Importance of the leadership for the success of an organization: Case study of Wijers

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Introduction

As the importance of the leadership for the success of an organization, this paper we will discuss some importance issues related to Wijers – the leader of Akzo, who had made great efforts to lead this organization to regain its propensity and reputation with many change means.

 

 

To better understand the importance of leadership change and managing the organizational change, in the following, we will discuss many aspects including Toffler’s model and the depth of organizational intervention in Akzo, the depth organizational intervention in Akzo Changes made by Wijers, the skills he used as the change agent,   Dunphy-Stace’s contingency model and Wijers’ type of change implementation as well as the consequences of change leadership.

 

 

Toffler’s model and the depth of organizational intervention in Akzo

 

i ) Toffler’s model

 

Toffler (1970, 1981) gave us an historical review of the previous two civilizations of the human beings and presented the next one which may be in the procedure of unfolding as the change in the globe, which was surrounded with changes in the society, culture, media, technology, business and so on. The remarkable theory offered by Toffler is the ‘three waves’ theory which describes three different kinds of stages in the development of our society, culture and some other related important issues (Baloch & Kareem n.d ).

 

 

In Toffler theory model, the first wave refers to the era around A.D. 10,000 when humans started to plant crops as well as cultivate their home in the first time, which was the era of agriculture. The next wave refers to the industrial era beginning from 18th century, in which the famous industrial revolution started, which presented people with more working opportunities. The last wave, namely, the third wave is the so called information era. Under the aim of creating a harmonious society and supported by modern techniques as well as, the cooperation between people has been enhanced to even a global scope (Toffler 1970, 1981). Due to these changes in this wave, a large number of companies have to implement some changes in the corporate level to make them more flexible and capable to meet changes and challenges in this era so as to have a relatively steady and promising as well as sustainable future development (Palmer, Dunford& Akin 2009).

 

 

ii) The depth organizational intervention in Akzo

 

As the case mentioned, in year 2003, Hans Wijers was appointed as the chief executive of Akzo to assist this company to regain its previous prosperity. And as Cummings and Worley (2005) advocated that the types of organizational interventions to better facilitate the changes of companies are classified into four types including interventions in techno-structural aspect, human resources management aspect, strategic change aspect as well as human process aspect. Based on this, we may conclude that the appointment of Mr. Wijers as the CEO of Akzo is a kind a leadership change which may be defined as the human resources management intervention to a certain extent.

 

 

In the meantime, the leadership change intervention of Akzo was implemented around the year 2003 which was fit for the time line of the third wave of Toffler’s model. And meanwhile, this kind of change leadership in Akzo was to inject the fresh blood for this organization which had enjoyed a high reputation in the past in order to assist this organization to have some relatively proper modification to meet the changing requirements of the market but not to carry out some radical interventional measures in this organization. As the kind of characteristics of the change leadership in Akzo also had the characteristics of personalization (e.g. especially to choose Wijers who has the special working and life background to be appointed as CEO of for Akzo.), customization (e.g. the appointment of Wijers as CEO was based on the point of view that Wijers’ life and working experience may assist Akzo work more flexible to meet customers’ requirements.) which was also fit for the characteristics of the third waves remarked with the content of personalization, customization , informationalization, democratization as well as humanization and so on. We may get the idea that the change of leadership in Akzo belongs to the third wave model of Toffler. (Ping 2002)

 

 

Since we have got the final conclusion that the leadership change in Akzo belongs to the third wave of Toffler’s model, the depth of which is mild and intermediate.

 

 

Toffler claimed in the third wave model that the ultimate aim of the world including profit or non-profit organizations is to meet the balance which is relatively mild and intermediate (Ping 2002). The aim of change leadership in Akzo is also an intermediate intervention. Just as Daft (2008) mentioned the change of leadership in an organization is just aimed to pursue the balance between the internal environment and external environment of the organization. And for Akzo, the appointment of Wijers as the CEO was also aimed to meet the balance namely the balance of the market environment and its operation which was not aimed to change the whole orientation of this company. By and large, based on Toffler and the real situation of Akzo, we can get that the leadership change intervention of Akzo was an intermediate one.

 

 

Changes made by Wijers

 

i)  Changes made by Wijers

 

The following are those changes made by Wijers since his appointment.

 

 

To begin with, the first change was to cut the costs in protecting the profitability of Akzo due to the high cost in the pharmaceuticals division, chemicals as well as coating.

