PROBLEMS OF CHANGE
Introduction
“It was a sad ending for appliance maker Moulinex, once considered an icon of French industry. On October 22, 2001 a
bankruptcy court approved the sale of most Moulinex
assets and brands to French rival SEB. Nearly two-thirds of Moulinex’s
8800 employees will lose their jobs as a result.
France Socialist government reacted with
predictable dismay, promising to help workers find new jobs. But government
officials – not just the Socialist but their conservative predecessors – bear
blame for the company’s demise. As Moulinex slid
deeper into the red over the past decade, authorities repeatedly blocked
management’s effort to cut cost. In August, the government rejected a plan to
shutter a refrigerator factory and lay off 670 workers. Instead, the company
was ordered to resume talks with unions. By then it was too late. Moulinex had racked up $120 million in losses the year
before on sales of $1.1 billion. Bankruptcy loomed.
The Moulinex saga
underscores a growing worry in corporate France. To stay competitive,
companies need flexibility to trim their payrolls especially now that Europe faces its steepest economic downturn in nearly a
decade”
(Source: Noe
R.A et al (2004) “Fundamentals of Human Resource Management” Pg. 508)
It has been
rightly said that ‘change is the only
constant thing in life’, and in order to stay ahead, organisations
have to adapt to the external environment, undergo and manage change.
However, Organisations that refuse
to adapt to and manage changes, find themselves going into oblivion and
obscurity. When the economy is healthy, many managerial mistakes go unnoticed, however econmic
downturns often claim corporte victims from organisations tht fail to adapt.
The Moulinex saga is just an example out of thousands.
In recent years,
almost all companies both large and small have made adjustment in the way they
operate, some more pronounced than others. For instance, General Electric,
Allied Signal, Ameritech and Tenneco all have radically altered the way they operate”
their culture, the technology they use, their structure, and the nature of
their relations with employees. With so many companies making such drastic
changes, the message is clear “either adapt to changing conditions or shut your
doors”. As technology and markets change, organisations
face a formidable challenge to adapt. (Ogunbameru
2004)
