MANAGEMENT & CHANGE - CASE STUDIES

SYLLABUS DOT POINT

- The Nature of Management
* The importance of effective management

CASE STUDY EXAMPLE

------------------------------------------------------QANTAS - Without Qantass ability to manage change
effectively and seize opportunities it could have encountered
many more problems in maintaining its profitability. As the
retired CEO Geoff Dixon stated Qantas needed to evolve its
operations and take responsibility if something wasnt working
and change it.
Qantas also must cope in a rapidly changing environment that
present many challenges such as rising fuel prices, security
concerns (september 11, 2011), global economic downturn,
increasing competition. Effective management is essential to
overcome these changes in the business environment and to
maintain profitability.
The importance of management in this case affects all aspects
of the business, especially its profitability. It is management that
ensures the overall performance in a business is successful to
achieve overall goals.

SYLLABUS DOT POINT

*

Management Roles:
- Interpersonal (figurehead, leader, liaison)
- Informational (monitoring, disseminator, spokesperson)
- Decisional (entrepreneur, disturbance handler, resource
allocator and negotiator)

CASE STUDY EXAMPLE

HARVEY NORMAN - The chairman, Gerry Harvey is the a key
figure to the success of Harvey Norman. Gerry Harvey must
take on the roles of all three management roles, interpersonal,
informational and decisional in order to successfully
communicate with all stakeholders associated with the business.
Gerry Harvey uses his interpersonal role by traveling throughout
the Harvey norman business and engaging with his employees
at their point of operation. His ability to lead and act as a
figurehead enables him to sell the changes and at the same
time to gain the loyalty of his employees in supporting the
proposed changes.
Gerry Harvey also disseminates information, acts as a
spokesperson and monitors information relevant to the
operations of Harvey Norman. Harvey monitors information, and
disseminates it according to the stakeholder he is
communicating with. For example he is able to communicate
this information in a professional manner to shareholders, able
to communicate the information on an interpersonal level with
employees to gain loyalty and also to the board of directors.
The decisional roles is also a key role in successful
management. Gerry Harvey acts as an entrepreneur in the
sense he looks for and implements new ideas that hopefully will
make the business more efficient and effective. This is seen with
the franchise system in place in Harvey Norman stores. This

SYLLABUS DOT POINT

*
-

Skills of Management
People Skills
Strategic Thinking
Vision
Flexibility and Adaptability to Change
Self-Managing
Teamwork
Complex Problem-Solving and Decision-Making
Ethical & High Personal Standards

CASE STUDY EXAMPLE

HARVEY NORMAN
People Skills - Able to mix with customers, media, shareholders
and political leaders with ease. As a result both Gerry and his
company continue to be improved as a great manager and
leader.
Visionary Skills - Gerry Harveys ability to implement change to
face the challenges of the future. This is seen from the
introductions of the franchise system to the newest technology
which Harvey Norman was able to sell exclusively has allowed
Harvey Norman to dominate the household market and not
allow other companies the opportunity to gain market share.
Ethical & High Personal Standards - His salary is far less than
other Australian executives and is now at the forefront of new
and environment friendly business ventures. As a result
consumers will continue to support a company who is lead by
such a renowned ethical and responsible leader. The value of
the brand name because of this is almost priceless.
-

research other known CEOs for the rest of the skills of

management in case 3 skills is not enough.

SYLLABUS DOT POINT

*

Responsibility to Stakeholders; reconciling conflicts of interest

CASE STUDY EXAMPLE

HARVEY NORMAN
Consumers - Enjoy the opportunity to purchase goods when
they are first released although usually pay more for this benefit.
Customers also expect before and after sales service. Harvey
Norman customers are offered a wide range of products to
assist them with their choice.
Shareholders - Experienced both share capital gain and capital
loss since the issue of shares. In 2007 shares peaked then fell
50% to just over $3, it has since increased back to $4.23.
Shareholders must be provided with full and timely information,
either through information via the ASX or annual general
meetings (AGMs).
Employees - Retailers are expected to abide by the Trade
Practices Act and the Company Law Review Act. Government
agencies now expect better corporate governance, open
reporting and more stringent controls to avoid abuse of
corporate power. Consumers, employees and shareholders are
all protected by the influence and regulation by government
agencies. Examples of these regulatory bodies include:
ACCC ~ Australian Consumer and Competition
Commission
ASIC ~ Australian Securities and Investment Commission
-