 

 

Following by the costs cut, Wijers also made some modification in the management team. Due to the importance of the right decision making by the management level of Akzo to regain its previous prosperity, Wijers replaced the people in the previous management because people in the previous team may be stubborn and short sighted. And meanwhile, as the case said there are people in Akzo who are eager for change and who are also very smart and far-sighted. It is reasonable for Wijers to make full use of the capability of such kind of people in the management team so as to gain a better performance.

 

 

And then, new products development was also implemented by Wijers including the asenapine and the fertility treatment. As Elliott et al. (2010) advocated that the new product development is good for a company to maintain a good reputation and its attraction to its customers. And compared to the previous performance of Akzo which was faced with the dilemma of sales decline such as Japirone, the change in new product development has won a good market response for Akzo already.

 

 

The next change was on the aspect of pension scheme. Due to the importance of pension scheme in maintaining the good relationship between the organization and its employees and the unsatisfactory performance of the previous one that there was a pension deficit €2.3billion, Wijers turned this scheme into defined-contribution scheme to gain more support from the employees (Cascio 2010).

 

 

The last change made by Wijers as the CEO was the acquisition. For instance, a series of acquisition helped Akzo widen its market into the Asia. And till 2010, the original paint sales were predicted to increase from $650m to $1 billion, which may make both of its shareholders and other stakeholders enjoy a proper profit.

 

 

ii) Strategic change

 

According to Palmer, Dunford and Akin (2009, p. 193) that strategic change often refers to the needs for change to be strategic, aligning organization with technical, political, cultural and environmental influences upon it.

 

 

Based on the changes in the above, we have got that these changes including the costs cut, management team change, new product development and acquisition were all because of the impact such as the technique, politics, culture and environment and so on. The cost cut change for instance was due to the environment change that the customers and market have fluctuant preferences and requirements on products. The change of new product development was also because of the environment and technique influence that the customers and market have new requirements for the products of Akzo and the competition from other rivals which were supported by modern techniques. The management team change was also affected by the above elements including the environment and culture and so on.

 

 

All in all, the above changes were all under the aim to help Akzo regain its reputation and prosperity in the market as before, which all focus on the strategic aim of Akzo. That is to say these kinds of changes of Akzo really belong to the strategic changes.

 

 

Change agent and the skills

 

i) Role of change agent

 

 

Daft (2010, p. 290) hold the idea that the change agent refers to an organization development specialist who performs a systematic diagnosis of the organization and identifies work-related problems. He or she gathers and analyzes data through personal interviews, questionnaires and observations of meetings, which can assist to define the extent of organizational problems and helps unfreeze managers by making them aware of problems in their behaviors.

 

 

Moreover, the change agent for an organization can be not only the internal one but also the external one (Cummings & Worley 2005). Cummings and Worley (2005) indicated that the internal agent for change is often the organizational member who posses a good understanding of his or her organization such as the cultural issue, operation practices, business target, current problems and the human resource issues and so on. Compared with the internal change agent, the external change agent often refers to the person who is not the staff of the target organization but works for a consulting firm or other related organization. And both the internal change agent and the external change agent are responsible to find out and solve the current problems for the organization.

 

 

ii) Wijers’ role as the internal change agent for Akzo

 

Based on the above points of views on change agent and the information offered in the case, we can get the idea that Wijers works as the CEO of Akzo is an outstanding leader who assist the company to implement many positive changes including the modification of the business orientation, the market expansion strategy, the new pension scheme and so on. These practices of change in Akzo went so smoothly and successfully which resulted in a good reputation and position of Akzo in the world market. Due to this kind of information, we can get Wijers is really an outstanding internal agent for Akzo, who has a good knowledge of his organization such as the cultural issue, operation practices, business target, current problems and the human resource issues and so on. And meanwhile with the assistance of the good knowledge, and his rich working and life experience, Wijers had tried every means to facilitate some positive changes to help this organization have a better business performance in the world market which is full of furious competition.

