about the influence of the people who the CEO brought in from their last organisation. The Manager People and Culture has worked in the hospital for 10 years and has worked her way up from commencing in payroll. She completed an undergraduate qualification some years ago and is enrolled to study a Masters of HR by distance. The role of HR in the hospital has been traditionally focused in administrative process although it plays more strategic roles in staff development and industrial relations. In the last year, the Manage People and Culture has been able to appoint two HR graduates with excellent academic records. There has been continuing conflict with the CFO who argues that HR adds little value and should be scrapped with money spent on clinical services. The CEO has set up a small working party to oversee the development and implementation of the community based strategy. It comprises the CEO’s Project Manager (one of the people brought in by the CEO), the Director of Nursing, the Head of Planning & Development and is to be led by the Manager People & Culture. This working party has conducted a diagnosis of the key issues to be addressed which are: To encourage the Executive to be ‘champions’ of the change; To implement programmes to increase capability in people and change management; To develop a communication approach that will encourage consultation and input. This will require addressing perceptions that issues raised will be considered seriously and people not ‘penalised’; Commence discussions with the 3 Unions towards a new Industrial Agreement that will incorporate conditions for community based activities; Providing clarity of the timetable for the restructure and consultation process. This is to be managed by the People & Culture Department. The CEO wishes the change strategy to proceed quickly but has a strong commitment to a transparent, inclusive and ethical process. As Manager, People and Culture, you have the task to coordinate the working party to develop a project plan for the change strategy which is to be delivered to the CEO in four weeks.