SYLLABUS DOT POINT

- Understanding Business Organisations with Reference to
Management Theories
*
-

Classical-Scientific
Management as Planning, Organising & Controlling
Hierarchical Organisational Structure - division of labour
Autocratic Leadership style

CASE STUDY EXAMPLE

------------------------------------------------------------------------------------------------------------------------------------------------------------------------QANTAS
Between 1947 and 1995 Qantas management structure
evolved from ownership by the Commonwealth Government.
Under government ownership and the domestic aviation (air
travel) duopoly (two companies exclusively provide a particular
product or service) between TAA and Ansett, Qantas had a
classical-scientific management structure and culture
charactersised by:
Hierarchical, with various levels of power and authority
Bureaucratic with rules, regulations and highly
centralised decision-making
Multi-layered because of numerous levels of
management
A long chain of command in the delegation of authority
Division of tasks through specialisation and
departmentalisation
A top down channel of communication from
management to employees
Little contact between workers and top management
because of an autocratic management style.
-

SYLLABUS DOT POINT

---- External Source of Change Lead to Introduction of New
Management Theories---- (deregulation and privatisation).

CASE STUDY EXAMPLE

QANTAS
In 1991 the domestic airline industry was deregulated with the
removal of regulations over entry and price controls in the airline
industry. In 1995 Qantas was privatised (transferring ownership
from the public sector -- government -- to the private sector --business---). These changes lead to numerous implications for
management to overcome:
Qantas had to become more competitive, efficient and
profitable business.
*
Qantas had to pay all taxes and levies paid by other
businesses in Australia.
*
Qantas had to make a profit and pay a dividend to its
shareholders.
*

Because of this, management had to change its management

practices. Management now exhibits a range of theories
including, behavioural, political, systems and contingency
theories of management.

SYLLABUS DOT POINT

*
-

Behavioural
Management as leading, motivating and communicating
Flat organisational structure, teams
Participative/Democratic Leadership style.

CASE STUDY EXAMPLE

QANTAS
Because of the deregulation in 1991 Qantas had adopted
features of the behavioural management theory these included:
*

Greater emphasis on human resource management,

more effective channels of communication and more flexible
working initiatives to assist staff to balance their work and
family life.

Flatter Organisational structure, reducing the number of

levels of management giving greater responsibility to
employees.

Introduction of practices to motivate employees e.g

placement of executives and middle managers on employment
contracts.

A more democratic style of management where

employees have more input into decision making

Development of work teams and an emphasis on multiskilling.

* Focus on improved communication of Qantas goals, plans

and financial results.

SYLLABUS DOT POINT

CASE STUDY EXAMPLE

Political
*
Focus on managers using power and influence to
Uses of power and influence, management as negotiating and
achieve their goals. Aviation (air transport) is highly political
bargaining.
and Qantas management are experts at lobbying government
Structure as coalitions
to protect Qantas Pacific routes, to get tax concessions and
Stakeholder view
relax foreign ownership rules.
*
-

Recognising the importance of management as

negotiating and bargaining skills. Qantas has recently
negotiated a number of enterprise agreements and strategic
alliances.

* Balancing the interests of competing stakeholder groups.

