Blog 1:- Change management

Change is the process that requires efforts not only from leaders and management but also from the employees to be a part of change process. Change is the key to success while analyzing the operations of the organization.

BREXIT and Changing dynamics of business environment

In the year 2017, British government decided to leave the European Union but the implementation is still uncertain. ‘BREXIT’ has impacted the operations of different agencies and companies working in United Kingdom. BREXIT can have different impact on different sector. Automobile industry is a star performing industry of United Kingdom compared to other manufacturing sector the output of this industry has increased by 60% from the year 2010 (Bailey and De Propris, 2017).

In the past five years £8 billion has been invested in automobile industry and this industry serves 800,000 jobs in UK (Bailey and De Propris, 2017).” Around 80% of the car manufactured in UK are exported to EU and the two third cars are sold to those countries which has a trade deal with EU” (Campbell, 2019).

According to SMMT 2019, report there will be reduction in on traffic barriers between UK and European automobile sector. “Automobile sector is the main pillar of UK’s economy as it contributes 12.8% in the export of UK goods” (SMMT, 2019))

More than 8 out of 10 cars manufactured in UK are exported to the European countries on the other hand, less than 4 out of 10 cars manufactured in EU27 are exported (Acea.be, 2018)

Impact of BREXIT on Jaguar Land Rover

The estimated sales growth of UK’s automobile industry is 3.2% as the result of BREXIT there is a downfall in a growth by 1%. UK is a huge and major market for automobile industry. The company like BMW is planning to close the plant near oxford on the other hand Honda is planning for 6 days closure. (Hotten, 2019)

Jaguar land rover is UK’s largest carmaker company. Due to uncertainty of BREXIT the company decided to cut the jobs by 4500 to plan £2.5bn of cost savings. (Hotten, 2019).
https://youtu.be/Bwvd5HRZnJo (ITV News, 2019)

”No deal BREXIT” can cost the company more than £1.2billion profit each year. As the sales of the company in the previous year were up 8.4% which is reduced to 3.7% down compare to previous year and Europe sales has decreased by 4.5% due to the diesel uncertainty of BREXIT (Jaguarlandrover, 2018). Company imports the parts required for manufacturing from different part of Europe more than 40% of parts used for manufacturing cars are imported. Company imports 20 million parts everyday from European countries (Jaguarlandrover, 2018).

Solution to tackle the uncertainty of BREXIT

Change is the essential and important need of every business. As the company is dependent on other European countries for the manufacturing parts the company cannot change the supplier easily but due to uncertainty of BREXIT company should look for the alternative suppliers as it has become the basic and important need of the company. For every manufacturing company stable growth is the basic need from sales perspective and it is only possible having an unsaturated market available for the automobile manufactures, rather than depending on the European market.

‘No deal’ in this situation there is a need of the company to adopt proactive approach to deal with the uncertainty situation. As the company is UK’s biggest car manufacturing company cannot be dependent on the future scenario they should have a backup plan to face the future circumstances. In this case we can use Fayol 5 elements of management. Company should plan according to the future uncertainty and organize things whenever needed in the future.

Action plan for the change

Change is an essential and most important factor for the company to be stable in a competitive market. In this situation there is a need of kotter change model suits the current situation of the company.

Create urgency as the company relay on European market for the parts to manufacturing the cars so to ignore the future additional cost due to BREXIT this can impact overall industry. There is a need to have an alternative option and the company should develop powerful vision for the change process whether the deal or no deal takes place. Clear objective in required for the sake of the company and to communicate with the vision for the future uncertainty. In this case a good leadership quality can be helpful for the change management.

Learning outcomes

The overall business will be affected due to BREXIT. The process of change is not one time as the changes can occur any time in any way as BREXIT so other than this a company should change according to the new trend as it is a long term process. And change requires patience and good management skills on the other hand vision plays an important role and it add value effectively to achieve certain future goals.

References

Acea.be. (2018). Motor vehicle trade between the UK and its main EU partners | ACEA – European Automobile Manufacturers’ Association. [online] Available at: https://www.acea.be/statistics/article/motor-vehicle-trade-between-the-uk-and-main-eu-partners [Accessed 20 Nov. 2019].

Bailey D. and De Propris, L. (2017). Brexit and the UK Automotive Industry. National Institute Economic Review, 242(1), pp.R51–R59 [20 November 2019]

Campbell, P. (2019). No-deal Brexit an ‘existential threat’ to UK car industry. [online] Financial Times. Available at: https://www.ft.com/content/912856f0-afbe-11e9-8030-530adfa879c2 [Accessed 20 Nov. 2019].

Hotten, R. (2019). Brexit: Jaguar Land Rover extends shutdown over no-deal fears. BBC News. [online] 24 Jan. Available at: https://www.bbc.co.uk/news/business-46993480 [20 November 2019].

Henley, J. (2018). How would a no-deal or hard Brexit affect Jaguar Land Rover? [online] the Guardian. Available at: https://www.theguardian.com/business/2018/jul/05/how-would-a-no-deal-or-hard-brexit-affect-jaguar-land-rover. [20 November 2019].

ITV News, 4,500 jobs are to go at Jaguar Land Rover (2019). 4,500 jobs are to go at Jaguar Land Rover | ITV News. [online] YouTube. Available at: https://youtu.be/Bwvd5HRZnJo [Accessed 1 Dec. 2019].

Jaguarlandrover.com. (2018). Jaguar Land Rover – Annual Report 2018/19. [online] Available at: http://annualreport2019.jaguarlandrover.com/\

SMMT. (2019). UK Automotive Industry -SMMT. [online] Available at: https://www.smmt.co.uk/industry-topics/uk-automotive/.[20 November 2019]..

SMMT. (2019). UK Automotive and the UK Economy – SMMT. [online] Available at: https://www.smmt.co.uk/industry-topics/economy/uk-automotive-and-the-uk-economy/.[21 November 2019].