 

 

iii) Wijers’ images as Akzo’s internal change agent

 

To begin with, as our above discussed, Wijers as the internal change agent of Akzo is excellent. On the one hand, Wijers realized the current problem of Akzo faced with including the pension scheme problem, operation cost and the management team problem and so on. On the other hand, under the assistance of his fantastic capability in observation, managerial ability as well as the diplomatic skills, Wijers implemented the three year reconstruction program for Akzo. For instance, Wijers modified the focus of the business of Akzo, adopted a low cost scheme, made modification in the pension scheme and so on. In a word, these management activities including practices such as planning, organizing, ordering, coordinating as well as controlling with the assistance of a comprehensive view of the entire organization practised by Wijers in Akzo to facilitate the changes disclosed his director image as the internal change agent (Palmer, Dunford & Akin 2009).

 

 

Furthermore, Wijers also made several modifications in the management team of Akzo. For example, he pointed out that there are many persons inside Akzo, who yearn for change and also understand the proper development direction of the origination. This penetrating insight of Wijers enabled him to build a relative reasonable management team or talent pool for Akzo. From this aspect, we may get the conclusion that Wijers is an outstanding coach when he acted as the internal change agent of Akzo. In the procedures of change, he acted as the role of coach to assist this organization to restructure its activities and practices so as to support a better performance of both the organization and its people ( Palmer, Dunford & Akin 2009).

 

 

iv) Wijers’ skills as the change agent

 

According to Cummings and Worley (2005) and North Central Regional Educational Laboratory (2000), as the change agent as well as to level in charge person of an organization, it is necessary to own many skills. In the first place, the intrapersonal skills and self management ability may be a must, which require the change agent to properly handle and remove their pressure from the organization. In the next place, the interpersonal skills are also important, which demand the change agent to cooperate with the working teams and build a trust to assist team members to enhance their competitiveness so as to meet the future challenges. And then, the change agent had better own the skills of general consultation which refers to the skills and views on interventional tactics to properly define the current problems and offer appropriate solving measures of changing interventions. Furthermore, it is better for the change agent of an organization to understand and master the organization development theory, which is helpful for the agent to better define his or her role and position in the changing process.

 

 

And based on the information obtaining from the case, we can get that Wijers as the internal change agent and the top in charge person of Akzo, he really owns the above mentioned necessary skills.

 

 

Primarily, Wijers has good general consultation skills. Due to the rich working and life experience in the past, Wijers was able to define the current problems in Akzo properly including the pension deficit, high operation fee and so on and then proposed many effective measures such as a new business focus, market expansion, new pension scheme and so on to support the development of the organization.

 

 

Then, the outstanding interpersonal and diplomatic skills are also owned by Wijers. For instance, the proper interpersonal and diplomatic skills enabled him to analyze the current situation of Akzo deliberately and then facilitated him to offer many useful measures to console the angry shareholders and regain their support for the ongoing change.

 

 

Moreover, Wijers also owned excellent self-management competence. His rich experience including the experience as the minister for economic affairs, managing partner in BCG and so on enabled him to be the suitable person to implement the change for Akzo. And the diplomatic as well as observation skills and rich working and life experiences also made him to act relatively relaxingly to handle the pressure from the change procedures.

 

 

Furthermore, Wijers also had a good knowledge of the organization development theory as the internal change agent. The role he played as both the director and coach in the change process indicated such skill and ability. For example, he defined the current problems of Akzo relatively exactly and assisted this organization to modify its current operation successful showed he mastered the organization development theory well enough.

 

Dunphy-Stace’s contingency model and Wijers’ type of change implementation

 

i) Contingency model

 

The contingency model of change implementation from Dunphy-Stace is properly fit for us to discuss and analyze the change practices made by Wijers in Akzo. As figure 1.0 shows, it gives us a clear clue to analyze the change scale and style in an organization (Palmer, Dunford & Akin 2009, p.230).

 

 

Figure 1.0 Dunphy / Stace Contingency Model of Change

 

 

 

Based on the Dunphy-Stace’s contingency model there are four main types of change implementation as below. The first one is the participative evolution which is suggested to adopt in the situation where there is a need for a small change or modification to meet the requirements of the environment which owns the background of enough time and full support from major shareholders. The second one is the forced evolution which is used when the organization asks for adjustment with enough time but resistance from the major shareholders. The third one is charismatic transformation which is often adopted when major change in the organization is required with the full support from its major shareholders but limited time. The last one called dictorial transformation. When time is limited and some resistance to change, this type of change implementation is suggested to use. (SocioSite1994; Palmer, Dunford & Akin 2009)

 

 

ii) Dictorial transformation

 

As the case concerned, we may get the idea that the scale of the change in Akzo is a wide one which is from the top to the bottom (Buchanan & Huczynski 1997). For example, Wijers had made some relative large modification in the management team to inject some new blood in this organization, he also led the whole organization to have a new orientation in the Asia market as well as he had offered the new product development strategies. At the same time, the pension scheme modification was also effective. In a word, all the changes in Akzo implemented by Wijers were in a relatively wide scale, which may be not so radical and deep to move the foundation of this organization.