SYLLABUS DOT POINT

*
Systems/Contingency
- Adapts management and organisational approaches to
circumstances

CASE STUDY EXAMPLE

Qantas management recognises that all its individual
parts contribute to the whole organisation. Changes in one
area, influence performance and create impacts in other parts.
They are aware that these parts are interrelated and
management makes sure they are coordinated so that it can
achieve its goals.
In order to achieve synergy (all parts cooperate to aim for
a common goal).
-

Qantas operates in a dynamic environment. Management

practices at Qantas are more flexible and adapted to suit
changing circumstances (contingencies). For example Qantas
has responded quickly to circumstances such as terrorism, the
Iraq war, changing market circumstances, rapid increases in
fuel prices and the success of rival low cost airlines.

Each of these circumstances require its own unique solution.

Qantas has developed a 2 brand strategy (qantas and jetstar)
has given Qantas the flexibility to adjust capacity, pricing and
market segmentation as circumstances change.
The outcome of using more modern management theories has
enabled Qantas to deal with changes in the internal and external
business environment more effectively and overall provides a
more productive and efficient management structure.

SYLLABUS DOT POINT

CASE STUDY EXAMPLE

MANAGING CHANGE:

Harvey Norman

*
*
*
*
*
*
*
*

External Influences
Changing nature of markets
Economic
Financial
Geographic
Social
Legal
Political
Technology developments

New Technology/Products - Australian consumers continue to

be amongst the worlds leaders when it comes to purchasing the
latest product. In 2004 there was the DVD player as the fastest
selling consumer electronic in history. In 2005 plasma television,
iPods and DVD recorders became popular.
In Christmas 2004 the company could not obtain enough
supply of ipods to match the consumer demand.
In December 2009 TiVo 320 was launched and sold
exclusively to three stores, JB-HIFI, Harvey Norman and Myer.
-

As a result of this fast-paced external influence Harvey Norman

now targets new product launches, trains its staff accordingly
and ensure it remains relevant to the technological driven
consumers.
Qantas
Legal & Political Influences:
-

Although it was deregulated, the Australian international

airline industry remains quite regulated and as a result is
subject to capacity controls that are part of system of air
service agreements defining which aircraft and how many
flights and seats are allowed between countries. Australia and
the US signed an Open Skies Agreement in 2008 allowing
Australia and US services to freely move between the two

SYLLABUS DOT POINT

*Internal Influences
Effects of accelerating technology including
E-commerce
New systems and procedures
New business cultures

CASE STUDY EXAMPLE

QANTAS
E-Commerce/New Systems & Procedures
Qantas has continued to develop its website by including
a faster booking engine; customer access to alternative fares;
increased alternatives for customers searching fro lowest
priced itineraries; and an online check-in.
-

Launched eQ, which streamlines corporate human

resources and creates an internet based inventory
management system.

- Upgraded security systems (>$600 million) and introduced

new procedures for all flight and cabin crew. Self service kiosks
at all its major airports help automate check in process.

SYLLABUS DOT POINT

*Structural Responses to Change
Outsourcing
Flat Structures
Strategic Alliances

CASE STUDY EXAMPLE

QANTAS
Outsourcing:
Has increasingly looked to outsourcing to become more
cost effective and to simplify its business.
Qantas has outsourced nearly all IT operations. IBM has
taken over Qantas data centres and Telstra has been handed
domestic voice, data and domestic services.
-

Low cost carrier Jetstar has outsourced its entire call

centre to Melbourne operator sales force

Already contracts some maintenance jobs overseas in

Singapore and New Zealand

Also established a base in London for 400 of its

international flight attendants saving approximately $18 million
through rostering efficiencies and reduced accommodation
and allowance costs.

Flat Business Structures:

-

Fewer layers of management and widening span of

control. This is aimed at cutting costs and speeding up
decision making to make Qantas more flexible and adaptable
to change.

