BSB61015 Advanced Diploma of Leadership & Management

Part A

Yes, we recommend the project as a good investment. The reasons for our recommendation are:

As per the project given and figures provided, we can see that initial investment of the project is at zero periods is $70000. There is the recurring cost of $ 25000 every year which makes it a total of $ 1,45,000 at the end of project tenure. The project is able to cover its total costs at 1.51 years. The project has a yield of $ 71,000 every year which accumulates at a total of $ 2,33,000. Hence, it is clearly shown that the project not only recovers all its costs incurred but also provides a net profit of $ 1,43,000.

The return on investment (ROI) of the project is also positive that is 98.62% which is nearly equal to 100% which shows that the project has a potential to break-even its entire costs within 1.51 years. Hence, we fully recommend the project.

In absence of discounting factor, NPV cannot be calculated. However, it may be calculated using an assumed discounting rate. The project is successful as it has covered all its costs and is able to break-even in 1.51 years approximately. The project is viable and is helpful in creating company’s reputation (Parrino et. al, 2012).

The ROI of the project is 98.62% which suggests that return on investment of this project is able to cover its costs and the investment made by the company shall be fully recovered. The company shall be able to generate profits after 1 year. The company can use such excess funds in other profitable ventures or may retain such profits in existing business also. It is also noteworthy that a profitable project not only helps in financial matters but also helps in boosting employees and stakeholders’ interest which are nonfinancial matters but as important as financial matters (Marsh, 2009)

Further, the compatibility of the project should also be assessed by the company using other tools like Net Present Value, Internal Rate of Return, Profitability Index, etc.

Conclusion

If the feasibility of the project is to be assessed through Payback period, then the project is totally viable as the payback period is very less and projects with lowest payback period are highly recommendable. Covering the total costs in just 1.51 years will be a great achievement for the company.

Further, if ROI is talked about, it can be seen that the company is expected to have a very high ROI which is a very rare scenario.

Hence, using cost-benefit analysis is a very important tool to assess whether a project or product will be able to cover its cost. This analysis is very important where the benefits are uncertain and resources available are scarce. The management needs to know well in advance whether the project or product in hand will reap them good benefits in the future or not.

Calculation of Payback Period = Estimated Payback Period + (Total Investment- Cumulative Benefits in Payback Period)/ (Cum. Benefits in the year next to P.B Period- Cum. Benefits in P.B Period)

Part – B

It is a higher difficulty to change the organization culture than to develop a new culture in a brand new organization. Since the bank is highly unionized and has an authoritarian culture it is difficult to introduce the change as the people are already accustomed to old assumptions, values, and rules. To introduce a cultural change the initial step is to redraft the internal rules and regulations and to have strong executive support along with training.

The main factor that will influence the cultural change is the presence of executives and the executives must support it. The executives must project behavioral change and not only verbal support. The change must be lead by changing the behaviors and it is the duty of the management to provide a clear cut explanation of the new culture so that their functioning is enhanced and more support can be ensured (Moncrieff, 2014).

Cultural change heavily relies on the behavior change and it is imperative that members of the organization must know what is expected of them and should understand the way to behave once the new culture is defined to them (Alter, 2013). Hence, training is an important factor that will be helpful in the communication of the expectations and teaching new rules and behavior.

Value and belief statement

The employee focus group must be used to ensure the mission, vision, and value in the description that will state the influence on every employee’s job.  The value and belief statement must be provided a complete understanding of the new goals of the organization. This will help in reflecting the actions and commit them to their jobs (Itami & Nishino, 2010).

Moreover, the reward and recognition should be evaluated and reframed so that the employees get to know about the reward attached to their performance. Hence, reframing of reward and recognition is another important concept that can be used to introduce cultural change in the organization (Levine & Prietula, 2013).