 

 

And to assist such kind of change, dictorial transformation was adopted by Wijers. In the first place, the pension problem, high operation cost and the decline of its share price and so on in Akzo may not be ignored. All of these problems may be relatively serious which may easily affect the business performance of Akzo. In another word, the change was needed badly and immediately.

 

 

In the next place, the sorting out of the pharmaceuticals division met a relatively big resistance from Akzo’s major shareholders, which was considered as money wasting activities by the shareholders.

 

 

At the same time, the modification on the pension scheme was seemed to be bad for the profit of the Dutch unions, which would also arouse the resistance from Dutch unions.

 

 

At last the dilemma faced by Akzo made it difficult for this organization to regain its previous prosperity. To change such kind of awkward situation, the change was imperative.

 

 

By and large, all of the above changes implemented by Wijers were in a wide scale, which faced many resistances from these stakeholders including major shareholders and the unions. And meanwhile, the time for change was also limited and pressed. Based on the scale of the change and the backgrounds such as the support level and time for change, we can conclude that the style of change implementation of Wijers belonged to the dictorial transformation with the support of directive and coercive management styles. (Buchanan & Huczynski 1997; Hofer& Schendel 1978)

 

 

iii) Consequences

 

Based on the information from this case, we can say that Wijers was an outstanding leader for Akzo. The leadership style change, namely appointing Wijers as the CEO of Akzo and adopting his leadership style to lead this organization was properly and effective.

 

 

On the one hand, the consequences of the change leadership style have many positive aspects. At first, as the case mention, due to the contribution of leadership change in Akzo, the sales grow of Akzo would reach to $1bn from $650m till the year 2010 as well as the operating profits reaching to €365m. Such kind of profit gaining may not only strengthen the confidence of shareholders but also improve the working morale of employees. (Buchanan & Huczynski 1997; Hofer& Schendel 1978)

 

 

On the other hand, the modification in the pension scheme was seemed to be good for the profit of the employees in the future. It was good determinant for employees to enhance their sense of belonging and productivity. (Buchanan & Huczynski 1997; Hofer& Schendel 1978)

 

 

Thirdly, the change leadership was also beneficial for Akzo to speed up the pace of global expansion and win more market shares such as its expansion in the Asia market. (Buchanan & Huczynski 1997; Hofer& Schendel 1978)

 

 

Moreover, the leadership change was also useful for Akzo to regain its reputation in the market and gain more customers due to these new strategies carried out by Wijers such as the new product development strategies was useful to attract more customers for Akzo. (Buchanan & Huczynski 1997; Hofer& Schendel 1978)

 

 

Besides the above positive consequences, there are also some bad consequences of the leadership change. On the one hand, the change requires a relative long process. Although it may bring many advantages for Akzo and its stakeholders, it is a time consuming activity as well. The longer the change process is, the more difficult for Akzo to control the entire situation fully. On the other hand, the leadership change also led to many kinds of changes in the organization, such as the pension scheme modification, new business orientation and so on, which may arouse many political issues inside ten organizations, which may have some bad effects on the development of the organization in the future as well. (Schack 2007)

 

 

 

Conclusion

 

From the above discussion we can get the following.

 

To begin with, Akzo carried out the leadership change in order to give new blood to this organization to meet the market requirements, which finally was proved properly.

 

Secondly, Wijers as the newly appointed CEO, he really met the expectation of Akzo to change the awkward situation of this organization with a series of change measures such as pension scheme modification, new product development and so on.

 

 

And meanwhile, as the outstanding internal change agent, Wijers made full use of his capability to lead this organization to function properly and smoothly.

 

 

Furthermore, Wijers also adopted the dictorial transformation style to help Akzo to gain the expected results with the assistance of detractive and coercive management style.

 

 

All in all, as the CEO of Akzo, Wijers really had a good performance.

 

 

Reference

 

 

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