SYLLABUS DOT POINT

*Reasons for Resistance to Change
Financial Costs
Inertia of Managers, Owners
Cultural Incompatibility in Mergers/Take-Overs
Staffing

CASE STUDY EXAMPLE

QANTAS
Financial:
Purchasing new equipment. New and more efficient
aircrafts. Qantas has planned for 158 new aircrafts planned for
delivery between 2011 and 2018 as part of a fleet renewal
program at the cost of $US 22 Billion.
Inflight entertainment systems
Security measures such as new passenger screening
equipment and surveillance equipment throughout all baggage
handling areas.
-

Redundancy Payments
As previous responses to internal and external influences
Qantas has been de-layering their organisational structure to
have a more flatter business structure to be more flexible and
adaptable to change. As a result it leads to the many
employees being made redundant as their needs are no longer
their required this incurs large compulsory payments.
As a way to manage large redundancy payments (in
2009 redundancy costs totaled $106 million) for the future, it is
trying to rely on increasing the number of casual and part-time
employees to reduce the need for large redundancy payments.
Re-Training
Any significant change at Qantas requires staff to learn

SYLLABUS DOT POINT

^ Continued

CASE STUDY EXAMPLE

Re-Training
Qantas has created a Qantas College Online as an
online learning programme. This eliminates the need for
managers to repeat information and training material to new
employees as it they can self-educate themselves online.
Retrained cabin crew for new international business
class.
Re-Organising Plant Layout
As Qantas acquires new aircrafts it must continually
reorganise the layout of its maintenance operations to try and
increase capacity and efficiency. For example JetStar is
replacing its Boeing 717s with Airbus A320s and as a result
must look for a new heavy maintenance base because its
Newcastle base will not accommodate the larger planes.
Staffing:
Considering Qantas intends on outsourcing many areas
of the company and also reduction in the size of the
permanent workforce and hiring more part-time/casual staff to
increase workforce flexibility has made employees fearful of
change as they feel it may threaten their job security.
Employees may also resist change because:
*
Their current skills are no longer required due to new
work methods
*
Required to retrain or learn new skills
-

SYLLABUS DOT POINT

*Managing Change Effectively
-Identifying the need for Change
Setting Achievable Goals
Creating a culture of Change -- Change agents
Change Models- Forcefield analysis, Lewins
unfreeze/freeze/refreeze model.

CASE STUDY EXAMPLE

Harvey Norman
In many cases Gerry Harvey acts as the change agent. He has
the drive and passion to implement the changes. He sells
changes and reduces resistance to change because of his
power, experience and previous success.
Adopts the force-field model, Gerry Harvey with the support of
the Board look at the benefits of change. Gerry Harvey has
been the force driving the change. The resistance to this change
will most likely come from shareholders, their resistance is
tempered by potential for future growth.
However Gerry Harvey ensures the change model is successful
through his ability of using the media and through meetings of
staff effectively to minimise resistance of change with the way
he communicates it, by reinforcing the benefits change will
bring.
Qantas
Setting Achievable Goals - To help manage change effectively
Qantas clearly sets out achievable goals and objectives,
devised after consultation with staff and communicated clearly
by management. These goals include:
Continued deployment of duel brand strategies
(Jetstar/Qantas)
Continued fleet modernisation (updating technology,

SYLLABUS DOT POINT

*Change & Social Responsibility
Ecological Sustainability
Quality of Working Life
Technology
Globalisation/Managing Cultural diversity
E-Commerce

CASE STUDY EXAMPLE

QANTAS
It is estimated that aviation (air transport) accounts for 2% of
greenhouse gases. As a result Qantas invests millions of dollars
to reduce its carbon emissions. Qantas allows their passengers
the option to pay extra to offset the carbon dioxide emitted from
their flight. The water used to clean the air craft is recycled.
Quality of Working Life - Qantas has health surveillance
program which will continually monitor workplace conditions.
Qantas has continued to use flexible work practices to foster a
work/life balance and staff training to improve the quality of
working life. However it can be argued outsourcing and
casualisation have decreased the quality of working life.
Cultural Diversity - Culturally diverse workforce. It allows them to
reflect internally a wide range of customers served around the
world. Qantas has encouraged greater understanding of cultural
differences within the workplace and established clear
communication processes.
Qantas has also donated over $2 million to charitable causes in
2010 across the community, environment, education, the arts
and disaster relief.