Answer – 2

Introducing a cultural change in the organization of bureaucratic authoritarian culture and the unionised workforce is that there might be a distortion or resistance to the change.  The organizational change might be seen in different perspective such as a change in the job, psychological threat, and disturbance in the social arrangements.   Resistance happens from the workforce concerning the best interest of the organization and the ideals of the organization. Older employees remain loyal to the firm and might take the decision of quitting the firm (Hemmer & Labro, 2008). Hence, it is important that the company should take a decision concerning the best interest of the company and might include the option of retrenchment.  The curtailment of the workforce is involved with higher risks because a strong workforce will be eliminated and the company will be devoid of experienced employees. Secondly, the new employees need to be provided further training in terms of work and the new ideals of the organization (Freedman, 2013). As per the general rule, the older employees share a better understanding of the organization and hence, their response to the change in the organization would have been more productive.

Unfamiliarity

The major risk or barrier to the organizational change is unfamiliarity. Employees often see change as a big risk to their career and hence, do not cooperate for its smooth implementation (Olsen, 2012).  Further, unfamiliarity on the part of the part of the management in terms of goal setting is yet another barrier to change.  When the targets are not set properly it fails to provide a platform.

Ineffective Leadership

For an organization to perform effectively and smoothly it is necessary that the people in the organization must perform. If the employee fails to accept the new implementation or the changes then the change will get a resistance. It needs to be noted that less number of employee respond in a positive manner to change (Olsen, 2012). The employees who have contributed their service to the organization undertake the change as a risk that will destroy their jobs. Failure to know the fear of the employee and their sensitivity creates a barrier in the change management.

Undue complexity

Change when it pertains to banks can be filled with complications and can be lengthy. The scale of change and the complexity can be said to be a vital barrier in the process of change.

Answer - 3

Risk Assessment

Assessment – 1 Part – C

1. Change requirements at APM

Going by the entire case study, it is evident that APM is not functioning at full capacity owing to some specific issues. There is the various change needed in the functioning of APM. The APM factory needs to be structured in a manner so that it can be competitive in nature. It is ailing from the fact that the production costs are rising and is the highest in the world. The productivity is lower while the operations cost is more. The share prices have declined over 20 percent leading to a strong alert. However, APM is not devoid of opportunities. It has various opportunities and if properly structured and tamed it can lead to the attainment of best figures in terms of productivity and labor. Moreover, the point that needs to be noted is that the machines and equipment are readily available only the performance needs to be changed and altered.  Further, the workers are not motivated and hence, a strong program where the workers will be infused motivation will play a crucial role in attaining great heights. The pay and the scenario of operations are strong and hence, the turnover is low. The HR strategy needs to be drafted in a manner that will influence the functioning of the company that will help in attaining the objectives of the business (Siraj et. al, 2011).

Strategic objectives

Recruitment and selection

The main aim of recruitment and selection process is to trace a pool of candidates that can fit into the organization and play the desired role as expected. The acquisition of best employee is a competitive advantage and such a process enhances the productivity of the entire organization.

After recruitment is done, the most important step is to filter the candidate through a process of selection that is not constrained to interview, testing, etc. Selection ensures that the best person is selected for the job (Weistroffer et. al, 2010).

Strategic objectives in the area of recruitment and selection are as follows:

• Ensuring that the company containsthe desired skills, knowledge and other features so that the requirements in terms of current and strategic requirements can be met.
• Meeting the supply with the demand
• Raising the number of applicants thereby raising the standard
• Increment of the organizational effectiveness

Training and development

• Enhancing the performance of the business by having a competitive edge by training the employee and motivating them
• Enhancing the skills of the employees and knowledge so that competition can be withstood with ease and flexibility.
• Increasing the employees’ generic skills that are the skills in terms of competencies like team work, communication, etc.
• Development of the organization as a whole in terms of values and shred
• Career development of the employee

Remuneration and Benefits.

• Alignment of reward with the job done
• Introduction of incentives that will influence the performance of the employees
• To increase the benefit plan that will motivate the employee
• Altering the penalty system and bringing incentive based system to get more production

Major stakeholder’s concern

It is obvious that the stakeholders will be concerned going by the implementation of the new strategy. It needs to be noted that the stakeholder relationship management needs to be balanced so that the organization does not suffer in any form. The stakeholders are influenced by the level of interest they occupy (Doz & Kosonen, 2010). The business stakeholders have the maximum power that consists of employees and shareholders. The change initiatives bring a lot of concern and the investors are unable to chalk whether to quit or remain invested. The same happens with the employee as they become reluctant and forming trade union (Demil & Lecoq, 2010). In short, them are resistant to change. Further, the customers are even scared of the change in the strategy because the product might be adversely hit or there can be something different.

Some of the steps that can be taken to counter the problem are as follows:

• Managers must acknowledge, as well as monitor the shareholders concerns in an active manner and the interest should be dealt in an active manner.
• A strong communication must be established with the stakeholders regarding the concerns and the contributions and regarding the risk involvement. This enables to deal with the problem in a proactive manner.
• The matter that is sensitive and concerns the stakeholders must be addressed by the management so that they feel at home with the new strategies
• The conflicts and the issues must be addressed by off open communication and appropriate reporting that leads to a better review.

Change Management Project Plan

Introduction

The performance of APM ranks below standard and is suffering due to various problems. The factors are internal, as well as external. To enhance the functioning and revamp the performance, STegic consultancy services have been hired.

Project Objectives

The main aim of the project is to enhance the productivity, motivate the workers, ensure strong HR policies, and reframing the regulations to ensure a better standard.

Change Plan Elements

Budget

• Growth – to enhance $5 million in the 5 years
• Revenue – increment of 10% annually by
• Expenses – decrease of expenses by 5%
• Efficiency – increment of net profit by 5% per year
• Production cost – reduction of production cost by 50%
• Budgeted production (increase by 20%) – 500*20% = 600

Resources

• Products adhering to the guidelines
• Stressing on physical facilities such as location, capacity, etc
• Utilization of wireless and virtual technologies
• Development of new strategic alliance on a yearly basis
• Increment of community outreach

Methodology

• Employment of professionals that will create a good link with the stakeholders
• Training of people so that the maximum can be attained with the workforce.
• Development of leadership skills of the team so as to be competitive
• Alignment of incentives and rewards with the performance
• Establishment of strong HR policies to lay better control and mechanism

Timeframe

5. Communication Plan

Strategic direction – Revival of APM

Objective – Revamp of APM that is undergoing through a bad patch by design of new strategies

References

Alter, S 2013, Work System Theory: Overview of Core Concepts, Extensions, and Challenges for the Future, Journal of the Association for Information Systems, vol. 14, no. 1, pp. 72-121.

Demil, B & Lecoq, X 2010, ‘Business model evolution: In search for dynamic consistency’, Long range planning, vol.  43, pp. 227-246

Doz, Y.L, and Kosonen, M 2010, ‘Embedding strategic agility’,  Long range planning, vol. 43, pp. 370-382

Freedman, L 2013,  Strategy,  Oxford University Press

Hemmer, T, & Labro, E 2008, On the optimal relation between the properties of managerial and financial reporting systems, Journal of Accounting Research, vol. 46, pp. 1209–1240.

Itami, H, & Nishino, K 2010, ‘Killing two birds with one stone: Profit for now and learning for the future’,  Long range planning, vol. 43, pp. 364-369

Levine, S. S, & Prietula, M. J 2013, Open Collaboration for Innovation: Principles and Performance, Organization Science, Harvard Press

Marsh, C 2009, Mastering financial management, Harlow: Financial Times Prentice Hall.

Moncrieff, J 2014, Is strategy making a difference?’,  Long Range Planning Review, vol. 32, no. 2, pp. 273–276.

Olsen, E 2012,  Strategic Planning Kit for Dummies, John Wiley & Sons.

Parrino, R,  Kidwell, D. & Bates, T 2012, Fundamentals of corporate finance, Hoboken,

Siraj, S, Mikhailov, L & Keane, J. A 2011, ‘Priests: an interactive decision support tool to estimate priorities from pairwise comparison judgments, International Transactions in Operational Research’, vol. 12, no.4, pp. 45-61

Weistroffer, H.R, Smith, C.H and Narula, SC 2010,  Multiple criteria decision support software, Springer: Oxford University Press.